Apr 2, 1998

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.