The right of developing countries to protect poor farmers and agricultural sectors in the unbalanced and unfair WTO negotiations

THE RIGHT OF DEVELOPING COUNTRIES TO PROTECT POOR FARMERS AND AGRICULTURAL SECTORS IN THE UNBALANCED AND UNFAIR WTO NEGOTIATIONS
Statement from Civil Society
May 2005
Context
Agriculture plays a vital role in the lives of people in developing countries. The sector is a critical source of income as it employs a substantial portion of the population especially in the rural areas.
Many developing countries have undertaken import liberalisation in the belief of benefits from freer trade. The results of implementation however have been extremely disappointing. The reform process has neither helped the sector nor improved food security. According to the Food and Agriculture Organisation, there has been “ a general trend towards the consolidation of farms as competitive pressures began to build up following trade liberalisation” and this has led to the “displacement and marginalisation of farm labourers, creating hardships that involved typically small farmers and food insecure population groups, and this in a situation where there are few safety nets.” Increases in imported foodstuffs have displaced rural farmers from the domestic market and without an alternative source of income, farmers have found difficulties in purchasing imported foodstuffs however cheap they may be, hence exacerbating poverty and food insecurity.
Getting the rules right in agriculture therefore remains essential if the Doha Round of trade negotiations is to deliver an outcome that supports development. Like most of the key agreements in the WTO, the Agreement on Agriculture (AoA) is fundamentally unfair and hinders development. As pointed out by many developing countries in the negotiations already, tariffs are often the only instrument available to developing countries to protect key agricultural sectors and poor farmers.
A controversial agreement on the conversion of non-advalorem tariffs was reached on 4th May. Agriculture negotiations will now move into a critical phase for developing countries, paving the way for the important issue of market access. There is deep concern that the enthusiasm of some members, to ‘fast track’ the negotiations to ensure a first approximation of modalities by July, runs the risk of further marginalizing developing country priorities in the process.
An unbalanced agreement and negotiations
Global trade rules in agriculture remain stacked in favour of developed countries and are having a devastating impact on poor people, farmers and communities, the environment and agricultural economies in developing countries. Furthermore, the current proposals on the table for any new agreement – and the undue influence of the Five Interested Parties in this process – will not correct this imbalance.
Developing countries paid many times for promises of new market access during the Uruguay Round, not least through the AoA. Supposed benefits to the poorest developing countries from
the Uruguay Round have simply not materialized because the AoA delivered a massively unbalanced deal in favour of rich nations and their transnational corporations. For example, developed countries were able to maintain high tariffs, had access to a safeguard mechanism (denied to most developing countries), retained substantial amounts of trade distorting domestic subsidies, and balked at phasing out export subsidies. At the same time, the AoA continued the push to open up Southern markets to developed country farm products, many of which are subsidized and dumped. This has had a massive detrimental impact on world markets and developing countries’ farmers.
Developing countries also made a very significant commitment during the Uruguay Round to agree to a maximum binding coverage of 100% for all their agricultural tariff lines (in non-agricultural goods, many tariff lines remain unbound), with many tariff lines bound at low levels.
But developing countries are being asked to pay again during a new Round. Current proposals are once more stacked in favour of developed nations and dumping will continue. For example, export subsidies (i.e. on sugar, meat and dairy products) are likely to continue for another 10-12 years - one member state of the EU has already stated that they would seek a timetable for cuts towards ‘an horizon of 2015 or 2017’. ‘Box shifting’ – the movement of subsidies between the amber, blue and green boxes – will do little, if anything, to reduce trade-distorting support. And the introduction of ‘sensitive products’ is likely to mean that developed countries can hang onto high import tariffs on certain products, possibly on the same products – i.e. sugar, dairy and meat products – that are so heavily dumped in developing country markets!
It is therefore important as pointed out by many developing countries that “the method of tariff reduction and the numbers negotiated are such that [they] are not called upon to pay an inordinately high, and iniquitous, price in these negotiations.”
Recommendations
We continue to support developing countries’ attempts to secure a favourable developmental outcome in the two ‘subsidy’ pillars of the agriculture negotiations - domestic support and export competition.
However, we believe it is now time for developing countries, with support from civil society, to ensure that the next round actually delivers benefits to poor people, farmers and agricultural workers and communities, the environment and provides protection to agricultural sectors. Time and time again, developed countries have consistently failed to put development at the centre of the talks, putting their own interests before those of developing countries. Developing countries can re-balance a new agreement by placing their own priorities at the heart of the agricultural negotiations. All developing countries should demand for themselves that they:
• Should not be called upon to make any market access commitments in the agricultural negotiations until and unless the imbalances detailed above are adequately and appropriately dealt with;
• In so far developing countries are making market access commitments, they should have the right to determine the nature and extent of their agricultural tariff commitments in this round of negotiations;
• Have meaningful access to special products (SPs) on grounds of food and livelihood security and rural development – these should be available to all agricultural products,
self selected, and unrestricted in number. Members should be able to increase bound rates where these have been bound at low levels. The negotiations should establish the principle that SPs should be an integral part of a new, and subsequent rounds; and
• Have access to a special safeguard mechanism which is: easy to implement, automatically triggered (both in terms of price and volumes), open to all agricultural products and under which both duties and quantitative restrictions could apply.
The next step demands that dumping—the persistent sale of agricultural commodities at less than the cost of production — must stop at the source. Dumping should be prohibited. Developing countries should have the right to effective and timely protection for their farmers, farming communities and agricultural economies.
Many of these demands have already been aired countless times by developing countries. Failure to respond to them has eroded the credibility of the WTO as a multilateral trade organisation that is sensitive to development issues. If negotiations do not move in this direction, we call upon developing countries to seriously consider whether and how the negotiations should continue. The employment and livelihoods of millions of people in the developing world are at stake. We welcome any opportunity to clarify these views further and would appreciate a response to our statement.
Thank you for your attention.
ActionAid International
ActionAid UK
ActionAid Ethiopia
Africa Europe Faith and Justice Network (AEFJN)
Australian Fair Trade and Investment Network
Biowatch South Africa
Catholic Agency for Overseas Development (CAFOD)
Catholic Institute for International Relations (CIIR)
Caritas Internationalis
Center for International Environmental Law (CIEL)
Center of Concern (Washington, DC)
Christian Aid
Coalition of Progressive Farmers in the Philippines
Columban Justice, Peace and Integrity of Creation Office
Comité Catholique contre la Faim et pour le Développement (CCFD)
Coordination Internationale pour le Developpement et la Solidarite (CIDSE)
Centre for International Trade, Economics & Environment (CUTS-CITEE), Jaipur/India
Econews Africa, Kenya
Focus on the Global South
Forum Syd, Sweden
Friends of the Earth Finland
GRET
Institute for Agriculture and Trade Policy (IATP)
International Coalition for Development Action/ICDA
International Gender and Trade Network (IGTN)
Intermediate Technology Development Group
IGTN-Europe
International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF)
K.U.L.U.-Women and Development, Denmark
Land Center for Human Rights, Egypt
Maryknoll Office for Global Concerns
The Oakland Institute
Oxfam International
PAN UK
Pakistan Kissan Ittehad (farmer's unity)
People's Movement for Human Rights Learning
Red Mexicana de Accion frente al Libre Comercio (RMALC), Mexico
ROBA dell'Altro Mondo Fair Trade Italy
SOMO (Foundation for Research on Multinationals)
Southern and Eastern African Trade and Information
Negotiations Institute (SEATINI)
Sustainable Agriculture Action Group (SAAG), Pakistan
The Berne Declaration Switzerland
Third World Network
United Methodist Church General Board of Church and Society USA
Vegetarian Economy & Green Agriculture (VEGA)
War on Want
WEMOS
WIDE
Women’s International League for Peace and Freedom, UK
WTO Watch Group, Pakistan
WWF International