According to University of Oklahoma College of Law Professor Drew Kershen, writing for the Giannini Foundation of Agricultural Economics publication Agricultural and Resource Economics, if California voters approve Proposition 37 (Prop. 37) in November 2012, it could be vulnerable to challenge under World Trade Organization (WTO) agreements. As Kershen notes, the ballot proposition would “impose mandatory labeling on a broad range of raw and processed foods.” Those produced “entirely or partially” through genetic engineering would be required to state that fact on product labels, and no processed food could be marketed as “natural,” “naturally made,” “naturally grown,” or “all natural.”

Kershen focuses on the WTO Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures and the Agreement on Technical Barriers to Trade (TBT). While the United States, but not California, is a member state under the agreements, Kershen argues that they nevertheless apply to California’s Prop. 37. He contends that Prop. 37 proponents “face a difficult, if not impossible burden of providing scientific evidence to support it as a SPS measure under the SPS Agreement,” which can be interpreted as providing that a SPS measure is not compliant with the agreement “if the measure is not necessary and if the measure fails to be based upon and maintained upon sufficient scientific evidence.” Because regulatory agencies worldwide have approved genetically engineered crops after evaluating purported human, animal and environmental safety, Kershen concludes that Prop. 37 “almost assuredly is not compliant with the SPS Agreement.”

He also examines whether Prop. 37 could be classified as a technical barrier to trade so as to avoid application of the SPS Agreement “and its scientific evidence standards.” According to Kershen, like U.S. country-of-origin labeling laws, Prop. 37 could be challenged as a TBT violation “by imposing discriminatory costs and burdens on” food imports into the United States. The article concludes that the ballot measure, if adopted, “may become a very important dispute within the jurisprudence of WTO law and decisions,” although questions remain as to whether WTO member states or the United States would challenge it and whether private parties would have standing to bring WTObased claims.

In a related development, the Giannini Foundation published an article in a July/August 2012 issue that surveys an array of potential impacts on the food industry if voters approve Prop. 37. Titled “California’s Proposition 37: Effects of Mandatory Labeling of GM Foods,” the article suggests that three general effects can be expected: “Certified non-GM processed food products will virtually disappear from food stores, Organic food will gain market share, [and] Food labels will be confusing for consumers: GM labeled products could have very low traces of GM, while organic products might contain accidental traces of GM ingredients but not be labeled as such.”