The Cancun negotiations have collapsed. The developing countries showed their unity in opposing the terms put forward by the developed countries. There was no draft declaration after the Cancun meeting. It is still not clear whether the COA chairman would issue a fresh draft for discussion in Geneva or whether the staring point of fresh discussion would be the controversial Harbinson draft or the draft circulated by the WTO chairman at the Cancun meeting.
It is clear that the most perturbed lot after the collapse of the Cancun meeting is the developed countries. The Peace Clause under Article 13 of the Agreement on Agriculture, which till date protects them from trade disputes, is likely to lapse by the end of 2003 after nine years of operation. With the lapse of the Peace Clause, the developing countries can impose countervailing duties on those products of the developed countries which are backed by heavy subsidies are causing injury to domestic producers. This Clause can only be extended consensus and this gives a leverage to the developing countries in negotiations.
The developing countries should act unitedly as they did in Cancun in placing their terms for negotiations. There is a need for the G-21 plus countries to work in close cooperation with the African, Caribbean and Pacific (ACP) countries. There is also a need for the G-21 plus countries to carry alongwith them the net food importing developing countries (NFIDCs). All developing and least developing countries (LDCs) are affected by the present unfair rules of global multilateral trade. The extent of injury is different for different countries. A broad coalition of all the affected countries is, therefore, essential to meet the challenges of the Quad group consisting of US, EU, Canada and Japan.
NFIDCs should also realise that many of them are suffering due to unfair trade practices. Their problems can be solved to a great extent if the WTO panel report proposals on setting up of a revolving fund or improving access to IMFs facilities are implemented. In fact, the IMF and the World Bank were instrumental in pressurising the developing countries and the LDCs for opening up their markets as a condition for extension of loans. Now it is the duty of both the IMF and the World Bank to bail out these affected countries. Comparatively, the developed countries remained protected by imposing high tariff barriers and heavily subsidising their farm sector. They aggressively entered the markets of the developing countries and the LDCs after they removed quantitative restrictions on imports and lowered their tariff barriers.
A study done by Oxfam International shows that if Africa, East Asia, South Asia were each to increase their share of world exports by one per cent, the resulting gains in income could lift 128 million people out of poverty. If the developing countries increased their share of world exports by just 5 per cent, this would generate $350 billion - seven times as much as they receive in aid. But the developing countries face tariff barriers that are four times higher than those encountered by rich countries. These barriers cost them $100 billion a year - twice as much as they receive in aid.
History of global trade under WTO regime bears testimony to the fact how developing countries, which were earlier net exporters of specific food products, subsequently turned into net importers. Indonesia, once rated among top 10 exporters of rice before the WTO regime came into effect, subsequently in 1998 emerged as worlds largest importer of rice. Philippines lost its market for coconut, abaca and sugar and its corn output declined. Coffee and cocoa growers in Central America, Brazil, sub-Saharan Africa and Vietnams Dak Lak province are suffering due to steep fall in coffee prices.
Cotton growers in Western Africa were affected due to a steep fall in global prices due to heavy US subsidy. African farmers are not getting remunerative prices for shea nuts which are used for preparation of shea butter. EUs subsidised dairy exports has destabilised dairy industry in Brazil and Jamaica. Sri Lankas dairy industry has been affected by imports from New Zealand. Perus food imports have increased dramatically. Mexico, once a major producer of corn, has now become a dumping ground for GM corn from US.