Global Policy Forum

By Gustavo Capdevila

The proposal by developing countries for unblocking negotiations on farm trade at the upcoming World Trade Organization ministerial conference in the Mexican city of Cancun is reviving the North-South debate. The initiative by a group of countries that includes Argentina, Brazil, China, India, and South Africa is based on the notion that in the current Doha Round of multilateral trade negotiations it is the industrialized nations that must give in. The new initiative, backed by 16 developing nations, demands a definitive end to all export subsidies, reductions in subsidies to farmers and greater access to agricultural markets.

It is widely believed among the delegations form the developing countries that during the previous series of talks, the Uruguay Round (1986-1993), when an international accord on farm trade was negotiated for the first time, the industrialized North obtained more benefits than did the South.

The new proposal seeks to reform agricultural policies in order to establish a fair international trade system, one that is guided by markets. It also aims to harmonize the diverse interests of the developing world through the adoption of the "special and differentiated treatment" mechanism for poor countries and authorization to implement protection measures for products considered strategic for their economies.

In this text, "much is requested from developed countries, since it is from them that we expect more," said Luiz Felipe de Seixas Correa, chief negotiator for Brazil, an early sponsor of the initiative. The nations of the North "have the means to finance distorting agricultural policies," he pointed out. Furthermore, they have a "wide array of mechanisms to protect their farmers" and possess comprehensive social security networks, added the Brazilian diplomat.

The differences Seixas Correa mentioned are reflected in these telling figures: more than half the world population lives on less than two dollars a day, while every cows in the European Union receives an average of $2.5 a day in government subsidies. Meanwhile, developing countries lack such resources and have only "border protection to insulate their farmers from the wide fluctuations that affect agricultural markets," he said.

But the EU reads the world agricultural trade scenario in a totally different way, saying it would be impossible to justify the "Southern" approach to the bloc's members. Peter Carl, trade director for the European Commission, the EU's executive body, alleges that when the bloc's membership is expanded in 2007 from its current 15 to 25, the per capita income of some of its members will be surpassed by that of "10 to 30 developing countries." "What constructive purpose can be served by this kind of Manichean approach to international economic cooperation?" wondered Carl. He charged that industrialized countries were making all the efforts and reforms, while "hardly any" developing countries were taking on those responsibilities. The European official asserted that the developing countries' farm trade proposal constituted a "reinvention of the 1970s slogan of South versus North." This radicalization of relations comes "just two days before finishing the preparatory work" for the Ministerial Conference to take place in Cancun Sep. 10-14, said Carl.

The chairman of the WTO General Council, Uruguayan diplomat Carlos Prez de Castillo, has announced that he will present on Friday a summary of the state of the trade negotiations, including the crucial talks on farm trade. The proposal from the 16 developing countries underscores profound differences with the agricultural trade initiative that the EU and the United States presented to the WTO last week.

The non-governmental humanitarian organization Oxfam International, based in Britain, described the developing countries' proposal as "a radical plan to reform agricultural trade." Celine Charveriat, head of Oxfam's Geneva office, said the proposal is "a direct challenge" to the EU-U.S. plan, which, if successful, "would have left billions of dollars in export subsidies intact." The two farm trade superpowers and the rest of the industrialized countries together spend approximately $311 billion a year on subsidies for their "inefficient" agricultural sectors.

The initiative of the South is backed by Argentina, Brazil, Bolivia, Chile, China, Colombia, Costa Rica, Ecuador, Guatemala, India, Mexico, Paraguay, Peru, Philippines South Africa and Thailand. Charveriat commented that the proposal "is the first piece of good news in months," adding, "It provides a good signal that developing countries will stand up for their rights at Cancun."

The negotiations on nearly every agenda item of the Doha Round, including agriculture, have failed to meet the established deadlines, in large part due to differences between the countries of the North and of the South.

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