Focus on Trade:Number 100, June 2004

Market Access: The Grand Illusion

Market access is the raison d’etre of trade negotiations, the objective being to maximise access to other people’s markets while minimising their access to yours. According to this logic, the advanced industrial countries always win the game because they have all the means to protect their markets and all the tools to pry open other markets. "Market access" is touted as the solution to all the failures of trade liberalisation and everyone, from the EU and the US through to the G20 and UNCTAD, is pushing the market access barrow. But what does market access mean? Whose market is being accessed, and who is being squeezed out in the process? Who benefits from market access: farmers, workers, TNCs? What’s more, market access doesn’t come for free: if the EU concedes part of its beef market to Argentina, it wants something very substantial in return. If the US opens its borders, you can be sure it’s not a gesture of good will. Market access goes (very unevenly) in both directions.

In this issue, Gerard Greenfield explores the link between commodity prices, market access and TNCs, while Jacques Chai Chomthongdi’s data based analysis of the Thai rice trade shows that farmers do not reap the benefits of increased exports.

The G20 initiative to launch a round of liberalisation using the Generalised System of Trade Preferences (GSTP) at UNCTAD XI in Sao Paolo next week could be a significant boost to South-South trade, however the implications certainly require critical analysis. For example, just because trade is "South-South" doesn’t mean that it is necessarily less damaging to local economies, and of course many Northern TNCs have extensive operations in the South. The agri-business giant Cargill, for example, does business in 160 countries. The GSTP was conceived in 1985 as a response to the Uruguay Round (and subsequently killed by the US) and a 1979 "enabling clause" of the GATT (and incorporated into the WTO) allows developing countries to enter into preferential trade agreements, regardless of the "most favoured nation" (MFN) principle. That is, they do not have to extend the benefits of the GSTP to all comers.

As Aileen Kwa points out in her article (G90 and G20: "Band Together!"), the critical point now is the conjuncture between EU efforts to divide the G20 from the G90 and the ambitious G20 proposal to launch an inclusive South-South trade agreement within the framework of the UNCTAD. This has the double benefit of potentially uniting developing countries – notwithstanding the obvious risks of the big fish swallowing the small fish – and at the same time further weakening the legitimacy of the WTO as the sole forum for trade negotiations.

Also in this issue: A valedictory for Ronald Reagan and updates from Geneva o­n agriculture negotiations.

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Contents

Ronald Reagan: A view from the Global South

By Walden Bello

G90 and G20: "Band Together!"

By Aileen Kwa

Return of the WTO: The battle of Cancun continues this July

By Mary Lou Malig

Agriculture Talks: Empty promises to the South

By Aileen Kwa

Free Market Free Fall: Declining agricultural commodity prices and the "market access" myth"

By Gerard Greenfield

Challenging the Market Access Agenda: A case study of rice from Thailand

By Jacques-chai Chomthongdi