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Speacial Reports/ WTO |
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Geneva accord: WTO still remains a question
mark
By Zafar Samdani
The WTO regime has come a long way: from
Marrakesh, where it started in 1994 to Geneva,
2004, where a semblance of meaningfulness and
understanding was reached.
There
were pitfalls on the way, resistance from the
developed nations to cast off, even marginally
loosen their grip on world economy and
apprehensions of developing nations that a Trojan
horse is to infiltrate in to whatever economic
security they possess. Distrust marred their
response.
While WTO covers both agriculture and industry,
the former vitally concerns Pakistan as the
national economy is based on it. This, however, is
an issue for most developing nations also because
their economies have similar resources in many
cases and their dependence on domestic farm
produce is substantial to total.
However, they cannot meet the needs of their
people due to inefficiencies in the sector. The
limitations of these nations are linked with
constraint on resources for modernizing their
agriculture.
The tools are expensive and controlled by
developed nations. Their access to world markets
is paved with problems and conditions weighing
heavily in favor of developed countries.
Plans and proposals seemed at the point of falling
apart more than once and misgivings clouded the
view at Seattle and Cancan rounds; Doha round did
not achieve any reportable results either.
Geneva talks have certainly been a step forward
and have been widely hailed as a move in the right
direction. Misgivings, the world is being
informed, have no cause for persisting anymore,
that a fair and equitable deal is on the way for
the developed nations and issues have been settled
once and for all.
Have they been? Pakistan seems to think they have
been and that a remarkably beneficial deal has
been struck. The Commerce Minister, who led the
country's negotiating team at Geneva's milestone
round, titled historical by media across the
world, has lost no time jumping the gun with the
announcement of benefits to Pakistani farmers
yearly worth about $3.6 billion.
According to the minister, cotton, rice, sugar,
above all, milk products would gain, the last
mentioned would be richer by about '$2-3 billion'
in their products. Is that really to happen or an
illusion has been conjured out of naivety? Would
the deal be genuinely as fair as the minister
believes or it would be like the handing back of
sovereignty to Iraq?
The issue of subsidies to farmers by EU countries
is not simple. It involves multiple internal
political and economic dimensions for them. Their
economies are integrated with subsidies and
supports for exports and most member states of EU
have an irrevocable commitment to their people's
welfare; it is an end more important for them, as
it should indeed be, than fate and future of
developed nations.
They are democracies where leadership is
answerable to the electorate and not one-man shows
of the third world denomination or farces enacted
in the name of representative government.
Nevertheless, there are redeeming features as far
as EU is concerned because although many nations
of Europe are former colonialists, their political
systems have been ticking with a clear sound of
social justice.
The principle has so far been applied internally
but is being increasingly extended to other
nations. But even EU has carefully kept Turkey out
of its business club. That should be indicative of
their sights and inform of a selective approach
when issues have political, cultural and racial
implications.
The farm sector is heavily subsidized in the
counties that, according to US leaders, represent
the 'Old Europe'. The total of subsidies runs in
to billions of dollars for Europe; the US supports
its farmers even more.
Then there are incentives for exporting farm
products. The combination of these supports
accords these countries agriculture produce an
edge that makes the terms of competition uneven
and exploitative for developing countries and
renders marketing of the same produce from them
non-viable.
A major change in the present systems would reduce
the balance of weight in their favor if not tilt
it against them. What can be the reason for them
to scuttle the share of their farmers? What can
motivate developing nations to offer equity to the
deprived of the world when there is no pressure or
compulsion?
These questions need to be seriously probed and
convincingly settled to trust the WTO regime that
is certain to govern the world in future, in a few
years time if not within a year or two.
The agreement that the final balance must grant
special treatment to developing countries where
agriculture is of 'critical importance to economic
development' is a welcome statement and informs
that the developing nations, while they must
always have been aware of conditions in developing
countries, have finally come round to
acknowledging them and expressed willingness to
take remedial measures to uphold, to some extent,
the principle of equity and sharing of resources.
Agriculture related proposals are based on the
concept of boosting competition by eliminating
export subsidies and elements of other export
support that 'may distort trade, driving down
tariff to increase market access and reducing
domestic support in some areas'.
Member states are also required to negotiate the
elimination of export subsidies paid to farmers by
rich countries. These supports have been the main
hurdle blocking the developing nations out of
world markets and keeping their economies
shackled, dependent on doles and their population
poverty stricken.
The EU accepted the viewpoint of the developing
nations but tagged a condition to it. That is for
good reason because EU alone cannot remove
imbalances from prevailing inequities in the
international system and nothing tangible is to be
achieved unless the US also adopts matching
measures comprising elimination of loans or
credits to farmers.
One of the most heavily subsidized crops anywhere
in the world is US cotton; the country also
ensures its farmers well being by giving them
financial assistance wherever it is needed.
Without the participation of the US in the
proposed reforms, positive results have to be
ruled out.
Till this point in time, the United States is not
on board the WTO. It is doubtful if it would go
all out for ensuring that proposals are
implemented. Judging from its track record in
international affairs of seeking the domination of
the world, it is unlikely that it would do away
with the most effective weapon for sustaining its
position as the sole super power in the world as
political status of nations is linked with
economic command of the world.
While the US representative at the Geneva round
called the Geneva a 'crucial step for global
deal', a concrete contribution is yet to be made
by it. Even otherwise, what happened in Geneva was
producing a framework of principles; its
modalities are yet to be worked out. That can
prove a demanding undertaking because it implies
sacrificing of national interests and rewording
their pledge to their citizens.
Which means that while the WTO regime has come a
long way from Marrakesh, it still would have to
cover a long distance to be the economic order of
the world. One must also remember that another
Economic Order already exists and as far as one
knows, it has not been abandoned so far.
The enthusiasm and optimism of Pakistan's Commerce
Minister thus looks a case more of scoring points
for the government (himself too) than realistic
assessment of development because agreements are
undeniably welcome but they are hollow words till
modalities for implementing them are worked out.
That would take some time, till December 2005
according to the schedule. The WTO would remain a
question mark till that point.
Courtesy:The DAWN |
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Pakissan.com; Advisory Point
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