As difficult as the year 2000 was for the western world’s food industry, suffice to say it was a lot worse for their counterparts in much of sub-Saharan Africa, where – the UN’s Food and Agriculture Organisation has reported – 28 million people are facing severe food shortages, mainly because of prolonged drought and civil strife.
The situation is most critical in eastern Africa, where 20 million people face possible famine and will require food aid well into 2001. While negotiators at the World Trade Organisation face a March deadline for the end of broad debates on the shape of a new agriculture agreement, these statistics will be a stark reminder that the food needs of the whole globe must be considered at Geneva this year, not just the west.
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For although alarming figures about the collapse in confidence in meat products among western Europeans because of the latest BSE crisis may shock Berlin and Paris and worry Brussels, it is not likely to raise so much as a shrug of the shoulders in Rwanda, Kenya and Ethiopia.
The problem for EU agriculture commissioner Franz Fischler – who represents European interests at the WTO – and whoever is confirmed as George W. Bush’s trade representative, is that the interests of developing countries will have to be taken into account, if there is to be a deal which delivers lower barriers to European and American food exports.
Contrasting the general perception of the WTO as a conspiratorial clique, where grey men in suits decide the fate of the world in dark committee rooms, the world’s trade body is actually extremely democratic. Its trade agreements have to be decided by consensus, which means that even if the rest of the world had decided to slash tariffs on coconuts, the delegate of the Maldives, (population 215,000), could veto the idea.
All of which focuses attention on the formal proposals that have been made by poorer countries in recent weeks to the special session of the WTO’s agricultural committee; longhand for the new agricultural round. They do not make comfortable reading for western food companies who would
welcome the chance to sell their produce to growing economies such as the Asian tigers. These developing countries appear to want to have their cake and eat it as well.
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By GlobalDataA proposal made by ASEAN, (representing south-east Asia), is most important, given that it is arguably the strongest bloc of what was called the third world. It argues that the principle of giving developing countries special treatment should be entrenched, from the size of tariffs that they can erect to the subsidies that they can pay their exporters and producers. Take ASEAN on export subsidies: “As a first general obligation, developed countries must immediately eliminate all forms of export subsidies and commit to their unconditional prohibition. Developing countries, on the other hand, must be able to continue using existing flexibility with respect to export subsidies.” It would be difficult to be much clearer.
On the ‘blue box’ domestic commodity production subsidies that the EU is very keen to retain, the south-east Asians say they “must be subjected to similarly substantial reduction commitments leading to their elimination.” So not much help there.
For those ‘green box’ producer payments supposed to have no market-distorting effects, ASEAN wants a review to check that these subsidies really are harmless, a suggestion guaranteed to worry Washington, given that it claims American farm supports are all in this category, generating considerable scepticism abroad.
Of course, these subsidy cuts would be for the developed west. ASEAN wants grants earmarked for agricultural investment in poorer countries to be exempt from any WTO deal on reducing subsidies. Also, where food supplies are scarce, the paper says no restrictions should apply.
Given the experience of Seattle in 1999, where an attempt to launch a general global trade round was scuppered by angry developing country delegates, claiming that their interests were being ignored, it is a sure bet that the ASEAN paper will have been studied closely in the New Year break.
Western WTO member countries will be desperate to avoid another diplomatic disaster and the organisation’s secretary general Mike Moore has been at pains to stress the benefits that can be brought to poorer countries by free trade.
So when diplomats start the detailed horse-trading in April, which should lead to a final deal, it is clear that the pressure will be on to allow developing countries to retain their free hand to protect their agricultural industries, whilst extracting concessions from the developed west on tariffs
and subsidies.
Apart from the third world, recent formal proposals from countries in the formerold eastern block shows they want help too. Papers from ex-communist countries, such as Bulgaria, the Czech Republic, Estonia, Georgia, Hungary, Kyrgyzstan, Latvia, Slovakia, Slovenia, Croatia and Lithuania have asked for special treatment because of growing pains suffered during the transformation to an adult capitalist economy. “It is a strong expectation […] that the extreme vulnerability resulting from the difficult and painful process of transformation to a fully fledged market economy will be fully recognised,” says one paper.
Not that these are the only examples of an appeal for special treatment. A group of Caribbean governments has called for small developing island states to be given special treatment in a future WTO agreement on agriculture, allowing them to maintain higher subsidies for their food sectors than other countries, because of their vulnerability to world market forces, as shown in the long running banana export dispute. Dominica, Jamaica, Mauritius, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago also called for island nations to be given a temporary carte blanche right to protect their food businesses if their territories have been devastated by storms that often hit the Caribbean.
If special treatment is considered appropriate, how exactly should this care be manifested? Well, by granting storm-hit islands and former communist countries – some of whom want to join the EU – the special right to preserve lower tariffs and investment, input and interest subsidies for the time being, while the richer west removes the protection now in place for its own food sector.
By Keith Nuthall, just-food.com correspondent
