All the hype at this Ministerial about development is a bag of empty promises. The draft agriculture text released tonight has language in it that will give the US and EU guarantees that they can continue their dumping in developing countries with results that will be disastrous for farmers in the developing world.
Paragraph 5 of the text states that “There has been some convergence concerning the reductions in Final Bound Total AMS, the overall cut in trade distorting domestic support and in both product-specific and non product-specific de minimis limits”.
This means endorsement of the US and EU offers currently on the table. US has offered to cut up to 60% of their “trade distorting supports” and the EU up to 70%. However, these offers will not actually lower their current levels of supports. Both these countries gave themselves a very high margin of supports they can provide in the Uruguay Round but do not currently spend. For both US and EU, their offers do not cut into the actual supports they currently provide. In fact, the US will still be able to increase their supports in the trade distorting category by another US$1.5 billion and the EU by between 9-15 billion Euros.
The US provides supports in the range of about US$74 billion a year and EU supports amount to about 90 billion Euros. There will be no change in the overall level of subsidies.
The entire exercise is about shifting supports from the less WTO legal category to other WTO legal categories, such as the so-called “Green Box”. The Green Box is supposedly non-trade distorting but at least two WTO panels on cotton and sugar have already found elements in the Green Box to have trade distorting effects. Yet the language on the Green box in the text is lame and will not discipline the games the US and EU are engaged in.
The subsidized imported from the US and EU entering the developing world causes dislocation of livelihoods and rural employment. Cotton will be affected by this paragraph unless the US is prepared to treat cotton separately. To date, they have given no indication they would. Other commodities affected by dumping include corn, soya, rice, wheat, diary and meat.
According to Aileen Kwa of Focus on the Global South, “There are absolutely no efforts by the US and EU to make this a Development Round. Their domestic agriculture policies of today destroy the lives of millions of small farmers from Asia to Africa. This is another confirmation that these countries are not willing to stop the destruction they wrought on the developing world.”