Global Policy Forum

Ruth Somerville*

The fifth World Trade Organization Ministerial is just seven [Sept 12] weeks away, but few believe the meeting will herald a new era of growth and poverty alleviation among middle income and least developed countries.

The AIDS Highway
Reasons to be optimistic are thin on the ground given that the GDP of the 50 poorest countries has fallen by 0.4% per year in the last decade, according to the United Nations Human Development Report 2003. This could yet worsen warns the World Bank if the AIDS pandemic is left unchecked. In Africa alone, 28 million people are infected with HIV, with only four per cent of this figure given access to life-saving retro-viral drugs.

The US could only find $200 million this year for the Global Fund. That's compared to $48 billion for fighting Saddam This is not to say that world leaders have not responded with heartfelt statements read out from autocues in months gone by. Recently, there has been a very public ‘awakening' of global policy makers to this ‘global crisis'. Everybody from George Bush, Tony Blair, Jacques Chirac, to the WTO, International Monetary Fund and World Bank, is talking about tackling the "roots of poverty".

Ensuing promises have been made to battle AIDs and sort out the rules of the global trading system. In 2000, the great and the good signed up to the UN-sponsored Millennium Development Project aimed at redressing the balance of global inequality. Each UN member nation, has committed itself to eight development goals spanning economy, education and AIDS – all to be completed by 2015.

With all these good intentions, hopes for developing countries at Cancun should be sky high but even a cursory glance at the development scorecard reveals a wholesale lack of political will.

Performance on AIDS
Take for example the performance on AIDS. In 2002, the European Union, Japan and the United States set up the Global Fund to fight Aids, Tuberculosis and Malaria. It was agreed that each bloc should give $1 billion to cover the costs of the fund's programs in 2004.

But at a recent donors meeting in July, the US reneged on its commitment despite the fact that $1 billion is just 0.1% of its GDP. The US could only find $200 million this year for the Global Fund. Likewise, the EU and Japan also went back on their pledges, leaving the fund with only one-third of its original target.

Now lets compare this to one area where aid seems to flow very freely - invading other countries. So far the US has spent $48 billion on invading oil rich Iraq, or $15 million a day (combined with the UK) on maintaining a force. According to UK defense sources quoted in the Guardian newspaper, the war in Iraq has cost the UK taxpayer £5 billion. Such budget "choices" show that, with regards to aid at least, rich countries remain committed only to schemes that further their economic agenda.

Trade Related Intellectual Property Rights (TRIPS)
The agreement on Trade Related Intellectual Property Rights (TRIPS) is a case in point. Here the US is actively undermining what Bush himself described as ‘Gods Calling' vis a vis the fight against AIDS. The United States could have already placed affordable AIDS drugs in the hands of millions of sufferers if it had supported an agreement at the WTO in December 2002 aimed at relaxing drugs patent laws preventing least developed countries from importing generic drugs from a number of countries such as India and Thailand after 2005. Since the last WTO meeting, the US has repeatedly blocked any attempts to reach an agreement on TRIPS. With $460 million received from the Big Pharma lobby in the last US presidential election, it is unlikely the Bush administration will seek to resolve the TRIPS issue at Cancun.

The gap between rhetoric and reality is similarly glaring on the issue of trade reforms. Since the WTO Doha summit in October 2001, world leaders have (publicly at least) finally made the link between world poverty and unfair world trade rules. In words of DTI chief, Patricia Hewitt in June this year: "The time has passed when richer countries could use trade negotiations to increase their profits at the expense of the developing world".

One area singled out for criticism is the massive agricultural subsidies paid to farmers in rich countries that allow them to sell surplus produce at a fraction of production cost into markets of poor countries. At present, annual subsidies paid to EU farmers under the Common Agricultural Policy (CAP) are larger than the entire sub-Saharan GDP. Total US agricultural subsidies are also larger than many economies. Combined, these subsidies have been instrumental in all but destroying local production in places like Mexico and Haiti. And just like TRIPS, both the US and EU have made sure that reform of subsidies was left very cloudy at the last WTO meeting.

Since then, however, the EU has been promising to reform the CAP. Hailed as the centre-piece of the EU's renewed commitment to fairer trade, CAP reform will be used as a bargaining chip at Cancun to persuade the US to also lower its subsidies. Now that the long-awaited reform has arrived, UK trade minister Mike O' Brien recently proclaimed that: "We can now go to Cancun with clean hands". So will the new CAP put an end to third world dumping? Not a chance. Although the format has been tinkered with, the EU will continue to pump $30 billion into the CAP for the next 10 years.

Business as Usual?
So while it's business as usual for the global trade juggernaut, the progressive spirit of the Millennium Development Goals is in danger of being thrown away at Cancun. Leaders of rich countries know what must be done to reverse this sinister trend. They must show genuine commitment to achieving the Millennium Development Goals by doubling world aid and directing towards health, education and sustainable development. Subsidies in G8 countries should be radically reformed and markets regulated. But in a world where EU cows are worth more than human beings, and the US military budget is thirty times greater than its aid budget, reality and sentiment remain very far apart.

About the Author:Ruth Somerville is a researcher at War on Want

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