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BIOTECH IN TROUBLE
The agricultural biotechnology industry's situation is desperate and deteriorating. To be sure, genetically engineered (GE) food is still selling briskly on grocery shelves in the U.S. but probably only because GE products are not labeled, so consumers have no idea what they're buying.
At present, an estimated 2/3rds of all products for sale in U.S. grocery stores contain genetically engineered (GE) crops, none of which are labeled as such.[1] However, polls show that U.S. consumers overwhelmingly want GE foods labeled. In a TIME magazine poll in January, 1999, 81 percent of respondents said genetically engineered foods should be labeled.[2] A month earlier, a poll of U.S. consumers by the Swiss drug firm Novartis had found that more than 90% of the public wants labeling.[3] The NEW YORK TIMES reported late last year that a "biotech industry poll" showed that 93% of Americans want genetically engineered foods labeled.[4] Legislation requiring labels on GE foods was introduced into Congress last November by a bi-partisan group of 20 legislators.[5]
For five years the GE food industry has been saying GE foods couldn't be labeled because it would require segregating GE from non-GE crops -- a practical impossibility, they said. However, in December, 1999, Monsanto announced that it had developed a new strain of rapeseed (a crop used to make canola cooking oil) that might raise the levels of vitamin A in humans.[6] How could consumers identify (and pay a premium price for) such a product if it weren't labeled? Obviously labeling will become possible -- indeed, essential -- when it serves the interests of the biotech corporations.
Many food suppliers seem to have figured out for themselves how to segregate GE crops from non-GE. According to the NEW YORK TIMES, Kellogg's, Kraft Foods, McDonald's, Nestle USA, and Quaker Oats all sell gene-altered foods in the U.S. but not overseas.[7] Gerber and H.J. Heinz announced some time ago that they have managed to exclude genetically modified crops from their baby foods.
For its part, the U.S. government has steadfastly maintained that labeling of GE foods is not necessary -- and might even be misleading -- because traditional crops and GE crops are "substantially equivalent." For example, the government has maintained that Monsanto's "New Leaf" potato -- which has been genetically engineered to incorporate a pesticide into every cell in the potato, to kill potato beetles -- is substantially equivalent to normal potatoes, even though the New Leaf potato is, itself, required to be registered as a pesticide with U.S. Environmental Protection Agency (EPA).
Now the government's position has become untenable. In February of this year, the government signed the international BioSafety Protocol, a treaty with 130 other nations, in which all signatories agree that genetically modified crops are significantly different from traditional crops. Thus with the swipe of a pen, the U.S. government has now formally acknowledged that GE crops are not "substantially equivalent" to traditional crops.
Meanwhile, a groundswell of consumer protest reached a crescendo last year in England and Europe, then spread to Japan and the U.S. where it has severely eroded investor confidence in the industry. Major U.S. firms that had invested heavily in the technology are now being forced to pull back. As we reported earlier, Monsanto, Novartis, and AstraZeneca all announced in early January that they are turning away from -- or abandoning entirely -- the concept of "life sciences" -- a business model that combines pharmaceuticals and agricultural products. The NEW YORK TIMES reported in January that American Home Products -- a pharmaceutical giant -- "has been looking for a way to unload its agricultural operations." At that time the TIMES also said, "Analysts have speculated that Monsanto will eventually shed its entire agricultural operation."[8] In late February, DuPont announced that it was returning to its traditional industrial chemical business to generate profits. The WALL STREET JOURNAL said February 23, "But the big plans DuPont announced for its pharmaceuticals and biotech divisions fizzled as consolidation changed the landscape, and investor enthusiasm cooled in the face of controversy over genetically engineered crops."[9]
Investors are not the only ones turning away from genetically engineered foods. The WALL STREET JOURNAL announced in late April that "fast-food chains such as McDonald's Corp. are quietly telling their french-fry suppliers to stop using" Monsanto's pesticidal New Leaf potato. "Virtually all the [fast food] chains have told us they prefer to take nongenetically modified potatoes," said a spokesperson for the J.M. Simplot Company of Boise, Idaho, a major potato supplier.[10] The JOURNAL also reported that Procter and Gamble, maker of Pringles potato chips, is phasing out Monsanto's pesticidal potato. And Frito-Lay -- which markets Lay's and Ruffles brands of potato chips -- has reportedly asked its farmers not to plant Monsanto's GE potatoes. A spokesperson for Burger King told the WALL STREET JOURNAL that it is already using only traditional potato varieties. A spokesperson for Hardees, the restaurant chain, told the WALL STREET JOURNAL that Hardees is presently using Monsanto's pesticidal potato but is considering whether to abandon it.
Earlier this year, Frito Lay also told its corn farmers to abandon genetically-modified varieties of corn for use in Doritos, Tostitos, and Fritos.[7]
According to the NEW YORK TIMES, U.S. farmers have sustained a serious financial blow because they adopted genetically engineered crops so rapidly. In 1996, the U.S. sold $3 billion worth of corn and soybeans to Europe. Last year, those exports had shrunk to $1 billion -- a $2 billion loss. The seed sellers like Monsanto and DuPont got their money from the farmers, so it is the farmers who have taken the hit, not the ag biotech firms. [11]
The WALL STREET JOURNAL reported April 28 that, "American farmers, worried by the controversy, are retreating from the genetically modified seed they raced to embrace in the 1990s... government and industry surveys show that U.S. farmers plan to grow millions fewer acres of genetically modified corn, soybeans and cotton than they did last year."[10]
The ag biotech firms dispute this assessment. They say demand for genetically modified crops has never been better. Less than a year ago Robert Shapiro, the chief executive officer of Monsanto, said bravely, "This is the single most successful introduction of technology in the history of agriculture, including the plow."[12] This year a spokesperson for Monsanto says, "We're seeing a very stable market. There's no major step backward; it's now a matter of how much we'll grow." [11] But Gary Goldberg, president of the American Corn Growers Association, told the NEW YORK TIMES recently that he believes that genetically modified (GM) corn plantings will be down about 16% this year, compared to last. He indicated that the ag biotech firms are resorting to deception to maintain sales: "The [ag biotech] companies are deceiving farmers into thinking their neighbors are planting G.M.," he told the NEW YORK TIMES.[11]
In coming days, genetically engineered (GE) food is likely to get more attention from the public. Last month the National Academy of Sciences issued a report confirming what critics have been saying about GE crops: they have the potential to produce unexpected allergens and toxicants in food, and the potential to create far-reaching environmental effects, including harm to beneficial insects, the creation of super-weeds, and possibly adverse effects on soil organisms. The Academy said there was no firm evidence that GE foods on the market now have harmful effects on humans or the environment, but the Academy also indicated that testing procedures to date have been woefully deficient.[13] Indeed, the present regulatory system is voluntary, not mandatory, so it is possible that the government may not even know about all of the genetically engineered foods being sold in the U.S. today.
The Academy pointed out that roughly 40 GE food products have, so far, been approved for sale in the U.S. but approvals have also been given for an additional 6,700 field trials of genetically modified plants.[13,pg.35] And a NEW YORK TIMES story May 3 about super-fast-growing GE salmon noted that "a menagerie of other genetically modified animals is in the works.... Borrowing genes from various creatures and implanting them in others, scientists are creating fast-growing trout and catfish, oysters that can withstand viruses and an 'enviropig,' whose feces are less harmful to the environment because they contain less phosphorus."[14] The TIMES went on to say that, "...[C]ritics and even some Clinton administration officials say genetically engineered creatures are threatening to slip through a net of federal regulations that has surprisingly large holes.... United States regulators interviewed could not point to any federal laws specifically governing the use or release of genetically engineered animals."
The Clinton/Gore administration announced last week that it will "strengthen" the regulatory system for genetically engineered foods but said the new regulations will definitely not require GE products to carry a label, despite overwhelming public demand for labels. Thus the government's latest regulatory initiative makes one thing crystal clear: what the Clinton/Gore administration and the biotech companies fear most is an informed public.
It will take years before anyone knows what the new regulations entail, or how effective they prove to be. By that time, there may have been hundreds of genetically modified plants and animals introduced into the environment with little or no regulatory oversight. The public is legitimately concerned about this.
In response to these legitimate concerns, the biotech corporations have begun to spend tens of millions of dollars on a public relations campaign because "the public has the right to know more about the benefits of biotechnology." Details next week.
STEPS TOWARD A CORPORATE STATE
Governments in the U.S. -- federal, state, and local -- together spend more than a trillion dollars of taxpayers' money per year. That's a thousand billion dollars each year, representing roughly 1/6 of total U.S. Gross National Product. By any measure, it is a huge sum of money.[1]
Many people concerned about the decline of their communities have begun to realize that government purchasing (often called procurement) has great potential for promoting environmental and social sustainability -- a potential that has barely been tapped.
By spending money strategically, governments can
** reduce environmental damage by (for example) purchasing recycled materials; 48 out of the 50 states in the U.S. have laws directing state agencies to purchase recycled materials.[2]
** create jobs in local communities and strengthen regional economies by purchasing from local firms;
** assist women-owned businesses, minority-owned businesses, or businesses that avoid the use of environmentally-destructive products such as tropical hardwoods, plastics, chlorinated solvents, or unnecessary pesticides;
** promote fair labor practices. Dozens of cities and counties, including Pittsburgh, Pa., Cleveland, Oh., and San Francisco, Ca. have local ordinances banning purchase of products made in sweatshops. Similarly, two dozen U.S. cities now require companies doing business with the city to pay their workers a "living wage."[3]
** reward firms that adopt innovative technologies, such as chlorine-free chemistry, solar power, or non-toxic cleaning compounds.
In sum, government purchasing policy offers citizens an opportunity to make both governments and corporations accountable to taxpayers. Citizens can use government purchasing policy to guide their regional economy onto the path most likely to improve their quality of life. To put it another way, government purchasing offers citizens an opportunity to impose human values on their local and regional economy.
Now, however, some of these U.S. laws have been declared illegal by the World Trade Organization (WTO), headquartered in Switzerland, and many similar laws are now under attack by corporations. It is crystal clear that the combined corporate power of Japan, Europe and the U.S. is now aiming to make government purchasing policy off-limits to democratic decision-making.
Despite the anti-WTO protests in Seattle last fall, the WTO has not changed in any fundamental way. It is a powerful new system of world governance, designed and run by corporate lawyers who are not elected, who do not answer to the people they govern, and who make decisions behind closed doors. Their decisions are binding and can only be appealed once, to a three-member tribunal composed of other WTO bureaucrats, who are themselves usually corporate lawyers.
To a historian, it seems reasonable to conclude that the WTO and the "free trade" policies it was set up to enforce are the most direct threat to democracy and popular sovereignty since the rise of the corporate state under National Socialism in Germany in the late 1930s.
The corporate media in the U.S. describe the purpose of the WTO as "globalization" -- a term so vague that it is meaningless. The media never say so in plain language but the overarching goal of the WTO (and of "free trade" policies in general) is to diminish the power of governments, and thus to reduce governments' capacity to influence the behavior of transnational corporations. The WTO was set up as a forum in which transnational corporations can challenge and effectively repeal restrictions imposed upon them by nations (or by sub-governments within nations). In other words, rather than "globalization," the real purpose of the WTO is "global corporatization" -- increased corporate control over all the nations and economies of the world.
Created by international treaty in 1995, and now boasting 134 nations as members (nations that are not members can be iced out of international trade), the WTO has written 700 pages of rules which add up to an enforceable commercial code governing markets and trade world-wide -- a code enforceable not by nation-states but by the WTO itself. One of those rules is called the Government Procurement Agreement (GPA).[4]
The GPA basically says that governments can set standards for the PERFORMANCE of purchased materials but cannot set standards based on METHODS OF PRODUCTION. Therefore, government purchasing policies cannot discriminate against materials produced by child labor or slave labor, for example. Likewise, requiring that items be manufactured from recycled materials would be prohibited under the GPA.
Thus the GPA provides one more way for corporations to strike down laws that curtail their freedoms. Corporations in the European Union, Canada, and Japan have been complaining for at least a decade that many U.S. laws are "illegal barriers to trade" meaning barriers to corporate freedom.[5] If such laws can be struck down in the U.S., they can be struck down anywhere because the U.S. is the 900 pound gorilla within the WTO. To avoid enraging the gorilla, foreign corporations have been moving cautiously, looking for a strategic opportunity to strike. Now the GPA has provided an opportunity for the first step.
The immediate issue is the country called Myanmar, formerly known as Burma. It is widely acknowledged that the military dictatorship in Burma suppresses political opposition, tortures and murders its opponents, harnesses the populace into slave labor battalions (sometimes to work for U.S. corporations that have invested heavily in Burma, such as Unocal) and generally violates universally-recognized human rights.[6,7]
Borrowing a technique that was used by 23 U.S. states in the fight to end apartheid in South Africa, a dozen U.S. cities passed local ordinances in 1995-1996 preventing local government from doing business with companies doing business in Burma. (Other U.S. cities have similar laws aimed at punishing dictators in Nigeria, Tibet, Indonesia and Cuba.[8]) In 1996, the state of Massachusetts passed a "Burma law," and this got the attention of corporations world-wide. (Although the GPA explicitly binds states and does not explicitly bind municipalities, there is widespread understanding that municipal laws will be challenged under WTO rules. For example, when Maryland tried to pass a law preventing state government from signing any contracts with the government of Nigeria or with any firms doing business in Nigeria, the Clinton administration opposed the legislation in testimony before the Maryland legislature, saying, "All state AND LOCAL sanctions are perceived to violate the rules, they can cause counterproductive disagreements.... [W]e would like to work with you to ensure that we don't expose ourselves to a potential WTO challenge."[9])
In 1998, Japan and the European Community (EC) each filed a formal complaint with the WTO, seeking to overturn the Massachusetts Burma law, basing their objection on Section XIII.4(b) of the GPA. However, a group of 550 U.S. corporations calling themselves the National Foreign Trade Council beat them to the punch and sued Massachusetts in a state court, arguing that the Constitution reserves foreign policy decisions to the Executive Branch of the federal government. Predictably the Clinton/Gore administration sided with the corporations against Massachusetts. The state court and a federal appeals court both ruled against Massachusetts.
"If such a ruling had come out a decade ago," said Massachusetts representative Byron Rushing, who sponsored the Massachusetts law, "Nelson Mandela might still be in prison today."[10] Now the U.S. Supreme Court will decide the issue. However, the European Community and Japan have announced that, if the Supreme Court rules incorrectly, they will ask the WTO to overrule the U.S. Supreme Court. The corporate rulers of Europe, Japan and the U.S. agree on this: the public has no right to impose moral standards on economic activity. The economy is not subject to democratic control. The Government Purchasing Agreement is where they are making their stand, campaigning to diminish the vestiges of democracy wherever they remain.
The good news is that this corporate assault on democracy offers unprecedented opportunities for getting the public involved. Nearly everyone can see that taxpayers have a basic right to spend their money as they see fit. With a modest amount of information, people can see the good that can come from well-crafted government purchasing policies. Such policies allow people to improve their local and regional economies, while rebuilding peoples' confidence that government can serve their needs. Lastly, the WTO assault on government purchasing makes it possible for people to understand what "free trade" and the WTO are really about -- they are really about removing the last remnants of popular sovereignty and substituting, in their place, the elements of a corporate state.
Thus this brazen corporate campaign offers us all many opportunities to take the offensive, to re-assert control over our regional economies.
For legal technical assistance on government purchasing policies, contact Robert Sturmberg, Harrison Institute for Public Law, Georgetown University Law Center, Washington, D.C.; phone 202-662-9600. See https://www.law.georgetown.edu/clinics/- hi/ (omit the hyphen). For further information about best practices in government purchasing policies, get in touch with Sustainable America, 42 Broadway, Suite 1740, New York, NY 10004-1617; phone: 212-269-9550; see www.sustainableamerica.org.
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