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WTO-SPECIAL: Dispute Settlement Body Offers Forlorn Hope
By Marwaan Macan-Markar
BANGKOK , Dec 12 (IPS) - Two successful rulings secured by developing countries in their battle for a free and fair trade environment are being seen as offering hope for the future, should this week's World Trade Organisation (WTO) ministerial meeting in Hong Kong fail.
These triumphs at the WTO’s Dispute Settlement Body (DSB) - in March this year and in August last year - are being seen as possible avenues for developing countries to tackle the developed world's intransigence over the contentious issue of subsidies on agriculture products. But not everybody is optimistic.
In March, the United States lost its final appeal at the WTO in a major dispute with Brazil over U.S. policy on subsidies to its cotton farmers. In August last year, the WTO ruled against the European Union's policy of sugar subsidies in a case brought up against it by Brazil, Thailand and Australia.
''Those victories will become more relevant if there is no breakthrough at the current round of WTO negotiations,'' Francis Perez, the East Asia regional advisor for trade and livelihood at Oxfam, the Britain-based development agency, told IPS. '' They provide an incentive for developing countries to file more cases against the U.S. and EU for unfair trade practices because of the heavy agriculture subsidies.''
This means that the DSB, the legal forum for countries to challenge each other on prevailing trade rules, could move up in significance in the future.
''From being the venue of last resort to settle trade disputes, the DSB may become the venue that developing countries will turn to as a first step to seek fair trade deals, particularly on agriculture subsidies,'' said Perez.
High on the agenda at Hong Kong is liberalisation of world trade in agriculture, non-agricultural market access (NAMA) and services. But the success of conference hinges on whether the U.S. and EU will cut subsidies to their farmers and open up to agricultural products from the developing countries.
Potential cases the EU faces at the DSB are innumerable, states Oxfam in a background paper released on the eve of the Hong Kong meeting. EU subsidies for tomatoes grown in Greece, Italy, Spain and Portugal could trigger cases of unfair trade practices brought up by Chile, China, Mexico, Morocco, South Africa and Tunisia.
Cases against EU agriculture products include canned peaches, canned pears, citrus fruit juice, wines and spirits, tobacco, butter and skimmed milk and can be filed by some 25 developing countries, according to Oxfam's backgrounder: 'Truth or consequences - Why the EU and the USA must reform their subsidies, or pay the process.'
Among countries that have strong cases against the EU are Argentina and South Africa for canned peaches, China and Chile for canned pears, Brazil and Morocco for citrus fruit juices and Armenia and Malaysia for wines and spirits. In addition, Sri Lanka, Guatemala and Zimbabwe have a good case on tobacco, while Egypt, Uruguay and Indonesia can be plaintiffs on butter and skimmed milk.
The U.S., on the other hand, can face potential cases for subsidies to its corn, rice and sorghum farmers, adds Oxfam. Potential plaintiffs here include Argentina, Ecuador, El Salvador, Columbia, Honduras, Mexico, Peru, South Africa, Thailand, India, Pakistan, Kenya and Zambia.
''Rich countries must unilaterally remove the vast swathe of illegal
subsidies which are handouts for agribusiness and destroy poor people's livelihoods,'' states Oxfam.
According to Oxfam, the U.S. and the EU spend an annual total of 9.3
billion US dollars and 4.2 billion US dollars respectively in subsidies for just 11 agricultural products, including corn, rice, canned fruit, tomatoes and dairy products.
Subsides have continued to force down world prices of agriculture products distorting their real market value and hitting farmers in the developing world who depend on these products for their living.
The WTO ministerial meeting in Doha, in 2001, pledged to change this unfair trading picture by agreeing to launch a new round of trade negotiations called the ‘Development Round’.
Reforming the global trade rules on agriculture products was among issues singled out in order to make international commerce fairer and sympathetic to the developing countries.
Four years later, U.S. and EU intransigence on agriculture subsidies
remains the key sticking point for the 148-member trading body, forcing many WTO watchers to admit that the Hong Kong ministerial meeting will see little movement towards reform.
''The WTO structure is not about free trade but about setting up monopolies and oligopolies and that is where the problem lies,'' Shalmali Guttal, senior analyst at Focus on the Global South, a Bangkok-based think tank, said in an interview. ''The WTO offers little to developing countries.''
Such a reality is also true of the trade body's DSB, she added, since developed countries that have been found guilty of violating trade rules, such as the U.S. on cotton, have refused to comply with the WTO's ruling. ''Even if the ruling is in favour of developing countries, there are no guarantees that the guilty party will comply with the judgement of the DSB.''
(END/2005)
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