Global Policy Forum

International Groups Denounce World Trade Pact


By Jim Lobe

OneWorld US
August 2, 2004

While negotiators from the United States and the European Union (EU) declared victory in rescuing global trade talks in the early hours on Sunday at the World Trade Organisation (WTO) in Geneva, international non-governmental organizations (NGOs) denounced the results as a sell-out of poor countries and the environment.

"After days of closed-door negotiations, rich countries have delivered a deeply unbalanced text as a take-it-or-leave-it option," said Celine Charveriat, head of Oxfam International's Geneva office. "This puts developing countries in the unfair position of having to accept a bad deal or reject and get blamed by the U.S. and the EU for failure."

The final deal, which was announced at about 2:00 a.m. Sunday morning, appeared to put back on track the Doha Round of international trade negotiations, which was launched by 147 nations in Abu Dhabi at the end of 2001.

The Round, which seeks to liberalize trade in a host of economic sectors, broke down at a ministerial meeting in Cancun last September when a group of poor countries led by Brazil and India demanded that Washington and Brussels commit themselves to sharp reductions in agricultural subsidies that they argued were making it impossible for farmers in poor countries to compete.

The World Bank has estimated that estimated US$300 billion in annual subsidies and other support given to farmers by western governments are costing developing countries some $60 billion a year, more than the total amount of official economic aid that these same governments and international agencies, like the World Bank, provide them annually in grants and loans.

The agreement on a framework for further negotiations was concluded by a small group of countries, including the U.S, the EU, Australia, India and Brazil, that were delegated to hammer out a consensus for moving forward.

"Today's decision is a crucial step for global trade," said U.S. Trade Representative Robert Zoellick shortly after the WTO secretariat announced the accord. "After the detour in Cancun, we have put these WTO negotiations back on track."

The Brazilian delegate, Foreign Minister Celso Amorim, also put the best spin on the final agreement, insisting, "This is the beginning of the end of (agricultural) subsidies. It is a rare combination of social justice and trade coming together."

But the NGOs were considerably more skeptical in their assessments, insisting that the results were considerably less balanced than Amorim had suggested.

Calling it a "face-saving exercise," Greenpeace said the final result was "highly imbalanced in favor of rich countries, which make vague promises in return for key concessions by developing countries," particularly in opening their markets wider to manufactured goods, services, and agricultural exports from wealthy nations themselves.

In addition, the Amsterdam-based group charged the accord will "open the door for further liberalization in sensitive sectors such as fisheries and the trade in forest products." The deal is not a victory for multilateralism, but a dangerous fudge," said Daniel Mittler, Greenpeace International Trade and Policy Advisor. "The secretive process practiced in Geneva this week once again showed that the WTO is an undemocratic organization mainly responsive to rich-country interests. The WTO does not seem capable or willing to deliver equitable and sustainable development for all; it only seems to be interested in ensuring its own survival."

Friends of the Earth International (FoEI) also complained about what it called "undemocratic procedures and intense pressure" from the U.S. and the EU in the rush to secure a final accord.

"Corporate lobby groups will be the big winners, the environment and the poor the big losers," said FoEI's Alexandra Wandel, point in particular to the agreement on Non-Agricultural Market Access (NAMA), a part of the framework accord which calls for the liberalization of all natural resources, particularly in fisheries, gems, and mining. NAMA would make it much more difficult for developing countries to protect these resources from foreign investors or collect revenue from their export. "The NAMA agreement could further deepen the de-industrialization crisis in these countries, thus accelerating unemployment and poverty and forcing countries to rely heavily on unsustainable and harmful exports of natural resources."

At the same time, FoEI charged that the "so-called concessions" made by the EU and the U.S. in agricultural negotiations - a commitment to cut some farm subsidies by 20 percent - may "turn out to be empty promises. The commitment to eliminate export subsidies credits is missing any substance as no end-date is mentioned in the text," the Brussels-based group said. "On domestic support for agriculture, language in the framework agreement clearly opens the door for the EU and the U.S. to maintain nearly their entire level of current subsidies and to use these to continue the dumping of agricultural goods in developing-country markets. At the same time, developing countries could be forced to give up import protections used to achieve food sovereignty."

That criticism was echoed by Oxfam which called the agreement "deeply disappointing and not sufficient to meet the needs of developing countries" and warned it may indeed cause the Round to collapse before their scheduled completion in late 2006. "The draft is unacceptable because it fails to meet the needs of developing countries," said Charveriat. "Presented as a breakthrough, the text on agriculture does little to address the problem of export dumping, instead introducing dangerous loopholes for yet more subsidies from the U.S."

She stressed that the framework failed to address the issue of U.S. cotton subsidies that were recently ruled illegal by the WTO itself. Instead, the issue of cotton is to be folded into overall agricultural negotiations without any specific commitment to eliminate them.

Production in the heavily subsidized U.S. cotton industry has had the effect of driving down global prices for a key commodity to levels that threaten the livelihoods of millions of small-scale cotton farmers in poor countries, particularly in West Africa. To gain an agreement from key West African cotton-producing nations - namely Benin, Burkina Faso, Chad and Mali - Washington agreed to accelerate cuts in its subsidies and mobilize more development assistance. On the other hand, the four countries - the last three of which are among the world's poorest nations - agreed to lower tariffs to agricultural imports, a concession likely to increase U.S. food exports to them.

But Charveriat said the deal was unfair, particularly because the WTO had already ruled that the U.S. subsidies were illegal. "This is a serious betrayal of developing countries and will have massive implications for the 10 million West African farmers whose livelihoods are currently undermined by U.S. export dumping," she said. "There are no cast-iron commitments here and no clear timeline for reform."

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