While trade liberalization advocates see a potential World Trade Organization deal as the tool that can help poor countries pull themselves up, the United Nations Food and Agriculture Organization last week offered a more somber assessment.
In a report on the implications of a WTO deal, the FAO said an agreement could hurt poor countries unless they are able to win an exemption from some of the border-opening and support-cutting measures that apply to others.
“Not only will some developing countries not gain from trade liberalization, in some cases they will be adversely affected and not surprisingly, they see this as a threat to their domestic production and food security,” FAO director general Jacques Diouf said in the introduction to the report.
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He said any deal will have to give poor countries the flexibility to avoid some of the cuts in border protections and government supports that are being imposed on others until their food production systems get stronger.
“This does not mean that some developing countries are being protectionist and unwilling to open their markets,” he said.
“It simply reflects concerns about the possible adverse effects on their prospects for food security, poverty reduction and longer-run development goals.”
Added David Hallam, chief of FAO’s trade policy service: “These countries need significant special and differential treatment.
“At the end of the day, the real measure of success in the WTO multilateral trade talks will be just how much they contribute to reducing hunger and poverty in the world.”
The developing world demand for exemptions from some of the trade deal disciplines has become a significant sticking point in negotiations.
Before talks were suspended last summer, United States negotiators were complaining that developing countries were looking for loopholes that would undermine the impact of a trade liberalization deal.
At the moment, there are few indications that a WTO breakthrough is imminent, despite an FAO claim that the talks have been revived.
Informal meetings between negotiators continue and ministers from most of the 19 members of the Cairns Group of medium sized traders, including Canadian trade minister David Emerson, gather in Pakistan this week for two days of talks.
However, formal negotiations are not on and American fast track negotiating authority almost certainly will expire at the end of June.
Other countries insist there is no point negotiating with the Americans if Congress has the right to go through any resulting treaty clause by clause. Fast track authority forces Congress to accept or defeat a WTO deal as a package.
Diouf said there are several ways a trade liberalizing deal could hurt underdeveloped countries.
If they were forced to open their markets to more imports, local production often could not compete.
Proposals to tighten rules governing export credits and food aid could mean many countries would have to spend more of their scarce dollars to import food to feed their population.
He acknowledged that some developing countries are able to compete in export markets and would benefit from a trade deal. Brazil, China and India are cited as potential beneficiaries.
“However, these success stories do not represent the majority,” he said. “There are fewer examples of such cases among the lower income countries, especially in sub-Saharan Africa.”
Declining foreign aid spending by rich countries means poor countries have less money to invest in their farm sectors.
“If poorer countries are to be able to withstand increased competition from imports and benefit from new trading opportunities that may arise from liberalization, they must first overcome local production, marketing and institutional constraints in their agriculture sectors,” said Diouf.
