Apr 2, 1998
THE STEAMROLLER ROLLS ON
By Bhagirath Lal Das
New Delhi, Mar 30 (TWN) -- Often it has been said that the WTO is an instrument for the spread of neo-imperialism. This fear is not unfounded. One may however add that the main weapon in the march of imperialism is technology; and the WTO is used as the vehicle and instrument to carry the weapon across borders.
In the late 18th and early 19th century, when Europe and Asia interacted, European nations had a mercantalist economy. They came to Asia in search of spices and goods (textiles). At that period, the local technology was superior -- for e.g. in what is now South Asia.
Neverthless, the Europeans prevailed in establishing themselves and becoming dominant in 'international' trade because of their superior technology in shipping.
This led to strengthening of European colonialism and imperialism, and the onset of the industrial revolution, first in the UK and then spreading to Europe. In turn, the range of technologies emerging out of that industrial revolution strengthened the imperial dominance of certain European powers. After an initial successful industrial revolution, Britain-led laissez faire spread to Europe, but in such a way that the countries of Asia, Africa and Latin America were prevented from participating in that industrial revolution.
Now we are amidst another technological revolution, many times more powerful than the last one. It is not only about the space, atomic energy and laser technology; it is in fact about the entire production processes and distribution and marketing systems in all sectors. All these are getting revolutionised by the use of new scientific and technological precision and continuous interaction among consumers, designers and producers, through advanced information system and other similar tools.
The strong linkages among the leaders in technology, production, international trade and government in the developed countries is somewhat unprecedented. Though cloaked under the term 'neo-liberalism' -- implying a return to the 19th century liberal or laissez faire economics where the state had a hands-off stance on economic activities -- the way it is practised in the developed world is such that the state plays an active role in promoting the interests of its corporations and businesses.
In this new wave, the countries and societies which remain satisfied with their current methods of production or with 'appropriate' or 'intermediate technology' will be left by the way side, and the caravan of 'development' in the twentyfirst century will move on. Those that have embraced the new culture of production will be the empire builders, whereas those that have just sat back lamenting their lot will be the victims.
In this massive change, the fear is that the means of production in the entire world will effectively pass into the hands of big firms of advanced industrialised countries. The production structures in developing countries will get weakened and they may be reduced to just being the satellites of these big firms. The governments and the societies in the developing countries will also become weak; and decision- making on policy issues may slowly pass on to these big firms and their centres in the developed world.
The empires in the twentyfirst century will not be carved out by the marching armies, but by the powerful industrial and financial firms.
The developed countries are trying to use the WTO to smoothen the progress of these firms by removing obstacles and also by positive encouragement. Their objective is to expand the economic space of their manufacturers, traders, service providers, innovators and investors. Towards this end, they have managed to develop compatible rules and are also pushing for formulation of new rules to take full advantage of the immense possibilities in the developing world.
The tariffs in developing countries have been slashed drastically, their options for direct import controls have been curtailed and the possibilities for government support for their production and export has been inhibited. At the same time, their markets have been opened to the services which are mainly provided by the firms of developed countries, and enhanced protection of 'intellectual property rights' has been ensured.
Now efforts are on to provide the investors of developed countries the facility to have free entry in developing countries and allow free play of action to the firms of developed countries in the garb of an effective competition policy.
Besides, like a typical pincer movement, the developed countries, while providing positive support to their own economic operators, are constraining the efforts of developing countries to boost their production and export. There has been a significant evolution of methodology in this regard.
Earlier the common method for restraining the imports from developing countries was through direct import controls, either in contravention or derogation of GATT. Later, anti-dumping processes started to be used in a big way, and these are still being used. Then came the measures ostensibly for the protection of environment and for preservation of life and health of human beings, animal and plants.
In reality, most of these measures were simply the device for protection and preservation of domestic industry, and a large number of them did not stand the scrutiny of independent internal examination or of the dispute settlement panels of GATT/WTO.
Now a more sophisticated approach is being tried through the attempts at introducing enabling provisions for trade measures to enforce implementation of labour standards.
A natural question arises as to why the major developed countries prefer to use the WTO as a forum of choice for pushing their economic objectives, even though some of these are not directly related to trade. There are two main reasons. First, the developed countries have found in their experience in the past that they have generally had their way in this forum due to various circumstances. Second, the WTO has a good mechanism of enforcement of obligations, particularly of the developing countries, through the threat of retaliation on their export of goods.
It appears somewhat incomprehensible that developing countries do not find their way easy in the WTO. The decision-making process is on the basis of one country one vote, and they are large in number. In fact out of about 132 members, only 29 are developed country members; and developing countries are there in more than thrice this strength. Yet they find themselves totally helpless and ineffective.
All the initiatives are taken by the developed countries; and decisions are generally taken in their interest. Even though developing countries resist some times, they almost always yield at the end. The only exceptions are the circumstances when all or a large number of them put up combined resistance.
Four reasons can be easily identified for the failure of developing countries in the WTO forum. First, generally they are not able to have a firm identification of their interests. Within a large number of developing countries, the process of clearly defining the position on issues is not easy. Various wings of government and interest groups have often differing views and approaches, which is not uncommon even among the developed countries. What is problematic in developing countries is that a rational filtering of firm and final positions through all the differing opinions is often not easy. The result is that there is absence of a single minded focus on any particular initiative or on a specific line of defence. In short, the line of a developing country in most of the cases is not firm, focussed and precise.
Second, the developing countries are not well prepared. This handicap primarily flows from the first; since the reparation can normally not be thorough if the lines of initiatives or defence are not clear.
Further, most of them have poor infrastructure for detailed analytical study and analysis of issues and problems. Often in negotiations, a country has to analyze the implications of various alternatives at short notice, and several times almost on a continuous basis. Generally the developing countries do not have the capacity to do it.
Third, they do not coordinate well among themselves. This handicap, in its turn, flows from the first two. If the positions of a country are not clearly and precisely defined and if there is absence of thorough and comprehensive analysis, it will naturally be difficult to have an effective cementing of positions.
Fourth, the developing countries are often overawed and sometimes even afraid in the WTO. This attitude arises initially because of lack of knowledge of the various subjects. Though the negotiators and trade policy officials of some developing countries are very knowledgeable and competent, for most of the countries, it is not the case. Lack of knowledge, coupled with inadequate preparation, makes them extremely diffident in intervening in the formal debates and informal discussions. This gets compounded by plurilateral and bilateral pressures in the capitals. The governments of developing countries generally hesitate to displease the major developed countries.
These problems suggest their own way out. It is necessary for developing countries to improve their internal system of finalisation of their positions on the WTO issues. Traditionally, the subjects of the GATT have been handled in the government by the Ministry of international trade or international economic relations. Now the subjects in the WTO are quite complex; besides, there is a close inter-relationship among various issues and there is a large number of interest groups involved in any subject. It is necessary to have an institutional mechanism for intra-ministry joint consideration of an issue and also for detailed consultation with all the interest groups affected by an issue.
Simultaneously, it is also necessary to have public debates, for example through the press, on some vital issues in the WTO which may be of national importance. If a position emerges after weighing the multi-sided implications in this manner, the national position will get very much consolidated, and the government will then be motivated to push ahead with its position with greater confidence and conviction.
There has to be intense research and analysis in this process of formulating the positions and also in the follow up during the negotiations for these positions. Governments in developing countries are not themselves quite equipped for this purpose. They have to take the help of research institutions and universities in their countries.
Besides, there can be major gain in this regard if some key research institutions in the developing countries develop a system of mutual cooperation in their work in these areas.
Then there should be an institutional arrangement for the coordination among the developing countries. Such coordination should be there not only among the delegations in Geneva, but also at the level of capitals. Already there are institutions like the G77 in Geneva and in New York, the informal group of developing countries in the WTO, the
Non-aligned group, the Group 15, the Group 24 (in connection with the work in the IMF and the World Bank), the South Centre, regional groupings of developing countries etc.
The time has come for a fresh thinking on what should be the effective institutional mechanism for the coordination among the developing countries in the matters relating to the formulation of positions and negotiations in the WTO. It could be the one or more of these existing institutions or it could be a proper blend of some of them. Yet another alternative could be to evolve a new institutional mechanism specifically suited to the WTO matters. Whichever institutional mechanism is chosen or created, it should have the twin objective of being a political forum and also an effective technical support apparatus. If it is not practical to have a mechanism involving all the developing countries, one should aim at one involving a large number of countries, say about thirty of them.
Such preparation and cohesion will certainly enable the developing countries to shape the agenda of the WTO in their best interest, which is almost impossible at present. It will not be a confrontational approach, but a positive and constructive one, which will enable them to focus on relevant issues, prevent their exploitation and minimise the threats and pressures on them. WTO can, in this manner, be turned into a useful organisation by them, which will be alive to the needs and imperatives of the economies of the vast multitude that inhabit the developing world. And in this manner, the developed world will also benefit. It is important for the developed world to learn once again that their growth and development depends a lot on the accelerated development of the peoples of the developing world, because their own areas are not adequate for full realisation of their potentials.
(The author was formerly India's Ambassador and Permanent Representative to GATT. He was also the Director of International Trade Programmes in UNCTAD)
Development: NGOs prepare for ASEM II battle
London, Apr 1 (IPS/Dipankar De Sarkar) -- Non-governmental
organisations gathered here ahead of this week's Asia-Europe Meeting
(ASEM II) plan to petition government leaders with a to-do list
covering everything from labour rights to reining in the IMF in favour
of a new economic model.
The umbrella Asia Europe People's Forum voiced its concerns at a
meeting in London, Tuesday. Speakers fear ASEM leaders gathering here
from Thursday will ignore human rights and poverty issues in favour of
addressing trade needs and the terms of the International Monetary
Fund's bail-out package for crisis-hit South East Asia.
"We are concerned that ASEM II will place too much emphasis on trade
liberalisation and deregulation," says Hilary Coulby of the Catholic
Institute for International Relations (CIIR), "free market policies
which, we believe, have contributed to the current economic crisis in
Asia. "Government leaders must pioneer a new economic model which puts
people at its heart," she says.
The British government's senior development cooperation minister, Clare
Short, did not detail such an alternative when she addressed the Forum,
but did say that both state-led socialist systems and the free market
paradigm that followed it had collapsed.
"The answer is one that is a synthesis of both, and learns from both,"
she theorised, moving onto the issue of managed markets without going
into detail. "The markets and state both have their place, but they
need to be properly regulated. Globalisation is unstoppable -- the
genie is out of the bottle, capital is moving around the world. If we
demand that it stop, it will not."
What was needed, Short said, was for governments and NGOs to ensure
that the process is beneficial to the poor by promoting "international
management" of the world economy and "proper regulation" of
international banking and finance.
And she said while the Asian crisis held lessons, "we should not throw
out the baby with the bath water -- we want to learn from the gains as
well as the prices. We must ensure that it doesn't cause harm to the
world economy and other countries."
Short also extolled the focus on poverty in the British government's
new policy for international development cooperation. But her comments
left some NGO representatives from South East Asia deeply unconvinced.
"The poverty strategy of Clare Short is nothing new -- it was there in
the 1960s and 1970s and it collapsed," said Irene Fernandez of the
Malaysian NGO, Tenaganita. "Left to me, I would want to junk the IMF,
rather than ask for reform. What we are going to see in the future is
more welfare, more trickle down (of wealth from business), so people
are kept at the survival level," she added.
The financial crisis, they pointed out, had impacted on every aspect of
life in South East Asia, threatening their economies with growing
unemployment, ethnic tensions, anti-migrant labour sentiments, food
insecurity, rural poverty and further inequalities.
"The IMF loan of $55 billion for structural adjustments in South Korea
must be renegotiated because it is an unfair and cruel agreement
between Korea and the IMF," a South Korean delegate said. "Already,
farmers are facing bankruptcy and high-interest loans are increasing
their debts."
Reiko Inoue, a Japanese delegate, said one result of the crisis could
be that the IMF is likely to put strong pressure on Thailand to step up
its export of food and agricultural goods, such as fish, shrimp and
vegetables. A direct result that would be that Japan, which relies on
imports to meet 40% of its food needs, will become even more dependent
on food exports, while Thailand could suffer from lack of food for its
own peoples.
"What we are discussing here has relevance to other regions," Fernandez
said. "In Sub-Saharan Africa, they follow all IMF directives that we
do. What they have is a much more severe effect of liberalisation," she
added.
However, it remains to be seen whether any of the NGO concerns actually
get to be heard by the heads of government who are to attend the main
segment of ASEM II on Apr 3-4. Though the meeting will be overshadowed
by the recent Asian financial crisis and its continuing legacy,
European Union heads of government are expected to advise their Asian
counterparts not to jettison economic liberalisation and to bring about
greater political reforms. It is expected to announce the creation of
an ASEM Trust Fund to be modelled along the Commonwealth Know How Fund
for extending technical assistance for financial restructuring and
gauging the social impact of structural adjustment programmes in the
region.
United Nations: North-South divide over Islamic holidays
United Nations, Mar 31 (IPS/Thalif Deen) - The United Nations,
overcoming strong opposition from Western nations and Russia, has
decided to declare two Islamic holy days - the Eid Al-Fitr and the Eid
Al-Adha - as official UN holidays.
The 54-25 vote in the UN's Administrative and Budgetary Committee in
favour of the two holidays reinforced the political clout of the 55
Islamic nations in the world body. "It was a battle between the North
and the South - and the North lost, " one Third World delegate told
IPS.
Lined up behind the Islamic countries were the 132 members of the Group
of 77 developing nations, while the opposition came from the United
States, the European Union, Russia and some of the East European
countries. The only exception to the North-South divide was Canada
which voted with the South.
Ambassador Nasser bin Hamad al-Khalifa of Qatar, speaking on behalf of
the 55-member Organisation of Islamic Conference (OIC), thanked those
who had voted in favour of an issue which, he said, "concerned more
than one-third of the UN's 185 members and more than one billion
Muslims worldwide."
Eid Al-Fitr commemorates the end of the 30-day Ramadan fast by Muslims
throughout the world while the Eid Al-Adha commemorates the annual
pilgrimage by Muslims to Mecca, Saudi Arabia, one of Islam's holiest
places.
Last year the General Assembly adopted a resolution calling on the
Secretariat to observe the two Islamic holy days as official U.N.
holidays. But the Secretariat opted only for one, sparking strong
criticism from the OIC and generating a second UN resolution last week.
The Secretariat decided to declare the second Islamic holy day an
"optional" UN holiday.
"There was no sense in having optional religious holidays because there
should not be discrimination among UN staff, in the light of the
universal nature of the Organisation," said Tammam Sulaiman of Syria.
"That universal nature applied to religious holidays. Other religious
holidays were officially observed, rather than made optional. "
After the vote, Ahmed Farid of Saudi Arabia, said "it was now clear
that all employees of the United Nations must take two days off on the
two holidays, with full pay. The doors of the United Nations would be
closed on those days."
Traditionally, the UN has had only nine official holidays, including
Christmas, Good Friday, and most of the official US holidays. But to
accommodate the two Islamic holy days, the world body decided to
increase its official holidays from nine to 10 under the resolution
adopted last week.
The Administrative and Budgetary Committee comprises all 185 member
states and took its vote Friday after several days of intense debate.
The meeting was so emotionally-charged that the committee, which
usually takes decisions by consensus, was forced into a rare vote.
The resolution in favour of the two holidays finally was adopted by a
vote of 54 in favour, almost all from developing nations, to 25
against, mostly from the North and Eastern Europe.
Nicholas Thorne of Britain, speaking on behalf of the 15-member
European Union, told delegates that the declaration of holidays was the
prerogative of the Secretary-General, not the member states. "The Union
was conscious of the sensitivity of the issue, and was, therefore,
reluctant to see such issues decided by vote."
Susan Shearhouse of the US delegation said she was "deeply concerned"
with the Committee's decision, since the designation of officially
observed holidays was in the purview of the Secretary-General. "The
Committee must remain mindful of the UN's secular nature, as well as
the need for equity among all religions and culture. The resolution
went against that spirit," she said.
Evgueni Deineko of Russia told delegates his country was not against
the Secretariat's observing the two Muslim holidays. "It had voted
against the draft resolution for different reasons. It was important
that the texts be adopted by consensus."
Deineko also said that his delegation always reacted negatively when
votes were forced. Another reason for his delegation's vote was that in
its view, there had been an attempt to interfere with the prerogative
of the Secretary-General regarding holidays for U.N. staff. "Taking a
decision to increase the number of holidays in the United Nations was
a dangerous path. It could lead towards an unlimited increase in such
holidays," he said.
Deineko also pointed out that there were numerous religions and
beliefs, "and perhaps there would be a desire to observe holidays that
exited in all cultures." "The increase in the number of holidays could
also impact negatively on the work of the Organisation; it certainly
would not enhance the effectiveness of the work of the staff," he
added.
Environment: GEF meets in India amid controversy
New Delhi, Mar 31 (IPS/R. Dev Raj) -- The first assembly of the Global
Environment Facility (GEF) begins on Wednesday in the Indian capital,
in the midst of controversy here over a $70 million eco-development
project that it supports.
Hutton Archer, senior external affairs coordinator of the GEF, a
multilateral financing mechanism created in 1991, said he hoped the
emphasis would be on project implementation rather than political
wrangling local or international.
According to Archer, India is an excellent location for the three-day
assembly, from Apr 1 to 3, because of the country's own rich experience
with the United Nations Development Programme (UNDP), United Nations
Environment Programme (UNEP) and the World Bank which implements GEF
projects.
But environmentalists and non-governmental organisations say GEF
projects in India serve as good examples of how bureaucrats get to
stuff their pockets with World Bank funds at the cost of local people.
The eco-development project was drawn up by the Indian Institute of
Public Administration (IIPA) for the stated objective of "protecting
ecologically valuable areas from unsustainable or unacceptable pressure
arising from needs and activities of people living in and around such
areas."
India's top environmental activists, including Anil Agarwal of the
Centre for Science and Environment (CSE), and Medha Patkar of the
Narmada Bachao Andolan (NBA) say the project would in fact see the
eviction of millions of forest dwellers and raise India's external
debt.
Critics of the project include George Fernandes, leader of the Samata
Party, and appointed last week as federal defence minister in the new
coalition government led by Prime Minister Atal Behari Vajpayee.
The project introduced to India the concept of national parks with its
underlying emphasis on the "voluntary relocation" of inhabitants while
promoting tourist-type activity.
Successive governments have failed to react to protests against the
GEF-funded project which began two years ago. The present one, which
took office just two weeks ago, failed to send a representative to a
GEF-NGO consultation here in Delhi on Sunday.
Tribal representatives from the Nagarhole National Park in southern
Karnataka state, one of seven sites covered by the project, pointed out
that concerns raised persistently at various levels have fallen on the
deaf ears of both the government and the GEF. Other project sites are
Ranthambore in Rajasthan, Gir in Gujarat, Pench in Madhya Pradesh, Buxa
in West Bengal, Periyar in Kerala and Palamau in Bihar.
"The conspicuous absence of government representatives spoke either of
indifference to the plight of local communities living in and around
the forests of India or unwillingness to face a growing controversy,"
said Sunita Narain of the CSE.
The government she said would have been hard put to explain how a
prominent hotel chain was allowed to set up a resort within the park
while the tribals living in it are being thrown out.
Through the meeting it emerged that GEF projects in other countries had
similarly ridden roughshod over local communities. For example Grace
Akumu of the Climate Action network, Nairobi, spoke of a project in the
Tana Reserve of Kenya which called for forced resettlement of the
Pokomo people.
Environmentalists accused India's powerful forest bureaucracy of using
a mixture of coercion and slow strangulation to deny any real choice to
the affected people in spite of well publicised protests. And they
accused the GEF of acquiescing.
Although two environment ministers from the previous United Front
government, which lost power in the February elections, repeatedly said
they planned to change forest laws to allow involvement of local
communities in the protection and maintenance of forests, the
bureaucrats simply ignored them.
Avdash Kaushal, who runs the Rural Litigation and Entitlement Kendra
(RLEK), pointed to the example of the forcible eviction of the Van
Gujjar pastoral tribe from the Rajaji National Park in northern Uttar
Pradesh state, raised by the National Human Rights Commission.
Environmentalists said the basic problem with the new conservation
policy is that they see protected areas as wilderness which can be
better managed by reducing human intervention, although forests in
India are already home to millions.
The concept also does not take into account the knowledge and expertise
of tribals and other forest inhabitants in managing wildlife and
forests which is often superior to those of forest officials, they
said.
According to Agarwal, the other major negative aspect of the
eco-development project is its unviability since $70 million would have
to go into just seven protected areas when India had a total of 521
areas which could be classified as national parks.
"International agencies like the GEF are willing victims of games
played by the Indian bureaucracy - to get more money for itself without
accountability or penalty should the projects fail to deliver," Agarwal
said.
The assembly will nevertheless be a unique opportunity for all
participating governments to exchange views on the policies and
operations of the GEF.
So far, the facility which addresses environmental issues not normally
funded through national, bilateral and international finance, has
programmed $1.8 billion in grant funding to more than 440 projects
around the world. It has also leveraged another $5 billion for actions
to reduce the risk of climate change to conserve and use biodiversity
sustainability, protect international waters and phase out ozone
depleting substances.
Europe: Six states sign up for EU's grand membership lottery
London, Mar 31 (IPS) -- The six countries leading the race to join the
European Union began negotiations on their applications to join, with
45 minute presentations to EU foreign ministers in Brussels Tuesday.
Ministers from the so-called 'fast-track' countries -- Cyprus, the
Czech Republic, Estonia, Hungary, Poland and Slovenia -- set out their
achievements so far and the EU targets they still have to meet.
All must make far-reaching changes to their economies and legal systems
during the membership process, accelerating privatisation of state
enterprises and restructuring their key industries, especially
agriculture and export industry standards.
But if the tests are passed, some, maybe all, will be able to take up
full membership by January 2003. It is a process that is turning into
a highly competitive race, with the leading nations leaving the weaker
nations behind without a blink.
Five other nations that had sought a place in the first rank --
Bulgaria, Latvia, Lithuania, Romania, Slovakia -- were refused the
chance to make their case by the EU, which says they are not ready to
join.
"We are all on our own," Igor Bavcar, Slovenia's Minister of European
Affairs told Britain's BBC TV. "There may be common interests among the
small countries, but in the end the EU is a moving target.
"It would be harmful to make Slovenia wait for other candidates before
it can join," he added. "But we have heard a lot of talk about waiting
for other candidate countries. We want to be treated as individual
applicants."
Others saw the process as a way of righting historical wrongs: "We have
a moral and historic right to membership of the Union," Poland's prime
minister Jerzy Buzek said. "If Poland had not found itself on the
eastern side of the post-war divided Europe, we would have been a
member of the Union long ago."
Still others said the process would make some of those historical
wrongs worse. Turkey, flatly refused consideration at the outset, has
denounced the inclusion of Cyprus in the negotiations. Turkish foreign
minister Ismail Cem says EU's talks with the Greek Cypriot government
would sharply increase tensions on the divided island.
Admitting the six will also require substantial changes to the existing
15 member's EU lifestyle. It will require reform of the EU's system of
agricultural subsidies under the Common Agricultural policy (CAP) which
takes up half the Union's budget and to its system of regional
'structural funds', which swallow up another third.
Most of the six prospective members in Brussels Tuesday have large
agricultural industries, adding more burdens to the EU's massive CAP
farm trade subsidy system if they join.
The EU, under pressure from global free trade rules, must lower the
guaranteed high prices the CAP system promises its farmers, bringing
them down to world market levels. It also wants to pay EU subsidies
direct to farmers instead of paying to store farm produce to keep goods
off the market and force prices up.
Similarly, at least some of the EU Structural Funds now used to support
the development of poor regions of the EU, will have to be offered for
development of the new six aspirants. The EU's executive Commission
says more than half the EU's populace live in areas eligible for
structural funds. It wants the aid re-targeted on the poorest regions
and the poorest 38% of the populace.
But the new member countries cannot expect to receive the kind of
financial support that the so-called 'poor four' -- Ireland, Greece,
Portugal and Spain -- were granted to bring their economies up to EU
standards in the 1980s. These three nations successfully used their
money to reinforce relatively new democracies taking root after years
of dictatorship. This is not an option for the new batch of
ex-communist states.
Whereas national incomes in the former communist states are about a
third of the EU average, existing EU members will expect to go on
receiving four times as much structural funds as their eastern
neighbours get in development aid.
Negotiations are expected to be protracted as existing members try to
minimise any losses when the EU expands. Belgium, the Netherlands,
France and Ireland stand to lose all their present share of EU aid to
poor regions under current reform proposals.
How much the present members will lose and how much the new members
will gain will have to be decided by end 1999 when the structural funds
systems expire and have to be replaced.
Like so much else awaiting decision at the EU, little of substance can
be agreed on before Germany's general election in September. Further
upheaval follows nine months later with the selection of new European
commissioners. At the same time there will be elections to the European
Parliament -- when the matter could become a disruptive campaign issue.
Trade: EU fights farm trade war on Polish soil
Warsaw, Mar 31 (IPS/Andrzej Rudka) -- Poland has become a battleground
for fighting out the explosive issue of European Union agriculture
policies.
Vested interests, social and political realities and disputes over who
will get substantial EU subsidies for agriculture, complicate the
process of bringing Polish produce to the new open market.
As the country enters accession talks, politics in Warsaw and the EU
itself have postponed the day of reckoning for Poland's small farming
sector, at the expense of the modernisation of Polish agriculture as a
whole.
The EU is slow to reform its agricultural subsidy programmes and takes
advantage of its stronger bargaining position to shortchange its new
partners and protect existing EU agricultural structures.
There is no question that Polish agriculture must change. Poland's two
million farms average under eight hectares while the average EU farm
has about 18 hectares; over a third of the country's farms are just one
to three hectares. Only the larger farms have a good chance of
surviving accession to the EU.
Small farms will have to be consolidated, and infrastructure and
services in the countryside must be developed, boosting efficiency and
improving the quality of life for Polish farmers.
Agriculture's share of Poland's gross domestic product has been slowly
decreasing, although in 1996 at 6.5% it was still much higher than the
2.5% EU average. About 25% of the Polish population works in
agriculture, though only 11 to 12% make their living exclusively or
mainly from it.
Polish agriculture does offer comparative advantages over the EU's,
notably lower labour costs and ecologically healthier products. Both of
these characteristics are threatened, however.
The removal of most subsidies to farmers in the early 1990s as part of
economic reform and the widening gap between prices and costs
contributed to a drop in production in the early years of transition,
and in 1993 Poland's traditional agricultural trade surplus turned into
a deficit. Any improvement in this situation will require substantial
modernisation of the agriculture industry.
The difficulty of such modernisation is complicated by the fact that
the agricultural policies of Brussels themselves must be reformed.
The CAP subsidies continue to be a major burden to the overall EU
budget, and there are plans for further reductions, by 10 to 30%, to
make EU products more competitive in world markets, which would also
narrow the gap between Polish and EU farm prices.
The Polish association agreement, signed on Dec 16, 1991, is the
foundation for agricultural trade between Poland and the EU. It
subjects agricultural products to selective and limited liberalisation,
but it only applies to some products and for most of them only reduces
-- not abolishes -- trade barriers.
But agricultural trade performance after the agreement has been
disappointing, despite the improved access to the EU market; Poland's
growing agricultural trade deficit with the EU has fuelled fears that
the EU is not yet ready to open its agricultural market to countries
like Poland.
Since 1995, Brussels has provided guidelines to help the applicant
countries prepare to join the EU internal market. Some 40% of EU laws
and regulations concern agriculture, many requiring applicants to meet
more stringent environmental standards than current EU members.
On Mar 18, the European Commission revealed its budget proposal for
years 2000-2006 and suggested the creation of a steadily growing farm
modernising fund for all new members, assuming they will join the EU in
2002. This is to grow from 600 million Ecu (648 million dollars) in
2002 to 2.5 billion Ecu (2.7 billion dollars) in 2006.
In addition, under a system of guaranteed prices, the European
Commission is to offer them 1.1 billion Ecu in 2002, increasing that to
1.4 billion Ecu in 2006; structural funds will contribute 3.5 billion
Ecu in 2002, to be raised to 11.6 billion Ecu in 2006.
Of course, the new members would also contribute their own dues to the
overall EU budget.
However, the European Commission has said that a longer adjustment
period would be needed for agriculture, during which Poland and other
new members would not fully participate in the CAP.
Some at the EU argue that farm goods prices in Central and Eastern
Europe would still be lower than the EU's at accession, and applying
CAP rules and prices would strongly stimulate production there,
producing surpluses in the EU.
In contrast others say agriculture in Central and Eastern Europe need
protection against strong competition from the West; food industries in
the region would be hit hard by high prices just as EU exporters
started challenging then on the Polish market.
These arguments can be readily challenged. First, no one can predict
what the prices will be after accession. At the moment, they remain
below the average EU level, but prices paid to Polish farmers have been
rising steadily over the last few years. In fact, wheat prices in
1996-1997 were higher than the EU's.
Equally, one cannot argue that agriculture in the region is weak and
non-competitive, while claiming that a sudden increase of prices would
result in huge production increases and exports to the West.
It appears that the EU proposal for long adjustment periods for the
agricultural sectors in Central and Eastern Europe has little or
nothing to do with preparing them for integration.
In fact, the EU may fear competition with its own slowly reforming
farms. And while continuing the CAP in the EU in a slightly reformed
but still very expensive form, EU countries appear unwilling to finance
the growth of competitive agricultural sectors.
In any case, some argue, especially in the United States, that Central
and East European countries should not set themselves to the EU's
inefficient standards, as the CAP system will be transformed to meet
global trade rules in ten years or so anyway. But that is a long time
to wait.
Understanding the economic and political importance of agriculture in
Poland, the EU will have no choice but to make some concessions in
other important areas, such as telecommunications and access to Western
labour markets. Whatever the terms, it is clear that Poland can count
on some EU financial support, especially after accession. But Poland
has not developed a consistent agricultural policy, and it is not yet
clear whether it will use this money efficiently.
Jerzy Buzek's election win in 1997, at the head of a coalition led by
Solidarity Election Action, a conglomerate of right-wing parties and
social groups headed by the Solidarity trade union, with the
reform-oriented Union of Liberty as junior partner, does not enjoy a
large parliamentary majority.
It is also condemned to cohabitation with a leftist president until the
end of 2000 and must face the threat of a presidential veto if it seeks
to introduce radical changes, although the president is much more
reform-oriented than many of his colleagues.
Poland will need successful negotiating skills and structural economic
reforms; combined with efforts to adjust agriculture to EU requirements
before accession, this will give Poland its best shot at favorable
terms of membership in the European Union.
Brazil: Amazon fires stoke criticism of vetoed law
Rio de Janeiro, Mar 31 (IPS/Mario Osava) -- The fires devouring forests
in the extreme northern Brazilian state of Roraima have fuelled
criticism of a presidential veto of a law cracking down on crimes
against the environment that went into effect this week.
A veto by President Fernando Henrique Cardoso on legislation approved
two months ago, the "Law on Environmental Crimes", which went into
force Monday, has drawn criticism from environmentalists.
Activists consider the new law a great stride forward for the
environment. But they are up in arms over Cardoso's veto, which
eliminated the fines and up to three-year prison sentences stipulated
for those found responsible for spreading fires due to failure to take
preventive measures.
The sanctions were designed to reduce risks from the traditional
farming technique of "clear-burning," by which farmers prepare land for
planting or facilitate the task of sugar cane cutters by burning trees,
scrub and the remains of past harvests.
Experts say the environmental disaster in Roraima, where fires raging
for the past two months have destroyed a large part of the state's
jungles and savannahs, was caused by that traditional peasant farming
technique. The fires got out of control, they explain, due to prolonged
drought in the area, low level of humidity in the air and strong winds.
The rains that fell Sunday and early Monday morning in Roraima boosted
the fire-fighting effort, especially where fires had penetrated dozens
of kilometres into the territory reserved for the Yanomami indigenous
community.
The military coordinators of the fire-fighting operation reported that
the fires that had devastated jungles in the indigenous territory were
under control. Although the scarce rain was insufficient to put out the
fires, the rise in the humidity level in the air helped contain the
flames, an army officer explained.
Although weather forecasters had not predicted abundant rain until late
April, they now report that a concentration of humidity above the
Caribbean to the north of Venezuela suggests moderate rainfall this
week, which should help contain the fires in Roraima.
But the problem is that the clear-burning technique will not disappear,
not only from Roraima but from other Amazon states where agriculture is
gaining terrain from the jungle, warned Reinaldo Imbrozio with the
National Institute of Research on the Amazon (INPA).
"With no money, poor farmers forced to leave other regions continue
migrating to Roraima," said Imbrozio, where thanks to their traditional
methods and lack of access to better technologies, they burn, deforest,
and weaken the jungle's defences.
With the drought that began in mid-1997, clear-burning gave rise to
huge fires this year that according to Imbrozio could burn up to 16% of
the state of Roraima, close to 35,000 square kms - an area slightly
larger than the Netherlands.
Environmentalists complain that the president's veto of the article
that cracked down on the careless use of fire left Brazil without the
legal means to fight that environmentally damaging technique.
Garo Batmanian, director of the Brazilian branch of the Worldwide Fund
for Nature, said the government should revise the veto and adopt new
measures such as environmental education programmes for farmers and
entities specialising in fire-fighting and prevention programmes.
Referring to the most widespread explanations, former environment
minister Jose Lutzemberger denied that the main cause of the disaster
was the El Nino phenomenon, which heats the waters of the Pacific
ocean.
He blamed the drought and fires in Roraima on the destruction of
jungles in the eastern Amazon state of Para. According to Lutzemberger,
the climatic changes occurring in the Amazon were produced locally, the
result of a major decline in forest evaporation and transpiration.
Senator Jose Sarney, a former president of Brazil (1985-90), joined the
environmentalists in criticising Cardoso's veto and demanding immediate
measures to prevent an "environmental hecatomb."
The fires sweeping Roraima have brought memories of the latter part of
the Sarney administration, when clear-burning in the south-
central and eastern Amazon brought an international outcry and turned
Brazil into the world's biggest environmental villain.
Fears of a fresh deterioration of the country's image abroad triggered
an unprecedented mobilisation in Roraima by the army and fire-fighters
from throughout Brazil. But the operation - in which around 1,700
fire-fighters and troops are participating - began too late, according
to Roraima state Governor Neudo Campos.
"Not one cent" has reached Roraima yet of the aid promised by the
central government or the five million dollars announced by the World
Bank, Campos complained.
The most welcome international aid - due to its efficacy - has come
from 165 specialists in fighting forest fires from Argentina, supported
by four helicopters, who are to return home Thursday after two weeks of
activity which turned their Brazilian colleagues green with envy.