Two alliances were formed. The Group of 21 (G21) underdeveloped countries led by Brazil and India pushed for agricultural trade reforms, demanding drastic cuts in developed countries’ farm subsidies and trade barriers.
The Group of 23 led by Indonesia meanwhile called for crop exemption in areas vital to food security and rural livelihood, and also demanded the use of a special safeguard mechanism against import surges of cheap crops. The Philippines was a member of both groups.
In response, the U.S. asked poor countries to give something in return while the EU pushed for the Singapore issues. By the time the agriculture text was circulated to member-countries, not a single line echoed the major concerns of poor countries. The contentious position of poor countries with regards agricultural trade counter-attacked the aggressive refusal of the U.S. and EU to drop their subsidies. Eventually, trade negotiations broke down as no consensus was formed, since draft declarations in the first place were not consulted to all members and instead were written by committee chairs.
The battle rages on
Poor countries however suffered a major setback last year. Despite their protests, a Framework on Modalities was accepted at the July 2004 General Council. The Framework did not contain clear commitments from the U.S. and EU on reducing their domestic supports, but insists poor countries to agree on formulas for tariff reduction, a framework for Non-Agricultural Market Access and the inclusion of at least one of the Singapore issues.
The endorsement has set in motion the completion of agreements under the Doha agenda to be accomplished this year in Hong Kong, as if Seattle and Cancun never happened.
Believing they have won the agriculture battle, rich countries are now gearing up on expanding trade under GATS and opening negotiations for NAMA, as well as the Singapore issues.
Implementing a fully-expanded GATS and NAMA are seen by poor countries as a double whammy that would bury the final nail on their attempts to retain the few protected sectors in their small economies and their chances of being industrialized themselves.
The problem with GATS is that liberalizing the services sector such as banking and finance, and transportation and communication, would only give substantial and clear benefits to industrialized countries which have relatively advanced service sectors. Poor countries however are relying on negotiations on subsidy, safeguards and government procurement in order for the GATS to have any use to them. Otherwise, their weak service sectors would be destroyed by bigger foreign competition.
Nevertheless, the biggest impact of GATS would come once it encompasses basic services such as public utilities. Privatization of water and power utilities in the Philippines has proven detrimental to consumers in terms of increased service rates. Fundamentally, government’s responsibility of ensuring basic services to its people would be severely compromised once these are fully under corporate control.
The NAMA on the other hand essentially would weaken local industries as it seeks elimination of import tariffs on almost all industrial products. The NAMA is expected to hasten the entry of cheaper industrial imports and provide undue foreign competition to small, struggling industries in poor countries.
The NAMA in itself is contradictory under the concept of fair trade. Reducing tariffs on industrial imports defeats the purpose of an industrialization program, wherein countries need to protect certain products and allow access for other products to develop their industrial base. What free trade advocates refer to as “competition” needed by local industries to improve their production is meaningless when the playing field is uneven from the start. Even Texas steel millers in the U.S. have complained against EU steel exports causing job losses in their factories.
Thus, the following months leading to the Hong Kong Ministerial would probably be the most contentious period yet both for rich and poor countries. While rich countries are trying to ram negotiations away from public scrutiny, poor countries are given another chance to forge their position and continue to fight for policies that would genuinely make global trade responsive to national needs instead of catering to corporate greed.
The Hong Kong Ministerial is an important venue for citizens and various people’s groups to renew their militant stance against unfair trade. This year, like the past ten years, they have relentlessly raised public awareness against the WTO and its disastrous effects on the economies and livelihood of Third World countries. With a report by Somayyah Abdullah / IBON Features / Posted by Bulatlat
IBON Features is a media service of IBON Foundation, an independent economic policy and research institution. When reprinting this feature, please credit IBON Features and give the byline when applicable.
