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By Tahir Hasnain The WTO regime established in 1995 at the culmination of Uruguay Round of trade negotiations, is shaping the lives of million of peoples in all continents. The ten year old organisation has so far failed on its claims to facilitate global trade in order to maximise economic gains and human welfare. WTO has not been able to perform its designated functions with impartiality and transparency. Rather it has provided an institutional cover to the unfair trade practices of big economic powers. The rules of game are being determined by powerful rich nations, while poor nations are facing the effects of these unfair practices in the form of poverty and inequality. But even in this unfair arrangement, some issues are more pressing than others. Take, for instance, agriculture. The sixth ministerial conference of the World Trade Organization (WTO) is scheduled for Hong Kong on December 13-18, 2005. Crucial negotiations on agriculture during this meeting are going to determine the future of global agriculture and more especially the fate of small farmers in developing countries. But in view of the bitter experiences in the last ten years, developing countries have now started voicing concerns against unfair economic interests of the developed countries. A strong resistance from the civil society as well as developing countries resulted the failure of WTO meetings in Seattle and Cancun in 1999 and 2003 respectively. The incidents of 9/11 and the absence of civil society mobilisation during the Doha meeting in 2001 allowed big trading powers to deceive developing countries by making them sign the so-called Doha Development Agenda (DDA) and to expand the ambit of the WTO. Between Cancun Ministerial Meeting and the General Council Meeting of WTO in July 2004, developed countries used a range of unfair tactics (mini-ministerial meetings, bilateral pressures, bilateral incentives, formation of G-5 also known as FIPs, the Five Interested Parties, etc) to divide developed countries. Consequently, they have succeeded in getting the July Framework Agreement signed. If Hong Kong meeting reaches an agreement on agriculture on the basis of this July framework, it will have serious repercussions on the agriculture, livelihood and rural development in developing countries. The emergence of the G-20 raised some hopes for a better deal for the third world but this has been belied so far. A significant failure of the group has been its inability to question the approach underlying the Agreement on Agriculture that privileges the export-led model, permits protection of agriculture in the rich North and opens markets for them in the developing and poor South. Despite its rhetoric of representing third world farmers, the group has failed to respond to the concrete demands of agrarian communities (on whose behalf they claim to be negotiating) and get tangible commitments from the EU and US on the elimination of trade distorting subsidies and opening of market for commodities from the South. The G-20 has provided a leeway to the unfair interests of the US and EU to dictate WTO agenda on agriculture. Tow influential members of the group -- India and Brazil -- have joined FIPs (Five Interested Parties) along side developed nations such as the US, the EU and Australia. The FIPs' role is mainly to broker a deal for increased market access for agri-business interests in both the developed and developing world. The anti-development July Framework is FIPs' first contribution that has now become a primary driver of the Doha round of trade talks. The G-20 has failed to project a clear distinction between 'corporate agriculture' of the developed countries and 'sustenance agriculture' of the developing countries as an important component of the negotiations. The G-20 proposal for reduction of subsidies by the developed world, therefore, is of no use. It is well known that agricultural subsidies given by the EU under its Common Agriculture Policy will continue till 2013 and cannot be withdrawn before that. Moreover, the US subsidies under the 2002 Farm Bill are for a period of 10 years -- that is, till 2012. So irrespective of the G-20's heroic rhetoric, there will be no reduction in these subsidies at least till 2012. Even the G-20 proposal on export subsidies grants developed nations five years for their elimination. This means that export subsidies will continue up to 2011 (starting from January 2006). In view of the fact that more than 2.5 billion people in the developing world are dependent on agriculture for their livelihood, what will happen to them if subsidies in the developed world continue till 2012-13? Cotton highlights the extent of the G-20's failure. The group has failed to get a firm commitment from the US on withdrawing subsidies to its cotton growers. This is equally true of other export credit guarantees benefiting other commodities. Moreover, the US has not taken any action on the WTO Dispute Settlement Body's ruling which tells Washington to reduce subsidies to its cotton farmers. Rather than highlighting fundamental issues confronting farmers and agricultural labour, the G-20 has focused on the narrow subject of market access. In July 2005, the group proposed a market access formula for tariff reduction (a middle ground between the Swiss and Uruguay round formulae), which has been widely accepted as a basis for further negotiations. Market access under this formula will primarily benefit agri-business interests in countries like Brazil and will do little to solve the agrarian crisis in other countries of the South. Despite the G-20 focusing on market access, it's the Sanitary and Phyto-sanitary (SPS) measures and technical barriers to trade (TBT) which are frequently used by developed nations to stop imports from developing countries. Moreover protection for sensitive products is allowed to developed nations. They can now term certain commodities sensitive and thereby deny market access. Furthermore, the developed world also uses Special Safeguards (SSG) to restrict imports from developing countries -- Canada, for instance, reserves the right to use SSG for 150 tariff lines, the EU for 539 tariff lines, Japan for 121 tariff lines, the US for 189 tariff lines and Switzerland for 961 tariff lines. On the other hand only 22 developing countries can use SSG. Unfortunately, the G-20 has failed to do anything about all these issues. The G-20 demands for operationalising the instrument of Special Products (SPs) as a protective measure to check import surge will not be useful for the biodiversity rich South. In G-20 countries, farmers cultivate hundreds of crops in a year whereas Europe does not grow more than 25. It will be possible for Europe to get a dozen or so products classified as sensitive but it is well nigh impossible for the biodiversity rich G-20 countries to get this status for over 100 crops. Special products, therefore, will not provide any protection to small farmers from import surges. The G-20 along with the G-33 should demand complete flexibility to declare any product as special product. The G-20 has also failed in reclaiming the right to reinstate Quantitative Restrictions (QRs) to protect the interest of their agricultural producers, while developed countries have evolved a clone of the QR system in the form of Tariff Rate Quotas (TRQs), where a fixed volume of imports is allowed at a lower tariff rate and beyond that level, imports are allowed only at prohibitive tariffs. Claiming and justifying the right to use QRs is an important policy mechanism to protect agrarian communities from subsidised imports. Reinstating QRs will provide developing countries a space for exploring and working out appropriate strategies for national development that protect the interests of their agricultural producers. The G-20 has not yet got a commitment from the developed nations, especially the US, for the mandated review of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) as well as its revision to exclude patent on life and indigenous knowledge and resources. Can the G-20 bring about surprises in the Hong Kong ministerial? Although the negotiations ahead of the sixth WTO ministerial conference point to a failure, past experience shows that surprises cannot be ruled out. As compared to others, the G-20 has the negotiating capacity that can help it spring surprises in the Hong Kong Ministerial Meeting. To achieve a surprise victory, the G-20 delegates need to realise that the interests of farmers, agricultural labour and the overall economies of poor countries are in their hands and, therefore, they need to act keeping this burden of responsibility in their minds. The episodes of Seattle, Doha and Cancun show that poor nations can resist the hegemony of rich countries and spring surprises. The partial success of the developed countries during the Doha Round to expand the ambit of the WTO was only because of the post-9/11 incidents and the absence of the civil society mobilisation. The current Doha Development Round of multilateral trade talks was launched on foundations considered promising for developing countries but the July Framework Agreement was, however, an unfortunate decision in the run up for the Hong Kong Ministerial Meeting because it happened through an exclusive and undemocratic process in which developed countries benefited through dividing the developing country groups, especially the G-20. Agriculture has already become the key issue in the Doha Round, largely due to the action of the G-20, which is now one of the main players in the talks, along with the United States and the European Union. The G-20 countries must take bold positions. For instance, if the G-20 links 100 per cent outcome in agriculture with any further progress on rest of the WTO pacts, the unjust WTO system can be shaken. This is what they have already achieved once. The G-20 and G-90 followed similar approaches at the Cancun and were able to block the unfair negotiations process. The G-20's main proposals should involve complete phasing out of export subsidies over the next few years, scaling down of domestic production supports that distort trade, and drastically reducing the prohibitive tariffs set by industrialised countries on some farm products. In a recent South Asian Parliamentary Forum, the parliamentarians called upon members of the G-20 to build defensive as well offensive positions that promote the interests of people and economies of poor countries and to continue efforts to strengthen unity and solidarity among developing countries as well as the Least Developed Countries (LDCs). It is also important to note that the negotiations are now taking place in a new scenario. Brazil has triumphed in its complaints before the WTO against the EU subsidies for sugar and the US support for cotton farmers. In the Doha Round, the G-20 must not, therefore, accept accords containing conditions that are less favorable than those set by the WTO dispute settlement body rulings in both the cases. The G-20 is also expected to do well due to the diversity of the group's make-up that allows it to be more flexible than other groups such as Cairns Group. The G-20's derives strength and legitimacy from several factors. Firstly, the weight of the group's members, which account for 60 per cent of the world population and 26 per cent of global farm exports. It also underscores the G-20's capacity to represent the interests of developing countries, as well as its demonstrated negotiating ability. Secondly, the G-20 is a heterogeneous but geographically balanced group. It has already shaken the hegemony enjoyed by the industrialised powers in the multilateral trade talks. Thirdly, though it comprises both large agricultural exporters and net importers, which apparently have different interests and which resort to varying levels of protectionism, the G-20 can remain united in the fight against farm subsidies. It is recommended that the G-20 try to get the following basic fundamentals addressed during the forthcoming WTO negotiations on agriculture: 1. The July Framework needs to be reviewed before any further negotiations. The framework is a result of an undemocratic process and is, therefore, defective. 2. Special and Differential Treatment for poor developing countries should be differentiated from those for the advanced countries and must confer adequate flexibilities and policy space. 3. Developed countries must take concrete measures by announcing an early end date for elimination of export subsidies. 4. In view of the fact that agriculture in poor countries is of subsistence nature and involves 70-90 per cent of the population as compared to corporate farming in the North, the G-20 countries should put forth defensive positions to safeguard their agriculture sector, farmers and farm workers. This is because any compromise on agriculture is likely to lead mass socio-economic disorder in agro-based poor countries. 5. The G-20 should not accept any proposal without SPs and SSM.
In
conclusion, it will be very important for developed countries to rethink
their negotiating mandate while keeping in mind the need to ensure that
concrete development agenda must hold centre stage during this
'modalities' stage of world trade talks. Without an integration of
concrete development ingredients in the current trade talks, poor
developing countries must not accept undertaking any further commitments
whether in agriculture, NAMA or services. |
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