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TED Case Studies

The US & EU Trade Dispute Over GMO Soybeans

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 IDENTIFICATION

 LEGAL CLUSTERS

 GEOGRAPHIC CLUSTERS

 TRADE CLUSTERS

 ENVIRONMENT CLUSTERS

 OTHER FACTORS

Case Number: 446

Mnenomic: Soybean

Name: Genetic Soybean Trade

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smallsoy I. Identification

 

1.The Issue:

soy fieldThis case study will examine the production of genetically modified (GMO) soybeans in the US US Flag and the effect that they have on trade and the environment in the European Union (EU) EU Flag. Since the late 1980's the US corporation Monsanto has been working on soybeans, which are resistant to Monsanto's herbicide Roundup. The benefit of this GMO soybean is a lower production cost through reduced tillage and increased yields through the elimination of competitive weeds. After a ban on the GMO soybean, the EU has allowed the beans to enter its market; however, individual members within the EU have not allowed the entrance of the soybean across their borders. The EU itself has also enacted a "novel food" law requiring all GMO soy to be labeled.

The US position on the GMO soy is that the new crop is no different from its original form. The US contends that scientific tests have generally not shown harmful side effects in the production and consumption of Roundup Ready soybeans. Despite the EU ban and labeling laws, some EU officials have conceded that the Roundup Ready soybeans are scientifically sound. For instance, EU environmental spokesman, Peter Joergensen, told reporters that three EU scientific committees had not found any new information to counter the Commission's decision of GMO maize and soybean approval. (Reuters June 18, '97) Despite the relative lack of scientific information or evidence supporting a ban on GMO soy and the US pressures to lift the labeling requirement, the EU has held firm in its requirement of soybean segregation. The following will examine the claims from both sides of the Atlantic, looking at uses of soybeans and the effect that GMO soybeans have on the environment and trade.

 

2. Description

 

Biotech Biotechnology Background

In the broadest sense, biotechnology includes, "any technique that uses living organisms, or parts of such organisms, to make or modify products, to improve plants or animals for human needs, or to develop microorganisms for specific use." (OTA '88) Biotechnology is a broad term that includes traditional methods of agriculture industry and food processing that have been preformed throughout human history. Biotechnology can also refer to modern scientific techniques characterized by genetic engineering. (Doyle and Persley)

ATOMBiotechnology history involves three phases. The first generation of biotechnology is based on empirical practice and minimal scientific or technical inputs. These techniques date back to the stone age, and use biological organisms such as bacteria, yeasts, enzymes, and traditional methods of fermentation to produce food and drink such as bread and wine. (Avramovic)

The long history of biotechnology has its roots in the brewers of Babylon and ancient Egypt. As history progressed, the process of alcohol production became a standard industry that nations developed. This fermentation process is known as zymotechnology, and it was eventually applied to alternative industries outside the realm of beer and wine. (Bud) By the year 1900, the zymotechnology processes had progressed to include a wide variety of applications including leather curing and citric acid production. (Bud) These zymotechnical methods constitute a bridge between the biotechnology's traditional heritage and its modern associations.

The second generation of biotechnology began during the inter war period when developments in fermentation technology using ATOMpure cell culture and sterile manufacturing facilities began to yield new products. Examples of the Phase II innovations are acetane, butanol, glycerol, Vitamin B2, citric acid, and lactic acid, but perhaps the most important discovery was that of penicillin in 1928. These discoveries led to the interest in, and subsequent development of, large-scale production of fermentation products for the pharmaceutical industry. The ability to innovate biotechnically, and produce new products for mass market, spurred a rapid increase in life sciences research. This research spawned the production of new antibiotics such as cephalosporines, as well as an increasing range of enzymes, vitamins and steroid like hydrocortisomes. (Avramovic)

In the 1930's the US agriculture industry began to use hybrid crop varieties which increased crop yields dramatically. By the late 1950's increases in biotech research led to the use of amino acid preparation for agricultural products such as glutamate in food flavoring and polysaccharides used as stabilizing/filling agents in food manufacturing. Due to the tremendous economic significance of the products developed this stage became known as the "Green Revolution." The Green Revolution can be viewed as a predecessor to the biotechnical revolution except that biotechnology encompasses a greater number of affected areas with a heightened impact. (Avramovic)DNA

The turning point leading to a third generation, or modern biotechnology, is the discovery at Cambridge University of the structure of Deoxyribonucleic acid (DNA). The subsequent research linking four related chemicals called bases to their related DNA sequence led to product developments signifying the beginning of modern biotechnology. (Rudolph)

The advances of modern biotechnology techniques have exponentially increased over the past two decades. The applications developed from these methods are consistent with those used throughout human history. Thus, the powerful new tools provided by modern biotechnology generate products that fill essentially the same role as those produced with more traditional methods. The major difference between traditional biotechnology and modern biotechnology is that modern biotech production is far more intensive than its predecessor. However, this production intensity allows for a more precise and less time consuming production process.(Doyle & Persley)

Modern biotechniques are varied, but three broad classes of basic biological techniques are of particularly prominent in industry use. First, tissue cell culture technology is used to establish cell lines used for medical diagnosis and treatments. Next, Hybridoma technology is used in various reproductions of human monoclonal antibodies. These antibodies can then be used as a supplement to natural human antibodies in medical treatments. (OTA '91) Finally, Recombinant DNA, also referred to as genetic engineering, is the most prominent biotechnique. This technique involves the direct manipulation of genetic materials of organic cells. Its application covers all industries that include organic cells such as agriculture, medical, and the environment. (OTA '91)

 

Soybeans - Facts and History

Soybean PlantThe soybean is the world's foremost provider of protein and oil. The soybean plant is a legume related to clover, peas and alfalfa. Soybeans, similar to maize and sugar beats, are planted in late spring and flower in the summer. These flowers produce 60-80 pods, each holding three pea-sized beans. The crop is then harvested in early fall. (American Soybean Association)

The history of soybeans can be traced to China where as early as 5,000 years ago, Chinese farmers grew soybeans. Soybeans history in the US; however, is relatively recent. The US involvement with soybeans is believed to be dated back to 1804, when a Yankee dipper ship brought soybeans to the US. The ship was loaded with soybeans because while leaving China, sailors loaded the ship with soybeans as an inexpensive ballast. Upon the ships arrival in the US the sailors dumped the soybeans to make room for cargo.(American Soybean Association)

In 1829, U.S. farmers took the Chinese soybeans and began to grow them commercially. The uses of soybeans are varied and can be historically seen through some interesting examples. For instance, the first popular use of the soybeans was for the making of soy sauce. Also, during the Civil War, soldiers used soybeans as "coffee berries" to brew "coffee" when real coffee was scarce. Another use of the soybean was as a cheap forage for cattle which began to be used by farmers in the late 1800's. This usage of soybeans as forage was altered after 1904 when George Washington Carver began to study the legume at the Tuskegee Institute in Tuskegee, Ala. Carver's showed that the beans provided valuable protein and oil. The results of Carver's studies sparked US soy production which had grown to 9 million bushels by 1929.(American Soybean Association)Soy Plant

Another significant contribution to the growth of the US soy crop came from William J. "Bill" Morse. In 1929 Morse left on a two-year odyssey to China during which he gathered more than 10,000 soybean varieties for U.S. researchers to study. The significance of US soybean production was further enhanced during World War II. At this time the availability and supply of imported edible fats and oils was reduced in the US. Prior to World War II, the United States imported 40 percent of its edible fats and oil, but during the war processors turned to US grown soybean oil. As a consequence of US industry reliance on the soybean, the US developed a trade surplus in the soybean throughout the 1940's. (American Soybean Association)

During the economic boom in the US in the 1950's the soybean producers began to look for further international markets for US soy. This led the American Soybean Association to begin to promote U.S. soybeans in Japan in 1956. The success that the American Soybean Association had in promoting US exports in Japan is evidenced by the fact that today, 50 percent of the US soy exports go to Japan. The European Union is the second largest market for US soy. This large export market drives the production of US soybeans which are currently the second largest US crop when measured in cash sales.(American Soybean Association)

 

Roundup Ready Soybeans

The US, Missouri based Monsanto Corporation has taken a leading role in the US agriculture biotechnology industry. Last fall marked the newest wave of genetically engineered crops that included a strain of glyphosate-tolerant soybean labeled as "Roundup Ready." Roundup is a popular herbicide, which is also manufactured by Monsanto. The benefit of Roundup Ready soybeans is that fields can be sprayed with Roundup anytime from pre-plant to canopy stage. This form of weed control is beneficial because Roundup is effective against most annual and perennial weeds. Additionally, this form of weed control has earned high marks from some environmental groups because it saves valuable topsoil from erosion due to the elimination of tillage. Also, Roundup begins to bread down when it first hits the soil. This lack of "residual" is healthy for the environment; however, it may cause the grower to mix herbicides to attain a soil residual that will eliminate weeds for a longer period of time. (Asgrow Seed Co.)

Roundup Ready Soy LogoAdditional advantages that Roundup Ready soybeans afford the grower are the ability to circumvent the weather in the weed control process by applying a postemergence program if the preplant weather is to wet. Yields should fair better also due to the assurance that crop stress arising from herbicide residue is eliminated. Economically, the grower only need apply one or two over the top applications, which will lower overhead costs associated with combining herbicide mixes and tillage programs. (Asgrow Seed Co.)

 

The Road Toward A Trade Dispute

In the spring of 1996, the EU allowing the importation and processing of Roundup Ready soybeans into food and feed granted regulatory approval. This approval was followed by a storm of activity by European Consumer and Environmental groups who opposed the approval of genetically modified soy. Greenpeace and other activist groups have mounted an opposition campaign in an effort to raise concerns among the European public about genetically modified (GMO) soybeans. The campaign is based on the "right to know" principle. The "right to know" advocates call for a segregation and labeling of all GMO soybeans, which enter the European Union. These groups are threatening a possible boycott of all US soybeans if their demands are not met. (Foundations of Economic Trends)

The EU has responded to the growing public pressures with new initiatives meant to limit the amount of GMO soybeans that are imported into the EU. These new regulation are cause for concern in the US agriculture industry who see moves such as these as laying the potential framework for an EU ban of US GMO products.

One of the difficulties faced by US exporters is that the EU Commission is the main body regulating the importation of GMO products. Despite the Union's primacy in trade issues, individual members may invoke controversial Article 16 (of the EU GMO directive 90/220) to ban soybeans, going against the directives of the EU. Members such as Austria, and Luxembourg have used this Article to ban GMO maize and are currently debating invoking the Article to ban GMO soy. (Reuters June 18, '97)

 

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4. Author: Jamey Butcher HOMER!
Date: 12-01-97

pointer*Any updates to this case may be found here.

Updates do not necessarily represent the views of the author.

small soy II. Legal Clusters

 

5. Discourse and Status: Disagree and In Progress

This case of the US / EU GMO soy trade is a classic example of the political give and take that occurs when two international powers disagree over an economic issue. The EU first approved the importation of Roundup Ready soybeans in the Fall of 1996. By the time that the first shipment of these beans arrived in Hamburg, Germany in early November of 1996 aboard the freighter Ideal Progress, EU consumer groups had targeted the GMO soybeans as a critical issue area for their protests against genetically altered products. (Reuters March 25, '97)

Due to the public protests and legal actions taken by the environmental group, Greenpeace, the EU had to put a hold on the importation of GMO soy from the US in January of 1997. The culmination of the legal battle and the public pressures led to the EU Commission's announcement of a "Novel Foods" labeling law in early April. (Reuters April 7, '97) This law requires the segregation and labeling of any GMO product imported into the EU. The final draft of the law was approved on June 18, 1997. The labeling law was described by EU's environment chief, Ritt Bjerregaard as, "valuable information for the consumer," and was not meant to dissuade the EU public from genetically altered products. Bjerregaard went on to say that the law requires companies seeking EU approval of genetically modified products to identify them as such on "a label or an accompanying document." (AP/Reuters June 18, '97)

Although this labeling law was meant to address the concerns' of the EU public, the law was criticized because many believed (including the US) that the law would not apply to previously approved products such as Roundup Ready soybeans. Citing the law as too soft, Greenpeace said in a statement that "The Commission continues to allow its own environmental policies to be decided by US trade pressures." (AP/Reuters June 18, '97) Additional measures in the EU were highly publicized as the region's governing bodies tried to address public concerns over biotechnology. An example of this highly publicized effort was a vote in the EU parliament on May 14 that passed a law which excluded GMO organisms from being described as "organic." (Reuters May 14, '97)

The US response to the growing regulations in the EU was to form an aggressive diplomatic campaign on the biotechnology issues. A US interagency team was sent to Europe to meet with EU scientists and regulators in May of 1997. (Reuters June 19, '97) Prior to the meeting Timothy Galvin, Associate Administrator of the USDA's Foreign Agricultural Service summed up the US centime over the impending negotiations with his statement that, "Hopefully, the meetings will allow us to obtain direct answers in some of the issues that have pushed EU regulatory policy out of focus." (Reuters March 14, 97) The EU saw much of the public debate in the US as political positioning prior to the US visit to the EU.

During the US interagency visit in the EU, the parties involved with the debate over the EU's importation of genetically altered US products often took their sentiments public. For instance, on June 19th, US Agriculture Secretary Dan Glickman told a meeting of the 44 member International Grain Council in London that the US would not tolerate the EU's law concerning the labeling and segregation of genetically engineered crops. Glickman stated that, "As long as these products prove safe we will not tolerate their segregation. Sound science ought to be the only arbitrator. The greatest threat to free trade is bad and phony science... We know that biotechnology holds out our greatest hope of dramatically increasing yields. I know biotechnology is an extremely sensitive issue in Europe. But the US consumer movement was stronger than ever and this underlined confidence in science-based decisions on food safety." (Reuters June 19, 97) Additionally, US Trade Representative Charlene Barshefsky sternly warned the EU that the US would respond with economic sanctions if the EU allowed domestic concerns over biotechnology to disrupt US - EU trade. Barshefsky, speaking at a US Senate Agricultural Committee hearing said, "at the minimum," the US would seek a World Trade Organization dispute settlement panel if the EU adopts a labeling policy for GMO products. (Reuters/AP June 17, '97) The US did, however win a small victory on June 18, 1997 when the EU Parliament voted to allow industry to have patents on living organisms, human parts, animals and plants. (Reuters June 19, '97)

Despite the US pressures upon the EU to eliminate the labeling laws concerning GMO products, on September 25th, 1997 the EU Commission approved a law which requires all foods with genetically modified soybeans and corn to have labels indicating the presence of genetically modified organisms. This law is meant to ensure that previously the EU's "novel food" law, which took effect on May 15th, also covered approved GMO products. As of today the US is still negotiating with the EU concerning the labeling laws and is working on a response to the GMO segregation issue. (Dow Jones Report September 25, '97) The potential ban proposed by the European Union and its individual members on the importation of soybeans grown in the US has caused great concern too much of the US agriculture industry.

 

6. Forum and Scope: European Union, and MultilateralGlobe

The Roundup Ready soybean trade dispute primarily involves the fifteen members of the European Union and the US. However, this issue resolution will have a worldwide effect. For instance, Brazil is a major exporter of soybeans. (USDA January, '95) Originally, Brazil was promising a "GMO free" soy crop for the European market; however, on October 7th Brazil went back on its original guarantee and the Brazilian government approved the importation of 1.5 metric tons of US soybeans. (Reuters October 8, '97) This change in Brazilian policy will potentially affect EU food producers who use a large supply of soybeans and soybean byproducts in such things as chocolate. Additionally, nongovernmental organizations such as the World Trade Organization may have to get involved with the issue of GMO labeling if the US follows through with it's threats of action against the EU's novel food directive.

 

7. Decision Breadth: 16 (EU and US)

As mentioned, the outcome in this case will certainly affect the fifteen members of the EU and the US primarily. Other nations who will be directly affected include the major exporting nations of soybeans and soybean products that include Argentina, Brazil, China, and Paraguay. Additionally, major importing nations of soybeans and soybean products such as those nations in Eastern Europe, and Japan will also be directly affected by a decision regarding EU importation of GMO soy.

 

8. Legal Standing: Treaty

WorldThe resolution to this issue may come in a number of forms. For example, if the US presses the issue and takes the case to the World Trade Organization, than a decision may set an international legal precedent. Alternatively, if the EU and US continue with negotiations, a bilateral treaty may provide the legal framework for this issues resolution. Finally, the US may decide to institute trade sanctions or ignore the EU's labeling laws all together and avoid any international legal action on this issue.

 

smallsoy III. Geographic Clusters

 

9. Geographic Locations

a. Geographic Domain: Europe

b. Geographic Site: North America

c. Geographic Impact: European Union

 

10. Sub-National Factors: No

The European Union Commission's decision to require labeling of GMO soy is certainly a product of consumer and environmental pressures coming from groups within the EU. Additionally, pressures for nontarriff trade barriers is coming from EU domestic farm lobbies. The EU is well known for its projectionist agricultural stances. This protectionism is primarily associated with the EU Common Agricultural Policy (CAP) that subsidized EU farmers. The CAP program is a highly guarded EU institution. Members feel CAP will be threaten if the EU has to accept GMO products because the US has an advantage in genetically altered soybean production.

Another pressure comes from the notoriously strong EU environmental lobby. This lobby has been able to effectively pressure greenpeacethe EU into accepting GMO segregation policies. Environmental groups such as Greenpeace, Super Heroes Against Genetics (SHAG), and the Women's Environmental Network have worked to disrupt soy importation and Monsanto operations in a variety of manners. For example, 40 protesters from various environmental groups, were responsible for entering Monsanto facilities in the UK plant at High Wycombe. The protesters were reported to have dispersed throughout the building and disrupted operations by turning off power and removing phone lines from the switchboards. Additional actions taken by European environmental groups include a legal challenge to Monsanto's patent for Roundup Ready soybeans which was put forth by Greenpeace in the European Patent Office (EPO). (Reuters March 26, '97) Also Green peace has staged rallies similar to their March 26th one in which 50 activists demonstrated in and around the city cathedral of Cologne, Germany. The protesters have adopted such slogans as , "Man is not God - Down with Genetic Manipulation." The pressure exerted by these protests has been very effective in persuading the government of Austria to completely ban the GMO soybean. This ban is in direct contradiction with the wishes of the EU, but it is an example of the effectiveness of the environmental lobby in the EU.(Reuters April 7, '97)

 

11. Type of Habitat: Temperate

 

smallsoy IV. Trade Clusters

 

12. Type of Measure: Import Banworld

As stated the EU has instituted a labeling requirement of all GMO products. This labeling law is disputed as unfair in the US where biotechnology products have to pass more stringent tests than other food forms. The USDA based its current GMO approval procedures on the 1992 policy requiring producers and sellers to offer only safe products to consumers. This policy states that GMO products meet and exceed all safety standards that are required of all other foods. Additionally, many biotech products require pre-market approval if the USDA feels that they exhibit qualities that are different in structure or function. (USDA)

 

13. Direct v. Indirect Impacts: Both

 

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: Yes (soybeans)

b. Indirectly Related to Product: No

c. Not Related to Product: No

d. Related to Process:Yes (Habitat Loss)

 

15. Trade Product Identification: Soybeans

 

16. Economic Datamoney

Biotechnology has the potential to transform the world in which we live. This industry can potentially affect 40 percent of all of the world's production. These sectors include but are not limited to anything, which is organic in nature. (Lane) This broad area of production potential has lead to a rapid expansion of research and development in biotechnology over the past three decades. This expansion is forecasted to persist into the near future. According to Consulting Resources Corporation (Lexington, MA), global biotechnology product sales in 1996 are expected to reach close to $11 billion. The forecast for the year 2001 is for sales to reach nearly $19 billion and by 2006 over $32 billion in biotechnology sales is projected. (Consulting Resources Corp.) The greatest obstacle to this transformation is public perception of biotechnology in the face of less than concrete scientific evidence of its safety.

The recent expansions in research and development in biotechnology is necessary because biotechnology is currently the most research-intensive industry in civilian manufacturing. (Lafrance) According to a 1995 survey by Business Week, five of the top ten firms in research expenditures per employee were biotechnology companies. (Business Week) The average biotech company spent $69,000 per employee in 1995, about eight times the US corporate average of $7,651. Additionally, biotechnology is an industry that combines scientific knowledge from biology, chemistry, physics, as well as many subsections from these fields. Due to this wide array of fields required for biotechnology labor, the biotech industry has a wage rate higher than the average in US manufacturing industries. (Lafrance)

In terms of product introduction, the biotechnology industry has been exponentially expanding with each passing year. The agriculture sector of biotechnology is no exception. To date two major categories of applications of biotechnology to crop production have occurred. The first is the development of crops expressing the Bacillus thuringiensis (Bt) gene for control of certain insects. The second application has been the development and marketing of plants resistant to herbicides. Those crops already on the market are corn resistant to imazethapyr and soybeans resistant to glyphosate and sulfarylurea. Soon to be marketed are glyphsate resistant sugar beats and potato's. (Foundations and Economic Trends) Further, agricultural biotechnology promises to expand the list of crops that can withstand drought, frost, insects, and disease. As the world's population continues to expand, agricultural biotechnology promises new means to feed these growing populations. Therefore, it is not surprising that estimates are for sales of agriculture based biotech products to grow at an average annual rate of 20 percent from $285 million in 1996 to almost 1.74 billion in 2006. (US Congress '94) These predictions make the agriculture the largest growing economic sector in biotechnology. (Lee and Burrill)

Even Chancellor Kohl of Germany (whose populace has one of the strongest resistance movements against genetically altered products) recognizes the need to incorporate higher yields of crop production to keep pace with growing populations. On October 12th of this year, Kohl gave a speech at one of the world's largest food fairs in Cologne, Germany. In his speech, Kohl pointed out that the third world countries will need to increase their production by 75 % over the next 30 years to keep pace with growing populations. In his speech, Kohl stressed the, "high economic significance of biotech for Germany."(Reuters October 14, '97)

Robert Horsch, general manager of Monsanto's Agracetus unit had remarks that were similar to German Chancellor Kohl's statements. In a business and environment program in Salzburg, Horsch explained his view that biotechnology was the only realistic means of feeding the world's growing population over the next 50 years. Horsch went on to say that, "I fear that continuing the status quo or returning to a low-tech style of agriculture will lead us to plow, drain or degrade much of the rest of the planet's rain forest, wetlands, temperate forest, prairie, streams, lakes seas... Failure to move forward with new technology, global trade and business development and other forms of sustainable development and economic growth...is probably the biggest risk we face." Horsch explained that more than 56 crops altered by biotechnology were tested in 34 different nations, and that more that 30 million acres of GMO products were planted in 1997. These tests and plantings were, in Horsch's opinion, subject to an, "elaborate system of checks and balances, which had evolved over the past decade to identify and deal with potential risks from genetically altered food." (Reuters September 15, '97)

The current dispute concerning the EU's importation of Roundup Ready soybeans, is attracting a large amount of attention due to the significance that the biotechnology industry may play in the future of both the US and EU's economies. Soybeans are used in a wide range of foods including 60% of all processed foods. (Intellectual Property & Biodiversity News) These foods include margarine, cake and chocolate, and soy meal is fed to livestock and poultry. Due to the wide variety of soybean usages, the soybean is on of the US's biggest farm exports to Europe. (Ibrahim) Additionally, soybeans represented 48% of total world oil seed production in 1995, and the U.S. accounted for 46% of the world's supply of those soybeans. In 1995, the US soybean crop totaled 2.152 billion bushels which added more than $14.5 billion to US agricultural output. These soybeans were grown on more than 380,000 farms located in 29 states.(American Soybean Association)

The opposition to GMO soybeans maintains that they are not against the technology but that with some 30,000 food products that use soy or soyoil, they simply want to have a choice through labeling. Currently, the labeling procedures are impossible as the US farmers integrate both GMO soy and non altered soybeans together. Thus, a labeling issue needs to be addressed at the time of harvest which leads many proponents of GMO soy to suggest that there is no way for a true separation of product to ever occur. (Reuters April 7, '97)

 

 World Oilseed Production: 1995

 World Soybean Production: 1995

 World Oilseed Production

 World Soy Production

 (Source: American Soybean Association, 1996)

 (Source: American Soybean Association, 1996)

 World Soybean Trade (1995)

World Soy Meal Trade (1995)

 World Soy Trade

 World Soymeal Trade

  (Source: American Soybean Association, 1996)

  (Source: American Soybean Association, 1996)

 

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17. Impact of Trade Restriction: High

The impact of the labeling restriction is difficult to assess. For instance, when the labeling laws were first debated an Austrian broker, in cooperation with Greenpeace, guaranteed 1,000,000 tons of GMO free soybeans for a five year period. This guarantee was based on the Brazilian pledge to keep their soybeans GMO free; however, one month ago Brazil was faced with a soybean shortage and decided to allow GMO soybeans to be imported. (Reuters March 25, '97) This Brazilian reversal means that many European companies who want to remain GMO free are faced with a limited and expensive crop of GMO free soybeans or giving into the GMO mixed soybeans. If many more nations decide to also use GMO soybeans in their production Europe may face a large shortage of soybeans in the near future. Europe faces a similar difficult position of a soybean shortage or an alteration to the labeling laws.

 

 

 Brazil & Argentina Soybean Production (1974-1995)

 World Vegatable & Marine Oil Consumption (1995)
 Brazil and Argentina  World Veg Consumption

  (Source: American Soybean Association, 1996)

  (Source: American Soybean Association, 1996)

 

From the US perspective the labeling laws are very limiting for continued exports to the EU. As mentioned the EU is one of the largest importers of US soybeans; however, the US position is that the GMO soybeans cannot be segregated. (American Soybean Association) This leaves the US with either a surplus of soybeans, or an alteration of their nonsegregation stance. Although the EU market is a key component of the US soy industry, the US is not with out other soybean markets. Other areas, which are large soybean importers of US soybeans, include India, and Asia.

 

18. Industry Sector: Agriculture

 

19. Exporters and Importers: US and EU

The EU market accounts for more than 40% of the total US exports of soybeans and the EU purchased $9 Billion worth of food and feed products last year. (American Soybean Association) Consequently, the stakes in this issue are large. Another problem that the US faces is that Central and Eastern European nations, many of whom desire EU membership, may follow suit with a GMO labeling law. If the Central and Eastern European nations did institute a labeling law the US may loose the estimated 134,700 metric tons of soybeans, and 82,000 metric tons of soybean meal imported in this region each year (1995 numbers). (American Soybean Association) Additionally, US soybeans accounted for two thirds of all Central and Eastern European imports.

 

 US Soybean Exports (1930 - 1995)

 US Soybean Export Customers (1995)
 Soy Exports  Soy Customers

 (Source: American Soybean Association, 1996)

 (Source: American Soybean Association, 1996)

 

smallsoy V. Environment Clusters

 

20. Environmental Problem Type: Biodiversity

Not all scientists are convinced that GMO soybeans are safe if entered into the ecosystem. Two scientists are traveling across Canada, the US, and Europe with the hopes of informing the public of their perception of biotechnology dangers. John Fagan is a biochemist from Cornell University and Joe Cummins is a professor emeritus in the field of genetics. Both are uneasy about the big push toward biotech products. Dr. Fagan explains that, "It's very risky because those genes have never been part of the human food supply before, and we don't know if they are allergic or toxic....They should test them as rigorously as they test a new drug. They aren't doing that." The Natural Law Party funds both and both are supportive of the EU consumer groups who have fought GMO labeling. (Schuler)

 

21. Name, and Type of SpeciesSoybean

 

Name: Soybeans

Type: Soy/Bean/Legume

beanClick here to see a diagram of the soybean and its' usagesbean

 

 

22. Resource Impact and Effect: Low and Regulatory

 

23. Urgency and Lifetime: Low and 1 Year

 

24. Substitutes: Like products (other legumes such as pinto and red beans)

 

small soy VI. Other Factors

 

25. Culture: Yes

 

26. Trans-Boundary Issues: Yes

 

27. Rights: No

 

28. Relevant Literatureworld book

American Soybean Association News, "European Response to Genetically Modified Soybeans," November 1996.

Asgrow Seed Company, "Roundup Ready Soybeans," 1996.

Avramovic, Mila. An Affordable Development?: Biotechnology, Economics and the Implications for the Third World. London, UK: Zed Books, 1996.

"Biotechnology on the Rebound," Consulting Resources Corporation Newsletter, Lexington, MA, Spring 1996.

Bud, Robert. The Uses of Life: A History of Biotechnology. New York: Cambridge University Press. 1993.

Dow Jones Report. "EU OKs Strict Label Law For Gene-Modified Soybeans, Corn," Sept. 25, 1997

European Economic Community: Com(96)366, Regulation N 2092/91

Evans, David. "More Protests to Hit US Soy Ships in Europe." Reuters News Service, November 6, 1996.

Foundation on Economic Trends press release, "Opposition Grows to Genetically Engineered Soybeans." October 7, 1996.

Ibrahim, Youssef, M. "Genetic Soybeans From the US Alarm Europeans," New York Times November 7, 1996.

Intellectual Property and Biodiversity News , "Natural Law Party Campaign to Ban Genetically Engineered Foods." Institute for Agriculture and Trade Policy, October 10th, 1996 Volume 5, Number8.

Lafrance, John, and Jon Paugh. "Meeting The Challenge: US Industry Faces the 21st Century" Office of Technology Policy, Technology Administration: US Department of Commerce (Unpublished Draft, 1997).

Lane, Michael. "Invention or Contrivance?: Biotechnology, Intellectual Property Rights and Regulation." Conference of the Parties to the Convention of Biological Diversity. Jakarta, Indonesia, 1995.

Lee, Kenneth B. & Burril, Steven G. Biotech 96: Pursuing Sustainability: The Ernst and Young Tenth Annual Report on the Biotechnology Industry, Palo Alto, CA, 1995.

Reuter. "USDA Pressures EU Officials on GMO Foods," March 14, 1997.

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