Success or Surrender?

—Girish Ghildiyal

Contrary to all the hype in the official press regarding the so-called “success” achieved at the WTO meet by our Commerce Minister Kamal Nath who claimed that “India has gained very significantly in this framework”, the fact is that the recently concluded agreement in Geneva in July has come up with a package of ‘framework' which removes with one go all the gains accrued to the poor and developing countries at Seattle and Cancun.

You will recall that the last ministerial meet eld at Cancun in Sept. 2003 had collapsed because for the first time poor and developing countries had put up a strong united stand and insisted on discussing “implementation issues”, i.e., to take immediate decisions on the older issues which had been kept pending for a long time, especially on agriculture, in which the United States and the European Union have been providing mind-boggling subsidies, and lack of market access to these countries. Richer countries wanted to sidestep these issues by raking up new issues to their benefit, without having actually to meet their obligations in other areas. Developed countries resorted to all kinds of blackmailing and arm-twisting and continued with their non-transparent and undemocratic processes in decision-making and draft text writing. However, for once all the poor and developing countries came together to call their bluff.

After Seattle and Cancun , another failure at Geneva would have made it clear that as far as poor and developing countries were concerned, the WTO had nothing to offer and it was just another tool by the developed countries to gain access to the developing countries' markets. However, this ‘historic' agreement has put paid to those hopes. Barely 11 months after Cancun a draft on more or less similar lines has been agreed to by India . India was part of FIP, or the “Five Interested Parties” as representative of poor countries, chosen to overcome the initial deadlocks (others were the US , EU, Australia and Brazil ).

This draft not only falls short of some of the Doha mandates back in 2001, but also leaves the “development issues”, which were bone of contention at Cancun , unaddressed. Certain important issues, like TRIPs in relation to public health were not mentioned at all.

However, the real sellout relates to paragraphs 7 and 15 of the Framework for Establishing Modalities in Agriculture – which should have raised India's alarming concerns about the new “Blue Box” domestic subsidies presented by the US and EU.

These two paragraphs have put paid to all efforts made by developing countries to get the “Blue Box” removed. The new framework allows the developed countries to shift a large chunk of agricultural subsidies (now under the Green Box and Amber Box – which are supposed to be discontinued) to the Blue Box. Peace Clause, the clause under which the developing countries could not challenge the agricultural subsidies in the rich countries earlier, was removed in Dec '2003, and now makes a backdoor entry through the ‘Blue Box'. So much so that now the US and EU can actually raise farm subsidies from the existing level. As per the formula, for example, the EU levels of subsidy after applying the first cut can be retained at Euro 76.63 billion. However, as per the current WTO framework, the EU subsidies at present will total around Euro 55.8 billion. Furthermore, the EU has Blue Box subsidies to the tune of Euro 14.31 billion. This is a huge amount, and therefore the framework states: “In cases where a Member has placed an exceptionally large percentage of its trade-distorting support in the Blue Box, some flexibility will be provided on a basis to be agreed to ensure that such a Member is not called upon to make a wholly disproportionate cut.”

Similarly, the US wants to shift $180 billion for ten years, that it has provided to farmers under the notorious Farm Bill 2002 to the Blue Box, i.e., before the WTO specifies the historical period from which the Blue Box implementation will begin, it means that the US can now protect the yearly installment of its counter-cyclic payments to farmers. For example in the case of cotton subsidies where the US provides a daily support if US $10.7 million to its 25,000 cotton growers.

No wonder that US trade representatives and EU representatives have been mighty happy about this agreement. The Wall Street Journal has commented: “The deal leaves so much room for the US to redefine some subsidies for the purposes of trade talks that significant cuts in aid to US farmers aren't required.” The US Trade Representative Robert Zoellick said: “We have a framework for cuts, but the numbers (concerning US subsidy cuts) are going to depend on what we get in market access.”

While very recently the Agriculture Minister Sharad Pawar himself has conceded that “there is no firm commitment from developed countries on cutting export subsidies” but “ India has agreed to cut its import tariffs” and therefore, “the agreement can be used to make India yield more” – the Left supporters of the UPA regime have maintained studied silence so far. It seems that their commitment towards the UPA is stronger than the commitments towards toiling people and peasantry.

Since the days of Uruguay Round it has been the practice of our leaders to hoodwink the people with the claims of “unprecedented gains” to Indian people as a result of entry into WTO and with each new agreement. Like Maran and Jaitley, like Kamal Nath. The process of sell-out cannot be reversed by any ruling class government, simply because it enjoys Left's assured support. It can be reversed only by patriotic people's assertion and eviction of compradors from power.