Imagine this situation: An impoverished developing country suffering severe food shortages in the midst of a years-long drought receives food aid shipments from industrialized nations to help fill the void. Instead of saving the day, the food aid sits untouched in warehouses. Food that could help prevent malnutrition in millions of people is locked away from starving villagers by government edict because it contains kernels of the same gene-spliced, genetically improved corn varieties consumed daily by scores of millions of Americans—but that allegedly have not been “proven” to be safe.
If it weren’t real, this scenario would be almost too implausible to believe. Yet this is precisely the situation in the southern African countries of Zambia and Zimbabwe. With some 2.5 million of his people at risk of starvation, Zambian president Levy Mwanawasa told a U.N. gathering in South Africa, “We would rather starve than get something toxic.” Tony Hall, the U.S. ambassador to the U.N. food agencies, was quick to respond. He lashed out at Zambian and Zimbabwean leaders who refuse food aid because of baseless fears of new biotechnology products. “People that deny food to their people, that are in fact starving people to death, should be held responsible . . . for the highest crimes against humanity, in the highest courts in the world.”
President Mwanawasa’s false dichotomy—the food has been extensively tested and consumed and is not, in fact, toxic or harmful in any way—and the flawed decision making that follows from it are the tragic but inevitable outcome of an increasingly popular tenet of public policy known as the “precautionary principle”: the idea that regulatory measures should be taken to prevent or restrict actions that raise even conjectural threats of harm, even though there is incomplete scientific evidence as to their magnitude or potential impacts.
These developments in Africa illustrate one of the absurd problems created by groundless fears about technological change and the potentially dangerous overregulation to which it gives rise. Consumers demand assurances of perfect safety from industries and governments, but such assurances can never be made. When we demand that our governments hold some product or activity to a zero-risk standard, the resulting attempts at caution often blind us to the potentially huge and unacceptable costs. As in the Zambian tragedy, such precautionary cures are often worse than the maladies they are meant to prevent.
If the baseless resistance to gene-spliced crops and food has been a catastrophe for starving Africans, it has also been a debacle for free markets. U.S. trade representative Robert Zoellick has defended free trade in biotech products, blasting Europe’s protectionist opposition to biotechnology as “immoral” and as Luddism “equivalent to that period when people were opposed to machines.”
More important, however, it appears that the United States finally has decided to fire the first salvo in what could evolve into a major trade war. Mr. Zoellick has urged the U.S. government to file a complaint with the World Trade Organization against the European Union’s nearly five-year-old moratorium on approvals of new gene-spliced crop varieties. He characterized that moratorium as “very bad for the world economy and development,” adding, “I personally am of the view that we now need to bring a case [to the WTO and] . . . I hope the time frame is sooner rather than later.” The momentum for such a course appears to be building. In January, Senate and House Republicans, including House Speaker Dennis Hastert and farm-state Senator Charles Grassley, urged President Bush to bring the issue before the WTO, and in March, the Senate Finance Committee grilled Mr. Zoellick on when the United States will do so. According to sources in the administration, the decision, which must be approved by a panoply of U.S. cabinet departments, has been delayed in order not to antagonize European countries at a time of heightened transatlantic tension over Iraq.
Although science and common sense favor the U.S. position, this will be no cakewalk. Even if the United States were to prevail at the WTO, it seems unlikely that the EU would revise its discriminatory regulatory policies; they are too entrenched and have already fomented too much public fear and antagonism toward biotech-derived foods.
The best-case scenario is probably that the WTO would find in favor of the United States and that the EU would agree to lift the moratorium on approvals. But that would leave in place the EU’s unscientific and excessive regulatory requirements for gene-spliced crops and food, plus its proposed new labeling and traceability rules. Even without the moratorium, plant breeders and farmers in exporting countries would still be reluctant to commercialize any new variety not approved in the EU. In effect, this would permit the most averse and protectionist player in the game to set the rules.
A more likely scenario is that the EU would simply ignore a WTO ruling that the EU’s moratorium on new biotech product approvals is illegal. The WTO has no real enforcement power but relies on member nations to accept its decisions voluntarily. The WTO could, however, authorize wronged countries to establish countervailing import tariffs on goods from the transgressor nations in an amount equal to the estimated sales revenue lost by the exporters. For example, following an adverse ruling from the WTO on a case that involved the importation of American and Canadian beef containing certain hormones, the European Union accepted the countervailing tariffs rather than change its policy. A successful WTO challenge to the EU’s biotechnology policies would likely have a similar result—causing European consumers still to be denied the choice of arguably superior products and U.S. consumers to pay higher prices for European goods.
No outcome that restricts international trade is desirable. But the imposition of compensatory tariffs would be more palatable if it took into account both the direct and indirect losses to U.S. seed producers, farmers, and food processors. (The direct losses this year alone will be in the billions of dollars.)
A ruling in favor of the United States would send a message to the world that the EU’s arbitrary and scientifically indefensible policies are an unacceptable barrier to trade—and that any country that violates international trade rules will feel the sting of punitive sanctions.
Even before this battle can be joined, however, Mr. Zoellick is being outflanked by European and American—yes, American—bureaucrats at the deliberations of the Codex Alimentarius Commission, the food standards program of the United Nations, whose ongoing task force on gene-spliced foods is in the process of crafting regulations that will provide cover for those who wish to regulate biotechnology into oblivion.
During three years of negotiations by the task force, the Europeans and the nongovernmental organizations (some of which are permitted full participation) have led the assault on technological innovation and free trade. The participants—including the U.S. delegation, headed by a senior FDA food regulator—have willfully ignored scientific principles and the basic axiom that the degree of regulatory scrutiny should be proportionate to the risk. They have also disregarded the scientific consensus that gene splicing is an extension, or refinement, of older, traditional techniques of genetic modification and that it does not warrant discriminatory, excessive regulation. They have deliberately circumscribed only gene-spliced foods for compulsory case-by-case “pre-market safety assessment of . . . both intended and unintended effects, identifying new or altered hazards and identifying changes relevant to human health.”
These requirements are more appropriate to potentially dangerous prescription drugs and pesticides than to improved varieties of tomatoes, potatoes, and strawberries. No foods modified by less precise, less predictable traditional techniques—which comprise virtually the entire diet of Europeans and Americans—could (or should) meet these standards. The requirements for gene-spliced foods, which are both sweeping and vague, will vastly increase the development costs of these products, drastically impair their competitiveness in the marketplace, and limit their use.
Derailing the development of gene-spliced foods is exactly the agenda of many of those on the task force. At least for the Europeans, the reason is clear. As Wellesley College political scientist Robert Paarlberg has observed, the products of agricultural biotechnology have been “developed mostly in U.S. laboratories, widely adopted by U.S. farmers, and pushed out onto the world market by U.S. companies” (emphasis in original). In other words, agricultural biotechnology is an icon of American technological success and supremacy, so naturally our trading partners intend to punish it.
Less obvious is why American regulators have been complicit. Economist Milton Friedman explained that you can usually rely on individuals and institutions (including regulatory agencies) to act in their own self-interest. And that self-interest for regulators lies in expanded responsibilities and larger budgets and bureaucratic empires. The FDA is now attempting to adopt an approach similar to that of its European counterparts—that is, focusing oversight not on risk but only on those products made with the most precise and predictable techniques. The public interest be damned.
The prospect of unduly burdensome Codex standards for gene-spliced foods is ominous—both for the prospects of the technology itself and for U.S. hopes of WTO relief from protectionist European policies—because members of the WTO will, in principle, be required to abide by those standards. In other words, the standards will provide cover for unfair trade practices because, with these measures in place, a country that wishes to block trade in gene-spliced foods for any reason can defend against charges of unfair trade practices simply by remonstrating that it’s deferring to Codex.
These unscientific standards will harm not only international trade but also the natural environment and public health. The greatest threats to the planet’s environment come from the world’s burgeoning population and its demands for water and for ever more land to be brought into food production. Yet an important tool in resolving this problem—the development of higher-yielding, drought-resistant plant varieties—will be blocked by discriminatory, hugely expensive regulation that will stifle the development of needed innovations.
Although efforts should be made to reassure the public that gene-splicing techniques are in fact at least as safe as more traditional methods of genetic modification, excessive regulation is not the way to do so. As the president of Consumer Alert, a U.S. national consumer organization, testified a decade ago to a federal investigative panel, “For obvious reasons, the consumer views the technologies that are most regulated to be the least safe ones. Heavy involvement by government, no matter how well intended, inevitably sends the wrong signals. Rather than ensuring confidence, it raises suspicion and doubt” (emphasis in original).
Regulation should focus on real risks and should not be triggered by the use of one technique or another. Already, though, technique-based, punitive regulation has had an impact on which biotech research projects are undertaken, which products are developed and used, and how costly those products are in the marketplace. If the approach currently favored by Codex delegates is adopted, the costs of biotechnology R&D will skyrocket even further and there will be essentially irreversible constraints on innovation and trade. Even the most favorable ruling from the WTO would be no more than a Pyrrhic victory.
Ambassadors Zoellick and Hall and Republican congressional leaders are to be congratulated for leading the charge against illegal restraint of international trade, but they must recognize that the enemies of free markets and technological innovation reside not only across the Pond but inside the Beltway.
