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DEVELOPMENT: More Fears Rise Around Doha Deal

Aileen Kwa

GENEVA, May 19 2008 (IPS) - As WTO negotiations pick up this week, some developing countries are in growing doubt that a deal liberalising their economies further could help them cope with the food crisis.

IPS spoke to an ambassador from an ACP (African, Caribbean and Pacific) country who declined to be named. His country is a net food importer and is now struggling to deal with the high food prices on the world market.

“WTO should not prevent us from having the policy space that we want to protect our agricultural sectors. We cannot totally rely on an import market to feed our population. An agreement that does this (constrains our policy space) will not fly at this time. We cannot be constrained unduly in what we can do in agriculture.”

Even more than the negotiations in agriculture, he was concerned about the loss of tariff revenues through the negotiations on cutting duties on industrial products. “The proposals (in the non-agricultural market access negotiations) will cut our applied (actual tariff) rates, and we will have our customs revenue cut. In the context of governments having to find more money to buy oil and to buy food, don’t cut our income at such a sensitive time! These things cannot be politically saleable. Our politicians will say, ‘How can I sign off when I face increasing energy and food bills?'”

In addition to revenue cuts, his country is also bracing against income cuts from the loss of markets such as the EU.

Simulations of the Doha Round conducted by the World Bank (Anderson and Martin in 2005) and even the EU’s own sustainability impact assessment (by Kirkpatrick et al of the University of Manchester in 2006) have shown that ACP countries will lose out in the Doha Round because of the erosion of preferences. In a liberalised environment, countries which have historically been provided preferential access will lose some of these markets.


According to the ACP ambassador, “income losses are particularly true for preference-receiving countries that will suffer from preference erosion. We are talking about existing export earnings that are going to be eroded by this Round. We need to be given more breathing space.”

Indonesia’s ambassador to the WTO, Gusmardi Bustami, has said that his country would fight even harder to have flexibilities or less liberalisation in the agriculture negotiations. Indonesia has been leading the G33, a developing country coalition of 46 countries arguing for less or no liberalisation in certain strategic agricultural products.

Bustami told IPS he was skeptical about the push from certain quarters that more liberalisation – so that food supplies could circulate unhindered around the world – would alleviate the food crisis.

“We have to fill the shortage of supply by increasing national production capacity. Some people say that you increase supplies by opening your market and reducing your tariff barriers. Maybe this is not the solution for all countries. What we need is more production. Let countries produce the food themselves, so that they are not very much dependent on others.”

The ambassador from the ACP country also talked about the different approaches to trade between agricultural exporting developing countries and the majority which have much less capacity to export.

“There are many perspectives around the world. The ultimate strength of the multilateral trading system will depend on how it deals with the different realities. It cannot be a one-size-fits-all approach. To prescribe the same remedies at the same time (as in the WTO) is something that cannot be legitimate. This is an issue I am grappling with right now, and it will be a recurring theme. It will not go away.

“There is solidarity amongst developing countries but there are also important differences. We are not all the same, we have different resources, and our economies have developed in different ways. And if multilateralism is to have credibility, it has to develop its rules to recognise these differences.

 
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