Global food politics

In the early 1990s, the U.S. Department of Agriculture estimated that Pacific Asia would absorb two-thirds of the over $3 billion increase in global demand for farm exports by the year 2000. Pacific Asian imports would be assisted by $1 billion in U.S. Export Enhancement Program subsidies to American exporters. A portion of this lucrative market (much of which is tinned beef and processed foods sold in South Korea and Taiwan) would involve bulk wheat and corn imports by Indonesia, Malaysia, and the Philippines.

Under the conditions of the 1994 agricultural agreement of the Uruguay Round of the General Agreement on Tariffs Trade (GATT) negotiations, Organization for Economic Cooperation and Development (OECD) projections predicted that U.S. corn exports would undercut Philippine corn prices by 20 percent in the year 2000, depressing domestic corn prices. According to Kevin Watkins, this would threaten half a million peasant households with income declines of 15 percent and result in high social costs such as reduced expenditures on education, increased reliance on child labor, nutritional decline, and the intensification of women's work outside the home to compensate. Comparatively speaking, the average subsidy to U.S. farmers and grain traders is roughly 100 times the income of a corn farmer in Mindanao. As Watkins remarks, "In the real world, as distinct from the imaginary one inhabited by free traders, survival in agricultural markets depends less on comparative advantage than upon comparative access to subsidies."

Noting that the government of the Philippines views this agreement as an instrument of economic efficiency, despite its implicit transfer of sovereignty over national food policy to an unaccountable trade body in Geneva, Watkins concludes: "Legal niceties aside, the Uruguay Round agreement bears all the hallmarks of an elaborate act of fraud. It requires developing countries to open their food markets in the name of free market principles, while allowing the U.S. and the EU to protect their farm systems and subsidize exports" ("Free Trade and Farm Fallacies: From the Uruguay Round to the World Food Summit," The Ecologist, 26 [1996]: 244-255).

The Uruguay Round's sleight of hand has been institutionalized in the recently formed World Trade Organization. The WTO presides over the most far-reaching attempt to level political, social, and environmental protections in the name of efficiency and market freedom. But, as the above case indicates, the "level playing field" is not level - because the United States and the EU retain indirect agricultural subsidies by decoupling farm payments from commodity prices (encouraging agro-export dumping), and through extensive infrastructural supports. By externalizing these subsidies, United States and EU exports compete with artificially low prices. In market terms, then, Southern agricultures appear relatively inefficient. In privileging market prices as the criterion of agricultural competitiveness, free trade rhetoric thereby justifies the use of institutional means that extend markets for agribusiness at the expense of small farmers across the world. As I will argue below, agribusiness imperialism, in which the United States has assumed a global "breadbasket of the word" strategy and sought to institutionalize its corporate "food power" via the current free trade regime, is integral to the coercive use of institutional mechanisms to monopolize control of world agriculture and flows of food.

From Agro-Colonialism to Agro-Industrialism

The historical relations of production and consumption of food on a world scale have always been both political and geopolitical. This fact tends to be obscured because much of our political-economic understanding of global power relations is anchored in a binary view of the world. In word-capitalist history, the metropolitan or European, world is seen as specializing in industry, while the "peripheral," or non-European world, specializes in raw materials and food production. Development came to be understood as the process of overcoming this division; agriculture was viewed as a specialization to be transcended.

The binary conception is flawed in many respects. The spread of sugar consumption in the seventeenth century signaled the rise of industrial capitalism and the deepening of markets through the expansion of wage payments. World capitalism emerged on the pedestal of colonial agricultures, where largescale slave plantations prefigured the rise of the factory system, and colonial systems generated much of the early capital that nurtured the rise of modern industry. More fundamentally, capitalist forms of production (and consumption) first emerged in agriculture, and the global food trade was, and remains, central to the organization of capitalism on a world scale.

The history of agriculture and capitalism involves two divergent, and yet connected, historical threads that have been conflated in these binary conceptions of development. These two threads are the global movements of British and U.S. hegemony, each of which modeled two distinct forms of development. The former hegemony involved dividing the world along the classic lines of the international division of labor, expressed in the British slogan of "workshop of the world." British specialization depended on access to agricultural exports from tropical colonies and New World temperate regions (including the future American "breadbasket"). In the twentieth century, the U.S. projected an alternative model of development based on the national integration of manufacturing and agricultural sectors, and on capital- and energy-intensive technological change. Whereas the British model was viewed as "outer directed," the U.S. model was viewed as "inner directed." However, obscured in this latter model is the powerful role of agribusiness and food power in the U.S.-centered global political economy of the twentieth century.

In the late-nineteenth century, white settler farming (typified by family farming in the United States) formed the new agricultural core of the world economy, fueling industrialization in Europe as well as in the settler states. With the relatively low frontier person-to-land ratio, this strategic "breadbasket" role generated a highly productive energy- and capital-intensive agriculture. In fact, this form of industrial agriculture became the model for agricultural development in the twentieth century, first in Europe and then in the postcolonial world.

The intensive agricultural model is significant because it required continual external inputs, provided through the market-whether technological inputs such as oil, inorganic fertilizers, hybrid seeds, machinery, and pesticides, or specialty agricultural outputs such as corn and soy feeds for the new intensive meat sub-sector, for example. On a national scale, the model integrated industry and agriculture, fueling post-Second World War prosperity within the terms of the Bretton Woods monetary regime (whose fixed exchange rates and controls on capital flows stabilized national economies). Meanwhile, on the transnational scale, large agribusiness corporations began coordinating exchanges of these inputs across national boundaries. Many of these exchanges originated in the postwar settlements in Europe and East Asia, whose reconstruction depended on U.S. trade and export credits. The Japanese livestock sector, for example, came to depend on feedstuffs such as imported corn from the United States and soy from Brazil. In other words, agro-industrial complexes (where agriculture is subjected to, and integrated with, industrial processes) were simultaneously nationally organized and internationally sourced. In the meantime, agro-industrialization intensified the global division of labor associated with colonialism.

Agribusiness in the Global Political Economy: The Rise of Agro-Export Dependency

The U.S. agro-industrial complex stemmed from adjustments made during the interwar period in response to the Great Depression, which was particularly severe in agriculture. In 1935 the Agricultural Adjustment Act was amended to allow the Secretary of Agriculture to bar agricultural imports to protect the USDA price-support program, which set domestic prices above world market prices. Ironically, this neo-mercantilist policy of import controls eventually produced an agro-export program of global significance. Farm supports led American farmers to overproduce, and the U.S. government disposed of these agricultural surpluses overseas via the Public Law 480 program of cheap foreign food aid. It was within the context of this food regime disbursing food at concessional - and later, commercial - prices that the huge grain traders, such as Cargill and Continental, prospered. They had traditionally marketed grains produced by American family farms, and had gained a captive market through the subsidized exports of the post-Second World War food aid program.

In addition to cheap foodstuffs, U.S. exports of agribusiness technologies flourished through the facility of U.S. foreign aid programs, including the Marshall Plan and the green revolution, which targeted select third world regions. These two particular programs spawned modernizing agricultural sectors replicating the capital- and energy-intensive model of American agriculture, from Europe through Japan to Mexico. In South Korea, four local firms formed joint ventures with U.S. agribusiness firms (including Ralston-Purina and Cargill) to introduce technical and marketing expertise to that country's food system. The 1972 Public Law 480 annual report approvingly concluded that "these firms were instrumental in accelerating the introduction of U.S. technology and were a major factor in the rapid expansion of ... the increase in Korea's imports of U.S. corn, soybean meal, breeding stock and other supplies and equipment."

This report illustrates how the U.S. agricultural model, including its specialized character, shaped the Korean livestock industry, which increasingly depended on foreign feedstuffs producers (in the United States, Brazil, and Thailand). That is, agribusiness corporations not only had new domestic markets within which to sell their technologies, but they also integrated global commodity chains linking specialized agricultural subsectors across national boundaries.

The progression from multinational markets to transnational complexes, as realms of corporate profiteering, did not derive from agribusiness specialization alone. It also grew out of geo-economic arrangements as global capitalism changed gears in the 1970s. This relatively stable organization of nationally regulated economies, with fixed exchange rates pegged to the dollar, gave way to an increasingly unstable organization of increasingly transnational economic relations governed by floating exchange rates, offshore money markets, and financial speculation (in other words by "financial globalization"). As national controls on capital movements eased, transnational corporate activity expanded, and development agencies like the World Bank identified exporting to the global market as the preferred strategy for states and firms.

Interestingly enough, the U.S. government in the early 1970s adopted a "green power" agro-export strategy to solve its growing imbalance of payments associated with the rising costs of empire (emanating in particular from the Vietnam War). Until the 1970s, U.S. farm policy focused on stabilizing the national farm sector, with exports and food aid as a by-product of the domestic management of surpluses. The 1973 Farm Bill, which removed production constraints on American farmers and encouraged commercial exports, was not simply a formal change in the mechanism of disposal of farm surpluses - it fundamentally altered the relation of American agriculture to the world economy.

From the early 1970s, U.S. agriculture displayed a new export dependency, in which the production of more than one acre in three consisted of low-value primary products (wheat, corn, and soybeans) destined for the export market. The green power strategy destabilized family farming throughout the world, and intensified export production and dependence on foreign markets, especially in the middle-income regions of the Third World, China, the Soviet Union, and Eastern Europe. Meanwhile, Western Europe, whose farm policies both mirrored those of the United States and led to similar overproduction problems, was itself becoming a major exporter of grain.

In the 1950s the Third World had accounted for about 10 percent of all wheat imports, but this proportion increased to 57 percent by 1980. A significant part of this food dependency arose from the United States' food aid program, which encouraged Western dietary habits on the one hand, and undercut local farmers' prices on the other. The food-dependent South became the site of intensified trade rivalry between the EC and the United States. This competition for markets, and the growing role of the transnational corporations in the global food economy, provided the context for GATT talks in the 1980s focusing on the liberalization of agriculture and trade in agricultural commodities.

Formation of the GATT and Northern Exceptions

The Uruguay Round's focus on agricultural liberalization broke new ground for GATT. As suggested in the case of the Philippines, liberalization is by no means a neutral matter of installing a 'level playing field' in the global food economy. At the outset, liberalization embodied both a free trade demand by the Cairns Group of agro-exporting nations, and a mercantilist, "breadbasket of the world" strategy pursued by the United States.

Interestingly, in the previous GATT Rounds, agriculture was always an exception to the liberalization of trade rules, at U.S. insistence. In 1955, agricultural trade was excluded from consideration in GATT codes, thus protecting U.S. farm supply policies from import competition. Since the mid-1980s, however, the United States has reversed this position, intending to deploy GATT against agricultural protection. Arguably, the immediate target is the European Common Agricultural Policy (CAP) of subsidizing cheap farm exports to enter markets once dominated by U.S. agricultural exports. Given the dependence of American agriculture on export markets, such rivalry has considerable domestic impact, on debt-stressed farmers and corporate exporters.

The American strategy evolved within this context: from a "green power" initiative in the world market in the 1970s, to a broader institutional initiative in the 1980s to enforce market power through a GATI' free trade regime. Behind this liberalization initiative was the considerable restructuring, or economic polarization, of the farm constituency. The farm crisis of the 1980s ultimately favored the large producer and the food companies. By 1994, 50 percent of U.S. farm products came from 2 percent of the farms, while only 9 percent came from 73 percent of the farms. In the same year, 80 percent of U.S. beef was slaughtered by three packers: Iowa Beef Packers (IBP), ConAgra, and Cargill.

The shift in farm credit delivery, from predominantly state-supplied credit in the 1970s to the Reagan policy of replacing Farmer's Home Administration loans with state-guaranteed private loans, marked an important change in farm policy. Not only did rural welfare policies shift towards socializing the cost of private expansion, this new policy climate also signaled the empowerment of private banks as suppliers of agricultural credit. The banks simultaneously benefited from U.S. monetarist policies which inflated the dollar; the inflated dollar opened the door for Southern agro-exporting, and thereby facilitated a strategy of debt-repayment to the banks, but it did so at the expense of American agro-exports.

In response to rising farm prices after the mid-1980s farm crisis eased, the newly-established Export Enhancement Program (EEP) subsidized agro-exports, particularly those competing with EC exporters. The U.S. sent the message: either "initiate policy reforms in accordance with U.S. priorities, or the U.S. would use the EEP to subsidize exports to recapture world market shares for wheat, feed grains, and selected livestock products in direct competition with the Community." To that end, EEP commodities have targeted markets in the Soviet Union, China, North Africa and the Middle East. The U.S. used the EEP as part of a negotiating strategy in the GATT Uruguay Round to challenge competitors' subsidies and other "unfair" trade practices. By 1994, agro-exports from the U.S. accounted for 36 percent of wheat trade worldwide; 64 percent of the corn, barley, sorghum, and oats; 40 percent of the soybeans; 17 percent of the rice; and 33 percent of the cotton. However, these trade challenges have not so much rewarded the United States (and other food exporting nations) as they have strengthened the grip of the food companies, which benefit from the free trade movement - for example, 50 percent of U.S. grain exports in 1994 were shared by two companies: Cargill and Continental.

GATT, TNCs and World-Agricultural Restructuring

The current restructuring of world agriculture builds on a division within agriculture between low-value and high-value products. Trade in low-value temperate cereals and oilseeds has been historically dominated by the North, and trade in high-value products has fallen increasingly to corporate agro-exporters (or their contract farmers) producing in the South - for example, Brazilian beef, Chinese and Hungarian pork, Southeast Asian shrimp, Brazilian, Hungarian, and Thai poultry, and generalized fruit and vegetable exports across the South. (Note that while some Southern countries - notably Argentina, Thailand, and Uruguay - are net food exporters, the large majority are net food importers.) The growth of agro-export "platforms" is an unstable strategy, signaling a more fundamental process at work: a widespread subordination of producing regions to global production and consumption relations organized by transnational food companies.

Under these conditions, agriculture becomes less and less a foundational institution of societies and states, and more and more a tenuous component of corporate global sourcing strategies. It increasingly anchors a system of global profiteering in food products, a system in which food travels from farm gate to dinner plate an average of 2,000 miles. Further, the corporate strategy of incorporating regions into global production and consumption relations simultaneously undermines the institutional bases of national farm sectors, in the North as well as the South.

Farm sectors have been so transformed that, for example, the U.S. government has even been considering eliminating "farming" as a population census category. This occurs in a context where two percent of the farms grow 50 percent of agricultural produce, the average family farm earns only 14 percent of its income from the farm, and 95 percent of American food is manufactured and sold by corporations (e.g., Philip Morris, which markets brand names such as Sungold Dairies, Lender's Bagels, Tombstone Pizza, and Kraft Cheese; and ConAgra, which markets Healthy Choice meals and desserts, Peter Pan peanut butter, Orville Redenbacher popcorn, Wesson oils, and Butterball, Armour, and Hebrew National meats). The food industry is in fact the largest American industrial sector, even though it doesn't produce food security, as 30 million Americans do not get enough to eat. And it is dominated by huge conglomerates which virtually monopolize sales - ConAgra, for example, accounts for 25 percent of sales in foodstuffs, feed, and fertilizer; 53 percent of sales of refrigerated foods; and 22 percent of grocery products.

Centralization in a few mega-food companies also puts them in a commanding position vis-a-vis producers. But the corporate takeover is not simply a question of the economic viability of family farming programs. It is also that these national farm-based institutions, which nurtured agribusiness by stabilizing national patterns of consumption of farm commodities, have now become obstacles to the transnational strategy and structure of the food companies. They are obstacles because domestic price supports, by raising prices of agro-industrial inputs, disadvantage food processors and grain traders in the world market.

In the South, the TNC strategy continues the neocolonial project of undercutting local farmers with cheap food imports on the one hand, and extending the green revolution strategy to produce new agro-exports on the other. The latter strategy (the "second green revolution") applies crop breeding techniques and chemical inputs to crops geared to affluent markets in the cities or overseas. Either way, the threat to local food security, leaving aside potentially unhealthy dietary changes and the greater fragility of monoculture, is real. In Brazil, the world's third largest food exporter and considered one of the "new agricultural countries," less than 1 percent of the population owns about 54 percent of the fertile agricultural land, and 32 million people are officially considered destitute.

Transnational corporations stand to gain overall from a free trade regime, since it will enhance and reward capital mobility and facilitate it by reducing institutionalized costs. Cargill, for instance, is one such corporation that views the world as its oyster. The largest private company and the eleventh largest company in the world, Cargill employs 70,700 people in 800 locations in sixty countries and over fifty different businesses - from grains through beefpacking to fertilizer, peanuts, salt, coffee, transportation, steel, rubber and fruits and vegetables.

Global firms and the agroexporting states (the Cairns Group) were key supporters of the GATT multilateral approach to liberalization. In fact, the original U.S. proposal to the Uruguay Round was drafted by Cargill's former senior vice president, also a former officer of the U.S. Department of Agriculture. Cargill shares roughly 50 percent of U.S. grain exports with Continental. Food companies, grain traders, and the chemical industry all generally favor using the WTO to phase out farm programs, eliminating supply management and driving down prices by exposing U.S. farmers to worldwide differential labor and land costs. By reducing price supports, the corporations maximize their ability to structure comparative advantages in the world market, sourcing their inputs from the variety of producing regions incorporated into the "free" world market.

The big grain traders (in order of size: Cargill, Archer Daniels Midland [ADM], Continental, Louis Dreyfuss, Bunge & Borne, Mitsui, and Feruzzi) have not only exerted their oligopolistic power in the world market to structure supplies and control grain prices, but they have exerted advisory power in the GATT negotiations regarding the content of the rules regarding agricultural liberalization. For example, the GATT agreement is now used at their behest to challenge national agricultural supply management boards on the grounds that they interfere with the free trade of agricultural products on the world market. This has been particularly effective in Canada, where supply-management agencies emerged earlier during this century to protect farmers from corporate food processors, only to be challenged by Cargill Canada. Companies like Cargill have supported the North American Free Trade Agreement(NAFTA) and GATT to institutionalize a trade regime outlawing such "distortions" to global markets, despite sustained national and international protests by farmer organizations.

The corporate assault on national regulatory policies is both a trading as well as a production strategy. Companies are looking either to capture new markets through direct purchasing of crops and processed food, or to organize agricultural production directly. New forms of mass marketing of commodities produced under contract in multiple locations are emerging, especially in the global fruit and vegetable industry. The contractual relation integrates growers into an essentially industrial enterprise, in which specific crop varieties are combined with particular chemical inputs. The global coordination of multiple production sites, for a year-round supply of fresh produce, is achieved through information technologies. In Chile, now the largest supplier of off-season fruits and vegetables to Europe and North America, more than 50 percent of fruit exports are controlled by five TNCs. Not only do these 'nontraditional' agro-exports reconfigure local agricultural landscapes, but also they impact agricultural labor - roughly two-thirds of the Mexican and Chilean agricultural labor forces depend on insecure, low-wage employment. Kevin Watkins reports that in Mexico, "workers on commercial farms are generally paid piece rates, are not entitled even to minimal social welfare protection such as sickness and maternity benefits and have no basic trade union rights" (Watking, op. Cit., p. 251).

Capture of new markets also depends on liberalization, and is often achieved by purchasing existing enterprises, if only to capitalize on the brand name familiar to local populations. Thus, corporations from the United States (Sara Lee/Douwe Egbert, Coca-Cola) and Europe (Nestle, Unilever, Feruzzi, and Montedison) have made significant inroads into Hungary's food processing sector. Meanwhile the Thai-based Charoen Phokpand (CP) has extended its feed, livestock, aquaculture, and fast food empire from Southeast Asia into China, where CP, as the largest foreign agribusiness, aims to put a chicken in every wok.

Geopolitical relations figure in corporate market strategies too. Thus, firms like Nestle Brazil use Brazil as a base from which to supply South America with biscuits. Meanwhile in Mexico, the food industry grew at an average annual rate in excess of all manufacturing through the 1980s. Moreover, growth in food processing was overwhelmingly concentrated in export production, growing faster than overall agricultural trade. Mexican economic liberalization offers new opportunities for foreign investors, often in joint ventures with Mexican capital, or with other foreign capital. An example is the Trasgo group, a vertically integrated poultry operation, which combines Mexican, U.S., and Japanese capital and targets Japanese consumers. Del Monte, a vigorous supporter of NAFTA, is currently experimenting with large scale commercial production of tomatoes via land companies managing the ejido lands (communal lands formerly under the control of peasants).

Under increasingly liberalized conditions, companies from the United States (Bird's Eye, Green Giant, Pepsico, General Foods, Kellogg's, Campbell's, Kraft), Japan (Mitsui, Mitsubishi, C. Itoh, Sumitomo), and Europe (Unilever, Nestle) have increased their rate of investment in food production and processing operations in Mexico, coinciding with changes in foreign investment regulations allowing 100 percent ownership. Presaging the 1990s, the Mexican Foreign Secretary proclaimed, "Mexico is one of the newer trading powers of the world that has helped to maintain the pace for bringing about an ambitious reform of the world trading system."

The World Food Economy in a WTO Regime

The endpoint of the Uruguay Round of GATT was the creation in 1994 of the World Trade Organization, in order to institutionalize freedom of trade, enterprise, and property rights on a world scale. A WTO regime is not just a device for promoting the global circulation of commodities. It is also a new supra-national political form. It has a distinctive constitutional focus and enforcing rules regarding commodity circuits and national and sub-national regulations. Arguably, it will operate as an enforcement mechanism of market rules for the globally dominant states and corporations. Pressures to deregulate Northern farm sectors and to expand Southern agro-exporting involve a universal challenge to national economic organization (and institutions) by transnational firms. Global access by TNCs allows them to exploit the asymmetry between North and South, undercutting Northern entitlement structures and their institutional supports by optimizing global sourcing strategies.

The WTO is not only an agent of trade liberalization. It is also a tribunal for enforcing corporate rights to manage consumption. On the horizon is an intensification of agrochemical-corporate domination of world food production by six conglomerates involved in genetically engineered food (Monsanto, Novartis, AgroEvo, DuPont, Zeneca, and Dow). Their claim that there are now 30 million acres of genetically engineered crops portends a controversial future. The companies argue that these new biotechnologies reduce the use of pesticides, and promise an end to world hunger. Critics dispute these claims, also arguing that these technologies will discriminate against small farmers, threaten public health, and narrow available food choices. In this context, where agriculture broadly construed (farming, the farm input and processing industries, and so on) still constitutes a large share of the global economy, it is not surprising to find lobbying to revise world food safety standards in favor of genetically-engineered foods, as well as food disparagement laws gaining ground in the U.S. (witness the recent suit against Oprah Winfrey by the cattlemen for her allegedly disparaging remarks about hamburger), and global PR firms structuring debate in favor of genetic engineering. The WTO is being deployed to challenge governments that oppose genetically engineered crops. For example, in September 1997 the WTO ruled against the EU's ban on imported hormone-produced beef and on milk from cattle treated with one of Monsanto's recombinant growth hormones, Posilac.

Behind the apparent multilateralism of the WTO stands the attempt to institutionalize rules of a neoliberal world order to match (and deepen) the corporate-led economic integration underway. This requires a formal codification of inter-state trade relations, much as we have seen occurring in the proliferation of regional free trade agreements. Free trade agreements like NAFTA mirror the asymmetry of the WTO regime. For example, quotas on duty-free U.S. corn, wheat, and rice imports into Mexico are being lowered in stages. In Mexico, 2.5 million households engage in rain-fed maize production, with production of two to three tons per hectare, compared with 7.5 tons per hectare in the American Midwest. With an estimate of a 200 percent rise in corn imports under NAFTA's full implementation by 2008, it is expected that more than two-thirds of Mexican corn production will not survive the competition.

A more far-reaching, substantive power is anticipated in the negotiation over the terms of the WTO. In particular, the current dispute over the reach of the WTO regarding investment concerns the institutionalization of a global intellectual property regime. Through the TRIPS protocol, trade-related intellectual property rights of foreign investors have been strengthened by the possibility of parenting a variety of products and processes. Global corporations are empowered by this protocol, for example, to patent genetic materials such as seed germplasm, potentially endangering the rights of farmers to replant seeds from their own harvests on the grounds of patent infringement. This is an extraordinary form of expropriation of genetic resources originally developed by peasants, forest dwellers, and local communities over centuries of cultural experimentation. Such biopiracy, or gene theft, has become a focal point of grassroots resistance to the WTO regime. And resistance is likely to quicken now that the so-called "terminator gene" has been jointly patented by the USDA, and Delta and Pine Land, the world's largest cotton seed company. This gene can switch off plants' ability to reproduce, transferring monopoly power to licensed seed and chemical companies by forcing farmers to purchase new seeds annually. While the USDA views the terminator gene as a vehicle of market creation, for seed companies in the "developing" world, where farmers save seed for the next year's planting, critics point out that this transgenic technology threatens to eliminate plant breeding by millions of small farmers, seriously reducing food security.

The WTO is as yet only empowered to rule on investments that are "trade-related," through the trade-related investment measures (TRIMS) protocol. However, the European Commission (backed by the United States and Japan) has a draft proposal for a Multilateral Agreement on Investment (MAI) that would relax all restrictions on foreign investment in any member state, grant the legal right for foreigners to invest and operate competitively in all sectors of the economy, and grant TNCs the same rights as domestic firms in signatory states.

Although stalled by considerable national and international resistance in the spring of 1998, the MAI, if implemented, would seek to render domestic regulations transparent to investors, and preclude restrictions on capital transfer across national borders. It would also restrict the right of governments to use investment policy towards social and environmental ends, or to impose performance requirements on foreign investment. The draft code includes proposals to institutionalize rights of corporations (and financiers) as investors, with a legal status equivalent to that of nation-states, except that governments are not granted rights to sue such investors for damages on behalf of their citizens. Further, the MAI has proposed to "lock in" new liberalization measures so that they are unaffected by changes in government in participating states, which will not be able to withdraw for five years from the MAI, while the rules for existing investments must stand for an additional fifteen years.

Conclusion

Agribusiness liberalization is deeply symbolic of the attempt to legitimize world-economic integration, precisely because of agriculture's historic identification with place and nation. While greater integration transforms all states through economic liberalization, it also reinforces global power relations - in this case the relations of agribusiness imperialism. That is, what are presented as universal trade rules (to which states individually commit) really serve to reinforce extant geopolitical and corporate interests.

Within global agriculture, the institutionally driven process of liberalization undermines the ability of weaker, food importing states to protect local farmers, and transforms food into a new frontier of commodification. Global regulatory agencies like the WTO threaten to entrench (Northern) agribusiness power at the expense of farmers across the world, to intensify the destabilization of rural communities, and to further compromise local food security. How far this process will go remains unresolved, especially as citizens and workers and farmers and peasants and indigenous movements are sensing that globalization is not so much a foregone conclusion as a political project delivering highly selective benefits to small fractions of the world's population.

Philip McMichael, professor of Rural and Development Sociology is Director of the International Political Economy Program at Cornell University.

COPYRIGHT 1998 Monthly Review Foundation, Inc.
COPYRIGHT 2000 Gale Group