Rich nations continue to rip off poor nations with farm subsidies

From the NY Times:

Promises, Promises

In 1947, when 23 nations agreed to start a new international organization to promote trade and arbitrate disputes, the wants of poor countries mattered little. Industrialized nations were rebuilding after World War II, and remained the colonial masters of Asia and Africa. Over the next half-century, that club - now known as the World Trade Organization - aggressively dismantled barriers against trade in industrial goods and services, areas in which its members hold a comparative advantage.

But when it comes to areas where poor countries could flourish, such as textiles and agriculture, it has been a different story. American tariffs on textiles and apparel are among the nation's highest. Europe, Japan and the United States continue to resist facing global competition in agriculture on fair terms. The very same representatives of the club of rich countries who go around the world hectoring the poor to open up their markets to free trade put up roadblocks when those countries ask the rich to dismantle their own barriers to free trade in agricultural products.

Last month, negotiations at the W.T.O.'s Geneva headquarters once again brought this sad reality into stark relief. The group is supposed to finally be taking up the issue of agriculture subsidies. Four years ago, in Doha, Qatar, poor countries demanded - and supposedly won - a promise that Europe, Japan and America would slash agricultural subsidies, in addition to further liberalizing world trade in services and manufactured goods. One year ago, the W.T.O. gave itself until July 2005 to draw up a plan for how it would do all this.

Since then - surprise, surprise - negotiators have made big strides toward agreeing how to cut tariffs on manufactured goods, and, to a lesser extent, services. Both of those are important to rich countries.

And guess where negotiations have stalled? The European Union and the United States are busily fighting over how little they can get away with when it comes to liberalizing farm trade. Listening to these two economic powerhouses snipe about who should be doing what is revolting; neither is doing anything real.

The developed world funnels nearly $1 billion a day in subsidies to its own farmers, encouraging overproduction, which drives down commodity prices. Poor nations' farmers cannot compete with subsidized products, even within their own countries. In recent years, American farmers have been able to dump cotton, wheat, rice, corn and other products on world markets at prices that do not begin to cover their cost of production, all thanks to politicians and at the expense of American taxpayers. Europe's system, meanwhile, is even more odious: United States farm subsidies are equal to only a third of the European Union's.

Farm tariffs are also a problem. Take cocoa. European tariffs on raw material are lower than tariffs on final products. That means that cocoa-producing countries like Ghana can't export chocolate to Europe, and are forced to export the raw material, cocoa, instead.

It was with great fanfare five years ago that the United States and some 188 other countries signed the United Nations Millennium Declaration, a magna carta to eradicate poverty and hunger and disease among the one billion people in the world who subsist on barely anything. Chief among those goals was for the rich world to finally put muscle behind that overused phrase "level the playing field," when it comes to trade.

But so far it has been nothing but talk, talk, talk on trade. While the rich continue their shameful obfuscating, poor countries are priced out of the market. A few weeks ago, the European Union's trade envoy, Peter Mandelson, actually complained to reporters that Europe had been making more than its fair share of compromises in the W.T.O. talks. "This process of compromise has been a one-way street for well over a year," he said.

Mr. Mandelson and his counterparts in America and Japan would do well to remember what happened in Cancún, Mexico, in September 2003, when a bloc of poor nations, led by West African countries upset about cotton subsidies, helped torpedo an international trade deal. Big business on both sides of the Atlantic dearly wants a trade pact that liberalizes the rules on manufactured products and services. But for poor countries, the process of compromise has been a one-way street for more than half a century. It's time for the rich world to start doing a little compromising.