Developing countries must ensure that WTO is not reduced to a permanent satellite of Washington and Brussels
An electoral debacle for the ruling party in a major state is one thing. But the failure to safeguard the interests of hundreds of millions of poor farmers will be a much bigger embarrassment. That is the predicament the Narendra Modi governments faces in less than five weeks. The verdict of the people in Bihar, India’s third-most populated state with around 100 million people, came as a body blow to Modi and his party. The inescapable lesson is that people want inclusive economic and social development with justice.
But, on a larger global stage, the Bihar electoral result also resonates with another message. It is whether governments in developing countries can secure multilateral justice for their subsistence/livelihood farmers. The existing global trade rules do not favour the wretched of the earth. That these rules are rigged in favour of rich countries is conclusively established by numerous studies. Little wonder that governments in industrialized countries continue to provide tens of billions of dollars regardless of the distortions they cause in the international markets. The cotton farmers of West Africa have suffered untold misery because of the American subsidies. The US, for example, provides around $50,000 to its farmers on a per capita basis annually. In contrast, India offers around $200 per farmer. And the number of people dependent on farming in India runs into hundreds of millions while in the US they add up to a little more than 25,000 farmers.
Come 15 December, the farmers of India and other countries will know whether their governments stood for their bread-and-butter interests at the trade ministerial summit of the World Trade Organization (WTO) in Nairobi, Kenya. The meeting is also an acid test for the future of WTO and whether it continues to pursue the unfinished Doha Development Agenda trade negotiations.
The US and the European Union started the Doha negotiations in 2001, immediately after the 9/11 terrorist attacks, promising that “the needs and interests of developing members" will be squarely addressed. After adopting intransigent positions during the past 14 years, the two trade elephants are working round the clock to bury the Doha negotiations at Nairobi.
More insidiously, the US and the EU along with other industrialized nations have ensured that the iniquitous rules of the previous Uruguay Round for farm subsidies are left untouched. Of course, it suits them to continue with their farm subsidies on an increasing scale. Hence, the sustained attempt to terminate the Doha negotiations in Nairobi without reforming those distorting farm subsidies.
Last month, India hosted a meeting of African leaders in New Delhi. When trade ministers meet in Nairobi, Modi said at the meeting, they should ensure that the “the Doha Development Agenda of 2001 is not closed without achieving those fundamental principles". They should also “achieve a permanent solution on the public stockholding programmes for food security and special safeguard mechanism (SSM) in agriculture for the developing countries," he said.
These two outcomes are central to the survival of poor farmers in India and other developing countries. The public stockholding programme enables governments in the developing world to procure food grains at market prices from subsistence farmers and then distribute them at cheaper prices to people for their daily consumption. But the rules governing the public stockholding programmes are filled with conflicting provisions. While the public stockholding programmes figure in the so-called green-box subsidies that are exempted from reduction commitments, they also come under the purview of trade-distorting subsidies. This anomaly needs to be corrected.
In a similar vein, SSM is critical for preventing unforeseen surges in imports of agricultural products coming from subsidized farmers of rich countries. The G-33 coalition of 47 developing countries led by Indonesia, in which India, China, and other countries of Africa, Asia, and South America are members, have offered simple proposals based on the decisions taken in the Doha negotiations.
These two issues could have been easily sorted out over the last two years. Indeed, the outcome on the permanent solution for public stockholding programmes for food security is mandated as part of the decisions taken last year, following a bilateral agreement between the US and India.
But the industrialized countries chose to adopt a vicious form of diversionary tactics time and time again. Last week, the US, the EU, Australia, Canada, Norway, along with Chile, Colombia, Paraguay and Pakistan, among others, scuppered the proposed outcomes on both the public stockholding programmes for food security and SSM, citing extraneous reasons.
During a meeting of heads of delegations at WTO on Friday, Chinese trade envoy Yu Jianhua pointed a finger at these countries for having walked away with the trade facilitation agreement last year while turning their backs to the remaining issues of the DDA.
Indeed, New Delhi had blundered by signing the bilateral agreement with the US on the public stockholding programmes without securing cast-iron guarantees last year. It should have known that there was never any genuine intention on the part of the US and other countries to deliver on the promises they made either in the DDA or at the Bali ministerial meeting.
The reasons for closing the round by these countries are as clear as daylight. They want to transform WTO to serve their egregious interests and sweeten bilateral deals struck among them. The developmental agenda of the DDA has almost been killed by these countries.
China, India, South Africa, Indonesia and other countries should form a robust alliance to prevent these sordid developments at the 10th ministerial conference. The developing countries must ensure that WTO is not reduced to a permanent satellite of Washington and Brussels. In short, the Modi government has an opportunity to prove that it stands for its farmers when push comes to shove at Nairobi. Otherwise, poor farmers of Bihar, Uttar Pradesh, West Bengal, Tamil Nadu, and Kerala will never forgive.