Text: USTR's Scher on Trade Policy and Biotechnology

For the governmental regulation of biotechnology to guarantee public health and environmental safety, it must be science-based, transparent, and independent of political influence, says Ambassador Peter Scher, special trade negotiator for the U.S. Trade Representative.

"The lack of such scientific, transparent, independent regulatory processes is what leads us to harbor some suspicion about the actions of some of our trading partners overseas, in particular the European Union (EU), in calling for restrictions on trade in agricultural biotechnology products," Scher said.

The EU seems to be saying that until it can be proven that there can never be a risk from a product, it should not be introduced, Scher said November 19 in an address to the New York Academy of Sciences. A copy of the text was made available in Washington.

All governments must act to protect health, safety and the environment, Scher said. "The Europeans appear to be adopting both an inconsistent and moreover, an unrealistic standard for new bioengineered foods, ignoring their own scientific assessments," he said.

Scher said that U.S. regulatory decisions are based on scientific assessments. "By contrast, European regulatory procedures gives much greater weight to politics," he said.

The United States does not require any other country to adopt its standards for biotechnology products, but it does ask for "clear, transparent, timely, science-based and predictable regulations," he said.

Following are terms and acronyms used in the text:

-- GMOs: genetically modified organisms.

-- WTO: World Trade Organization.

-- FDA: Food and Drug Administration.

Following is the text of Scher's remarks as prepared for delivery:

(begin text)

Trade Policy and the Scientific Revolution:
The Case of Agricultural Biotechnology

Ambassador Peter Scher
Special Trade Negotiator

New York Academy of Sciences
New York, NY
November 19, 1999

Good morning, and thank you all very much.

I very much appreciate the chance to address the Science and Technology Policy Forum on our trade policy approach to agricultural biotechnology. As senior scientists and research executives, you may be a tough crowd. But you are also an informed crowd. And I therefore see this Forum as an opportunity to set out some of the principles our government has developed for one of the most complex emerging trade policy issues, and a chance to receive advice and ideas as well.

Before I begin, I have to confess something, since I have learned during my years in Washington that it's tough to keep anything secret anyway. When I give talks around the country, often to farming and agriculture groups, they usually find it just a bit ironic that a guy who was born just a few miles from here in the Bronx and reared in America's heartland -- Long Island -- is representing the interests of America's farmers and ranchers around the globe. To illustrate how that makes me feel, I often tell the story of the two dairy cows grazing by the side of the road when a milk truck drives by. On the side of the truck is a big sign which screams out "Pasteurized, Homogenized, Vitamin Enriched, Good for You." The one cow turns to the other cow and says: "Kind of makes you feel inadequate."

This gives you some indication of how I feel this morning. Just as many find my representation of American farmers ironic, I can assure you that there are science teachers throughout Great Neck who are being sent to early graves over the notion that this former student would be addressing the New York Academy of Sciences. But I am honored to be here.

BIOTECHNOLOGY: ITS PAST, ITS FUTURE

Let me begin with a broad conceptual point.

Historically, trade policy has had two missions: to reduce foreign barriers to American goods, and to ensure that foreign exporters more or less played fair with us. Today, our task is far more complex. Many of the fields we take up today in the trade arena -- intellectual property, the services industries, electronic commerce -- are fields on the cutting edge of the technological revolution. And we must not only address their effects on trade today, but set ground rules that allow them to develop with the most beneficial effect for our economy and consumers tomorrow.

In some senses, the greatest challenges facing the "technological revolution" are challenges of policy more than challenges of technology. Steve Case, the Chairman of America OnLine, recently made a similar observation regarding the future of the Internet. Governments around the world are struggling everyday with how to set rules for technologies which are changing so much faster than the governments themselves are capable of acting -- struggling to accept the idea that while there is clearly a role for us to play in establishing the basic rules of the road, some decisions might be better left to the marketplace.

This is the challenge we face in biotechnology. In its broadest sense, the technological challenges, particularly in the field of agriculture are not new. Modern wheat, for example, is a hybrid of different species that over thousands of years has spread from the Middle East to nearly every country on earth. More recently, Mendel's work on genetics in the nineteenth century gave Dr. Norman Borlaug the intellectual foundation of the Green Revolution -- an advance which, through the scientific development of new strains of rice and other staple foods, has prevented literally hundreds of millions of people from starving.

But as we have seen in the case of the Internet and electronic commerce, as new techniques move from the laboratory to the marketplace, they have the potential to fundamentally transform whole sectors of the economy. Just as telecommunications has revolutionized finance, transport and education, so biotechnology is changing the industries that depend on the life sciences -- agriculture, medicine, health care, perhaps others. Since Crick and Watson's discovery of the shape of the DNA molecule -- "the secret of life" -- in 1953, through the academic research of the 1960s and 1970s, scientists have learned to copy minute fractions of DNA and transfer it from one organism to another. Instead of mixing thousands of genes, as in traditional crossbreeding, modern biotechnology allows the transfer of a single gene.

And as a result, in the decades to come, we can expect revolutionary changes that improve human health and longevity; reduce hunger; and ease pressure on land, water and wildlife habitat. To quote Sir John Maddox, the retiring editor of Nature, in his 1998 book on the future of science "What Remains to Be Discovered:"

"The understanding of life that has followed from the structure of DNA ensures that the century ahead will be transformed by engineered forms of plants and animals, and by different and more effective human medicines. ... They will feed the hungry and cure the sick of simple ailments; it is a matter of time only before they can list the kinds of cancers that are curable this year, and those that are on the cards for cure next year or sometime soon afterwards."

AND ITS DEVELOPMENT TODAY

The early signs of these developments are clear today.

In medicine, reports indicate that a large share of new pharmaceutical products are developed through biotechnology techniques. And the line between pharmaceutical products and agricultural products is blurring, as researchers are already developing a banana that can be used to deliver oral vaccines for diseases, such as hepatitis B.

As this shows, agricultural biotechnology is just beginning to reach its potential. Biotechnology can be used in a wide range of crops -- corn, soybeans, canola, peanuts, potatoes, rice, fruits and vegetables -- and are now being produced to provide many health benefits, such as the reduction of fat content, the addition of vitamins, or the elimination of allergens.

On a broader scale, the potential implications of biotechnology are still more striking. In the next fifty years, the world's population may double, and the amount of arable land available for cultivation is likely to decline by nearly half. That means, barring some massive acceleration of the loss of wild lands, that productivity is the only way to feed more people. Biotechnology could increase crop yields in developing countries by over 25 percent, with less need for pesticides and herbicides and without degrading natural resources. Farmers report other benefits, such as reduced worker exposure to chemicals and lower costs.

CONCERNS ABOUT BIOTECHNOLOGY

But for all its obvious and immense benefits, biotechnology also raises concerns among the public that we must address.

These concerns are not entirely new. Many of you will recall, that the first research on biotechnology in universities during the 1960s and 1970s created sharp, although short-lived, fears that genetically engineered cells might cause new types of diseases. As Harvard, MIT (Massachusetts Institute of Technology), Columbia and NYU (New York University) began to experiment with recombinant DNA, the Mayor of Cambridge and the Attorney General of New York raised the question of whether such research should be banned altogether.

Dr. Lewis Thomas, then President of the Sloan-Kettering Cancer Center, made the logical response in his essay "The Hazards of Science." Science and government must respond to specific questions about risks -- "is there a risk of inserting the wrong sort of toxins or hazardous viruses, and then having the new hybrid organisms spread beyond the laboratory?" But we must not yield to the temptation to believe there is something unnatural, arrogant or wrong about scientific research into the issues raised by a growing understanding of genetics. Rather, he wrote that the true danger was:

"To pretend that we can get along somehow without inquiry and exploration and experimentation, and that the human mind can rise above its ignorance by simply asserting that there are things it has no need to know."

Obviously, in the end research continued. It has in fact paid off with practical and humanitarian benefits -- to cite just one, human insulin for diabetes patients. But today, a similar set of concerns have arisen as biotechnology has been adapted for agricultural use. The concerns have arisen mainly in Europe but also to some extent in the United States. Some fear risk to consumers: that is, to people who eat the food produced in part with biotechnology techniques. Others fear environmental damage -- "killer weeds," "super bugs," and "terminator genes." And some express their views in very intemperate ways, in fact at times going so far as to compare this technology to the AIDS and Ebola viruses.

These are extreme views, and in fact most people are relatively confident about agricultural biotechnology. At least in the United States, a recent poll found that 78 percent favor the use of biotechnology in agriculture; and even in Europe, a survey by the European Commission found that out of nine environmental issues, concern over GMOs ranked last.

But some fears about these products are real, and do reflect genuine and natural concerns about the introduction of a new technology that uses the basic stuff of life. And, as scientists or as representatives of the public in government, we must address these concerns squarely. We cannot pretend to have all of the answers.

THE U.S. APPROACH

The question then is, what is the appropriate role of the government in the field of biotechnology? Our fundamental responsibility as a government is to guarantee public health and environmental safety. And we must meet this responsibility through a fair, transparent and independent regulatory process applied to domestic and imported goods that will get the answers and allow us to act upon them. And in the United States, our regulatory procedures, I believe, meet the test.

First, these regulatory procedures are based upon science. To introduce a biotechnology product as a food, companies must perform years of tests to the satisfaction of several different agencies. For crop plants with introduced pesticidal traits, the Environmental Protection Agency (EPA) uses the data from these scientific tests to assess the dietary risks of products and also to determine that no unreasonable adverse environmental effects result from their use. The Department of Agriculture (USDA) requires field tests of all such products; if appropriate, the Environmental Protection Agency does as well. And all food products in the United States made from modern biotechnology have been submitted voluntarily by companies to FDA (Food and Drug Administration) for review.

FDA has had more than a half-century of experience regulating food safety, and in these decades has developed a set of requirements that give Americans food as safe as any in the world. In every case thus far, it has found that agricultural biotechnology products meet the high standards of consumer safety we have set for all foods.

Second, our regulatory procedures are transparent and offer the opportunity for public input. FDA consulted widely through public hearings when developing its policy several years ago. To respond to recent increased consumer interest, the FDA has scheduled three sessions around the country. FDA plans to explain its regulatory procedures.

Some of the questions I believe it would be interesting to seek views on are:

• While modern biotechnology is revolutionary in its potential to allow the use of genes from almost any source, it is also evolutionary in the hundreds of years of experience gained from genetic modifications. Is it useful to distinguish this form of genetic modification from previous breeding methods?

• Should we hold products made from biotechnology to a higher standard than those made with more conventional techniques; in particular, as some consumer advocates have suggested, should we adopt a standard of "certainty" in safety that we do not apply to other new products? And, "certainty" of what?

• If we develop such tests, should we require them only of products made from modern genetic engineering or for all food products with "novel" technologies?

• Are there specific tests that would provide increased assurance of safety for man or animals consuming these foods?

And third, while open and transparent, the U.S. regulatory system is independent of political influence. Americans trust FDA in large part because they know we politicians cannot tell FDA whether or not to approve a product. If we are to retain this strength and Americans' trust, we must retain the independence of our regulatory processes.

THE LINK TO TRADE POLICY: REGULATION

The lack of such scientific, transparent, independent regulatory processes is what leads us to harbor some suspicion about the actions of some of our trading partners overseas, in particular the European Union, in calling for restrictions on trade in agricultural biotechnology products.

With respect to these products, the Europeans invoke a newly developed variant of the "precautionary principle" to justify inaction. That is, Europeans seem to be saying that until you can prove that there can never be a risk from a product, it should not be introduced.

Let me be clear here. U.S. assessments of products use pre-caution. And we believe all governments should be able to act to protect health, safety and the environment even in cases where the relevant scientific evidence is insufficient. Indeed, that principle is enshrined in the WTO Agreement on the Application of Sanitary and Phytosanitary measures.

However, the Europeans appear to be adopting both an inconsistent and moreover, an unrealistic standard for new bioengineered foods, ignoring their own scientific assessments. It is, for example, an even higher standard than Europeans used to ban tomatoes from Europe for three hundred years, from the 16th century until 1820, when they had no scientific means available to test their safety.

The EU seems to be applying its precautionary standard to products some there consider potentially unpopular. However, what would happen if the "certainty" the EU demands of these foods applied to other foods as well? If this precautionary standard were taken to its logical conclusion it would seem to bar consumption of any food but wild game, the only food one could argue with a degree of certainty that man has not tampered with, at least as of yet. Or, to take less extreme examples:

• Some European countries use dried animal blood as a clarifying agent in the production of their wines. We might question this practice, particularly given the incidence of BSE or Mad Cow Disease in Europe: should we therefore stop drinking French wines until we are sure they are safe?

• Most varieties of European barley are products of mutation breeding caused by heavy bombardment of nuclear radiation and that the mutagens are powerful carcinogens. Shouldn't products like whiskey and beer made from irradiated barley be proven safe before drinking?

To find political solutions to these issues is to run significant risks -- and not only of trade disputes. It is, in fact, to risk the public health. The political approach inherently moves away from decisions based on science, and towards decisions guided by ignorance, fear, or material gain. This approach resulted in the "mad-cow" fiasco in Britain, the tainted-blood scandal in France, and the recent dioxin debacle in Belgium.

In biotechnology, a politicized regulatory process has made the EU stop approving any new agricultural biotechnology products -- despite findings by many of the EU's own scientific panels determining these products to be safe. EU leaders admit that this moratorium could easily last another three years -- not because of any defined risk but due to political pressure.

The new leadership of the European Union, particularly President Prodi, knows there is a problem. President Prodi has openly spoken about the need for a new EU food regulatory system structured after the U.S. FDA. We should respect these are brave words and help foster the type of reform they represent. And we should learn from the problems facing the EU. We must avoid steps that politicize their authority, as well as our own. Otherwise, we undermine the very reason the public should trust their regulatory system.

Let me be clear. We do not insist that the EU -- or any other country -- adopt the U.S. standard for these products. All we are asking for are clear, transparent, timely, science-based and predictable regulations. As I like to say, if the rules are fair, tell us what they are and we will live by them.

CONSUMER CHOICE

There is, however, a further question: that is, whether a safe product will succeed in the market. In the case of biotechnology, some who are ready to accept scientific findings that biotechnology produces safe food also say they would like to know what they are eating, for religious or ethical reasons, or simply out of curiosity. And these are reasonable requests.

The challenge to all of us, whether we are government officials, industry executives or consumer advocates, is to find the right way to do so. Because just as the government has the responsibility to keep unsafe food off the shelves, it also has the responsibility to avoid creating unnecessary fears about foods that science finds are safe, and to ensure that the information consumers get is accurate.

This is the reason the U.S. government does not endorse mandatory labeling of agricultural products made by modern biotechnology. Our requirements for ingredient labeling apply the same to all foods. Since 1992, FDA has held an official policy that substances engineered into foods would be subject to pre-market approval as food additives if those substances were significantly different from those commonly found in the diet. At the same time, the FDA has decided that if a bioengineered food were not significantly different from its conventional counterpart -- i.e., its nutritional content and its allergenic properties are not significantly different -- there is no reason to label the product. That is, if a bioengineered product is found to be essentially the same as its conventional counterpart -- and this is the case in all biotech products in the market today -- FDA does not require any additional labeling information.

These are questions other countries are also grappling with, and I might mention that we do not necessarily object if they come to answers that differ from ours. Thus, we are not trying to stop countries like Japan, Australia, New Zealand, Korean and the EU from adopting labeling regulations on bioengineered products. But we have insisted, and will continue to insist, that any labeling regulations be clear, non-discriminatory, and can be implemented.

The difficulty the European Union has had in developing a labeling program illustrates one of the challenges governments face in trying to address legitimate consumer concerns. The EU has been trying to implement labeling regulations for the past 18 months and has failed -- and not for want of trying, but because the EU officials have been unable to trace, test, or even appropriately define a genetically modified product. Even companies which want to provide the EU with a "GMO-free" product have been unable to do so because the EU has not been able to define exactly what that means.

The challenge all of us face is how to answer reasonable consumer questions without discriminating against biotech products or otherwise raising unwarranted concerns. I believe this is a challenge we can meet.

In this Internet age, governments, consumer groups and the market can deliver more precise consumer information to a much wider audience. And all of us are doing so. From the government side, FDA, EPA and USDA have Web sites that provide a great deal of information about this technology, including their approval processes. A variety of independent Web sites contain news and facts about biotech products. And biotech companies themselves are very active in the field.

And voluntary labeling, based on the response of the market to consumer questions and concerns, can be very effective as long as it does not lead to untruthful claims about consumer benefits or threats. A number of companies -- ADM (Archer Daniels Midlands), Natural Products in Iowa, Gerber, the Hain Group in New York -- are marketing specifically food produced without biotechnology techniques. In addition, USDA is developing rules on organic labeling, which will result in standards for those who wish to use the "organic label." As a result of public views, USDA's current plans are to exclude genetically engineered products from those to be listed as "organic" foods. When completed, these standards on organic food will provide those consumers who want to avoid biotech foods for ethical or other reasons a way to do so.

CONCLUSION

What I outline is a moderate, long-term policy approach to the issues and challenges agricultural biotechnology raises. An approach which has at its core the fundamental principle of sound science.

If we take a different approach -- if we react based upon vague fears, or adopt political regulations that block safe products while perhaps allowing unsafe foods to reach the market -- we will have failed.

But if we rely on science, reason and informed choice in our decisions:

• Consumers will have their questions and concerns met with accurate information that allows them to make an informed choice.

• Our professional regulators will be able to concentrate their energies and wisdom on guaranteeing the safety of the food supply and the environment.

• Our companies will have confidence that products proven safe will not encounter unfair discrimination overseas, or for that matter at home.

• And our next generation will be able to enjoy the remarkable benefits biotechnology has to offer for a healthier environment, better medicines and a higher standard of living.

Thank you.

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