Remaining Cautious about the Precautionary Principle


The U.S. and the EU have had fundamental trade policy differences on hormones in beef and the use of biotechnology in food production for over ten year. The EU has been steadfast in its use of the precautionary principle in its regulatory approach on food and environmental issues. In an analysis for the United Nations University Institute for Advanced Studies titled “Trading Precaution: The Precautionary Principle and the WTO” Sabrina Shaw of the Secretariat of the World Trade Organization and Risa Schwartz, Counsel for the Ontario Ministry of the Environment, Canada, explore how the precautionary principle has developed and how it is used in the WTO.

The authors explain that the EU’s use of the precautionary principle first impacted trade and the WTO in 1989 when they banned the use of hormones for animal growth production. The same approach was used later to limit the use of crop biotechnology. The precautionary principle is included in the Treaty on European Union (the Maastricht Treaty) in title XVI on the environment, “…It shall be based on the precautionary principle and on the principles that preventive action should be taken…” that has been in effect since November 1, 1993. The treaty does not provide a specific definition, but the concept has been thoroughly debated within the EU.

A layman’s definition of precaution may be helpful. Webster’s New World Dictionary, Second College Edition from 1984, states “care taken beforehand; caution used in advance; a measure used beforehand against possible danger, failure, etc.” Many in the U.S. would say that is what government regulations and cost benefit analysis are all about, assessing risks and tradeoffs before moving forward on private activities or public policies.

The issue is not that simple. In discussing risk assessment under international treaties, the authors point out, “Risk assessment plays a key role in characterizing the potential adverse effects of certain actions, while precaution is an attitude in decision making that reflects an aversion to risk in the face of uncertainty.” It is not a case of rejecting risk assessment, but about which risks should be subject to assessment and which risks are too great to subject to assessment. Some U.S. food safety regulations are not based on cost benefit analysis because the risks are clear and overwhelming.

The precautionary approach conflicts with the WTO Agreement on Sanitary and Phytosanitary Measures that generally focuses on scientific principles and international standards. The WTO does not set standards; they depend on other institutions. Groups like Codex have spent years working out international standards to give participants in international trade some assurance on consistency of regulations across countries. Shaw and Schwartz note how difficult it is to reach agreements, “However, there seems to be little consensus evidenced, for example, in the Codex standard for minimum residue levels for growth promoting hormones that were referenced in the EC – Hormones dispute, as the standard was adopted by a vote of 33 to 29, with seven abstentions.” That is not a bright line for regulations to address concerns of supporters of the precautionary principle.

The authors explain, “The significance of the term ‘principle’ is that principles create obligations.” The U.S. government has accepted that there can be precautionary approaches or precautionary measure and these are used in many multilateral environmental agreements such as the Cartagena Protocol on Biosafety. Those are not the same as precautionary principles. They ask, “What types of obligations would ensue for Member States if the WTO Appellate Body were to accept that precaution is not merely an “approach,” but a “principle”?” That would be a monumental change.

This is not just an argument over words; words can have a huge impact on innovation and technological development. All change involves risk, and regulations have generally supported the idea that an absolute level of certainty cannot be required. The argument is over the acceptable level of uncertainty, which is greatly influenced by social and economic conditions. India with over one billion people and a need to increase food production to feed a growing population may be willing to accept a different level of uncertainty for biotech crops than Norway with a well-fed population which is not growing in size and has other economic activity for income to buy food.

The authors note that developing countries have much at stake in this debate and are uncertain about what to do. They need economic growth, but do not want to sacrifice their futures by accepting risks that have large long-term costs. They also want to maintain access to markets, but are concerned about the cost of complying with precautionary principles and the potential for them to be used as trade barriers which limit access to markets. These countries need to find a balance for these concerns that encourage innovation and economic growth while limiting long-term risks.

An argument can be made that the world is slowly but surely sliding towards the precautionary principle. The authors say, “The battle lines seem to be drawn – with the precautionary principle and the Biosafety Protocol on one side and ‘science-based risk assessment’ and WTO rules on the other.” If the precautionary principle is used enough it can become considered as customary international law. The EU already argues from that position.

For now, sorting out the issues in the WTO falls to the dispute settlement process. A clear definition of the precautionary principle would be helpful. These issues will continue to be political ones where political leaders will reflect the risk concerns of their citizens. Leaders need to continue to seek out common understandings based on science or other factors rather than making unilateral decisions that add to the already divisive debate.

Ross Korves

Ross Korves

Ross Korves served Truth about Trade & Technology, before it became Global Farmer Network, from 2004 – 2015 as the Economic and Trade Policy Analyst.

Researching and analyzing economic issues important to agricultural producers, Ross provided an intimate understanding regarding the interface of economic policy analysis and the political process.

Mr. Korves served the American Farm Bureau Federation as an Economist from 1980-2004. He served as Chief Economist from April 2001 through September 2003 and held the title of Senior Economist from September 2003 through August 2004.

Born and raised on a southern Illinois hog farm and educated at Southern Illinois University, Ross holds a Masters Degree in Agribusiness Economics. His studies and research expanded internationally through his work in Germany as a 1984 McCloy Agricultural Fellow and study travel to Japan in 1982, Zambia and Kenya in 1985 and Germany in 1987.

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