Monday, April 11, 2005

We do not disagree

Painful though it might be to acknowledge the work of any NGO – and particularly Oxfam, whose socialist agenda is not flavour of the month on this Blog – we have to take note of a report issued today by this organisation on world trade (link to follow).

Reported by Associated Press under the heading, "Rich nations' farm subsidies rigging world trade", Oxfam is saying that rich nations are rigging international trade by providing heavy farm subsidies while also pushing developing countries to lower protective tariffs.

Oxfam further claims that, in negotiations at the WTO, richer states particularly the United States of America and the European Union are forcing developing countries to open their markets and then dumping their own excess agricultural produce at below cost price, undermining the livelihood of farmers in poorer nations.

We are told that the USA and EU have repackaged their farm subsidies so they appear to conform to WTO rules, but they are still able to dump products such as corn, milk, rice and sugar.

Phil Bloomer, head of Oxfam's Make Trade Fair campaign, is cited, saying: "This is an example of rigged rules and double standards at their baldest. Their selfish motives couldn't be clearer."

The report is in preparation for a WTO meeting at the end of the year in Hong Kong, aimed at producing an agreement on trade liberalisation treaty by the end of 2006.

If this meeting collapses – as the Doha Round did before it - Oxfam believes the WTO "risks becoming an irrelevance in global trade. Developing countries would then face the demands of rich countries through bilateral and regional trade agreements."

The rice trade is regarded as a particular problem, because it is the staple food for more than half of the world's population, and rice-producing developing countries are being pressured to lower their tariffs, while rich nations continue to dump their excess produce at below cost price.

According to Oxfam, between 2000 and 2003, USA dumped its excess rice production at 34 per cent below its true cost. "US rice would not be competitive without massive state subsidies," Bloomer says. "It is scandalous that poor countries are forced to compete with the U.S."

American agro business is the real winner from the combination of subsidies and rapid trade liberalisation in developing countries, the report concludes.

Today, actor Colin Firth will meet WTO Director General Supachai Panitchpakdi to discuss the Oxfam report and present a petition with 7 million signatures on behalf of Oxfam, calling for a more fair treatment of the poor countries.

"Trade could be a powerful force for poverty reduction but unless the rules are changed this will not happen", said Mr Jo Fox, who is coordinating the petition for the aid group.

With this, we do not disagree, and never let it be said that we are not even-handed on this issue. In terms of farm subsidies and protectionism, the US is probably as venal as the EU - or nearly. All the more reason, we believe, why the UK – with its still close links with Commonwealth countries and its global trading perspective – should break away from the EU bloc.

Allied to third world producers and combines such as the Cairns Group, the UK could lead a "third force" in world trade negotiations, breaking up the often sterile confrontation between the EU – dominated by France – and the US.

This is one of those many examples where, within the EU, we lack influence, bound as we are by the "common position" which invariably favours French interests. Outside this stultifying, restrictive grouping, we could be a powerful force in the world, fighting for rather than against, the interests of the developing world – and better trade deals for Britain.

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