World Trade Organisation to jumpstart talks again
Beijing (AsiaNews/Agencies) – World Trade Organization Director-General Pascal Lamy will be in India next week to gauge industry views on talks on a global trade agreement which collapsed in Geneva last month. India’s and China’s new role as emerging world powers torn between self-interest and world needs will be discussed.
The Doha round on trade liberalisation collapsed on 29 July largely because India and China refused to give up on their protectionist policies in farming (especially cotton, rice and sugar) as requested by the United States.
Both countries dismissed US demands and chose instead to protect their poorest farmers, especially those involved in subsistence agriculture, pointing the finger for the failure at the United States and Europe, which protect their farming sector through subsidies (for example, cotton) to compete against African products. This said both Asian nations insisted on their right to protect their own farmers.
The United States has always insisted on trade liberalisation in food staples like cereals to cope with recent price rises. However, this could lead to Western grain swamping South and East Asia, negatively impacting local, often uncompetitive farmers who would lose their only means of livelihood.
“The most important thing was livelihood security, the vulnerability of poor farmers, which could not be traded off against the commercial interests of the developed countries,” said India’s Trade Minister and lead negotiator Kamal Nath.
For its part China has between 750 and 800 million farmers— nearly twice the entire population of the European Union with a majority surviving on two dollars a day.
What is more, Western food imports would only temporarily reduce prices since many local farmers would be driven out of business, decreasing global output, not to mention imports’ transportation and environmental costs.
Officials from India and China also pointed out that current price increases are due to speculation rather than greater food demand. In Europe bread for example costs 10 per cent more now even though the price of wheat increased by just 3 per cent.
For some experts China and India cannot afford to lose food self-sufficiency.
“Recent food riots in several countries have made Chinese leaders realise even more than before that food security must be resolved internally,” Meng Zhou, a Beijing-based independent researcher, recently wrote. “If food supply is dependent on imports then you can never guarantee social stability.”
US demands “from the developing world a price as high as heaven,” said China’s trade Minister Chen Deming.
Still both India and China need free markets. Beijing needs them to sell its manufactured goods and attract foreign capital. India needs them to get the foreign investments to continue growing its economy.
For this reason both nations agree that talks must continue, but only after the West understands where they draw the line. (PB)
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