E-mail this article to
yourself or a friend.
Enter address:


A WTO deal on farm subsidies while globalization opponents gather in France

Editor's note: After the following two stories, please see the links to graphs depicting the situation for U.S. farmers. -- RS

(Thursday, Aug. 14, 2003 -- CropChoice news) -- Paul Meller with David Barboza, NY Times: BRUSSELS, Aug. 13 — In an effort to breathe life into global trade negotiations, the United States and the European Union said today that they had agreed on a way to reduce the subsidies and import duties used to protect their farmers.

Agriculture subsidies have been the chief obstacle in the current round of negotiations at the World Trade Organization. Delegates from the 146 member nations of the organization will meet next month in Cancún, Mexico, and the poorer nations have said that the trade talks would be doomed unless the developed nations cut back sharply on the subsidies.

Today's proposal was necessary if the Cancún meeting is to have any chance of success, Europe's top trade official, Pascal Lamy, said in a telephone interview.

"We have agreed to substantial reductions to domestic support," Mr. Lamy said. "This moves the negotiations 50 or 60 percent forward."

Allen F. Johnson, the chief agriculture trade negotiator for the office of the United States trade representative, gave an equally cautious welcome to the accord. He described it as a breakthrough but warned that there remained "tough issues ahead."

The agreement between Washington and Brussels is preliminary and thin on details, and trade officials from developing nations were skeptical of its merits.

Still, it reflects remarkable cooperation between the world's biggest trade powers, which have clashed often on agricultural issues. And it is a new start on the issue of agriculture subsidies after previous negotiations had failed.

"It is an important deal," said Richard Weiner, a trade lawyer with the law firm of Hogan & Hartson in Brussels. "Developing countries may criticize it, but the two sides have now created the conditions needed for success in Cancún. They have created the framework; now they have to fill in the numbers."

The Cancún meeting is intended to deal with trade distortions across a range of goods and services, ahead of a new global trade agreement that is set to be signed by the end of next year. Agriculture accounts for a much smaller share of world trade than industry, but it could upset wider talks because of its political sensitivity.

Developing countries are pushing hardest for global cuts in farm subsidies and import tariffs that make their products less competitive in other markets. Developed countries, likewise, are looking to gain easier access to developing markets and especially China, the W.T.O.'s newest member.

However, regions where farmers have grown dependent on subsidies, including the European Union and Japan, contend that these protective measures are needed to keep rural communities alive.

Big farm groups in the United States were encouraged by the announcement, saying that agreements to reduce government subsidies and do away with trade barriers would eventually benefit American farmers.

"U.S. farmers face significant trade barriers around the world," said Ron Heck, president of the American Soybean Association. "We want these markets open."

The National Corn Growers Association also said that it was in favor of phasing out United States government subsidies and price supports if it meant opening more markets for American corn.

"We're saying let each country produce what they produce best, and not be adversely affected by the size of another government's treasury," said Rick Tolman, chief executive of the National Corn Growers Association.

The United States abandoned an earlier proposal to cap trade-distorting subsidies at 5 percent of the value of a country's farm output. Mr. Johnson reiterated his aim to eventually wipe out agriculture subsidies, but the agreement announced today does allow for some state support for farmers.

The joint proposal does not specify a reduction in subsidies and import duties, nor does it set any deadlines. It commits the United States and the European Union to reducing protection for their farmers in parallel, and it separates some subsidies, like assistance to improve environmental standards on farms, into a category Mr. Lamy said should not be considered protectionist.

Protectionist measures used by the United States and the European Union amount to $15,000 to $20,000 per farmer each year, according to estimates by the Organization for Economic Cooperation and Development.

The agreement comes after the European Union said in June that it would reduce its subsidies to wealthy farmers if the United States and other countries followed suit.

Officials of developing countries said they welcomed today's effort, but that the proposal fell short of what they would expect to achieve at Cancún.

"We welcome the step; everyone welcomes that," said Luiz Felipe de Seixas Corrêa, Brazil's envoy to the W.T.O. "But it's not enough."

India's ambassador to the W.T.O., K. M. Chandrasekhar, was more critical, telling reporters in Geneva that the proposal "seems to be an attempt to pry open the developing country markets without clear commitment" on the part of the United States and Europe to open their own. "I think it isn't feasible for us."

Farmers in developing countries complain that assistance to European and American farmers hurts them, not just by keeping them out of lucrative Western markets but also because some subsidies encourage European and American farmers to sell their produce below cost in third world markets, undercutting local growers.

Tim Rice, a trade policy analyst with the international group ActionAid, said of today's agreement, "America and the E.U. are paying lip service to third world farmers."

But the details of the accord could change everything. "The numbers make all the difference," Mr. Corrêa said, "and the deadlines make all the difference."

Celine Charveriat, head of advocacy for the aid group Oxfam International in Geneva, welcomed the effort to tackle the agricultural subsidies issue. "At least they are showing willingness to sit down and come up with proposals," she said.

The talks came at the request of the World Trade Organization in an effort to break the stalemate ahead of the meeting in Cancún. "It's not a question of take it or leave it, but you've got to start somewhere in these things," a spokesman for the European Union, Eric Mamer, said. "We're at the beginning of a process, not at the end."

Source: http://www.nytimes.com/2003/08/14/business/worldbusiness/14TRAD.html?pagewanted=2&th

2. Globalization opponents gather in France to stragetize ahead of Cancun WTO Ministerial

John Taglibue, NY Times: Call it a summer camp for antiglobalization crusaders.

Tens of thousands of people, young, old and in-between, [August 8] heeded the call of organizations opposed to the way the global commerce is being reorganized and gathered on this sun-baked, wind-swept plateau in southwest France [Causse Du Larzac] to discuss ways influence the coming round of World Trade Organization talks in Cancún, Mexico, in September.

It was a Woodstock against globalization. Environmental groups, trade unions and opponents of nuclear energy and the wars in Palestine, Iraq and Chechnya handed out pamphlets. Rock bands and circus acts performed and vendors hawked local specialties from sausages to wine to pungent Roquefort cheese, which is manufactured in a nearby village.

Being French, much discussion revolved around the menace to diversity in the food world, as globalization opponents contend that the rules of commerce empower giant multinationals to crush the small farmers who produce the hundreds of varieties of French wine and cheese.

Among the stars of the show is José Bové, the 50-year old sheep farmer, union leader and national hero for his refusal to bow to globalization. Mr. Bové, who has been serving a 10-month prison sentence since February for destroying genetically modified rice in 1998, was paroled last week.

"In France, there has never been a public debate, never a discussion of the mandate" given to the European Union for the Cancún round of talks, he said in an interview. "It's something being done on the backs of the people."

Mr. Bové, a wiry, mustachioed man pale from his jail cell, said the main topics of the three days of debate, which end Sunday, would essentially be the Cancún agenda: farming, services, intellectual property rights in food and medication, and projected accords on international investment, which he called tantamount to a "surrender of all sovereignty."

President Jacques Chirac of France has been anxious to include nongovernmental organizations in the debate leading up to major global meetings like Cancún. Mr. Bové, clad in a T-shirt that read, "Other Worlds Are Possible," said this weekend's events, which the organizers hope will draw as many as 100,000 people, was an appeal to Mr. Chirac to draw a broader public into the discussion. "We need a general debate," he said.

Many of the organizations that came encapsulated resistance to the social changes that are sought in France by Mr. Chirac and his conservative prime Minister, Jean-Pierre Raffarin.

Daniel Retureau, director of international institutional relations for the General Confederation of Labor, among the most radical French trade unions, said many French linked global liberalization with efforts by Mr. Raffarin, at the behest of the European Union in Brussels, to put pensions, health care and education on a sound financial footing. "Brussels says competition," Mr. Retureau said, "but it's privatization."

Mr. Bové and other organizers chose Larzac because of its notoriety in the 1970's when local farmers went to jail resisting French government plans to expand a local military base. A decade of stubborn resistance ultimately led President François Mitterrand, after his 1981 election, to drop the plan. The peaceful victory established the plateau and its farmers as symbols of opposition to government dictate.

The big gathering took place only a short distance from the town of Millau, where in 2002 Mr. Bove organized the bulldozing of a McDonald's restaurant to protest the Americanization of France. He spent six weeks in jail for that escapade.

Gwyn R. Williams, a Cambridge University anthropology student who is writing a thesis on Larzac, said local farmers saw themselves as offering hospitality for a broader cause, including, for instance, "farmers who lose the right to plant their own seed, because multinationals control the seed."

And because the commercial liberalization favored by the World Trade Organization is generally associated with the United States, he added, they generally viewed the Cancún agenda as "the Americanization of the entire planet."

Lori M. Wallach, the director of Global Trade Watch at Public Citizen in Washington, said she would stress in the debates the "two hottest topics " at Cancún, namely proposed accords governing international investment and procurement. Many critics attack them because, she said, "they expand the notion of one size fits all" by imposing uniform standards globally. The accords have met resistance from developing countries, but are favored by the United States and the European Union.

French critics of the Cancún agenda, she added, were "more aware of quality of life issues than Americans," including for instance the quality and diversity of food products. "In the United States, it's more of an economic reaction."

And indeed, one reason for the choice of Larzac, one of France's best known gastronomic regions, was to underscore that concern.

Pierre Caron, 72, a retired schoolteacher from the Vaucluse region, slurped oysters under an umbrella with Daniele Alvernhe, another former teacher. The oysters were sold by one of many food vendors that dotted the sprawling campsite. Their main concern, both agreed, was the future of French culture and education, which was undermined by a drive toward privatization.

"We believe the accords at Cancún would by very profitable for private investors," Mr. Caron said. "Our system's not perfect, but we need more discussion."

Links to graph depicting bad situation for U.S. farmers: