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Western greed stalls trade talks

Church Times

8 August 2008

AFTER the collapse of trade talks in Geneva — called to try to finalise the World Trade Organization’s (WTO’s) long-running Doha Round — the question is whether the poor can ever get a return from world trade that will help their development efforts.

The Doha Round was launched in November 2001, and was supposed to be a development round. It followed the collapse of the WTO ministerial meeting in Seattle in 1999, when developing countries insisted that the trade liberalisation that the West wanted was not helping people to escape from poverty. Development, it seemed, was back on the agenda. But not for long.

As the Doha Round negotiations got under way, it soon became clear that Western countries still hankered after a free-trade, not a development, agenda. This was a betrayal of what had been agreed in Doha. The round was supposed to have been concluded by the end of 2004, but has since limped on.

The immediate issue over which the Geneva talks collapsed is known as the Special Safeguard Mechanism. While this may sound technical, it goes to the very heart of what the Doha Round was meant to be all about — people’s livelihoods.

The mechanism is a system that allows developing countries to raise their import tariffs to safeguard their farmers’ livelihoods if imports surge above a certain level. Western countries want the mechanism to work in a manner that developing countries find unacceptable. On the West’s terms, developing countries would be allowed to safeguard products only after they had imported a considerable volume. It could mean that, for some products, domestic production would be wiped out before they could stop imports.

“We cannot put at stake the livelihood security of one billion people,” said India’s Commerce Minister, Kamal Nath. He was willing to negotiate commerce, he said, “but not livelihood security”.

The Special Safeguard Mechanism is, however, only one of the issues in the Doha talks which affect the livelihoods of the poor. There are several other key differences between rich and poor on which the Doha Round was in difficulty. These include the thorny issue of Western countries’ farm subsidies, and rules on manufactured goods and the service industries, and also on specific products such as bananas and cotton.

One of the arguments used by Western governments to try to secure a Doha Round agreement on free-trade terms was the gains that they said would come to developing countries from opening up markets. Gordon Brown has said, for example, that “opening up Western agricultural markets would be worth $15 billion a year to the poorest countries.”

In terms of helping the poor, however, these figures mean very little: they are largely an illusion.

“When huge gains are attributable to trade reforms,” says the leading economist Jeffrey Sachs, “we need to look at the fine print: almost all those gains accrue to the richest countries and the middle-income countries, not the poorest countries, and especially not the poorest countries in Africa.”

After almost seven years of negotiations, developing countries are still being offered nothing that would correct the unfair rules of inter?national trade. Unless Western countries recognise the injustice that poorer countries feel, and the depth of feeling about it, the Doha Round is dead. And there is a big question mark over the WTO.

Radical changes will be needed if the WTO is to handle the pressing concerns that affect the poor. The WTO does not cover trade issues such as the volatile prices for primary commodities on which many of the poor depend. It has no brief to control the power of transnational agribusiness. It is not geared up to to deal with rising food and fuel prices or the rapid expansion of biofuels.

But, whatever the forum for negotiations, should developing countries wait any longer for the West to offer changes in trade rules and procedures which would help their development?

There is also the question why developing countries, where people are often short of food, should use their land to grow food for export to feed the already well-fed in the West. Is this not Robin Hood in reverse? If prices are good, there is a case for exporting agricultural products, provided that farmers really benefit. But it is far more likely to be traders, the transnational corporations, who reap most of the gains.

Alternative approaches are being sought. There is, for example, growing interest in food sovereignty. Food sovereignty is about growing food for local people rather than for export, ensuring that the farmers rather than transnational corporations are in control of what they farm and how they farm. It is about ensuring that communities have the right to define their food and agricultural policies to suit their own social and economic circumstances, in line with their cultures and environments. It encourages local investment in local markets, and genuine agrarian reform.

More people in developing countries are also looking to the fairtrade market, which is setting a new pace for international trade.

In 2007, the volume of Fairtrade goods sold in Britain was more than double that in 2006. Fairtrade products have now expanded far beyond food and drink. The question is increasingly being asked: why cannot all trade be fair trade? The opposite of fair trade is unfair trade.

Trade has a part to play in development, but only if it is conducted on terms that are seen to be just.