WT… Oh, forget it
There was little commotion in the blogosphere as the WTO's Doha Round, which had been struggling to bail out its liberalization life raft for years, finally slipped below the surface last week. I, for one, was on vacation, watching shrimpers in much sturdier boats cast their nets off of North Carolina's Outer Banks. But now I'm back, and so as to avoid making an already behind-the-curve post even more so, I thought I'd share some thoughts on the topic.
In an earlier post on the Farm Bill, I summarized some of the main critiques of Doha, which was supposed to be the round of trade talks that brought real economic gains to developing countries. By getting government out of agriculture -- prohibiting subsidies, tariffs on imports, barriers to foreign ownership of companies in the food supply chain, and other policies that could potentially give farmers of one country an advantage over farmers elsewhere -- the Doha Round was supposed to level the playing field and let the free market do its thing. And its thing, claimed WTO talking heads, would magically bring about development for poor countries.
The only problem is that if the free market put Cargill, with its army of grain elevators, cargo containers, and 20-ton combines, and a small developing-country farmer together on the same patch of ground -- even a level patch -- it's pretty easy to guess who'd end up flattened.
Developing countries, led by China and India, gave Cargill and co. the symbolic finger last week by refusing to join the WTO's merry ag-liberalization band. And they were right to do so. Many developing countries are now net food importers (though they didn't used to be), and the rise in world food prices has hit them hard. At the same time, much of their domestic food production goes to export crops they can't survive on -- coffee, soybeans, cotton, bananas. Since food prices shot up, some developing countries have responded by restricting food exports, trying to keep more domestically-grown food at home. Others are considering new policies to help their farmers grow food real food: Offering credit, extension services to increase productivity, subsidies to build local food production infrastructure. But under proposed WTO rules, these policies could be all-out prohibited.
Instead, under WTO rules, developing countries are supposed to put their faith in a global market that, when you think about it, is anything but free. Three companies control about half of the world market for agrichemicals; three companies [PDF] crush 70% of U.S. soybeans and 85% of Brazilian beans. Yet somehow, it's OK for Cargill -- whose annual profits are four times larger than Ethiopia's GDP and fifteen times larger than Nicaragua's -- to exercise a market monopoly. But when a government tries to get involved, it had better watch out.
And so last week, with the talks in their final death throes, developing countries defended their right to use policy tools to build stronger local and regional food systems. In wonk-speak, it's called "preserving policy space" -- keeping the wiggle room they need to address food crises and build food security. "These [policy tools]," they announced, "are at the core of the development [goals] of the round, as they involve the concerns of food security, livelihood security, and rural development."
They're not saying that the market in and of itself is a bad thing, or that trade is (and for the record, neither am I). What they're saying is that farmers, in their role as providers of food, jobs, open space, and environmental stewardship, are a public good worthy of public support, and that a world market dominated by a small number of huge mega-corporations isn't food-secure.
Of course, governments will now have to use that policy space in the right way, which isn't at all a guarantee; that's the case in the U.S. just as much as it is in poor countries abroad. There's also a risk that the U.S. could push through what it lost in the WTO in bilateral trade agreements with developing countries -- depending on who gets elected in November. In other words, there's still a lot of work to do. But at least the global liberalization party train has slowed for the moment. So let's give a little cheer in the 'sphere.
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