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Doha Round will not prevent another food crisis

The article below was published in the South-North Development Monitor (SUNS) #6614, 19  December 2008, and is reproduced here with permission.


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Trade: Doha Round will not prevent another food crisis

Geneva, 18 Dec (Kanaga Raja) -- The UN Special Rapporteur on the right to food has said that the WTO and its current Doha Round "will not prevent another food crisis", and has called on States not to accept undertakings under the WTO framework which would be incompatible with their right to food obligations.

The Special Rapporteur Prof Olivier De Schutter, an independent human rights expert, said States should define their positions in trade negotiations in accordance with national strategies for the realization of the right to food and always conduct human rights impact assessments of trade agreements.

In some preliminary conclusions in a first-ever report on this issue, Prof. De Schutter examined whether the current path of trade liberalization in agriculture complies with the WTO Members' obligations towards the human right to adequate food, as recognized under international law.

Presenting the preliminary conclusions at a media briefing at the UN on Wednesday, just as the WTO was holding a formal meeting of the Trade Negotiations Committee, a day before the final General Council meeting for the year, the independent expert said that up to now, the WTO's Agreement on Agriculture has failed to solve the problem of hunger in the world.

He pointed to 963 million people who are hungry in the world and that the figures are up in comparison to 2005 and 2006.

The global food crisis itself is responsible for over 100 million more people falling into hunger since the figure of 852 million in 2005, which had been stable for a number of years before that.

"... it is fairly consensual that we have not succeeded yet to ensure that trade works for development and works to combat hunger," the rights expert said.

He noted that there is one view that "we haven't gone far enough. We should do more in order to remove trade-distorting mechanisms, remove in particular subsidies in industrialized countries, and we should do more to improve further market access for developing countries."

He said that there are many problems with the existing system which is heavily distorted in favour of OECD countries.

"We all know the very damaging impact on agriculture in developing countries which export subsidies and domestic support schemes (of the OECD countries) have led to. We know that this is a serious problem which has to be remedied, and there are many obstacles which are both linked to tariffs and non-tariff barriers [that] remain which prohibits developing countries from benefiting from openings to trade of their products."

He emphasized that the further implementation of the reform program "is based on an illusion that by removing existing distortions, we will achieve a level playing field."

"This is simply not true. We all know that even without the subsidies, which are heavily biassed in favour of OECD countries in the current situation, the differences in productivity will remain extremely important between developing countries and developed countries in general."

He noted that there is an exception for countries of the Cairns Group, which are much better equipped and have a much stronger competitive advantage in agriculture.

The rights expert stressed that trade is not a substitute for building the capacity of each country to feed its population. "That is the core message of the report."

"We should not trust international trade to achieve food security in a sustainable manner," De Schutter said.

The report by the independent expert was the outcome of a mission to the WTO and broad consultations with a range of actors, including a number of Ambassadors to the WTO. It is the first time that the WTO has accepted a request of the Special Rapporteur to conduct such a mission.

His mission to the WTO has brought him to consider controversial issues such as safeguard mechanisms and the "specificity" of agricultural products, which are at the core of the negotiations.

The independent expert is expected to present the official report at the March 2009 session of the Human Rights Council in Geneva.

The report argues that if trade is to work for development and to contribute to the realization of the right to adequate food, it needs to recognize the specificity of agricultural products, rather than to treat them as any other commodities; and to allow more flexibilities to developing countries, in order to shield their agricultural producers from competition from industrialized countries' farmers.

The reason for this is at the heart of what justifies special and differential treatment for developing countries, De Schutter said. Even after the removal of existing trade-distorting measures, which currently are disproportionately benefiting industrialized countries, the average productivity per active labourer in agriculture will remain much lower in developing countries.

In 2006, agricultural labour productivity in least-developed countries was just 46% of the level in other developing countries and below 1% of the level in developed countries.

In this context, the idea of establishing a "level playing field" is meaningless, says the report, adding that the deepening of the trade liberalization path will not result in farmers in developing countries being able to compete on equal terms with producers in industrialized countries, unless wages and agricultural prices in the South are repressed at very low levels to compensate for a much lower productivity per active labourer.

This will inevitably result in more violations of the right to food, says the independent expert.

The report examines trade liberalization in agriculture from the perspective of the human right to adequate food, as recognized in the Universal Declaration of Human Rights and in the International Covenant on Economic, Social and Cultural Rights.

This has four implications, he said.

First, it leads to emphasize the need for States to prepare national strategies for the realization of the right to food, in which the role of trade should be determined in reference to human rights and development objectives.

Second, it leads to highlight the importance of a collaborative multilateral trading system, and one which should not impose on States commitments that are contrary to their human rights obligations, thereby emphasizing the importance of ensuring that States have a sufficient policy space.

Third, says the report, the perspective from the right to adequate food requires a shift from abstract aggregates (such as GDP measurements) to focusing on the needs of the vulnerable and food insecure.

There are 963 million people hungry in the world today. The majority, representing at least 50% of the hungry, are small-holders living off 2 hectares of cropland or less. 20% are landless labourers, and 10% are pastoralists, fisher-folk, and forest users. The remaining 20% are the urban poor.

Any trade regime which does not benefit these categories, far from solving it, is likely to lead to further violations of the right to food.

Fourth, because it focuses on the perspective of the right to adequate food, the report recalls the unique value of safe, nutritious, healthy, culturally appropriate and sustainable food as a fundamental right for all. Impacts on health, nutrition and the environment should therefore be fully integrated in trade discussions.

Isolating the impacts of WTO agreements from other factors discouraging States from seriously implementing their human rights obligations is an impossible exercise, since the disciplines imposed under the Agreement on Agriculture have an impact only in combination with the trade, fiscal and social policies pursued at domestic level.

Nevertheless, in order to assist States in implementing the reform program of the Agreement in compliance with the right to food, the report seeks to identify the impacts of trade liberalization in agriculture on the ability of States to protect this right.

The report notes the following risks, which States should take into account in developing their national strategies and in defining their position in the negotiations within the WTO:

-- Increased reliance on international trade in order to ensure food security results in a dependency on international trade, which is a source of various vulnerabilities: loss of export revenues when the prices of export commodities go down, threats to local producers when low-priced imports arrive on the domestic markets, balance of payments problems for the net food-importing countries when the prices of food commodities go up, as witnessed during the recent food crisis.

-- Increased reliance on international trade in order to ensure food security also reinforces the power of highly concentrated transnational corporate actors: increased cross-border trade implies an increased role for transnationals rather than domestic agro-food systems. Global sourcing increase the number of suppliers and thus, the competition between them, leading to dominant actors to force outrageously low prices on agricultural producers.

The current trade regime also encourages the segmentation of the farming sector, increasingly divided between one segment which had access to high-value markets, and as a result, to the best technologies, inputs (including land, water, and state support), credit, and political influence, and another segment which is left to serve only the low-value, domestic markets and is comparatively neglected and marginalized.

-- Increased reliance on international trade in order to ensure food security promotes long supply chains which imply long distances in transport and unsustainable modes of production, with serious implications for climate change and human health and nutrition.

The Special Rapporteur goes beyond the technicalities of the Doha Round and draws important lessons from both the food crisis and the emerging threat of climate change.

These two issues, the expert argues, are vastly under-estimated in the current WTO negotiations. He also proposes, in his report, ways to reconcile trade with the right to food, addressing the failure of global governance mechanisms to tackle the fragmentation of international law.

Consistency between obligations imposed under trade agreements and human rights obligations cannot be rescued through domestic policies, if such consistency is not ensured in the preparation of the trade agreement themselves.

Indeed, because trade agreements are backed by the threat of economic sanctions, States, when faced with situations of conflict, generally opt for compliance with their trade obligations at the expense of human rights. This results in a "chilling effect": when the Members do not know whether or not any particular measure they take, in order to comply with their human rights obligations, will be considered acceptable by the other Members or instead expose them to retaliation, they will prefer not to adopt such measure, out of fear that they will be facing economic sanctions.

The report presents four substantive recommendations on how to make the international agricultural trade system "human rights compatible."

First, the Special Rapporteur calls on States not to accept undertakings under the WTO framework which would be incompatible with their right to food obligations. In order to do this, States should define their positions in trade negotiations in accordance with national strategies for the realization of the right to food and always conduct human rights impact assessments of trade agreements.

The Special Rapporteur highlights the important democratizing effect of open and participatory consultations, emphasizing the role of national parliamentary hearings for example. Peasants' organizations would play a key role in drafting national right to food strategies, and such strategies would serve far beyond the WTO context, supporting the position of governments in their discussions with international financial institutions, with donors, or in bilateral trade negotiations.

It is indeed a particular source of concern that, in a large number of cases, States have been unable to use flexibilities allowed under the WTO agreements - or to apply certain tariffs remaining under their bound tariffs - because of prescriptions from such institutions or because of bilateral free trade agreements.

Secondly, safeguard measures are crucial. States, particularly developing States in accordance with the principle of special and differential treatment, must retain the freedom to take measures which insulate domestic markets from the volatility of prices on international markets.

Although a relatively small proportion of the food produced, estimated at 15%, is traded internationally, prices fixed on international markets have a disproportionately negative impact on the ability of small-scale farmers in the world to make a decent living. Indeed, there is a tendency for domestic and world prices to converge as a result of trade liberalization.

Unless and until appropriate mechanisms are put in place at the international level to deal with the issue of volatility, it is crucial that States have full flexibility to protect their market against import surges. Supply management schemes and other orderly-marketing mechanisms have an important role to play in this regard.

Thirdly, States should avoid excessive reliance on international trade in the pursuit of food security. In building their capacity to produce the food needed to meet consumption needs, States should support in particular small-scale farmers.

Throughout the developing world, agriculture accounts for around 9% of GDP and over 50% of total employment. In countries where more than 34% of the population are undernourished, agriculture represents 30% of GDP and 70% of employment. Therefore, for the realization of the right to food, there is no alternative but to strengthen the agricultural sector, with an emphasis on small-scale farmers.

Fourthly, States should control market power in the global supply chains and counteract the risk of increased dualization of the farming system. One major imbalance in the current multilateral trade regime is that, while disciplines are imposed on States, transnational corporations, whose freedom to act has been significantly increased as a result, are not subject to any obligations as regards the exercise of their power on the market.

This is an important gap in global governance. In the medium to long-term, a multilateral framework may have to be established to ensure a more adequate control of these actors. In the short-term, States should protect human rights by adequately regulating actors on which they may exercise an influence, including in situations where these actors operate outside the national territory of the States concerned. +

 


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