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Friday, September 19, 2003
Roperos: The WTO debacle
By Godofredo M. Roperos
THIRD World nations have a reason to gloat over the results of the recently concluded Fifth World Trade Organization (WTO) Ministerial Conference at the Cancun (Mexico) World Trade Center.
The conference broke up without any concrete accomplishments. In fact, global observers consider the meeting a total failure in the face of inability to agree over basic points of interest between the world’s so-called rich and poor nations. The poor or third world nations have finally agreed to join forces and formed the Group of 21.
The report has it that the Philippine delegation was instrumental in bringing together the poor countries to tackle the possibility of taking advantage of their economic clout over the developed nations, especially on the matter of agricultural issues.
There is, for instance, the longstanding practice of the rich and highly developed nations of extending productivity subsidy to their farmers so that they could maintain their level of production without the risk of suffering the volatility of the global market.
This practice has placed the Third World countries at a distinct disadvantage in the sense that their agricultural products, whose price in the international market would have to depend on their production cost, would be unable to compete with decidedly cheaper products of government-supported farmers.
The United States and Western European farmers are fortunate to have steady yearly subsidy from their respective governments. This gives the farmers a risk-free investment that often results in bumper crops.
In the past, the United States used the surplus production of its farmers, from wheat to yellow corn, as tools of diplomacy. This was how the US government justifies, in a way, its unwavering financial support to their farmers.
The US State department arranges grants-in-aid for Third World nations to alleviate their shortage of flour or feed mix as well as extend cereal products to poor families as a means of fighting malnutrition. For these highly developed countries, developing nations are no match to their diplomatic tact.
But last week, developed nations came upon organized developing countries that called themselves G-2l and which strongly sought to have their problems heard during the WTO ministerial meeting in Cancun, Mexico.
Philippine delegation head Manuel A. Roxas II, our trade and industry secretary, said the poor nations scored a victory in that conference, showing that the results of the ministerial meeting could not be always controlled and dominated by the developed ones. The G-21 took a stand against the subsidies and succeeded.
It should be noted that the aggregate amount of subsidies developed nations extend to their respective agriculture sectors amount to about $300 billion—a financial assistance that the farmers could transform into various forms, including hi-tech farm equipment, whether light or heavy ones, fertilizers and chemicals for farm use, and marketing operation.
Some farmers, indeed, have never had it so good. And now comes WTO, with its plan to drop national barriers and allow non-tariff imports to come in, at perhaps cheaper prices than the domestic product. When that happens, our farmers would be in trouble.
On the other hand, consumers of the products, whatever they may be—rice, yellow corn, fruits fresh or processed—would enjoy a cheaper price in the market when compared to our own. This, however, would also mean the death knell of our industry.
Take for instance, our mango industry. What will happen if we get flooded with cheaper California oranges or Fuji apples, China’s ponkan and nuts that can certainly dominate our local market? Poor Iyo Hantoy, he would be sitting there with his tabig of fruits drawing not customers but hordes of flies.
Now, lest I be misunderstood, I am not opposed to the objectives of the WTO. I am all for it, so long as the developing nations would not be left with unequal share of the global market for whatever products they produce for the world trade.
The cohesion that the developing nations showed in Cancun was said to have impressed WTO leaders, giving notice to the US and EU that the poor nations would stand their ground.
The WTO ministerial conference did break down, but it would seem that the developing nations did not cause it.
(September 19, 2003 issue)
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