THE Doha round of World Trade Organization talks was once again back on course when exhausted delegates from 147 member countries finally agreed the next step Saturday in Geneva. Unfortunately, back on course does not mean that they are close to arriving at a final deal, the key to which will be the vexed question of agricultural subsidies. The rich First World — principally the Americans, the Europeans and the Japanese — has long resisted enforced cuts in the financial assistance they give their own farmers. So long as those subventions remain in place, farmers elsewhere in the world, most particularly the Third World stand no chance of being able to compete in the international market place.
Meanwhile, First World consumers are paying twice for their food, once at the checkout and once again in their tax bills. Removing subsidies and allowing Third World countries to sell into global agricultural markets ought to be a win-win situation for everybody. That is not however the way the rich countries have chosen to see it. They fear the long-term impact of cheaper outside competition on their own agricultural sectors. They are reluctant to give up the degree to which they can currently feed themselves. Put bluntly, these concerns boil down to the ceding of producer power, which translates into a diminution of political power.
The Americans are notoriously chauvinistic in this area. Even Democrat John Kerry who has a far more informed worldview that than of George Bush used his nomination acceptance speech to call for an end to the export of US jobs to cheaper countries and extol US creative genius.
WTO officials admit that it is going to take at least two years to hammer out the detail of Saturday’s framework agreement in Geneva. That means yet more wasted time while Third World economies struggle with their debt burdens and their incoherent economies. Nevertheless, these countries should not be too downhearted. This is a crucially important deal because, for the first time, the whole principle of agricultural subsidies has been addressed and the eventual introduction of free market mechanisms has been accepted. There will almost certainly be much frustration and anger in the many months of finely detailed negotiations to come, but whatever agreement that emerges, is likely to be groundbreaking. Most contentious will be the speed with which subsidies are phased out.
Away from the forum of the WTO there is however another important step that can and must be taken and this is on debt forgiveness. It will be the height of cynicism if when the First World deals on subsidies, it then demands that the resulting leap in Third World economy incomes is channeled into settling these countries’ massive debt burdens. The freeing of international agriculture should be accompanied by a coordinated write-off of Third World debt. That way countries crippled by past political mismanagement and insane borrowing binges will have a chance of beginning to compete on a truly level playing field.
