WTO and the hypocrisy of rich nations

A drama was played out in Geneva for four days. The developed countries - the US, the European Union (EU), Japan and Australia - were desperate to break the deadlock in the WTO's Doha round of talks. But fortunately they couldn't do so until China, India and Brazil agreed with them.

Wednesday saw headlines screaming that the US had agreed to cut its farm subsidy. That should have removed a major obstacle and made the developing countries jump with joy. But it did neither.

The US had agreed to cut its farm subsidy to $15 billion. But the developing countries rightly argued that its current subsidy was actually lower than that. In effect, the new draft would allow the US to raise its subsidy - and the same is true for the EU.

The reason for it is not difficult to find. The US Congress has rejected the appeal of developing countries to cut its subsidy to farmers, and instead approved a bill with a provision of $289 billion in agricultural subsidy for the next five years. How much will it amount to per year? You do the math.

Farm subsidies in the rich countries have systematically harmed the agriculture sector in poor countries. The total agricultural subsidy in the rich Organization for Economic Cooperation and Development countries adds up to $311 billion, higher than the GDP of many developing countries.

Still, the rich countries want the poorer ones to not only cut their subsidies, but also to open their markets further. If the developing nations accept such terms, they can only bring doom to the livelihoods of millions of their farmers. They will threaten food security and food sovereignty, and aggravate the food crisis in the developing world. The developing countries can agree to these terms only if they are ready to sacrifice their control over food and other agricultural productions.

The hypocrisy of the developed world has pushed small- and mid-level farmers in countries like China, India and Brazil out of their occupation. These people have been forced to look for jobs elsewhere, which essentially means serving big business houses that in turn are directly or indirectly linked to the developed world, completing the vicious cycle.

The story of the rest of the developing world is worse. Corn subsidy of $20,000 per year per farmer in the US have forced corn prices in the Philippines to drop by one-third and caused distress in rural Mexico, leading to influx of people from rural areas to cities, not unlike what has happened in China.

The developed world refuses to move away from its protectionist trade policies. But it forces the developing world through the WTO to accept treaties that clearly benefit their already advanced economies. Many developing countries are being told to cut their import tariffs on agricultural products by 36 percent on an average. True, there are "Special Safeguard Measures" to protect the developing countries from a rapid increase in food imports and allow them to impose higher duties on exports. But there is a condition here. The developing countries can do so only after proving that domestic prices have fallen by 30 percent or the volume of trade has expanded by 35 percent because of the imports. That nullifies the effect of the so-called safeguard measures because by the time the developing countries can satisfy the condition, the lives of millions of their farmers would have been devastated.

It has never been in doubt that the developed world is pushing through its own agenda at the WTO (like it has done in the IMF and World Bank) with total disregard for human rights and democratic decision-making.

The developing world may agree to some of the developed countries' terms in Geneva by Friday morning (Beijing time). But it is high time the developed world honored the very principles it has been preaching: equality, justice, sustainability, food security, human rights and livelihood for all. If it doesn't, and continues its arm-twisting methods, the WTO could go the defunct way of the IMF and World Bank, and at least the developing world will not be complaining.

E-mail: oprana@hotmail.com

(China Daily 07/25/2008 page8)