Corporate Rights vs. Human Need

Discussion in 'Politics' started by harrytrader, Oct 5, 2003.


    Rachels' 677
    Corporate Rights
    vs. Human Need

    For many years, the potential market for baby foods and infant formula in the "developed" countries has been shrinking because birth rates have declined. Therefore, to create new demand for their products, baby food corporations have aggressively sought to "open new markets" in the Third World.
    A key vehicle for "opening new markets" is advertising intended to convince women that breast-feeding their babies isn't "modern" and bottle feeding is healthier. Of course the premise of such advertising is medically false -- breast-feeding provides superior benefits compared to all synthetic substitutes. (Breast-feeding provides an infant with significant immunity against disease; it creates a strong emotional bond between mother and child; it helps prevent breast cancer in the mother, and more.) Nevertheless, many women are taken in by the false advertising; as a result, according to the United Nations Children's Fund (UNICEF), only 44% of infants in the Third World are breast-fed. (The proportion is even smaller in "developed" countries.)

    Chiefly because of this false advertising, according to UNICEF, 1.5 million infants die each year because their mothers unwittingly prepare infant formula with contaminated water, causing fatal diarrhea.

    During the 1970s, a world-wide grass-roots campaign focused attention on this problem, boycotting products made by Nestle, a major manufacturer of infant formula.

    Partly because of the Nestle boycott, the World Health Organization (WHO) developed and published a Code on Marketing of Breast-Milk Substitutes. The WHO code prohibits words like "humanized breastmilk" and "equivalent to breastmilk." Furthermore, to protect illiterate women from being duped, the WHO code prohibits pictures on labels "that idealize the use of bottle feeding."

    In 1983, Guatemala passed a law and regulations incorporating the WHO code. The goal of the Guatemalan government was to encourage new mothers (1) to breast-feed their infants and (2) to fully understand the threats to their babies of using infant formula as a substitute for breast milk. The Guatemalan law prohibited the use of labels that associated infant formula with a healthy, chubby baby; specifically, the law prohibited pictures of idealized babies on packages of baby food intended for children younger than 2 years. Furthermore, the Guatemalan law required labels to carry a statement that breast-feeding is nutritionally superior.

    The law also prohibited baby food manufacturers from providing free samples of their products (if a baby starts taking free samples the mother stops lactating, thus converting mother and infant into full-time, paying customers). And finally the law prohibited baby food manufacturers from directly marketing their products to young mothers in the hospital.

    The regulations went into effect in 1988 and all domestic and foreign manufacturers of baby foods -- with one notable exception -- came into compliance. Infant deaths attributable to bottle feeding declined, and UNICEF began highlighting Guatemala as a model for what works.

    However, the U.S. baby food manufacturer, Gerber (motto: "Babies Are Our Business"), objected to Guatemala's new law. Although the Guatemalan Ministry of Health made numerous attempts to negotiate with Gerber, the company reportedly continued to market its infant formula directly to mothers in the hospital, and continued to give free samples to doctors and day care centers.

    Most importantly Gerber refused to remove its trademark picture of a chubby, smiling baby from its product labels, and it refused to add a phrase saying breast milk was superior. In sum, Gerber thumbed its nose at Guatemalan health authorities, who were trying to protect their most vulnerable citizens, infants, against harm.

    In November, 1993 -- ten years after Guatemala passed its law, and five years after its regulations went into effect -- Gerber lost its final appeal. A Guatemalan Administrative Tribunal ruled in favor of the Ministry of Health and it looked as though even Gerber would have to comply with the Guatemalan law.

    But Gerber opened a new line of attack on Guatemala, arguing that the Guatemalan law was illegal under international statutes because the law was really an "expropriation of Gerber's trademark." This tactic bought Gerber some time while the World Trade Organization was being created. Then in 1995, when the WTO came into being, Gerber dropped its claim about illegal expropriation of its trademark and began threatening to challenge Guatemala before a WTO tribunal.

    Within a short time, Guatemala realized it was now up against immense power and the Guatemalan government changed its law to allow Gerber to have its way. Gerber won without ever having to formally request that the U.S. take its case to the WTO. Just a few letters containing the WTO threat were sufficient.

    This example illustrates another marvelous feature of the WTO -- the ease with which small, poor countries can be intimidated by transnational corporations into "opening their markets." Under WTO rules, countries must open their markets to foreign corporations and governments cannot establish, as a precondition of doing business, that their domestic laws will be respected. In effect, the WTO has given corporations a powerful new way to challenge the laws of any government (federal, state or municipal).
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