THE IMBALANCED SCALES OF JUSTITIA: CRITICAL ANALYSIS OF THE WTO
TRIPS AGREEMENT IN LIGHT OF INDIA’S AGRARIAN CRISIS
– Drishya B. Shetty272
ABSTRACT
John Austin, an advocate of the Legal Positivism Theory of International Law, believed that International law receives its validity only because of the will of the State which consents to abide by the same. One of the major criticisms to this theory was that International Law will lose its validity if a State merely withdraws its consent. This paper analyses the situations and circumstances where the consent of the nation was forced. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is one such example where, merely because Nations were members of the World Trade Organization (WTO), they were coerced by fellow members to ratify this agreement. The author will analyse the consequences of such unwilling ratification in India with respect to import of Genetically Modified seeds from the United States. Through this paper, the author will throw light on the biased and arbitrary manner in which Uruguay Rounds of Multilateral Trade Negotiations took place, the role of international co-operations from developed countries in the formulation of the TRIPS Agreement and the agrarian crisis persisting in India due to the same.
Keywords – Developing countries, Genetically Modified Seeds, Patents ,TRIPS, WTO.
INTRODUCTION
Adam Smith, the classical economist in his book, The Wealth of Nations first published in 1776, advocated for free trade and frowned upon protectionist methods implemented by nations.273 However, after more than 200 years since the publication of his ideas, history has seen the world move from free trade to fair trade which allowed for protection to be given to developing and under-developed nations. The World Trade Organization, established in 1995 is the central international body that governs the rules of trade between different countries.
To ensure equality, it has applied two important principles, that is, the Most Favored Nation Principle and the Principle of National Treatment. However to ensure equal opportunity of participation of third and second world countries in international trade, it has allowed for certain protections to be adopted by these nations. These are of varied types, most prominent being – export and import subsidies and tariff and non-tariff barriers to trade.
Among developing countries, one of the most common barriers that is adopted are barriers to the import of agricultural and processed F&B goods from developed nations. 274 This is for the simple reason that, it is difficult for the raw product to compete with the finished product. With the new “gene wave” that has hit the world, developing countries like India, Africa and Thailand face a new problem. The fight to own the seeds they grow, the produce they reap and their very survival in this competitive world.
The crisis that India presently faces is the rising number of farmer suicides. One farmer commits suicide every 30 minutes in our country275. The number one cause for farmer suicides is debt. When the farmer’s crop fails and he does not earn enough income, he is forced to take loans from banks and money lenders thereby further pushing him into debt. Earlier traditional farming practices and indigenous methods saved an ample portion of the farmer’s money276. In the present day the expenses the farmer incurs every season to grow his crops has been increasing.
This is because the cost of the seeds increased drastically when GM (Genetically Modified) and hybrid crops and seeds entered the market. These seeds required mechanized forms of irrigation and the use of expensive pesticides and insecticides to achieve expected yields. Thus the farmer had to spend extra to buy these products and in the situation where the yield is not as expected, it pinched the farmer’s pockets. Another problem was the payment of royalties for these seeds. Since the GM seeds were patented by private organizations and companies, the farmers had to pay royalties as well.
One such private company that patented their GM seeds and plants is the Monsanto Company. It is an American based sustainable agriculture company.277 This paper will focus on how this company started the “GM Genocide” in India278 through false advertising and by charging exorbitant royalties. It will also throw light on how the WTO TRIPS Agreement has been instrumental in allowing large MNCs to pursue their private profit making interests which has had an adverse effect on Indian agriculture.
URUGUAY ROUND ON MULTILATERAL TRADE NEGOTIATIONS (MTN)
The developing world’s most valuable resources such as agriculture and medicine have now been commercialized due to the transactions that took place during the Uruguay Round on Multilateral Trade Negotiations (MTN). It was during this round of negotiation that previously exempted areas such as agriculture, industry, services and IPR was urged to be brought under the GATT jurisdiction by the quad countries, that is, the United States, European Union, Canada and Japan.279
The 8th round of MTN was held to discuss the Trade Related Intellectual Property Rights Agreement (TRIPS). The TRIPS Agreement was conceived by a self-appointed“Intellectual Property Committee”which was a coalition 13 US corporations under the administration of the then US President, Ronald Regan.280It is also pertinent to note the parties that were present and involved during this round of negotiation. The members of this committee consisted of the top MNCs that were at the time dominating the nation in their line of business. Chief among them were – Monsanto, Johnson and Johnson and General Electric.281
Though the US was not officially present during the Uruguay round of negotiations, ample participation of their leaders through these industrial corporations is noteworthy. Robert Shapiro was the chair of Monsanto, while also leading the President’s Advisory Committee for Trade Policy and Negotiations.282Mickey Kantor, US trade representative (USTR) for much of the Uruguay Round, subsequently became a Monsanto board member. The Director of International Government Affairs for Monsanto, Marcia Hale, was formerly an assistant to Bill Clinton.283Clayton K. Yeutter, a former secretary of agriculture and US trade representative, who led the US team in negotiating North American Free Trade Agreement (NAFTA) and helped launch the GATT Uruguay Round, joined the board of directors at Mycogen Corporation (a US based private agriculture company).
These corporations justified the inclusion of IPR and agriculture under TRIPS by stating that – “nearly 200 American transnational companies were deprived of 24 billion dollars of copyright earnings because of weakness or absence of protection of intellectual property in some countries, primarily countries in the South”284. Thus the representation of these corporations during the rounds of negotiation secured them the right to gain monopoly over the worlds food supply.
Due to patent protection of plants and seeds, the corporation could not only exclude others from using vital natural resources but at the same time could increase their profits by collecting royalties from the developing countries who used their patented technology285. Also due to the patent these corporations could exercise their monopoly over a vast span of time extending from 20 to 70 years.
The TRIPS agreement of WTO is at the heart of the GMO takeover of world food production.286 Under TRIPS the WTO demands that all member countries give ‘intellectual property protection’ via patent rights to plant varieties, something entirely outside the domain of normal patent rights. Even though the Indian government refused to ratify the GATT TRIPS clause at Uruguay, a US challenge in the WTO later forced India to pass TRIPS legislation that gives patent protection to firms like Monsanto and Syngenta.287
A private patent monopoly on natural plants or life is absurd. Yet the WTO, on pressure from Monsanto, Washington and the GMO agribusiness cartel, has become the policeman to ram GMO down the throats of the world, using TRIPS to demand countries open their borders to untested GMO plants.288A patent blocks any person except the patent holder from even using the patented product, in this case GMO seeds from Monsanto, Syngenta and others who control the GMO seed market worldwide289. This is the heart of the Monsanto GMO conspiracy to force unwanted and unproven seeds on the world.
EU, US AND THE CARTAGENA PROTOCOL, 2000
In order to protect itself from the harmful effects of allowing import of hazardous genetically modified agricultural products into its border, the European Union nations implemented the Cartagena Protocol on Biosafety in 2000. This Protocol was based on the principle of – “prior informed consent”.290 It laid down various rules and procedures that the country importing GM products must comply with.
These ranged from mandatory Risk Assessment Tests of the GM crops, to submission of all documents to the importing nations government, explicitly stating whether the product “may contain” GM strains. All EU Members and nations that are major importers of agricultural goods, such as – India, China, Egypt and Japan ratified the same. The one nation that vehemently argued against its ratification, was the largest producer and exporter of GM Crops, the United States of America.291 However, since majority members had ratified the Protocol, it obtained recognition from the WTO.
This Protocol acts as a major threat to Monsanto’s profit gaining initiatives as its provisions aim to protect traditional knowledge of nationals of a state and imbibing the traditional international law principle, that the State has control over the activities that take place within its territory.292
THE ENTRY OF MONSANTO IN INDIA
The first patent right on a living organism was granted by the United States Supreme Court in the case of Diamond v. Chakrabart293 and thus laid down a precedent for further such patents to be granted.294 The first international instrument which granted strong IPR in the reproduction, commercialization, and sale of protected plant varieties was the International Convention for the Protection of New Varieties of Plants (UPOV).295 Monsanto is one such company that patented its seeds under this Act and earned huge profits through commercial sales. Monsanto wanted to widen its reach and establish itself in all parts of the world.
Unfortunately, the laws of many countries and states did not allow patents on living organisms, India was one among them. But, as discussed in the preceding sections of this paper, private, non-state actors such as Monsanto have had a big say when it comes to International Policy matters296.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement eased Monsanto’s transition into India. The Agreement is administered by the World Trade Organization. Article 27.3(b) of this agreement states “parties shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof…”297. But it was in 1988 when the New Seed Policy was imposed on India by the World
Bank which opened the gates for Monsanto’s entry.298 India was forced to relax its strict import laws since it was a member of the WTO.
ILLEGAL PATENT AND ITS EFFECTS
Patents are granted for inventions which are useful and non-obvious299. Another important issue when it comes to granting patents is that the interest of the public and the society will be valued over the interest of the patent holder.300 The TRIPS agreement of the WTO allows patents to be granted on living organisms and even urges member nations to promote granting of patents.301 Thus Monsanto was granted the patent right over its Bt cotton seeds which the company had ‘created’. It is essential to note here that the TRIPS agreement was drafted by Monsanto’s lawyers who cleverly incorporated their company’s policy within the agreement.
In the case of Schmeiser v. Monsanto302 the United States Supreme Court held the following: first, that Monsanto is entitled to extend a patent for a transgene, and a cell containing that transgene to include both a plant and a seed containing the transgene; second, that merely possessing a plant which contains the transgene constitutes infringement of the patent rights of the patentee.303 This judgment further strengthened the position of Monsanto in the IPR sector and gave it the authority to exercise its power unethically.
But the question is, how can a patent be granted over a seed? A seed is a biological unit which is created by the plant. It undergoes a continuous process of change throughout its lifetime. Simply “adding” a gene into the genetic structure of the seed does not imply “creating” the seed itself.304
Another reason why Monsanto was granted the patent was because the company claimed that these GM seeds were resistant to the Bollworm pest which commonly infested the cotton farms creating major loss for the farmers. However, in many cases were reported where the farmer’s cotton crop had been infested even after using Monsanto’s GM cotton seeds.305
Whenever Monsanto is questioned about the patent over its GM seeds and its failure to fulfill its claims, the Company takes the defense of Article 27 of the TRIPS Agreement. But this provision was to be mandatorily reviewed after 4 years from when the agreement came into force.306 The review process has not been completed yet and hence the Agreement that forced granting of patents exists in violation of this rule.
Thus, Monsanto using this method of deception has privatized the public agriculture sector and is the cause for genetic pollution, biopiracy and the farmer suicide epidemic in India.
PATENTS ON THESE SEEDS LED TO THE FOLLOWING EFFECTS
First, the knowledge of the farmers with regard to traditional farming practices and indigenous methods of irrigation and pest control which was developed decades ago was stolen by the company and patented. Thus, the farmer commits patent infringement each time he uses these traditional farming methods on his own.307
Second, the GM Bt cotton seed sold by Monsanto required it to be grown in monocultures and not along with other crops. This made the crops more vulnerable and prone to infestation by pests which further led to crop failure.308
Third, pollen drift occurred when cross-pollinating plants from GM seeds naturally released pollen that contaminated nearby conventional crops growing on another farmer’s land – a farmer who is not paying a licensing fee to the patent holder for the GM crop. Monsanto filed over 144 lawsuits between 1997 and 2010 for alleged patent infringement or breach of license for its seeds.309
Fourth, since the GM seeds were patented the farmers had to incur an extra cost to pay royalties to these companies. Monsanto in its official website claims that collecting royalties is essential as
it is a source of their income considering the massive cost the company incurs on Research and Development.310 And, it also acts as an incentive which drives innovators to invent other such GM seeds for the welfare of the farmer. But ever since this royalty hungry company has been reaping profits since it has patented the Bt cotton seed it has subsequently produced only failures.311
Fifth, the doctrine of patent exhaustion came into effect. This doctrine states that “a farmer is not allowed to plant and grow, saved patented seeds without the permission of the patent holder”312. Doing so would be considered as patent infringement and a violation of TRIPS agreement. This implied that the farmers now had to incur costs every season on buying new seeds and growing them unlike before where traditional farming practices were followed and allowed for the previous season’s seeds to be saved for re-growing313. This traditional farming method of saving seeds drastically reduced the costs incurred by the farmers, but now the introduction of patented seeds in the market has burnt a hole in the farmer’s pockets.314
Sixth, these GM seeds require the use of expensive fertilizers, pesticides, insecticides and herbicides to ward of pests from infesting the crop315. Earlier farmers in India would use Neem as a natural insecticide to ward of pests for bare minimum costs. But now, since the GM Bt cotton seed required it to be grown in monocultures, it was more susceptible to insect infestation especially the Pink Bollworm and natural pesticides were not effective on these crops316. Thus, the farmer had to spend a huge amount of money to buy these chemicals.
Seventh, to achieve high yields from Monsanto’s GM seeds, it did not just require the use of expensive fertilizers and other chemicals, but also needed highly mechanized forms of irrigation.317 Unlike desi varieties used by farmers earlier which required less water, the GM seeds required much more water to reach optimal growth. Employing and investing in such irrigation methods was not an issue for the rich farmers. But for most of India’s farmers who live below the poverty line, investing their money on these irrigation methods was not an easy task. Also, most of the farms are completely dependent on rains as a source of water318. Thus, since the required level of water for the plants consumption could not be met, the farmers did not obtain the expected yields.
CONCLUSION
Our country must fight hard to protect indigenous knowledge regarding farming practices from being stolen and patented by foreign companies. For example, India is still fighting against Rice Tec (a Texas company) to revoke their patent over Basmati rice.
Indian government should study the China movement against US MNCs like Monsanto as China has taken a different route in ensuring that their agriculture does not succumb to the seed MNCs such as Monsanto tries to force upon them319. They have bought some crucial patents from smaller companies in Japan and other countries and have developed their own GM products. Bt Cotton and Bt rice in China are from their public sector scientific institutions and operating on the same principles that green revolution did320.
In India, women are not recognized as farmers because the title of the agricultural property is not in her name. Despite it being a known fact that, women are the de facto heads of the household and the farm, they are failed to be recognized in official agricultural schemes and policies.321 Thus, they are not entitled to avail the benefits that the government provides under them. A study conducted during the World Food Program finds that “If women farmers had the same access to resources as men, the number of hungry in the world could be reduced by up to 150 million”.322
It would be unwise to come to an absolute conclusion to state that the World Trade Organization is completely susceptible to the influence exercised by developed nations. However, it would not be prudent either to ignore their power to determine international law. One of the most glaring examples of the power these nations hold would be, the veto power of the five permanent members (United Kingdom, United States, France, China and Russia) in the United Nations Security Council or the ability of countries like France and Germany to completely ban GM Crops, while India still fights for the rights of its farmers, in the hope that they will live to see the fruits of their labor.