Sep 4, 2009

WTO mini-Ministerial: India learns to wag the tail

Farmers protesting against WTO Agreement on Agriculture at New Delhi, Sept 3, 2009. Over 50,000 farmers joined the protest.

Actually, Mr Pascal Lamy is right. When he said at the inaugural of the ongoing WTO mini-Ministerial in New Delhi yesterday that 80 per cent of the issues of the Doha round have been resolved, he was telling the truth. Whether we like it or not, the fact remains that those who are negotiating on our behalf, and I am talking of all the developing countries, are in reality keeping us in dark with their statements (which mean nothing) aimed only at pacifying the public galleries backhome. The fundamentals and the broad contours of the Doha round especially in agriculture and NAMA have all been agreed upon.

India's Commerce Minister Anand Sharma, the host of the New Delhi confabulations, has mastered the art of saying nothing in as many words as possible. When he said: "In some quarters, it has been suggested that most issues have been settled and we are almost in the 'endgame'. However, if we look at the text modalities on agriculture and non-agriculture market access (NAMA) alone, it would be apparent that there are still gaps and a number of unresolved issues," he only meant that we have to fine tune by tightening the nuts and bolts of the agreement, and rest everything is almost settled.

You couldn't have expected anything better from Mr Anand Sharma. He knew that thousands of farmers were pouring onto New Delhi streets, and any guffaw could have boiled into an unsavoury situation. But those of us who have followed the developments in the run-up to the mini-Ministerial can easily decipher the real motive and objective of the Indian government. New Delhi was particularly perturbed at its global image of a 'bad boy' in the trade negotiations, and therefore was keen to give a message that it has now learnt to wag its tail. And that in future it will behave like a lapdog.

I am told that only a few days back, the Commerce Secretary Rahul Khullar, had actually used the term 'looney fringe' for all those who are opposing the Doha round. It is however another matter that it is because of the 'lonney fringe' elements that India has been able to put up a strong front at successive Geneva negotiations. If it was not for the 'looney fringe' India would have been made to sign the Doha Agreement much earlier. Perhaps there would have been no need for the Doha round, India's former chief negotiator, Anwar Hooda, who had switched sides to become a deputy Director General of WTO, would have been more than happy to conclude the agricultural negotiations during his tenure.

The New Delhi meeting is not about 'substantive' issues but on the process itself, meaning on how to take the Doha negotiations to its logical end. The Doha Ministerial declaration of Nov 14, 2001 had explicitly stated: "We shall continue to make positive efforts designed to ensure that developing countries and epecially the least developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development." This mandate is the bedrock of the Doha round, says a discussion paper for senior officials meeting (which was held a day prior to the Sept 3-4 mini-Ministerial).

This mandate has somehow been relegated to the background. While I am not sure about the gains accruing to the least developed countries, I do not even know what is the gain in agriculture and NAMA for India from the Doha round. Although the Commerce Ministry says that it has the calculations ready, I doubt if they can establish that the Doha round would be in any way beneficial for Indian agriculture, and the livelihood security of its 600 million farmers. I am willing to challenge them for an open debate, and they can also bring along their backroom boys from the International Food Policy Research Institute (IFPRI), Consumer Unity & Trust Society (CUTS), Indian Council of Research in International Economic Relations (ICRIER) and the Indian Institute for Foreign Trade (IIFT).

That agriculture is being sacrificed for the sake of services was clearly and loudly brought out by a delegation of the agitating farmers of BKU which had met Mr Anand Sharma a day before the conclave. The delegation had made it abundantly clear that Special Products and the Special Safeguard Measures (SSM) that is on the negotiating table, does not protect the interest of Indian farmers. Mr Sharma had merely repeated what he and his predecessors have been saying for long: We will not compromise on agriculture.

In fact, in a high-level closed door dialogue that happened a week earlier, the message that came out very clearly was that agriculture and NAMA were through (except for some modalities that need to be worked out), and India was pinning hopes by putting services on the table now. This is the right time to get something in services, a senior bureaucrat had said. If we don't get anything now, we will never be able to extract anything significant. As far as my understanding goes, this in itself was a flawed assumption. This is not the right time to seek any headway in services sector.

The US and EU are already grappling with economic recession, and any commitment at this stage on services would be politically suicidal for them. They are however looking at the developing countries to bail them out of the recession by providing more market access in agriculture and industry. And this is exactly what India is trying to help them with, by bringing in like-minded developing countries who are willing to walk an extra mile to appease the masters.

It was however really heartening to see more than 50,000 farmers converging in New Delhi yesterday in a show of solidarity and strength. New Delhi has not seen such a disciplined and strong protest for a number of years now. While the farmers who came to New Delhi may not understand the nitty-gritty of the negotiations, but what they know for sure is that it is their future and survival that is being placed on the chopping block.

I sometimes wonder what has happened to the brilliant minds that we often talk about. What has happened to all those economists, researchers and analysts who at least used to express their scepticism and doubts in their essays and analysis. They were truly the watchdogs of society. Today, I find the breed of lapdogs growing at a phenomenal pace. The media too, more importantly the pink media, has joined the tribe. You hardly find any article that is even remotely critical of WTO or FTA. You will of course see the backroom boys of the Ministry of Commerce dominating these pages. Didn't I say the lapdog breed is multiplying??

I remember at the time of the Hong Kong WTO Ministerial, Pascal Lamy had said that Special Products is a carrot that he is dangling before the developing countries. These SPs are temporary measures, and have to be phased out over a period of time. The SSM is so complex in implementation that I doubt if we can ever use that instrument to stop import surges. What is more important is that while all these measures have to be gradually phased out, none of the developing countries have ever talked of asking the rich and industrialised countries to draw a phase out plan for their agriculture subsidies.

When will the Green Box, which houses 80 per cent of the farm support, be phased out? Do we know when will US and EU remove their subsidies under the Blue Box or even the Amber Box? The answer is that the developing countries have never emphasised on these subsidies. Even the Indian negotiators are not willing to open up the pandora box of subsidies. Which means that in essence the developing countries have ensured that agriculture in the OECD countries remains protected for posterity. Isn't this a betrayal of the interests of the developing country farmers? Shouldn't our negotiators be held accountable for allowing this to happen?

The subsidies (in these boxes) we are talking about is something close to $ 374 billion every year. In reality, the subsidy is much higher, if we include the implicit support also.

The G-20 has failed us. The G-33 has failed us. The G-77 has failed to point a finger at the inequalities in farm trade. Unless these blocks are able to bring back the issue of farm subsidies on the negotiating table, they should be asked to return back to their respective countries. Let it be clear: no deal is better than a bad deal. #


Rajan Prakash said...

very informative piece

Anonymous said...

Dear Mr Sharma,
I have just read your “WTO Mini-Ministerial: India learns to wag the tail” paper. I agree with most of it, however I disagree with your recurrent assertion that the developed countries ag subsidies are of $374 billion a year, a figure given by OECD. The OECD figure of $376 billion for 2008 contains $140 billion of fake market price support not implying any actual subsidy although OECD presents them as “subsidies from consumers to producers”, the gap between the domestic prices and the world prices times the domestic production, meaning that consumers are deprived from their entitlement to buy their food (agricultural products in general) at world prices because of OECD tariffs. But this calculation is meaningless because these world prices are as you know highly dumped prices, lower than the production costs of almost all countries, and it is therefore absurd to consider them as the “true” prices on which all domestic prices of all countries should align. In addition, the market price support concept of OECD is totally biased since it assumes that farmers are selling directly to consumers, which holds for less than 10% of their production in developed countries, the remainder being sold to agri-food industries and hypermarkets: they are the large agri-food corporations in the transformation and distribution sectors which are cashing the surplus. This has been acknowledged all over the world, in the EU as in the USA and at the world level: the drops in world prices are not transmitted to consumers in importing countries while the rises are. Besides considering the gap between OECD countries domestic ag prices and the world prices as subsidies endorses the neo-liberal mantra of free trade and contradicts the food sovereignty defended by La Via Campesina for all farmers, including of the EU and US, provided that they do not export any product. Furthermore the OECD calculation of the $140 billion in market price support applies to all its Member countries, including those which do no export almost any ag product, as Japan and Norway for example.

Jacques Berthelot