The+rich+world+is+playing+dirty,+Tayob,+BDay




 * Business Day, Johannesburg, 28 July 2005**

=The rich world is playing dirty=


 * Riaz Tayob**

THE second-highest decision-making body of the World Trade Organisation (WTO) is meeting this week in preparation for the body’s sixth ministerial conference in Hong Kong in December. WTO director-general Supachai Panitchpakdi said recently “these negotiations are in trouble”. After he sounded the warning bells earlier this year, countries seem no closer to an agreement that will secure progress in the multilateral trade negotiations.

Aggressive negotiation tactics by developed countries over the past few years have now sharpened disagreements. The divides are generally along north/south lines, but there are considerable differences within each group. The agenda is hefty: industrial goods, forestry and fisheries, services, agriculture, rules and development.

Within each of these issues there are differences of varying complexity. After all, reaching consensus among more than 140 countries cannot be easy.

Unlike at other times, it is the rich countries’ intransigence, mainly on agriculture, that has brought the talks to this impasse. For years developing countries have wanted improved disciplines on agriculture and the rich countries employed every tactic they could to divert attention from this issue. Now it has taken centre stage. Developing countries such as India and Brazil have made it clear that progress on other matters depends on the outcome on agriculture.

The last big WTO ministerial meeting held in September 2003 in Cancun, Mexico, ended with no agreement reached. Developed countries were quick to point out that developing countries lost out on a chance to promote economic development by securing a new trade deal. The developing countries and southern civil society replied with the common-sense view that “no deal is better than a bad deal”. The Africa Group and a relatively new configuration, the Group of 20 (G-20), emerged in strength to oppose the rich countries’ alliance at Cancun.

Notwithstanding the heightened focus on the WTO issues, the rejected Cancun draft agreement was in large part accepted by all countries at last July’s general council meeting of the WTO. This text became known as the July Approximation, and narrowed down the scope of the talks. In the fluid, opportunistic and untransparent negotiation processes of the WTO, the July Approximation secured its right of passage through a deal brokered between the rich countries and the Five Interested Parties (FIPs) — the US, the EU, Brazil, India and Australia. Developed countries and the WTO secretariat hailed this as a breakthrough because it reflected progress from the Doha ministerial agreement.

Incredibly, the FIPS were able to push forward the stalled negotiations. Subsequently, the FIPs negotiating club has lost a great deal of credibility and now a new mutation of FIPs is in the offing to lend credibility to unrepresentative negotiating processes. The new extended FIPs now includes Japan, Switzerland, Canada, Malaysia, China, Argentina and Indonesia besides the original club.

It is still unclear whether Korea and Benin were also present at the recent extended FIPS meeting.

These meetings were intended to reach agreement on a text that can be agreed to at the general council meeting this week.

The rich countries and the mainstream media picked up on the flattery of the words Doha Development Agenda, and used this to criticise developing countries for failing to pursue developmental aspects of the agreement.

It struck none of these peddlers of the rich-country interests that neither Doha nor the July Approximation reflected the interests of the poorer countries. Implicit in these shallow criticisms was the view that developing countries did not know what was good for them and had to be cajoled and even bullied into accepting policies in their interest.

Paternalism is a major feature of the negotiations, and often finds expression in bullying tactics that are now characteristic of the WTO negotiations.

The major issues in contention at present are: agriculture; nonagricultural market access; services; development; and rules on antidumping measures and trade facilitation. In addition there is a host of unresolved issues also being negotiated, including trade-related intellectual property rights and access to medicines for countries with limited or no local production capacity, implementation issues (outstanding since 1995) and demands for a just system for dispute settlement.

The agriculture talks have been contested by the poorer countries ever since the WTO was established. The WTO Agreement on Agriculture has legalised the subsidies and other measures used by rich countries to maintain a system of production that is neither free nor efficient. There is clear duplicity on the part of rich countries in preaching free trade while protecting their agricultural markets where developing countries clearly have a comparative advantage.

Their rhetoric has been accompanied by fanfare from the mainstream press, which has given the distinctly inaccurate impression that progress is being made.

But by retreating into legalism, the rich countries have been able to increase their farm subsidies while at the same time demanding tariff cuts in other countries’ markets. The effect of these policies in developing countries has been enormous and is responsible for the preventable suffering of the poor.

The Europeans and Americans are always at pains to point out the problems of governance in developing countries and to use it to bully them into onerous conditions for aid and other forms of assistance. This dirty business has been castigated even by the former European Trade Commission and the previous WTO director-general, Pascal Lamy.

In practice, developing countries face pressure not just at the WTO but also from the World Bank and International Monetary Fund, which usually secure free-trade elements in agreements that would otherwise have to be negotiated at the WTO. This places many developing countries at a considerable disadvantage. Rich countries hypocritically continue to demand at the WTO that developing countries act contrary to their national interests on agricultural issues.

In contrast to rich countries, agriculture is the major economic activity in developing countries. Agriculture comprises less than 10% of rich countries’ economies, compared with more than 70% of some developing countries.

A simmering tension among northern and southern civil society members is becoming evident in the agricultural talks. There are competing views on whether a common position is possible between the north and the south on agriculture. The debate is framed in terms of the protection of subsistence, small and family farmers, irrespective of where they farm in the north or the south.

The WTO’s realpolitik prevents full solidarity on negotiation issues because the outcomes of the negotiations are a function of power and not rationality.

The ever-present danger of skulduggery and secret machinations still exist in these negotiations, and we can expect the rich countries to use more carrot-and-stick tactics through their aid agencies and proxy international financial institutions.

The rich countries are impatient but capable of waiting to push their agenda forward, however incrementally. Developing countries need to be vigilant and clear about what they want in order to prevent further erosion of their policy flexibility in trade and related matters.


 * **Tayob is with the Southern and Eastern African Trade Information and Negotiations Institute in SA**


 * From: http://www.businessday.co.za/articles/article.aspx?ID=BD4A73959