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Looming Trade War Over Plant Biotechnology Cato Trade Policy Analysis No 18

Looming Trade War Over Plant Biotechnology Cato Trade Policy Analysis No 18

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American farmers are caught in themiddle of a battle between the UnitedStates and the European Union overgenetically modified organisms (GMOs).The EU is one of the most importantpotential markets for those crops, two-thirds of which are grown in the UnitedStates, but impending EU regulations onbiotech crops would seriously disrupt theflow of those exports to European markets.Plant biotechnology has already dramat-ically boosted American farmers’ productiv-ity and lowered their costs and, at the sametime, helped them to protect the naturalenvironment by reducing their use of agri-cultural chemicals and preventing soil ero-sion. Consumers have also benefited fromlower prices and a healthier environment. Indeveloping countries, the deployment of plant biotechnology can spell the differencebetween life and death and between healthand disease for hundreds of millions of theworld’s poorest people.One scientific panel after another hasconcluded that biotech foods are safe toeat, and so has the U.S. Food and DrugAdministration. Even an EU review issuedin the fall of 2001 of 81 separate Europeanstudies of GMOs found no evidence thatbiotech foods posed any new risks tohuman health or the environment.The EU has banned all foods containingGMOs on the basis of the “precautionaryprinciple,” under which regulators do notneed to show scientifically that a biotechcrop is unsafe before banning it; they needshow only that it has not been provedharmless. Jettisoning scientific risk assess-ment and replacing it with a precautionaryapproach will open the entire trading sys-tem to interruptions based on arbitrary jus-tifications. Capricious labeling require-ments will also proliferate. Such labels areunjustifiably stigmatizing and costly andoffer no consumer health or safety benefits.Consequently, all U.S. negotiatorsinvolved with trade in biotech crops mustmake it unalterable U.S. policy to opposethe application of the precautionary prin-ciple and insist instead on scientificallybased risk standards in all internationaltrade forums.
The Looming Trade War over Plant Biotechnology
by Ronald Bailey
August 1, 2002No. 18
 Ronald Bailey is
Reason
magazine’s science correspondent and an adjunct scholar at the Cato Institute.
Executive Summary
 
Introduction
The battle lines are being drawn. On oneside stands the United States, the world’s lead-ing developer and exporter of genetically modi-fied crops. On the other is the European Union,whose consumers, spooked by anti-biotechnol-ogy activists, are demanding that all biotechcrops be labeled if not banned altogether.Caught in the middle are American farm-ers, who plant more than two-thirds of all theworld’s acreage devoted to geneticallyenhanced crops. The U.S. Department of Agriculture estimates that genetically modifiedcrops will represent nearly one-third of the2002 corn harvest and nearly three-quarters of the 2002 U.S. cotton and soybean harvests.The EU is one of the most important potentialmarkets for those crops. American farmersalready export about 30 percent of their soy-bean harvest and 20 percent of their corn har-vest to the EU. American farmers exported$6.3 billion in agricultural goods to the EU in2000. Twenty-four percent of those exportswere oilseed products, chiefly soybeans and soyproducts, and 16 percent were grains and feeds.Sixty-three percent of U.S. corn byproductexports went to the EU.
1
U.S. corn growersalone have lost about $200 million per yearsince 1998 because of the EU ban on import-ing genetically enhanced crops.
2
ImpendingEU regulations on biotech crops would seri-ously disrupt the flow of those exports toEuropean markets.The Office of the U.S. Trade Representativehas already threatened to bring the issue to theWorld Trade Organization in Geneva for adju-dication. This transatlantic food fight hasbroader implications as well: If the U.S. posi-tion prevails, the poor of the world will haveaccess to a safe technology that could dramati-cally reduce hunger and malnutrition. If theEU position prevails, research will slow,putting the world’s poor at greater risk of star-vation and setting a terrible precedent for thefuture of free trade.This analysis will answer four questions: (1)What is plant biotechnology? (2) Who oppos-es it and why? (3) Where does the trade battlestand now? (4) What should U.S. policy be?
What Is Plant Biotechnology?
In the last decade, biologists and cropbreeders have made enormous strides in theirability to select specific useful genes from vari-ous species and splice them into unrelatedspecies. Previously, plant breeders were limitedto introducing new genes through the time-consuming and inexact art of crossbreedingspecies that were fairly close relatives, forexample, rye and wheat, plums and apricots.For each cross, thousands of unwanted geneswould necessarily be introduced into a cropvariety. Years of “backcrossing”—breeding eachnew generation of hybrids with the originalcommercial variety over several generations—were needed to eliminate the unwanted genesso chiefly useful genes and characteristicsremained. The new biotech methods are farmore precise and efficient. The plants they pro-duce are variously described as “transgenic,”“genetically modified,” “genetically engi-neered,” or “genetically enhanced.”Plant breeders using biotechnology haveaccomplished a great deal in only a few years.For example, they have created a class of high-ly successful insect-resistant crops by incorpo-rating toxin genes from the soil bacterium
 Bacillus thuringiensis
. Farmers have sprayed
 B.thuringiensis
spores on crops as an effectiveinsecticide for decades. Now, thanks to someclever biotechnology, breeders have producedvarieties of corn, cotton, and potatoes thatmake their own insecticide.
 B. thuringiensis
istoxic largely to destructive caterpillars such asthe European corn borer and the cotton boll-worm; it is not harmful to birds, fish, mam-mals, or people.
3
Another popular class of biotech crops incor-porates an herbicide-resistance gene that hasbeen especially useful in soybeans. Farmers canspray herbicide on their fields to kill weeds with-out harming the crop plants. The most widelyused herbicide is Monsanto’s Roundup(glyphosate), which toxicologists regard as an
2
If the EU positionprevails, researchwill slow, puttingthe world’s poor atgreater risk of star-vation and setting aterrible precedentfor the future of free trade.
 
environmentally benign chemical that degradesrapidly, only days after being applied. Farmerswho use “Roundup Ready” crops don’t have toplow for weed control, which means there is farless soil erosion.
4
Biotech is the most rapidly adopted newfarming technology in history. The InternationalInstitute for the Acquisition of Agri-BiotechApplications estimates that the global area plant-ed in biotech crops in 2001 was 130 million acres(52.6 million hectares), up 19 percent from 2000.The area planted in biotech crop varieties is up30-fold since 1996.
5
The first generation of biotech crops wasapproved by the Environmental ProtectionAgency, the Food and Drug Administration,and the U.S. Department of Agriculture in1995. The USDA estimates that in 2002 trans-genic varieties will account for 32 percent of corn acreage, 74 percent of soybean acreage,and 71 percent of cotton acreage in the UnitedStates.
6
With biotech soybeans, U.S. farmerssave an estimated $216 million annually inweed control costs and make 19 million fewerherbicide applications per year.
7
In addition,using no-till farming made possible by herbi-cide-resistant biotech soybeans, farmers pre-vent 247 million tons of topsoil from erodingaway.
8
It is estimated that herbicide-resistantbiotech soybeans, canola, cotton, and corn vari-eties and insect-resistant biotech cottonreduced global pesticide use by 22.3 millionkilograms of formulated product in 2000.
9
U.S.cotton farmers avoided spraying 2.7 millionpounds of insecticides and made 15 millionfewer pesticide applications per year by switch-ing to biotech varieties. Their net revenuesincreased by $99 million.
10
Researchers esti-mate that
 B. thuringiensis
corn, by preventinginsect damage, increased yields by 66 millionbushels in 1999.
11
Documented Safety
One scientific panel after another has con-cluded that biotech foods are safe to eat, and sohas the FDA. Since 1995, tens of millions of Americans have been eating biotech crops.Today it is estimated that 60 percent of thefoods on American grocery shelves are pro-duced using ingredients from transgeniccrops.
12
In April 2000 a National ResearchCouncil panel issued a report that emphasizedthat the panel could not find “any evidencesuggesting that foods on the market today areunsafe to eat as a result of genetic modifica-tion.”
13
Transgenic Plants and World Agriculture
,a 2000 report prepared under the auspices of seven scientific academies in the United Statesand other countries, strongly endorsed cropbiotechnology, especially for poor farmers inthe developing world. “To date,” the reportconcluded, “over 30 million hectares of trans-genic crops have been grown and no humanhealth problems associated specifically with theingestion of transgenic crops or their productshave been identified.”
14
Both reports concurredthat genetic engineering poses no more risks tohuman health or to the natural environmentthan does conventional plant breeding.As biologist Martina McGloughlin of theUniversity of California at Davis remarked at aCongressional Hunger Center seminar in June2000, the biotech foods “on our plates have beenput through more thorough testing than con-ventional food ever has been subjected to.”
15
According to a report issued in April 2000 bythe House Subcommittee on Basic Research:“No product of conventional plant breeding . . .could meet the data requirements imposed onbiotechnology products by U.S. regulatory agen-cies. . . . Yet, these foods are widely and properlyregarded as safe and beneficial by plant develop-ers, regulators, and consumers.”
16
The reportconcluded that biotech crops are “at least as safe[as] and probably safer” than conventionallybred crops.
17
Even a 2001 review of 81 separateEuropean scientific studies of genetically modi-fied organisms funded by the European Unionfound no evidence that genetically modifiedfoods posed any new risks to human health orthe environment.
18
Feeding the World’s Hungry
Today, pest resistance and herbicide resis-tance, along with some disease resistance traits,are the chief improvements incorporated intobiotech crops. And most of those enhance-ments have been made in leading commercial
3
With biotech soy-beans, U.S. farmerssave an estimated$216 million annu-ally in weed controlcosts and make 19million fewer herbi-cide applicationsper year.

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