2002-2003/TRADE: Civil Society Opposes Farm Subsidies

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Dec 23 2002 (IPS) - The fate of the subsidies that the industrialised North shells out to its farmers not only depends on the negotiations in the World Trade Organisation (WTO), but also on the strength of campaigns launched by farmers’ associations and other civil society groups in the developing world.

In the past few weeks, the talks in the WTO have been running aground, while mobilisations in poor countries against the rich world’s protectionist measures have gained in strength.

Significant discrepancies persist between the countries discussing the liberalisation of global trade in farm commodities, which moves around 500 billion dollars a year, said former Hong Kong ambassador Stuart Harbinson, who is presiding over the talks in the Geneva-based WTO.

The negotiations are being closely followed by non-governmental organisations like the Britain-based Oxfam, the Institute for Agriculture and Trade Policy (IATP) in the United States, and the Malaysia-based Third World Network.

IATP director of trade issues, Sophia Murphy, criticised Harbinson for trying to reduce the differences between the various countries before Mar 31, the deadline set by the November 2001 WTO conference of trade ministers in Doha, Qatar, for resolving the question of subsidies.

Harbinson’s plan is unreal, and undermines the so-called Doha spirit of development, said Murphy, referring to the new round of international trade talks launched by the ministerial conference.

On the other hand, the delays in the negotiations for dismantling the North’s subsidies is leading to an increase in the pressure from social sectors in the developing South that have been hurt by the protectionism of industrialised countries.

In Mexico, farmers’ associations called for a suspension of the final phase of the lifting of tariffs on farm products among the members of the North American Free Trade Agreement (NAFTA) – Canada, Mexico and the United States.

”The countryside is a timebomb that could explode at any moment,” warned Rosario Robles, the president of the Party of the Democratic Revolution, the third-strongest political force in Mexico.

Mexico’s farmers ”are walking towards death, because they are overrun by unfair commercial competition from the United States, and the Mexican government has abandoned the countryside,” said Alberto Gómez with the National Union of Autonomous Regional Peasant Organisations.

In May, the U.S. government stepped up its agricultural protectionism, earmarking a total of 173.5 billion dollars in subsidies for farmers over the next 10 years.

Agricultural producers in Central America argue that Mexico’s experience in NAFTA clearly shows that free trade accords with the United States are negative for the region, because Mexico’s trade deficit in farm products has ballooned since the free trade deal went into effect in 1994.

U.S. economist and 2001 Nobel Economy laureate Joseph Stiglitz warned the countries of Latin America that they would not benefit from a trade agreement with the United States, because Washington is not willing to remove the barriers standing in the way of imports.

Nearly all of the industrialised countries grouped in the Organisation for Economic Cooperation and Development (OECD) sustain inefficient agricultural sectors, especially through restrictions on the inflow of competitive products from other nations, credit for exports, and other domestic support measures, according to the OECD itself.

The cost of the subsidies, paid for by consumers and tax-payers in those countries, amounted to 311 billion dollars in 2001, equivalent to 1.3 percent of the combined Gross Domestic Product of the OECD, dubbed the ”rich nations’ club”.

The European Union (EU), for example, provides an average daily subsidy of two dollars per head of cattle, while more than 40 percent of India’s 1.1 billion people scrape by on incomes smaller than that, stated a recent Oxfam report.

The governments of the world’s rich countries constantly repeat that they are committed to reducing poverty in the world, while, through their trade policies, they plunder the poor to give to the rich, according to the British humanitarian organisation.

Import duties, one of the protectionist measures employed by the North, cost the countries of the South around 43 billion dollars a year, based on estimates of how much imports by the industrialised world would increase if the tariffs were not in place.

But import tariffs are not the only, or even the main, protectionist mechanism. Based on the same calculation, the losses to the developing world caused by all of the trade barriers in place in the industrialised North amount to more than 100 billion dollars a year – or double the industrialised world’s combined annual official development aid.

Subsaharan Africa, the poorest region in the world, loses around two billion dollars a year due to the trade restrictions applied by rich nations. And in the cases of India and China, the annual losses reach three billion dollars.

Some of the barriers put in place by industrialised nations are outlandishly stiff. Japan, for instance, charges a tariff of 406 percent on rice imports, the WTO confirmed in October. That duty effectively bars access to the lucrative Japanese market by rice from countries that are efficient producers, especially Thailand.

Thailand is one of the agricultural exporter nations represented by the Cairns Group, which advocates the freeing up of trade in agriculture. The organisation’s demands mainly face resistance from the EU, but also from Japan, South Korea, Norway and Switzerland.

The Cairns Group warned that the present negotiations on trade in agriculture are one of the ”last chances” for the members of the WTO to correct the injustices of the multilateral trade system.

The very success of the Doha Round of talks depends on the favourable results obtained in agriculture, it stated.

2002-2003/TRADE: Civil Society Opposes Farm Subsidies

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Dec 23 2002 (IPS) - The fate of the subsidies that the industrialised North shells out to its farmers not only depends on the negotiations in the World Trade Organisation (WTO), but also on the strength of campaigns launched by farmers’ associations and other civil society groups in the developing world.
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