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There are at least four areas related to trade and agriculture in which DFID can "do something." I will ignore three of them here as I have referred to them in my previous messages: measures to stimulate domestic agricultural markets at arm's length from international trade; and support for both global anti-trust policy and a serious reconsideration of supply management on commodity markets. The fourth area is that mentioned by Duncan Green: WTO, regional trade agreements and the CAP - traditional areas of trade policy. I suspect that little has been said about these because among development-minded people, at least in the UK, a consensus exists about them and, frankly, people are getting bored with repeating it. But I may be wrong. Anyway, I will give my twopenn'orth on them and then have something more to say about trade preferences in particular. I can see four main things to achieve in the WTO and CAP reforms: - banish all ag. export subsidies; - sharply reduce developed-country subsidies in general, including "decoupled" ones - indeed any payments that do not specifically reimburse actual costs incurred, e.g. for environmental benefits or animal welfare measures. A general payment to a farmer enables him or her to sell crops below cost just as much as an area payment, price support or export subsidy does; and it enables the purchasers of the produce to sell it on international market at dumping prices. - give much greater latitude to developing countries to impose agricultural tariffs, not only as a defence against dumped imports but as part of a food security policy to raise prices for domestic farmers - bearing in mind that 70 per cent of those who live on less than $1 a day live in rural areas. This is the old Development Box argument. - there's less consensus on my fourth than the others, but maybe special and differential treatment should apply to things like SPS and technical barriers to trade (excuse the WTO jargon) - rules and regulations which, often with good reason from the consumers' point of view, make it more difficult for developing countries to export to developed countries. This could prove controversial in the rich countries but it's worth thinking about. The question of achieving what UNCTAD calls "market entry," rather than just market access, has been raised by several contributors to this consultation. It's a difficult one but this might be one way to deal with it. On trade preferences, I am coming to the conclusion that they should be provided according to strictly economic criteria rather than historical factors or to benefit specific commodities. Two criteria which deserve consideration are poverty or low human development (catered for by the EU under the Everything But Arms deal), and remoteness from markets. The latter would help landlocked countries and those that are remote for other reasons, e.g. South Pacific countries like the Solomon Islands. A large number of the very poorest countries are relatively small and/or landlocked (so not in a good position to engage in international trade). Landlocked countries at the bottom of the HDI scale include Niger, Burundi, Ethiopia and Zambia, while among those at the bottom of GDP per capita scales are Moldova, Kyrgyzstan, Nepal and Laos. I am concerned by the more arbitrary forms of preference groupings because I do not see why, for example, Central American countries should not have the same trade privileges in the EU as other countries in similar circumstances. But they don't. And regional trade agreements enable the EU and the US to play one group of developing countries off against another. Those who benefit at present will of course object to such a change, but in the long run it will be less paternalistic, less open to manipulation and better in general. On preferences allied to specific commodities, I was struck by the list of commodity-dependent countries discussed in the EU's commodities paper last year, when analysed according to the nature of their trade relations with Northern countries. The ones in greatest poverty either depended on commodities traded in almost completely free markets (mainly coffee and cocoa), or ones where they competed with heavily subsidised Northern farmers (e.g. cotton and tobacco). From the point of view of poverty reduction, those countries deserve privileges but they don't get them. Specific privileges go to countries which have traditionally exported goods under quota (with managed supplies, indeed). Examples are certain of the sugar and banana exporters - by no means all of them, not the poorest (in the case of sugar, at any rate), and generally pretty small countries. The four that get the lion's share of the ACP Sugar Protocol, guaranteeing prices at three times world market levels, have a combined population of about 4m. But this system depresses sugar prices for farmers in much poorer and bigger countries which either have surpluses for export (like Malawi) or large domestic markets to serve (e.g. Bangladesh). On the other hand, two of the four countries with the big sugar quotas (Fiji and Swaziland) should benefit if preferences were redirected to remote and landlocked states. Once again, I hope that makes some sense. Best wishes, Tom Lines Consultant in Trade and Development 57 Victoria Road Oxford OX2 7QF Tel./fax +44-1865-559198 ============================================================= To send a reply to this message that goes to all list members, make sure that you send your reply to <address removed> To unsubscribe from this list, send an email to "<address removed>", with the message body: unsubscribe global-trade <your-email-address>
Please visit dfid-agriculture-consultation.nri.org.