Sierra Club of/du Canada


The World Trade Organization at Cancún
Agriculture and the Environment



WHAT IS THE WTO?

The World Trade Organization (WTO), stemming from the General Agreement on Trade and Tariffs (GATT), was founded in order to develop rules that would bind sovereign nations together in an international system designed for the exchange of goods. Building on the GATT agreements, which set in motion the drive to reduce tariff barriers to international trade, the WTO has extended powers and acts as an international legal body regulating trade actions of its 146 member states. The goal of the WTO is “to help producers of goods and services, exporters, and importers conduct their business.{1}”

The WTO Meetings

The heads of all of the member states of the WTO meet, in what is known as a Ministerial, once every 2 years. At each of these meetings the member states discuss previous draft texts and eventually finalize and agree to certain clauses. Also at each meeting a new round of discussions is launched which will be finalized at the next meeting. The WTO has set a final deadline of January 1st, 2005 to reach a final agreement on international trade protocols.

The Doha Round

The Doha Round of trade negotiations was launched at the 2000 ministerial, in Doha Qatar. It was at these meetings that the text to be agreed upon in Cancún was first proposed. Since the Doha meeting, committees have been assigned with the task to negotiate key elements in order to ensure agreement in Cancún Mexico.

The negotiations, if successful, will have many negative effects on the Environment, on social systems and especially on democracy. Organizations around the world have been mobilizing, not in opposition to trade, but in a clear opposition to the WTO and to the policies that it puts forward.


FOOD AS A HUMAN RIGHT

Article 25 (1) of the Universal Declaration of Human Rights states:

    Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.{2}

However, the total number of undernourished people in the world is growing. Six million children under the age of 5 die from hunger every year. Statistics from the Food and Agriculture Organization (FAO) show that 840 million people were undernourished in 1998-2000. Many nations where hunger is a major problem are net food exporters, all too often residents can’t afford to buy the food they themselves produce.

The world’s poor want to sustain themselves, their families and their communities with food that is safe and healthy. The world’s poorest people live in rural areas and work in agriculture. Indigenous seeds and seed sharing need to be protected so farmers can preserve traditional adaptive varieties, by-pass dependence on agri-business corporations and increase food security. It is estimated that as many as 1.4 billion people, including 90% of African farmers depend on saving seed to provide crops for the following season. Through patents and intellectual property rights GE seeds threaten seed saving and exchanging. If poor farmers move to GE seeds they lose their right to save seed and are forced every single year to purchase expensive seeds and pesticides.

Creating a secure food system is dependent upon land access. Land needs to be available and accessible to the farmers who work the land not only those who are rich enough to buy land. Those who work their traditional lands need to be protected so that they can remain self-sufficient and autonomous. All of the displaced people who have been removed from their traditional lands can not continue to be ignored.

The negotiation taking place at the WTO meetings in Cancún will not support the human right to food or to property. Instead the Cancún agenda is promoting industrial agriculture. Industrial agriculture has been proven to be more harmful to the environment, more socially destructive, and less efficient than ‘traditional agriculture’. The United Nations Environment Program has called modern agriculture “one of the major threats to indigenous and local communities as well as to biodiversity, health ecosystems and food security.”{3} Large-scale, corporate run, export-oriented monoculture farming is the primary cause of landlessness, hunger and food insecurity in the world today. Right now, while farmers also lose their livelihoods, their right to seeds and their sovereignty; nations are losing their sovereignty through rules intended to ease the exchange of goods.

Why the Current Text Doesn’t Promote Sustainable Farming

The WTO has the ability to erode all of the progress that citizens, organizations and governments have made surrounding ecological protection, biodiversity conservation, and sustainability. A first draft of possible modalities for agricultural negotiations was released on February 12, 2003 and was followed by a second draft on March 18, 2003, both written by Stuart Harbinson, the chair of the WTO agricultural negotiations. Already corporate profits have been weighted against ecological preservation.

In WTO negotiating texts, environmental or social concerns are reviewed under trade-related aspects by the Committee on Trade and Environment (CTE). However, environmental or social concerns, as issues of foreign trade are seen as potential “barriers” to the free flow of goods and/or services. In cases where the environmental protection has become a barrier, protectionist measures are forfeited for the benefit of the corporation. In reviewing the environmental disputes heard at the WTO tribunal, not one case has favoured environmental protection.{4}

There are four key areas relating to agriculture which will be discussed in Cancún.

  • The Agreement of Agriculture (AoA);
  • The Trade Related Intellectual Property Rights (TRIPs) agreement;
  • Three ‘new issues’: investment, government procurement and competition policy; and
  • The General Agreement on Trade in Services (GATS).


The Agreement on Agriculture

The most important agreement which will be debated in Cancún is the AoA or the Agreement on Agriculture. The AoA has not yet been decided on but the draft text ignores many of the proposals from the developing world. The current text serves to increase indirect forms of export subsidies which do not benefit small farmers in the developing world but which will increase the dumping (selling food for lower than the cost of production) of export food into the market of developing nations. The AoA text will:

  • Reduce food security in developing countries as small farms will be lost to large monoculture export-oriented industrial agriculture;
  • Increase agricultural pollution through the increase in large-scale industrial monoculture;
  • Increase the reliance on genetically engineered foods and seeds. Variety and diversity in food stock will decrease as natural biological diversity will be compromised; and
  • Food will travel long distances, contributing to climate change.

As subsidies serve to support farmers domestically, tariffs are additional fees added to the prices of imported goods to aid domestic consumption. Only wealthy countries can afford to give their farmers substantial subsidies so tariffs are an important tool for developing countries. However, within the context of international trade, countries no longer have the authority to increase tariffs. Developing countries have asked that tariffs in the developing world be increased to counter balance subsidies in the developed world. Yet Harbinson’s text puts the issue of subsidies in the developed world on the back burner, while making the reduction of tariffs in developing countries a priority. The text proposes slashing any tariff over 120 percent by 40 percent while any tariff between 20 and 120 percent must be slashed by 33%. The staple commodities in the developing world are the same commodities, being subsidized in the US and in the EU. In reducing tariffs on these commodities hunger and food insecurity in the developing world will increase.


The Special Safeguard Provision

At the present time, there exists a special safeguard provision (SSG), which is currently only available to 30, mostly developed, countries. The SSG is like an insurance policy of tariffs. In the case of price drops or rapid surges of imports, the SSG allows a country to add an additional tariff on imported goods or restrict the quantities imported thereby protecting their domestic producers. Developing countries have asked that they be permitted the use of the SSG in the same circumstances as the 30 countries that are blessed with this power. The current text ignores that request. Instead, the draft allows the 30 original countries the continued use of the SSG for five to seven years, following the completion of the Doha program. For developing countries the use of SSG will be limited to a couple of products per country. However, they will only be allowed to use the SSG after undergoing a review aimed at improving the efficiency of the use of the SSG by the 30 developed countries. In other words, developing nations will have to undergo a review aimed at assisting developed counties in their use of SSG for 5 to 7 years. Eventually, the developing countries will be able to use the SSG, only that power will be limited to two or maybe three products per country.


The Trade Related Intellectual Property Rights agreement

The Trade Related Intellectual Property Rights (TRIPs) agreement sets specific global laws on copyrights and patents. The TRIPs agreement is of great concern because patents can be extended to living things such as seeds, plants, genes and animals. In practice, these global laws are allowing multinational corporations to hold monopolies on seeds, the linchpin of food security. The TRIPs allows corporations to claim ownership of life and criminalizes seed saving and seed sharing.


The General Agreement on Trade in Services

The GATS is an all round ‘liberalization agreement’ which serves to limit the sovereign powers of nationals to make their own decisions. The practical application of GATS limits the powers of countries to regulate measures and services such as those that protect the environment, worker safety, and public access to water, health care and education. Democracy would dictate that control of a country’s own land, natural resources and public services should be regulated by the public vote, not, by international trade agreements. The GATS agreement pertains to agriculture in numerous ways as private corporations could push small farmers out of the market through inflated privatized hydro or water costs.



HEALTH RISKS
The Example of Lindane

NAFTA contains one particularly controversial clause, Chapter 11. Article 1106 of Chapter 11 prohibits host countries from imposing certain types of requirements on investors as a condition to entry and establishment. Host countries are not permitted to require that investors export a certain percentage of sales, demand a percentage of inputs be purchased locally, or to demand that certain technologies be transferred to the host country.

The concern here is that in several cases now it has been argued that an import ban constitutes a performance requirement. Import bans are a frequently used tool of environmental policy for dealing with toxic substances. Canada has banned the import of lindane, a highly toxic organochlorine pesticide on both health and environmental grounds. The manufacturer of lindane, Crompton Corporation has claimed that the ban is an unfair trade barrier. The dispute, to be settled in WTO court could lead to Canada having to pay millions in damages to pay for lost sales as well as possible reverting to allowing the import of lindane. If the US wins this dispute not only would Canada either have to allow lindane or pay compensation but this would set a precedent which would discourage other countries from strictly regulating dangerous chemicals such as lindane.



THE SANITARY AND PHYTOSANITARY AGREEMENT
The Example of Hormone Use in the EU

An agreement exists which allows for any country to place bans on particular commodities if they can prove without doubt that it has negative health consequences. The agreement, entitled the Sanitary and Phytosanitary Agreement (SPS) is in theory something quite positive but in practice it has failed to allow the sovereign right of nations to protect the health of their own citizens. The agreement eliminates independent countries’ ability to err on the side of caution, or have standards which are ‘higher’ than international standards. The SPS takes the key decision making power away from national governments and instead places the power to make decisions regarding health, food, safety and the environment in the hands of unelected international standard-setting bodies, in this case trade experts who have little or no scientific expertise.

Beginning in 1980 until 1989, the EU or then EC hotly debated prohibiting the sub-therapeutic use of hormones and antibiotics as growth promoters. The EU placed a ban on using hormones in cattle in 1988 and followed this by placing a ban on importing hormone treated Canadian and US beef in 1989. In 1996 the United States, Canada, Australia and New Zealand presented their case against the hormone ban to the WTO where they successfully challenged the EU ban on hormone treated beef under the SPS (Sanitary and Phytosanitary measures) agreement. The WTO panel found in favour of the United States, Canada, Australia and New Zealand in 1996, 1997 and twice in 1998, citing that the EU ban violated the Sanitary and Phytosanitary (SPS) agreement. It was ruled that the EU did not have absolute proof of any negative health consequences of hormone treated beef and thus the ban was decided to be in violation of international trade agreements.

The WTO ruled that the US was free to impose sanctions of equivalent value on the EU . In May of 1999, the EU stated that it would not lift the ban. The US responded by imposing US$191.4 million in trade sanctions against the EU for its failure to comply with the WTO ruling. (Canada also imposed sanctions.) Regardless, of the ruling, the EU refused to reverse its ban and does not import hormone-treated beef to this day.



The Hormone Issue

The EU ban and Canada US dispute with the ban was centred around six hormones: estradiol, melengestrol acetate (MGA), progesterone, testosterone, trenbolone acetate (TBA), and zeranol. Melengesrol acetate, zerandol and trenbolone acetate are synthetic hormones while estradiol, progesterone and testosterone are natural hormones.

They are normally administered in a slow-release lozenge-type tablet which is inserted under the cow’s skin on their ear. The ears are then thrown away at slaughter. Estradiol is one of the main ingredients in beef-hormone cocktails used in Canada. Much scientific research has lead to estradiol-17 beta, being labelled an endocrine disruptor. Studies have also shown estradiol-17 beta to be carcinogenic with both tumour developing and tumour growth effects. Revelor-H, an estradiol containing hormone cocktail, was approved in 1997 against the recommendations of Health Canada’s scientists. Canadian studies have indicated that Revelor-H caused a significant reduction in the Thymus gland of cattle which is essential to the healthy function of the immune systems .

Hormones are widely used in US agriculture: over 90% of US cattle producers use hormone implants or add them to feed. The prevalence of hormone use in Canada is not known although it is expected to be about 40-50%.



THE INFRINGEMENT ON DEMOCRACY
The Example of GMOs in the EU

Biotechnology companies like to claim that genetically modified seeds are going to feed the world and protect the environment. The problem with this assertion is that is rests on two mistaken assumptions. The first assumption is that there is not enough food to feed the world, the second assumption is that industrial food systems and genetic engineering are going to increase agricultural production. The citizens of many democratic countries have questioned these two fundamental assumptions and as well as the health and environmental safety of these products.

The concerns of citizens and corresponding pressure on elected officials led to discussion and review of GE policies in many countries. In the European Union, democratic processes encouraged the governments of EU nations not to import genetically engineered food. However the European Union had a formal complaint launched against it by US along with several other nations including Canada which argued that a moratorium on GE food was not in compliance with WTO agreements. It is assumed that trade sanctions will follow.

Trade liberalization through the World Trade Organization allow transnational corporations to challenge domestic laws or to sue when their products are banned for health or environment reasons. In this case the democratic will of the people is being undermined by the interest of transnational corporations. The laws of sovereign counties and treaties regulating GE food should not be challenged by WTO policies. The Sierra Club of Canada feels the WTO should remove itself completely from the agricultural sector.



FOOD SYSTEMS CONTROL AND CENTRALIZATION
The Example of Irradiation

Food irradiation is another tool for corporations to control our food supply. Food irradiation is a type of food preservation where food is bombarded with ionizing radiation. The radiation source is either gamma rays from nuclear material, x-rays or speed-of-light electrons. This process causes electrons to be knocked out of place within the food. Food irradiation is a way of using outdated nuclear technologies to allow food importers and food distributors to ship food further and store food longer. Irradiation allows multinational corporations to produce food in the Global South, irradiate it and then ship it to wealthy developed countries, allowing these corporations greater control over the world’s food system. It will help to further centralize the food system which can hurts local food producers and merchants in the US, EU and Canada. Due to extended shelf life, irradiation creates food surpluses which can be ‘dumped’ into the markets of developing nations, driving farmers in developing nations out of business. The land of the small farmers in developing nations is then bought as is their labour to grow monoculture crops for export.

Health Canada is currently considering expanding irradiation from only spices and potatoes to also include ground beef, chicken, shrimp, prawns and mangoes. If Health Canada chooses not to expand irradiation in Canada it could get stung by a WTO trade dispute.



CANADIAN ECONOMIC WOES
The Example of GE Wheat

In December of 2002, Monsanto applied to allow Roundup Ready wheat to be registered for the Canadian market place. Crops which have been genetically engineered to be herbicide tolerant offer no significant increases in yields or benefits to consumers. Quite they opposite, they come with a track record of increased pesticide use and decreased farm profitability. Despite these risks, the major reason Canada should not allow GE wheat is economic. According to Canadian Wheat Board estimated, 70% of Canadian wheat is exported. Of the 70% which is exported, customers representing two-third of Canada’s international wheat market do not wish to purchase or receive GE wheat.{5} Allowing GE wheat in Canada will mean the collapse of our export market and will cause financial ruin for many Canadian wheat farmers. The specific variety of wheat, hard spring wheat, which Monsanto is pushing its own genetically modified version, is primarily exported to the markets of the US, China, Indonesia and Iran{6}. Most of the countries have expressed rejection for this new GE product{7}. This would have a major impact on the economy of Canada, as wheat is our leading agricultural export with three billion Canadian dollars per year in revenue{8}.

Similar to the Lindane case, if Canada were to deny Monsanto the registration of GE wheat, Canada could be accused of creating an unfair trade barrier and in such a case would be penalized financially.



THE CURRENT TRADE REGIME AS A ROOT PROBLEM

Industrial food systems are more expensive, less efficient and less accessible than “traditional” food systems. Industrial food systems remove farmers from the land, pollute our water, air and land and produce pesticide and hormone-laden food which is less nutritious. The aforementioned examples of lindane, meat hormones, GE foods and irradiation raise some of the fundamental problems with the policies and acts of the WTO. Worker’s rights, human health, environmental sustainability, democracy and the human right to food are all being infringed upon by the WTO. Proponents of the WTO will argue that safeguards have been worked into the negotiating texts to allow for the ability of nations to ensure ecological integrity. These attempts are watered down with loop-holes that would undermine previously negotiated agreements. The root problem is not hunger or poverty, the root problem is the current and future trade regime as envisioned by the WTO.


CONCLUSIONS

The Sierra Club of Canada is critical of the policies and acts of the World Trade Organization. The Sierra Club of Canada encourages individuals to recognize that the World Trade Organization’s practices and approach to rural development have undermined its own environmental policies and its stated commitment to the poor.

In the arena of international trade, farm subsidies in rich countries are of paramount concern. As long as farm subsidies remain in developed nations nothing can protect developing countries from imports from developed countries. Until the agricultural subsidies in developed nations are addressed there should be no further negotiations. The Sierra Club of Canada is urging World Trade Organization to recognize and promote biodiversity, democracy and people’s rights to food sovereignty.

It is imperative at this time that we consider what can be done right now at Cancún to achieve positive change and prevent substantial harm. International trade agreements and their approach to agriculture and rural development have undermined any stated commitment to the poor and to food sovereignty. The Sierra Club of Canada strongly feels we should also consider steps which should be taken to avoid repeating such mistakes in the future.

  • People before Profit
    Around the world people need access to land to grow their own food, land access can’t be denied in the interest of international trade

  • Small Farmers First
    Small farmers losing their land to concentration agricultural businesses is the single biggest cause of hunger and poverty in the developing world. They need to be protected and policies should be in place to protect people working on their traditional lands. In communities where people have been deprived of their lands, reform is needed.

  • Close to Home
    Around the world, the distance between producers and consumers needs to be shortened.

  • Transition
    As a planet, we need to stop encouraging a transition to industrial agriculture and start encouraging a transition to non-corporate, small-scale agriculture which will increase food security and protect our environment.



The World Trade Organization will erode the world’s environment, opening up agriculture to extraction and to trade. Governments will lose their ability to regulate the use of resources and to ensure a safe environment for generations to come.

The Sierra Club of Canada recommends that in Cancún:
  • the Agreement on Agriculture be withdrawn from the World Trade Organization,
  • the Trade Related Intellectual Property Rights agreement be eliminated, and
  • the World Trade Organization remove itself from the agricultural sector.





WHAT CAN I DO?

  • Don’t buy any Genetically Modified Foods;
  • Boycott food produced through industrial agriculture;
  • As much as possible boycott multinational agri-business corporations;
  • Look for Fair Trade coffee and cocoa;
  • Support local farming, organic where possible;
  • Make sure to preserve the natural connection between your thoughts and your actions;
  • In everything that you do, promote equity, diversity and democracy; and
  • Wherever and whenever you can promote local control, self reliance and self-determination.


Sierra Club of/du Canada
412-1 Nicholas St.
Ottawa, ON K1N 7B7
Tel: (613) 241-4611
Fax: (613) 241-2292
www.sierraclub.ca/national



FOOTNOTES


{1} According to a review of the WTO environmental trade disputes http://www.wto.org/english/tratop_e/envir_e/edis00_e.htm .

{2} Human Rights Declaration: United Nations, Adopted and proclaimed by General Assembly resolution 217A (III) of 10 December 1948, as cited by Doha Minesterial 2001: Briefing Notes Trade and the Environment. The Trade and Environment Committee, and Doha Preparations. http://www.wto.org/wnglish/thewto_e/minist_e/min01_e/brief11_e.htm .

{3} International Forum on Globalization factsheet, Making Room for Alternatives, http://www.foodfirst.org/progs/global/ge/sactominesterial/alternatives

{4} According to a review of the WTO environmental trade disputes http://www.wto.org/english/tratop_e/envir_e/edis00_e.htm (viewed on August 18th, 2003).

{5} Cereals Sector Profile. April 1999. Grains and Oilseeds Division, International Markets Bureau, Market and Industries Services Branch, Agriculture and Agri-Food Canada URL: http://atssea.agr.ca/public/htmldocs/e2207.htm


{6} For more information on the Montreal protocol see the United Nations Environment Program website at http://www.unep.org/ozone/montreal.shtml .

{7} Canadian Grain Industry Working Group on Genetically Modified Wheat. Discussion Document: Conditions for the Introduction of Genetically Modified Wheat. February 5, 2003. http://www.cwb.ca/en/topics/biotechnology/gmowheat.jsp

{8} Freeze, C., "Buyers Distrust Modified Wheat," Globe and Mail, 21 May 2001.