Development at Stake

This column was distributed internationally by the Inter Press Service, Columnist Service, July 2004. http://ipsnews.net/weekly.asp?Dir=Next Editors interested in acquiring the full text of these columns, please contact [email protected] specifying the name and address of the publication.

Current trade talks in Geneva aimed at reviving negotiations on lowering global trade barriers, which have floundered since the collapse of the fifth ministerial in Cancun, are a reminder of the crisis of inequity and hypocrisy within the WTO, which have afflicted the organization from the very beginning.

The text put before the 147 members on July 16 endorses the reprehensible treatment of development issues in the WTO. For example, the draft callously disregards the concerns of the developing countries in the field of agriculture. Agriculture being an area where developing countries might compete head-on with the industrialized nations - the draft asymmetrically panders to the interests of the politically influential corporate agriculture in rich countries like the U.S. at the expense of millions of poor farmers across the Third World. It enables rich countries to protect their markets in 'sensitive' products from import competition from developing countries while encouraging export dumping at artificially low prices by proposing a framework for new blue box subsidies to accommodate its richest members.

In addition, the draft openly discriminates by adopting a non-committal approach to the Special and Differential treatment needs, sensitive products and special safe guard mechanisms and leaves them for a "post framework stage." At the same time, the draft overlooks the demand of African countries for the Cotton Initiative to be treated on a stand-alone and fast-track basis, and instead, adopts the U.S. demand to consider this issue under the broader agriculture negotiations.

Using its powerful influence on the World Bank, IMF, and international trade agreements, the U.S. has already pressured poor countries into removing subsidies that favor local producers, and lowering tariff charges on foreign imports. With its own subsidies intact, the U.S. dumps cheap subsidized food into developing nations, ravaging the livelihoods of small farmers. The numbers are alarming: For example, the U.S. exports corn at prices 20 percent below the cost of production, and wheat at 46 percent below cost. The result is that the U.S. farm subsidies cost poor countries about $50 billion a year in lost agricultural exports - that's the same as total of rich countries aid to poor countries.

The draft fails on several other accounts. It does not mention the Doha mandated review of TRIPS to prevent monopolies in agriculture and pharmaceuticals. TRIPS have denied farmers and citizens access to affordable seeds and medicine, and promoted piracy of biodiversity and indigenous knowledge. In other areas such as Non Agriculture Market Access (NAMA) issues, it reproduces the same text that was rejected by the developing countries in Cancun on grounds that it would deepen their crisis of deindustrialization and unemployment. In services, the text advocates for swiftly moving forward with market access negotiations instead of respecting the right of developing countries to regulate trade in services.

Supachai Panitchpakdi, WTO director-general is keen to have country members reach agreement on the broad principles for cutting subsidies and import tariffs by July 31, ahead of the U.S. presidential election and changes in the European Commission, that will put trade negotiations on hold for months. With the rejection of the draft by the Indonesian government which represents the G33, and growing discontent among other member countries, the General Council Chair Ambassador Oshima has announced that the formal meeting of the General Council would be suspended on July 27 before the agenda item on the July package is discussed, ensuring most of the negotiations will take place in an "informal mode." Whenever Third World governments have balked at U.S. and EU dictated WTO proposals, they have been shown into a darkened room where they are bludgeoned with threats to cut off preferential market access, suspend aid, or otherwise have their arms twisted.

However this tactic does not work as already proven in Cancun. The crisis of Cancun has been deepened by the double standards of the WTO. The truth is that the draft July package pulls a reverse Robin Hood: robbing the world's poor to enrich American and European corporations and will remain deadlocked as it continues to fail the development needs of the poor.

* Anuradha Mittal is the founder and director of the Oakland Institute, a non partisan research, analysis and advocacy group.