"Resuscitating Doha is essential to right the rigged rules of trade, but what's been simmering on the WTO stove will simply not deliver for poor countries, said Oxfam America president Raymond C. Offenheiser. "The financial crisis, which started in developed countries but is taking its worst toll on developing countries, should be the impetus for a change in course."
In a new report released today called "Empty Promises," Oxfam details how the Doha Round has become an exercise in prying open developing country markets rather than an effort to rebalance decades of unfair agricultural and industrial trade rules. In the midst of a global economic crisis, a food crisis, and a climate crisis, nations with the least blame and with the least capacity to cope with the consequent effects must not have to pay even more to enable their economies to develop, according to the report.
Over 50 million people stand to lose their jobs, remittances are collapsing, and growth in sub-Saharan Africa is predicted to fall by 70 percent this year trapping 90 million more people in poverty, because of the crisis. Food prices meanwhile remain high for poor consumers: by the end of 2008 a further 109 million people had been added to the ranks of hungry, topping 1 billion people worldwide. As the world experiences the sharpest drop in trade in 80 years, a "development" trade deal—as originally promised—remains crucial, according to Oxfam.
"Now is the time for WTO members to come back to the negotiating table, recognize that the current crisis provides an opportunity to address urgent development needs, and change the course of negotiations, much as they did nearly eight years ago in Doha," said Offenheiser. "At this time of desperate need for a change of course, the Doha Round has to step up to deliver on its development promise. There is little credit left for another failure."
The welcome political commitment from the G8 could lead to a fresh start to negotiations, but it cannot be business as usual. In the past eight years, developed countries have used the talks to continue to push to open up new export markets. Developing countries have resisted, saying they were promised a deal that would give them space to protect their farmers and new industries, an end to rich country trade-distorting agricultural subsidies, and more access to rich markets for their farmers and industries.
The widespread food price crisis has shown that food and livelihood security cannot depend solely on market forces. Development, rather than liberalization, has to be the central objective of negotiations and trade rules must respond to the needs of the most vulnerable people first and foremost, according to Oxfam. It is the responsibility of WTO member states to analyze the role of trade in the recent global crises so that the Doha negotiations take into account the new global context and contribute to a solution, rather than exacerbate the problem.
"What's on the table is no silver bullet since it continues to favor the richest and biggest farmers and industrialists in the US and Europe and sidelines the needs of the poor," said Offenheiser. "We have seen what can be done when countries find the resolve to avert problems at home, and this resolve must be translated to the multilateral trade agenda so that the much-needed conclusion of the Doha Round can be achieved in a manner that addresses developing country needs first and foremost."
]]>"President Obama's historic visit to Ghana, so early in his presidency and on the heels of important commitments at the G8 in Italy, signals the importance of African development to US interests," said Raymond Offenheiser, President of Oxfam America. "President Obama gets it. He understands that without a strong civil society, and capable, transparent governance, efforts to fight poverty and bring about social justice in Africa will at best be incremental. Good governance and sustainable use of resources will inspire more effective international assistance and increase trade."
President Obama had several recommendations that will help Africa on the road to prosperity. Here are a few of the highlights from the speech:
"In the 21st century, capable, reliable, and transparent institutions are the key to success—strong parliaments; honest police forces; independent judges; an independent press; a vibrant private sector; a civil society. Those are the things that give life to democracy, because that is what matters in people's everyday lives." These are all important parts of a thriving democracy, and President Obama made clear in his speech that these should be a priority in Africa just as they should be on every other continent. Building strong institutions that protect the rights of citizens, and allow business and entrepreneurs to flourish, will encourage investment in Africa. Oxfam is focused on helping civil society organizations work to hold their governments accountable. Examples include our partnerships with groups promoting new laws that accord equal rights to women and girls in southern Africa, and a region-wide proposal for uniform laws governing the mining industry in West Africa.
"So in Ghana, for instance, oil brings great opportunities, and you have been very responsible in preparing for new revenue. But as so many Ghanaians know, oil cannot simply become the new cocoa... Dependence on commodities—or a single export—has a tendency to concentrate wealth in the hands of the few, and leaves people too vulnerable to downturns." Resources like gold, diamonds, and oil can bring enormous wealth and potential for development. The road to prosperity will require leaders to avoid the path of poor management, corruption, violence and war. Ghana is a promising example of what is possible: Since Ghana discovered oil near its coast, the country's President John Atta Mills pledged earlier this year to disclose all petroleum agreements, so citizens can track what money comes to the government and how revenues are spent. This pledge has not yet been turned into reality. Real transparency needs to be built into a new legislative framework for how Ghana's new oil wealth will be managed, to ensure revenues are spent on social services and poverty reduction. Oxfam is working with the US Congress on legislation to require all US and foreign companies subject to Securities and Exchange Commission rules to disclose payments to developing country governments. This will be a critically important tool for citizens working to avoid corruption and waste of natural resource revenues.
President Obama also highlighted steps that the US would take to help combat corruption, including addressing corruption in the annual State Department human rights report, a recommendation that was made by Oxfam America in its Presidential transition memos.
"Aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it's no longer needed." The United States needs to make a number of key reforms to make our foreign aid system as effective as possible in reducing poverty and creating prosperous communities throughout the developing world. The US lacks a coherent strategy for global development. Oxfam is calling on the US to keep recipient country governments and their public informed on the nature and amount of American aid, and let each recipient country lead its own development agenda. President Obama's focus on using aid to defeat poverty is on the right track—one that we hope will lead to a new strategy for global development and a reinvigorated, effective aid system that will also rebuild US leadership in the world.
"A warming planet will spread disease, shrink water resources, and deplete crops, creating conditions that produce more famine and more conflict." Climate change is already affecting the lives and livelihoods of millions of poor people in Africa, as a recent Oxfam report detailed. Tackling these impacts is essential to addressing food security and broader development objectives. President Obama must commit to help bring about a comprehensive global climate strategy that will help poor communities cope with failed crops, dwindling reserves of clean water, and displacement caused by extreme weather events. The US and other wealthier countries must curb their greenhouse gas emissions to prevent climate chaos and provide adequate financial assistance to help African countries adapt in greener and more sustainable ways.
"Now, America can also do more to promote trade and investment." The economic welfare of Americans is inextricably linked with the well-being of people across the globe. While our foreign policy seeks to address the problems of poverty, disease and lack of economic opportunity, our trade policy has often exacerbated them, by demanding greater access to export markets in the poor countries, more favorable rules for US investors that can lead to greater poverty and inequality, and limiting access to affordable medicines. President Obama must develop a new trade policy with economic development as a core objective, spreading the benefits of trade as widely as possible, in the developing world as well as in the United States. This must include focusing efforts on the multilateral trading system to achieve a successful conclusion of the Doha Development Round, while working with Congress to pass legislation providing for duty-free and quota-free market access for all Least Developed Countries (LDCs).
]]>Overall, the proposal would spend an estimated US$10 billion less over the next 10 years than projected spending for the 2002 Farm Bill, which is set to expire in September 2007. Much of the anticipated savings are from expected high prices for many commodities in future years. However, the Johanns proposal actually would spend US$5 billion more from 2008 – 2012 than simply extending the existing provisions in the 2002 Farm Bill.
Download the attached file to read the full text of this report by Oxfam America employee Emily Alpert. (From Bridges No. 1, February-March 2007, published by the International Centre for Trade and Sustainable Development.)
]]>While the Farm Bill does little to help poor farmers in the US, it actually harms rural communities around the world. After receiving massive subsidies, US cotton farms produce more than they otherwise would, and sell their surplus at less than the cost of production. These subsidies hurt African cotton farmers by reducing the world price of cotton and shrinking their share of the market. This situation is not only unfair; it violates international rules set by the World Trade Organization.
]]>The U.S has taken some steps in the right direction. The President spoke unequivocally about the need to cut trade distorting agricultural subsidies during his speech to the UN General Assembly this past fall and Secretary of Agriculture Johanns and US Trade Representative Robert Portman have echoed the President's position. American negotiators have put new proposals on the table attempting to restart the stalled negotiations. But, it is still not enough to deliver on the promises of a "development round" and lift millions of people out of poverty.
The Doha Round of trade negotiation was supposed to change the dynamics on trade. Launched in 2001, negotiators announced that this trade round would put the interests of developing countries at the heart of the effort. But four years later, the negotiations have stalled and development concerns are sliding to the bottom of the agenda.
For the more than 2.5 billion people in the world that rely on agriculture for their livelihood, Hong Kong is more than a meeting of diplomats - it is an opportunity to meaningfully improve their lives. Throughout the world, poverty is concentrated in rural areas, with more than a billion people living on less than $1 a day. The average cotton farmer in Mali earns about $400 a year from the entire cotton crop. Between 2001 and 2003, Oxfam estimates that West African countries, including Mali, lost over $400 million dollars because US subsidies depressed global cotton prices. The backbone of Mali's economy, providing employment for more than 3 million people, falls victim to rules that have permitted rich countries to benefit for decades from dumping subsidized cotton. By leveling the playing field, we could have a massive impact on poverty reduction.
The Doha Round promised developing countries that it would do things differently, that the development of poor nations would occupy center stage. What that means is drastic cuts in agricultural subsidies and offers of market access for developing countries. But this will require that leaders of the U.S., EU and Japan see a greater good for both developing nations and their own citizens. In the US, it means envisioning a new era for American farmers that shifts subsidies from anachronistic, trade distorting support payments to new programs that support sustainable rural livelihoods and stewardship.
President Bush has delivered the right message on cutting subsidies. But the opportunity to lift millions out of poverty through fair trade rules still lies far out of reach. The US should take the lead and demonstrate to the rest of the world that we believe in the power of trade to change lives, and that we care about the lives of farmers in the US and abroad. Two and half billion people are watching and waiting.
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