Letter from Saskatchewan, July 28, 2004

Letter from Saskatchewan
Trade talks will never be the same after Cancun

By Paul Beingessner

Meet Paul

Saskatchewan farmer Paul Beingessner has missed only a handful of deadlines in writing a weekly column during the past eight years. He covers Canadian agriculture from a High Plains perspective. His straight-talk style informs readers about corporate influence in national and international agriculture, national ag politics on both sides of the border, and why some farmers do the things they do. Click here for more information about Paul.

TRUAX, Saskatchewan, Canada, July 28, 2004: When talks on the liberalization of world trade began a couple decades back, the U.S. and the European Community set the agenda. Smaller players like Canada were mostly confined to supporting roles as they kowtowed to the big guys and bought all the fertilizer they doled out in the form of promises. Poor countries had little to say and were largely ignored in the process. As a result, the Uruguay round of trade talks gave the advantage to rich countries and, by the admission of the Food and Agriculture Organization of the U.N., hurt poor ones.

The silence of the lambs changed dramatically in September, 2003, with the collapse of the WTO talks in Cancun, Mexico. That meeting saw a group of developing countries, calling itself the G21 and led by Brazil, India and China, demand an end to the dumping of subsidized agricultural goods by rich nations. The G21 simultaneously asked for access to the markets of rich countries, while refusing to countenance lowering their own tariffs against agricultural imports.

Cotton became the subject of one of the major battles at Cancun, and a symbol of the problems with agricultural trade. With American cotton farmers receiving an average of $230 per acre in subsidies, cotton from the U.S. has driven down the world price of a commodity that was the backbone of the economies of some of the world's poorest countries.

It must have been a rude awakening for the world powers when upstart Third World countries began to flex their collective muscle. But it was inevitable.

The notion of global trade and a global economy have become inextricably linked with the concept of Intellectual Property Rights. Progress at trade liberalization has been linked to the adoption by countries of a patent and property rights regime like that of the U.S. and the E.U.

Patent laws have done little to benefit poor countries. The most striking example of this involves the AIDS epidemic. Multinational pharmaceutical companies hold patents on drugs that can bring immense relief to AIDS sufferers. While these drugs can be produced for pennies, the companies that control the patents charge thousands of dollars a year to those who can afford to buy them. Millions of Africans are dying from what is now a treatable disease because the cost of AIDS drugs is vastly beyond the modest means of their governments. Counties that have signed international treaties on patents are told they must watch their citizens die, even though they possess the resources to make cheap copies of AIDS drugs.

Trade liberalization is about opening the world up to the control of multinational companies and removing the control of governments. If it worked in practice as it does in theory, that might, at times, be a good thing between developed countries. (It rarely, however, works that way, as Canadian lumber producers and cattle ranchers have found out.)

When applied between poor and rich countries, the practice is even further from the theory. Recognizing that multinational pharmaceutical companies were not about to save the lives of millions of AIDS victims, countries like India began to make their own AIDS drugs, and were subject to immediate pressure from the likes of the U.S. and Britain.

I suspect that their experience with AIDS taught many poor countries that they better begin to speak with a united voice at world forums. Hence the unexpected turn at Cancun.

Nor is this likely to change soon. India declared recently that it would not allow the livelihood of its 600 million small and subsistence farmers to be destroyed by concessions at the WTO table. This is a practical move on India's part. What would it do with the 550 million farmers that could be driven off the land if food grown with large government subsidies were allowed free access to Indian markets?

The WTO talks on agriculture are close to stalling completely. Rich countries still have a few tricks up their sleeves, however. One is the American model. When global talks fail, negotiate separate agreements with countries. Use your economic power to get your way where diplomacy fails. Before those counties sign on the dotted line, they should consult with Canada. We could tell them a few things about how the U.S. honors trade deals.