round [of WTO trade talks]”);, that no-one would twig that their promises are as
empty as their souls.
rich country representatives stump for the WTO’s next ministerial, to be held in
the Persian Gulf emirate of Qatar in November, to formally launch a new round of
comprehensive trade talks, they proclaim the necessity for “free trade”, for
liberating all countries rich and poor from any restrictions on what, how and
when to trade and for allowing them to go about their business unimpeded, freely
would be bad enough: the equivalent of throwing a goldfish into a tank of sharks
and telling it to compete.
it’s worse than that. While enforcing market-opening measures on the weak, World
Trade Organisation agreements allow the strong to do pretty much whatever they
like. “Free trade” is only the catchcry when it advances the interests of the
rich nations and the giant corporations; when it doesn’t, the WTO legalises,
even entrenches, Northern protectionism.
report by the British charity Oxfam, released immediately before the UN’s LDC
conference in Brussels, lifts the lid on the scale of this WTO-sanctioned
protectionism. Entitled Rigged Trade and Not Much Aid, the study shows how
“rich countries help to keep the least developed countries poor”.
LDCs have undergone extraordinarily rapid trade liberalisation in the last
decade, lowering import tariffs and scrapping non-tariff barriers, both as a
result of negotiations in the WTO and as a result of pressure from the World
Bank and International Monetary Fund.
Cambodia, for example, is halving its average tariff, from 30% to 15% in the
next year, while Haiti now has 800 product lines which have no tariffs on them
and has scrapped all import quotas.
contrast, through various tricks, all of which are perfectly legal under the
WTO’s Agreement on Agriculture, both the European Union and the United States
spend more on agricultural subsidies today than they were spending at the start
of the Uruguay Round of world trade talks in 1986.
OECD nations currently spend US$1 billion each day on agricultural subsidies.
Over a year, the spending is about the same as the combined gross domestic
products of the LDCs.
of this assistance goes to the biggest companies and farms: in the US, 61% of
the US$22 billion a year given out in direct payments goes to 10% of farmers,
according to the Environmental Working Group.
result, the report notes, is that “some of the world’s most vulnerable rural
producers [are] competing against the treasuries of Europe and North America,
with heavily subsidised imports driving down local prices and destroying
1995, under pressure from the US, Haiti reduced import tariffs on rice from over
50% to less than 3%. This prompted an immediate, and entirely predictable, surge
of subsidised US rice imports. Unable to compete, local farmers were driven out
of business and, from a position of near self-sufficiency in 1990, Haiti’s
imports now account for over half of national consumption.
Northern policies even deliberately discriminate against imports from the LDCs.
The exports of the least developed countries are almost three times as likely as
those of the major trading powers to face “tariff peaks” of more than 15%, for
some product lines, “tariff escalation” discourages countries from exporting
goods further up the value chain. Fully-processed manufactured food products
face tariffs twice as high as products in the first stage of processing in both
the EU and Japan, rising to 12 times as high in Canada.
study makes no estimate of the total dollar figure impact of Northern
protectionism on Southern economies, although Oxfam has previously put it at
US$700 billion a year.
whatever the monetary cost, the social cost–in lost food security, in even more
extreme rural poverty, in worsened child malnutrition, in people forced into the
slums of the cities to look for work <197> is far greater.
promise made to LDCs at the UN conference was that Northern countries would
expand existing Generalised Systems of Preferences and allow LDC exports to
enter duty- and quota-free.
promise is fraudulent.
Oxfam’s report notes, “Most [such schemes] have been carefully designed to
maximise the public relations benefits for industrialised-country governments,
and to minimise the real trade benefits for the LDCs”.
“Africa Growth and Opportunity Act”, passed by the US Congress in 2000, which
promises completely unrestricted access to US markets for all sub-Saharan
exports, offers those countries nothing they don’t already have.
the US-Africa-Caribbean trade bill, African exporters of apparel are required to
use yarn and fabrics imported from the US to benefit from duty-free access.
Japanese offer of free market access focussed on industrial goods not exported
by LDCs and explicitly excluded those agricultural products in which poor
countries might have a competitive edge.
for the poster-child of such schemes, the EU’s “Everything but Arms” policy,
such are the loopholes and exceptions in it that critics have dubbed it
“Everything but Farms”.
plan, first put forward by the EU Commission in October, would have granted
duty- and quota-free access to European markets for all LDC exports except
Financially, however, the benefits for the LDCs would have been meagre, as they
already have such access through various preference arrangements and they have
limited capacity to greatly increase production to meet new market openings.
According to one World Bank estimate, the dollar figure impact of “Everything
but Arms” would have been in the region of US$185 million a year, a 1% increase
in LDC export earnings.
that benefit, however, has now been done away with, thanks to the European
Commission buckling under pressure from powerful, cashed-up farm lobby groups.
Howling that Europe would be flooded by cheap sugar, the British sugar beet
industry was able to force back liberalisation of the sugar and rice markets,
the two products of most interest to LDC exporters, to 2008 at the earliest
Commission also put in place a system to prevent “serious disturbances to EU
markets”, meaning, to stop LDCs actually increasing their market share.
this is the carrot that is supposed to entice poor country governments into a
new round of trade talks, it’s a pretty wilted and bedraggled carrot. And the
least developed countries might be poor, but they’re not bunnies.