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WTO Talks Failure:GREAT SUCCESS FOR INDIA, by Shivaji Sarkar, 14 August 2008 Print E-mail

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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