HORMONES, HEIFERS AND HIGH POLITICS – BIOTECHNOLOGY AND THE COMMON AGRICULTURAL POLICY
| DOI | http://doi.org/10.1111/j.1467-9299.1989.tb00741.x |
| Date | 01 December 1989 |
| Author | JOHN PETERSON |
| Published date | 01 December 1989 |
HORMONES, HEIFERS
AND
HIGH
POLITICS
-
BIOTECHNOLOGY
AND
THE COMMON
AGRICULTURAL POLICY
JOHN
PETERSON
The recent
Ec
ban on imports of hormone-treated
beef
and the central place of agricultural
rkgime liberalization in the Uruguay round of
GATT
(General Agreement on Trade and
Tariffs) negotiations have combined to make agricultural reform a matter of
‘high
politics’
in international trade. But debates on medium-term reform of the Common Agncultural
Policy fail to consider the impact of future developments
in
biotechnology, which threaten
to overwhelm the
EC’S
ability to cope with agricultural surplus. Meanwhile, the
EC
has
begun to accelerate its
efforts
to promote Europe’s competitiveness in global biotechnology
markets through new collaborative research programmes. The clash of interests between
the EC’s agricultural and technology policy communities has produced contradictory
policies and new obstacles toward the critical goal of reforming the
CAP.
The EC’S efforts
to promote biotechnology must be reconciled with biotechnology’s future impacts on
European agriculture through more rigorous technology assessment and reform of
agricultural policy-making mechanisms.
The discord and acrimony which have beset the
GAIT‘S
current Uruguay Round
have long lurked beneath the surface of relations
between
the European
Community
and the United States. The predominant American view of the EC‘s
effort
to create
a single European market by 1992 has always been marked by unease and skepti-
cism. Fears that
EC
negotiations toward harmonization of European trade rc’igimes
will
yield insidious EC-wide trade barriers and a
‘Fortress
Europe‘ in markets where
US
exports
now achieve
high
levels of penetration have been aroused at a time of
profound domestic concern for the gaping American trade deficit. From the point
of
view
of ‘comparative advantage’
in
international trade, the current American
position in
GATT
negotiations reflects the firm conviction that agriculture is ‘one
of
the nation’s last indisputable worldclass industries’ (Runge 1988, p. 143). Thus,
it is hardly surprising, and indeed predictable
(see
Hager 1987, p. 62) that conflicts
over
agricultural
&-@me liberalization have poisoned the atmosphere of the Uruguay
Round, and now threaten to bring the entire
GATT
process to a standstill.
John
Peterson is a lecturer in the Department
of
Government at the University
of
Essex.
The author
would
like
to
thank
Richard Doherty,
Stuart
Hall,
Brendan
O‘Leary,
Hugh
Ward, and
two
anonymous
referees.
Public Administration
Vol.
67
Winter 1989
(455-471)
0
1989
Royal
Institute
of
Public Administration
ISSN
0033-3298 $3.00
456
JOHN
PETERSON
After the Montreal
GATT
summit of December 1988, the dispute arising from the
EC
ban on imports of hormone-treated US beef threatened to escalate as each side
considered retaliation with new barriers to separate categories
of
imports. The
American insistence in Montreal that
GATT
signatories should work toward the
elimination of all agricultural subsidies by 1990 was, from the outset, viewed as a
negotiating strategy to ‘bid high’ and eventually settle for a cut in subsidies radical
enough to reopen substantially agricultural export markets in which US predomin-
ance was eroded in the mid-1980s. Acceptance by the Bush administration‘s new
negotiating team of the
EC’S
ambiguous commitment to ’ratchet down’ subsidies,
together with an
agreed
75-day ’cooling
off
period in the beef dispute (Buchan and
Dickson
1989
The
Economist
1989a), shed light on the true
nature
of the
US
strategy.
But the essential caveats of the episode are
less
clear-cut and reveal more about
the issues that will dominate future debates on agricultural reform. First, the
EC
clearly attempted to justify a politically derived trade barrier on
specious
scientific
and public safety grounds. As
will
be shown,
in
view of looming biotechnological
advance and the central role of agriculture
in
GATT
negotiations generally, this
tactic represents an
alarming
precedent. Second, US negotiators have driven a wedge
between divergent national interests
among
EC
memberstates by
linking
liberaliza-
tion of world-wide markets in the services sector with agricultural reform in the
Uruguay Round. Some
EC
memberstates (particularly Britain and the Netherlands)
would gladly trade
off
substantial concessions on
farm
subsidies for new inter-
national market opportunities in services (Boland 1988a). Others clearly would
not. Finally, the US position is certainly
informed
and fuelled by the spate of recent
academic work which has attempted to calculate the potential
effect
of multilateral
liberalization of agricultural rkgimes
(see
OECD
1987; Demekas
et
al.
1988;
Rosenblatt
et
al.
1988; Tarditi
et
al.
1989). The 1988 US Trade Act in fact requires
the Bush administration to report to Congress an estimate of the impact of inter-
national trade barriers, and the hypothetical consequences of their elimination,
in its annual forecast of trade flows. In short, radical reform of the
CAP
is now
a matter of high politics in international trade.
Meanwhile, the autumn 1988 publication of the European Court of Auditors
report on fraud and embezzlement within the
EC
has laid bare the actuarial in-
adequacies of the
CAP’S
export subsidies and intervention schemes. Estimates that
fraud may cost the
EC
up to E6bn. per year and benefit
organized
crime (Cottrell
and Usborne 1989; Oakley 1989) would, at
first
blush, logically result in enhanced
pressure for simplification of procedures and strengthened controls on
CAP
spendmg. Yet, under current arrangements the responsibility for exposing and
eliminating fraud within the
CAp
ultimately
falls
to
individual member-states
themselves.
EC
members are thus placed in
a
classic prisoner’s dilemma. They are
expected
to
police their
own
use
of
agricultural
subsidies,
voluntarily bring evidence
of fraud to the attention
of
the commission, and consequently accept decreased
subsidies from future
CAP
advances
to
compensate for wasted funds. If fraud is
rife in most or even many member-states and curbs on farm spending intensifies
competition for a decluung pool of total funds, why should any one country smgle
itself out for penalties? In the words of a British member of the Court of Auditors,
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