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September 28, 2003

G21 After Cancun

While the subject of the WTO meeting in Cancun may seem a bit off-topic for AfricaBlog, there is no denying the potential effects that an effective G21 can have on the economies and development of African nations. The subject may not be about Africa, but the subject touches the continent deeply.

Last week, AfricaBlog was invited to answer a question for Marc Brazeau’s Blogonaut. A simple question, yes, but thought provoking.

Given the collapse of the WTO talks in Cancun, what do you feel is the most strategic next step for the G21 countries?

Being the gent who runs AfricaBlog, it falls upon me to answer it, but I make no claim to speak for the contributing authors of the blog. Their opinions may be markedly different, their beliefs opposite mine.

Most importantly, to me, is to understand why the ending of the talks wasn’t necessarily a failure or a loss. G21, an organization made up of representatives of 21 of the worlds poorest nations, showed itself to be a strong organization with a powerful agenda.

As Alex Kirby said in his column for the BBC:

The collapse of the WTO talks in Cancun may look like disaster for all. Eventually though, out of the ashes may come a new, abrasive self-confidence from the poor.

Although his belief that a win for the smaller farmers of the world is a loss for the rich farmers in prosperous nations is a bit questionable, he’s right about the potential good for developing nations in a show of unified strength. This surprising strength from nations that normally have such a small voice is, in itself, a small victory.

This small victory has the potential to lead to greater victories.

The end of these talks should surprise no one. Of course, these first steps will be contentious; will have some air of battle about them. A short-term loss does not always mean a long-term failure, though. If the nations can maintain a united front and continue to press their case, they will be successful in the long run.

G21 nations understand that tariffs imposed on agricultural goods by the US and the EU in particular are detriments not only to that industry in developing nations, but to the economic growth of those nations as a whole. While a small African nation cannot compete in manufacturing, consultation, or high-tech, local farmers could sell within their own nations at competitive prices if farmers from developed nations weren’t receiving artificial subsidies that made it possible to dump products on third-world countries.

In essence, the trade complaint that the US has against China—that artificial price controls and monetary manipulation make it possible for Chinese manufacturers to dump goods on the US at reduced costs, hurting domestic manufacturing—is the same complaint that G21 has about the EU and the US.

And they are right.

The tariffs that keep competitive products out of the US and EU, and the subsidies paid to farmers, amount to trade barriers that developing nations have no hope of overcoming.

For G21 nations, there are three things that must happen:

  1. Continue the course with appeals to the WTO.
  2. Appeal to the US and EU directly.
  3. Compromise

Continue the Course.
There is no need for desperation or fear. Continue the course and expect this to be a lengthy process. Farmers and farm advocates form powerful political blocks in the US and EU; respect that it will take time and effort for the governments to find ways of addressing G21 concerns without thoroughly alienating voters. Expecting these leaders to commit political suicide overnight might be reaching.

Appeal Directly.
Take the conversations directly to the US and the EU. Direct approaches can have a much quicker response—or at least more fruitful dialog—than trying to appeal to larger organizations that cover a wider array of interests. Focused dialog with the US, for instance, could tie into President Bush’s conversations about extending trade concessions and free trade zones to developing nations in exchange for certain governmental liberalization or assistance in the continuing war on terror.

This ties into the first strategy. G21 nations need to understand that they probably will not get all that they want—at least, not yet. And that’s acceptable. Taking strides in the right direction is the goal, not the end of the effort.

One of the things that should be made clear is that it is unlikely that developing nations will be competitive in Western markets for some time. Economies of scale simply work against them, as to the delivery mechanisms available in the West, the agricultural technology, and the business knowledge. What is important is that they become competitive in their home markets.

Money that should be going to local farmers, that should be powering local economies, is instead drained off to the subsidized farmers of the West. Without those subsidies, economies in developing nations will be free to grow—and economic growth and success is an integral component of development in education, health care, and liberalization of governments.

No, the collapse in talks was not a failure. It was an uncertain, yet impressive first step towards a more fair structure of worldwide trade in agriculture.

Posted by zombyboy at September 28, 2003 12:45 AM
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