STWR - Share The World's Resources

Never underestimate the self-pity of the ruling classes. Since Labour took office in 1997 the Confederation of British Industry (CBI) has been engaged in one long whinge. It doesn't matter that British taxes are among the lowest and regulations among the weakest in the developed world. It doesn't matter that the rich are richer than they have ever been. The CBI is the monster with a thousand stomachs that will never be satisfied.

In the submission it made to the chancellor's pre-budget report it demanded that the government spend less on everything except business. The state should cut its planned spending on health, social security and local authorities, and use some of the savings to protect and enhance its "support and advisory services for trade and businesses". The higher-education budget should be used to supply free research for corporations. The regional development agencies should "expand their activities to support more extensive business-to-business networking and collaboration". Further road taxes should be abandoned, and the climate-change levy "should be frozen", but the government should help businesses by building more roads and airports. This is what the CBI means by free enterprise.

Do you ever suffer from a sense of deja vu? That you have seen something before.

By Andy Rowell

We have been repeatedly told by those that govern us that great progress is being made this year to eradicate poverty and end pollution. But yet it seems there is no progress at all. The progress that is made is so painfully slow that it is meaningless.

Yet on our TV screens and in our newspapers we are told that at meeting after meeting great historic deals have been done by our noble leaders. The photos are taken, the hands are shaken, and the leaders go home happy. Yet nothing seems to change.

The reality is that, despite all the promises from politicians, the poor stay poor and the rich stay rich. That despite all the promises from the politicians, bureaucrats from rich countries make the rules that ensure the poor stay poor. That despite all their great promises, the rich carry on polluting, whilst saying they care for the planet.

We were made to believe that everyone cannot be befooled at all the times. Ten years after the World Trade Organisation (WTO) came into existence, and looking at the outcome of the sixth Ministerial Conference at Hong Kong, it is time to bury the age-old adage under the heaps of trade drafts.

For the sixth time in a row, the trade ministers of the developing world – representing issue-based coalitions like G-20, G-33 and G-90 – have been duped to believe that trade is for development. Despite making loud noises, threatening and fuming over the injustice done to the poor and developing countries, the trade ministers of the G-110 countries, comprising the entire developing world, finally bowed before the rich and mighty.

Ten years after the WTO came into existence, and after six ministerial conferences, developing countries have failed miserably to force the rich industrialised countries to remove even one dollar from the massive agricultural support they provide to agribusiness corporations in the name of farmers. Unable to make any dent in the citadel of unfair trade – farm subsidy of US $ I billion a day – developing countries have time and again taken refuge behind an illusionary smoke screen. After each of the ministerial conferences, they have returned ‘victorious’, and the price has been paid by millions of small farmers edged out of farming.

Aftab Alam Khan, head of ActionAid's trade justice campaign, reflects on the WTO's sixth ministerial conference and what the final declaration means for the world's poorest people.

Six thousand delegates, six days of talks, but what has all this effort achieved? Hong Kong has been in the eye of the storm as trade ministers and officials from the WTO's 150 member states descended on the city to thrash out an agreement on how global trade can be harnessed to help alleviate poverty.

Expectations were low even before the WTO's sixth ministerial conference kicked off on December 13, but as the ink dries on the final declaration, it is disappointing and frustrating that poor countries have been cheated once again.

The current round of trade talks - the so-called Doha development agenda - are meant to culminate in an agreement that ensures trade rules help fight poverty rather than hinder it. But, right now, it feels as though we are going backwards, not forwards.

The declaration, issued by the WTO yesterday evening, reflects the interests of a few rich countries like the EU and the US rather than those of more than 100 developing countries, home to four-fifths of humanity.

The EU and US ended up making only paltry offers to reduce their agricultural subsidies, the thorniest issue on the negotiating table.

The trade reform promises rich countries made four years ago are set to be broken at a World Trade Organisation (WTO) meeting in Hong Kong next week, international agency Oxfam warned in a new report published today.

Trade has the potential to lift millions out of poverty. However, what was meant to be a ‘development round’ has been turned on its head, with rich countries demanding greater and greater concessions from poor countries, but giving very little in return.

“Negotiations that were meant to deliver needed reform of trade rules to boost development have been derailed by back and forth demands between rich countries that have created a standoff. This is not the kind of leadership that will improve the lives of poor people,” said Phil Bloomer, Head of Oxfam International’s Make Trade Fair Campaign.

“Rich countries have insisted on a number of concessions from poor countries, saying they need to see ‘blood on the floor’ from other WTO members in order to sell the deal back home. Such power politics turn upside-down the promises made in Doha. On their current course, the negotiations will have little benefit for the poor and may even hurt some developing countries,” he added.

Agricultural reform is essential to help the world’s poorest people, yet rich countries have not delivered on promises to end dumping and improve access to imports from poor countries, says Oxfam. Progress is stalled on cotton, one of the starkest examples of the impact of dumping on poor African farmers. Meanwhile, developing countries are under increasing pressure to open up their own markets, even at the expense of their impoverished farmers.

Once again international attention is focussed on trade negotiations, with hectic parlays between groups of countries before the forthcoming WTO Ministerial Meeting in Hong Kong. And once again it is clear that developing countries are unlikely to get much relief or advantage from these talks, either in terms of being allowed greater flexibility to provide some protection to their own producers, or in terms of greater market access to the markets of developed countries.

So it is worth asking the question: why are developing countries so persistently unable to extract any advantage from these international negotiations, despite their clear moral advantage, their greater numerical strength, and even the greater unity across some groups that they have recently displayed by forming pressure groups like the G-20 and the Group of African countries?

Of course it is true that international power remains unequally distributed and dramatically skews the balance between the core group of rich nations (and the US in particular) and developing countries in general. But that is only part of the problem. One basic weakness of developing countries, and one that renders them so much less effective in international trade negotiations, is the concern they all have with increasing market access to the developed world, which stems from the obsession with exports as the engine of growth. This in turn make developing country governments so desperate that they are willing to offer various concessions and accept problematic clauses that affect their own domestic producers, in the hope of somehow achieving the export expansion that is now seen as the key to the development project.

It is history repeating itself as farce. Negotiators meeting in London, Geneva and elsewhere await an acceptable agreement between the US and the EC on agriculture, before working out a deal that would help salvage the next major step in the Doha Round of trade negotiations: the Hong Kong Ministerial starting December 13.

The US seeks to appear reasonable by putting out an offer that sounds path-breaking. The offer includes the following: First, in US Trade Representative Rob Portman's words (Financial Times, October 10, 2005), the deal should involve ''steep tariff cuts over the next five years, starting from 55 per cent up to 90 per cent in the highest tariffs in rich countries''. This is to be followed by a second stage in which tariffs would be brought down to zero. Further, there should be very limited scope for alternative treatment of sensitive products, and the creation of this list should not be used to undermine market access.

Second, "a 60 per cent cut in "amber box" support - the most distorting type of subsidies - over the next five years" and a fifty per cent reduction in the cap on the less trade-distorting support under the "blue box", which needs to be further defined. Here too, there is to be a second stage in which all trade distorting support is to be eliminated.

And, third, setting a deadline of 2010 for the agreed elimination of export subsidies, combined with a tightening of ''rules on the donation of food aid to guard against possible commercial displacement but not at the risk of further reducing already inadequate food aid for those who need it most.''