Robin Hood in reverse

MS partners in Central America use the WTO as a stone to throw at the 'free' trade agreement with the United States.

From 13 to 18 December member countries of the World Trade Organisation (WTO) meet at a Ministerial Conference in Hong Kong – once again in an attempt to conclude the Doha Round, the development round based on an agenda set by the big ones. The priority issue will be preferential treatment for poor countries.

However, only a few weeks later, small farmers in Central America who have no access to modern technology, will find themselves forced to enter into competition 'on equal footing' with the gigantic high-technology agricultural apparatus of the United States.

One may well wonder what sense there is in worrying about the Hong Kong negotiations and the possible agreements that may be reached at the development round, or that the WTO has recognised that developing countries need asymmetrical agreements if they are to survive. 
But there is at least one reason, concluded MS partners in Central America after two days work, to stake out a common position vis-à-vis the Hong Kong meeting. 

While the WTO allows the poorest countries in the world a small breather, the DR-CAFTA – the 'free' trade agreement between Central America, the Dominican Republic and the United States – is the biggest Robin Hood in reverse in history.

The Ministerial Conference in December may be used to expose that it is quite hypocritical to talk about a policy that is intended to show some concern for poor countries, when it has long since been undermined by regional or bilateral “free” trade agreements, as well as the structural adjustment programmes created by the World Bank and the International Monetary Fund. The WTO will be put to the test as an instrument to change the DR-CAFTA.

MS partners in Central America will attempt to use the WTO to attack  the DR-CAFTA. Photo: Eva Rasmussen.

Demands

"We insist that the governments of developing countries must defend the Doha Declaration, in which developed countries acknowledge existing asymmetries between economies, and must therefore demand Special and Differentiated Treatment", MS partners write in a common Declaration which also stresses that all the different types of subsidies for agriculture in the US and the EU must disappear and that poor countries have a right to protect themselves against dumping. 

All of this is actually on the Doha agenda, but for Central America this is fiction pure and simple, as the DR-CAFTA excludes small, agriculturally dependent countries from possible agreements on these issues, explained Carlos Galian, advocacy officer at Oxfam International in Nicaragua during the WTO forum held by MS and its partners. 

"While Doha talks about differentiated treatment, DR-CAFTA is an ‘agreement among 'equals'. However, the problem resides in that the so-called 'equals' are in reality very different," says Galian. 

"The DR-CAFTA is a historical agreement. Never before has the world’s biggest food exporter signed a 'free' trade agreement with countries that have such high levels of poverty as Nicaragua. Per capita GDP in the USA is of US$ 37,610, in Nicaragua it stands at a mere US$ 730."

Privileges

And that is not all. While the General Agreement on Tariffs and Trade (GATT), the forerunner of the WTO, began to discuss differentiated treatment as far back as 1979, the DR-CAFTA is an authentic Robin Hood in reverse, which confers a number of privileges to the gigantic US economy.

When the DR-CAFTA was negotiated, the US imposed that subsidies should not be a subject for negotiation, arguing that these form part of the WTO agenda. This implies that small farmers in Central America must now compete with state-subsidised American products, something that at least at the outset will mean that they will sell on the Central American markets for lower prices than national products. 

Doha includes the possibility of giving special treatment to several products that are important to the food sovereignty of developing countries, a rule that does not include rich nations. The DR-CAFTA is quite the opposite: everyone is on an equal footing. For instance, while it was being negotiated, every country could select a product that would receive special treatment. 

The Central American countries opted for white maize, a single tariff item line, while the United States chose sugar. But they included not only sugar as a raw material, but all sugar derivatives, its substitutes and a number of products high in sugar, for a total of 47 tariff item lines. Further, the US obtained a mechanism that allows for compensating Central American sugar exporters for not using the share established in CAFTA. 

"Through CAFTA the United States has made clear that it wishes to further reduce what little flexibility was left for Central American countries to manage their agriculture. The Robin Hood in reverse that is CAFTA can decidedly damage the multilateral trade system and substitute it for 'agreements amongst equals'", explains Carlos Galian, adding Oxfam tries to influence in order to establish the primacy of Special and Differentiated Treatment over bilateral and regional agreements, as set forth in the WTO.

We insist that the governments of developing countries must defend the Doha Declaration, MS Partners say. Photo: Eva Rasmussen.

The forum on the WTO held by MS and its partners will be followed by actions in the Central American countries and in Denmark, as well as by common activities, first of all in Hong Kong. 

Niels Brøgger Jakobsen of MS Denmark, who is active in the 'Stop the Trade Robbery' campaign, participated in the Managua forum, with the aim of supporting the construction of a stronger link between the South and the North in the worldwide campaign for fair trade.