Remove structural imbalances favouring rich countries in agricultural trade
The UN High Commissioner for Human Rights has examined the adverse human rights impacts of agricultural trade liberalization in a recent report, and called for targeted and enforceable special and differential treatment under the WTO’s Agriculture Agreement aimed at developing countries and vulnerable groups.
GENEVA: The removal of structural imbalances favouring wealthier countries in the ongoing agricultural reform process at the WTO, and the provision of special and differential (S&D) treatment to developing countries while distinguishing between commercial and subsistence agriculture and between different players (low-income and resource-poor farmers on the one hand and national and international agribusiness on the other), are advocated in a report by the UN High Commissioner for Human Rights.
The report by Mary Robinson, “Globalization and its impact on the full enjoyment of human rights” (E/CN.4/2002/54), is in pursuance of a Human Rights Commission request made last year. It focuses on international trade liberalization as one of the processes behind globalization, and within it the agricultural liberalization talks at the WTO mandated under Article 20 of the Agreement on Agriculture (AoA).
Also before the Human Rights Commission, and addressing different elements of globalization, trade, development and human rights, were the reports of the Special Rapporteurs on the right to food and right to housing (see following articles), and the report of the Working Group of the Commission on the Right to Development. The High Commissioner’s report draws attention to these, situating its own focus on agriculture within this context, and also to the report that will come in August from two jurists, rapporteurs of the Sub-Commission on the Promotion and Protection of Human Rights, on the human rights dimensions of the WTO.
The report of the High Commissioner for Human Rights calls for targeting of S&D treatment in the agricultural reform process to vulnerable peoples and groups, but not to wealthy farmers or agribusinesses in poor countries, and for giving greater flexibility to developing countries to raise tariffs and grant domestic support.
Such policies, rules and measures, the High Commissioner says, can have positive effects for the enjoyment of human rights by resource-poor farmers and rural populations, while at the same time have relatively minor trade-distorting effects.
“The greater flexibility in liberalization commitments (that will be provided to the developing countries) should be matched at the national level with strong emphasis on implementing poverty alleviation strategies that improve access by the poor to productive assets, land, technology and employment,” the report adds.
The High Commissioner’s report also draws attention to the ongoing work in the Sub-Commission on the Promotion and Protection of Human Rights on the human rights dimensions of the WTO’s trade agreements, the work of the independent expert on the right to development presented to the Working Group on the Right to Development, and the report to the UN General Assembly of the Special Rapporteur on the right to food.
The independent expert on the right to development, Dr. Arjun Sengupta, has linked the implementation of the right to development to trade and macroeconomic issues concerning access to food and food security, and said that the right to development implied looking at the provision of food as part of a country’s overall development programme - bringing in fiscal, trade and monetary policies and issues of macroeconomic balance.
In his report on the right to food, the Special Rapporteur Jean Ziegler has underlined that “free trade does not automatically feed the hungry”.
The High Commissioner’s report underscores the “concurrent responsibility” of WTO member states to protect and promote human rights as well as implement trade rules, and stresses that norms and standards of human rights provide a legal framework to protect social dimensions of globalization.
Given the important role that agriculture plays for food security and development in many countries, the design and implementation of WTO rules concerning agriculture could affect the enjoyment of human rights, in particular the right to food and the right to development, the right to health, the right to social security, as well as the rights of particular groups such as children, indigenous people or migrants, the report underscores.
Referring to the elaboration by the Committee on Economic, Social and Cultural Rights of the core contents of the right to food and the obligations of states, at the national and international levels in terms of the International Covenant on Economic, Social and Cultural Rights (ICESCR), and the obligations of states under the right to development, the High Commissioner points out that it could be assumed that states at various levels would use legislative, economic, social and political means to achieve these rights. The ICESCR itself has identified the need to ensure that international trade promotes the right to food.
Effects of agricultural trade liberalization
Analyzing the AoA, the High Commissioner notes that the most positive achievement has been to subject international agricultural trade to a rules-based and more transparent system. However, beyond this, an Organization for Economic Cooperation and Development (OECD) study indicates that the empirical evidence of the overall effects have been modest, while the Food and Agriculture Organization (FAO) and UN Conference on Trade and Development (UNCTAD) consider the implementation of the Marrakesh decisions on agricultural trade to be “unsatisfactory.”
In terms of balance and fairness, the OECD has concluded that agricultural tariffs on some products are still very high and prohibitively high on some products considered “sensitive”; that trade-distorting domestic subsidies remain highly skewed, with over 90% concentration in the developed countries, and over 60% of domestic support in OECD countries excluded from reduction commitments; and that while export-subsidy commitments have been implemented, few countries have had to change policies substantially since the implementation period coincided with risk in world market prices.
In contrast to the OECD countries, points out the report, the least developed and net food-importing developing countries cannot benefit from the flexibility. The agricultural sectors of these countries have already been substantially liberalized under structural adjustment programmes, and far more liberalized than needed under the AoA (due to macroeconomic reforms led by the IMF and World Bank). And while some OECD countries continue with high levels of domestic support, the least developed countries (LDCs) and many net-food importing developing countries (NFIDCs) do not have the finances to do so. In addition, as the FAO has pointed out, countries seeking accession to the WTO are facing tough negotiations on domestic support and have not been able to ensure S&D treatment.
While a new Food Aid Convention has been negotiated in accordance with the Marrakesh decision, the World Food Programme points out the need for food aid to reach targeted populations but that the aid tends to be erratic in terms of tonnage. “When prices are high, food aid is low, and when prices are low, food aid is high.”
In terms of financing for agricultural development, the report points to the level of public expenditure on agriculture being lower in countries with the highest prevalence of undernourishment. Internationally, official development assistance (ODA) has stagnated, while foreign direct investment has bypassed most countries and with relatively little investment going to agriculture.
The report underscores the difficulties of isolating the effects of the AoA on human rights from the effects of trade liberalization generally (for example, as a result of macroeconomic reforms), and even from effects of many other factors.
While noting that trade liberalization is a positive contributor to poverty alleviation, a WTO study also recognizes that trade liberalization will create losers even in the long run, and trade reforms could exacerbate poverty temporarily.
An FAO study on the effects of agricultural trade liberalization on 14 developing countries has noted possible negative impacts on certain individuals and groups, and the tendency towards consolidation of farms, which, while contributing to increased productivity, has also led to displacement and marginalization of farm labourers, and created hardship for small farmers and food-insecure populations, in a situation where there are few safety nets.
The FAO study, the High Commissioner notes, has also brought out the implications of trade liberalization on the availability, accessibility or sustainability of food supplies, and the effects on local food products in smaller countries.
There are also likely to be long-term and unsustainable balance-of-payments problems that could negatively affect the ability of states to promote the right to development. According to the FAO study, in 11 of the 14 countries studied, the total value of food imports grew more rapidly than the value of exports in 1995-1998, compared to 1990-1994. A more comprehensive WTO study too has brought out the growing negative trade balances in agricultural products in 59 of the 107 non-OECD countries.
While the reasons are complex, the figures underline the asymmetry for some countries between capacity to attract imports after opening markets and the capacity to increase exports, the High Commissioner comments.
Developing countries also are prone to vulnerability to price fluctuations as a result of trade liberalization, with many states exposed to vagaries of markets which have a negative impact on the ability to finance development or even to guarantee availability of food in some cases, the High Commissioner notes, pointing to the rise in world cereal prices over 1995 to 1997 and subsequent decrease in 1998. The price rise, according to the FAO, led to a 49% rise in cereal import bills of the LDCs and NFIDCs. And while LDCs and NFIDCs continue to enjoy preferential treatment for their exports under various arrangements, there was also the issue of discrimination, when certain LDCs and NFIDCs are not party to particular arrangements.
Part of the difficulties of the AoA, the High Commissioner points out, have sprung from the fact that the framers of the agreement sought to correct the situation of mounting surpluses in a number of food products from developed countries through heavy domestic support and export subsidies. But the terms of the AoA did not necessarily correspond to the needs of other countries, in particular their need to deal with inadequate production and lack of resources to raise agricultural productivity.
Need for affirmative action
“The opening of markets in a manner conducive to protection of human rights in fact requires a different form and pace, depending on the country in question, and an approach to trade rules that guarantees affirmative action for vulnerable individuals and groups. Without this, trade rules risk creating a level playing field of unequal players.”
A human rights approach would consider the impact of trade liberalization not only on the need to minimize trade distortions, but also on different groups, in particular vulnerable people and groups, and set rules accordingly.
“In spite of the inclusion of several S&D measures for developing countries, the AoA does not yet sufficiently take into account the highly varying fields of development of the agricultural sectors between countries and of the people whose livelihood depends on agriculture.”
Applying the human rights principle of non-discrimination to trade law “encourages affirmative action for the poor.” While non-discrimination is also a principle of international trade law, “there is a distinction in the application of the principle.” National treatment in international trade law envisages equal treatment for nationals and non-nationals, whether they are poor farmers or large agribusiness or industrial firms. Treating unequals as equals is problematic for the promotion and protection of human rights and could result in institutionalization of discrimination against the poor and marginalized.
“Under human rights law,” the report stresses, “the principle of non-discrimination does not envisage according equal treatment to everyone in all cases.” Affirmative action is necessary in some cases to protect vulnerable people and groups. While S&D treatment under trade law is a positive step, the High Commissioner “encourages the introduction of measures that go beyond long transition times and ‘best endeavour’ commitments and calls for targeted and enforceable treatment,” the report adds, welcoming the Doha WTO Ministerial Declaration commitment to make S&D treatment an integral part of the rules and disciplines of the AoA, so as to be operationally effective and enable developing countries the flexibility to take into account food security and rural development objectives.
In broad terms, the High Commissioner has recommended the following:
* In the context of the ongoing reform process under Article 20 of the AoA, greater consideration should be given to developing a legal framework for social dimensions of agricultural trade liberalization, through express references in the AoA to the promotion and protection of human rights.
* States should undertake human rights impact studies, and look more closely at the positive and negative impacts of agricultural trade liberalization on human rights, in particular the right to food and right to development.
* The AoA at present makes no distinction between different types of agriculture - such as commercial and subsistence - and different players - such as low-income and resource-poor farmers on one hand and national and international agribusinesses on the other. A human rights approach to trade liberalization should hence focus on protecting vulnerable groups and individuals. Any measures should be targeted so that special treatment is awarded to vulnerable peoples, and not to wealthy farmers or agribusiness in poor countries.
Leaving greater flexibility for developing countries to raise tariffs and grant domestic support can have positive effects for enjoyment of human rights by resource-poor farmers and the rural poor, while having relatively minor trade-distorting effects.
The greater flexibility in liberalization commitments should be matched at the national level with strong emphasis on implementing poverty alleviation strategies that improve access by the poor to productive assets, land, technology and employment.
* S&D measures targeted to crops essential to food security, as opposed to other food crops, are also important to promote the right to food. Food-security crops are often cultivated for local consumption more than for export, and special measures targeted at such crops should improve food-security at national level, while remaining minimally trade-distorting in world markets.
* In terms of operationalizing S&D in the AoA, as committed to in the Doha Declaration, the operational mechanisms should include allocation of rights and responsibilities to relevant actors, and the creation of a centralized monitoring and enforcement mechanism with a duty to report annually on assistance given and received.
* There should also be more targeted financing for development, and “the High Commissioner reiterates the call for developed countries to implement their commitments at the UN General Assembly Special Session in 2000 to meet the targets of providing at least 0.7% of GNP as ODA.”
* There should be more targeted food aid programmes, such as food-for-work programmes.
* There is a need for a just social and international order in the field of trade liberalization and for fair trade. The ambiguities of the AoA have allowed some OECD countries to overestimate bound tariffs, set peak tariffs on “sensitive” goods and continue high levels of domestic support. Fair international trade rules would encourage implementation in spirit, and not only in letter, of the AoA. The current structural imbalances in the AoA favouring wealthier countries over others should be ended, and there should be concerted efforts by the OECD countries to reduce and remove trade distortions, particularly in export subsidies.
* Developing countries seeking accession to the WTO should be able to maintain full S&D open to developing-country members.
“The High Commissioner reminds States of the general responsibility to respect human rights in other countries and encourages WTO members to negotiate in ways that would enable acceding countries to respect, protect and fulfill human rights of their own people.”
The High Commissioner has also encouraged, among others, further research to be undertaken to develop human rights approaches to agricultural trade liberalization, in particular for clarification of: principles of national treatment and most-favoured-nation (MFN) treatment; development of mechanisms for S&D treatment targeted at vulnerable individuals and groups, but not wealthy farmers and agribusiness; development of mechanisms for allowing effective and minimally trade-distorting protection of food-security crops in food-insecure countries; and drafting of guidelines for the provision of food aid responsive to need rather than to world food prices. (SUNS5090)
From TWE No 277 (16-31 March 2002)