:: Saturday, July 05, 2003 ::

The WTO and Agricultural Trade Reform: The Fallout of the Doha Negotiations: Part Two

Harbinson reiterates article 4.2 of the AoA text in wanting all developing countries to stop using QRs or tariffs to counter dumping; opening their markets to highly subsidised exports from developed world farmers at the expense of local production, the problems this has caused has already been in seen the classic Berg report on Sub-Saharan Africa (although there the culprit was the overvalued exchange rates which allowed cheap imports of foodgrains for the growing urban population in the continent). There obviously needs to be a quid pro quo in that such QRs should not be sacrificed until Developed countries agree to seriously start dismantling their own export and production subsidies, until then they form the only effective protection against dumping the developing countries have. A further example of how the rich are favoured over the poor is in the provision for Special Safeguards (SSG), which is a provision whereby a country can take action to protect its farmers against surges of import and fall of prices, and these are available only for the developed countries. While most of the developing countries, which have overriding need for SSG, are denied this provision, developed countries can use these provisions for another 5-7 years. Thus, the developed countries that distorted trade by applying non-tariff measures earlier and converted them to equivalent tariffs in the Uruguay Round continue to get the benefit of the SSG, while the developing countries that did not apply such trade distorting measures earlier and thus did not have the necessity of conversion of such measures to tariffs will continue to be denied the use of SSG.

The delegates from many countries, Brazil, Barbados, the Philippines and India made clear their unhappiness and disappointment with Harbinson’s text. However, many critics feel that what is needed is a totally new text that will firmly address the inequalities and distortions in the AoA. Unfortunately, given the direction of past trade rounds and ministerial conferences, developing countries frequently find it hard to form an effective counterweight to the developed country agenda, despite the principle of one-country, one-vote and the reliance in the WTO of consensus as a means of endorsing and agreeing on policy; yet as Doha showed a combination of insider negotiations and strong-arm tactics by the WTO Director-General steamrollered any opposition to agricultural reforms, on occasion as in Punta Del Este in the 1980s LDCS did manage to combine together to resist damaging concessions on Intellectual Property rights and Services being conceded without adequate safeguards but the recent TRIPS and GATS moves have reversed some of these gains as well as the difficulty of maintaining an effective bloc within LDCs themselves. The pressure for liberalisation and drive for FDI and investible funds has increased the reluctance of LDCs to resist market-opening measures, even when they come without any complementary moves by Developed countries; one potential solution would be to form a new coalition of forces on an informal basis amongst long-time critics from the LDCs within the WTO such as Brazil and India; the recent entry of China should have allowed India to work towards some sort of shared platform on which the two giants could form a plank around which smaller LDCs could coalesce, unfortunately Vajpayee seems to have squandered much of the political capital from his recent visit to China on more narrowly chauvinist concerns (more on this later) and the NDA government has been strangely lacklustre for a self-professedly ultra-nationalist government in asserting India’s economic sovereignty within the WTO.

No surprises here then.


:: Conrad Barwa 10:36 PM [Permanent Link] :: ::
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The WTO and Agricultural Trade Reform: The Fallout of the Doha Negotiations: Part One


It should come as no surprise that the lead up to the Cancun Ministerial meeting in September of this year is going the same way that all previous WTO meetings have. The developed countries continue to utilise WTO as a means to remain selective about how trade liberalisation is preceding in the global economy. The intentions of the developed countries emerge quite clearly in the new text on modalities for the Agreement on Agriculture (AoA) by Stuart Harbinson, the Chairperson of the Special Session of the Committee on Agriculture. Finalisation of the modalities is an important step as it will be the basis of the AoA and what gets left out cannot be added later. So, it becomes very important that developing countries make sure that their needs are addressed. Harbinson’s text came out mid-February and already many developing countries and international organisations are up in arms against it. Firstly, Harbinson’s draft addresses only those issues that were in the Uruguay Round such as (i) tariffs (ii) domestic support and (iii) export subsidy; it does not attempt to go beyond that. It takes no cognisance of those issues that are priorities for the developing countries and so the underlying inequalities in the structure of agricultural trade rules remain unchanged. It is precisely these inequalities that are the main reason that farmers in the third world are facing hardships and also the reason that unsustainable methods of agriculture continue to be encouraged in developing countries.

Even though the text tries to give some concessions to developing countries such as concepts like ‘strategic products’ for food security, the protection of small farm families and for rural development, it remains extremely superficial and ineffectual on these fronts. In fact, the text actually enhances the distortions, imbalances and handicaps faced by poor nations. The text brazenly continues not only to defend but also even legalise the subsidies being given by the Developed countries to their farmers and allows them to continue, in one form or another. All the domestic supports given to their farmers under ‘green box’ and ‘blue box’ subsidies will continue, some will be phased out in five years, others in nine years and some will go on indefinitely! These are subsidies that are, supposedly, not trade distorting and cover a wide range of domestic support to farmers such as giving farmers specialised training, environment and soil protection, payments to farmers to leave land unploughed etc. etc. But this is a fallacy as these domestic supports definitely are trade distorting. Combined with export subsidies, farmers in the Developed countries are able to export their produce well below the actual cost of production and hence undercut the world market prices in their own favour. The text thinks it is being equitable by allowing developing countries to have the same subsidies but this overlooks the inability of the latter to bear these costs and the structure of their economies: while developed countries have large industrial and service sectors which can generate enough revenue to effectively cross-subsidise and ‘carry’ their much smaller agricultural sectors which often form much less than 10% of the economy the reverse is true for developing countries as they often have large agricultural sectors which as in India comprise over 20% of the economy and often employ the bulk of the labour force. While in the US these subsidies are only 2-3% of their GDP, in India or any other third world country the same subsidies to their farmers would be more that 50% of their GDP and in many cases procurement systems are already imposing a heavy burden on the fiscal systems of the latter.

Furthermore, the text allows the Developed countries to use high export subsidies to boost up the export of their agriculture products. The OECD countries give a large $400 billion in annual subsidies to their farmers. Contrary to the claims of the WTO, which maintains that the Developed countries have reduced agricultural subsidies, the US Farm Bill for 2002 shows an increase of $83 billion. African countries are facing a loss of $250 million each year due to the subsidised export rates in the US. One of the greatest concerns of developing countries is the subject of dumping by the Developed countries. Dumping of exports is a major way in which our farmers are being hit, are unable to sell their produce, are being forced to cut back in cultivation etc. The only effective way for countries like India to put an end to dumping is through Quantitative Restrictions (QRs), which are more effective than raising tariffs. But countries like India have been forced to remove all QRs so that Developed countries can have unfettered access to their markets. While one of the prime objectives of the WTO is to end practices like dumping, what we are actually seeing is the exact opposite.



:: Conrad Barwa 10:30 PM [Permanent Link] :: ::
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:: Conrad Barwa 10:26 PM [Permanent Link] :: ::
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Maintainance problems:

Looks like Blogger is having some trouble publishing full posts; will try to rectify asap but until then posting will be short and infrequent I can only suggest that you follow the excellent links to fellow Bloggers given on the Left sidebar; and email any comments/queries/rants to us directly. Normal programming will be resumed soon hopefully; in the meantime I shall be off chastising Saffronists and assorted political deviants and I can only trust you will be doing the same.

:: Conrad Barwa 8:13 PM [Permanent Link] :: ::
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India - Iraq - USA:

A Communist Party of India (Marxist) activist holds an anti-U. S. placard, as others look on at a demonstration as policemen stand guard in Bombay, India, Tuesday, July 1, 2003. The activists were protesting against the sending of Indian troops in Iraq to take part in peacekeeping efforts. (AP Photo/Aijaz Rahi)

:: Vikash Yadav 8:16 PM [Permanent Link] :: ::
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Charred justice: The first Post-Godhra Verdict:


Twenty-one people accused of burning 12 Muslims alive in a bakery during the Gujarat pogrom last year walked free after witnesses turned hostile . The trial court had to acquit them for lack of evidence. Nearly 36 of 70 eyewitnesses who had earlier identified the accused backtracked during the hearing saying that they hadn’t seen anything. Some even went to the extent of saying that the accused had rescued Muslims during the violence. Even the daughter of the owner of Best Bakery and the only surviving member of the Habibullah family turned hostile. There is no denying that the witnesses had been threatened and coerced into changing their stories. The feeling of insecurity and alienation among the minorities in Gujarat facing murderers and rapists will have their sense of helplessness underlined.

The police came in for a severe rap over the knuckles from the judge who charged them with slackness in probing the case. They were hand in glove with the mobs during the pogrom, helping them and later refusing to accept FIRs, and even tearing up FIRs filed because they named VHP and Bajrang Dal activists or leaders. This will surprise no one. Allegations that police picked up people at random and got them to sign pre-prepared panchnamas are credible. The judge lambasted the police for arresting people found at the site long after the real culprits had left. The botching up of the investigation, is on the evidence believable. The Best Bakery carnage was one of five that the NHRC had wanted the CBI to investigate. Hundreds of bakeries owned by Muslims across the state were burnt down, but this was the most gruesome with the highest number of fatalities. Therefore one could see it as a first test case of how the state administration would handle the fallout from the riots. In the classic case of an explicitly politicised administration, the police and bureacracy sabotaged an inconvenient investigation and it was left to a powerless judiciary to criticise and expose the cover-up that was going on.

This is the first verdict in a case relating to the Gujarat pogrom and it is likely that other cases will follow the pattern set. The police and the administration have ensured that the cases of violence against Muslims are not investigated properly leaving the judiciary with no option but to let the accused go for lack of evidence. Where the police have stopped, the VHP has stepped in to threaten witnesses. If these 21 accused were innocent, where are real culprits? They must be found. While those accused of setting on fire a bogey of the Sabarmati Express and killing 59 people are held under POTA, murderers who killed over 1,000 Muslims and raped hundreds of women in the following few days are likely to get away scot free. This is, unfortunately, Narendra Modi’s sense of justice. Equality before the law and the relaince on the Law and ORder agencies to enforce it are two crucial supports to any democratic community; even in India with all its problems of political criminlisation and legal bureacracy one could hope to eventually see justice set in motion after the dust clears; it is now obvious that this will not happen as long as the current Gujarat administration remains in power.


:: Conrad Barwa 6:08 PM [Permanent Link] :: ::
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Advani & Dubya

President Bush, left, drops by during a meeting between Indian Deputy Prime Minister Lal Krishna Advani, right, and National Security Adviser Condoleezza Rice at the White House in Washington, Monday, June 9, 2003. (AP Photo/Embassy of India)

:: Vikash Yadav 9:26 PM [Permanent Link] :: ::
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