Who needs WTO

Updated: Dec 19 2005, 05:57am hrs
The World Trade Organisation (WTO) has completed a decade of its existence. During this 10-year period, the multilateral trading system has generated more problems than solutions. The global body had suffered severe blows at the Seattle and Cancun ministerials. The sixth ministerial at Hong Kong has brought to the fore the cumulative public resentment against this global body.

The ministerial is likely to end with no solution in sight. It is time for a comprehensive review of the impact of globalisation under WTO regime in general and on farm sector in particular. Also, the study should incorporate the impact of economic liberalisation and free regional and bilateral trade agreements undertaken by different countries across the globe.

Some environmental NGOs like Greenpeace have called for an assessment of the health and environment impact. Their studies should be based on hard facts. Ideally WTO itself should commission such studies through a network of independent agencies, including civil society organisations and experts.

Doha Work Programme, launched in November 2001 has, in fact, very little development agenda. There was initial resistance at Doha against calling this a development round. Even after fours years, the development round remains unimplemented due to the rigid positions of the developed countries.

Developing countries need more policy space and have the option of using a wider range of policy instruments than are permitted under the aegis of WTO, IMF and the World Bank. These policy choices should be at the level of what todays industrialised countries enjoyed during their period of industrialisation and development.

However, fragmented studies done so far paint an awful impact of globalisation of trade on the worlds poor. To cite a few examples, in many African countries food imports recorded a surge, severely affecting domestic production.

The import of tomato paste by Senegal increased 15-fold from an annual average of 400 tonne during 1990-94 to roughly 6,000 tonne in 1995-2000. Between the same period, average annual production fell 50% from 43,000 tonne to about 20,000 tonne. In Burkina Fasco, the import of tomato paste increased by four times between the same period from 400 tonne to 1,400 tonne while tomato production fell by 50% from about 22,000 tonne 10,000 tonne.

In Kenya during 1980-90 the volume of processed milk rose steadily from 1,79,000 tonne to 3,92,000 tonne. From 1992 onwards, the volume of processed milk fell dramatically to as low as 1,26,000 tonne in 1998. This decline was mainly due to the decline in deregulation of the Kenyan Milk Board. In Benin, chicken meat imports increased 17-fold by 1995-2000 from 1985-1989 annual average of about 1,000 tonne. The sorrows of cotton and coffee growers in Africa are well known.

In central America and Mexico where some of the worlds highest quality of coffee is grown, the World Bank estimates that 6,00,000 permanent and temporary coffee growers have lost their jobs in the past two years alone. Relief agencies estimate that more than 1.5 million peasants in the region lack food.

Back in Asia, Indian farmers are unable to get remunerative prices on exports of several agro produces and products on account of depressed global prices. The near self-sufficiency achieved in oilseeds production on account of the efforts of the technology mission was upset by dependence on cheap vegetable oil imports from Malaysia and Indonesia. Between 1996-97 and 2003-04 agriculture imports into India have increased by a whopping 375% in volume and 300% in value terms. It is important to note that the value of imports as proportion to agricultural GDP has also increased from less than 3% to 4.34% during the same period.

The surge in imports of several agro commodities is also marked in the Philippines, Sri Lanka, Vietnam and Indonesia.

In face of the sufferings in developing countries, the developed world continues with their protected regime in the farm sector, denying market access to the produces and products from the Third World.

The subsidy regime in developed countries has depressed global prices to the disadvantage of the farmers in the developing world. The subsidy regime in the developed world benefits only farmers with large landholdings and agri-business corporation, much to the neglect of small and family farms.