The Tyranny of Aid and Free Trade

(Dr. krishan Bir Chaudhary)

The World Bank perfidy is crystal clear now. It has come-up on the expected line. The World Bank report on the Doha Development Agenda though pretty worded but is actually critical of protection of agriculture in developing countries and advocates blatantly greater Agricultural Trade Reforms.

Distortions in AoA and persistent dubiousness of developed countries on highly sensitive issues like abolition of tariffs, subsidies and domestic support are real stumbling blocks responsible for the collapse of Doha Round of Trade Negotiations.

In the given situation, the World Bank is highly erroneous in presupposing that there will be a global gain of $ 300 billion per year by 2015 and that close to two-thirds of the gains will come from agricultural trade reforms. The motive of World Bank fringes on suspicion.

In its view, making agricultural market more accessible is the most fundamental reform that needs to emerge from the Doha Round of WTO negotiations. But it conveniently fails to accept that for the developing countries, market access is the highly contentious issue that will jeopardize the economy of agro-rural sector of the developing countries.

Therefore, to be acceptable to developing countries, the issue of market access must be worked out on a reciprocal basis to minimize the trade imbalance between the developing and developed countries.

World Bank findings that developing countries would receive 45% of global gain from completely freeing all merchandise trade is illusive and as we have already seen, the 10 years past WTO formation, agriculture, the prime livelihood resource of the people in developing countries has been shattered and pushed into doldrums. Aid for trade has put the Sub-Saharan Africa precariously on the fringe of hunger, malnutrition and economic bankruptcy.

In an indirect threat, the report warns the developing countries to resist from the temptation to except 'sensitive and special' products from tariff cuts. It obviously aims at providing greater market access to developed countries. The emphasis that cuts to tariff can be deceptive because the reductions are in bound tariffs and not to tariffs actually applied, will further widen the trade imbalance.

The suggestion that removing cotton subsidies as part of freeing all merchandise trade, would expand cotton export from Sub-Saharan Africa by 75% and the developing countries share of global cotton export would rise from the current 56% to 85% by 2015 seems to be highly hypothetical.

The developed countries and MNCs push on their strategies through the machination of WTO to advance their agenda, having the sole motive to maximize their profits. Side by side, the US and EU continue to advance the negotiation of bilateral and regional trade agreements as a parallel arena to advance the corporate agenda.

To counter the challenge of corporate-led globalization, greater cohesive and effective collaboration between developing countries are more needed now than ever. The stalemate and uncertainty arising out of the collapse of Doha Round of Trade negotiations must motivate the Latin American, Asian and African countries to evolve strong and viable alternatives to counter the tyranny of free trade.


(Editorial : Farmers' Forum Magazine)