PRESS RELEASE

Focus on the Global South

13 February 2003

AGRICULTURE PROPOSAL WILL INCREASE DUMPING, UNEMPLOYMENT AND HUNGER

Developing Countries Must Reject Harbinson Text

WTO‚s Agriculture Committee Chair Stuart Harbinson has released his first draft modalities paper on agriculture, ahead of this weekend's mini-ministerial meeting in Japan where agriculture is expected to be high on the agenda. The exclusive Tokyo gathering will be attended by just 25 trade ministers.

The negotiating modalities put forward in Harbinson's paper are a sham. They are intended to give the green light to transnational agri- businesses to take over developing countries‚ agricultural markets. More dumping of cheap subsidized food can be expected and developing countries forced to import more food will also be importing unemployment. Hundreds of millions of small farmers in India, China, most of Africa, countries in South Asia and Southeast Asia, as well as Latin America will be faced with unemployment and poverty as domestic markets are flooded with cheap subsidized imports and commodity prices plunge.

The proposal is clearly in line with the aims of the world agricultural exporters as outlined by President Bush when he introduced the US Farm Bill: „We want to be selling our beef and our corn and our beans to people around the world who need to eat‰.[1] The EU‚s policy ˆ „to consolidate its position as a major world exporter‰˜will also be advanced [2] as will the interests of major Cairns Group exporters, Australia, Canada, New Zealand.

The draft seems to deliberately ignore many of the proposals put forward by developing countries to protect their producers against dumping and address the problems of rural unemployment and food insecurity plaguing a large number of developing countries.

Focus on the Global South calls on developing countries to reject the text because it will not rebalance the inequity in agricultural trade. At stake are farmers‚ livelihoods; access to food especially of women and children; and given the centrality of the rural sector in the South, also the long-term economic development of most developing countries.

1) Dumping to Escalate: Indirect forms of export subsidies are being legalized and legitimized.

The present Agriculture Agreement‚s domestic support loopholes remain. Export subsidies and AMS (trade-distorting subsidies) will be shifted into the Green Box (supposedly non-trade distorting). There are no caps on the Green Box. An overall cap on total Green Box support, called for by developing countries, has not been taken up in the Harbinson text. The Green Box is where OECD direct payment programmes are housed. Such subsidies to producers provide an implicit support to agri-corporations, allowing them to buy food cheaply from Northern producers, and export food at prices so low it undercuts domestic producers in developing countries.

2) The treatment of strategic products‚ will increase, not abate hunger and food insecurity.

The draft says that strategic products (the number to be determined) will have lower tariff cuts ˆ 10 per cent, with a minimum of 5 per cent per tariff line. Most of the staple crops and livelihood crops for developing countries are exactly those that are being highly subsidized in the US and EU ˆ corn, wheat, rice, soya, dairy products, sugar, beef. Some developing countries have asked for total exclusion of food security crops from further commitments. Instead, they are again called upon to reduce these tariffs. One Southern delegate said: „Some countries are already grappling with very low tariffs on their sensitive food security crops. The required 10 per cent cut will have very negative effects‰.

3) Rebalancing /Countervailing Mechanism Denied to the South, Tariffs Instead to be Slashed

Developing countries have asked for the structural imbalance in agricultural trade to be redressed, via a rebalancing /countervailing instrument that can defend their producers from the $1 billion a day OECD subsidies in agriculture. Such an instrument would allow countries to put up tariffs on crops which are subsidized by the OECD by amounts proportionate to the subsidies. These proposals have been ignored in the Harbinson text. Instead, for developing countries, tariffs greater than 120 per cent are to be slashed by 40 per cent. Those between 20 ˆ120 per cent decreased by 33 per cent. No linkage to OECD subsidies is made.

4) Real Special and Differential Treatment Provisions (SDT) for the North!

Due to the structural imbalances, the real SDT provisions will flow to developed countries. The SDT provisions for developing countries, littered throughout the text are intended to pull the wool over the eyes of developing countries‚ Ministers. Eg. best endeavour (non- mandatory) clause about providing more market access to developing countries‚ products; expanding the Green Box for developing countries‚ to subsidise small farmers when they cannot afford to do so anyway.

5) Special Treatment to Developed Countries on the Special Safeguard Provision (SSG) for another Decade

Developing countries have requested the use of a temporary safeguard measure for all products, so that in case of import surges or price drops, they are able to have recourse to a temporary additional tariff or quantitative restriction. The current Safeguard provision is available to only 30, mostly developed countries. The draft says that developed countries can continue to use the SSG until the end, or two years past the end of the implementation period for tariff reductions (ie another 5-7 years upon completion of the Doha programme). Developing countries‚ recourse of the SSG will be limited to the few „strategic products‰ (probably 2-3 per country) identified. And to crown it all, it says that this access to the SSG will be dependent on completion of a review to be conducted to make „operationally effective‰ the current SSG! The Special and Differential Treatment negotiations

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[1] Lawhon, H 2002, Brief Analysis No. 413, National Centre for Policy Analysis, August 15.

[2] Commission des CE 1997 ŒAgenda 2000 ˆ Volume I Communication: Pour une Union plus forte et plus large‰, DOC/97/5

Contact:

Focus on the Global South

Aileen Kwa, Geneva (41) 0 79 3713774

E-mail: aileenkwa@yahoo.com

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