South Asian Media Net
key to a breakthrough
on trade and
|NEW YORK: The reopening of World Trade Organization
talks on agricultural trade this week in Geneva provides an opportunity
to remove an injustice against millions of people in some of the world's
least developed countries - while also rationalizing economic policies
in the rich countries and getting stalled trade negotiations moving
again. At issue are subsidies that distort the cotton market at the
expense of poor producers.
Cotton is one of the world's most heavily subsidized crops. U.S. cotton
that was exported at 37 cents a pound in 2002 cost agricultural companies
86 cents to produce, even before shipping, according to U.S. Department
of Agriculture figures. The difference was made up by the U.S. government,
underwritten by American taxpayers. In 2001, the payout of subsidies
by the United States for cotton alone soared to $3 billion, before
settling down to $1.7 billion in 2002.
These subsidies, placed on cotton by Europe as well as the United
States, form a barrier to poor countries trying to work and trade
their way out of abysmal poverty.
Cotton figures as a significant export item for at least 20 of the
50 nations designated as least developed countries by the United Nations.
Most of these 20 countries - where life expectancy averages about
50 years, and most of the population is living on $1 a day or less
- are in western and central Africa.
Last year, in the run-up to the WTO ministerial meeting in Cancun,
Mexico, a plea against the system of cotton subsidies was issued by
Benin, Burkina Faso, Chad and Mali. These African countries are among
the lowest-cost producers of cotton in the world.
The four countries proposed that the European Union and the United
States should embark on a three-year phase-out of cotton subsidies,
and set up a transitional mechanism to offset the losses incurred
in the meantime.
Since the breakdown of trade talks in Cancun last September, there
has been some attention but too little action directed toward the
problems of cotton growers from poor countries.
As the talks on agricultural trade issues reopen, it is time to revisit
the proposal made by Benin, Burkina Faso, Chad and Mali. These countries
are not asking for preferences, but for a correction of trade distortions.
In addition, there should be assistance for the development aspects
of cotton production - improving technical capacity, infrastructure
and the ability to bring cotton products with greater value-added
to the markets.
In the poor and developing countries, 75 per cent of the people live
in rural areas, so a full phase-out of cotton subsidies in the near
term is critical to the international fight against poverty.
Such a move would not only open up economic opportunity in some of
the world's poorest countries, it might also be the confidence-building
step needed to jump-start progress in other areas of agricultural
trade disputes, which in turn are perhaps the single largest obstacle
to progress in the current round of trade negotiations. If that happened,
the whole world would benefit.
Anwarul K. Chowdhury, a former ambassador of Bangladesh to the United
Nations, is a UN undersecretary general and the UN high representative
for the least developed countries.