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Poorest nations opt out of WTO block Reuters, 22 Sep 2003 CANCUN (AlertNet) Like previous World Trade Organisation (WTO) ministerial conferences in Seattle and Doha, last week's Cancún meeting provided the stage for Northern and Southern trade ministers, delegates, NGO representatives and more progressive social movements to express their views about whether and on what terms international trade can be a vehicle for poverty reduction. Almost everyone present in Cancún, whether inside the conference centre or out on the streets, agreed on one thing -- that the WTO is currently falling short of delivering for developing countries and the world's poor. But there are real differences between those who believe that the WTO can be made to work for poverty reduction and development and those who do not. Very crudely, there are three camps. First there are those who believe that international trade, guided by a multilateral rules-based framework -- the WTO -- has the potential to bring major benefits to poor countries and peoples and that the so called "development round" launched in Doha two years ago provides the road map for success. The European Union chief negotiator Pascal Lamy falls into this camp, though by the end of the Cancún conference he had famously declared that the Doha round was in "intensive care". The second camp is made up of those developing countries and NGOs actively involved in WTO negotiations who share a belief in the potential of trade -- regulated through a multilateral system -- but have long pointed to the deep flaws in the current rules and the manner in which negotiations have been proceeding. Representatives of this camp have watched development priorities drop off the agenda, which is almost entirely dominated by the rich countries, but still believe that the WTO can be reformed for the better. The third camp comprises those who believe that the WTO and its trade liberalisation agenda is, simply, bad for the poor. Members of this anti-globalisation, pro-localisation camp were on the streets of Cancún demanding the abolition of the WTO. At the heart of much of the debate among all groups is the sticky question of agriculture. The European Union and the United States promote free trade yet continue to subsidise their farmers to the tune of $1 billion a day. Odour Ogwen of the Kenya-based organisation Econews Africa likes to point out that the level of payment that goes to cows in Europe makes it "better to be a cow in Europe than a Kenyan in Kenya." Yet at Cancún, as before, the rich countries were deeply resistant to budge on this issue or even enter into meaningful discussions about subsidies. In fact the talks collapsed before the real negotiations on agriculture had even begun. LEVELING THE FIELD For the developing world, trade in agriculture is a double-edged sword. On one hand agriculture is a sector that could bring increased national wealth and improved livelihoods if developing countries were able to export freely to rich country markets. On the other hand, because the vast majority of people in developing countries depend on agriculture for their livelihoods and food security, an increase in imports threatens to undercut and undermine millions of vulnerable small farmers. And given the subsidies paid to rich country farmers -- payments that few developing countries can afford to make -- the vulnerability of small farmers in the South is exacerbated by grossly unfair competition. Moreover, rich countries demand that the poor countries further reduce tariffs, the one instrument poor countries have to protect their farmers from unfair competition. But not all poor countries are alike. The newly formed G21 alliance of developing countries that generated such excitement during the Cancún talks is primarily comprised of large agricultural exporters, including Brazil, India and China. The G21 proposed a radical alternative to the official negotiating text, demanding serious reductions in rich countries‚ subsidies and greater market access commitments from the rich countries than would be required from developing countries. The main interest of the G21 countries is in leveling the playing field between Northern and Southern agricultural exporters, so that the developing countries are better able to compete in international markets and reap greater benefits from agricultural trade. MARKET ACCESS These countries are looking at the export side of the equation and aggressively pushing for a bigger share of the market. They have support from many NGOs who argue that trade has enormous potential as a motor for poverty reduction. On the other side, despite the cheering of the G21's assertive stand, there are those who will no doubt worry that the focus on market access to the North for Southern agricultural products is a dangerous one. When Oxfam launched its Make Trade Fair campaign two years ago it was mistakenly read by many as a campaign only for greater market access. The response from Walden Bello of Focus on the Global South was that "monopolistic export agricultural interests that will be the main beneficiaries of greater agricultural market access to northern markets." He argued that a focus on market access would undermine the effort of many small-holder-based agrarian movements in the South to reorient production from export to small-farmer based production systems producing principally for the local market. The fear is that diversion from food staples to cash crops increases vulnerability and dependency on market fluctuations and undermines food sovereignty. At the same time, Bello and others like him worry that a focus on market access will also increase pressures on developing countries to open up their markets as the quid pro quo for the accelerated opening of markets in the North. Speaking in his role as chair of the G21, Brazilian Foreign Minister Celso Amorin said, "The fight for social justice is not only outside of the WTO on the streets, but also with us, inside the WTO." At Cancún the G21 staunchly defended the right of developing countries not to open their markets to the same degree as the rich countries, yet fears remained from smaller developing countries that this right was not placed high enough on the G21's agenda. SMALL FARMERS MISSING How many people heard about the G32 group? Far less noticed, but very much present, this group of less developed countries came together at Cancún to articulate a fear that small farmers were missing from the agriculture discussions. Many of these countries, including Kenya, Uganda, Zambia, Pakistan, Honduras, Nicaragua, the Philippines, held sympathy with the G21 but could not bring themselves to join the alliance because they felt that its position failed sufficiently to promote countries' right to defend vulnerable agricultural sectors from any tariff reductions at all. In other words, they expressed a more defensive and vulnerable position, which was about protecting their small farmers from being crushed by imports. This concern of the G32 group was widely felt by groups inside and outside of the WTO talks. The suicide of the Korean farmer Lee Kyung-hae provided the shrillest articulation of the message, which thousands of Mexican and Korean farmers had made their way to Cancún to support. The Honduras-based small-farmers' organisation Via Campesina (Peasant Way) immediately pointed out that "the act of the Korean peasant represents the most energetic protest and the sheer desperation before the lack of alternatives for small farmers and poor people all over the world." Others who found their way into the conference center to silently hold up small placards, said it even more simply and starkly: "The WTO kills farmers." At one press conference Indonesia's trade minister Rini M. Sumrno Soewndi spoke about the liberalisation of the soya market in her country leading to imports soaring by 40 percent and the ruin of 800,000 local farmers who were unable to compete with heavily subsidised Organisation for Economic Cooperation and Development country soya. Oxfam circulated briefing papers pointing to the destruction of the livelihoods of thousand of Chinese sugar farmers, as a consequence of the inflows of E.U. subsidised sugar immediately following China's accession to the WTO. Mexican corn farmers have also suffered as a result of the liberalisation of Mexican markets under NAFTA and the continuation of U.S. subsidies, amounting to a flood of cheap corn imports destroying hundreds of thousands of livelihoods. Many Mexican peasants argued in Cancún that agriculture should be removed from the WTO framework. Yet, most developing countries along with NGOs such as ActionAid and Oxfam believe that the fight to protect small farmers must take place within the WTO. Why? "We don't like the WTO as it is, but the realpolitik is that there is currently no more tolerable alternative," said Gonzalo Fanjul, head of policy for the Spanish Oxfam, Intermon. "The alternatives are bilateral and regional trading agreements which actually make poor countries even more vulnerable," he said. "Of course the WTO is facing a real crisis of legitimacy, but at least a rules-based regime provides the potential for leverage on the part of developing countries. "This conference has been an example of how developing countries standing together in the WTO can exercise real power," Fanjul said. FAIR USE NOTICE: This document contains copyrighted material whose use has not been specifically authorized by the copyright owner. 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