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<p class=""><img src="http://readersupportednews.org/images/stories/article_imgs10/011373-wto-agriculture-subsidies-121713.jpg" alt="At the recent World Trade Organization meeting in Bali, developing world resistance against predatory trade policies that quash small farmers collapsed. (photo: David Williams/Flickr)" title="At the recent World Trade Organization meeting in Bali, developing world resistance against predatory trade policies that quash small farmers collapsed. (photo: David Williams/Flickr)" border="0"> <br>
<b><font size="1">At
the recent World Trade Organization meeting in Bali, developing world <br>resistance against predatory trade policies that quash small farmers
collapsed. <i>(photo: David Williams/Flickr)</i></font></b><i><br>
</i></p><div class=""><h1 class=""><font size="4">Spineless in Bali: Fooled Again by the WTO</font></h1>
<p class="">By Walden Bello, <a href="http://splashurl.com/lyqwwx4">Foreign Policy in Focus</a><br></p>
<p class="">17 December 13</p>
<blockquote><strong><em>Developed countries are still using the WTO to
squeeze small farmers in the developing world-and developing world
governments are going along with the charade.</em></strong></blockquote>
<p>During
the national debate on whether the Philippines should join the World
Trade Organization in 1994-95, proponents promised that joining the
organization would help create some 500,000 new agriculture jobs a year.
The Philippines, they said, would become a powerhouse exporter of
high-value-added crops like broccoli, snow peas, and cut flowers.</p>
<p class="">In fact, over the next decade, the country was turned
from a net agricultural exporter into a net agricultural importer, and
employment in agriculture dropped drastically in absolute numbers, from
11.2 million in 1994 to 10.8 million in 2001. In one commodity after
another, Filipino producers were driven out of business by cheap
subsidized imports of grain, poultry, vegetables, and livestock.</p>
<p class="">The situation was pretty much the same for many
developing countries after 1995, as they were turned from dynamic net
agricultural exporters to troubled net agricultural importers. Becoming a
party to the Agreement on Agriculture in order to join the WTO, in
short, was a bad, bad move.</p>
<p class=""><strong>Carrot and Stick </strong></p>
<p class="">I was reminded of the historic WTO debate by the
negotiations over the so-called "Bali Package" at the recent World Trade
Organization Ministerial meeting in Bali, Indonesia, which took place
December 3-7.</p>
<p class="">The developed countries, led by the United States and
the European Union, came to Bali with two proposals. The carrot was a
"trade facilitation" initiative that would allegedly simplify customs
procedures and thus increase global trade, they said, by a "trillion
dollars." The stick was a demand that developing countries get rid of
significant support programs for farmers and consumers, like food
stockpiling, in the next four years, or else be charged in a WTO court
for exceeding their allowable subsidy levels of 10 percent of gross
domestic product. This was the so-called "peace clause extension
proposal."</p>
<p class="">Many developing countries were upset by the peace
clause proposal and skeptical about the benefits for them of the trade
facilitation deal. India was especially threatened since it had just
passed an expanded program of food stockpiling to help ensure the food
security of poor farmers and consumers. But others joined India's
protest because the motion placed the burden of rectifying imbalances in
the global food trade on developing countries while avoiding any
commitment by developed countries to cut their more than $200 billion
worth of yearly subsidies to their own agricultural sectors. This
massive subsidization has led to systematic dumping, or selling goods
below cost, in developing country markets that is driving farmers to
bankruptcy.</p>
<p class=""><strong>An Unbalanced Deal </strong></p>
<p class="">After nearly 20 years of pulling off one shenanigan
after another at the WTO, the developed country governments were at it
again. Thus, I felt compelled to have a lengthy telephone exchange with
the Philippines' lead negotiator in Bali, Secretary of Trade and
Industry Gregory Domingo. Secretary Domingo agreed that both proposals
were unbalanced in favor of the developed countries. Those countries, he
informed me, were not even willing to entertain cuts in their export
subsidies - a small portion of their massive subsidy programs - in
return for cuts in the already relatively minute subsidies of developing
countries.</p>
<p class="">As for the proposed trade facilitation deal, Domingo
admitted that it favored mainly big corporate players, not the small and
medium enterprises of developing countries that were engaged in global
agricultural commerce. In other words, the Philippine negotiating team
was going to Bali with eyes wide open.</p>
<p class="">The same debate, between food-security advocates and
government negotiators pressured by the United States and European
Union, took place in other delegations, with Indian, Latin American, and
African civil society groups warning their governments not to
capitulate.</p>
<p class=""><strong>The President's Orders </strong></p>
<p class="">Gravely worried about the pressure that would be
brought against the Philippines if it chose to support India's stand
against an agricultural trade deal, I texted the Philippine President,
Benigno Aquino. "Let me just restate my strong opposition to the
Philippines' signing on the unbalanced Bali package," I said. "I really
hope we will not sacrifice the strategic interests of the Philippines
and other developing countries just to achieve a Bali deal."</p>
<p class="">I was pleasantly surprised when the president replied:
"Prof, they are still negotiating and they have been instructed along
the lines you have stated." That gave me hope.</p>
<p class="">Over the next 24 hours, momentous developments took
place. India backed down from its opposition when the developed
countries agreed to drop their push to invoke sanctions on developing
countries maintaining significant food support programs after an
extension of four years. However, the burden of living up to the
Agreement on Agriculture was still placed on developing countries.
Moreover, only their existing food support programs would be covered by
the deal, meaning new programs to support their farmers or consumers
would open them up to lawsuits in the WTO court.</p>
<p class="">Most importantly, the developed countries, led again
by the United States and European Union, refused to entertain any notion
of reducing their massive subsidies, which are the main factor wreaking
havoc in global agricultural trade.</p>
<p class="">As the negotiations drew to a close in the early
morning of December 7, I got the following message from Secretary
Domingo: "Congressman Bello, the Bali Package is a balanced package, and
while parts of it, like some parts in the Trade Facilitation deal, will
benefit others more, we benefit also big time in the more transparent
processes that we will have, particularly in customs. The peace clause
is also of significant benefit to the Philippines as revised without a
fixed term limit."</p>
<p class=""><strong>D�j� vu All Over Again </strong></p>
<p class="">This was d�j� vu all over again, to borrow Yogi
Berra's immortal phrase. We agreed to a deal on agriculture without the
promise of any subsidy cuts on the part of the rich agricultural
superpowers, who simply promised that the parties would work towards a
"permanent peace clause," whatever that is.</p>
<p class="">And as far as the gains from trade facilitation were
concerned, the Philippine legislature was not provided with any figures
on how we would gain "big time" from the deal. Again, the likely source
of our trade secretary's optimistic statement was an act of faith in the
estimates of the WTO secretariat and neoliberal think tanks like the
Washington-based Peterson Institute that there would be a global gain of
$1 trillion in trade. Completely abandoned was his concern that it
would be mainly big corporations, and not small and medium enterprises
in the developing world, that would reap the greatest benefits from the
deal.</p>
<p class="">As in 1995, Philippine negotiators allowed themselves
to succumb to the pressures of developed country negotiators whose
marching orders from their capitals are to make no substantive
concessions. This hardline attitude has forced the developing countries
to form an effective defensive bloc since the Seattle Ministerial of the
WTO in 1999. In Bali, that bloc collapsed under the pressure exerted by
developed countries as well as from Brazil, one of whose
representatives fills the post of director general, and host country
Indonesia, which wanted a deal at any cost for prestige reasons.</p>
<p class="">As in the Philippines, food-security advocates in
other countries felt betrayed by their governments' capitulation. "The
Ministerial Decision seriously compromise[s] India's food security and
farmers' livelihoods," said the All India Kisan Sabha farmers' coalition
in a statement. "The agreement will threaten expansion of present
programs of food security and price support to farmers as well as future
programs with such objectives. The USA, EU and other developed
countries have brokered a deal with the Commerce Minister Anand Sharma
to protect the interests of the rich nations and their agribusinesses. "</p>
<p class="">For its part, the Africa Trade Network saw the trade
facilitation deal as "the very opposite of what African countries need
to address the fundamental and peculiar challenges that they face in
moving goods and services across national borders. The text imposes
obligations on all countries to adopt customs procedures which are
standard in the advanced industrial countries, and which most of the big
emerging economies have already voluntarily adopted, and which are
commensurate with the stage of economic development. African countries
on the other hand, have to undertake massive legislative, policy and
infrastructural changes to live up to these standards."</p>
<p class=""><strong>Fooled Again </strong></p>
<p class="">There is now a consensus that the Philippines - and
most other developing countries - lost out by joining the WTO nearly 20
years ago. Our agriculture and industry are now on their last legs after
becoming part of a global organization whose main "principle" is trade
liberalization for developing countries and continued protectionism for
the developed countries. I thought we had learned from the debacle of
1995. Our negotiators have not, being steeped in the art of swallowing
the rosy calculations of the WTO spinmasters and caving in at the
slightest pressure from the powerful.</p>
<p class="">As in 1995, developing countries will live to regret joining the frightened herd and signing the Bali deal.</p></div></div></div>