food and food security:

the implications of current trade negotiations

This briefing is the fourth in a series of six from Friends of the Earth International (FOEI) covering the Seattle WTO Ministerial Conference and the proposed new Round of negotiations (the Seattle Series of briefings).

summary

Food and food security are likely to be the key issues in the WTO's forthcoming trade negotiations, whether or not a new Round brings new issues into the WTO.

The WTO's Agreements on Agriculture (AOA) and Trade-Related Intellectual Property Rights (TRIPs), agreed during the last Uruguay Round of negotiations, have had a great influence on farming around the world.

Together these agreements have strengthened a global system of trade in food and agriculture that supports large-scale industrial production at the expense of small-scale, sustainable farming.

This is true in the North, where the AOA has maintained a predominantly regulated system benefitting large farms and Northern transnational corporations (TNCs). It is also true in the South, although the direct impacts are quite different. Here, the AOA is to a large extent liberalizing agricultural trade - by increasing access to Southern agricultural markets - and the TRIPs Agreement regulating production by local farmers. Together, these two WTO agreements are having a particularly devastating impact on agriculture in the South, where farmers frequently find themselves unable to compete with the prices of imported crops. Their situation is all the worse since the TRIPs Agreement also fails to recognize the traditional knowledge of farmers and indigenous groups; and works against the transfer of technology that might assist farming and food security in the South.

The progressive industrialization of agriculture combined with WTO rules on standard setting is also having a marked impact on food safety standards. By way of a series of high-profile transatlantic disagreements, it has now become clear that food standards and consumer concerns are being undermined by current WTO rules. These rules override the precautionary principle and are heavily influenced by TNCs. It also seems that those countries exporting genetically modified food are trying to ensure that the WTO takes up the highly controversial issue of trade and biotechnology.

Overall, the current process of trade liberalization, combined with an emphasis on export-led development, is associated with growing land alienation, declining food security, increasing hunger, negative impacts on rural life and the environment and the concentration of business within larger producers. In particular, net food importing developing countries find themselves with higher food import bills; farmers and indigenous groups in the South are losing both productive capacity and control of the food crops they have developed over many generations; and consumers are finding it increasingly difficult to locate and purchase safe and healthy food.

Further trade-focused negotiations concerning the AOA, TRIPS, the SPS and the Technical Barriers to Trade (TBT) Agreement are likely to make an already serious situation worse. As a first step in the right direction, Friends of the Earth believes that WTO negotiations on agriculture should be stopped and biological diversity removed from the TRIPs Agreement.

A new and different means of promoting sustainable agricultural systems is now required. Instead of focusing on trade, this should be based on meeting national and local needs for employment and food security; targeted support for rural communities and sustainable agricultural

practices; high food quality standards; access to appropriate technology; and recognition of the contribution of farmers around the world to crop diversity.

Box 1: 'Food security' and 'food sovereignty'
There are many different ways of defining food security, but the basic principle is to ensure access to an adequate supply of nutritious food for every individual. Whilst there is little disagreement over this principle, there is much debate about how to achieve it. Prior to the 1970s, the 'conventional wisdom' was that food production was such an important domestic objective that it should be dealt with separately from trade. Times have changed, however, and the prevailing view is the opposite, in theory at least. Many officials argue that deregulated trade will achieve an adequate supply and distribution of food and that governments should therefore relinquish control over food trade policy. In other words, food should be treated like any other industrial commodity. As a result, the Uruguay Round of trade negotiations saw agriculture and food issues placed firmly within the WTO, although measures to liberalise agriculture in some Northern countries were limited. Many countries and organizations reject this position and argue that countries should have the right to determine their own policy on such an important issue as food security, i.e., 'food sovereignty'.

Introduction

Negotiations on agriculture - and thus on food and food security - will take place as part of the WTO's 'built-in agenda', whether there is a 'Millennium Round' or not. These negotiations are inextricably linked to the results of the Uruguay Round, which dealt with:

1. Agricultural policy (in the World Trade Agreement on Agriculture (AOA));
2. Consumer and health policy (World Trade Agreements on Technical Barriers to Trade (TBTs) and on Sanitary and Phytosanitary Standards (SPSs)); and
3. Intellectual property (the Agreement on Trade-related Intellectual Property Rights (TRIPs)).
4. 
   

Also relevant in this context is the body that sets global standards for food - the Codex Alimentarius Commission (see Box 9). Codex is recognised explicitly by the World Trade Organisation and therefore constitutes part of the 'food trade system'.

Box 2: Basic food facts

Food is the most basic need of humankind. Even though trade in agricultural products topped $580 billion in 1995, it is estimated that about 820 million people (14% of the world's population) are now malnourished; ¹ in Sub-Saharan Africa, average calorie intake in 1995 was still below the daily minimum calorie requirement of 2,300. ²

What happened in the Uruguay Round?

the agreement on agriculture

International trade in agricultural and food products is now regulated through the Agreement on Agriculture (AOA), agreed during the Uruguay Round. This Round was the last of the General Agreement on Tariffs and Trade (GATT) negotiations and ran from 1988 to 1994 (GATT was the predecessor to the WTO). Negotiations to completely liberalise agriculture are still a long way off, but even so the negotiation of the AOA was grossly inequitable and stacked against developing countries; and is already contributing to decreased food security and environmental degradation. When finally agreed, the AOA was based on a bilateral negotiation between the US and the EU. Many developing countries were opposed to the AOA, but since it was presented as part of a comprehensive package, to be accepted on an 'all or nothing' basis, they were forced to concede.

The theoretical aim of the AOA is to reduce agricultural support and protection so as to correct and prevent distortions in world agricultural markets. However, what actually emerged was an Agreement that largely liberalised agricultural trade in developing countries and maintained a regulated trade system in developed countries. Key outcomes are increased market access for companies exporting to the South; dumping of food products in developing countries; and higher prices for net food importing developing countries. The overall result is an agreement that benefits large transnational corporations and large farms, at the expense of small and subsistence farmers.

The Agreement on Agriculture is complex, but basically covers three main areas: market access, domestic production subsidies and export subsidies. In terms of food and food security, the main points of the current AOA are that: ³

Existing domestic production subsidies and export subsidies are to be reduced . The domestic production subsidies that are directly linked to production and thus distort trade (these subsidies are commonly referred to as the Amber Box) are subject to WTO disciplines and are to be reduced. However, because of the 'reference years' selected, the EU and US have been able to avoid further significant reductions in both domestic and export subsidies. On the other hand, developing countries with little or no existing subsidies are prohibited from providing new ones above a maximum level. Thus the industrialised world has been able to maintain high domestic production subsidies (see Boxes 3 and 5) and high export subsidies (see Box 4), whilst the AOA prevents the developing world from adopting similar support mechanisms.

Box 3: Subsidies
(figures from the Organisation for Economic Co-operation and Development (OECD) for the total amounts of agricultural subsidies in OECD countries need to be treated with caution. They have been widely criticised and many observers fundamentally disagree with the way they have been calculated. However, they reveal that such subsidies within OECD countries remain extremely high.) For example, in 1998:

OECD countries spent US$362 billion on agricultural subsidies, two and a half times the total GDP for all least developed countries. ⁴

subsidies in the US and the EU (based on the OECD figures) were roughly equal at about US$19,000 for each farmer. If water subsidies and food vouchers are included in the calculation, subsidies in the US were even higher. ⁵

EU domestic support was approximately US$78 billion. ⁶

Some subsidies are exempt from reductions: The AOA currently allows certain forms of direct payment subsidies, provided they are not linked to production or prices (commonly known as the Green Box) or are applied so as to limit production (commonly known as the Blue Box). The Green Box includes measures such as environmental payments, support for rural infrastructure and insurance schemes; and the Blue Box includes payments based on unit size of farm and numbers of animals. However, production has remained high - particularly in the EU - as the support system, on balance, continues to favour large farms at the expense of the small ones via the Blue Box. Large farms tend to be more intensive and highly mechanised. They benefit from new and more powerful agro-chemicals, further damaging the environment.

Dumping is 'accepted' as part of the rules in the AOA (dumping is usually defined as sale at less than the domestic price). The commitment to cut the volume of export subsidies was set at just 21% for developed countries by the year 2000: effectively 79% of export subsidies are still 'allowed' (see Box 4). ^7,8 Moreover, subsidised domestic production in developed countries is also often dumped in developing countries at less than the domestic price (see Box 5). Dumping in developing countries has severe consequences for their domestic food production. Countries in which products have been dumped may be able to take counter actions through the WTO; but, in practice, such action is very complex (ie, they have to prove injury to a domestic industry), costly and beyond the scope of most developing nations.

During the 1980s and early 1990s, the EU exported beef using subsidies of about US$2.60 per kg. In 1991, the EU spent the equivalent of US$116 million disposing of beef worth only US$31 million. During the 1980s, increased exports to West Africa undermined the price of beef produced in Burkino Faso, Mali and Niger by 30% to 50%. ⁹ Whilst campaigns to stop these subsidised exports of beef to Africa were successful, intervention stocks in the EU are projected to rise; and the EU has confirmed that because their prices are higher than world prices due to the CAP, they can only export with subsidies. ¹⁰

The AOA requires signatories to convert all non-tariff barriers to imports into 'equivalent' tariffs and to then reduce these tariffs (commonly known as 'tariffication'). Since the industrialised countries already had much greater non tariff-barriers to start off with they were able to convert these into tariffs that are still highly prohibitive. Even after reductions, these tariffs are an effective barrier to many imports (see Box 6).


The AOA contains a Peace Clause which expires at the end of 2003. This calls on WTO members to use 'due restraint' and not challenge agricultural support measures (ie fully conforming export subsidies and those in the Blue and Green Boxes) that are used by other countries so long as they are kept below 1992 levels. However, this restraint appears only applicable to subsidies usually found in developed countries. Those usually found in developing countries seem to be open to countervailing duty actions. ¹¹ Some have also questioned the tightness of the Peace Clause and believe that, in practice, countervailing duties could be imposed. ¹²

Box 5: Domestic production subsidies, dumping and small scale farming in the South

As developing countries open their economies, so they expose themselves to subsidised imports. For example, the US used to provide up to US$5 billion a year in WTO compatible subsidies (known as direct 'deficiency payments') to its maize producers (such payments were eliminated in the last US Farm Bill but new programs were introduced). This allows countries to export at prices that are so low that most staple food producers in developing countries cannot compete with them (ie it is dumped in their markets).

Trade liberalisation of maize could jeopardise up to half a million livelihoods in the Philippines and between 700,000 to 800,000 livelihoods in Mexico due to lower prices. Mexico is competing with US imports from the mid west where average yields are five times higher. The Philippines is liberalising its imports of a range of agricultural commodities under the AOA. For maize, tariffs on imports will be halved over the next six years. According to the UNDP, who stated in 1997, " depending on world price trends, maize imported from the United States could be available at 30% below current market prices by the end of the decade. " This would drive down domestic farm prices and undermine local production. ^13,14

Developing countries have 'special and differential treatment' options. They can provide certain subsidies - such as investment or to low-income producers. However, these cannot exceed 1992 levels. Since subsidies in developing countries were low in 1992, there is a limit to what can be done to support the production of food for domestic consumption. Such support is never likely to reach the US$19,000 per annum that the EU and the US still pay each of their farmers (on average).

Special safeguard provision. Domestic markets can also be protected under the 'special safeguard provision' (SSG) when there are surges in import volumes or a sudden fall in prices. Some have commented that the EU sets its trigger prices for SSG at artificially low levels, allowing it to introduce protective tariffs more easily. ¹⁷

Box 6: Total tariffs on selected products after 'tariffication' ^15,16

Japan Canada
Rice 550%
Cheese 289%
Wheat 353%
Eggs 236%
Butter 360%


trade-related intellectual property rights

The Agreement on Trade-Related Intellectual Property Rights (TRIPs) impacts on peoples' ownership of and access to food and seeds and has the potential to significantly reduce genetic diversity. It permits northern transnational corporations (TNCs) to claim traditional plant varieties or plant uses as 'inventions' that must be respected the world over. TRIPs was first brought into the GATT in the Uruguay Round and implemented in a way that favored large Northern corporations. TRIPs and the use of patents expropriates knowledge from farmers and indigenous peoples in developing countries who, in many cases, have been cultivators, researchers and protectors of plants for thousands of years. This practice is commonly referred to as 'biopiracy'. Biopiracy is not the result of the absence of Intellectual Property Regime (IPR) systems in the developing world but a direct consequence of the imposition of western style IPR systems (based on the US patent regime) through the TRIPs Agreement.

It is Article 27.3(b) of the TRIPs agreement that calls for WTO members to protect intellectual property over plant varieties. They can do this either by patent or by an effective sui generis (that is, alternative) system, or a combination of the two. The Article allows: " Members to excludefrom patentability plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, members shall provide for the protection of plant varieties either by patents or an affective sui generis system or by any combination thereof. The Provisions of this sub-paragraph shall be reviewed four year after the entry into force of the WTO Agreement ". Patents often raise the price of products, blocking technology transfer and making food and pharmaceuticals more expensive. This exemption is of potential benefit to developing countries who want to resist patents on biological resources, in order to promote food security and health.

Developing countries face at least three serious obstacles if they want to use a sui generis system. They have to ensure that the protection is effective. In order to do that they are likely to have to devote considerable resources to developing new legislation and new legislative bodies. Finally, they must defend their action in light of the fact that almost all WTO support so far has been focused on UPOV-style protection (Union for the Protection of New Varieties of Plants). This again is invariably based on developed country models (see Country Positions below). ¹⁸ Yet developing countries face a dilemma. They have until January 2000 to comply with TRIPs obligations to protect the rights of those who develop new plant varieties. At the same time, many are questioning whether it is possible to comply with the both the TRIPs agreement and the Convention on Biological Diversity. Article 8 (j) of the latter calls on each contracting party to respect, preserve and maintain the knowledge, innovations and practices of indigenous and local communities.

Developing countries want to preserve the exemption under Article 27.3(b). However, the US has often pushed for full life-form patenting and may do so under the in-built review of the TRIPs agreement (see Country Positions below). Full-life form patenting would require IPR protection for all animals and plants per se, as well as plant varieties and microbiological processes, and raises many ethical concerns.

'high standards' or 'trade barriers'?

sanitary and phytosanitary measures (sps)

The SPS deals with food safety and standards. Through the SPS, the WTO is able to determine what measures are necessary to protect human, animal and plant life or health. Members are 'encouraged' to use international standards where they exist, such as those developed by the International Organization for Standardization (ISO) or the Codex Alimentarius Commission (see Box 9). Countries may maintain higher standards, but only if they can demonstrate 'scientific justification' (under WTO rules, consumer and ethical concerns are not acceptable reasons for trade barriers.)

The SPS has already been used by the WTO in food-related disputes such as the European Union's ban on the imports of hormone-treated beef (imposed due to consumer and health concerns). The SPS requires that appropriate risk assessment, involving an analysis of the available scientific evidence, must be undertaken before trade barriers can be introduced.

Box 7: TNCs, patents and food security

Under WTO enforced patent law, Monsanto has the right to take farmers to court if they collect and use seeds from its patented plant varieties. In the USA, Monsanto has opened more than 475 such 'seed piracy' cases nation wide. Monsanto's 'terminator gene' technology that makes plants sterile would have helped the company to enforce its patent rights. However, even if Monsanto keeps its voluntary pledge not to commercialize this technology, the promotion of patented varieties, backed by legal action, could pose a significant threat to food security in the developing world. Approximately 1.4 billion people around the world depend on farm-saved seed for their food security. But Monsanto - and other companies such as DuPont, Zeneca and Novartis - continue to research seed sterility and apply for biologically engineered seed patents which mention sterility (for example, seeds which would not germinate unless exposed to a certain chemical produced by the company). ¹⁹

Monsanto also holds extremely broad patents on a wide variety of food items such as the brassica family. It also holds patents on neem products. Similarly, US company W.R. Grace has patented certain pesticide properties of the neem tree. This tree has been used for centuries by people in India for a variety of uses - including for pest control - yet they may have to start paying royalties to W.R. Grace for this use under WTO law. At the same time, the indigenous knowledge that resulted in the 'innovation' will not be acknowledged financially - the 'benefits' will exclusively go to W.R. Grace and those consumers that can afford its products.

There has been some debate about whether or not the SPS agreement permits reference to the precautionary principle in its Article 5.7 on so-called 'provisional measures': " In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent informationIn such circumstances, members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary or phtyosanitary measure accordingly within a reasonable period of time " (Article 5.7).

The EU attempted to use this article to defend its ban on hormone-treated beef. However the WTO's Appellate Body ruled that the precautionary principle cannot be used to override the risk assessment requirements in the SPS Agreement. In other words, there is still a requirement for sound scientific evidence. This is despite the precautionary principle now being widely recognized in international law.


sps and genetically modified food

The beef-hormones case is being seen as a 'dry-run' for a potential dispute over barriers to trade in genetically modified organisms (GMOs), where the same issues of scientific uncertainty, corporate interest and public taste could resurface.

Box 8: Beef, consumer concerns and animal health

One of the reasons that the EU imposed the import ban on beef hormones is a fear that they may cause health problems; specifically the EU cited health issues surrounding breast and colon cancer. The ban has, however, proved controversial because of differing opinions on whether the banned products are safe for human consumption (hence the EU invoked the 'precautionary principle'). But an equally important reason for the ban is that consumers in the EU, according to officials, have expressed a strong preference to eat hormone free meat regardless of its safety (these concerns come hard on the heels of many health scares in food production, such as bovine spongiform encephalopathy - BSE - more commonly know as mad cow disease). There is also the additional argument for a ban on animal health/husbandry grounds (ie, pushing animals to grow faster than they would naturally).

Whilst the US has affirmed five basic principles behinds its policy on biotechnology - an arm's length regulatory process, consumer acceptance, fairness to farmers, corporate citizenship and fair and open trade - it clearly has no intention of letting other nations introduce barriers to agricultural imports that could be in contravention of WTO rules. Central to this position is the SPS Agreement (see Country Positions below). ²⁰


technical barriers to trade agreement (tbt)

The Technical Barriers to Trade (TBT) agreement covers any procedures or standards that might be deemed to interfere with international trade. This includes packaging, marking and labeling standards, and thus eco-labels. The Confederation of British Industry urges WTO members to establish that TBT rules apply to eco-labeling and to clarify the extent to which private eco-labeling rules should be covered by the agreement (which would bring well-established initiatives such as the Forest Stewardship Council scheme under the remit of the WTO). ²¹ Similarly, in the run up to Seattle, the International Chamber of Commerce has lobbied against eco-labeling requirements, arguing that they hinder free trade. ²² The TBT is up for review, whether or not there is a Millennium Round bringing new issues into the WTO.

Box 9: Codex

Codex Alimentarius Commission is the main body of the United Nations dealing with food standards. It is comprised of the FAO and the WHO and is recognised by the WTO for the establishment of international food standards. Codex has been criticized for being heavily influenced by representatives of food and chemical corporations, and the standards it sets are sometimes 'least common denominators' that are lower than standards in place in many nations.

what impact did the uruguay round have on food, people and the environment?

The Uruguay Round and the AOA have allowed the developed world to maintain high levels of domestic support for agriculture by subsidising their own farmers, whilst continuing to restrict access to its own markets. Large farms (which often employ fewer people per hectare) and agri-business (which would not have developed to anything like its present scale without public subsidies) are favoured in both the North and the South. The AOA therefore has significant impacts on rural communities and on the environment. Large farms tend to be more intensive and highly mechanised. They benefit from new and more powerful agro-chemicals, further damaging the environment.

Where food safety is concerned, the SPS Agreement has been used to rule in favour of free trade. WTO dispute rulings also favour free trade over development and social issues. For example, the European Union's preferential import regime for Caribbean banana farmers - aimed at supporting small scale growers where costs are high because of steep terrain, poor soils and climatic hazards - was deemed incompatible with WTO rules.

The AOA also prohibits the developing world from implementing effective domestic agricultural support policies themselves and has done very little to curb the 'dumping' of cheap subsidised northern agricultural products on the South (which destabilises local markets and production).

The AOA places no obligation on least developed countries (LDCs) except to bind tariffs (in other words, not to increase import tariffs). However, LDCs have probably been hit hardest by the AOA, with serious implications for food security. At the signing of the Uruguay Round in Marrakech, member governments agreed that 'compensation' should be afforded to LDCs and net food importing developing countries (NFIDCs) in recognition of the problems they would face due to the implementation of the AOA. These include higher food import bills, price instabilities and reduced availability of food aid. However, compensation mechanisms have never been implemented.

Box 10: Export-led development, women and Ghana

Export-led development is exacerbating the problems of small farmers in the South. Dora Biney, a 37 year-old farmer from Bodwireagya-Anikoko in Ghana, is one of many millions to have experienced the downside of free trade. Until recently Dora farmed her land, but now she has been moved off it against her wishes, to make way for gold mines. Dora and her family have been resettled several miles away in a smaller house made of 'sandcrete' blocks and cement with what she describes as 'woefully inadequate facilities'. Dora's changed circumstances mean she can't even pay medical bills or her children's school fees (pressure for economic reform from governments in the developed world means that people in Ghana are obliged to pay for health and education). Worst of all, she's had to take her children out of school.

In 1995, the Food and Agriculture Organisation calculated that the food import bill for low-income food deficit countries would be $9.8 billion higher in 2000 than it was 12 years previously (an increase of 55%). Of this increase, $3.6 billion would be as a direct result of the Uruguay Round. ²³ More recent studies have confirmed the deteriorating position for NFIDCs. Between 1993/4 and 1997/98, the cost of cereal imports increased by 47%. ²⁴ Globally, about 820 million people are now malnourished.

Trade liberalisation and the emphasis on export-led development for cash crops and minerals has been accompanied with growing land alienation, declining food security, increasing hunger, impacts on the environment and the concentration of business within larger producers. Small scale producers or farmers - particularly women - have become marginalised or displaced from their land (see Box 10).

TNCs - such as Monsanto, Cargill, Novartis and Nestle - are increasingly exerting their control over the food system. To compete in the global market place, they seek to reduce costs and capture greater market share. Thus the increasing trend is for corporations to merge operations - the process of globalization is concentrating trade rather than opening-up markets. This has important implications for food security: ^25,26,27,28

1. The top ten companies in agro-chemicals control 80% of a $32 billion global market.
2. 60-90% of all wheat, maize and rice (ie staples) is now marketed by just five companies.
3. Five corporations control over 70% of the cereal trade.
4. Three corporations control 80% of the banana trade.
5. In 1988, the value of mergers and acquisitions in the biotechnology sector was $9.3 billion. By 1998, mergers and acquisitions reached $172 billion.

The concentration of the most widely grown commercial non-food and non-staple crops is also of serious consequence for food security because they are often grown on land which could grow food: ^29,30

1. Three corporations control 83% of the cocoa trade.
2. Three corporations control 85% of the tea trade.
3. Five corporations are responsible for 70% of tobacco production.
   

What's being proposed for Seattle?  

Agriculture and food proved to be some of the most contentious issues of the Uruguay Round. They are already part of the WTO's 'built-in' agenda, which means they will be negotiated at and after the Seattle Ministerial, whether or not there is a Millennium Round. There is little doubt agriculture and food issues will once again be the most controversial of issues.

country positions

the us and canada

The US wants to eliminate export subsidies, constrain domestic subsidies (particularly those in the Blue Box) and lower tariffs for market access.

The US also believes that the WTO should address biotechnology more directly and is the appropriate forum for this issue. The Miami Group of countries - the US, Canada, Australia, Uruguay, Argentina and Chile - were responsible for the demise of the last round of negotiations of the Biosafety Protocol, an international environmental agreement to regulate the use of and trade in genetically modified organisms under the Convention of Biological Diversity. Together with Canada (also a Cairns Group member), the US opposes the labelling of GM foods, arguing that they are substantially equivalent to traditional foodstuffs (in other words the US considers GM food and non-GM food to be like products). However, the EU, Japan, Australia and New Zealand all have GM labelling requirements; and the Centre for International Environment Law has argued that labelling of GM foods would be compatible with WTO rules since GM and non-GM foods are in fact dissimilar (the traditional WTO test for 'like products' include consumer tastes and habits, physical characteristics and the products' properties, nature and qualities.) ³¹

The US believes that biotechnology and the SPS will be the most difficult stumbling blocks in forthcoming negotiations. They have stated that they require full SPS compliance. The US and Canada opposed the establishment of a Global High Scientific Council for Food Safety (at the 1999 group of Eight Economic Summit) arguing that food safety should be negotiated within the WTO. It seems likely that the US will attempt to raise biotechnology within the agricultural negotiations; and that they are keen not to open up the SPS. In this way they hope to preserve the 'science-based' focus of the Agreement and limit further application of the precautionary principle (precisely the opposite of the EU's position, as outlined below). Canada has also reiterated its opposition to opening the SPS Agreement to deal with biotechnology issues and has called for the for the establishment of a working group to examine how biotechnology products should be handled in the WTO. The revised draft text of the Ministerial Declaration for Seattle includes wording to this effect.

However, the interpretation of Article 5.7 in the SPS Agreement could be one the surprises in store for Seattle. FOE and other non-governmental organisations have been advised that there is a good, clear legal basis for a moratorium on the trade in certain GM seeds under this Article of the SPS Agreement.

In the Uruguay Round, the USA wanted patent protection for all plants and animals but was only able to secure protection for plant varieties and micro-biological processes. The TRIPs Agreement is up for review as part of the WTO's built-in agenda. Latest indications suggest that the US wants TRIPs off the agenda because they are concerned that a review might lead to a backsliding of commitments and an extension of the phase-in period for developing countries (see below). Instead they - together with US-based TNCs - are pushing to turn the review into a meaningless exchange of information on implementation, instead of addressing the provisions of Article 27.3(b). Their ultimate agenda is to remove the Article from TRIPs altogether, so that not only plant varieties but plants and animals per se would be subject to patents in all WTO member states. Fallback positions for this pro-patenting camp are the removal of the sui generis option for plant varieties in Article 27.3(b) of TRIPs.

The review of the TRIPs agreement is now underway. In advance of developing countries' deadline for implementation (early 2000), these nations "are under pressure to adopt the 1991 International Convention for the Protection of New Varieties of Plants (UPOV 1991) as the mechanism to fulfil their 27.3(b) obligationsThe U.S. recommended their own patent-based model to other Members, arguing that an effective intellectual property protection system has been beneficial in stimulating research and development. The U.S. warned other Members that any sui generis model for plant variety protection not modelled on UPOV-1991 would need to be looked at on a case-by-case basis." ³²


the european union

Under the Common Agricultural Policy (CAP), the EU has one of the most heavily protected markets and subsidised production systems in the world. The EU's negotiating position at the WTO on agriculture has been determined by the recent reform of the CAP within the framework of Agenda 2000. However, these reforms were very limited so that the EU will need to maintain a number of key provisions in the AOA, particularly a 'successful defence of the 'blue box''. Not surprisingly, the EU will be negotiating for a renewal of the peace clause and the special safeguard provisions (see above) in order to maintain its agricultural support system. ³³

The EU has so far revealed no formal negotiating position on biotechnology. It argues for the concept of multi-functionality of agriculture which justifies domestic government support on environmental and social grounds and for non-trade reasons (to address such issues as animal welfare, food safety, food quality and consumer concerns, for example). The EU believes these issues should be considered in the appropriate agreements, notably the SPS and TBT. However, it wants clarification and if necessary strengthening of the SPS, so that the precautionary principle can be used for food safety. ³⁴


japan and south korea

These countries support roughly the same position as the EU. Again, they have heavily protected agricultural markets and wish to maintain or expand the Blue and Green Boxes. Generally opposed to further trade liberalisation, they each support the concept of multi-functionality of agriculture.

Japan and South Korea, are opposed to more liberalisation, for that would mean the demise of their small rice farmers. Indeed, it is reported that Japan's rationale in supporting the European Union's position for a new round of comprehensive negotiations is to give it flexibility in defending agriculture. A comprehensive, multi-sectoral round would enable it to trade concessions in say industrial tariffs, in exchange for yielding few or no concessions in agriculture.

norway, switzerland (ie non eu countries)

Similar positions to the EU, Japan and Korea although in principle not opposed to further trade liberalisation.


the cairns group

The Group is a collection of developed and developing agricultural exporting countries that favour further trade liberalisation. In particular, they call for the elimination of all trade distorting subsidies and will target the EU, the US and Japan, although their primary concern is the EU support system. The Group has recently made overtures regarding more meaningful provisions under special and differential treatment, to address developing countries' food security concerns, They have not offered concrete proposals as to what this might entail. But they are " very concerned that this happen without creating a wider space that would suggest acceptance of multifunctional agriculture, at least in as much as that in turn means allowing continued protection of developed country agriculture. " ³⁵


developing countries (large food exporters)

Most belong to the Cairns Group (for example, Argentina, Brazil, Chile, Colombia, Uruguay, Malaysia, Thailand, the Philippines, Indonesia, Paraguay and South Africa). The Southeast Asian governments' position in favour of more liberalisation of agricultural markets in the North is prompted mainly from the interests of organised lobbies of cash crop exporters and processors. ³⁶ Similarly, countries in Latin America - particularly the MERCOSUR group of nations - will be seeking market access to developed countries.


other developing countries (particularly ldcs and nfidcs)

Many developing countries - for example members of the South Asian Association for Regional Co-operation - have called for the total elimination of export subsidies.

Many nations have also called for a delay in implementing their commitments under the TRIPs agreement. Some countries - for example Cuba, El Salvador, Honduras, Nicaragua and the Dominican Republic - want to preserve the exemptions under Article 27.3 (b) in light of previous US attempts at full-life patenting. ³⁷ Developing countries are under pressure to adopt the UPOV 1991 as the mechanism to meet their obligations under 27.3(b). To achieve this, it appears that the US (see above) can count on the support, not only of UPOV itself but also of the WTO Secretariat and the World Intellectual Property Organisation (WIPO), all three having joined forces to persuade developing countries to adopt UPOV-like plant variety protection legislation. However, given that the TRIPs review is already underway, India " has advised developing countries to wait before implementing sui generis systems, as the only model offered so far was that of the developed countries. " ³⁸

Many of these countries - for example through the G15 and G77 groups of developing countries - are also demanding that issues of food security, income levels of the rural poor and the problems of small island developing economies and net food importing countries be addressed as a matter of urgency. (The G15 also called for further liberalisation reflecting the fact that a number of its members are also part of the Cairns Group). Some countries - such as India - have gone even further, calling for a 'market plus' approach. Whilst they view liberalisation as being important, the emphasis on a market-oriented approach jeopardises the lives of millions of people, and greater autonomy should be established for domestic agriculture to improve productivity, increase incomes and reduce the risk of price fluctuations. In addition, the concept of a 'Development Box' (ie, along the same lines as the Green and Blue boxes) has been proposed and supported by Cuba, the Dominican Republic, Egypt, El Salvador, Honduras, Sri Lanka, Uganda and Zimbabwe. This would be designed to assist developing countries achieve objectives related to food security, rural development and poverty alleviation. ³⁹

Overall, developing countries have argued that they have witnessed few if any benefits from trade liberalization and have therefore called for the 'built-in agenda' to review and focus on the implementation of existing agreements before any more substantive talks in a new Round.


corporate positions

Most of the corporate influence appears to be emanating from the US, particularly in relation to biotechnology. EU companies probably feel that the best opportunities for advancing biotechnology and GM foods in the global trade system lie with the backing of the US government.

In the US, the private sector plays a pivotal role in trade negotiations through the mechanism of advisory committees. At one level is the Advisory Committee on Trade Policy and Negotiations (ACTPN), appointed by the President. The committee has about 45 members from representative elements of the US economy with international trade interests. Its mandate is to provide overall policy guidance on trade issues. This committee has the ear of the President and the chief executive of Monsanto, Bob Shapiro sits on this committee. ⁴⁰

At the next level are the policy advisory committees to the USTR in specific areas, of which agriculture is one. All these committees advise the highest positions in the USTR including Charlene Barshefsky, the US Trade Representative. The US food and agricultural community has approached the Seattle Round as a united front by forming an agricultural coalition of over 80 associations and companies to prepare for these negotiations. This coalition, the Seattle Round Agricultural Committee (SRAC), represents US agriculture from producer to processor. The SRAC is playing an influential role. It appears to have succeeded in getting the USTR to listen to their concerns over 'early harvests'. This may well be because they want a 'single undertaking' whereby no element of an agreement can be implemented until all issues have been negotiated. They believe such a position would preserve the maximum leverage for an agreement on agriculture. ⁴¹

Just as the Intellectual Property Committee (IPC), which brought together 13 major US corporations (including Monsanto and DuPont), was instrumental in getting TRIPs onto the GATT agenda, ⁴² so other corporate organizations are now pushing for biotechnology. The Biotechnology Industry Organization (BIO) is the largest trade organization serving the biotechnology industry in the US and around the globe (and includes such companies as Monsanto, DuPont, Novartis, AgrEvo and Bayer). In relation to the WTO, BIO's chief objective is to ensure that rules facilitate trade in biotechnology products; and that the US guards against weakening of 'scientific provisions' in favor of regulations based on consumer concerns. Guiding BIO's trade policy work is a consulting firm - Powell, Goldstein, Frazer and Murphy LLP - members of whom have held prominent positions with the Secretary of Agriculture for Trade Policy, the Patent and Trademark Office, and the USTR's General Council in Geneva. ⁴³

The position of the US Grocery Manufacturers of America (GMA) is indicative of the many other corporate groupings that are attempting to influence government policy. The GMA is the world's largest association of food product companies with US sales of more than $450 billion. It includes companies like Chiquita, Nestle, Monsanto, Philip Morris and Unilever. The GMA has adopted a similar stance to ensure that the integrity of the science-based SPS Agreement is left untouched. ⁴⁴

Perhaps the most influential corporate lobby group on these matters is the Transatlantic Business Dialogue (TABD), in which European and American companies and business associations develop joint US-EU Trade policy, " working together with the European Commission and US Administration ". The TABD covers many issues - from aerospace and biotechnology to investment and climate change. The contact points for the EU and US on the agriculture and biotechnology issue group in the TABD are representatives from Unilever and Monsanto respectively. ⁴⁵ For each TABD issue group, there is also a designated person in the European Commission to act as a contact point, no doubt to discuss trade policy. ⁴⁶

What impact will further negotiations have on food, people and the environment?

Agriculture has many aspects unrelated to trade including food sovereignty, food security, food safety, employment, the environment and culture. Yet, by bringing agriculture into the World Trade Organization during the Uruguay Round, governments have allowed trade concerns to prevail over these other key aspects of agriculture.

WTO negotiated agreements and rules pertaining to farming and food have a wide variety of negative impacts. The principal culprits are the Agreements on Agriculture, TRIPs, TBT and SPS. Together, these Agreements favor agribusiness, large farms and the developed world in general. They have a negative impact on food production in developing countries (particularly net food importers and least developed countries), the environment, consumers, the poor, small-scale farmers and those employed in the sector, notably women. A number of issues are worth stressing here.


food security

Further negotiations under the Agreement on Agriculture are on the agenda. One of the main focal points will be the use of both production and export subsidies to support agriculture. Such negotiations are likely to have a direct bearing on food security in Southern countries, where small-scale farmers are often unable to compete with cheap imported food from the North that is dumped in their markets. However, it can also be predicted with confidence that any further liberalization will also and again be regressive between and within countries, with the gains accruing to the more wealthy. Reductions of EU and other OECD subsidies will potentially benefit large agricultural exporters within middle-income developing countries (such as Brazil, Thailand and Argentina). ⁴⁷ The losers are still likely to be subsistence farmers, small farms and the mainly low-income food importing developing countries.

It is also possible that the US will - either in or after Seattle - attempt to extend the TRIPs Agreement to cover full life-form patenting. This would have serious consequences for food security and farming world-wide. Developing countries, aware of the potential impacts of such a move, are currently arguing that life-form patenting should be removed from the TRIPs Agreement.


food safety

Europe has been beset by a number of high profile food safety concerns and European consumers are insisting that a precautionary approach be adopted. However, food safety issues and concerns are being marginalized by the WTO in the interest of free trade. In particular, the WTO's

ruling against the European ban on imports of hormone-treated beef effectively negates any use of the precautionary principle under the SPS agreement. It therefore seems reasonable to expect governments participating in WTO negotiations to find themselves under considerable pressure to move further in this direction, as the US attempts to craft rules that would force the EU's 'completely broken' GMO approval process

(and similar mechanisms in other countries) to be reformed in favour of biotechnology imports. ⁴⁸


the environment and rural communities

The current trade system promotes fossil fuel- and chemical-dependent farming. Friends of the Earth International believes that further WTO negotiations on agriculture are highly likely to undermine rural communities further, creating serious social problems and exerting additional pressure on the environment.

Friends of the Earth International (FOEI) is particularly concerned that any intergovernmental negotiations or agreements relating to agriculture need to promote sustainable agricultural practices and sustainable livelihoods and contribute to improving quality of life in rural communities. Furthermore, small producers have a right to resources and to control the means of sustenance; and all people have a right to safe and sufficient supplies of food and water. Given the range of concerns outlined above, FOEI is therefore calling on governments meeting in Seattle, on the occasion of the WTO's Third Ministerial Meeting, and elsewhere to:

1. cease discussions to initiate a comprehensive Round of negotiations which would bring any new food and agricultural issues into the WTO, such as biotechnology;
2. call a halt to any further negotiations under the Agreement on Agriculture;
3. remove clauses relating to patents on life and exclude biological diversity and indigenous and local knowledge from the Trade-related Property Rights Agreement (TRIPs);
4. recognize the existence and validity of the precautionary principle and amend all relevant trade rules accordingly, including those in the SPS;
5. conduct a thorough review of both the implementation and the environmental and social impacts of all existing WTO rules and agreements, including those relating to food and agriculture;
6. agree to deal with any negotiations relating to biological diversity and indigenous and local knowledge under the Convention on Biological Diversity;
7. agree to ensure that the Biosafety Protocol - and only the Biosafety Protocol - is the acknowledged forum for any negotiations relating to trade in biotechnology (and all negotiations relating to trade