TRADE: Agricultural Nations Pin Hopes on China

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Dec 13 1999 (IPS) - China’s pending admission to the World Trade Organisation (WTO) has created high expectations among agricultural countries, tantalised by the huge Chinese market. They wait now with even greater impatience since the WTO’s Third Ministerial Conference ended in failure earlier this month.

China, with its 1.3 billion inhabitants, feeds high hopes among the rest of the world for increased imports of farm products and reduced Chinese tariffs and subsidies.

The problem is that the complex agreement for China’s accession to the WTO, which would undoubtedly produce an increase in global trade demand, could be put off along with the beginning of a new round of international trade talks, which do not seem likely within the next two or three years.

Agricultural countries had not been very optimistic about the outcomes of WTO conference, held two weeks ago in the northwestern U.S. city of Seattle, but they now face an even more discouraging scenario, with commodity prices continuing to fall and prospects for increasing farm subsidies in wealthier nations.

Argentina, Brazil, Paraguay and Uruguay – the four nations of the Southern Common Market (Mercosur) – have decided to strengthen their union, faced with beginning the new millennium without a new round of talks that call for the elimination of farm subsidies in the countries where Mercosur wants market access.

At a summit held last week in Montevideo, the Mercosur nations’ presidents agreed that the WTO’s failure to convoke a new round of talks makes the regional bloc’s consolidation “essential,” as they will have to negotiate jointly, taking on the failed conference’s negative consequences as a united front.

“In this world, more than ever, the idea that brought us together in the first place has gained strength. It would be very difficult for our countries individually to hold the negotiating power that we have together,” declared Uruguayan president Julio María Sanguinetti at the summit.

Delegates from 136 countries attended the Third Ministerial Conference of the WTO, the agenda of which included the proposal to launch a new round of international trade talks to set the rules of the game for the coming years.

But the ministers arrived in Seattle with few points of consensus, and during the conference, amid massive protests by non- governmental organisations (NGOs) against the effects of globalisation, agreement was impossible. The meeting concluded Friday, Dec 3, without producing any accords.

Thursday, Dec 2, the nations that base their trade on agriculture caught a glimpse of a potential agreement when the United States and the European Union(EU), together responsible for 80 percent of the world’s farm subsidies, presented a draft proposal before the assembly of trade ministers.

To the surprise of non-farm subsidising countries, the United States and the EU – with a nod from Japan, which also heavily subsidises farmers – offered to commit themselves to the gradual elimination of subsidies and to withdraw the “multi- functionality” concept from their development accords.

The Europeans have previously invoked the multiple roles that agriculture plays in development, as a response to complaints by countries that put their farm products on the global market without subsidies.

But the proposal fell through and the conference ended in failure. The 15 agricultural countries that make up the Group of Cairns, which calls for an end to farm subsidies, expressed their disappointment with the conclusion.

WTO Director General Mike Moore, remarked that Charlene Barshevsky, U.S. delegate and president of the conference, had not given up on the meeting, but considered it “on hold” due to lack of time for continuing deliberations.

This Friday in Geneva, Moore will attempt to clear up with other WTO officials whether or not it is feasible, within the organisation’s rules, to renew negotiations in order to impel the agreements already reached and resolve discrepancies.

Barshevsky, considered the principal author of the complicated agreement to bring China quickly into the WTO fold, was left powerless in Seattle to handle either the ministers or the tense environment created by groups protesting against free trade.

Pascal Lamy, the EU’s trade commissioner, admitted that the timing of the Third Ministerial Conference had been “poorly chosen,” because of the pre-electoral pressures in the United States against free trade for its alleged negative effects on the environment and employment.

Government leaders and farmers do not kid themselves that there will be short term results on multilateral trade negotiations, even if Moore uncovers a legal basis for renewing the talks.

“Even if the negotiations continue, the end of the meeting allows one to conclude there will not be a new round within two or three years,” predicted Jorge Campbell, one of the Argentinean delegates sent to Seattle.

“The elections in the United States will delay the deliberations even more. The negotiations will be paralysed ‘de facto’ until January 2001, when it is known who will govern the country,” he added.

The greatest hopes currently lie in pushing China’s WTO accession to occur as soon as possible. But it remains to be seen if the increase in demand, coming from China, will solve the agricultural nations’ problems, or leave them facing the same farm subsidies, but this time in Chinese territory.