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A new solidarity trade policy

The new red-green government should stop taking the US and the rich parties in the agricultural negotiations. Norwegian Church Aid supports Thorbjørn Jagland's proposal for an "agricultural commission", to ensure a healthy Norwegian agriculture that does not harm farmers in poor countries.




(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)

The agricultural negotiations in the WTO have been predicted to be the round of developing countries. So far, there are many indications that the country that comes best from the negotiations is the United States. It is now incumbent on Norway and other countries to do what is possible to ensure that the outcome in Hong Kong takes into account the requirements and interests of developing countries. Ahead of the WTO ministerial meeting in Hong Kong, it will be exciting to see if the government has the will and courage to translate the good efforts we find in the Soria Moria Declaration into a "solidarity multilateralism".

The WTO's credibility and destiny as a multilateral institution will be in the balance ahead of and during the Hong Kong meeting. On the one hand, the negotiations under the Doha Mandate have been strongly influenced by the EU and the US trying to force a broad and deep integration in industrial goods / fish, services / investments and intellectual property rights, while maintaining unreasonable privileges – an extensive use of trade-distorting agricultural subsidies – which have built up in a formidable subsidy and export race between the two since World War II: OECD countries spent NOK 1800 billion on agricultural subsidies in 2004.

This suggests that the WTO's multilateralism is strongly influenced by European and American interest policies. On the other hand, ever since the 1999 collapse in Seattle, there have been visible trends that developing countries, when they can gather together for common interests, can use their overwhelming majority of land votes to influence the agenda, especially through the G20 coalition and the G33. The Hong Kong ministerial meeting will show whether the WTO can withstand the tension between continued economic power exertion from rich countries and the beginning institutional power failure in developing countries.

Risk of breakdown

The question now is whether the Norwegian government and the G10 will contribute to saving the WTO on terms that go in developing countries' favor, or whether they will negotiate tactically so that they contribute to a collapse. There is little doubt that developing countries need the WTO in the field of agriculture: EU and US direct and indirect export subsidies lead to the dumping of sugar, powdered milk, vegetable oil, soy, rice, maize, cotton, chicken and grain at an artificially low price of world markets, which drives poor farmers out of both domestic and high-purchasing markets abroad. The United States subsidizes its 20 cotton farmers with $ 000 billion a year – more than the United States' total aid to all of sub-Saharan Africa. The production surplus is being dumped, threatening the livelihoods of millions of people in West Africa. In Benin, the fall in the world market price of cotton in 4,7-2001 led to the proportion of poor in the country rising from 2002% to 37%.

No one can be surprised that Mozambique's zero tariffs on sugar do not lead to increased Norwegian imports as long as Rema 1000 can import Danish subsidized sugar at a quarter of the production price. Despite all the good intentions in the "food sovereignty" perspective and other alternative approaches: the WTO is and will be the only multilateral regime with muscle that developing countries can use to deprive the EU and the US of the privileges that destroy the world's agricultural markets.

In the field of agriculture, developing countries will not gain anything from a collapse in Hong Kong – the subsidy race in the US and the EU will continue as before. In the meantime, the World Bank and the IMF have already more or less forcibly opened most of the developing countries' markets, with the result that in many poor countries we can buy cheap subsidized chicken from the EU, American subsidized corn and Danish subsidized butter. This is the brutal reality in many poor countries. If these countries are to succeed in developing their own agriculture, they need a market where farmers can sell their products.

Selfishness of rich countries

Unfortunately, the WTO has worked from the wrong side throughout the Doha Round: While rich countries with the July 2004 agreement were successful in keeping most of their subsidies in the overly spacious "boxes", they have aimed for quite ambitious market access negotiations ( tariff reductions). The injustice is obvious: the political tool available to all countries regardless of the level of development – namely customs duties – is increasingly banned. While the tools that only rich countries can afford – subsidies – are maintained.

Recent calculations from Oxfam show that the draft agreement for internal support means that the US can retain $ 73,1 billion / year, compared to today's $ 74,7 billion / year, while the EU need not reduce internal support at all. With this defeat on the retina, the G20 has now advocated that rich countries must compensate for continued subsidies with ditto tariff reductions. But this will primarily benefit the US agricultural exports: After cooperating with the EU and the G10 in which Norway is involved in fixing the subsidy level, the US can now cooperate with the G20 and demolish customs walls.

Since Americans are far more productive than the EU – and have secured subsidy advantages over the G20 – tariff reductions mean that US exports will penetrate even further into both rich and poor markets. The few who dare to invest in the agricultural sector in poor countries do so only if they have the prospect of being "compensated" for the distortion of competition by freely renting for social and environmental exploitation. A removal of customs tariffs instead of subsidies will thus throw more countries into the race to the bottom.

Dumping of agricultural commodities is not only a result of export subsidies, but also a result of internal support that compensates for under-priced sales on the world market. The US and the EU's ability to tamper with definitions and box colors shows that internal support paid for production for export must be subject to sharp reductions, regardless of whether they can be defined in yellow, blue or green box.

Norway on US team

In the further negotiations, Norway in the G10 must argue that all direct export subsidies must be phased out from 2007, as required by the UNDP. Then the new government must form a clear picture of how national interests – especially vulnerable agriculture – can be safeguarded without us negotiating in a way that is detrimental to developing countries.

Norway and the G10 have so far made a joint case with the EU and the US in the requirement to retain as much internal support as possible. In this way, negotiations for the benefit of Norwegian small farmers have become a hand-stretch for further export farming in the EU and the US, and thus for the destruction of agriculture in poor countries.

Norway must work to ensure that all subsidies paid to products that are exported must be counted among those who will take significant cuts. If such a solution is not feasible, Norway must take the consequences of this, and work in the WTO to reduce the most trade-distorting subsidies as much as possible. The transfer to agriculture must be organized to prevent overproduction and dumping.

Norwegian Church Aid is not concerned with removing or reducing subsidies to Norwegian agriculture. We fully acknowledge that Norwegian farmers need government transfers and market privileges to survive. Our point of view implies a continued shift in the direction of so-called green support, which is justified by, among other things, the importance of agriculture as an important economic sector in the districts. Here, it will be crucial that Norway in the WTO works for criteria that prevent an abuse of green support for exports.

To ensure that Norwegian interests in sustainable agriculture should not conflict with active support for developing countries' opportunities for development, Norwegian Church Aid will support Thorbjørn Jagland's proposal for an agricultural commission. This must be mandated to find viable ways to ensure healthy agriculture in Norway with instruments that do not affect farmers in poor countries at the global level.

Norway must take a constructive WTO position that does not conflict with poor farmers' demands for a production that they can also live by. This must also be combined with schemes where Norway gives clear preferences to poor countries in its own import policy, while at the aid side we actively contribute to poor countries being able to take advantage of such preferences.

Requirements for the government

In the ongoing negotiations in Geneva, the 44 countries in the G33 have demanded protection of so-called "special products", which are particularly important for food security and the living conditions of small farmers. This is the most important requirement of this group. The vast majority of people in these countries live off the land, and they first and foremost need access to their own markets to save themselves and their families and to provide income for fuel, medicine and school fees.

The G33's proposal will allow governments to shield the poor from subsidized dumping by the US and the EU. Norway must actively oppose the US line of negotiation, which understands the Doha Declaration's objective of "ambitious liberalization" to the point that even the poorest countries must accept profound liberalization. Norway must also not contribute to a negotiating situation where the poorest have to "pay" for this protection with concessions in other areas (NAMA, GATS), as required by the EU and some other countries.

As soon as the new government has recovered from Hong Kong, it should begin work to prepare the ground for a 'social clause' in the WTO so that we can stop the social dumping driven by multinational corporations in general and agrobusiness in particular. In this way, the government will be able to follow up on its promises of solidarity multilateralism.

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