Trade ministers from around the world are concluding a contentious week of negotiations in Nairobi, Kenya under the World Trade Organization’s (WTO) Doha Development Round. Thus far, there is no indication that Pope Francis, when he was in Nairobi three weeks earlier, blessed the Kenyatta International Convention Center where the summit will take place.
Given the intransigent tone of the U.S. and other developed country representatives, a papal blessing may be the only thing that can produce an outcome worthy of the WTO’s current mandate to promote development. The United States is demanding nothing less than the ending of the Doha Round.
A welcome shot in the arm came earlier this week from Dr. Hilal Elver, the U.N. Special Rapporteur on the Right to Food, who issued a statement urging negotiators to deepen their commitment to achieving the development objectives of the Doha Round. She called it “profoundly troubling” that a “handful of countries” are calling for an end to Doha.
Trade rules and the right to food
The Special Rapporteur’s sharply worded statement highlights the importance of fair trade in achieving the U.N. mandate for governments to promote “the progressive realization of the right to food.” Trade rules can – and do – undermine food security in developing countries in a number of ways, and many of those issues are at the center of the WTO’s agriculture negotiations.
Trade rules allow excessive levels of “domestic support” for their farmers by rich countries, which results in the “dumping” of cheap, subsidized commodities on developing country markets.
WTO rules, strictly applied, can threaten legitimate food security programs, such as the public procurement of staple food crops at administered prices (to benefit poor farmers) for distribution to the poor at subsidized prices. Many countries, including the WTO host government of Kenya, maintain such programs.
India’s vastly expanded food security program came under fire from the United States and a few other countries, which used arcane WTO calculations to inflate the estimated subsidy implied by such programs. The conflict almost prevented agreement in Bali, Indonesia two years ago.
Such conflicts between trade rules and the right to food prompted a public dust-up in 2011 between then-WTO head Pascal Lamy and then-Special Rapporteur Olivier De Schutter. De Schutter had issued a briefing note identifying the many ways in which WTO rules undermined the right to food. As a human right, De Schutter argued, the right to food should take precedence and trade rules should promote rather than impede its realization.
The subsequent attack on India’s National Food Security Act (NFSA) only highlighted De Schutter’s point. India’s National Food Security Act (NFSA), approved in 2013, seeks to reach hundreds of millions of poor farmers with better prices while providing basic foods to fully two-thirds of the nation’s people. It represents a huge step toward achieving the right to food, which had been formally upheld by the Indian Supreme Court.
United States farm policies under fire
The United States led the calls in Bali to question India’s food security measures, calling them – apparently with a straight face – an unfair subsidy to India’s farmers. The hypocrisy of that charge was only made more stark by the passage the following year of the new U.S. farm bill.
Though claiming to reduce “trade-distorting” subsidies, the bill may well end up increasing them. Early projections suggest that commodity payments to farmers will be around US$12 billion, higher than in recent years. There is little doubt that U.S. cotton subsidies will have such a “price-suppressing” effect.
A recent study estimated that removing the new subsidies to cotton, which were supposed to be WTO-compliant, would reduce U.S. exports by 29 percent while raising prices 7 percent. The costs of lowered prices and lost markets to other cotton producers were estimated at US$3.3 billion per year, US$16 billion over the five-year life of the farm bill.
India, the country the United States accuses of unfairly subsidizing its farmers, would be one of the hardest hit, with lost cotton revenues of US$800 million per year. The so-called Cotton 4 West African countries – Mali, Chad, Benin, and Burkina Faso – which had been promised “expeditious” action on U.S. cotton subsidies fully ten years ago, now face losses collectively of US$80 million per year.
Will the WTO abandon development?
U.S. Trade Representative Michael Froman, in a bold stroke of hypocrisy, opened his speech to the WTO plenary calling on trade representatives “to move beyond the cynical repetition of positions designed to produce deadlock.” Deadlock, of course, is exactly what Froman wants so he can start shaping the WTO in the image of the Trans-Pacific Partnership, an agreement far more to the liking of the U.S. negotiators.
This is no time to abandon the development mandate embodied in the WTO’s Doha Round. More than one hundred WTO member countries issued a statement challenging the call to end the negotiations, citing Doha’s many unmet promises. The African group issued a statement with India and other developing country allies demanding the reaffirmation of the Doha mandate.
Special Rapporteur Hilal Elver agrees. She particularly urged the removal of rich country policies that “hamper efforts by developing country governments to increase domestic food production, particularly by smallholder farmers whose families are among the world's hungry.”
If rich countries are permitted to jettison the Doha Round and put their own priority issues on the table instead, we’ll be looking at what the late great U.S. baseball legend Yogi Berra called “déjà vu all over again” – a few developed countries setting the agenda and writing the rules in their own interests. That history is what prompted the present effort to seek greater equity in the WTO. It should not be abandoned.