Pakissan.com; Geneva accord: WTO still remains a question mark

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.

Geneva accord: WTO still remains a question mark

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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