Economic Highlights
New Delhi, 14 August 2008
WTO Talks Failure
GREAT SUCCESS FOR INDIA
By Shivaji Sarkar
A great disaster was averted. Every minute of the World
Trade Organisation (WTO) negotiations in Geneva
recently, on opening up farm exports at the cost of reduced subsidies in the
developing countries, was packed with suspense.
The Indian Government was under pressure from the US and West
European countries led by US President George Bush. New Delhi’s reticence was the most despised. Importantly,
the Indian farmers have been saved, as of now, of a surge in farm imports. Clearly,
the Special Safeguards Measures (SSM), projected to save the farmers of
developing countries from imports, would have done just the opposite.
There were many problems during the talks. President Bush
had called up the Prime Minister Manmohan Singh thrice in three days. There was
a section in the Indian bureaucracy and the Government, who were not unwilling
to “save” what, is called the Doha
round.
There were many backroom operations to create counter
pressure on the Government. Eminent scientist MS Swaminathan, a former Supreme
Court judge and many farm lobbyists played an active role in educating the Government
along with a chunk of the bureaucracy. That stalled the disastrous process.
It was a challenge to the US.
Two of the biggest countries --- India
and China refused to sign
the Doha draft.
Indian negotiators could see through the US and Western
game. They had been pressurising the developing countries to cut down on farm
subsidies as “it is harmful to developing economies”.
The US
had proposed to cut trade grants (subsidies) to its farmer by 70 per cent and Europe by 80 per cent. On the face of it, this looked
attractive. But it was only on paper. They had planned to reduce something that
had yet not been given.
The US
gives $ 7 to 9 billion farm subsidies every year. What it was projecting as a
sacrifice was the assurance of not increasing it to $ 14.5 billion. Similar was
the proposal of Europe. The ploy was to make
the developing countries fall for it so that the rich farmers of rich countries
could have had a field day.
The UN’s World Economic and Social Survey Report 2008 gives
a detailed analysis of how dearly the Marrakesh
talks have cost the developing countries. They had agreed to replace GATT with
WTO at Marrakesh.
Moreover, the UN report says that the developing countries need not further
open up their markets for imports.
The US
and European operation had been devised extremely carefully to divert attention
from the subsidies by renaming it. The Organistaion for Economic Cooperation
and Development (OECD), representing the rich few, has decided to extend “farm
grants” of $ 374 billion in the next five years.
Besides, the US Farm Bill 2008 has proposed to extend $ 307
billion farm assistance in five years. Till such measures were curtailed,
nothing could be done to stop the flood of imports to developing countries.
Those who favoured imports and the opening up of the economy need to rethink.
The Food and Agriculture Organisation (FAO) has recorded a surge of imports in
102 countries. It found that there were 12,167 cases of excess imports. This is
what exposed the Western proposals.
The SSM “was aimed at stopping 40 per cent excess imports”.
But in reality all developing countries are being flooded with imports under
the WTO Marrakesh regime. The Doha
round was not protecting the farmers from imports. The excess imports are
already having a disastrous impact.
Lakhs of farmers are being forced to keep off their fields.
They are committing suicide and consumers are paying higher prices as they get
virtually pawned to big farm corporates that rule the US and Europe.
This is not happening only in India.
The Kenyans have been the worst sufferers. Excess sugar imports in Kenya for 28
years till 2004 has cost 32,000 jobs.
There is another intriguing phenomenon. The process of
so-called liberalization during the last 30 years has turned 105 food-producing
countries into importers. The developing countries as per international records
were exporting food products and
were earning over $ 700 crores. It has been reversed, thanks to the Western
mechanism, to cause them a loss of $ 11 billion because of the loss of the
international market and surging excess imports.
Had the Doha round “succeeded,”
the Third World would have been driven to
starvation, is the surmise of international farm experts. Whether it is a Special
Product (SP) --- such farm products, which do not merit cut in import duties,
or SSM, nothing could save the farming industry in developing countries. Recall,
the WTO President Pascal Lamy, in 2005, had described SP as a “carrot” to lure
the poor countries to the negotiating table.
Significantly, the Indian farmers do not need such Special Product
safeguards. They need an effective mechanism to save their farming and
livelihood. Farmers in India
need price protection. The lobbies that speak against farm subsidies and even
criticised the recent farm loan waiver forget the high subsidies that are
extended to the corporates every year in many forms. Such subsidies are at
public cost but the profits are private. In the case of farm subsidies the
protection is to the public at their own cost.
The liberalization lobby had been campaigning for the last
over a decade against farm subsidies. They had even said, “farming was an
expensive avocation as there were many hidden costs”. They had suggested the
easy way out --- stop foodgrain production, raise cash crops, earn dollars and
“buy” food from the international market. They had succeeded to an extent.
This has played havoc with the country’s food security,
which has resulted in a steep rise in prices as well. When a nation of 100
crores goes shopping, it automatically raises the international prices.
Besides, without a strong farming sector, a nation cannot be expected to emerge
strong.
While integrating with the international market, utmost
precaution is needed so that the rich countries are unable to exploit the
poor. The rich need to open up their
markets and the poor need to close access to the rich. Food security alone
gives the nation strength so that it can flex its muscle. The US has learnt
that and wants every one else to deny it so that its super power status is not
challenged.
India needs to learn this at a time when the world is facing
a severe food shortage. Nations should not strive to fight for a handful of
corporates, which are dictating the WTO negotiations. The fight should be to
save hundreds of farmers all over the developing world. The present Doha draft
needs to be dumped for them. A renegotiation on the same draft is fraught with
immense risk. That should not be allowed to happen.---INFA
(Copyright, India News and Feature
Alliance)
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