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98 EN Official Journal of the European Communities C 284/39

An understanding of the true situation brings only or their children, either now or perhaps in the future,
benefits. No poor person wants to continue to live in nor can they fail to be concerned about the future of
poverty. The solution thus lies in a fair and realistic society in the various Member States and the protection
shared responsibility for the prerequisites for develop- and promotion of the values which they espouse.
ment and a fair and realistic allocation of the fruits of
development. 15. The Committee made the same observations in
1989 in its information report. The above observations
14. The ESC urges that the proposals outlined in do not imply that nothing has been done in the meantime
this opinion be implemented without delay. Initial — far from it — what they do imply, however, is that
assessments — admittedly very limited — demonstrate, the situation has worsened and that resolute, realistic
if proof were needed, that poverty represents a serious policies, based on consensus, are needed to tackle it.
social and economic problem, quite apart from the
ethical, moral and civic aspects of this issue. Everyone This is an issue which fully concerns every single one of
is involved. No-one can be unconcerned for themselves us in the European Union.

Brussels, 1 July 1998.

The President
of the Economic and Social Committee

Opinion of the Economic and Social Committee on ‘Genetically modified organisms in
agriculture — impact on the Common Agricultural Policy’

(98/C 284/08)

On 11 December 1997, the Economic and Social Committee, acting under the third paragraph
of Rule 23 of its Rules of Procedure, decided to draw up an opinion on ‘Genetically modified
organisms in agriculture — impact on the Common Agricultural Policy’.
The Section for Agriculture and Fisheries, which was responsible for preparing the Committee’s
work on the subject, adopted its opinion on 15 June 1998. The rapporteur was Mrs Sánchez
At its 356th plenary session (meeting of 1 July 1998) the Economic and Social Committee
adopted the following opinion by 145 votes to two with six abstentions.

1. Introduction around the world (compared to 14 million in 1997),
essentially concentrated in the United States (some
88 %), South America (Argentine cotton; 6 %) and
Japan (also 6 %). The area under cultivation in China
1.1. The use of modern biotechnology in agriculture is unknown, but thought to be considerable. It is
offers new solutions which are, at first sight, guarantee- calculated that worldwide, 60 million hectares will be
ing yields, helping to cut the use of plant health products under this form of cultivation by the year 2000, only
in combating pests and diseases, and creating quality 1 % of which will be in Europe.
products. A debate is opening up within the EU on the
use of transgenic organisms in farming, reflecting views
on the possible undesirable medium- and long-term
effects on consumer health and the environment of their 1.2. This opinion sets out to adopt a flexible position
application to the plant sector. Meanwhile, genetically which, nevertheless, constantly takes account of all
modified produce from non-EU countries, the US in those concerned, farmers, consumers and agro-industry,
particular, is being marketed. and to reach conclusions. It will focus in particular on
the effects which the cultivation of transgenic organisms
would have on the CAP and, consequently, on final
1.1.1. According to estimates for 1998, transgenic product prices, with a view to the possible impact of
plants occupy 30 million hectares of cultivated land their widespread presence on the international market.
C 284/40 EN Official Journal of the European Communities 14.9.98

1.3. A key issue, which needs to be looked at first, is techniques do not currently concern complex or non-
that of permission to register and market genetically localized genetic characteristics.
modified varieties. Not all Member States have similar
policies in this regard: some Member States still refuse
to allow genetically-modified maize varieties from the 2.2. In February 1998 the European Parliament adop-
United States to circulate within their territory, in spite ted a balanced opinion on biotechnologies, firstly setting
of Community authorization. France authorized the out the expected benefits for agriculture and urging the
marketing of American transgenic maize several years Union to make a major research effort in this field to
ago, but until recently would not allow it to be grown catch up with its international competitors. It also calls
on its own territory. for international harmonization of the legal framework
governing the authorization of GMOs in order to prevent
distortions of competition. Secondly, it underlined the
human and environmental risks posed by biotechnolo-
1.4. Authorization of transgenic crops in the EU gies, as well as the ethical questions raised by their use.
must be preceded by comprehensive information and
wide-ranging public debate involving all interested
parties, setting out in scientific terms both the advantages 2.3. At European market level, on 22 April 1998
and disadvantages for farmers and consumers: market the Commission delivered a favourable opinion on
success depends on consumer confidence. Dialogue marketing three genetically-modified varieties of maize
should be sought between GMO producers and farmers. and one of colza.

3. Technical section
2. General comments

2.1. State of biotechnological progress at experimen- 3.1. Definition of genetically modified organisms
tal level and in practical applications.

3.1.1. A genetically modified (or transgenic) organism
2.1.1. Genetic engineering techniques were ready for is a living organism to which a given gene, identified on
experimental use by the mid 1980s. They began to a donor organism, has been transferred by genetic
provide commercially exploitable products in the early engineering. The transferred gene confers a new charac-
1990s, with the US, Japan and China leading the teristic or property to the plant, which is passed on to
field. The development of practical applications in the succeeding generations.
European Union has been held up by the obstacles which
have been erected, in particular by the slow and complex
official authorization procedures, the delay in granting 3.1.2. Genes may be transferred by using a bacterium
patents, and also by a less favourable economic and such as Agrobacterium tumefasciens, which is capable
industrial environment. of injecting genetic material into a plant cell, by means
of plasmids. The genes are then incorporated into the
genome of the infected cell. Another method is to
bombard a plant cell with beads coated with DNA
2.1.2. Applications currently concern bacteria, fungi
fragments containing the transfer gene.
and certain plant organisms, although potential also
exists for animals. Genetic engineering applications for
animals are not yet ready or profitable, and raise ethical 3.1.3. Biotechnology includes a variety of techniques
problems for the higher animals. and tools in addition to transgenesis, such as in-vitro
reproduction, the large-scale production of metabolites
via bacteria in fermentation, etc. Not all of these
2.1.3. Transferable characteristics are simple ones, techniques have necessarily resulted in large-scale appli-
coded by a clearly determined single locus gene. These cations.

3.2. Summary of commercialized GMO applications

As of January 1998 Characteristic United States Canada Japan EU

Soya tolerance to glufosinate- Agr Evo
tolerance to glyphosate Monsanto Monsanto Can. Monsanto Monsanto
Inc. Japan Ltd.
14.9.98 EN Official Journal of the European Communities C 284/41

As of January 1998 Characteristic United States Canada Japan EU

high oleic acid content Du Pont Agr

Colza/Canola modified lipid profile Calgene Calgene Inc.
tolerance to glufosinate- Agr Evo Can. Agr Evo Plant Genetic
ammonium Inc. System (P) (F,
UK, April 1998)
tolerance to imidazole Pionner Hi Bred
Int. Inc.
tolerance to glyphosate Monsanto Can. Monsanto
Inc. Japan Ltd.
tolerance to a herbicide Monsanto
Japan Ltd.
Sterile male, fertility restorer Plant Genetic

Maize resistance to corn borers Northrup King Ciba Seeds & Monsanto Novartis
(Novartis) Myogen Co. Japan Ltd. (Dec. 1996)
resistance to corn borers/tole- Novartis Novartis Novartis Novartis (glu-
rance to glufosinate or gly- fosinate), Agre-
phosate vo (glufosinate),
(F, UK April
resistance to lepidoptera Monsanto Ciba
tolerance to glufosinate De Kalh Agr Evo
male sterility tolerance to glu- Plant Genetic
fosinate ammonium System
tolerance to imidazole Pionner Hi Bred
Int. Inc.
Tolerance to herbicide Ciba Geigy
resistance to an insect Ciba Seeds
resistance to an insect De Kalb Ge-
netics Corpora-
tolerance to glyphosate/ Monsanto Agr.
resistance to lepidoptera Co.

Potato resistance to insects
resistance to coleoptera Monsanto
resistance to Colorado beetle Monsanto Nature Mark

Tomato retarded ripening Agritope Cal-
gene Monsanto
DNA Plant
retarded softening Zeneca & Peto-
C 284/42 EN Official Journal of the European Communities 14.9.98

As of January 1998 Characteristic United States Canada Japan EU

Cotton tolerance to sulphonyl Du Pont de
tolerance to glyphosate Monsanto
tolerance to bromoxinyl Calgene
resistance to lepidoptera Monsanto

Pumpkin resistance to a virus Upjohn
(3 viruses)
(2 viruses)

Papaya resistance to virus PRV Cornell U
(Papaya Ringspot Virus)

Tobacco tolerance to bromoxinyl SEITA (F)

Chicory male sterility + tolerance to Bejo Zeden BV
glufosinateammonium (NL)

Apart from the major countries mentioned in the above of farming on the environment. They also entail risks
table, transgenic soya is being grown in Argentina and for farmers due to their dependence on companies,
Brazil, together with transgenic cotton in Argentina and when the latter are in an oligopolistic position and
Australia, and corn borer resistant maize in Argentina. require farmers to buy both transgenic seeds AND
This list is not exhaustive and is changing every month. the herbicide in question (see point 3.4.5).
It should be pointed out that the area which may be
under cultivation in China is unknown, but could be — The advantages lie in ease of weed control. This can
considerable. be accomplished with a single, generally recent and
selective product, which is consequently of low
persistence and is relatively harmless to the environ-
ment. Repeated treatment is unnecessary: ‘insurance’
3.3. Expected benefits treatments in particular can be avoided. Gains in
terms of cost, time and pollution reduction are
therefore considerable. Difficulties may arise in
3.3.1. In addition to those varieties currently on the destroying regrowth of tolerant plants in subsequent
market which have been improved by genetic engineering seasons.
— some dozen food or commercial crops — enormous
research-based progress may be expected imminently in
this area, although most applications are still (June B. resistance to diseases (attacks of viral, bacterial and
1998) at the experimental stage. The potential improve- fungal origin)
ments are very considerable, particularly for food crops
in southern countries, where the contribution of GMOs
will, quite simply, be vital. Nevertheless, biotechnology — the advantages of plants acquiring resistance to
— just like any other plant improvement technique — disease (by means of transgenesis) are clear: in
can never represent a miracle cure for all ills. Huge particular, conventional means of combating bac-
improvements may be expected, but it would be danger- teria and viruses are rare: indeed some cannot be
ous to view them as a panacea. Mention should also be combated. In nearly all cases, the inherent resistance
made of the expected development of GMOs in the area of the plant means that no treatment is necessary,
of non-food products. These represent a valuable source and the impact on yields is substantially greater
of diversification for agriculture. than that obtained with treatment. Clear gains are
therefore made in this area in terms of time,
simplification of technical procedures and costs, For agricultural production (technical provided that transgenic seed is not marketed at a
improvements, yields, product quality) prohibitive cost.

A. tolerance to herbicides C. resistance to insects and other pests

— The most advanced applications are in this sphere, — in the instance of transgenic maize resistant to corn
and are very encouraging in terms of agricultural borers, the gene encoding a toxin causing the death
production, limiting production costs and the impact of the attacking insect, generally derived from a
14.9.98 EN Official Journal of the European Communities C 284/43

bacterium (Bacillus thuringiensis), is incorporated For product adjustment to new market require-
into the plant’s genome by genetic engineering. The ments
plant therefore becomes more resistant to the insect,
and insecticide treatment is no longer necessary.
Yields would be boosted significantly (by approxi- New opportunities for the production of highly specific
mately 10 %), in comparison with crops treated with compounds
a pesticide. There may however be a risk of secondary
fauna being affected by these toxins. Research needs
to be carried out over a period of time. N. vaccines

D. resistance to difficult soil or climatic conditions:
O. antibiotics
drought, salinity, etc. (Nordic countries, drought
regions, developing countries).
P. human factors highly valuable to medicine (haemo-
— This facilitates adaptation by plants to less favour- globin, insulin, the factor VIII which is essential
able environments and could offer hope to in treating haemophiliacs, growth hormone; for
developing countries. References are still mostly example, it is possible to induce the tobacco plant
experimental. to produce a pancreatic lipase which is highly
valuable in treatment of serious diseases)

Results Q. processing aid microorganisms (yeasts, fermenting
agents), enzymes; e.g. producing goats’ cheese using
chymosims of vegetable origin enables vegetarians
E. (appreciable) improvement and greater regularity of to eat cheese;

F. control of production costs and economic margins. R. products used in the agrifoodstuff industry (flavour-
ings, additives), GMO response to increasing market
segmentation, use of the niches thereby created. For the environment: more environment-
friendly procedures For food self-sufficiency of developing
countries, etc. definitely encouraging in theory — in
G. lower level of fertilizer inputs due to improved plant practice, considerably less promising, and dependent on
assimilation the public sector research effort.

H. reduction or possible halt to insecticide and other S. GMO development costs are high for seed compa-
pesticide applications for the crops in question nies; they are therefore not prepared in the short
term to develop products whose rapid payback on
prime markets is not guaranteed. With the notable
I. use of non-selective ‘broad-spectrum’ herbicides exception of sweet potato, it is unlikely that GMOs
which are rapidly degradable, reduction in the emerging from private sector research concern food
number of treatments. crops relevant to developing countries; public sector
national or international agricultural research centr-
es could fill this important gap. The International For food product quality Rice Research Institute (IRRI), for example, is
currently making the final preparations for trans-
genic rice varieties whose full importance is reflected
J. enhanced product flavour in the fact that rice is the world’s leading crop, and
an essential foodstuff. ORSTOM (French Institute
of Scientific Research for Development Cooperation)
K. vitamin or protein content, better balance between is presently working with ILTAB (United States)
saturated and unsaturated fatty acids and between to finalize manioc varieties improved by genetic
different amino-acids, greater content of oil or engineering.
certain valuable compounds Be that as it may, GMOs represent one of
L. length and quality of conservation (tomato, melon) the only ways of enabling developing countries to
achieve food self-sufficiency, with world food demand
set to double in the coming decades and little opportunity
M. digestibility and elimination of allergenic com- existing to extend the amount of land under cultivation
pounds. around the world. It is, however, the developing
C 284/44 EN Official Journal of the European Communities 14.9.98

countries — where farm land is least available and is, V. transfer of antibiotic resistance to bacteria found on
indeed, shrinking — who are generating this increase in man. According to GMO production companies, in
demand. the near future it will be possible to dispense with
the marker characteristic provided by the gene for
antibiotic resistance to distinguish those plants on
which transgenesis has been successful, during the Advantage of molecular engineering over process of creating the variety (the agronomic
conventional genetic improvement characteristic to be transferred to the host plant is
not necessarily an efficient marker). This risk, the
real size of has not been demonstrated, should By its nature, molecular engineering enables therefore soon be eliminated.
the transfer gene to be isolated, whereas conventional
genetic improvement relies on crossing the entire genome
of the improving organism with that of the crop variety According to the specialists consulted, these
to be improved. In this case, successive back-crossings risks are real, at least theoretically, but the media have
with the target parent is necessary to restore its agro- exaggerated their importance by focusing on them
nomic characteristics to the full. This leads to a waste in recent months and presenting potential problems
of several years and high costs, for a partial result only. detected prior to authorization as problems arising on
Genetic engineering allows highly-targeted improve- the market itself.
ment of plant characteristics. It also allows more
accurately targeted risk prediction.

3.4.3. I n c r e a s i n g u n i f o r m i z a t i o n o f t h e
3.4. Possible or probable risks arising from the use of
GMOs Although in preparing their new varieties,
seed producers call upon a wide range of preserved
3.4.1. Cross-breeding with nearby adventitious genes for each plant grown, the use by farmers of a
plants, conferring herbicide or antibiotic resistance: this small number of varieties, particularly transgenic ones,
risk is only likely with allogamous plants when closely would further limit the already low level of diversity in
related species are among adventitious plants present in the genetic pool of plant populations in areas under
the crop region. Only research on colza has currently cultivation. The adaptability of cultivated in the event
revealed any real possibility of crossing with a nearby of attack by pests or mutant adventitious plants would
adventitious plant — wild radish — which could lead then be seriously reduced.
to treatment difficulties if wild radish acquired resistance
to colza herbicide by this natural cross-fertilization. The
possibility always remains in this case of destroying 3.4.4. D e p e n d e n c e o f f a r m e r s o n p l a n t
resistant wild radish using other herbicides. Such a risk health and seed multinationals
can practically be ruled out with straw cereal crops,
which are exclusively autogamous, and with maize (an
imported plant with no close relations in our part of the
world). There is a further risk, in particular with strongly Since most seed companies around the world
allogamous maize, of contaminating neighbouring fields have been bought by multinational plant health com-
by transmitting the transgenically acquired characteristic panies, the current picture is one of the same firm
— this is not necessarily harmful but would be unintend- obliging farmers to buy both herbicide-resistant seeds
ed and unwanted by neighbouring farmers. Particular AND the herbicide in question. In the US, contracts exist
difficulties could arise where neighbouring crops must under which farmers earmark part of their production for
meet precise specifications (quality or organic pro- the company in question, which are highly restrictive for
duction labels, for example). farmers. This practice may spread, furthering reinforcing
the small number of all-powerful plant health product
3.4.2. H u m a n h e a l t h r i s k s

3.4.5. A t w o - f o l d n e e d : s t r i c t , h a r m o -
nized and credible controls on
U. risk of allergies: for example, transferring genes from marketed GMOs upstream of the
groundnuts or Brazil nuts to plants which are in market; subsequent ‘biomonito-
principle non-allergenic could trigger allergies in ring’ of products
persons unable to tolerate these foodstuffs; all these
problems were detected far upstream during the
multiple and rigorous experimental phases, which
are a precondition for authorization. No product This need is acknowledged by all those
presenting such drawbacks has, of course, been concerned with GMOs. It is the only way of giving
marketed. consumers the confidence which is necessary if they are
14.9.98 EN Official Journal of the European Communities C 284/45

to accept these products. According to recent FAO and authorization and experimentation, appear considerably
OECD recommendations, controls must, as a minimum, less favourable in the EU than in its main competitors,
apply to: the US and Japan. Harmonization should be sought at
international level to prevent distortions of competition
— differences between GMOs and ‘conventional’ prod- putting the EU even further back in research terms.
ucts in terms of nutritional make-up (differences Possible acceleration of procedures must not of course
which might, amongst other things, clash with under any circumstances jeopardize authorization credi-
religious or cultural obligations); bility. The ESC calls upon the Commission to ensure
that the WTO recognizes the need for GMOs to be
— absence of allergens;

— total product non-toxicity, which must be guaran-
teed by controls.
3.9. Possible consequences of expanding the use of
GMOs on the CAP, which is currently being
3.5. European rules on GMOs and labelling (see reformed (Agenda 2000 proposals)
Appendix I)

3.5.1. Consumer confidence must be strengthened by
labelling which matches the information required for 3.9.1. The rules governing the Common Agricultural
product marketing, as stipulated in Articles 14 et seq of Policy are currently the object of reform proposals by
Directive 90/220/EEC. the Commission, as set out in the Agenda 2000 document.
Without wishing, at this early stage, to prejudge the
outcome of these proposals over coming months and
3.6. Consumer protection and information pending the adoption of any regulations by the Council,
it is noted that the proposals tend generally towards a
reduction in support prices and some de-linking of direct
3.6.1. Consumers, who are the final destination of aid and production. They would lead to an alteration in
GMO products, must have a dual channel of infor- the nature and objective of the CAP, moving away from
mation: firstly, information issued by the competent market guidance towards income support. They also
bodies, at both EU and Member State level, in accordance aim to forge a closer connection between support
with their powers to authorize the marketing of such and the achievement of environmental objectives. The
products and, secondly, the necessary data which must development of GMOs does not in principle appear to
appear on product labels, in order to avoid a negative contradict these aims.
system resulting in confusion on the market, particularly
with regard to combinations of GMO and naturally
grown products. At this stage, we can only look at the possible links
between the development of GMOs and each of the six
new CAP objectives proposed by the Commission for
3.7. Assessment of current GMO access to the Euro- after the year 2000:
pean market today: separation and labelling prob-
— Improving the competitiveness of European farm
produce: increased use of GMOs would appear to
3.7.1. It is certain that an undetermined proportion help largely achieve this objective where plant crops
of US soya and maize imported into the European Union are concerned. GMOs would allow losses due to
today is made up of GMOs. The US, however, does not pests and diseases to be limited (leading to increased
separate GMO and non-GMO grains. Under these yields) and should contribute to lowering production
conditions, clear and unambiguous product labelling costs, if GMO prices come down (fewer treatments
(‘contains’/‘does not contain’ GMOs) — even if an required).
agreement were to be reached at European level (see
point 3.5) — would in practice be impossible for
— GMOs will also help improve product quality (richer
imported produce. There is a fundamental divergence
in valuable compounds, enhanced flavour, better
between public opinion in Europe and in the US.
preservation, etc.). Product quality, particularly for
American consumers are entirely unconcerned about
European farm and food products, is a decisive
consuming transgenic products.
factor in their competitiveness. Competitiveness is
not, it should be remembered, simply a matter of
3.8. Need for international harmonization of GMO
experimentation and authorization conditions
— Safety and quality of agri-food products: if biotech-
nologies are used sensibly and in full accordance
3.8.1. The conditions under which research is sup- with the precautionary principle, they can make a
ported, and administrative requirements for GMO positive contribution to achieving this objective,
C 284/46 EN Official Journal of the European Communities 14.9.98

since they permit higher quality foodstuffs to be 3.10.3. As part of the broad debate generated by
produced. GMO safety and consumer information Agenda 2000 on farm policy, the ESC must not lose
guarantees must be applied with the utmost rigour. sight of the need to investigate whether GMO crops
might represent a remedy for employment losses, as
expected from certain COM reforms.
— Integration of environmental goals into the CAP:
transgenic crops need fewer plant-health treatments
and can therefore make a substantial contribution
to a healthier interaction between farming and
the environment. However, the potential risks of
spreading genetically-introduced characteristics 4. Conclusion: if GMOs are to be acceptable, there is
through the environment must be studied with the a need for more, and transparent, communication
greatest care before any authorization is granted to
market GMOs, and biomonitoring must continue
after authorization.
4.1. GMOs are necessary for the development of
European agriculture.
— Stabilization of farm income: insofar as, in the
Commission proposal, the proceeds of sale of prod-
uce account for a falling share of income compared
with direct support, the impact of more regular 4.1.1. The above assessment indicates that GMOs
yields is lessened. However, the development of are one among a range of indispensable factors for the
GMOs would still have a positive influence on development of European agriculture over the coming
income stabilization, by reducing crop-related uncer- years. The expected gains in terms of guaranteed yield
tainties. levels, the environment, lower costs and product quality,
together with diversification into non-food applications,
represent an asset which European agriculture cannot
— Source of supplementary income and employment afford to go without. GMOs are one tool amongst
in agriculture: GMOs can contribute to this aim by others, not a panacea, but are nevertheless essential.
the improvements they can bring to the ever-growing
range of dietary and non-food applications for
energy or medical purposes.
4.2. Authorization trials should be rigorous but not
unduly obstructive.

3.10. Social effect of producing GMOs 4.2.1. In view of the presently imperfect knowledge
of the potential negative effects of GMOs on the
environment and public health, and the absolute need
to apply the precautionary principle to this question,
3.10.1. An initial estimate, based on econometric pre-authorization trials must continue to be carried out
studies (1), suggests that growing GMOs will increase with the utmost rigour. Harmonization of international
farm employment, on account of the increase in land rules in this sphere should however be pursued in order
under cultivation and, above all, the positive impact of to avoid the distortions of competition which would
obtaining a large quantity of value-added products such arise if one country applied stricter and more restrictive
as medicines, additives, perfumes, etc., as well as new rules than others. Harmonization should be up to the
fuels or biodegradable plastics. highest common denominator, since public health is at

3.10.2. Despite the highly positive attitude of the
European authorities regarding increased employment 4.3. Product performance monitoring must be carried
through GMO production, a number of clarifications out by a biomonitoring organization.
need to be made. Firstly, there are differences in national
attitudes, meaning that production will not be uniform
throughout the EU; and secondly, the lack of dedicated
research, combined with the slowness of authorization 4.3.1. As the long-term effects of the spread of GMOs
and patent procedures for discoveries, could delay are inherently unknowable at present, it would appear
production and result in seed prices having a negative necessary to monitor approved products by regular
effect. checks over a period of time. Such checks would not
relate to any major faults which must of course be
detected before release for marketing and would prevent
authorization. Their aim would be to guard against
minor but undesirable effects of products emerging with
(1) Carried out by the Science Policy Research Unit, University time. This supervision is proposed by national labelling
of Sussex, UK, and presented at EuropaBio 97, Amsterdam. bodies under the title of ‘biomonitoring’.
14.9.98 EN Official Journal of the European Communities C 284/47

4.4. Full and transparent communication is a sine 4.5. Labelling and the separation of distribution
qua non for the restoration of European consumer chains lie at the heart of the debate.
4.5.1. At both EU and Member State level, the various
4.4.1. GMOs have been coming onto the market for actors of civil society (administrations, politicians,
several years. It is however clear that farmers and final farmers, consumers and GMO producers) are currently
consumers in Europe are reluctant and have voiced fears engaged in a debate on how to label products. The
about these products in the absence of the necessary Commission’s proposal that products be labelled ‘con-
thoroughness and transparency in communicating their tains GMOs’ or ‘may contain GMOs’ is unacceptable
advantages and potential risks. Full, clear and completely and has not met with the Council’s support. Moreover,
transparent information — on the potential disadvan- on 26 May 1988 the Council adopted a regulation
tages too — would certainly increase consumer accept- abolishing the ‘may contain GMOs’ option for processed
ance of GMOs. At present, consumers have the feeling products. The debate also concerns the necessary sepa-
that they are not being properly informed, and this fuels ration of GMO and non-GMO distribution chains, the
their legitimate fear of being misled. only way of allowing satisfactory labelling.

Brussels, 1 July 1998.

The President
of the Economic and Social Committee


to the opinion of the Economic and Social Committee

GMOs — Current state of Community legislation

— On 23 July 1997 the Commission presented its general guidelines on the labelling of products derived
from GMOs. These guidelines aim to provide consumers with coherent information, by creating a
framework for planned legislation in this field.

— Community legislation on GMOs comprises four legal bases, some of which have been or are
currently being amended, covering the following fields:

• the contained use of genetically modified micro-organisms;

• horizontal legislation, deliberate release of genetically modified organisms into the environment:
‘living’ GMOs;

• sectoral legislation: new foodstuffs (novel foods regulation of 15 May 1997), animal feed (in
preparation), seeds (in preparation), pesticides (under examination);

• a specific regulation on genetically modified maize and soya.

— Lastly, it should be pointed out that product safety and labelling are two separate aspects of
regulation. Labelling cannot substitute proper safety assessment (risk analysis) prior to each
marketing authorization.

Guidelines for a Community labelling system

On 23 July 1997 the Commission put forward general guidelines for labelling GMOs, whether ‘living’
GMOs, processed GMOs or products based on them, whether of Community origin or otherwise. These
guidelines will provide a framework for proposals for new legislation or amendments to existing
C 284/48 EN Official Journal of the European Communities 14.9.98

— the guidelines are based on the following principles:
• science-based labelling, throughout the food chain;
• labelling aimed to provide consumers with clear, honest and neutral information on the genetically
modified origin of products;
• labelling in accordance with the European Union’s international obligations.

— the guidelines propose three categories of label:
• ‘contains material of GMO origin’: mandatory labelling for products which can be proven to
consist of, contain or be derived from GMOs;
• ‘does not contain material of GMO origin’: voluntary labelling for products not containing GMO
or derived substances;
• ‘may contain material of GMO origin’: mandatory labelling of products where the presence of
GMO cannot be excluded (as in cases of mixing).

With regard to the principle of voluntary labelling for non-GMO products (‘does not contain material
of GMO origin’ formula), the Commission is currently considering a framework for Community
certification and labelling.

Contained use of genetically modified micro-organisms

Council Directive 90/219/EEC, adopted on 23 April 1990, is the basic Community text on the contained
use of genetically modified micro-organisms.

The rules set out in the directive are highly technical and only concern the use or handling of genetically
modified micro-organisms within research centres or laboratories. Its content is therefore not analysed
in this document.

It should nevertheless be noted that on 6 December 1996 the Commission proposed to amend this
directive to bring it into line with technical progress and new knowledge in the area of risks.

Horizontal legislation: deliberate release into the environment of genetically modified organisms (‘living’

— Scope

Council Directive 90/220/EEC of 23 April 1990 represents a horizontal type Community legislative
framework, intended to guarantee market conditions as well as human health and environmental
protection for ‘living’ OGMs (such as cereals). It does not apply to processed or derived products, but
provides for the development of sectoral legislation (of the novel food type) to be adopted in line with
technical progress. Directive 90/220/EEC does, however, apply to products not covered by sectoral

— Labelling

Initially, Directive 90/220/EEC was virtually silent on labelling. The Commission acted in two stages to
remedy this situation:
• to meet immediate needs, on 18 June 1997 the Commission adopted a directive (97/35/EC) amending
an annex to Council Directive 90/220/EEC, introducing compulsory labelling if a product is composed
of or contains GMOs. Indication of the ‘possibility that genetically modified organisms may be
present’ is required in the case of products containing mixtures of GMOs and non-GMOs. Since this
amendment to Directive 90/220/EEC is not retroactive, it does not cover the two products (soya and
maize) notified before 18 June 1997.
• to provide a more complete framework, on 26 November 1997 the Commission presented a proposal
to amend Directive 90/220/EEC. The proposal aims to adjust the current directive in line with technical
progress, to clarify its scope and to make up the shortcomings observed in implementation, concerning
both authorization procedures for placing GMOs on the market and labelling rules. It lays down
precise labelling measures incorporating the Commission’s guidelines adopted in July 1997. However,
since the text is not yet available, the planned terms for the labelling and the detail of certain regulatory
aspects remain unknown. The Commission was to present its proposal officially on 23 February. The
proposal is then to be discussed with a view to adoption by the European Parliament and the Council
(Environment Council meeting, 23 March 1998).
14.9.98 EN Official Journal of the European Communities C 284/49

Sectoral legislation: novel food, animal feed (in preparation), seeds (in preparation), pesticides (under

— Scope (novel foods)

European Parliament and Council Regulation (EC) No 97/258 on novel foods, which came into force on
15 May 1997, concerns final products. It applies to novel foods and food ingredients, including those of
genetic engineering.

— Labelling (novel foods)

The novel foods regulation is the first item of European legislation to have incorporated a specific
labelling framework for biotechnology products. It establishes compulsory labelling and requires
consumers to be informed of the differences between novel products and equivalent existing products.
This regulation, which preceded the guidelines adopted by the Commission in July 1997, is not based on
the three labelling categories proposed by the guidelines.

— Animal feed, seeds and pesticides

The Commission is to submit proposals, including labelling rules which tally with the guidelines adopted
in July 1997, during the course of 1998.

Labelling: the specific case of soya and maize

One variety of genetically modified soya and of maize was authorized under the terms of Directive
90/220/EEC before it was amended on 18 June 1997, and before the novel food regulation came into
force. It was therefore necessary to lay down labelling rules for these two varieties and products derived
from them, which were not initially subject to compulsory labelling. The Commission negotiated the
possibility of voluntary labelling for these two varieties with the producers in question. In contrast, in
order to rectify the specific situation of products derived from the two varieties, and so as not to give
rise to a contradiction between these products and those which in future will be authorized under
Directive 90/220/EEC, as amended, and/or the novel food directive, the Commission has taken the
following steps:

• to meet immediate needs, on 19 September 1997 the Commission adopted Regulation (EC) No 1813/97
which, with effect from 1 November 1997, provides for labelling for products containing genetically
modified soya or maize or derivatives, similar to that imposed by the novel food regulation. This ad
hoc measure states that the detailed arrangements for labelling are to be specified at a later stage.
• to provide a more complete framework, on 3 December 1997 the Commission submitted a proposal
for a Commission regulation laying down labelling arrangements, on the basis of the novel food
regulation and the July 1997 guidelines, for foodstuffs based on genetically modified soya or maize
(i.e. processed products). In the proposal, the Commission proposes scientific criteria for labelling.
The presence of modified DNA was selected as a criterion, since the Commission believes that it will
enable a larger number of foodstuffs to be labelled than the modified protein criterion. However,
where the DNA criterion is not decisive, a comparison will be carried out between the proteins of
modified and of conventional products.

The draft must be approved by a qualified majority of the Standing Committee on Foodstuffs in order
to become a final regulation, replacing that of 19 September.

However, differences of views between the Member States have rapidly emerged on the Standing
Committee: only Austria, Germany, Denmark and Sweden have expressed support for the Commission
text. The proposal’s most controversial point has proved to be the criterion selected by the Commission
for detecting GMOs, i.e. the presence of modified DNA. Most other Member States consider that the
detection of modified proteins alone should serve as the criterion for labelling.

In the absence of a qualified majority opinion on the Standing Committee at its meeting of 15 January
1998, it fell to the Agriculture Council to decide on the matter.

Following a number of examinations and consultations with the Commission, the latter finally backed
the British Presidency’s counter-proposal, which enabled the Council to reach a decision on 26 May
1998 [Regulation (EC) No 1139/98 (1)]. The regulation specifies that it is modified DNA or modified
proteins which will be subject to detection and will require labelling.

(1) OJ L 159, 3.6.1998.
C 284/50 EN Official Journal of the European Communities 14.9.98

In contrast to the Commission’s initial stance, based on its report of 23 July 1998, the regulation of
26 May 1998 abolishes the ‘may contain GMOs’ option.

Moreover, it establishes a list of foodstuffs not subject to labelling (the list is initially empty, and will
gradually be built up on the basis of opinions from the scientific committees) and in the preamble
introduces the concept of a threshold for DNA or protein presence, below which labelling will not be
necessary. No threshold value is set.

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Directive on
a common system of taxation applicable to interest and royalty payments made between
associated companies of different Member States’ (1)

(98/C 284/09)

On 30 March 1998 the Council decided to consult the Economic and Social Committee,
under Article 100 of the Treaty establishing the European Economic Community, on the
above-mentioned proposal.
The Section for Economic, Financial and Monetary Questions, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 9 June 1998. The
rapporteur was Mr Pelletier.
At its 356th plenary session on 1 and 2 July 1998 (meeting of 1 July) the Economic and Social
Committee adopted the following opinion by 136 votes to seven, with four abstentions.

1. Introduction displayed concerning the plan — approved by the
Council and referred to in the explanatory memorandum
— for a directive ‘to ensure minimum effective taxation
of income from savings’ while bearing in mind the need
1.1. The ESC welcomes the Commission’s move to to preserve the competitiveness of European financial
rectify a tax discrepancy which is an obstacle to markets at international level, which presupposes exten-
completion of an integrated single market. sion to non-EU countries and to the Member States’
dependent or associated territories (3).

1.2. Abolition of the withholding tax levied by some
Member States on interest and royalties has long 1.5. The purpose of the draft directive is to exempt
been recognized as being of major importance for a interest and royalty payments made by a company of
Community-wide market. one Member State to an associated company (in which
the first company has directly or indirectly a minimum
holding of 25 %) of another Member State from any
1.3. The Commission’s first initiative in this direction withholding tax in the Member State from which the
dates back to 20 April 1990. In 1992 the Ruding report payments are made. Hence tax on revenue deriving from
— broadly approved by the ESC (2) — prioritized this such payments shall be levied solely by the Member
reform. Unfortunately the Commission, in the absence State in which the beneficial owner is located.
of consensus within the Council, decided in 1994 to
withdraw its proposal. Eventually, in December 1997,
the Ecofin Council gave the Commission the go-ahead
to draw up the proposal on which the ESC is now
consulted. 2. Financial justification for the draft directive

1.4. The ESC acclaims the Commission’s persistence, 2.1. From the financial angle, the aim is to avoid
not to say obstinacy. The same persistence should be double taxation — which is undesirable per se — or, at

(1) OJ C 123, 22.4.1998, p. 9. (3) Conclusions of the Ecofin Council meeting on 1.12.1997
(2) ESC opinion of 24.11.1992; OJ C 19, 25.1.1993, p. 65. regarding fiscal policy (OJ C 2, 6.1.1998).