What the WTO Talks Mean: 1.2 Billion People at risk of Poverty
Chong Chan-yau, Executive Director, Oxfam Hong Kong
Oxfam Hong Kong is extremely disappointed that the WTO talks in Hong Kong ended with decisions that will put the 1.2 billion people around the world who work as farmers at risk of an even deeper poverty: millions of people will unjustly lose income, go hungry, become ill, and millions of children will not be able to attend school.
The end of the Hong Kong WTO Conference in fact marks a beginning: the first few months of 2006 present a huge challenge for trade justice, as the text approved in Hong Kong requires that modalities be agreed by 30 April 2006 – an implausible deadline. Delegates will be congregating in the first few months of the year, either as a full ministerial or (more probably) a ‘general council plus ministers’. Oxfam Hong Kong is very concerned that the negotiations might be held behind the closed doors of the WTO, away from public scrutiny, and even some ministers, which is what happened to some extent in the July Framework Agreement in 2004.
The pledge in Hong Kong to eliminate export subsidies by 2013 is three years later than almost every country wanted, and this delay will continue the suffering of poor people worldwide. Oxfam viewed the 2010 cut-off date as a compromise already.
Eliminating export subsidies is only a very minor offer, as it comprises a relatively small part of the farm support that leads to dumping — for the EU, only 3.6 per cent of overall farm support. Dumping caused by excessive levels of domestic support was almost neglected in the Hong Kong Declaration.
Looking at cotton in particular, while the US promised to eliminate all forms of export subsidies (in 2006), this was already required by a WTO ruling in Spring 2005: the US offer in Hong Kong merely constitutes a compliance. Again, export subsidies only constitute a small part of US cotton subsidies (10%), and again, the text failed to address the massive domestic payments that distort trade and facilitate dumping.
Let’s remember: the 2013 and 2006 dates are only pledges. Considering the very disappointing performances of such pledges in the past, Oxfam Hong Kong is worried that even the export subsidies may not end on time, but could continue for years beyond, and prolong poverty.
Oxfam Hong Kong believes that world trade, specifically world agricultural trade, could be a powerful tool for reducing poverty, as well as driving economic growth, but that this potential is being lost. Because the rules of world trade are rigged in favour of rich countries and big companies, millions of the world’s poorest people are being left behind, and intolerable and unsustainable extremes are developing between rich and poor people.
If Africa, East Asia, South Asia, and Latin America were each to increase their share of world exports by just one per cent, 128 million people could be lifted out of poverty. Yet, as it stands now, rich countries are closing the escape route from poverty by locking poor countries out of their markets, and are undermining developing country farmers in their own markets by dumping cheap, overly subsidised produce.
Farmers of cotton and sugar are particularly being impoverished by the combination of rich-country subsidies and dumping. This injustice is happening near and far – from Africa to mainland China.
On cotton, twenty million people in Africa depend on the crop for a living – particularly in the western African countries of Mali, Burkina Faso, Chad and Benin. It has been estimated that US subsidies in 2001/2002 had reduced approximately 334,000 people in Benin to a standard of living below the poverty line. Oxfam estimates that US dumping deprived Africa of US$400 million between 2001 and 2003. In China, cotton production has helped a significant number of the 46.2 million cotton farmers of Gansu and Xinjiang to get out of poverty, yet with the influx of subsidised, low-priced US cotton – the volume has increased 21 times between 2001 and 2004 – they are now at risk of returning to an impoverished life.
Sugar is not sweet in world trade. The EU, the world’s biggest sugar subsidiser, dumps around five million tonnes of sugar every year. They also limit access to its market to such an extent that sugar farmers in the world’s poorest countries, Mozambique, Malawi and Ethiopia, are estimated to have lost $238m from 2001 to 2004 in potential earnings. In China, some 26 million people work in sugar production in Guangxi alone. Before China’s WTO accession, some 11 million of these people had earned enough to be lifted out of poverty. Recently, sugar prices have fallen drastically, factories have been closing, and poverty is on the rise.
For two decades, Oxfam Hong Kong has been working with farmers. Our programmes span across China, across Asia, and across Africa. We have experienced how people everywhere have been crippled by unfair trade, and have thus been advocating for trade justice: we view it is an extension of our longstanding sustainable livelihood programmes. Oxfam Hong Kong has dedicated resources to efforts to make WTO trade rules work for farmers since 2002, as part of the Oxfam International Make Trade Fair campaign, which 17.8 million people have supported through the Big Noise petition. It is no coincidence that a farmer from Ghana presented this petition to the group of 110 developing countries newly formed in Hong Kong.
Trade-related poverty is an injustice. Oxfam Hong Kong urges WTO members to come to better decisions that will address the needs, and rights, of the majority of the world’s population, poor people, and the majority of poor people, farmers.
