25 de febrero del 2001
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The South Demands Trade Reform

By Mike Moore *

Greater mutual concessions between the industrialized North and the developing South are needed, says the Director-General of the WTO, who hopes to convene a new round of global trade talks prior to the end of his term in 2002

GENEVA - One thing is clear from the negotiations at the World Trade Organization (WTO) headquarters: developing countries want more substantial liberalization in agricultural trade than proved possible in the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) at Marrakesh in 1994.

And these nations are not expected to settle for concessions by the industrialized world on traditional products with scant added value, as occurred seven years ago. What they want is global trade reform.

In the current WTO negotiating process on the deepening of liberalization in agriculture and services, underway since January 2000, the relevant discussion involves concessions on 'temperate' products that are efficiently produced by developing countries.

Thus far the North has granted preferential treatment for tropical products that is doesn't produce while maintaining protectionist barriers against temperate products that it does.

Agriculture plays a far greater role in the economic growth of developing countries than it does in the industrialized world. It accounts for a far higher percentage of export income in developing countries than in industrialized ones - 15 percent in Africa, and 20 percent in Latin America as opposed to 0.1 percent in Japan and 4.9 percent in the United States.

Moreover, in many developing countries agriculture employs more than half of the labor force, as opposed to relatively small and declining shares in OECD (Organization for Economic Cooperation and Development) countries, where it ranged from 2.7 percent (in the US) and 12.2 percent (Korea) in 1999.

It is this reality that for decades has driven developing countries' persistent demands for more access to world markets for their agricultural exports and more equitable conditions of competition, particularly in regard to export subsidies that the North uses to protect its own agricultural production.

Import markets in industrialized countries will, of course, not be the only ones in the firing line. The markets of developing countries, and of transition economies, have and will continue to become increasingly important outlets for their own products. Indeed, they are almost as important as those of the industrialized countries, now accounting for around 40 percent of developing countries' agricultural exports.

Of course, developing countries are concerned about the impact of predatory and subsidized imports in their own markets as well, as reflected in various proposals for special and differential treatment in terms of counter measures permitted under the WTO system.

But the answer to their demands is emphatically not a wholesale extension to them of the special agricultural safeguard mechanisms, which allow for exceptions to opening up a given market in order to prevent a dramatic rise in imports or a drop in domestic prices caused by a sharp decline in import prices.

Instead, the answer must be to correct the distortions at their source.

Further reductions, if not the eventual elimination, of ''export subsidies'' and more effective disciplines on other forms of export subsidization are both areas where developing countries have major interests.

Agricultural exporting countries, both developing and developed, will be immeasurably better off when export prices are determined directly by fairer conditions of market competition rather than indirectly by bureaucrats calculating and handing out export subsidies or by the manipulation of other governmental export promotion programs.

A key point stressed on all sides of this debate is that, to one degree or another, all countries have legitimate non-trade concerns in agriculture, and that these should be addressed in so far as is possible in ways that are not at the cost of trading partners.

It is worth recalling that the Uruguay Round made a significant contribution towards enabling countries to accommodate, through domestic support measures, non-trade concerns - such as food security, regional assistance, and the environment - in ways that are minimally trade-distorting.

However, these arrangements are seen as more responsive to the concerns of industrialized countries, in appearance if not in fact.

The adequacy of these domestic support arrangements from the point of view of developing countries will therefore be an important focus of the agricultural negotiations.

Key non-trade concerns of developing countries, such as poverty alleviation, rural development and food security, are qualitatively quite different from those asserted by certain highly industrialized countries. And there are many developing countries that would oppose any combining of the two.

With pragmatic but principled approach, it should be possible to effectively and constructively address most non-trade concerns with a minimum of trade distortion. If so, then there is a way forward, particularly in case of a broader process of negotiations where there is greater scope for eventual tradeoffs for everyone.

(Copyright IPS)

* Mike Moore is the Director-General of the World Trade Organization (WTO)


Copyright © 2001 Tierramérica. Todos los Derechos Reservados


Crédito: Fabricio Vanden Broek
  Crédito: Fabricio Vanden Broek

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