Tragedy Averted At Cancun

 K Varadha Rajan

THE most significant trend emerging from the failed Cancun meet of the WTO is the growing solidarity among developing countries on key issues like agriculture and investments. In fact, it is this solidarity which ensured that the US and the EU could not force their agenda down the throats of other WTO members at Cancun. The arrival of China on the scene and the stand taken by major economies like Brazil, Argentina, South Africa, and India (in the last minute) are seen as the key factors behind this shift in power. At least 21 developing countries fought together against agricultural subsidies and more than 15 countries stood firm against Singapore issues.  This unity sent a message to the US, the EU and other powerful, dominating members of the WTO that it is not easy for them to bulldoze poorer countries into meekly accepting their terms.

For people like Arun Jaitly, who were all along declaring that there is no alternative to WTO and that the conditions of the bigwigs of the WTO must be accepted, the Cancun outcome must hopefully have made them realise that the real alternative is the unity of developing countries.

The Cancun ministerial meeting took place in the shadow of the martyrdom of a Korean farmer, Lee Kyung-Hae, who took his life during a farmers protest on September 10, the first day of the meeting, right in front of  the barricades guarding the meeting venue. Lee was the former president of the Korean Advanced Farmers Federation. He saw the unfair WTO rules as the root cause of the crisis faced by him and small farmers worldwide. This is the story of Lee as reported by the Guardian newspaper on September 16: “The Seoul Farm, 80 hectares of grazing land that has built from scratch on the steep wooded slopes of his families land, earned Lee a UN award in 1998, for rural leadership. The herd had expanded to 300 cattle and the fame of charismatic farm leader for Lee who had mastered a hostile land was growing. Then calamity in the form of a shift in international market struck. The government opened the market to imports of Australian cows, which led to a steep fall in the price of beef. The Seoul farmland bought with loans had suddenly become almost worthless.” The story of Lee also illustrates the crisis millions of Indian farmers are facing – a crisis which is pushing thousands to commit suicide. Lee and thousands of protesters collected outside the conference hall shouted anti-American and anti-WTO slogans. These protesters were not only from the poorer countries but also from the developed countries, which is a clear proof that WTO agreements are affecting the toiling masses of all countries, whether developing or developed.

The struggle, both inside and outside the conference hall, was a reflection of the struggles of millions of peoples all over the world including India from 1994 onwards against the WTO. This mighty people’s power actually stopped the further onslaught on the people by the WTO at Cancun.

WHY THE COLLAPSE?

The deadlock at the Cancun meeting has, at least for the time being, held back threats to our agriculture and our autonomy in economic policymaking in regard to investments and other related issues. But it is to be remembered that billions of dollars of agricultural subsidy by the US, the EU & Japan governments still remains and the dumping of their produce in the world market which led to suicides of thousands of farmers still persist. In fact, their attempt at Cancun has been to legalise these subsidies, which attracted powerful opposition by the developing countries.

The Cancun talks collapsed because the US and the EU insisted on continuing unfair and restricted agriculture trade which was killing the third world farmers in huge numbers. Pascal Lamy, the EU Trade Commissioner had announced even before the Cancun meeting that the EU would not cut export subsidies. The US had also announced that it would not cut domestic support. In fact, both the US and the EU have increased farm subsidies since the WTO agreements came into force even though reduction of Northern subsidies and the creation of a level playing field in agriculture was the most significant promise made at Marrakesh ministerial meeting of the WTO. The WTO has legalised the increase in subsidies through the creation of blue and green boxes. Thus, while the explicit subsidies for cereals in the EU decreased from 2.2 billion euro to 6,883 million euros, the total subsidies increased by 36 per cent when we add the 2.1 billion euro in direct payments allowed under Act 6.5 of the AOA, which the group of 21 developing nations wanted it scrapped at Cancun. The recent US farm bill brought by the Bush administration has increased agricultural subsidies by $82 billion. The US Farm Act of 2002 allows the US government to pay cotton farmers the difference between the world market price, $1.23 per kilo, and a fantasy ideal price of $1.57 per kilo. The US cotton farmers receive $3.9 billion, most of it going to the giant corporate farmers. With these subsidies, the US has doubled cotton exports and destroyed the livelihoods and incomes of nearly 250 million African cotton farmers. That is why Africans were upset and led the walkout at Cancun talks on September 14, 2003. The appalling levels of subsidy by these rich nations are illustrated by the following fact: The US and the EU are giving a subsidy of $2 per day per cow while Japan is doling out $7 per day per cow. Those who talk of cow protection in India must better note this.

The revised proposals on agriculture put forward at the Cancun meeting were too soft on the US and the EU in regard to their commitments to reduce domestic support and export subsidies; but the proposals required developing nations to reduce tariffs substantially and rapidly and indeed asked for certain tariff lines to be bound at nominal rates between 0 and 5 per cent. This implied general worsening of the distortions and unfairness in the world agriculture market. Even worse, this posed a serious danger to our agriculture and to the survival of the millions dependent on agriculture for their livelihood. That these proposals were rejected by the G-21 nations is a matter of satisfaction. However, the revised proposals have exposed the inherent weakness of the Vajpayee government’s belief that tariff instrumentality is adequate to protect this vital sector from the onslaught of the multinational agri-businesses of the US and the EU. At Cancun, it was precisely the tariff instrumentality that was sought to be blunted and made virtually useless for us.

In his message to the Cancun conference, the UN secretary general Kofi Annan has stated, “The reality of the international trading system today does not match the rhetoric. Instead of open market there are too many barriers that stunt, stifle and stop it. Instead of fair competition, there are subsidies by rich countries that tilt the playing field against the poor”. 

ROLE OF THE INDIAN GOVT

It should be noted that just as during the Doha meeting this time also the representatives of the Indian government were prepared to sign on dotted lines. There are reports that the union cabinet had authorised the commerce minister Arun Jaitly to soften the earlier rigid stand of India on at least three of the four Singapore issues on the last day of the meeting. According to The Economic Times, Jaitly had provided sufficient indications that India may be willing to compromise on two of the four Singapore issues in return for concessions from the US and the EU on agriculture. This, read along with the other statements of Arun Jaitly about a possible settlement in Cancun, shows that Indian government was ready to capitulate. But thanks to the walk out of the delegates of African, Caribbean nations and least developed countries, this tragedy was averted.

The task now before the people of India is to see that the space gained at Cancun is not allowed to be frittered away in the next three months or so when the General Council of WTO is scheduled to meet in Geneva to take the process further.