POLST 362'3 The International Political Economy IPEof Biotechnology

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POLST 362.3 The International Political Economy
(IPE)of Biotechnology

• Lecture 12
• International integration--States and IGOs

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POLST 362 States and IGOs

• Context
• Role of states vis-à-vis International
  Governmental Organizations (IGOs) during the
  dynamic process of International Integration
• Lots of IGOs Key ones for biotech
• science based IPPC, OIE, Codex
• Trade WTO
• Broader OECD, FAO, WHO, RIs, BSP

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POLST 362 The Study of IPE

• Two Broad Areas of Inquiry
• The dynamic, transitional issues associated with
  international integration
• Focus on Gains/Losses from International
  Integration
• National Autonomy Gains/Losses
• Absolute relative distribution
• Focus on Governance of International Integration
• International Institutions/Regimes
• Hegemonic Stability Theory

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POLST 362 The Study of IPE

• But First
• what is international integration?
• The dynamic process whereby the economic and
  social (political, cultural, normative, etc.)
  dimensions of a nation converge with those
  dimensions of other nations.
• It occurs
• Explicitly (trade agreements, MEAs, Land Mines)
• Implicitly (cultural convergence e.g. internet,
  sports)

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POLST 362 The Study of IPE

• States can choose
• Level of integration
• Regionally (bilaterally or plurilaterally)
• Globally (multilaterally)
• Depth of integration
• Shallow/economic integration
• Deeper/social integration
• Strategy of Integration
• Competition
• Coordination

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POLST 362 The Study of IPE

• Examples of integration
• Level of Integration
• Regional Global
• Shallow/Economic Shallow/Economic
• NAFTA, MERCOSUR WTO
• ASEAN MAI
• Deeper/Social Deeper/Social
• EU, TAED CITIES, BSP, TACD Basle
  Convention

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POLST 362 The Study of IPE

• Of central concern to states is the impact of
  international integration upon domestic autonomy
  
• Both economic and political
• Some argue never a net loss
• If every state agrees to the same rights and
  obligations, then there is no real change in
  state power vis-à-vis other states
• Example Lipsey (1988) Canada-US FTA

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POLST 362 The Study of IPE

• Others argue always a loss of autonomy
• International integration starts at the border,
  then works its way into the social fabric
• Thus requiring a benefit-cost analysis
• Benefits Sensitivity
• Mutual interdependence, global externalities
• Costs Vulnerability
• Exploitation, erosion of distinctiveness

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POLST 362 The Study of IPE

• States use various strategies to influence the
  gain/loss of international integration, depending
  on whether they are a leader or a laggard in the
  particular policy area
• There is rarely a consistent position on
  integration pursued

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POLST 362 The Study of IPE

• Leaders maximize gain
• Level Global Free Trade
• Liberalized inflows of factors into innovative
  clusters free trade
• Pursuit of international market access rules for
  outflowing innovative products
• Depth Shallow/economic
• Shape international institutions and regimes to
  adopt their economic approach
• Example regulations

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POLST 362 The Study of IPE

• Laggards minimize loss
• Level regional
• protectionist blocks
• Prevent outflows of resources (subsidies)
• Prevent inflow of innovative foreign products
• Depth deeper/social
• Prevent international institutions and regimes
  from disciplining the shared social perspective
  of the block
• Example EU and biotech and hormone-beef?

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POLST 362 The Study of IPE

• Second Governance of International Integration
• For the most part, international integration has
  been based on the ideology of a liberal
  international economic order
• Problem
• power to enforce compliance rests with states
• Solution
• political leadership must be achieved among
  sovereign states, but how ?
• International Regimes Institutions
• Hegemonic Stability Theory

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POLST 362 The Study of IPE

• International Regimes Institutions
• Regimes
• Sets of implicit or explicit principles, norms,
  rules and decision-making procedures around which
  actors expectations converge in a given area of
  international relations
• e.g. Principle of Non-Discrimination in the WTO
• Institutions
• Formal Organization whose mandate may be the
  creation or protection of regime principles eg
  WTO
• Generally assumed are international
  governmental organizations, not (NGOs), eg
  Greenpeace

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POLST 362 The Study of IPE

• A regime can encompass several institutions
• Liberal International Economic Order
• WTO
• IMF
• World Bank
• Sustainable Development
• Secretariat to the Convention on Biological
  Diversity
• UNEP (UN Environment Programme)
• An institution can encompass several regimes
• United Nations
• FAO, WHO, Codex, UNEP, WFP

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POLST 362 The Study of IPE

• International Regimes Institutions exist to
• Minimize transactions costs (NIE)
• Reduce risk/uncertainty
• Prevent/correct market failures
• the inability to provide global public goods
• Further, they rely upon the cooperative behaviour
  of members/signatories
• Did not rely upon a dominant leader
• Example
• EU, no one dominant leader (France Germany
  together)

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POLST 362 The Study of IPE

• International Regimes Institutions
• Provide global leadership (global gains)
• Facilitate cooperation (conciliatory coordination
  of policy)
• Build ideological consensus (emphasizing shared
  values, minimizing differences)
• Example EUs Common Agricultural Policy (CAP)
• in order to provide global public goods
• And any adverse domestic impacts are mitigated by
  the integration strategy of coordination
• Problems solved beforehand
• Therefore, international regimes institutions
  are benign

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POLST 362 The Study of IPE

• International Regimes Institutions ensure
  compliance
• Through mutual concern over collective action
  problem cooperative bargaining game where
  tit-for-tat leads to a retaliatory race to the
  bottom
• Example for tariff barriers to trade
• Example against environmental degradation
• Rules are set to minimize cheating
• Example Science basis in WTOs SPS Agreement

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POLST 362 The Study of IPE

• Critics
• International Regimes Institutions are not
  benign
• Have distributional impacts
• Somebody wins, somebody loses in the bargaining
  for rules
• Instead, they are a cunning attempt to disguise
  US domination
• Example Strange argues that trade does not
  represent cooperative behaviour, it represents
  subversive US-style liberalism
• Critics generally believe in Hegemonic Stability
  Theory (HST)

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POLST 362 The Study of IPE

• Hegemonic Stability Theory (HST)
• Suggests that competing states will not act
  cooperatively enough to realize potential of
  international regimes/institutions
• Instead, requires a leader to use its economic,
  political and perhaps even military resources in
  order to facilitate cooperation and punish
  defection from the rules of integration
• Coercive power, bribes, sanctions
• Example
• US post WWII US leadership in European and
  Japanese reconstruction
• Counterfactual Great Depression no hegemon,
  therefore no strong leadership to prevent state
  self-interest seeking from leading to overall
  losses

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POLST 362 The Study of IPE

• Supporters of HST argue that without a hegemon
• International Institutions/Regimes
• Cannot credibly create and enforce rules
• Institution Example
• rise of transatlantic trade tensions in the WTO
• Regime Example
• Kyoto Protocol
• Environmental Protectionism while a global public
  good, runs counter to a liberal order because it
  supports protectionism
• Example NTBs based on process and production
  methods

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POLST 362 States and IGOs

• What does IPE say about this?
• Remember IPE is about determining the
  appropriate
• Structure, function and governance of the
  international system
• Which for nation-states supporting international
  regulatory regimes means determining the
  appropriate
• Level of integration
• Depth of integration
• Strategy of integration

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POLST 362 States and IGOs

• In order to better understand the IPE of
  biotechnology, perhaps we can look at various
  IGOs
• Is there a potentially good candidate for
  establishing, monitoring and enforcing an
  international regualtory regime?
• What IGOs deal with Biotechnology?
• still dealing with the Multilateral Level
• Two categories to consider
• Within the UN system
• Outside the UN system
• What level, depth strategy of integration are
  pursued?
• What are strengths weaknesses of each?

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Which international institutions are regimes vs
products of hegemons?
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POLST 362 States and IGOs

• Within the UN System
• World Health Organization (WHO)
• Food Agriculture Organization (FAO)
• These two agencies often work jointly on the
  issues associated with biotechnology

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POLST 362 States and IGOs

• World Health Organization WHO
• Located in Geneva, established in 1947
• Broader social development mandate global health
• WHO has a history of technological progress
• For example irradiation
• 1993 Report on Antibiotic Resistant Markers in
  Biotech
• 1995 Report on Substantial Equivalence
• Supports scientific rationality regulatory
  trajectory

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POLST 362 States and IGOs

• Food and Agriculture Organization FAO
• Located in Rome, established in 1945
• Mandate improve quantity and quality of global
  food production ( distribution)
• Collaborates with
• Consultative Group for International Agricultural
  Research (CGIAR), 1971
• Commission on Plant Genetic Resources (CPGR),
  1983
• Control of variety germplasm ensuring that
  developments are transferred to LDCs

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POLST 362 States and IGOs

• FAO WHO (continued)
• 1990 FAO/WHO Joint Report on Assessment of Foods
  from Biotechnology
• Supported science as basis for regulations
• 1996 Consultation on Safety
• Supported substantial equivalence and
  product/novelty basis
• Rejected CRTK labelling strategies
• Jointly administer
• Codex Alimentarius Commission
• WTOs Food Safety Organization

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POLST 362 States and IGOs

• FAO WHO (continued)
• Level Multilateral
• Depth Deeper
• Strategy Regulatory Coordination
• Strengths
• Highly respected
• Global welfare calculations
• Weaknesses
• Supports technological progress

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POLST 362 States and IGOs

• An interesting dimension of the UN agencies is
  that different agencies support very different
  international regulatory regimes
• WHO FAO
• Scientific Rationality technological progress
• UNEPs CBD, BSP
• Social Rationality technological precaution

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POLST 362 States and IGOs

• Outside the UN System
• WTO
• OECD
• ISO

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POLST 362 States and IGOs

• Organization for Economic Cooperation and
  Development (OECD)
• Located in Paris, established in 1961
• Forum for inter-disciplinary development of
  economic and social policy
• Growth, development, trade, technology,
  agriculture, environmental sustainability
• Chief adviser to G7/G8 Summit Meetings
• Very important IGO in the development of
  international biotechnology regulations

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POLST 362 States and IGOs

• OECD (continued)
• 1983 Group of National Experts on Safety and
  Regulation of Biotechnology
• 1986 rDNA Safety Considerations
• Consistent with Scientific Rationality Trajectory
  (role of US)
• Initially widespread support even in EU!
• 1993 Safety Evaluation of Foods Derived From
  Biotech
• First defined the principle of substantial
  equivalence
• 1995 Working Group on Harmonization of Regulatory
  Oversight
• Publishes Biotechnology Update

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POLST 362 States and IGOs

• OECD (continued)
• Level Multilateral/Plurilateral
• 29 Member Countries
• Depth Shallow
• Despite 1998 commitment to Sustainable
  Development
• Strategy Regulatory Coordination
• Strengths
• Policy Horse Power
• Scientific rationality technological progress
• Weaknesses
• Limited role for social dimensions
• Not truly multilateral club of the developed

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POLST 362 States and IGOs

• International Organization for Standardization
  (ISO)
• Located in Geneva, established in 1946
• Association of national standards-making bodies
• i.e. Canadian Standards Association (CSA)
• Technical Committees develop risk assessment
  standards
• Convened in a particular country
• (TC 34) Agri-Food Products
• Therefore Product-Based!
• Scientific interpretation of the precautionary
  principle

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POLST 362 States and IGOs

• ISO (continued)
• Level Multilateral
• Depth Shallow
• Strategy Regulatory Coordination
• Strengths
• scientific rationality technological progress
• Weaknesses
• No role for social dimensions

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Emerging IGOs

• Biosafety Protocol\
• WEO World Environment Organization
• Codex Environmentarius

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POLST 362 What is the BSP?

• Signed in Montreal in January 2000 by over 140
  countries
• Now must be ratified by 50 countries and
  transposed into domestic law
• Canada has ratified
• Basis Social Rationality
• Technological Precaution
• Social Responsiveness
• Social Interpretation of the Precautionary
  Principle
• Focus Process/technology-based
• Rejects Substantial Equivalence

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POLST 362 BSP

• STRENGTHS
• Wide range of risks
• From biodiversity to socio-economic
• Socially responsive
• Role of perceived risks

• WEAKNESSES
• Uncertain, Unpredictable
• What is a risk?
• No Dispute Settlement Mechanism

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POLST 362 States and IGOs

• NGO led initiatives include
• WEO World Environmental Organization
• Codex Environmentarius
• Both proposed with
• Level Multilateral
• Depth Deeper
• Strategy Regulatory Coordination
• Potential Strengths
• Socially responsive technological precaution
• Potential Weaknesses
• Commercially deleterious

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POLST 362 States and IGOs

• Conclusions
• There is no obvious candidate organization to
  establish, monitor and enforce an international
  regulatory regime
• Strength/weakness depends upon domestic
  circumstances
• Instead a fragmented collection of international
  rules, guidelines and recommendations
• Why?

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POLST 362 States and IGOs

• The problem seems to be that a nation-state
  interested in supporting an international
  regulatory regime faces a dichotomy
• A scientific rationality regime WTO-style
• WHO, FAO, OECD, ISO,
• A social rationality regime BSP-style
• And, the decision is based on the leader-laggard
  position of various nation-states

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POLST 362 States and IGOs

• Therefore, what can we say about the IPE
  (appropriate structure, function and governance)
  of the international regulatory regime for
  biotechnology?
• Dominated by the national gains/loss perspective
• National ganis/loss calculation little
  influence of global gains calculations
• Finally, what are the implications upon
  international biotechnology policy?
• Must couch international regulations into the
  competitiveness interests of nation-states