Posted by WTO Watch Qld on July 8, 2002 at 23:48:07:
QUOTES OF THE WEEK
"The WTO Agreement on Agriculture (AOA) is one of the most
complicated of all the WTO agreements. Ostensibly introduced to
remove subsidies around the world, it has worked largely to the
benefit of large agribusiness corporations, no matter what their
country of origin......
Barlow and Clarke. 2001. "Global Showdown: How the New Activists
Are Fighting Global Corporate Rule." Canada: Stoddard [pp 82-83].
'Countries do not trade; farmers do not trade; transnational agri-business trades.'
Managing the Invisible Hand: Markets, Farmers and International Trade, by Sophia Murphy.
1) WATER UNDATE
a) Water Matters Campaign Launched in Australia
b) Water Privatisation continues in Africa
c) Thirst for Control--New Rules in the Global Water Grab
d) Water Magazine
2) GATS UPDATE
a) Canada announces Transparency in GATS policy
b) Australia announces Non-transparency in GATS policy
c) New Zealand's policy on GATS negotiations
d) Press Release form Doctor's Reform Society re GATS.
3) FOCUS ON THE WTO, AGRICULTURE AND THE CORPORATIONS
a) Background: the Agreement on Agriculture
b) Managing the Invisible Hand...Markets, Farmers and International Trade
4) CALLS TO ACTION
a) Call for Submissions into White Paper on Australia's trade and foreign policy
a) WATER MATTERS CAMPAIGN LAUNCHED IN AUSTRALIA
"Over 1 billion people lack access to a safe water supply."
"Over 2.4 billion people lack access to adequate sanitation."
"Two out of three people will be living with water shortages by 2025."
"We resolve to halve, by the year 2015.the proportion of people who are unable to reach or afford safe drinking water." United Nations Millennium World Leaders Summit Declaration, September 2000.
Water Matters is campaigning to ensure that everyone in the world has access to safe water and adequate sanitation. As part of an international movement Water Matters is campaigning for all governments to provide enough resources so achieve the 2015 UN Millennium Development Goal (MDG) to halve the number of people without access to safe water. As well as funding, however, Water Matters is campaigning to ensure water needs are met in a sustainable way that fosters genuine participation and ownership by affected communities, respects the integrity of the environment, and fully respects the rights of the poor.
The Australian Government will be attending the 2002 Earth Summit in Johannesburg this August where world leaders will decide on future global development policies. Water Matters, supported by TEAR Australia, ACFOA and other agencies, want to ensure the Australian Government represents our concerns, and the rights of those in the world today without water.
Please join in the Water Matters campaign by downloading the petition (www.watermattersaustralia.org) and getting as many signatures as possible. We will present this petition to the Australian Government before they go to the Earth Summit in August.
Please also find out more about the issue by downloading resources from our website, www.watermattersaustralia.org, or ordering the free Water Matters Action Resources Pack from Water Matters, PO Box 164, Blackburn VIC 3130, ph.03 9877 7444, toll free 1800 244 986, tearaust@tear.org.au. Or join up to get email updates at watermatters@tear.org.au.
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b) Water privatization continues in Africa
Nearly ten million South Africans have had their water and electricity cut
because they could not pay their bills, and two million people have been
evicted from their homes for failing to pay their water and electricity
bills, a new report says. The IMF, in its negotiations with Ghana regarding
the conditions that will be attached to the IMF's next tranche of loans
under the so-called Poverty Reduction and Growth Facility, appears ready to
continue requiring the implementation of full cost recovery in public
utilities. For the full stories, go to Gw/oB's membership discussion board,
at http://www.internationaldonors.org/discussion/forum/w3bbs.cgi?forum=idd.
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c) The Council of Canadians' Blue Planet Project is pleased to announce the
release of Thirst for Control: New Rules in The Global Water Grab.
Written by internationally respected trade and environment lawyer Steven
Shrybman, Thirst for Control uncovers how international trade rules and
International Monetary Fund policies work together to force the
privatization of the world's water. This report includes a special section
on the threat to Indigenous Peoples' right to water.
The full report with 14page executive summary is available on the Blue
Planet Website under publications at: www.canadians.org/blueplanet.
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d) Water Magazine
Check out www.watermagazine.com for links, papers and articles.
If you've got an article or link you'd like to share with subscribers, please send it
Joel Cayford, Editor, www.watermagazine.com
Email: cayford@watermagazine.com ; joelc@kiwilink.co.nz
Ph/Fx: +64 9 445 2763; Auckland, New Zealand
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3) GATS UPDATE
a) CANADIAN MINISTER ANNOUNCES TRANSPARENCY IN GATS NEGOTIATIONS
"Canada has been a leader in ensuring more openness
and transparency in trade negotiations, beginning with our call to
release draft negotiating texts for the Free Trade Area of the Americas just over a year
ago. We will continue this tradition with our approach to GATS negotiations.
Specifically, Canada will make public the conditional
offers it will be putting on the table during the GATS negotiations. These offers
are essentially the proposed guarantees of market access that we are
ready to offer to other countries in exchange for greater access to their markets.
We will also release shortly a description of the initial market access requests that Canada
will be making of other countries. It will provide a fairly detailed snapshot of the barriers our companies face
and the sectors where we are asking for openings. This information has been
compiled after detailed consultations with Canadian stakeholders.
While the details of Canada's initial offer will be worked out in the coming months,
we can be clear on one point right away: Canada's health, public education and social services systems,
and culture will not be on the table."
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b) The Minister for Trade, the Hon. Mark Vaile, announces Non-transparency in GATS policy.
"With regard to the detail of our negotiating proposals, the government will release as much general information as practicable, including on the sectoral and country coverage and the nature of the commitments sought, where this would be consistent with any commercial confidentiality and does not compromise our negotiating interests"
The Australian Fair Trade and Investment Network reports that the Australian government has lodged in Geneva its initial detailed requests in the GATS negotiations .
The government has not released the requests publicly, as AFTINET and other organisations have asked, but has released a summary of them which says little more than the short papers released last year on the DFAT website.
The summary emphasises that no government is obliged to agree to the requests of another government. We have never claimed that this is the case. The problem is that the negotiations take place behind closed doors, and cover a range of agreements including services, agriculture, and other goods. Governments can come under pressure to trade off services, for example, for gains in agriculture. That is why we are asking for full public disclosure of Australia's requests, and of their responses to requests from other governments which are due on March 30, 2003. This would enable public debate about any proposals which could impact on important areas of public policy like the ability to regulate levels of foreign investment, and the public provision of essential services like health, education, water and postal services. The summary also claims that governments retain the right to regulate services without mentioning that there are proposals in the negotiations to enable some regulation to be challenged under WTO rules. For the full summary see www.aftinet.org or www.dfat.gov.au
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c) Press release from Doctor's Reform Society re GATS
30th June, 200
AUSTRALIA SIGNED AWAY DENTAL SERVICES AT GATS.
IS MEDICARE NEXT?
At a meeting in Brisbane on Friday 28 June, the Alliance to Expose GATS (AEG) called for a Senate Inquiry into the implications of the GATS for Australia. Unions, community groups and non-profit organisations were represented at the meeting.
Dr Tracy Schrader, a representative for the Doctors Reform Society (DRS) who attended the meeting, said today that "The Doctors Reform Society urgently calls on the government to guarantee protection of Australia's public services including healthcare. The DRS believes that the GATS threatens public health care, the Pharmaceutical Benefits Scheme and Medicare. The Canadian government has confirmed that Canada's health, public education and social services systems and culture will not be on the negotiating table. The Australian government should do the same."
Governments are required to negotiate away their regulatory authority by 'progressive liberalisation' through specific commitments within GATS rounds. "Proposed commitments need to be made publicly available and open to debate" said Dr Schrader. "Australian service sectors are already automatically committed to the full range of general obligations of the GATS. Ambiguity in Article 1.3 (c) opens public services including healthcare to the provisions of the GATS. The DRS again calls on the government to press for clarification of Article I.3 to make it absolutely clear that public services are exempt."
Dr Schrader said "Australia's GATS commitments regarding health have neither been clearly defined nor adequately debated. It is alarming that Australian governments have not considered the specific commitment to 'liberalise' dental services to be a healthcare commitment. Dental services are found in the GATS in the 'Business' section under 'Professional Services' rather than within 'Health Related and Social Services' and this has allowed governments to claim they have not yet signed off important health services. This is an example of how commitments can slip in the back door with consequences not addressed."
Dr Schrader said "Australia may have already signed away the chance of ever extending Medicare to cover dental services. Dental care is a serious health issue. This is a scandal that the Australian government and Department of Foreign Affairs want to keep quiet!"
Dr Schrader said "Recently leaked documents from the European Commission (EC) on GATS negotiations further illustrate the secrecy and lack of public accountability of negotiations. These confidential documents contain sweeping requests in sensitive sectors. Sectors covered in requests to Australia include postal services, telecommunication, research and development, road and rail transport, energy and water services. The EC demand to open water services to private competitors would threaten most state government policies of public ownership and price regulation of water services. The DRS is alarmed that the EC's requests include bids to liberalise the distribution of tobacco in developing countries such as Mexico, Korea, and China and to remove restrictions on alcohol distribution."
Dr Schrader said "The DRS supports the call for a Senate inquiry. Transparency, accountability and public involvement in negotiations and commitments is essential. We call on the government to make public all relevant information on negotiations, including details of specific commitments both sought by and sought from Australia. The Federal government must submit all policies on GATS to full parliamentary debate and vote before commitments are made. The New Zealand and Canadian governments have made significant steps towards making GATS requests public. It is time the Australian government did the same."
For further information contact:
Dr Tracy Schrader, Doctors Reform Society, ph 040 889 2610 or
Mr Richard Sanders, AEG, ph 040 209 2803
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3) FOCUS.........................THE WTO, AGRICULTURE AND THE CORPORATIONS
a) The Agreement on Agriculture (AoA) is a product of the Uruguay Round of the
General Agreement on Tariffs and Trade (GATT) negotiations (1986-94). The
AoA provides the rules governing international agricultural trade and, by
extension, production. It bans the use of border measures other than
tariffs, and it puts tariffs on a schedule of phased reduction. Under the
AoA, domestic support programs are categorized as either acceptable or
unacceptable, with the latter also scheduled for reduction, and export
subsidies, while effectively legalized by the agreement, have also been
disciplined and slated for reduction. The content of the AoA reflects the
shared agenda of the U.S. negotiating team and the non-European Union (EU)
grain exporting countries (known as the Cairns Group,which includes Australia) to push for as much
liberalization of agriculture as possible.
http://www.fpif.org/briefs/vol7/v7n08ag.html .)
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b) (ED; Global accounting services are dominated by four accounting firms; global water services are controlled by 10 huge corporations; 50% of world trade is carried out by only 200 trans national companies...........and 90% of global trade in agricultural produce and services is dominated by 5 huge agribusinesses.)
Managing the Invisible Hand: Markets, Farmers and International Trade, by Sophia Murphy.
The report was produced by IATP for the Canadian Foodgrains Bank. The full report can be viewed at: www.tradeobservatory.org
This is the Executive Summary
Agriculture is central to food security, employment, and to building broad-based economic development.
Trade, too, is an important development tool. Trade is not, however, an end itself. In fact,
the promotion of trade liberalization, particularly as structured in the current Agreement on Agriculture (AoA),
ignores basic elements of the global agriculture economy, specifically the concentration of market power by transnational corporations. The AoA will not successfully move us toward the underlying developmental goals articulated
at the creation of the World Trade Organization (WTO), until it addresses market power and
the question of monopoly and oligopoly power. Governments must take the lead to ensure more coherence
between trade policy and the fulfillment of development objectives.
Multilateral negotiations for agriculture are at a critical moment.
Between now and March 31, 2003, governments must draft revisions to the Uruguay Round Agreement on Agriculture.
The framework for negotiations is set: negotiators will focus on export subsidies, then market access, then domestic support programs in three successive meetings. A final meeting will bring the pieces together at the end. Governments have agreed to address "non-trade concerns" (which includes food security) and "special and differential treatment" (which are the measures that favour developing countries) at each meeting.
The existing framework of the Agreement on Agriculture (AoA) provides many negotiators with the structure they want to fight about: export subsidies, domestic support to producers and agribusiness, and market access. While everyone agrees the 1994 agreement failed to do much to curb spending on agriculture in rich countries or to create market access opportunities, many maintain it at least provided the basis for further negotiations. This framework remains the most frequently cited positive outcome of the AoA.
To put it in simple terms, many believe there are only two things wrong with the AoA: the lack of political will to implement the agreement and the disproportionate capacity of rich countries to create exceptions to the rules for themselves. Both observations reflect abuses of power by developed countries and must be addressed. They are, however, not the only problems.
Even if the European Union ended all export restitution payments, the United States, Japan, and Europe ceased all payments to farmers, and all countries established duty-free market access for all agricultural products, agricultural market distortions would remain. Food security would not be guaranteed, nor would a decent livelihood for all those living from the land be assured. These reforms would not ensure the most efficient use of limited natural and genetic resources. Perhaps most concretely, market distortions would continue to disrupt developing countries' agriculture.
This paper argues that AoA ignores some of the basic elements of agriculture and therefore has perverse consequences.
The paper considers the nature of agricultural trade and trends in global agricultural production. It evaluates some of the public policy responses that have been tried to manage agriculture. And it argues that the framework set up by the AoA is flawed because it ignores:
. the inelastic nature of demand in agriculture:
Food is essential to life, and should not be accessible only to those with
purchasing power in the market.
. the relatively inelastic nature of supply in agriculture:
Physical stocks are necessary to protect against weather-related production
shortfalls, but the high cost of maintaining the stocks limits private sector
interest in this service.
. the political and economic weakness of most farmers:
Farmers are price-takers in the food system.
. the vertical integration of the agricultural system:
Chemical companies (now dominant players in the seed business) are
now linked to grain traders and food processors in a production chain
where price becomes internal to the industry. The same companies buy,
ship, and mill grain, then feed it to livestock or turn it into cereal, often
crossing several national borders in the process.
. the fact that countries do not trade; farmers do not trade:
transnational agribusiness trades.
The paper proposes revisions to the WTO Agreement on Agriculture.
These include:
1. Investigating and publishing the scale and scope of transnational agribusiness activities in member states. The WTO would ask governments to complete a standard questionnaire on transnational agribusiness activity. The WTO secretariat would then compile a composite view of this activity worldwide.
2. Evaluating the sources of market distortion, public and private, and discussing how best to address them.
3. Creating a WTO working group to discuss competition issues specifically related to agriculture. Until multilateral trade rules take account of the concentration of market power in transnational agricultural trade, they cannot manage an open and fair trading system.
Agricultural trade rules need to take into account the rapidity of change in the whole agricultural sector, from seed production to food processing to retailing. At the very least, these rules must allow countries, particularly developing countries, the flexibility to block dumped agricultural products, protect food security and preserve the livelihoods of low income farmers. Support for the inclusion of a Development Box in the revised AoA-a proposal described in the final section of the document- would be a step in this direction.
The models used by governments to predict the outcome of the Uruguay Round Agreement on Agriculture did not provide accurate results. They were wrong about the direction prices would take, wrong about who would get the increased exports and wrong about how farmers would respond to changes in support programmes. They failed to take into account these vital aspects of international agriculture. We need to- and can, this paper argues-go into the next round of negotiations better informed. In fact, we must: the lives and livelihoods of millions of people depend upon it.
Economic activity is ultimately valuable for its contribution to humanwelfare.
Food security is one of the most basic elements of welfare-it is essential to human survival.
Every person has an inalienable right to food. The primacy of food security is reflected in the frequent appearance of the term "food security" in WTO texts on agriculture, domestic agricultural legislation, UN declarations, and NGO advocacy efforts.
Analysts have shown agricultural development to be an effective way to generate employment and reduce poverty. This is not necessarily because agricultural development reduces poverty in itself, but because increasing incomes in rural areas has an immediate and significant knock-on effect by increasing demand for local goods and services, such as construction, clothes, and hired labour. Although farmers are rarely the poorest people in their societies, increasing their wealth reduces overall poverty because it boosts local employment. This is especially true when landholdings are equitably distributed.
Farmers' prosperity depends on their capital base (including access to land, water, credit, seed and animal stock) and their economic power (how much profit they can earn from the production of food).
International trade, and globalization more generally, increasingly affect both these elements: access to resources and relative economic power.
The changes associated with globalization have spurred new international initiatives to develop stronger international regulations. In the agricultural sector, heightened concerns about food safety have led to trade disputes and then to new initiatives to develop internationally agreedupon standards and norms that are politically acceptable to the people and companies affected.
In other cases, international policy prescriptions have shaped the direction of globalization. For example, through much of the 1980s and 1990s, international financial assistance was conditional on recipient countries reducing their tariff barriers, making their currencies convertible, servicing their debt obligations and increasing export production.
These programmes prompted a shift towards export agriculture that has transformed the rural economies of many developing countries.
The Peculiarities of Agricultural Economics
Much of the writing and thinking that dominates discussions of international trade today is premised on the notion of comparative advantage. International trade in this theory is a tool to ensure efficient distribution of goods, allowing the lowest cost (used as a proxy for most efficient) producer to set world prices. The model sees market barriers such as tariffs and unfair advantages such as export subsidies as impediments to the free flow of goods-and thus as impediments to the maximization of welfare.
However, in the enthusiasm for open markets, the necessary role of public oversight tends to be overlooked or downplayed. For markets to work at all, governments must enforce laws to avoid the creation of cartels and reneging on contracted commitments. They must ensure information on supply and demand flows easily and provide customs officials to control borders.
In the discussion aired at the WTO, trade expansion quickly becomes a proxy for development and economic growth. The Director General of the WTO, Mike Moore, along with many developed country delegations at the WTO, has adopted the language of development as the reason for global trade rules. However, a growing number of commentators reject the conflation of trade expansion and economic growth.
There are gaps between market economics and meeting basic human needs. Meeting effective demand for food is not the same as ending hunger and malnutrition. The market cannot reflect the demand of consumers who do not have the purchasing power to be present in the market.
Neither demand nor supply of food is as sensitive to price as most products because food is not like most products. People need to eat to survive, and will spend everything they have to avoid starvation.
However, once basic caloric needs are met, demand drops off sharply.
Supply of many cereals comes once or twice a year at harvest time, even though people need food every day of the year. Supplies of basic grains cannot be timed to meet consumer demand-they must be stored against future need. Moreover, despite the increasingly sophisticated technology available to farmers in developed countries, weather remains an all-important and unpredictable determinant of supply, and thus of price.
The relatively inelastic nature of both supply and demand in agriculture complicates the operation of the market. Almost all governments, whatever their political persuasion, intervene in the market to ensure that most people are fed. While the current push for fully liberalized trade markets for agriculture ignores this fact, in practice the AoA is full of exemptions for public spending on agriculture. This is not only a recognition of the political impossibility of banning such programmes, but perhaps an acknowledgment of the role well-designed public action can playin correcting market failures.
Transnational Agribusiness and Market Power
Ahandful of large grain companies-among them Cargill, Continental, Louis Dreyfus, André and Bunge-play a central role in the food system. The UN Conference on Trade and Development estimated in 1986 that 85-90 percent of global trade was controlled by these five companies. They remain dominant today. Each of the companies is present in dozens of countries, across all continents.
These multi-billion dollar operations have broadly diversified interests.
Cargill, for example, owns a huge financial services unit, alongside its salt, steel, cotton, seed, and fertilizer businesses. For grain traders, profit is a percentage of sales-higher prices are fine, especially if the trader controls a good supply, but a high volume of sales at a lower prices is also profitable. In fact, because the grain companies have a significant interest in keeping the barges, rail cars and ships they own busy, higher volume may at times be more important to the companies' bottom-line than higher prices.
Neo-classical economics recognizes that undue market power, whether as a monopoly supplier or monopoly buyer, will undermine the welfare-creating potential of a given market. Where a monopoly or near-monopoly is in place, the industry must be regulated to control profit levels and restore economic equilibrium. For example, privately owned and operated utility providers often have a monopoly but their profits are capped at a publicly regulated maximum to avoid price gouging.
However, the WTO rules for agriculture ignore the presence of this potential for market distortion.
The economist Susanna Davies, writing in 1986, raised questions that seem to have remained otherwise invisible in the literature on agricultural trade. Davies argued that the dominance of the largest grain traders should be treated as a given. She then asked how assumptions about grain markets and the way they operate should be adjusted to take into account this dominance. Unfortunately, debate at the WTO has overwhelmingly emphasized governments, farmers and, to a lesser extent, consumers.
Companies are nowhere mentioned.
Vertical integration in the food and agricultural sector of the United States and the European Union deserves international attention because it overturns the assumptions that have impelled governments to embrace trade agreements and to change their agricultural policies to increase dependence on imported food. To date, few corporate mergers or joint ventures have received public scrutiny outside the country in which they are headquartered. This needs to change.
While suppliers are increasingly global in their reach consumers remain tied to local markets. Their purchasing power is measured in ringgits, dinars, or pesos, rather than in U.S. dollars. International trade may increase the choice of products available to consumers, but will not necessarily deliver those products at low cost, especially in local terms. The decline in prices for commodities has not necessarily translated into cheaper food for consumers.
Public Policy Responses: The Agreement on Agriculture
The World Trade Organization rules are designed to address national policies that distort global markets for agriculture. In particular, they are intended to curb subsidy use and to remove trade barriers. What the rules do not address, except obliquely by reference to state-trading enterprises, is market power and the question of monopoly and oligopoly power. This oversight means much of the modeling from academics, and the rhetoric surrounding different negotiating positions taken by national delegations, miss essential aspects of the agricultural sector in most countries.
Farmers, Trade and Public Policy
Most agricultural policy is enacted in the name of farmers, and farmers are often the object of criticism made of developed countries farm policies.
However, farmers are the weakest link in the chain that brings food from the field to the table. They are price-takers, dependent on highly concentrated industries for their inputs and for the sale of their products. Farmers in Mexico and the Philippines who depend on maize for their livelihoods do not compete with farmers in the United States but with the companies that export grain to their countries-companies, incidentally, that are the prime beneficiaries of U.S. farm policy.
What can farmers do to manage this situation?
For developing country governments considering how best to respond to their food security needs and their concern to support sustainable livelihoods for their farmers, it is invaluable to consider other marketing and production models. The debate should not be over public/ private ownership but how best we can realize our objectives for agriculture and rural development.
One immediate proposal before governments at the WTO is the Development Box. This proposal reflects the widely-shared concern that current trade rules reduce vital policy flexibility for the majority of countries that cannot afford to support their agricultural sector with direct payments. The proposed measures include an exemption for staple foods from minimum import requirements; the right to maintain, and if necessary increase, tariffs as protection against distorted prices on international markets and to safeguard the livelihoods of low-income producers; and a moratorium on further domestic support reduction commitments until developed countries have made very significant reductions in their support levels.
Conclusion
Trade negotiators cannot hope to anticipate every development with perfect rules. That is why a permanent multilateral trade-negotiating forum, the WTO, was established: to allow trade rules to respond as circumstances change.
As trade negotiators review the existing rules for international agricultural trade, they ought to keep a few central points in mind.
First, we must remember why we engage in trade. Trade is a tool that ought to serve the fundamental objective of maximizing human welfare.
Human welfare depends on all people having access to a nutritionally adequate diet at all times. Insofar as international trade serves this goal-by increasing the supply of good-quality food at affordable prices; by gener- ating foreign exchange for investment in economic development; by creating livelihoods for people, especially those living in poverty-then it serves our objectives and should be encouraged. Trade, however, is not an end in itself.
Second, we must keep in mind that agricultural economics has distinct characteristics-characteristics not reflected in the assumptions that underlie the Uruguay Round Agreements and the AoA. Among these characteristics is the relative inelasticity of demand and supply.
Furthermore, because food is vital to human survival, governments must intervene in the market to ensure that people are able to obtain adequate food. Public policy is thus an inevitable component of any economic framework for the agricultural sector.
Third, the assumptions in the AoA are not well supported by empirical experience. Companies trade-not farmers or countries. The globalized food system, the part of the food system that international trade is about, is largely managed by a few enormous private firms. These companies and their practices are at least as significant as the public policies that affect agricultural production and international agricultural trade, not least because of their influence on the public policies in question, yet the multilateral trade rules ignore them.
Fourth, about 90 percent of agricultural production is for domestic use. The grain that is traded internationally comes from relatively few countries; supplies are dependent on weather patterns, which makes prices volatile. The AoA's emphasis on reducing public stockholding has exacerbated this volatility, and undermines the stated goal of providing reliable and affordable supplies to the developing countries that must import food to feed their people.
Assessments of the Uruguay Round Agreement on Agriculture show that many of the promised benefits of liberalized agriculture have yet to materialize; they may not materialize at all. The promise made to developing countries that the AoA disciplines would end problems such as the dumping of agricultural products at less than cost of production prices in world markets has proven hollow. However, this is not simply because export subsidies and domestic payments to farmers continue. It is the structural result of an agricultural sector where transnational agribusiness have the power to set prices. The level playing field promoted by trade liberalizers will have to include some kind of handicap to ensure that transnational agribusiness pay the real costs for the grain they process, ship and sell. This is precisely the role of public policy, and should be the task assigned to trade negotiators at the WTO in Geneva.
In the longer run, the challenges posed by environmental limits on our resources, especially on land and water, and the need to protect genetic diversity, are providing an incentive for a different model for agriculture.
In developed countries, this means a move to create an alternative to the centralized industrial production model that has so many hidden costs. In the developing world, this could be an alternative path for the development of agriculture that avoids the pitfalls of industrial agriculture, and protects a decentralized distribution of the benefits of production.
Governments need to take on these problems more directly. The current review of the Agreement on Agriculture is an opportunity for change.
It is hoped this paper has provided a clear argument as to why more of the same will not be enough. We can and must do better.
Sophia Murphy is the director of IATP's Trade and Agriculture Program,
which focuses on multilateral institutions and food security. She is a
former Policy Officer at the United Nations in Geneva, Switzerland, and
Policy Officer at the Canadian Council for International Co-operation in
Ottawa. She is a graduate of Oxford University and the London School of
Economics. She has written frequently on food and trade issues and has
spoken to many international panels on these topics - most recently at the
United Nations Financing for Development meeting in Monterrey, Mexico.
The Institute for Agriculture and Trade Policy promotes resilient family
farms, rural communities and ecosystems around the world through research
and education, science and technology, and advocacy.
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4) CALLS TO ACTION
The government has announced the development of a White Paper to form the foundations for Australia's future trade and foreign policy in the post September 11 context. DFAT is inviting short submissions (5 pages) from the public by August 1. It is important that the government receives input from a wide range of organisations and indivinduals. Please consider whether your organisation can put in a short submission. The DFAT information about the process is below.
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The Minister for Foreign Affairs, Mr Downer, and the Minister for Trade, Mr Vaile, have commissioned Australia's second foreign and trade policy White Paper titled Advancing the National Interest. The government produced Australia's first White Paper, In the National Interest, in August 1997. That White Paper laid the foundations for the government's approach to foreign and trade policy during its first two terms in office. Many of the assumptions and analyses that underlay In the National Interest remain relevant to the international challenges Australia confronts today.
Australia's international security and economic environment, however, has undergone some significant changes since 1997. The terrible events of September 11 demonstrated terrorism's threat to security and jolted the established international order. There has been a significant reordering of the international agenda, with the war against terrorism featuring prominently. The further strengthening of globalisation since 1997 has accentuated the opportunities and challenges of global integration. Australia has addressed these challenges well; others, including in our region, have coped less well and this has had implications for Australia.
The new round of WTO negotiations offers the prospect of a fairer global trading system for Australia. But the negotiation environment and agenda is more complex than previously. Our immediate region has also undergone pronounced change. Indonesia's democratic transition and East Timor's move to independence have been fundamental changes to the political landscape since 1997. East Asian economies remain subdued, having failed largely to regain the levels of growth achieved before the 1997 financial crisis. And several of Australia's Pacific neighbours are grappling with economic and security problems as difficult as any they have faced previously.
Australia is well placed to meet these challenges. Our country has considerable assets in its abundant resources, strong and stable political institutions, modern infrastructure and diverse, educated society, that it can bring to bear on these challenges. And Australia's economy, strengthened by progressive economic reforms, has proven its resilience and ability to adapt and prosper in an uncertain international environment. The central purpose of the White Paper will be to ascertain how Australia can best use its considerable credentials and attributes to advance its national interests in an increasingly globalised and fluid international environment. Advancing the National Interest will examine the key international security, economic and political challenges facing Australia, including, although not exclusively:
· What are the implications of September 11 for the international and regional security environment and what will the impact be on Australia?
· How can Australia best advance its economic interests in an environment of deepening globalisation? How can Australia maximise the benefits from the new WTO round of global trade negotiations and from the increased international interest in free trade agreements?
· What is the balance and interplay between Australia's relations with Asia and our broader international interests?
· What are the main challenges and opportunities for Australia in the Asia-Pacific region?
· How can Australia make best use of coalitions of likeminded countries toadvance its interests on key economic and security issues?
· Where do Australia's interests lie in the United Nations system and how can these best be advanced?
Members of the public are invited to make submissions to the White Paper Task Force. Submissions should be typed and be up to five pages in length. Submissions can be lodged electronically with the Task Force at whitepaper@dfat.gov.au or by post to:
The White Paper Task Force
Department of Foreign Affairs and Trade
BARTON ACT 0221
Australia
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Terrie Templeton WTO Watch Qld gumbus@powerup.com.au
[Non-text portions of this message have been removed]
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