John Purvis

SUBJECT: TESTING COSMETICS ON ANIMALS AND THE WTO

Under WTO rules, imported products must be treated the same as 'like products' of domestic origin. In past cases of dispute, a decision is based on the end product and not the way a product is produced. It has been argued, therefore, that the introduction of a ban on the marketing of cosmetic products if they are tested on animals will result in a trade war as the process, i.e. not testing on animals, would not be taken into consideration.

In light of the Parliament' s vote on 3 April 2001 to move towards such a ban, what action would the Commission take to avoid a potential trade war and does the Commission consider that the WTO rules should be interpreted to include the processing of a product when deciding on its 'likeness'?

Lamy, Commission. - (FR) This question relates to the testing of cosmetics on animals and considering the issue in the context of the WTO.

The Commission shares Parliament's objective of improving animal welfare and we fully acknowledge that placing restrictions on animal testing would contribute to the achievement of this objective. On the other hand, the European Union is also required to provide a high level of health protection and to ensure that its policies are in line with its international commitments. Now, a marketing ban that is based not on the product characteristics but on manufacturing procedures would certainly force many of our trading partners to change their policy and legislation in order to be able to enter our market. This could, in fact, provoke a reaction. We should be aware that, until now, animal testing is the only method used in most countries to assess the safety of products intended for consumption, particularly cosmetics.

As far as we are concerned, we remain convinced that there are other methods, aside from a marketing ban - which is Parliament' s position - which can be used to bring an end to testing the finished product and its cosmetic ingredients on animals. This is the purpose of the proposal that the Commission made in order to ban animal testing within the European Union. In our opinion it is the acceptance of alternative testing methods by the international community that will provide the most effective contribution to animal welfare. We are committed to encouraging the use of in vitro cosmetic testing, particularly within the OECD in order to move forward in this direction.

In order to provide a precise answer to your question, Mr Purvis, we believe that there is a strong possibility that the WTO may challenge a marketing ban, if it enters into force. There are many issues to be considered in this matter such as extra-territoriality and proportionality of this and many others measures.

As for the issue regarding 'like products', the GATT panels supported the fact that the determination of identity criteria of two products can only be based on the characteristics of the end product and not on the way that the product is produced. In other words, production methods and processes cannot be taken into consideration when coming to a decision on the issue of a product' s identity.

We therefore believe that any defence against an attack based on a product' s identity has little, or hardly any, chance of succeeding at the World Trade Organisation. This is also the reason why, on a number of occasions, we have drawn Parliament' s attention to the danger of moving in this direction from the point of view of respecting our international commitments, which we believe should also be one of Parliament' s concerns.

Our proposal must, therefore, be appreciated within the context of protecting animal welfare, guaranteeing a high level of health protection and avoiding legal disputes, which would certainly cause problems for everybody concerned.

We believe that this situation - meaning rules which allow measures on production methods to be established only within strict limits - is far from satisfactory. This applies to the WTO' s current legislation. This is the reason why we hope to be able to include these issues in the agenda of the next round of WTO negotiations. If current legislation can be changed - and we hope that we are able to clarify it in this area - then so much the better. As the texts currently stand, there is a risk that disputes will arise.

Purvis (PPE-DE). - I take it from you that it is very unlikely that any agreement could be reached. Just a month or two ago the American Ambassador to the EU stated that the cosmetics area could be the basis of one of the biggest trade disputes, putting bananas and all the others far into the shade, if it was not resolved. So I take it that you are telling us we are going down a path that could lead to near disaster. Have you tried to quantify the potential for retaliation against European industry of other injured parties, and what that could mean in terms of lost jobs in Europe?

Lamy, Commission. - (FR) Mr Purvis, it is my job to handle the trade disputes that we are currently involved in. It is preferable that I avoid disputes altogether. I believe that my task, therefore, particularly in my dealings with the Council and Parliament, is to be totally honest when a Council or Parliament decision might mean we are in danger of losing a dispute. I am sure you have a good understanding of the risk. The proof of this, in fact, is that we are now discussing the implications that all this will have on sanctions.

I cannot say what the current situation is because, in order for sanctions to be taken against the European Union, a panel would have to be set up, we would have to fail before this panel and the amount of sanctions would then have to be assessed. In general, the amount of sanctions is assessed by considering the volume of trade affected. In a hypothetical scenario, in other words, a scenario where this proposal ends up becoming a European Union proposal, which is not yet the case, if it is challenged and if we lose, the volume of trade in question must be assessed and, at that point, we would have an idea of the system of sanctions.

I would reiterate, so that you have all the details, that in this case, sanctions do not necessarily and do not generally target the industries which are at the root of the problem. They target others, since sanctions are chosen by the party who wins the dispute at the WTO.

Kauppi (PPE-DE). - (FI) Mr President, it is very good to hear that the Commissioner is not afraid of a trade war but responds very positively to the idea that these important political aims set by the European Parliament, for example, such as a ban on the marketing of cosmetic products tested on animals, are political decisions, not a question of protectionism, and thus it is important that our representatives defend these issues at international level. You yourself referred to the possibility of bringing up in the next WTO round the question of whether in the future more attention could be paid to the way the product is produced in these trade issues, in other words not merely the end product. Has there been any discussion on this? Can you shed any more light on this reference of yours? Do you believe this is a possibility?

Lamy, Commission. - (FR) With regard to the first point of your question, Mrs Kauppi, I am, of course, responsible for applying the policies that the European Union has decided upon, including those taken on external issues. It is my duty, and I think that I do this openly, to explain that, when a political decision taken by the European Union brings us into conflict with our international commitments, as would be the case here, then the people who are taking this decision must be made aware of the risks they are taking. If you want to run this risk, do so. I will handle it. Incidentally, I believe that there are more intelligent, less risky ways of resolving this issue.

In particular, we could consider a compromise solution between our proposal to ban testing and your position to ban marketing, in other words, that of labelling requirements. From the point of view of international trade legislation, these requirements present less of a risk than a ban on marketing. If we could move in this direction, in order to bring together both our points of view, I believe that we would avoid provoking useless disputes.

My second point relates to our desire to have some of the WTO rules clarified, in order to allow the European Union to move in the direction that it wishes, and this concerns production methods, for example. We hope to move in this direction since we are relatively isolated at the moment. One of the reasons for this is that we are faced with the belief of some of the developing countries that the use of these production methods may equate to protectionist measures. We are, therefore, in need of some very strong arguments in order to show that this matter is not about protection, it is a matter of collective preference and that we each have our own ethics. Within the European Union, animal welfare is part of our ethics, although this is not necessarily the case in other countries - as we can see - and perception varies according to the level of development.

This is our position. We will do everything that we can so that this issue is placed on the agenda of the next round of negotiations, so that progress can be made. I make no secret of the fact that, at the moment, our position is hardly shared at all in other parts of the world.

Schierhuber (PPE-DE). - (DE) Mr President, I was very pleased to hear just now that Commissioner Lamy believes that it is very likely that during the next round of WTO negotiations production and labelling methods will also have to be considered. What I would like to ask you, Commissioner, is whether you are willing to accept that imports from third countries are also subject to the same criteria that apply to production at European level, be it in agriculture or elsewhere. Are you prepared, for the sake of public health, and that is what is at stake here after all, to take such steps to counter this opposition during the next WTO round?

Lamy, Commission. - (FR) Of course, Mrs Schierhuber, I am willing to do all of this because, and I reiterate, one aspect of the European Union' s trade policy is to apply the collective preferential scheme to its external trade in the same way as it is applied to internal trade. From this perspective, it is quite straightforward. It is sometimes slightly more complicated, as demonstrated, for example, by the panel on hormone-treated beef, at which we were unsuccessful. As we imposed a ban on hormone-treated beef within the Union, we banned imports of it as well, but the conditions of this ban meant that it was found to be in breach of international legislation.

In general, the principles which apply are those of non-discrimination and of proportionality and the national treatment principle. These are the principles that we wish to see taken into account in the agenda on the environment at the negotiations, especially everything which relates to the precautionary principle. We have some way to go before this can be done. There are risks in what we are doing within the European Union - in some cases, perhaps - with regard to existing laws which are considered to be excessive. Therefore, on the one hand, we must adjust our internal approach and, on the other, we must adjust international legislation to our own preferences, which is only possible if other countries are in favour of changing this international legislation which is outside of our control. Since we do not have any particular unilateralist tendencies, we must, therefore, change the legislation on a number of points or, at the very least, clarify its position on these issues.

This is the situation at the current time. We are aware of your concerns in this area. We support them, particularly from an ethical standpoint. I cannot hide the fact that, as things currently stand, some of your plans will pose serious problems from the WTO' s point of view.