Developing countries clamour for free trade in agriculture

by Marcela Valente

Buenos Aires, 31 Aug 2001 (IPS) -- While the industrialised North loudly extols the benefits of free trade for the South, it is developing countries that are fighting the battle to liberalise trade in agriculture, while the rich countries keep their markets clamped tightly shut.

The US, European Union (EU), Japan and South Korea increase the subsidies handed out to farmers year by year, and set quotas limiting imports of farm products.

Meanwhile, they sign agreements pledging to lift protectionist measures, although in exchange for a greater opening of markets in the developing South to services and manufactured goods.

In the 1990s, developing countries saw their farm exports grow, while their share of global trade in agriculture increased from 40% to nearly 43%, according to a report by the Organisation for Economic Cooperation and Development (OECD), which added, however, that most of them had experienced trade deficits.

The OECD stated that the main cause of the decline in the developing South’s overall balance of trade were subsidies for farm production and exportation.

Governments in the industrialised North make their farm products competitive by shelling out around $370 billion a year in subsidies, to the detriment of countries with more efficient farm sectors, said the report.

The question of subsidies and barriers to farm imports will be debated once again at the ministerial meeting of the 18-member Cairns Group (Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Fiji, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand and Uruguay), at the meeting in Punta del Este. (Egypt and Pakistan will also send representatives to Punta del Este, and may join the group within the next few months). There will also be a meeting of private sector representatives, parallel to the ministerial meeting.

The Cairns group’s foreign and agriculture ministers will try to reach agreement on a common position regarding the liberalisation of trade in agriculture, to take to the fourth ministerial meeting of the WTO, slated for 9-13 November in Doha, Qatar.

The Cairns Group, in its declaration last year is basically demanding the elimination of trade-distorting subsidies, as well as a substantial improvement in access of farm products to other markets, which “would bring significant benefits in terms of economic growth, well-being, food security and sustainable development,” as the group’s ministers declared last year.

The case of honey is illustrative of the difficulties faced in terms of gaining access to rich world markets, said Delfino. Argentina is the world’s leading exporter of honey, and until this year, 50% of its exports went to the US. But US apiarists complained of dumping - the exporting of products at prices deemed artificially low -, filed a lawsuit, and got the US Department of Commerce to impose a 50% to 60% duty on Argentine honey last May.

The decision triggered an outcry among Argentine apiarists. The foreign ministry complained to the US government, and conditioned negotiations in other areas on a review of the duty slapped on honey.

The two governments finally reached an understanding, which amounted to a defeat for Argentine apiarists. The Department of Commerce promised to sign an agreement in September allowing a “temporary” quota of 30,000 tonnes of Argentine honey - 30% below previous levels of imports - which will not begin to be shipped until December.

The South and North are clashing over a growing number of products, illustrating the difficulties that farmers in the developing world face when they knock on the doors of other markets with their goods that were produced efficiently in both economic and environmental terms.

Argentina, Brazil, Paraguay and Uruguay, the four full members of the Southern Common Market (Mercosur), will take advantage of the Cairns Group meeting to begin discussing, with Zoellick, a possible free trade agreement with the US.

The US announced the talks with the Mercosur at the same time it backed an $8 billion credit package from the International Monetary Fund for crisis-stricken Argentina. – SUNS4960

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