Towards Cancun WTO Ministerial: Abandoning Agriculture (8/7/2003)

By Devinder Sharma

At probably the last officially organized public symposium in Geneva (June 16-18) before the forthcoming WTO Ministerial at Cancun in early September, the writing is clearly on the wall: agriculture has for all practically purposes been abandoned in the ongoing multilateral negotiations.

And with this cleverly manipulated turnaround, ends the final hope for billions of small and marginal farmers in the developing world who were initially promised the stars when the WTO was formally launched on January 1, 1995. Eight years later, their dreams have been completely shattered. Swamped by a surge in food imports, and with their respective governments agreeing to further lower the tariffs, it is only a matter of time before the collapse of agriculture in the developing world triggers massive displacements from the rural areas. 

The big boys have done it again. After Doha, where the United States, European Union and the Cairns Group of grain exporting countries, managed to stage a coup of sorts by committing nothing more by way of reduction in their mammoth agricultural subsidies, the focus of the ongoing negotiations has been very conveniently shifted to market access and its modalities. Except for a regular mock drill of a tit-for-tat over subsidies and domestic protection that is staged so eloquently by the EU and the Cairns group, the underlying emphasis remains on force opening the developing countries to provide increased market access. 

At Geneva too, Mark Vaile, Minister of Trade for Australia (part of the Cairns Group), and Ambassador Luzius Wasescha of Switzerland (keen to protect subsidies) did regale the audience with scathing charges and counter-charges. Trading charges in open forums is surely meant for the public galleries, the hidden agenda for both the blocks being to protect their highly subsidized (and protected) agriculture. The public postures notwithstanding, the US/EU have a history of arriving at a compromise to protect their economic interests, and every other country is then made to fall in line. But what has become more significant during the post-Doha phase is the co-option of the developing countries as well as the civil society groups in the process of hijacking the ëAgreement on Agricultureí (AoA).

The AoA hinged precariously on eliminating agriculture subsidies as a basic step in getting the fiscal house in order. Knowing well that any reduction in subsidies would be politically suicidal, the developed countries managed to not only maintain the level of subsidies but in fact succeeded in increasing it manifold. At the same time, they continue to arm-twist the developing countries to reduce tariffs and open up markets for farm goods from the industrialized countries. Shifting the focus to increased market access or what some negotiators call as ëover-ambitioní on market liberalization became the rallying point. Agricultural subsidies have been simply pushed back to the backburner.

An indication to this clever shift in negotiations was time and again provided by the US Secretary of Agriculture, Ann Veneman: 'Some developing countries argue that they shouldn't have to open up markets until the developed countries first make domestic support reductions. This is a formula for failure.' Echoing the same brand of hypocrisy, the World Bank Chief Economist Nicholas Stern, while traveling through India, denounced subsidies paid by rich countries to their farmers as "sin ...on a very big scale" but warned India against any attempts to resist opening its markets. ìDeveloping countries must remove their trade barriers regardless of what is happening in the developed countries.'  

The only way to escape reduction commitments was to shift the focus entirely on to market access, special safeguard mechanisms, tariff rate quotas, and strategic products. Stuart Harbinson, chair of the agricultural negotiations, presented his first draft of possible modalities for the agriculture negotiations on February 12, 2003. This was the culmination of the post-Doha negotiations and the paper reflected a compromise formula based on the conflicting positions of the governments. A second draft was released on March 18, just before the self-imposed deadline of agreeing to new modalities by March 31, 2003. Harbinson actually has no mandate to present such drafts in his own ëindividualí capacity. But he did, and no country objected.

The presentation of such drafts, and still worse the numerous proposals being put forward by the chairman of the councils, has in reality marginalized the developing countries ability to negotiate and exert pressure. Such has been the bureaucratization of the negotiating process that real power has clearly shifted to the narrow corridors of the Centre William Rappard (housing the WTO) in Geneva. Trade experts, who have little idea about the ground realities in the developing countries, their only brush with subsistence farming being through the television snippets, are busy framing formulas and proposals that they think would help farmers in the majority world. 

The Harbinson drafts (including the revised ëHarbinson 2í) nevertheless were largely welcomed by a majority of the western NGOs. Equally worse, the developing countries dominant group in WTO agricultural negotiations, better known as Like-Minded Group (includes India, Pakistan, Nigeria, Kenya, Uganda and Zimbabwe besides others), actually ëcelebratedí the Harbinson draft 1 as ëa small victoryí for the coalition of developing countries that have fought hard for resisting further opening up their domestic markets. In reality, the Harbinson drafts are nothing more than the proverbial bikini ñ protecting more than what it reveals.

It created three bands for reduction in higher tariffs that would enable more and easy market access. For the developed countries, tariffs higher than 90 per cent would be reduced by an average of 60 per cent, with a minimum of 45 per cent cut per tariff line. Tariffs between 15 and 90 per cent would be cut by 50 per cent, with a minimum of 35 per cent cut. Tariffs lower than that would be reduced by 40 per cent, with a minimum cut of 25 per cent. At the same time, it called for a 60 per cent reduction in domestic support in amber box in the next five years. The draft proposed the elimination of export subsidies over a period of ten years.

In other words, Stuart Harbinson had very cleverly proposed a formula that actually aims at seducing the developing countries with the promise of an increased market access into the rich industrialized countries. In addition, he provided another lollipop to the developing countries ñ the option to classify a number of ëstrategic productsí with respect to food security, rural development and/or livelihood security concerns. Unfortunately, the developing countries were trapped by the discussions around the new special safeguard mechanism that he had proposed, without realizing that this new safeguard mechanism does not first remove the ëspecial safeguardsí provisions under Article 5 of the AoA, which is a privilege enjoyed by only 21 developed countries, including the United States.

The concept of strategic products is merely a proxy for the ‘development box’, a proposal that will eventually turn out to be more damming if implemented. More and more countries have lately understood the dangers of supporting the ëdevelopment boxí and have by and large backed out. The ëstrategic productí concept, therefore, is equally harmful for the developing countries. It does not realize that production of crops and its imports into developing countries cannot be equated with industrial production. This is a mistake, which was earlier committed also by s

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