DEBORAH
JAMES IS A LEADING VOICE IN THE fight for just rules in the global trade order.
She is the director of International Programmes at the Centre for Economic and
Policy Research, a Washington, D.C.-based think tank that was founded in 1999
as part of the alter-globalisation movement. Deborah James had previously
worked at Global Exchange, where she was an expert in the unfair trade policies
that emerged out of the “globalisation” era of the 1990s. As the director of
the World Trade Organisation Programme at Public Citizen’s Global Trade Watch,
she participated in the debates leading up to the WTO’s Doha Round, which began
in 2001. Deborah James also served as the first executive director of the Venezuela
Information Office in Washington, D.C., an organisation that sought to intervene
in the public debate on the progressive social transformation under way in
Venezuela. In this interview, Deborah James spoke about the ongoing tussle in
the WTO around the question of food security. This debate is germane to India,
whose government played a role at the last WTO meeting. Excerpts:
Currently,
there is an open-ended negotiation on global food security that must produce
some kind of consensus for the WTO by December 2015. What divides the WTO
member states over the idea of food security?
The
WTO has a myopic focus of merely increasing trade. There are many downsides to
holding a discussion on food security at the WTO as a result. It would be
better to hold these negotiations in the Committee on Food Security at the Food
and Agriculture Organisation [FAO], which has a better track record of being
sensitive to the need to guarantee food security. No member is proposing to
take the WTO out of the discussion on agriculture, however. There are many who
argue that to remove agriculture from the WTO would only make global
agricultural trade much more unfair.
The
problem is that it is the WTO, not the FAO, which regulates agriculture and
trade. Thus, WTO obstacles to food security must be removed. Developing
countries should be allowed to invest in their own agricultural production and
feed their own populations. This would allow these countries to no longer be
dependent on global food aid. Public stockholdings for food security should be
welcomed, as should protection for markets against import surges through a
workable special safeguard mechanism. Countries that subsidise agriculture, as
many developed countries do, should not be able to export that food at subsidised
prices because it competes unfairly with local farmers and prices them out of
their own markets, diminishing local production in the long run.
The
process under way should revise WTO rules in line with the global consensus on
agricultural investment and food security. Millennium Development Goal no. 1
called for the eradication of poverty and hunger. The current rules at the WTO work
against this goal. They need to be revised urgently.
You
talk of the “global consensus on food security”. Could you elaborate on this?
Every
international body that deals with agriculture has come to recognise the need
to prioritise food security over simply promoting trade. While the original
Rome Declaration on Food Security in 1996 emphasised ensuring food security
through market-based mechanisms, the 2009 World Summit on Food Security placed
emphasis instead on national investments in agriculture. The African Union
announced in the “Maputo Declaration” in 2004 the commitment by each country to
invest 10 per cent of national budgets in agricultural production; 2014 was the
African Union’s Year of Food Security. Olivier de Schutter, the former United
Nations Special Rapporteur on the Right to Food, has detailed how WTO policies
are incompatible with the right to food. He wrote a paper on this, which caused
a massive uproar at the WTO [de Schutter’s 2011 paper is entitled “The World
Trade Organisation and the Post-Global Food Crisis Agenda: Putting Food
Security First in the International Trade System”]. De Schutter highlighted the
importance of developing countries maintaining food reserves, as well as the
importance of protecting their markets from international market volatility.
The
policies that people like de Schutter talk about amount to subsidy regimes and
other kinds of protective measures. Does not the United States, which is
opposed to such regimes, have a subsidy regime in place for its domestic food
production?
Yes,
this is the case. The U.S. is the world’s largest agriculture subsidiser. In
2011, it spent over $139 billion for domestic support, double the subsidy paid
out in 1995. Most of this is for food stamps for the poor, something similar to
the public distribution system in India. But $15 billion of this was for
overtly trade-distorting support. The European Union [E.U.] also provides
domestic support—to the tune of $79 billion in 2013.
No
wonder that the U.S. is often taken to the WTO on charges that its farm
subsidies distort the level playing field. It has lost many of these cases.
U.S. cotton subsidies alone have so depressed global cotton prices that Brazil
has twice won WTO cases against the U.S. But rather than change the subsidies,
the U.S. pays off Brazil to the tune of hundreds of millions of dollars.
Sadly,
this leaves less politically powerful small farmers in Benin, Burkina Faso,
Chad and Mali in the dust. In 2013, despite having its own domestic food
security provisions, the U.S. blocked negotiations in the WTO. It specifically argued
that India was trying to “roll back commitments” or that its distribution of
poor farmers’ produce to poor citizens
would
somehow distort global markets.
Could
you explain how the U.S. and the E.U. get away with their subsidy regimes?
First,
the WTO rules allow countries that had subsidy regimes before 1994 to continue
these polices, with the idea of reducing them over time. At the time of the
inception of the WTO, almost all the countries that were engaging in subsidies were
developed countries. Over 100 developing country members are not allowed these
subsidies. Ten years ago, the U.S. and the Europeans agreed to phase out the
tens of billions of dollars -worth of legal subsidies. They have not lived up
to their bargain. Second, even with all this latitude, they do get fined, which
they prefer to pay off rather than participate to change the rules for the
benefit of all countries.
There
is one more problem, which relates to the “reference price”. To calculate the
“trade-distorting” subsidies, countries have to figure out the difference
between the minimum support prices [MSP] and the WTO “reference price,” which
is the average world price from 1986 to 1988. The WTO prefers to use this
archaic method rather than calculate the difference between the MSP and the
current market prices. Since developing countries have experienced terrible
inflation, the gap between the MSP and the WTO “reference price” is ludicrously
high. India’s Ambassador to the WTO, Jayant Dasgupta, has been a vocal critic
of this “reference price” system. It disadvantages developing countries. Developed
countries, by the way, don’t have to use this system because their food
security programmes are considered “non-trade-distorting” by the WTO rules.
Could
you describe what happened regarding food security at the WTO meeting in Bali,
Indonesia, in December 2013?
The
Bali meeting was very contentious. The U.N. Special Rapporteur on the Right to
Food again called for developing countries to be granted the freedom to use
food reserves to help secure the right to food without the threat of sanctions
by the WTO. He said that states that must provide food security polices should
not have to “tiptoe around WTO rules”. Indian farmers, I recall, wanted the
Indian government to hold fast. This pushed India to lead the food security
coalition in the WTO, which fought a hard battle against U.S. intransigence.
No
final agreement was reached, only a commitment to further negotiations. The WTO
members gave themselves four years to reach a settlement. The interim agreement
was what was called a peace clause. It came with concessions to developed countries
in the guise of a Trade Facilitation Agreement, which would force developing states
to put resources towards making trade easier rather than health care and
education. Transnational shipping and logistical corporations won out over “development”.
This was called the Bali Package.
Could
you elaborate upon the peace clause?
Under
the peace clause, countries that have existing subsidy programmes cannot be
subject to legal cases by other WTO members if they comply with onerous
reporting requirements and prove that their subsidies do not distort markets.
By the way, the U.S. does not need to follow these requirements. No new
programmes may be implemented, and there was no guarantee that a permanent
solution would be agreed on the end of the four years. However, there was a
wrinkle. Legal ambiguity in the text meant that it was not clear whether the
peace clause would be in effect until a permanent solution was agreed on, or
only for four years—and would then expire. Thus, when the new Government of
India came to office last spring, they requested a clarification that the peace
clause would be in effect until a permanent change in the rules was agreed on.
Again, the U.S. refused to make this clarification, demonstrating that indeed
it had been planning on allowing the peace clause to expire without a new deal
in place.
India
then countered that it would not let the other aspects of the Bali Package come
into effect until it had received this simple clarification. And while the U.S.
spent the summer blaming India for supposedly scuttling the Bali Package, it
refused to make the clarification. Indian farmers and Indian Left parties,
supported by global civil society, kept the pressure on their government.
Months dragged on. U.S. corporations didn’t want their trade facilitation deal
imperilled. Because of the trade facilitation gift, the U.S. agreed to allow
the peace clause to remain in place until a permanent solution is agreed upon.
WTO members agreed to make “all concerted efforts” to find a permanent solution
on public stockholding for food security by the last day of 2015. They moved up
the date for the expiration of the peace clause by two years. This means that
the decision would have to come out of the upcoming WTO ministerial meeting to
be held in Nairobi, Kenya, from December 15 to 18 of this year.
Thus,
there is a short window of time in which to expose U.S. hypocrisy in the negotiations
and work to build global pressure to ensure that the most damaging rule in the
WTO can be brought into line with the global consensus in favour of developing
countries engaging in the global best practice of strategic food reserves, for
the benefit of farmers’ livelihoods, rural development and the right to food.
Published in Frontline,in
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