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"By increasing the fertility of the land, it increases its abundance. The improvements of agriculture too introduce many sorts of vegetable foods, which, requiring less land and not more labor than corn, come cheaply to the market."

-Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations

Book I.XI.n

The United States and the European Union are currently in dispute over the trade of genetically modified organisms. These altered plants produce more fruit per acre than traditional methods of farming while protecting the species from insects, environmental changes, and mutations. The output coupled with the benefits of environmental protection yield better products at a cheaper price for consumers. Adam Smith would favor the technologies of genetic modification because the fertility of the land increases, as well as its abundance. This growth results in more agricultural products on the market that require less land for cultivation, and no increase in labor. The consumer is then presented with a cheaper price because there eliminates the need to incur great labor costs and, at times, crop protection inputs such as pesticides. The European Union should allow these products to enter their market freely, to provide the maximum gain to EU consumers.

GMO stands for a ‘genetically modified organism’. A GMO is artificially developed by scientists to produce specific results such as sustain life through a drought or produce a greater quantity of fruit per plant (Monsanto Corporation:1999). This practice began centuries ago when plants and animals were selectively bred and microorganisms were used to make beer and wine. Through traditional crossing methods, scientists like Mendel have transferred genes from one individual to another with the aim of producing offspring with desirable traits.

Biotechnology in agriculture is a collection of scientific techniques used to improve or modify plants and microorganisms. Simplistic examples of biotechnology are employing yeast, molds, and bacteria to create fermented foods such as milk and cheese, or crossbreeding plants in hope of improving agriculture. The benefits of biotechnology in agriculture increased over the past few decades after scientists discovered that DNA (deoxyribonucleic acid) is interchangeable among plants, animals and other organisms, alike. This allows scientists to invent new products through both crossbreeding and a transfer of genes. Nearly any desirable trait found in nature can be transferred to a select organism. This process of transferring DNA from one to another is referred to as genetic engineering (The United States Mission to the European Union:1999).

The genetic code is universal. Related species share a large number of genes, and on that assessment, GMOs were created. By incorporating genes from an alternate plant species, an animal, bacterium, or virus, scientists can generate a new variety of organism. The most common varieties produced are corn and soybeans resistant to pests and herbicides (Monsanto:1999).

Genetically engineered, or transgenic crops, are being grown and tested throughout the world. GMO technology grants the ability to add, subtract, alter or exchange an individual gene or group of genes, which are known to influence characteristics, to produce new species of organisms (S.A.C.,2: 1999). These plants are tolerant to pests, viruses, and herbicides and produce genetically altered seeds and flowers. Examples of this technology are bacteria resistant corn and tomatoes that can stay ripe longer on the vine (Monsanto:1999).

Over the past twenty years, genetic modification of plants impacted traditional agricultural production by enabling the expedient development of new crop varieties and providing hope for future producer and consumer gain. In 1983, tobacco was the first plant to be genetically altered followed by cereals in 1990. Subsequent products, like that of soy and maize (corn), only recently reached the European market stirring up both public concern and controversy (The Royal Society, 1:1999).

Scientists’ incredible success in breeding and producing crops from modified plants resulted in a great controversy regarding food safety. The development and production of GMOs raises a number of legitimate scientific, political, and ethical concerns. Several countries restrict the importation of GMOs on the presumption that the new technologies might contain allergens or other harmful substances. Many argue that this issue can be debated for traditional crops as well (Overseas Development Institute, 2:1999).

Experts on both sides of the Atlantic overwhelmingly dispute claims that transgenic crops are hazardous. The United Kingdom’s Royal Society compiled a group of expert scientists to study the effect on humans from exposure to GMOs. The scientists concluded that consumption of genes, or DNA in food products is consistent with a typical diet. They claim that the possibility of a gene transfer from vegetables to humans is, at best, slight. Furthermore, The Royal Society submitted that many products, like that of sugar derived from modified sugar beets, is identical to that of sugar produced through traditional growing methods.

Although the tests of GMOs proved that many altered foods are safe for human consumption, the organization offers a policy prescription to increase the transparency of new product marketing. The Royal Society urges the government of the European Union to establish an independent regulator to monitor and enforce legislation throughout the Member States (The Royal Society, 2:1999). This body would represent somewhat of a European Food and Drug Administration.

U.S. citizens consume a variety of products from genetic alteration. The U.S. Food and Drug Administration adheres to strict health and safety guidelines, but continues to find GMOs as acceptable. Alan Larson, the Secretary for Economics for Business and Agriculture Affairs at the State Department addressed the issue of health standards for GMOs to the Senate Agriculture Committee. He remarked that:

Extensive scientific research has shown that foods derived through biotechnology are as safe as traditional foods. Furthermore, foods produced through agricultural and food biotechnology must meet the rigorous government standards designed to ensure the safety of any food marketed in the United States (Biotech in Brief, 1:1999).

Food production requirements for today’s population of almost 6 billion can not be met by 1940s growing technologies. It is impossible to assume that obsolete methods will provide food in the future for an expected 8 billion by 2020 (The Royal Society, 1:1999). Biotechnology provides the tools for greater productivity in agriculture. This innovation is important when considering the millions of people dying from starvation, the exponential growth of the world’s population, and the lobby to avoid cultivating delicate environmental resources. In a world where many families continue to rely on farming as their subsistence, biotechnology is the tool to combat poverty and hunger (Overseas Development Institute:1999).

Scientists believe that biotechnology has the potential to increase crop yields by over 20 percent while not increasing the use of natural resources, even in small productions areas like family farms. Research is being conducted to test the ability to implant vitamins and other nutrients that would assist in feeding the poor with greater health benefits. Developing countries must learn these techniques to ensure the advantage to their farmers and consumers.

Observers submit that developing nations stand no chance to benefit from biotechnology because they will be exploited by multinational corporations. This is not seen in places like Africa where small – scale farmers benefit from the application of using hybrid seeds. Local farmers also benefit from tissue enhancing technologies for bananas and other crops. Consequently, there is every reason to believe that the countries will also benefit from crop – protection technologies such as disease and pest resistant varieties. In fact, these GMOs are being developed and tested in Mauritius, South Africa, and Egypt.

Africa missed the green revolution and has never achieved self – sufficiency in food production. The continent’s food production is the lowest in the world and they currently import over 25 percent of their grain. Its population cannot afford to be excluded from another technological revolution. This is the opportunity for these countries to improve food production methods, rather than living under the victim mentality of the Europeans.

Because biotechnology food production increased from 4 million to 70 million acres over two years in the late 1990s, it is a much greater economic risk for developing nations not to begin implementing these techniques. Experts say that developing nations have the potential to double their production if viral diseases are controlled by transgenic breeding (Wambugu, 15: 1999).

Arguably, biotechnology could release developing nations from their dependence on primary product production. The technologies introduced to the countries increase human capital along with the production of superior agricultural products.

Experts see advancements in agriculture technology as an extension of initiatives by farmers by employing selective breeding to produce higher quality commodities. Traditional techniques took a long time to see results with no assurance of exactitude. Food biotechnology offers a quicker, more precise solution to creating more nutritious and better tasting food that stays fresh longer, while using less pesticides in production. There is a belief that transgenic products offer great benefits to the consumer with no evidence of health risk.

Dan Glickman, the US Secretary of Agriculture states that, "Biotechnology can be the [greatest] promoter ... of the health of this country and the health of American agriculture" (Food Insight, 2:1999).

The Pro Farmer Editors conclude, "While producers find benefits from [genetically engineered organisms] in lower inputs and more flexibility in crop management, consumers are finding economic and environmental benefits via less production costs and reduced use of pesticides" (Biotech in Brief, 1:1999)

James Murphy, Jr., Assistant U.S. Trade Representative for Agriculture said in May of 1999,

Not since the Green Revolution of the 1960s, when high-yielding wheat and rice varieties were developed that increased harvests in Asia two-, five-, and even ten-fold, have technological advances had the potential to so affect world agricultural trade...Biotechnology is the key to achieving food security, establishing sustainable agricultural sectors in developing countries, meeting environmental concerns, and helping U.S. farmers and ranchers maximize market returns (U.S. Mission to the European Union, 1:1999).

 

The United States and the European Union are natural allies. American values and political institutions derive from that of their European forefathers. The Western values perform the same utility function and cultural links are strong. Before the Maastricht Treaty (the 1994 international agreement that indoctrinated the Federalism of the EU), countries of Western Europe and the United States jointly participated in the North Atlantic Treaty Organization to ensure security during the Cold War. The birth of the European Union influenced the need for an increase in bilateral trade agreements between the global leaders.

As partners, the two generate over $300 billion in bilateral trade. One half of all US foreign direct investment is granted to member states of the European Union, and in turn, the EU invests 60 percent of their monies in the United States. Although the relationship across the Atlantic appears to be quite strong, trade is often a great source of contention. There exists a cultural division that economics cannot overcome (Sheridan:1998).

Smith said, "The most opulent nations, indeed, generally excel all their neighbors in agriculture as well as in manufacturers. ... Their lands are better cultivated, and having more labor and expense bestowed upon them, produce more, in proportion to the extent and natural fertility of the ground (Smith, 16: 1981 [1776])." The United States continues to advance their agricultural sector with new technologies to ensure their dominance in the world arena. Biotechnology allows farmers to maximize the output, while keeping costs to the consumer low. In 1999, almost 50% of the corn, soybeans and cotton grown in America were modified by recombinant techniques (Pro Farmer Editors, 1: 1999).

United States businesses, governments, and consumers realize the enormous benefit of genetically modified organisms. The consumer is presented with a higher quality product at a cheaper price. There is less damage to the environment because of the reduced dependence on pesticides. Production is enhanced by artificial resistance to changes in soil temperature and irrigation. Farmers experience an increased yield of production while reducing chemical and labor costs. The superfluous profit then becomes income. Finally, farmers gain the ability to market products that are easier to store, do not require refrigeration, and have a longer shelf – life.

In the United States, bio – engineered foods are regulated by the Food and Drug Administration. They have the primary responsibility for food safety concerns regarding new plant varieties. The government agencies jointly hold open meetings regarding specific risk issues of growing and eating genetically altered food. The FDA assures the public that GMOs are healthy for consumers (Larson, 2:1999). Furthermore, testing and regulation are transparent processes in the United States (Revelt, 1-2:1998). James Maryanski, Biotechnology Coordinator for the FDA said, "We have spent a considerable amount of time and resources examining the science of gene technology and how it would impact the food supply. These foods are as safe as other foods on the market (Food Insight, 2:1999)."

American research does not have any evidence to support that GMOs are less safe than produce grown by traditional crop cultivation methods. The US Food and Drug Administration permits the production and sale of novel foods to the American public because they meet all health and safety standards (US Mission to the EU: 1999).

The American Government position on the trade of GMOs with European nations is clear. Because consumer safety has proven not to be an issue, and attempt by the European Union to ban imports would be a breach of World Trade Organization rules (The Royal Society, 17:1999). Furthermore, unlike their EU counterparts, the United States government is not in favor of labeling genetically engineered food as a separate class.

Despite positive developments of biotechnology, there is a challenge from the Europeans. Regulations concerning food labeling make approval for imported agricultural products very difficult. Furthermore, the European public lacks the confidence of scientific judgement.

The public debate on transgenic crops in Europe is centered on fear and mistrust, quite possibly resulting from the experience of ‘mad cow disease’. Critics say that European concern is based on ethical, socio – economic and anti – multinational issues. This lack of knowledge and misinformation coupled with the continents’ environmentalism, need for labeling and desire to aid developing nations have nothing to do with the umbrella issue of food safety (Revelt, 3:1998).

The European Commission approved several genetically modified products, but the issue of labeling creates a long and complicated process. Within the EU, the production, release, and marketing of GMOs are tightly regulated by legislation. Laboratories must register with a higher interstate body both applying for permission, and explaining their intended research or production. If approved, scientists are then permitted to produce GM crops under frequent inspection. Once a potentially useful variety has been produced, the next step is to attempt small-scale field trails and monitor the performance while assessing potential risks to the environment and consumer. If the stage is successful, labs must then apply for the right to market GM plant varieties to their respective Member State. If Member States approve the application, there may be further regulation imposed by national governments or European Union bodies (The Royal Society, 4:1999).

The Food and Veterinary Office (FVO) was established in 1997 under Directorate- General XXIV, Consumer Policy and Consumer Health Protection. Their mission is to, "monitor the observance of food hygiene; veterinary and plant health legislation within the EU and elsewhere and to contribute toward the maintenance of confidence in the safety of food offered to the European Consumer."

The FVO is headquartered in Brussels and Dublin and will work to carry out independent studies to protect consumers, work toward transparency in legislation, and ensure excellence in food production to guarantee the highest health standards. These parameters work to reinforce consumer confidence and assist the public in making informed choices (The European Commission-DG XXIV, 3:1999).

While the political debates continue, EU citizens do not reap the benefits of GMOs. Some argue that consumers do not understand the need for greater output of agriculture because of the surplus produced under the Common Agriculture Policy program, but a poll of over 16,000 consumer throughout the EU produced different results. The majority of people polled favored the use of GMOs when there was a social or environmental benefit. An even greater majority was found in Italy, the United Kingdom, and Finland where companies are already developing and producing genetically altered plants. The minority of consumers considered genetic engineering as a "serious hazard" (Revelt, 3:1998).

An October 1999 survey by the European Commission (the executive branch of the European Union) showed that, in reality, Europeans are more interested in protecting the air, water, and soil from environmental degradation, than restricting novel foods from supermarket shelves. When asked to rank nine environmental issues in order of seriousness, Europeans ranked concern over GMOs as their lowest priority (Biotech in Brief, 1:1999).

Regardless of scientific testing, Europeans remain skeptical. Like all new technologies, genetic engineering raises a series of morality questions as to the amount of public involvement in the decision making process, and the risk assessment for society. By the new millennium, the European Union will institute new regulations on genetically modified foods. One regulation requires that producers must prove that they avoided the use of genetically modified material as a source, and the food content must not be greater than 1% of each ingredient considered individually. This is referred to as a de minimis threshold for accidental content of GM material. According to Regulation (EC) No. 258/97 (the Novel Foods Regulation) and Regulation (EC) No. 1139/98 (the labeling of two corn and soy products), this food and food ingredients must be labeled.

The second measure concerns the labeling of foods containing additives and flavorings produced from genetically modified materials. This second category can be labeled if there is a question regarding "safety or ethical concerns." These foods can include any substance that is a potential allergen, which, in reality, could be anything. Furthermore, labeling under this category must occur when the substance in question is not equal to their conventionally produced counterparts do to protein alteration or genetic mutation (US Mission to the European Union, 2:199).

Prior to the proposed regulations of this year, the European Union operated control over GMOs by Council Directive 90/220/EEC. This, "Genetically Modified Organisms – Deliberate release into the environment of genetically modified organisms" legislation was set out to harmonize the presence of GMOs in the EU market in order to protect human health and the environment (European Commission: 1990).

In addition, foods and food ingredients falling within the scope of these regulations must not present a danger for the consumer, mislead the consumer, or differ from foods or food ingredients that they are intended to replace to such a degree that consumers have a nutritional disadvantage. Directive 258/97, Article 12 goes on to state:

Where a Member States, as a result of new information or a reassessment of existing information, has detailed grounds for considering the use of that food or food ingredient...endangers human health or the environment, that Member State may either temporarily restrict or suspend the trade in and use of the food ingredient in question in its territory...(European Commission: 1997)

In complying with Community legislation on GMOs, states must find that the transgenic crops are contrary to health standards within the Union in order to restrict their sale on the European market. Ireland is a Member State with a large public opposition to the sale of genetically modified organisms. Contrary to public opinion, the Irish Food Safety Authority finds that, "There is no reason to believe that the GM foods currently on the market in the 15-member European Union are any less safe than their traditional counterparts Biotech in Brief, 2: 1999)." Experts agree that the trade barriers surrounding biotechnology (such as labeling) are not scientific, but political (Biotech in Brief, 1:1999).

Labeling may inform the consumer of a hypothetical health risk associated with the consumption of genetically modified organisms, but since these risks have not been scientifically discovered, product labeling is most likely an attempt to protect the European agricultural market. The underlying assumption as to why Europe protects their agricultural industry from advancements in technology is that their established policies cater to the farmer and not to the consumer. Smith disagrees with giving precedence to the domestic industry at the expense of the consumer. Monopoly power results in an inability to compete with increased production and lower costs, the externalities of employing GM growing methods.

The Common Agriculture Policy (CAP) is the most important European Policy in terms of the number of people directly affected, its share of the budget, and to the extent of powers transferred from national governments to the EU level. The initial objectives were enumerated in the Treaty of Rome. These were to increase agricultural productivity through technical progress, create a fair living standard for the agricultural community and a stable market for goods, while maintaining reasonable prices for consumers. The CAP was put in place to establish price mechanisms, rather than income subsidies for farmers.

It is easy to understand why the Community wanted to coordinate national policies. The memory of European food shortages was vivid, and the emphasis on an increase of agricultural productivity would ensure that from not recurring. However, by the 1980s, there were surpluses of certain products. Taxpayers were paying for both the produce and the storage or disposal of the surplus.

Many criticize that the CAP program is a wasteful, bureaucratic way of supporting agriculture. Economists fear the Common Agriculture Policy shields farmers from market fluctuations, and restricts food from being purchased on the world market. The Member States argue that the CAP is a cornerstone of European integration and that the policy aided Europe in becoming self-sufficient in the production of many products (Bainbridge and Teasdale, 52:1997).

The dramatic protectionism of the agricultural sector is both expensive and dwindling in necessity. There are a greater number of countries to accommodate to, in the contemporary EU, and a new wave of accession is set to begin next year. The CAP is based in cultural ideals of farming, and many Member States continue to present large public support for the assistance. The effect of safeguarding the EU market is that they are not now able to compete on a global scale.

Biotechnology and the CAP are related, as well. There exists a large production surplus in the Union that taxpayers currently support, and biotech increases the yield of agriculture. This would undoubtedly add to the surplus, along with forcing the EU farmers to advance their growing technologies. Biotechnology calls for less farmers, and greater innovation in research and development to create newer and better products. These qualities are against the European culture of productions, and are therefore, resistant to change (Sheridan: 1998).

The European Union extends preferential trade to 71 countries of the African, Caribbean, and Pacific regions. Many of these nations are former colonies of European member states. The agreements are structured over a number of years. The current round of agreements from the fourth Lome Convention ends at the close of 1999 (Bainbridge and Teasdale, 3:1997). ACP countries benefit from one way trade preferences from the EU, and in return grant the European Union Most Favored Nations status. Furthermore, the EU grants all 71 countries the eligibility of Common Agriculture Policy subsidies coupled with over 15 billion dollars annually in development assistance.

In reality, these agreements benefit the European Union much more than the developing countries. Their provisions for products include a 50 percent content requirement from the EU or ACP region on all manufactured products, and the exclusion of exporting products in ‘sensitive sectors’. Europeans fear that by extending preferences to these developing nations, their jobs are in jeopardy. The true worry is that these mirages of trade creation are really locking developing nations into primary product production. There is no advancement of technologies or specialization in agriculture production because the incentive to sell to the European market is eradicated with protectionism (Sheridan:1998).

In regard to the differences in developing nations and the European Union member states, their biotechnology needs are different. Europe has a surplus of food and has never experienced hunger, mass starvation, and regular death from malnutrition like in the Third World. These countries lack human capital, funding for research, and regulatory infrastructure that foster advancement. However, developing nations must avoid exploitation and begin to participate in expanding their agricultural capacity.

The goal is to find a balance between participating in agricultural biotechnology to reap the benefits, and assessing the risks attempting modernization. The differences between countries of Africa, the Caribbean, and the Pacific versus Europe are vast. The Western influence on policies of the developing world can either benefit the process of sustainability through research grants and technologies, or harm advancements through unsubstantiated opinions on scientific innovation. The criticism of transgenic crops in Europe is based on socio – economic issues, not food safety. There exists no evidence to support the European view that developing nations should be excluded from biotechnology initiatives (Food Insight:1999).

Genetic modification represents progress in agriculture; the world’s oldest and most important industry. Nearly 40 million hectares (metric form of an acre) of land were planted with genetically modified organisms in 1999. The global market for these crops is worth $1.64 billion. This technology is proven safe, and is the future for agriculture.

The United States recognizes the benefits of developing and producing GMOs as an increased crop yield, further application of technology, method of protecting a depleting environment, and presentation of high quality and yet, affordable goods for the public. It is inferred that the barriers to trade established by the European Union are to protect their domestic industry. Smith argues that barriers to trade are harmful because they raise the price of foreign goods and create a monopoly to the home market. Furthermore, there is no impetus to innovate the industry when competition is restrained (Smith, 672: 1981 [1776]). Smith also submits, "To give monopoly of the home market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or hurtful regulation (Smith, 456: 1981 [1776])."

These excerpts of The Wealth of Nations support that Adam Smith support Europeans opening their markets to transparent trade of genetically modified organisms. If, as Smith says, "The real wealth of the country is the annual produce of its land and labor," then biotechnology increases a country’s real wealth. Biotech allows countries and individuals to prosper while simultaneously benefiting the lives of the consumer.

In order to open markets to new technologies in agriculture, there is a pressing need for good information on both sides of the Atlantic. Biotechnology is a complex issue that cannot be addressed while countries formulate slogans ("Frankenfood") and expensive public relations campaigns against healthy food. GMOs are certain to be a central element in agriculture debates in the new millennium because they initiate the topics of developing the global South and the control of new technology (Larson, 3:1999).

The European Union is dynamic and forced to alter many of their existing policies to assimilate new entrants. The health and safety regulations of the EU are partly set in response to agricultural health scares of the 1990s, and also to protect their domestic industries. This is sure to change, however. With the continent beginning to develop GMOs themselves, the public and governments will realize the benefits from technology and open their market to trade partners.

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