Free Trade Agenda hits major snag in Cancun

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The devoloping countries have formed a block of opposition to the free trade agenda espoused by the major industrial nations including the US and the EU. As reported in the Manila Times, Trade Secretary Manuel A. Roxas II, in a statement today, said the failure of the ministerial meeting in Cancun is a victory for the developing nations. Roxas says "the talks actually underscored the fact that WTO meetings can not be always dominated by richer countries".

The tough stand taken by the developing countries and subsequent failure of the talks, according to a recent report, has put the whole international trade system in deep doubt, to the point of where countries are considering to regulate trade through multilateral treaties rather than through the WTO. The reporter said that world trade is at an important crossroads. A statement by Romano Prodi, president of the European Commission, seems to agree.

The Center for Science and Environment in India has picked up an article that outlines the contentious issues which led to the Cancun debacle, in their recent newsletter.

The fight is on between the defenders of free trade and the advocates of fair trade.

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A fortnightly news bulletin from the Centre for Science and Environment, India, to our network of friends and professionals interested in environmental issues.

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DON'T MAKE THE WORLD DYSFUNCTIONAL

It is interesting how the coalitions of the willing and the wanting shift in this world. When it comes to negotiations on ecological globalisation -- conventions from climate change to biodiversity protection -- the powers almost always align as follows: on one side, the US flanked by its partners (Japan, Canada, Australia and New Zealand); on the other the European Union (EU), supported willingly or hesitatingly by
developing countries. But when it comes to negotiations on economic globalisation, the chessboard changes. In most cases, trade negotiators from developing countries find the US full of empathy for their concerns, while the EU is seen as protectionist, mean and antagonistic to developing country aspirations for a larger share of world trade.

Why does this happen? After all, negotiations on a fairer world are equally negotiations for a more sustainable world. For instance, the insistence on steep reduction in emissions of the industrialised world -- to provide ecological space for poor countries to grow -- is no different from the insistence on reduction of subsidy on agriculture in the rich world to secure livelihoods in the poorer parts.

How, then, this contradiction in the positions which shape world politics? Politics isn't prostitution. Or is it? Or, could it be that we have also not forcefully articulated our position -- that the brown (development) and the green (environment) agenda are integrated for us? If so, then let it be said now. We are not part of a world made dysfunctional by the separation of business and right livelihoods.

Take agriculture, on the agenda of the World Trade Organization ministerial meet in Cancun in September. That the global trade system is rigged against farmers in the developing world is accepted by the most fervent of free-trade advocates. Hypocrisy compounds outrage here; the US and EU have systematically
unlocked our markets for their industrial goods and services, but have not reciprocated when it comes to opening up their farming sector -- an arena we can compete fairly in. As a result, economic globalisation has become a one-way street. The industrialised world spends an astronomical US $1 billion -- a day -- on subsidies to the farming sector. Just think, a European cow nets an average of US $2 a day on subsidy alone. Ridiculous. And as with most global negotiations, when push comes to shove, the EU and the US have aligned. With their initiative announced just days before Cancun, they will hope to continue this rigging game.

In this unequal world, the issue of equal standards -- on environment, health and technical parameters -- becomes a contentious one. Sanitary and phytosanitary standards, imposed by the rich world for its public health purposes, are seen as a camouflage for trade restrictions. For instance, Germany rejects a consignment of Indian tea. It is found to contain excessive pesticide. Tetradifon (a pesticide the Germans produced then later banned) is detected, at levels higher than EU standards, but within the limit prescribed by the US. A further twist: the Codex Alimentarius Commission, which fixes benchmark specifications, has not any standard for Tetradifon. So: is the German ban about health, or politics? Indian officials argue that tea meets the standards set in the Prevention of Food Adulteration Act, 1954, but do not explain that we have no standards for pesticide residues. Without data from India on pesticide safety limits -- generated by responsible science and hard research -- this was and will be a losing battle.

I think we must fight this battle differently. I agree in many cases, standards the industrialised world sets are unfair and unattainable. But, the time has come to realise we cannot hide behind that excuse called poverty anymore. Standards set for public health purposes are important. Not just for the rich of the world, but even more so for the poor. It is entirely in our interest to attack the cause, reduce contamination; we are too poor to grapple with the outcome, the crippling burden of disease.

We have to articulate this. But we must then demand that the terms of negotiation change. It has to be explained that our part of the world is getting contaminated because of globally rigged agricultural and industrial policies and that this must change. Fast.

Firstly, poor farmers compete in a world of overproduction, and cheap because heavily subsidised products. They over-work the land, over-fertilise it, over-use pesticide -- all to increase production. They devalue the land and their labour to compete in unfair terms of trade. Global markets do not allow them to capture the ecological costs of what they produce. Therefore, sustainable agriculture is not possible, without removing distorting subsidies in the North. Nobody can tell us otherwise.

Secondly, developing country governments are spending too little on domestic support to create rural infrastructure for water security and biodiversity security, both critical to sustainable agriculture. We have to spend more, not less, on agriculture.

Thirdly, the world trading system does not provide a product liability on the manufacturer. While it rewards the inventor through the patent system, it does nothing to penalise the same inventor if the product is found to be toxic or environmentally damaging. Today, products are introduced first. Then, research reveals how toxic they are. Then, standards are tightened. If inventors need incentives (patents) then they also need disincentives (liability) so that they do hard and long-term research before rushing to the market.

As we go to Cancun, we need to make it clear that for us, development and environment go hand and hand. But we want less free-trade rhetoric. And we definitely want less hypocrisy, particularly from the EU. They must make their environmental agenda match their development agenda. Just as we have.

-- SUNITA NARAIN

WRITE TO THE EDITOR: editor@downtoearth.org.in

Here you can read this editorial where it was first published.

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Related article

Free trade is not the solution

And here a recent AP wire story as reported on AOL News

WTO Trade Talks Collapse in Mexico

By Niko Price, AP
09/14/03 22:36 EDT

CANCUN, Mexico (Sept. 14) - World trade talks collapsed Sunday amid sharp differences between rich and poor nations, a blow to the World Trade Organization that many poor countries called a victory against the West.

It was the second time WTO talks have collapsed in four years, and a major setback to efforts to regulate the world's trade. EU Trade Commissioner Pascal Lamy said the round of talks wasn't dead, "but it certainly needs intensive care."

"We could have gained - all of us," he said. "We lost - all of us."

An increasingly powerful alliance of poor but populous farming nations said that while they didn't achieve the trade reforms they wanted, they found a new voice to rival the developed world.

"The developing countries have come into their own," said Malaysia's minister for international trade and investment, Rafidah Aziz. "This has made it clear that developing countries cannot be dictated to by anybody."

In the end, it was the diverging agendas of 146 member countries that split delegates beyond the point of repair.

Poor nations, many of which had banded together to play a key role in negotiations, wanted to end rich countries' agricultural subsidies. European nations and Japan were intent on pushing four new issues that many poor countries saw as a complicated and costly distraction.

Many poor countries accused the United States and Europe of trying to bully poor nations into accepting trade rules they didn't want.

"Trade ministers have been pressured, blackmailed," said Irene Ovonji Odida, a delegate from Uganda.

The United States blamed some countries, which it didn't name, that it said were more interested in flowery speeches than negotiations.

"Some countries will now need to decide whether they want to make a point, or whether they want to make progress," U.S. Trade Representative Robert Zoellick said.

His comments appeared directed at a group of mostly poor nations - often known as the Group of 20-plus - that emerged as the major opposition to the U.S. and European positions. The group represents most of the world's population and includes China, India, Indonesia and Brazil.

Leaders of that group said they had brought concrete issues to the table that would be the basis for future trade talks.

"We eme