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New WTO Pact Threatens World's Poor Farmers & Rural Villagers

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Published on Monday, August 2, 2004 by

International Groups Denounce World Trade Pact

by Jim Lobe

WASHINGTON - While negotiators from the United States and the European Union
(EU) declared victory in rescuing global trade talks in the early hours on
Sunday at the World Trade Organization (WTO) in Geneva, international
non-governmental organizations (NGOs) denounced the results as a sell-out of
poor countries and the environment.

"After days of closed-door negotiations, rich countries have delivered a
deeply unbalanced text as a take-it-or-leave-it option," said Celine
Charveriat, head of Oxfam International's Geneva office. "This puts
developing countries in the unfair position of having to accept a bad deal
or reject and get blamed by the U.S. and the EU for failure."

The final deal, which was announced at about 2:00 a.m. Sunday morning,
appeared to put back on track the Doha Round of international trade
negotiations, which was launched by 147 nations in Abu Dhabi at the end of

Bush's Trade Representative Robert Zoellick smiles before a news conference
at the World Trade Organization (WTO) headquarters in Geneva early August 1,
2004. Friends of the Earth International (FoEI) also complained about what
it called "undemocratic procedures and intense pressure" from the U.S. and
the EU in the rush to secure a final accord. REUTERS/Denis Balibouse

The Round, which seeks to liberalize trade in a host of economic sectors,
broke down at a ministerial meeting in Cancun last September when a group of
poor countries led by Brazil and India demanded that Washington and Brussels
commit themselves to sharp reductions in agricultural subsidies that they
argued were making it impossible for farmers in poor countries to compete.

The World Bank has estimated that estimated US$300 billion in annual
subsidies and other support given to farmers by western governments are
costing developing countries some $60 billion a year, more than the total
amount of official economic aid that these same governments and
international agencies, like the World Bank, provide them annually in grants
and loans.

The agreement on a framework for further negotiations was concluded by a
small group of countries, including the U.S, the EU, Australia, India and
Brazil, that were delegated to hammer out a consensus for moving forward.

"Today's decision is a crucial step for global trade," said U.S. Trade
Representative Robert Zoellick shortly after the WTO secretariat announced
the accord. "After the detour in Cancun, we have put these WTO negotiations
back on track."

The Brazilian delegate, Foreign Minister Celso Amorim, also put the best
spin on the final agreement, insisting, "This is the beginning of the end of
(agricultural) subsidies. It is a rare combination of social justice and
trade coming together."

But the NGOs were considerably more skeptical in their assessments,
insisting that the results were considerably less balanced than Amorim had

Calling it a "face-saving exercise," Greenpeace said the final result was
"highly imbalanced in favor of rich countries, which make vague promises in
return for key concessions by developing countries," particularly in opening
their markets wider to manufactured goods, services, and agricultural
exports from wealthy nations themselves.

In addition, the Amsterdam-based group charged the accord will "open the
door for further liberalization in sensitive sectors such as fisheries and
the trade in forest products."

"The deal is not a victory for multilateralism, but a dangerous fudge,"
said Daniel Mittler, Greenpeace International Trade and Policy Advisor. "The
secretive process practiced in Geneva this week once again showed that the
WTO is an undemocratic organization mainly responsive to rich-country
interests. The WTO does not seem capable or willing to deliver equitable and
sustainable development for all; it only seems to be interested in ensuring
its own survival."

Friends of the Earth International (FoEI) also complained about what it
called "undemocratic procedures and intense pressure" from the U.S. and the
EU in the rush to secure a final accord.

"Corporate lobby groups will be the big winners, the environment and the
poor the big losers," said FoEI's Alexandra Wandel, point in particular to
the agreement on Non-Agricultural Market Access (NAMA), a part of the
framework accord which calls for the liberalization of all natural
resources, particularly in fisheries, gems, and mining. NAMA would make it
much more difficult for developing countries to protect these resources from
foreign investors or collect revenue from their export.

"The NAMA agreement could further deepen the de-industrialization crisis in
these countries, thus accelerating unemployment and poverty and forcing
countries to rely heavily on unsustainable and harmful exports of natural

At the same time, FoEI charged that the "so-called concessions" made by the
EU and the U.S. in agricultural negotiations - a commitment to cut some farm
subsidies by 20 percent - may "turn out to be empty promises."

"The commitment to eliminate export subsidies credits is missing any
substance as no end-date is mentioned in the text," the Brussels-based group
said. "On domestic support for agriculture, language in the framework
agreement clearly opens the door for the EU and the U.S. to maintain nearly
their entire level of current subsidies and to use these to continue the
dumping of agricultural goods in developing-country markets. At the same
time, developing countries could be forced to give up import protections
used to achieve food sovereignty."

That criticism was echoed by Oxfam which called the agreement "deeply
disappointing and not sufficient to meet the needs of developing countries"
and warned it may indeed cause the Round to collapse before their scheduled
completion in late 2006.

"The draft is unacceptable because it fails to meet the needs of developing
countries," said Charveriat. "Presented as a breakthrough, the text on
agriculture does little to address the problem of export dumping, instead
introducing dangerous loopholes for yet more subsidies from the U.S."

She stressed that the framework failed to address the issue of U.S. cotton
subsidies that were recently ruled illegal by the WTO itself. Instead, the
issue of cotton is to be folded into overall agricultural negotiations
without any specific commitment to eliminate them.

Production in the heavily subsidized U.S. cotton industry has had the
effect of driving down global prices for a key commodity to levels that
threaten the livelihoods of millions of small-scale cotton farmers in poor
countries, particularly in West Africa. To gain an agreement from key West
African cotton-producing nations - namely Benin, Burkina Faso, Chad and Mali
- Washington agreed to accelerate cuts in its subsidies and mobilize more
development assistance. On the other hand, the four countries - the last
three of which are among the world's poorest nations - agreed to lower
tariffs to agricultural imports, a concession likely to increase U.S. food
exports to them.

But Charveriat said the deal was unfair, particularly because the WTO had
already ruled that the U.S. subsidies were illegal. "This is a serious
betrayal of developing countries and will have massive implications for the
10 million West African farmers whose livelihoods are currently undermined
by U.S. export dumping," she said. "There are no cast-iron commitments here
and no clear timeline for reform."