Race to the subsidies!

September 14, 2003 4:30 PM

In events not suprising to anyone,the WTO's "development round" ends without agreement. The IHT published an interesting dissent from the leftist hope of poor nations climbing out of poverty by using sustainable agriculture as unrealistic. Likely industrial ag businesses would eventually dominate, just as they did in the developed world.
posted by raaka (6 comments total)

Has anyone besides me noticed how most of the news sources use the wording "World Trade Talks Collapse" in their headlines, and felt how creepy it is to see the words "World Trade" and "Collapse" in such close proximity?
posted by wendell at 7:51 PM on September 14, 2003

Wow. Wendell, not only is that an interesting observation, it almost makes one wonder if it indicates underlying pattern...
posted by namespan at 11:24 PM on September 14, 2003

The NYT's coverage makes it sound like poorer countries walked out, dissatisfied with the concessions offered by the US and Europe. The US rep is quoted as saying that he looks forward to pursuing bilateral talks with individual countries.
Can someone who actually understands this stuff explain why it would be in a poorer country's interests to eschew the multilateral rules based format and instead sit down with the US or the EU directly?
Wouldn't they have less leverage in such a format? Or was that not the intent? Is this just failed brinkmanship? Or is this not dictated by rational calculations of interests?
posted by ednopantz at 5:18 AM on September 15, 2003

Possibly it lets the poorer country come to a deal independent of the coalition they were operating in at Cancun, which might potentially leave it better off than it would have been under the deal on the table there.
posted by biffa at 10:01 AM on September 15, 2003

In a meeting prior to the Cancun talks, a Brookings Institution speaker noted: "The big items on the table are the subsidies that are paid by rich countries to their farmers, something on the order of $300 to $350 billion a year, more than the combined incomes of all of sub-Saharan Africa, and with, you know, staggering factoids out there, like each cow in the EU receives more in government subsidies per day than half the world's population lives on."

With the little I know, I have to say: Yay, third world--way to stick up for yourselves and oppose first world agricultural subsidies. I have ten fingers crossed that this doesn't backfire for the 22 countries who pushed hard for the subsidy reductions. It's not fair for the first world to pressure the third world free up the industrial markets where it has advantages while restricting the agricultural markets where the third world does. Way to go, Brazil and India, showing leadership. I'm eager to see what else comes out of Lula da Silva's government.
posted by win_k at 4:01 PM on September 15, 2003

ednopantz, we’re talking about a coalition of developing countries led by some serious emerging market heavyweights: Brazil, China, and India. If they can maintain that cohesion, they negotiate from a group position, not via bilateral agreements. (This is similar to the strategy that Brazil is pursing vis a vis the FTAA talks, next meeting in Miami coming up soon – building a coalition based on Mercosur. In that context, entry to Brazilian market on its own provides a lot of leverage; add to that other countries, and that leverage grows. In the WTO context, I think just Brazil, China and India alone banded together represent a serious bloc, given the consumer markets and investment opportunities they represent.)

Why push this hard? Because they’ve been saying for a long time that it’s not fair that they open up their agriculture consumer markets while rich countries continue to deploy subsidies and select tariffs – farming employs a lot more people and makes up much more of GNP in these countries, and these practices are killing them. The rich countries keep pressing them to open up on other areas too while not making any concessions on ag.

An article in the National Post reinforces this idea that the decision to pull out was strategic – a move by developing countries to recast the field, and this story from the LA Times is helpful too.

The Economist focuses on the role that the so-called “Singapore issues” played.
posted by Kneebiter at 10:28 PM on September 15, 2003