Did you know that, according to an Oxfam report, America has 25,000 cotton farmers and every acre of cotton farmland in the US attracts a subsidy of $230 ($3.9 billion in 2001/2)? In fact America’s cotton farmers receive so much money in subsidies that it adds up to more than the entire GDP of Burkina Faso – the comparison being particularly relevant seeing as though more than two million people in Burkina Faso depend on cotton production. It’s facts like these that hammer home the imbalances of the global trading system and act as a reminder of what’s at stake for millions of people in discussions over agriculture at the World Trade Organisation (WTO). Read on for more quick facts, a glossary of WTO terms and links to background reading on the WTO.
Quick Facts on Trade
* Forced trade liberalisation has cost Sub-Saharan Africa US$ 272 billion over the past 20 years.
* The amount of money lost as a result of trade liberalisation could have paid all of these countries’ debts plus pay the vaccinations and school fees of every child.
SOURCE: http://www.christian-aid.org.uk/indepth/506liberalisation/index.htm
* The privatization of water in Ghana has meant that fees have increased by 95% and will probably rise by another 300% to meet the “market rate.”
SOURCE: http://www.wsws.org/articles/2002/sep2002/wate-s07.shtml
* Farmers in G8 countries are subsidised approximately $1 billion a day, which is roughly equivalent to the entire GDP of sub-Saharan Africa. SOURCE: http://www.washingtontimes.com/upi-breaking/20040725-031636-7601r.htm
* 24 sub-Saharan African countries face food emergencies. Some 30.5 million people will need food assistance.
SOURCE: http://www.fao.org/newsroom/en/news/2005/107852/index.html
* Uganda’s textile sector used to employ 500,000 people and earn $100 million in annual exports, but has virtually been brought to its knees by imports. 80% of clothing available in Uganda is imported and second hand. SOURCE: http://www.newint.org/issue373/currents.htm
* America has 25,000 cotton farmers and every acre of cotton farmland in the US attracts a subsidy of $230 ($3.9 billion in 2001/2.) America’s cotton farmers receive more in subsidies than the entire GDP of Burkina Faso – a country in which more than two million people depend on cotton production. This figure constitutes three times more in subsidies than the entire USAID budget for Africa’s 500 million people.
SOURCE: http://www.oxfam.org.uk/what_we_do/issues/trade/bp30_cotton.htm
* An estimated 25 million adults and children were living with HIV in sub-Saharan Africa at the end of 2003. During that year, an estimated 2.2 million people died from AIDS. The epidemic has left behind some twelve million orphaned African children.
SOURCE: http://www.avert.org/subaadults.htm
* In 2002 ten of the highest grossing pharmaceutical companies each had sales over $11.5 billion. The world’s top 5 drug companies have a combined worth twice the Gross Domestic Product of sub-Saharan Africa. Mergers are leading to behemoths with ever increasing power. In 1995, 25 drug companies controlled over half the global drugs market; by 2000, just 15 managed to do the same thing.
SOURCE: New Internationalist (362) November, 2003
* It is reported that since the discovery of oil in 1956, Nigeria has made about $400 billion in profits. 70% of the 130 million Nigerians live on less than a dollar a day. SOURCE: http://www.zmag.org/sustainers/content/2004-10/11majavu.cfm
WTO Glossary
ACP: Stands for Africa, Caribbean, and Pacific.
Agreement in Agriculture: Occurred under the Uruguay round and set out to protect the G8 countries’ interests in terms of agriculture.
Doha Round: This round of World Trade Organization negotiations aims to lower barriers to trade around the world, with a focus on making trade fairer for developing countries. Talks have been hung over a divide between the rich, developed countries, and the major developing countries (represented by the G20).
Cotonou Agreement: A treaty which sets out the relationship between the European Union and the African, Caribbean and Pacific governments. The agreement was established in June 2000 in Benin, succeeding the Lomé Convention, and provides for replacing the unilateral trade preferences that the EU accords to the ACP countries under the Lomé Convention with Economic Partnership Agreements involving reciprocal obligations.
Development Box: Rules and exemptions that would allow poor nations to protect their agricultural industries (these are an extension of “special and differential treatment” WTO principles, which intend to help developing countries integrate into the global economy of trade and implement their commitments).
Economic Partnership Agreements (EPAs): The European Union has been bargaining with African countries in order to enable market access to European goods and services in Africa, which go beyond what is required of African countries according to the WTO.
Five Interested Parties: Comprised by US, European Union (EU), Brazil, India and Australia, the Five Interested Parties constitute the core negotiating group for the Doha round. (http://www.hardnewsmedia.com/portal/2005/11/205)
Free Trade: The untaxed flow of goods and services between countries, and is a name given to economic policies and parties supporting increases in such trade.
Free Trade Area (FTA): An area in which member states eliminate tariffs among themselves but maintain individual tariff schedules on imports from non-member countries. (http://www.eu-ldc.org)
General Agreement on Tariffs and Trade (GATT): Functions as the foundation of the WTO trading system, and remains in force today. The GATT, is an international agreement and is based on the "unconditional most favored nation principle." This means that the conditions applied to the most favored trading nation (i.e. the one with the least restrictions) apply to all trading nations.
Group of 90 (G90): An umbrella body of the African Group, the least developed countries and the African, Caribbean and Pacific (ACP) Group. It is the largest grouping of members in the World Trade Organisation. (http://www.twnside.org.sg/title2/gtrends16.htm)
Group of 77 (G77): A loose coalition of developing nations, designed to promote its members' collective economic interests and create an enhanced joint negotiating capacity in the United Nations.
Group of 21 (G21): A bloc of developing nations established in 2003. The group emerged at the 5th Ministerial WTO conference, held in Cancún in 2003. In trade negotiations, the group has pressed for rich countries to end subsidies to their farmers and opposed liberalisation of their own agricultural sectors.
Lome Convention: First signed in 1975, it arose out of Europe's wish to guarantee itself regular supplies of raw materials, and to maintain its privileged position in its overseas markets.
Non-Agricultural Market Access (NAMA): These talks centre around industrial goods, but also include natural resources, and the goal of these talks is to open up the economy and make access to these products easier.
Special and Differential Treatment: The argument of developing countries that special circumstances require specific consideration and trade restrictions can be legitimate and appropriate instruments for development purposes. (www.soutchcentre.org)
Trade liberalization: Another term to refer to free trade.
Trade-Related Intellectual Property Rights (TRIPS): An international treaty which sets down minimum standards for most forms of intellectual property regulation within all member countries of the WTO.
Uruguay Round: A trade negotiation lasting from September 1986 to April 1994 which transformed the General Agreement on Tariffs and Trade into the World Trade Organization (WTO).
World Trade Organisation (WTO): An international rules-based and member driven organization which oversees a large number of agreements defining the "rules of trade" between its member states.
* All definitions, unless otherwise noted, come from Wikipedia.
Links
EPA Watch - http://www.epawatch.net
Eco News Africa - http://www.econewsafrica.org/
ACP EU Trade - http://www.acp-eu-trade.org/
International Gender and Trade Network - http://www.igtn.org/
Third World Network Africa - http://www.twnafrica.org/
SEATINI - http://www.seatini.org/
Further Reading
Does Foreign Equal Cheaper, Better, More? http://www.ipsnews.net/news.asp?idnews=31286
Egypt Cottons On To Its Interests http://www.ipsnews.net/news.asp?idnews=31269
Will WTO Shrink or Sink? http://www.nadir.org/nadir/initiativ/agp/free/wto/news/2005/1203doha_hon...
Nothing to Gain, Everything to Lose: Developing Country Prospects at the Hong Kong WTO Ministerial and Beyond
http://www.choike.org/nuevo_eng/informes/3637.html
Disneyland, Doha and the WTO in Hong Kong: The Spectacle of Corporate Fear, Absurdity and the New Universalism
http://www.zmag.org/content/showarticle.cfm?SectionID=13&ItemID=9164
Action Aid Report – Down the Plughole: Why Bringing Water Into the WTO Services Negotiations Would Unleash a Development Disaster
http://www.actionaid.org.uk/wps/content/documents/GATS_report.pdf
Oxfam Report – Africa and the Doha Round: Fighting to Keep Development Alive
http://www.oxfam.org/eng/pdfs/bp80_Africa_and_the_Doha_Round.pdf
EU must negotiate itself out of a corner
http://tinyurl.com/b6p47