GMOs and intellectual property rights in the TPP

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1

GMOs & Intellectual

Property Rights in the TPP

Student: Finn Mewton

Student Number: 10601570

Supervisor: Dr. Robin Pistorius

2

nd

_{Reader: Dr. Hein Anton van der Heijden}

June 2014

MA Political Science

International Relations

University of Amsterdam

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Acronyms

FDA – Food and Drug Administration FTA – Free Trade Agreement

GATT – General Agreement on Tariffs and Trade GMO – Genetically Modified Organisms

IPR – Intellectual Property Rights

ISDS – Investor-State Dispute Settlement PPA – United States Plant Patent Act

PVPA – United States Plant Variety Protection Act TPP – Trans-Pacific Partnership

TRIPS – Trade-Related Aspects of Intellectual Property Rights USTR - Office of the United States Trade Representative

UPOV – International Union for the Protection of New Varieties of Plants WTO – World Trade Organisation

Acknowledgements

I would like to thank my supervisor, Dr. Robin Pistorius, for all his patience and assistance while writing this thesis. It has been a challenging endeavour, but with his support and guidance I believe I have managed to produce a worthwhile research project and learn a great deal during the process.

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What is the TPP?

In 2008 the U.S. announced its intentions to join the Trans-Pacific Partnership (TPP) negotiations. Prior to the United States entering the talks just four countries were involved in discussions, Brunei, Chile, New Zealand and Singapore. Along with the United States another eight countries have since joined, Australia, Peru, Canada, Mexico, Malaysia, Vietnam and Japan, bringing the total number of participating nations to twelve.

Combined, these twelve nations account for roughly 40% of global trade, leading many commentators to call the TPP the largest free trade agreement (FTA) in history. Given its size the agreement represents a significant event in the trajectory of contemporary trade relations on a global scale. Though still in the negotiation phase, the outcome is likely to have a major impact on the nature of international trade and the global economy in general.

CHAPTER 1 1.1 Introduction

This thesis will attempt to understand exactly what sort of impact the intellectual property rights (IRP) chapter of the TPP will have on the agricultural biotechnology sector, specifically genetically modified organisms (GMOs). IPRs are a pertinent issue in regards to agricultural biotechnology, as the industry relies on IP protection to control and profit from its unique range of commodities.

The TPP is significant, not only for the amount and value of trade the agreement will encompass, but also due to the U.S. having indicated that the TPP will serve as a model for all future trade agreements in the Asia-Pacific region (GICP, 2014). Therefore the results of the TPP negotiations will have lasting effects that will extend beyond the immediate impact of the agreement itself.

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The TPP’s chapter on IPR is being branded a “TRIPS plus” approach to IPR (Lewis, 2011). This epithet is being used to indicate the manner in which the proposal goes above and beyond the Trade Related Aspects of Intellectual Property (TRIPS) agreement adopted by the World Trade Organisation (WTO). A primary concern of this thesis is understanding what is meant by a TRIPS plus approach to IPR and to what extent the TRIPS plus approach of the TPP is applicable to the agricultural biotech sector and, if so, what impact this will have. Uncovering the motivations and interests behind the formation of a TRIPS plus approach to IPR is also a central concern of this thesis. Despite having proliferated in the United States, GMOs are facing mounting opposition from various groups across the globe. Lilliston (2014) suggests that this opposition is driving industry calls for the U.S. government to push for loose regulatory systems on GMOs through international trade deals. Lilliston (2014) describes this strategy as a ‘backdoor’ method, aimed at introducing GMOs into hostile markets. This thesis will explore the extent to which this claim is true by looking at the TPP, as well as how and why the TRIPS agreement was adopted by the WTO.

Using the biotech sector as a case study, this thesis will also endeavour to understand whether the IPR clauses point towards further integration of the global economy or a new form of protectionism in international trade. To understand the processes of integration and protectionism two theories will be explored. Firstly, Marx’s commodification theory, which states that capitalism expands and becomes increasingly integrated by continually creating new commodity forms. Following Kloppenburg (2004), GMOs represent the full commodification of the seed, suggesting that the spread of this technology as a commodity amounts to increased integration of a more complete capitalist system.

The argument in favour of the protectionist explanation for the TPP is derived from the work of Chang (2010), who argues that rules found in the WTO amount to developed countries “kicking away the ladder”. By this, Chang (2010) is

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drawing attention to the fact that developed countries are prosperous in part due to their unwillingness to adhere to international rules on issues such as IP rights. Therefore, the insistence with which the U.S. now demands others to adopt these rules is an attempt to prevent others developing as they have done, thus protecting their own economic position. The degree to which this perspective can be said to be true for the TPP will indicate the level of protectionism the treaty promotes.

The motivation and interests behind the clauses of the IPR’s chapter of the TPP that relate to agricultural biotechnologies will be key to understanding the general thrust of the agreement. With regard to the countries involved, agricultural biotech companies are based almost exclusively in the United States, a fact reflected by the pro-biotech stance the U.S. has adopted during TPP negotiations (Wikileaks, 2013). The industry has had a great deal of support from the U.S. government, including the alteration, over time, of the U.S. IPR system to suit the needs of the biotech industries (OTA, 1989).

In order to explain the steadfast support of the biotech sector by the U.S. government, Schumpeter’s new leading sectors theory will be utilised. Broadly, Schumpeter’s theory argues that economic growth occurs in cycles stimulated by new technological innovations (Schumpeter, 2010). It will be suggested that the U.S. state views biotechnology as a new technological innovation capable of creating high levels of growth. The state relies on this growth, explains Schwartz (2010), in order to finance its own existence and activities.

It is generally agreed that U.S. economic hegemony is in decline, especially when considered in the context of rising economic and political competitors such as China (Cammack, 2010, Jacques 2009, Quinn, 2011). Schwartz (2010: 4) concludes that any further revival of American economic power “hinges on control over the next wave of technologies”. Schumpeter’s theory therefore provides a plausible explanation for the U.S. to be championing the interests of the biotech sector through international trade agreements.

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The theoretical approaches used suggest a double movement is occurring, both towards further market integration and protectionism. A geographic understanding of the global economy provided by Schwartz (2010) helps to explain this process. He suggests that economies have a territorially defined central location, around which economic activity is oriented. The centre of the economy is the area where the most profitable industrial activity clusters. Therefore, while the economy as a whole may continue to expand, states will compete to have the central hub, containing the most profitable sectors, positioned within their territory. This thesis will explore the extent to which the U.S. views the agricultural biotech sector as a new leading sector, worth protecting and encouraging, as a strategy for maintaining its position at the centre of the expanding global economy.

Given the central topics of this thesis, as described above, the leading research questions is as follows:

How will the TPPs proposed IPR clauses affect the trade of agricultural biotechnology commodities in the Asia-Pacific region and do these changes point towards increasing integration or a new form of protectionism in international trade?

1.2 Relevance

The relevance of this research project is derived in part from the topical nature of the subject at hand. The TPP agreement is still in the negotiation phase and has begun to gain attention from various groups, yet despite this, surprisingly little academic work has been produced on the subject (Lewis, 2011). Therefore this thesis will attempt to fill a gap in the existing literature on international trade agreements.

With the TPP negotiations currently occurring in secret, the publishing of the IPRs chapter by Wikileaks (2013) has presented the unique opportunity to engage in a semi-informed discussion on the direction the TPP negotiations are moving and the possible outcome of the talks.

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The publication of the IPR chapter has led to commentary and analysis on the impact that the proposed TPP agreement will have on Internet privacy and pharmaceuticals (Sutton, 2012, Kardas-Nelson, 2014). Yet there has been very little detailed discussion about the sections of the chapter that quite clearly relate to agricultural biotechnologies, such as article QQ.E.1 that shows the U.S. is pushing for all countries to allow for the patenting of life forms, including plant life (WikiLeaks, 2013).

As with the TPP, GMOs are a contemporary subject and have attracted much attention recently. In the United States, where GMO crops have been grown for two decades, there is a growing opposition movement, focusing primarily on the introduction of GMO labelling (Lilliston, 2014). GMOs have also become contentious in other TPP countries, for example activists and campaigners recently forced the Chilean government to abandon a so called ‘Monsanto Law’, which sought to privatise seeds (DuMonthier, 2014). Consequently, any impact the TPP might have on the laws and regulations relating to the trade and use of GMOs in countries involved in the negotiations, is highly relevant.

1.3 Objective

As stated above, analysis of the IPR’s chapter of the TPP thus far has emphasised its ramifications in relation to Internet privacy laws and pharmaceuticals (Sutton, 2012, Kardas-Nelson, 2014). The objective of this thesis is to show how the clauses proposed will impact the trade of agricultural commodities in the region. By researching this area the thesis can cover a slight gap in the literature, which has not yet been explored.

This initial objective will hopefully shed light on the broader goal of determining trends within economic development and geopolitics, with the intention of showing the existence of both geopolitical protectionism and economic integration. Ultimately it will be suggested that the TPP is heading in the direction of greater global market integration, in a manner that presents the

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possibility for a revival of U.S. economic power through a geographically oriented protectionist strategy.

1.4 Methodology

Research will be based on an extensive literature review of the relevant areas. A primary source within this investigation will be the IRP’s chapter of the TPP negotiations published by WikiLeaks (2013), which provides information on the clauses to be included as well as the negotiating position of each of the parties involved. Alongside the Wikileaks documents, the literature regarding agricultural biotechnologies will contribute to the empirical analysis, as will literature covering geopolitical and international trade issues. This will include the work of relevant NGOs, academic articles and books, sourced via the Internet and university library.

1.5 Structure

To begin, an account of the emergence of the biotechnology sector in the United States will be described, covering the political, scientific and economic changes and consequences involved. A large part of this account will be given over to describing the history of IPR relating to plants and seeds under the U.S. legal system. This section will provide an essential overview of IPR that will form the basis of further analysis of IPR in the context of international trade agreements undertaken in chapter 3.

Chapter 2 will also include a theoretical discussion regarding economic integration and protectionism. This section will draw on the work of Kloppenburg (2004) to explain the commodification of the seed within the broader context of the capitalist economic system. This approach will be supported by the work of Harvey (2003) who offers insight into the systemic nature of capitalism that explains the trend towards greater integration. These arguments will be balanced by Schumpeter’s (2010) new leading sector theory, which explains economic growth as a product of innovation. Finally, Schawtz (2010) will be introduced, adding a geographic element to the analysis.

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The chapter finishes with an examination of the barriers to growth and expansion facing the agricultural biotech sector. Drawing on the work of Lilliston (2014), the chapter concludes by claiming that agricultural biotech companies are attempting to use international trade agreements as a backdoor method of opening up access to new markets.

This leads into the third chapter, which focuses the discussion on the application of IPR to international trade agreements. Included is a detailed look at the WTO and TRIPS, as well as a discussion on the apparent stagnation of the WTO and the switch in focus to regional trade agreements. This section also includes an account of IPR as a form of protectionism, drawing on Chang’s (2010) “kicking away the ladder” theory of development.

The fourth chapter turns to discussing the TPP, analysing the impacts of the IPR chapter on participating nations. This will include looking in detail at the impact of the agreement on agriculture in both Chile and Vietnam. It will also discuss other issues relating to GMOs raised by the TPP, specifically the issue of GMO labelling.

The fifth and final chapter will draw together the discussion in order to make some concluding remarks. The impact of the TPP on the trade of agricultural biotech commodities in the Trans-Pacific region will be summarised in order to determine whether the agreement points towards a new form of protectionism, further integration of the global economy or both.

CHAPTER 2 – Biotechnology & IPR

2.1 Introduction

In order to understand the implications of the IPR chapter of the TPP it is necessary to be aware of how the biotechnology industry has grown and developed and the role IPR have played. The industry was brought into existence by publicly funded research into genetic engineering. Large chemical companies recognised the potential for this technology to create new profitable

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commodities in the area of agriculture. However, in order to realise these profits the commodities required legal protections. This necessitated an alteration of existing IPR laws to incorporate plant life.

Biotechnology has since become a primary concern of the United States government. It is viewed as a way of increasing American exports and improving the state of the economy. The U.S. government’s focus on supporting biotech growth is explained with the use of Schumpeter’s leading sectors theory, which states that periods of economic growth are stimulated by technological innovation.

As will be explained, concerns over biotechnology, its safety and social and economic implications, has led to the emergence of a great deal of opposition, particularly outside the United States. This is presenting a barrier to the industry’s international expansion and the U.S. government’s economic agenda.

2.2 Biotechnology: From Lab to Market

I. The beginning of Biotechnology

Genetic modification has been part of agricultural processes for centuries. Traditional cross breeding methods aimed to combine the DNA of plants with particular qualities in the hope that these attributes would be present in the offspring. Wieczorek & Wright (2012) explain that this is an extremely indirect procedure as there is no guarantee that the desired genetic traits will be combined in the new plants. Therefore, cross breeding plants is very slow and uncontrolled, requiring horticulturalists to pick and choose plants with selected traits time and time again before achieving the desired outcome.

In contrast, explain Wieczorek & Wright (2012), crop breeding with the use of recombinant DNA technology, which allows the transferring of one or more specific gene from one organism to another, is a direct and controllable process. While both classical and contemporary cross breeding methods seek to change the genetic makeup of an organism it is the latter, interspecific gene transfer

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method to which people typically refer when discussing genetically modified organisms (GMO). Here on in the same simplification of terminology will be used. Modern GMO technology began to develop in the 1980s, predominantly centred on the West coast of the United States, particularly the San Francisco Bay area. The University of California at Berkley, often referred to as Caltech, played a pivotal role. The technology emerged from the belief that controlling genetics will allow for the reshaping and improvement of society, a belief that links to the eugenics movement that gained momentum during the 1930s and a deep, ideological commitment to industrial capitalism. (Cummings, 2005)

Historically, plant breeding has avoided criticism by appearing unbiased and benign, giving the impression, as Kloppenburg (2004: 5) describes it, that it is the “most unambiguously beneficial of scientific endeavours”. This perception has been reinforced by success stories, the most prominent being the development of hybrid corn, which by 1985 achieved average yields six times higher than during the 1930s (Kloppenburg, 2004). Focusing on success stories has artfully avoided discussion of the downsides associated with the commercialised trajectory of traditional plant breeding, such as environmental destruction, displacement of labour and dependency on chemical inputs (Kloppenburg, 2004, Weis, 2007).

The same narrative of technological neutrality is being drawn upon to invoke support for the use of GMO varieties. Commonly proposed justifications provided by advocates of GMOs tend to focus on their potential to solve issues of global hunger and address the problem of a growing population (Juma, 2011). Thus arguing, in essence, that GMO technology is as benign as traditional plant breeding methods. Advocates suggest that the technology could result in higher yields therefore providing more, and cheaper, food. The term Green Revolution is often invoked to suggest that GMO technology will provide a technical solution to the problems facing global food production (Weis, 2007).

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As was the case with proponents of traditional plant breeding methods, advocates of GMOs tend to ignore, downplay or dismiss concerns regarding the potential for negative consequences brought on by their use. These include possible dangers to human health, the emergence of so-called “super weeds”, genetic pollution and dependence on agrochemical inputs (Cummings, 2005, Weis, 2007). These concerns have largely, until recently at least, been swept aside in the rush to create and commodify new plant varieties with modern GMO technologies. The reason for this is linked to the huge potential for profits offered by GMOs, and the role of interested parties in silencing opponents in order to protect their investments.

The powerful ideological narrative driving the scientific breakthroughs in genetic engineering has been coupled with a highly compelling market incentive. As Weis (2007) explains, the commodification of the seed offered unique opportunities for generating profits and exerting control over the agricultural industry as a whole. This is possible, he claims, because owners of the seeds would be in the “position to technologically weave together dependence upon seasonally purchased seeds with dependence upon other inputs, which would prevent farmers reclosing agro-ecological loops and escaping this off-farm purchase and control” (Weis, 2007: 70-71).

Kloppenburg (2004: 201) echoes this sentiment arguing, “the seed, as embodied information, becomes the nexus of control over the determination and shape of the entire crop production process”. The centrality of the seed in agricultural production explains why its commodification has been pursued with such ferocity. Through the commercialisation of plant breeding and the introduction of GMO technology “the agricultural plant sciences have become increasingly subordinated to capital” asserts Kloppenburg (2004: 8).

In doing so, plant breeding and seed production have become increasingly embedded in capital accumulation processes. For, while the technology for creating genetically modified seeds was conducted primarily by public institutions, such as Caltech, agro-chemical companies have come to dominate

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the field and the direction it has taken, buying up smaller seed companies around the world and involving themselves in the research agendas of the universities (Weis, 2007). Howard (2009: 1265) emphasises this, arguing that the “commercial seed industry has transformed dramatically” during the last 40 years and is now “dominated by a small number of transnational pharmaceutical/chemical corporations” (See fig. 1.).

Kloppenburg (2004: 8) argues that, before these companies could successfully commodify the seed and turn it into a “vehicle of accumulation” subjected to the logic of capitalism, there were a number of scientific and political barriers that had to be overcome. In fact, as will be explained, many barriers still remain and are a driving factor in the way the industry, along with the United States government, are attempting to set the agenda on IPR in international trade fora.

II. Overcoming Scientific Barriers

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In order to make the scientific theory surrounding GMO technology a commercially viable reality, a combination of technological innovations in other fields of science were necessary. As Cummings (2005: 27) explains, “the study of enzymes that cut DNA, and bacteria that recombine it, were teamed up with high speed computers that provided the computational muscle needed”. From the beginning, the main focus of the industry was on finding a way to genetically modify corn, due to the crops centrality in American agricultural production. However, early attempts to insert DNA into target cells resulted in the destruction of the cells. In some plants, this problem was overcome by infecting cells with a soil microbe, but this technique failed with corn. (Cummings, 2005) The end result of experimentation into the genetic modification of corn was the gene gun, which quite literally shoots DNA into target cells. The technique was developed in 1983 by John Sanford at Cornell University and is now widely used by genetic engineers around the world. While the gene gun made the transferring of DNA simple, this is only the first step. The plant will naturally resist the new DNA in an attempt to protect its original genetic makeup. To persuade the plant to accept the new gene containing the desired characteristic, engineers must also include other genes that facilitate the process, which is known as transformation. Once the plant has successfully been persuaded to accept the new genes there is the added complication of where they will end up and exactly what impact they will have on the plant. In this regard, the biological process is completely random and causes most attempts at genetic modification to result in failure. Through trial and error a viable crop will eventually be produced that can be released to market. (Cummings, 2005)

Once the science was in place the companies involved needed to ensure the political and, even more essentially, the legal environment was conducive to their business strategy. This started with dealing with possible regulatory barriers that might be thrown in their pathway.

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With the science in place, the biotech companies turned to dealing with the political landscape. Having been responsible for widespread pollution in the past, the companies involved were hampered by environmental regulations. As they began entering into the field of GMOs they sought to pre-empt similar barriers to their business from developing. (Cummings, 2005)

In 1986 Monsanto executives visited Washington to seek assurances that their multi-billion dollar business venture had the full support of the United States government. Monsanto’s strategy was to request a suitable regulatory system that fitted their objectives while placating public concern over GMOs (Eichenwald et. al., 2001). The company was successful and assurances were granted before the public could have any real input. The result was a weak regulatory framework, announced in 1992, which introduced a system “whereby the industry doesn't tell the government about problems with its products and the government doesn't look for them” (Cummings, 2005: 28).

The basis for the lack of stringent regulation, argues Cummings (2005), is the idea of “substantial equivalence”. This concept holds that GMO foods are not substantially different from traditional foods. This principle has been adopted by all the relevant government agencies in the United States and “it is the reason there have been no safety studies of GMO foods, no post-market monitoring, no labels, no new laws, no agency coordination, and no independent review” (ibid: 28).

Regulation has since been adopted and disposed of in line with the demands of the biotech industry and in particular the demands of Monsanto, the largest most deeply politically embedded of the biotech corporations (Eichenwald et. al., 2001). Indeed, the revolving door between the U.S. government and Monsanto is well documented. A case in point is Michael Taylor who was made responsible for policy development at the U.S. Food and Drug Administration (FDA) having formerly worked as a Monsanto lawyer. Taylor returned to Monsanto some years later to become a Vice President, though not before a stint at the United States Department of Agriculture (USDA) where he was involved with food

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safety and biotechnology (Cummings, 2005). Most recently Taylor is back at the FDA, working as Deputy Commissioner for Foods and Veterinary Medicine, which involves planning new food safety legislation (FDA, 2013). There are at least 22 revolving door cases between the biotech industry and U.S. government (Cummings, 2005). The extent of agricultural industry’s influence on the USDA has led Mattera (2004: 4) to suggest that it is no longer the “Peoples Department”, as it was referred to by President Lincoln, but rather it is the “Agribusiness Industry’s Department”.

Thanks to the U.S. government’s unwavering support for the needs and wants of the biotechnology sector, the first GMO seeds reached the U.S. market in 1994. The first product was a tomato named the “Flavr Savr” developed by Calgene (now owned by Monsanto), which turned out to have absolutely no commercial advantage and was promptly withdrawn from market. This was followed by the release of Bt Corn in 1996 and then “Roundup Ready” canola, soy and cotton, strands that contained genetic material making them resistant to Monsanto’s herbicide Roundup. (Kloppenburg, 2004)

GMO varieties have become increasingly big business, particularly in the United States where 91% of soybeans, 87% of cotton and 73% of corn consisted of GMO strains by 2007, meaning virtually the entire population has eaten some form of GMO food (Strauss, 2009). While these figures suggest a broad use of biotechnology in agriculture, it is worth noting that only two forms of GMO seed were actually in use by 2003; those producing herbicide tolerance and those incorporating Bt toxins (Kloppenburg, 2004). “The rather constricted character of commercial agrobiotechnology”, argues Kloppenburg (2004: 296), stems from the “narrowing range of companies that are now involved in that undertaking”. Alongside the challenges of creating a marketable product and dealing with the political barriers, the biotech sector had one further hurdle to overcome. Patent law in the United States and the world over did not always offer protection for living organisms. To commodify the seed it was necessary to first alter the existing approach to patenting of plants and other living organisms.

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2.3 Intellectual Property Rights

As mentioned earlier, profiting from seed patents is dependent firstly on technological rents subject to intellectual property protections. Therefore, to commodify the seed it is essential that it be patentable under IPR laws. Until recently, this was both legally impossible and considered immoral, particularly by cultures that continue to consider nature as part of a common heritage governed by principles of common ownership (Weis, 2007). If the biotech companies and the United States government were to reap the benefits of the new technological advances that had been made, these conditions would first need to be changed.

IV. IPR and The Problem with Plants

Property rights have played a central role in the development of a global capitalist economy. Derived from Roman Law, the right to private property was revived in the medieval era with the support of the European nobility, who used the right to justify their ownership of land in the face of increasingly centralising kings and restless peasants who also attempted to claim ownership (Schwartz, 2010). Property rights essentially entail the control of property, both material and intellectual, by a certain person or persons. This entails the right to sell, rent or delegate control of that property to others as the owner(s) see fit (Alchian, 2008).

Broadly, intellectual property refers to “ideas, inventions, discoveries, symbols, images, expressive works (verbal, visual, musical, theatrical), or in short any potentially valuable human product (broadly, “information”) that has an existence separable from a unique physical embodiment” (Landes & Posner, 2003: 1). The need for intellectual property rights is driven by the desire for inventors to protect the ideas they have produced from being copied by others, thus allowing them to commodify and profit from the idea (FAO, 2001).

Patent law has been developed as the method of legally protecting one’s intellectual property, yet disputes over ownership regularly occur, particularly

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between corporations eager to profit from a certain patent (Landes & Posner, 2003). Other methods of protection also exist, such as trademarks and copyright, all with the essential aim of preventing anyone except the property owner from benefiting from intangible works (FAO, 2001).

In the United States protection of inventions is enshrined in the country’s constitutions and patents have been in operation since 1790. However, as in many places, plants proved particularly difficult to subject to patent laws. This was down to three factors; firstly, as indicated above, that nature was not patentable, secondly the inability to adequately describe new plant varieties in a manner that fitted the requirements of patent laws, and finally, the conviction that breeding did not produce plants with uniform genetics (OTA, 1989).

These problems are clear when considering the characteristics of traditional seed varieties, also known as landraces or farmers’ varieties. These seeds are not easy to patent due to their genetic diversity. This diversity makes them difficult to “define or distinguish unequivocally as a particular variety” (FAO, 1997: 19). The inability to effectively patent traditional seeds has meant that most research and development in crop breeding has taken place in the public sphere, where investment is not dependent on profitability (Boettiger et. al., 2004). Kloppenburg (2004) points out that the centrality of public institutions in the research and development of plant breeding was itself a barrier to the commercialisation of the sector, as the private sector was forced to compete with the public. Therefore, it was not until the introduction of the Plant Patent Act of 1930 that a private seed industry was able to develop in the United States (Boettiger et. al., 2004).

V. Plant Patent Act of 1930

The first possibility for protecting strains, and thus commodification of the seed, was through the use of hybridisation (Cummings, 2008). Hybridisation occurs naturally in nature as plants cross-pollinate with related species or back-cross with parent species (BSBI, 2005). Plant breeders can also orchestrate the

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process under controlled conditions in order to produce plants with desired traits. As mentioned earlier, hybridisation through cross-breeding is the traditional method of altering a plant’s genetic makeup (Wieczorek & Wright, 2012).

Through these processes it is possible to produce hybrid plants that do not breed true or, in other words, which do not produce genetically identical offspring (Boettiger et. al., 2004). This makes it possible for breeders to create a specimen with desired traits that an exact copy of which cannot be grown from the seeds the plant produced. This means that farmers and growers cannot simply share, swap or buy seeds from one another but must provide actual cuttings from the plant if they are to propagate an exact replica (OTA, 1989).

The United States Plant Patent Act (PPA) of 1930 provided protection against the propagation of such plants by anyone other than the patent owner. In essence, the act protects plant varieties that have been asexually produced (through grafting, cuttings, or budding) but not plants sexually produced (from seed). This allows breeders to maintain a monopoly over the original variety for the length of the patent, though not its offspring. Prior to this law “the breeder’s sole opportunity for financial reimbursement was through high sales prices of comparatively few reproductions during the first 2 or 3 years after the variety’s initial availability”. After this point growers could simply propagate the plant themselves. (OTA, 1989: 71)

The PPA can be considered “a major innovation in intellectual property rights for germplasm” (Boettiger et. al., 2004: 1091). For the first time, private industry had legal protections that allowed them to achieve greater profitability and invest more capital in plant development, assured to some degree that those investments would be protected (OTA, 1989).

In overcoming the previous qualms relating to patenting plant life, the U.S. congress determined that breeding was assisting nature and therefore produced patentable inventions. As for adequately describing a new variety, the U.S.

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government simply relaxed the standards they had previously adopted. At this point, the willingness of the U.S. government to accommodate breeders’ needs within the patent system was largely due to concerns about crop losses from diseases, such as Chestnut blight. The government hoped that by encouraging breeders, new disease resistant strands would be produced. (OTA, 1989)

VI. Plant Variety Protection Act of 1970

New discoveries in the science of genetics and plant breeding, coupled with a changing international political environment, prompted Congress to introduce the Plant Variety Protection Act (PVPA) in 1970. After the PPA was introduced, development of sexually produced plant varieties continued to be carried out by the public sector, as the inability to patent such varieties deterred private investment. However, once it became accepted that sexually reproducing plants could breed true (produce genetic replicas), private industry clamoured for protection in order to invest in producing new patentable varieties in this way. (OTA, 1989)

The additional patent protections established by the PVPA were also motivated by the creation of the International Union for the Protection of New Varieties of Plants (UPOV), which was introduced by a collection of European countries in 1961 (OTA, 1989). The UPOV treaty provides national protection for new plant varieties developed by breeders that are “deemed new, uniform, stable and distinct against unauthorised sale for replanting” (Boettiger et. al., 2004: 1091). This gave UPOV members higher protection than their U.S. counterparts, motivating the U.S. to introduce the PVPA law (OTA, 1989).

As with the PPA, the PVPA was designed to give private sector plant breeders a greater incentive to invest, this time, in sexually reproducing plant varieties. Within the first 20 years of the PVPA more than 2000 certificates had been awarded. (OTA, 1989)

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In 1980 the Supreme Court case of Diamond v. Chakrabarty determined living things were patentable (FAO, 2001). However, this ruling covered microorganisms while the issue of plant life was not dealt with until the case of Ex parte Hibberd. The 1985 Hibberd ruling concluded that plants and seeds containing increased levels of tryptophan were patentable under utility patent laws. Unlike the PVPA, owners of plant utility patents can block others from using a patented plant to develop new plant varieties. (OTA, 1989)

According to Hemphill (2012), the utility patent imbues upon the holder ownership for a limited period of time, normally around 20 years. Boettiger et. al. (2004) explain that within the biotechnology sector such patents have been applied to a variety of innovations, besides the plants and individual genes, involved in the research and development processes. This includes, they continue, the necessary tools and components of genetic engineering, such as vectors, which assist in the transference of genetic material.

As stated, discoveries in the realm of living organisms have not traditionally been considered patentable; rather they have been thought of as ‘natural’ discoveries. With this attitude wholly changed in the 1980s, a huge growth of investment into biotechnologies occurred, particularly in the field of pharmaceuticals, but also in agriculture. (FAO, 2001)

With the application of utility patents to life forms the commodification of the seed, which began with the PPA, was completed in the United States (Kloppenburg, 2004). In 1995 the U.S. also introduced the Biotechnology Process Patent Act, which allowed for the patenting of the processes used to create novel and unobvious GMOs, solidifying the patenting of biotechnologies under U.S. law (Hemphill, 2012)

With support and encouragement by the United States for the patenting of genetically modified plants, there has been a huge surge in patents of this sort in recent years, the majority of which are owned by U.S. corporations. Between 1996 and 2000 66% of the 4000 patents for genetic transformations were filed.

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Out of the total number of biotechnology patents that have been awarded, which are related to agriculture, 4331 are owned by U.S. businesses, with non-U.S. businesses controlling just over 3000 patents. Due to the concentration of ownership within the industry, it is now estimated that just five companies, Pfizer, DuPont, Syngenta, Aventis and Dow, control 71% of all agricultural biotechnology patents. Meanwhile, more than 90% of GM seeds are either sold or licensed by Monsanto. (Strauss, 2009)

According to the FAO (2001), the high concentration of patent ownership is in turn reinforcing the concentration of the biotech industry. Since so many aspects of agricultural biotechnology have been patented, from individual genes to the methods used to extract them, the large Trans-national companies (TNCs) involved have taken to cross-licensing their patents. Essentially, trading patents in order to progress with research. Smaller companies who do not have existing patents to trade are faced with barriers in this regard as they cannot gain access to patents necessary to continue their research. This barrier to entry furthers the concentration of agricultural biotechnologies in the hands of just a few very large TNCs.

2.4 U.S. Economic Strategy and the Biotech Sector – State & Capital

Having emerged primarily from the United States, and now controlled and dominated chiefly by American corporations, the biotech sector has clearly been recognised as an important sector of the economy by the U.S. government. Partly, perhaps, this is a result of the industry’s capture of key government offices, but this does not fully explain why the United States has acquiesced to the demands of the biotech sector so readily. To complete the story it is important to take into account the general recognition of U.S. economic decline and the potential for revival presented by new technologies (Cammack, 2010, Jacques 2009, Quinn, 2011, Schwarts, 2010).

This section takes a closer look at the economic theory underpinning the process of commodification in relation to the seed, as mentioned earlier, and seeks to account for the role of the state in these activities. The commodity, as

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Kloppenburg (2004) explains, is central to capitalism and the extension of the commodity form equals the expansion of the system itself. This theory explains the efforts of industry to commodify the seed and open up new avenues of capital accumulation

The work of Schwartz (2010), Harvey (2003) and Arrighi (2010) are then used to explain the role of the state as a facilitator and co-benefactor of these processes. While Schumpeter’s (2010) new leading sectors theory provides a plausible explanation for the emphasis the state might place on supporting a particular industry, such as biotechnology.

Finally, the market integration processes of commodification and capital accumulation are combined with the territorial and protectionist aspects of the new leading sector by using the work of Schwartz (2010). His theory suggests that a state may take protectionist measures to ensure its position within an expanding global economy, where the geographic location of a territory within an economy defines its wealth and power.

This leads to the conclusion that the state is simultaneously a self-serving territorial entity, seeking to benefit from capital accumulation processes located within its boundaries vis-à-vis other territories and a tool subordinated to the needs of capital accumulation processes.

I. Primitive Accumulation & the Commodity Form

As indicated in the prior discussion on the emergence and formation of the biotech sector in the United States, the main objective is the commodification of the seed in order to create new avenues for capital accumulation. Kloppenburg, drawing on the work of Marx, asserts that capitalism is “characterised by a system of generalised commodity production in which labour power also figures as something that is bought and sold; in a sense, the production of commodities by commodities” (2004: 23). In order for this system to emerge, continues Kloppenburg, there must be a period of primitive accumulation, which is the “initial separation of the worker from the means of production” (Ibid: 24).

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In the case of farming, the seed is a fundamental part of the means of production, essential as it is for the growing of all food and feed crops. Thus the commodification of seeds can be seen as a form of primitive accumulation as it robs the farmer of control over an essential part of the means of production and places control into the hands of capital, in this case represented by industrial agribusiness (Kloppenburg, Ibid). Cummings confirms this analysis, claiming, “Agribusiness’s long-term strategy has been to eliminate the autonomy of farmers as independent producers” (2008: 6). This process has been characterised by the increase in off-farm inputs, such as heavy machinery and chemicals, designed to replace traditional, autonomously produced methods of production (Kloppenburg, 2004). As indicated earlier during the discussion on the emergence of the biotech sector, the introduction of GMOs is a further step in this process, intended to further separate the farmer from the means of production.

When it comes to determining whether the TPP’s proposed IPR system represents a form of territorial protectionism or an expansion and integration of the global economy, understanding the process and implications of commodification are essential. For, Kloppenburg argues, “to extend the imposition of the commodity-form to new areas is to expand the system” (2004: 24). Therefore, the successful commodification of the seed can be viewed as an extension of the capitalist economy as a consequence of the further integration of agricultural processes under the control of capital. When it comes to discussing the TPP in Chapter 4, it will be necessary to determine to what extent the treaty will support the processes of commodification beyond the United States.

II. Capital Accumulation and the State

Kloppenburg’s (2004) application of Marx’s theory of commodities to the seed provides a framework for understanding the role and motivation of capital in the spread of agricultural biotechnology. However, other than to recognise its role as

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a coercive force during periods of primitive accumulation, the function of the state is largely ignored by his analysis.

Arrighi (2010) contends that the expansion of capitalism was and is dependent upon the combined efforts of territorial power structures and bourgeois capitalists. The territorial component “specialized in the provision of protection and in the pursuit of power”, while the capitalist element “specialized in the buying and selling of commodities and in the pursuit of profit” (Arrighi, 2010: 123). Harvey (2003) defines the separation of these two power structures as the ‘territorial logic’ and the ‘capitalist logic’, arguing that they exist in a symbiotic yet contradictory relationship. This relationship, argues Harvey, is titled towards the power of capital, though he recognises that ‘there are times in which the territorial logic comes to the fore’ (2003, p.33). In other words, while engaged in a mutually beneficial relationship the will of capital tends to supersede the interests of territorially based power structures.

Schwartz also recognises the symbiotic nature of the relationship between these two components. He argues “modern states and modern markets cannot exist without each other: states selectively create and enforce the property rights that maintain markets; property rights sustain the accumulation of capital and growth of incomes that create the regular and substantial sources of revenues which sustain states” (Schwartz, 2010: 1). Like Arrighi and Kloppenburg, Schwartz clearly sees the states role as an enforcer while markets, also understood as capital, are concerned with the pursuit of profits.

As an enforcer the state facilitates the expansion of capital, which is driven by market pressures to continually pursue more and greater returns on investment. Due to this the global economy is perpetually expanding and becoming more integrated as capital seeks out new investment opportunities (Schwartz, 2010, Arrighi, 2010). If new avenues for investment cannot be found, an over accumulation crisis will occur, which is characterised by “the lack of opportunities for profitable investment” (Harvey, 2003: 139). This, as Harvey (2003) explains, is because capitalism requires an “outside”, which over time it

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can internalise in order to maintain capital accumulation. Put more simply, capital requires a constant supply of new and growing markets in order to thrive. This links with Kloppenburg’s interpretation of Marx’s commodity theory, as he argues “capital systematically seeks not only to make a commodity of all use-values but also to create new needs whose satisfaction entails new use-use-values that in turn can be commodified” (Kloppenburg, 2004: 25). By turning existing use-values into commodities and creating new needs, capital is creating new markets to expand into, as a means of maintaining accumulation processes. In the context of biotechnology, the alterations to the IPR system in the U.S. can be seen as facilitating the emergence of a new commodify form, while promoting the sector through international trade agreements may turn out to be a method of enabling access to new physical markets by persuading those markets to recognise and accept the new commodity.

The recognition of the symbiotic relationship between state and capital is crucial to understanding the role of the state in relation to emergence of a private agricultural biotechnology sector. For if the accumulation of capital is a source of income that allows the state, as a self-interested, power seeking territorial entity to sustain itself, then its support of capital accumulation processes becomes axiomatic.

Yet to understand why the state should choose to support biotechnology in particular requires further explanation. What is it about the biotechnology sector that makes it so attractive an option for state power to pursue? Schumpeter’s New Leading Sector theory, which argues that economic growth occurs in cycles stimulated by technological innovations, supplies one plausible justification.

III. New Leading Sector Theory

Schumpeter’s theory is based on the notion of Kondratieff cycles, which Schwart’s (2010) explains are the perceived cyclical upward and downward swings in the economy. These cycles, he continues, are considered to last an

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average of 50-60 years with alternating periods of fast and slow economic growth. Building upon the theory of Kondratieff cycles, Schumpeter suggested that upward swings were driven by entrepreneurial innovations in the sciences (Schumpeter, 2010). He believed that these innovations emerged as new leading sectors of the economy and caused disruptions across multiple industries forcing them to adapt and improve, a process Schumpeter called “creative destruction”. American has always had an obsession with invention and innovation and has long viewed science as a way of improving business. In 1945 the U.S. government produced a report titled “Science, the Endless Frontier”, which described how science could be used to serve the private sector (Cummings, 2005). Biotechnology was a science identified as having huge potential for profits and growth (Eichenwald, 2001). In this sense it fits the characteristics of an innovation worthy of being dubbed a new leading sector. Certainly the Obama administration has treated biotechnology to a great deal of privileges, such as the so-called Monsanto Protection Act. This bill, which was signed into law by Obama, gave biotech companies legal immunity at the federal level, preventing federal courts form halting the sale or use of GMOs even if they are deemed harmful (Global Research, 2013). The willingness of the state to make exceptions for, and provide privileges to the biotech sector demonstrates the sectors perceived importance to state objectives.

The state seeks to control any new leading sector as a means of positioning itself in the centre of the global economy. Other states will then be forced to adapt themselves to serving the centre, as stipulated by Schawtz (2010). According to Schwartz (2010), the existence of economic centres tends towards the creation of inequality between regions and results in a hierarchy between states.

Schwartz (2010: 43) argues that inequality within societies has always existed, but with the spread of global markets inequality between societies also began to emerge. Schwartz (2010) understands the cause of this inequality in terms of the global division of labour. Depending on the characteristics of a particular state and taking into account its geographical locality, a state will be pressured to

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adopt certain policies. He contends that agricultural economies emerge around a central point and then expand around this point in concentric rings. The distance of each ring from the central point will dictate the form of production that can occur in this region. The end result of this geographic spacing is a “hierarchical pattern of zones producing goods with diminishing degrees of value added”, which leads to inequality between regions (Schwartz, 2010: 45).

As stated, these rings are caused by the difference in costs of production dictated by the distance a given location is from the central production hub. Schwartz (2010: 53) explains that more profitable, higher-value-added commodities will be produced closer to the centre because they can afford the higher costs of land rents determined by the short distance to the centre. Meanwhile, he continues, production of less profitable commodities will be forced outwards, where rents are lower due to higher transportation costs to the centre. This leads Schwartz (Ibid: 53) to conclude that inequality is caused by rational market behaviour, as producers are forced to select or locate the production of their chosen commodity in the zone where it will be profitable.

However, it is important to note that these conditions do not necessarily equate to underdevelopment in the outer rings as it might suggest. Schwartz argues that if the ratio of labour to lands is low it may be possible for higher living standards to be achieved. The cause of unequal development, he contends, is when “peasants are forced into the market against their interests” (2010: 55). This occurs when it is not rational for a peasant to switch from subsistence to commercial agriculture, but they are coerced into doing so nonetheless. Given this, Schwartz (2010: 55) holds that “coercion is the more direct cause for underdevelopment […] than the market per se.”

Schwartz (2010), drawing on Krugman and the product cycles theory, also suggests that industrial production occurs in clusters and operates a similar centre/periphery dynamic as found in agricultural production described above. Within industrial production zones, explains Schwartz (2010: 57), high wages, incomes and skill levels result in new industries emerging that generate rents for

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innovators. As an innovation becomes standardised rents disappear and competition over price becomes prominent, leading production to move further out in search of lower wages (Schwartz, 2010). As Arrighi et. al. (2003) point out, the profitability of production at the point of standardisation drops considerably, largely due to the increased competition caused by easy access to the innovative technologies and practises.

The fact that the original innovators are the only ones to achieve high profits explains the importance, for states, of supporting and encouraging new leadings sectors to develop within their territory. For it is only by being the first that substantial profits can be derived from innovation.

By facilitating the leading sector’s development, the state is able to position itself at the centre of the global economy. Unable to benefit from innovations due to increased competition, other nations are forced to adopt whatever profitable activity the market will allow for in their region. As will be shown in chapter 3, IPR prevent developing states using innovations emerging from the central hub to assist their development. It will be argued that IRP are a form of coercion, which contributes to the maintenance of inequality between regions.

Therefore, while biotech companies are concerned with the commodification of the seed as a way of creating new avenues for capital accumulation, the state is concerned with centring those accumulation processes within its territorially defined area. By supporting the new leading sector the U.S. state is simultaneously facilitating the processes of capital accumulation through the spread of a new form of commodity to new markets, providing the industry with an “outside” into which it can expand, and at the same time, creating new and larger revenue streams that will bolster its own power.

Essentially there is a double movement occurring, with motion both in the direction of integration and protectionism. Due to the inherent interdependence of state and capital it is not possible to separate the two impulses. Rather they occur in tandem, simultaneously contradictory and consonant. On the one hand,

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capital accumulation processes drive forward the integration of the capitalist system, while on the other, states carry out protectionist measures in an attempt to secure or improve their position in the economy.

2.5 Challenging Agricultural Biotechnology, in the U.S. and Abroad

Despite the tendencies of integration and territorial protectionism described above, the advance of the agricultural biotechnology industry has been fraught with problems and is facing mounting resistance. Even with the political support of the U.S. government, and the power of the corporations pushing GMOs to curtail and avoid public debate, the issue has nevertheless given rise to massive resistance both inside the United States and internationally.

Indeed, resistance to the commodification of the seed is not a recent phenomenon; environmentalists and consumer groups challenged the U.S. government’s attempt to extend the PVPA in the 1980s citing concerns over an emerging oligopoly developing in the seed industry (Kloppenburg, 2004). Opposition to GMOs both within the United States and abroad is growing based on several factors including health concerns, environmental issues and the social and economic impacts of the way the technology is being implemented.

I. Health and Environmental Concerns

The potential dangers associated with the genetic modification of the seed have been reiterated by scientists and environmentalists repeatedly and are now starting to gain mainstream recognition. Studies on the health impacts of consuming GMO foods carried out on rats have suggested the possibility of malformed organs, tumours and early death (Cummings, 2005). One study in particular, which was published in the journal Food and Chemical Toxicology, linked tumours in rats to the consumption of GMO maize and was given wide circulation, causing a veritable scandal. Though the results were not conclusive, the paper was later retracted by the journal on very dubious grounds, an action widely attributed to pressure from Monsanto (Casassus, 2013, Engdahl, 2013). The silencing of opposition by the biotech sector, particularly opposition from scientists, has become common argues Cummings (2008). This has resulted in a

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serious lack of unbiased information and available research into the possible health risks from consumption of GMOs, making an informed analysis difficult. Prominent environmental concerns also abound, including the risk of unpredictable results stemming from the genetic transfer from GMO crops to related plant species and wild varieties, often referred to as ‘genetic pollution’ (Cummings, 2005, Weis, 2007). One possible outcome of this process is the emergence of ‘super weeds’ that develop a resistance to herbicides by adopting the genetic characteristic from GMO crops (Cummings, 2005).

II. Social and Economic Issues

The results of genetic pollution are also having a damaging social and economic impact as non-GMO crops are becoming contaminated. This has left organic farmers unable to obtain licences as their crops no longer meet the required standards (Cummings, 2005, Kloppenburg, 2004, Weis, 2007). Conventional farmers have also been affected by GMO contamination and suffered the consequences (Strauss, 2009). The most well-known case is that of Percy Schmeiser, a Canadian rapeseed farmer who was sued by Monsanto in 1998 for allegedly sowing their patented seeds without purchasing a licence. Monsanto initially claimed Schmeiser must have stolen the seeds, yet later conceded that this was not the case. Despite this, the court ruled in favour of Monsanto stating that it did not matter how the seeds had ended up in Schmeiser’s fields (Goldsmith, 2004).

The case of Percy Schmeiser against Monsanto has set a precedent whereby responsibility for avoiding contamination is placed on those not using GMO crops. Schmeiser (2004) suggests that contamination of super weeds has already become prolific across Canada and, to make matters worse, many organic and conventional farmers have lost access to European markets due to GMO contamination, further increasing the economic ramifications.

Another key social and economic consequence is the dependency of farmers who do adopt GMO crops. As Kloppenburg (2004) explains, the commodification of

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the seed is predicated upon the separation of the farmer from the means of production. In practical terms this means the creation of a relationship of dependency between the farmer and the biotech company supplying his seed. Yet Weis (2007) describes how throughout history farmers have always saved, traded and sold seed to one another freely. No one person or institution controlled the rights to the seeds being used or exchanged. With the introduction of patentable seed technologies, it is possible for farmers to become dependent on the companies who have ownership of the seeds, marking a sharp shift in the historical relationship between farmer and seed. Many farmers are not keen to change these traditional methods and as such, agricultural biotech companies have been going to great lengths to persuade farmers to sign their reputedly nefarious business contracts (Schmeiser, 2004).

Once a farmer has signed a seed contract with one of the providers they are dependent upon them, not only for the seed, but also for the other inputs, such as herbicides and pesticides, which the seeds have been designed for (Weis, 2007). Schmeiser (2004) claims contracts are generally about 3 years in length and effectively sign away all of a farmers rights.

III. Civil Society Reaction & Governmental Barriers

As awareness of the issues associated with GMOs has increased, a variety of civil society groups have organised to oppose their use, both within the United States and abroad. These groups and organisations have achieved varying degrees of success, with Europe being a prime example of how strong popular opposition to GMOs is preventing their full implementation.

According to a study by Font (2011), Europeans generally view GMOs negatively, though with some ambivalence. While many people feel GMOs pose an environmental threat and would not want to consume them, there is support for the idea that they may assist Third World agricultural development. Overall however, the study found that Europeans view the primary beneficiaries of GMOs to be the biotech companies, not the consumers.

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According to Fresco (2012), in order to get approved in the European Union a new GMO must first be granted a positive “final opinion” by the European Food and Safety Authority, before being authorised by the European Commission and voting member states. Fresco (ibid.) explains that many strains of GMO have simply become stuck between these bodies, unable to achieve approval. This is either because the commission has failed to bring the case to vote or because a majority of member states have been opposed to authorisation.

Indeed the approach of many member states has reflected the viewpoints of European citizens. Many areas of Italy, Spain, France and Germany, among others, have banned GMOs outright, while national governments have banned particular varieties, including Bt Maize (GENET, unknown). Perhaps the most important difference between the European Union and the United States are the regulatory models they have adopted. In the United States regulation operates on a risk assessment model, which Cummings (2008) explains requires strong evidence of the potential harm before regulatory action can be taken. This, she continues, leads to harmful products being on the market for years while scientists and regulators argue over technical details, such as appropriate sample sizes, elements of chance or the possibility of errors. In regards to GMOs specifically, U.S. regulators have relied on the principle of substantial equivalence, which states that GMOs are essentially no different to conventional foods and should therefore be dealt with under the same risk assessment model of regulation (Vigani et. al, 2012).

In comparison, the European Union operates on the basis of the precautionary principle, often described as the “better safe than sorry” principle according to Cummings (2008). The precautionary principle shifts the burden of proof onto the companies pushing the GMOs to demonstrate their safety, preventing the product from reaching market until their soundness has been verified.

The position of the European Union and its member states on GMOs has also had an impact on struggles over the technology in other regions. For example, in Canada access to the European food market has been affected by GMO