As a new world order emerges, numerous trade negotiations are either underway or about to commence. The key sticking points in these negotiations are found in traditionally protectionist sectors such as agriculture. As technologies and demographics shift, so too does the political power held by these sectors, potentially changing the direction of these negotiations. Emerging technologies, such as CRISPR, are forcing regulators in the European Union and elsewhere to consider legally differentiating between genetically edited organisms and genetically modified organisms — or not.
The European Court of Justice has ruled that new gene editing techniques fall within the broader definition of genetic modification, which is subject to strict regulation and, in some cases, outright bans within the European Union. The decision unveiled on July 25 modifies a previous opinion issued by the court that was less definitive. Last week's ruling will hobble research and development of agricultural biotechnology within Europe and likely prompt more biotech companies to move their operations outside the continent. As Stratfor wrote earlier this year:
Much of the world will seek to distinguish between the genetic editing of plants and animals and traditional, transgenic GMOs (and the reputation they have acquired). Such a distinction would permit a more rapid incorporation and dissemination of such products to reach markets faster and with lower costs. The evolution of new and evolving gene-editing techniques, such as CRISPR, and their relationship with policy is an example of the push and pull between emerging, potentially disruptive technologies and policy that is constantly playing catch-up.
Why it Matters
Agriculture remains a key sticking point in newly reinvigorated EU-U.S. trade negotiations. Over the weekend, officials on both sides traded rhetoric over the issue as they highlighted agriculture's role in the discussions. But beyond a few easy points of agreement, like increasing the volume of soybean trade between the two, agriculture is poised to remain a contentious issue throughout negotiations, especially where GM crops are concerned. The French, in particular, have been vocal about their opposition to a trade deal with the United States that includes agriculture. Given those limits, it's easy to see how disagreements over agriculture could lead to a collapse of the broader conversation between the European Union and the United States, inviting the return of a cycle of tariff threats and retaliation. In the long term, the fundamental disagreements on the future direction of agricultural technology — particularly the development and use of genetically modified organisms — could create even more barriers to a trade deal between the two.
A mismatch in definitions of what constitutes genetic modification could place future trade agreements at risk.
The European court ruling now sets the stage for a battle over what regulations on the applications of new technologies will become standard. Gene editing and GMOs have the potential to revolutionize agricultural production, but regulation could limit cutting-edge applications. When considering the long-term compatibility of agricultural trade, differing definitions of what constitutes genetic modification, especially whether or not to include the products of gene editing techniques in that definition, could hinder not just the current U.S.-EU trade talks but limit other trade deals as well.
The ruling could affect several EU trade agreements in various stages of negotiation, including those with Australia, Canada and the Common Market of the South (known by its acronym in Spanish, Mercosur). Like the United States, Canada does not equate genetic engineering with genetic modification. While the law in Mercosur member Brazil classifies any genetic engineering technique as a modification, the country is far more open to the use of modified organisms than the European Union. In Australia, the matter recently underwent a lengthy review, and policy modifications are under consideration.
What to Watch for Next
A mismatch in definitions of what constitutes genetic modification could place future trade agreements at risk. It could also set up a scenario in which other nations would feel the tug between the European bloc and the United States as negotiations over agricultural policy pull in opposite directions. This tug of war will be important to watch as the Brexit process unfolds and the United Kingdom tries to manage its relationships with both the European Union and the United States.