Developing Countries Forsaken?
Byline: Johan Norberg, SPECIAL TO THE WASHINGTON TIMES
The good news is that the United States and the European Union recently agreed on agricultural trade in advance of the Sept. 10-14 World Trade Organization meeting in Cancun, Mexico. The bad news is that the agreement is more of the same old stuff. And, as a result, it is viewed by developing countries as a betrayal and perhaps as reason to give up on globalization and the West's promises about free trade and prosperity.
The Western countries say they have agreed to reduce tariffs against foreign farmers and subsidies to their own. But they don't say by how much, on which goods or when. And the deal contains this convenient phrase: "Without prejudging the outcome of the negotiations." In other words, anything goes.
That's an approach that could doom globalization, which has already brought a better life to much of the world. In the last two decades, more than 200 million people have been lifted out of absolute poverty thanks to liberal reforms and increased barrier-free trade. A recent World Bank report concluded that 24 developing countries with a total population of 3 billion are integrating into the global economy more than ever. Their per capita growth has increased from 1 percent in the 1960s to 5 percent in the 1990s. At the present rate, the average citizen in these developing countries will see his income doubled in about 15 years. Imagine how that will strengthen the demand for rich world exports.
But many countries have been left behind because the liberalization of trade during the last 50 years has not included two sectors: textiles/garments and agriculture. Those are the labor-intensive goods poorer countries can produce and sell at competitive prices. In manufacturing, the volume of trade has risen 45-fold since the end of World War II. But in agriculture it has risen only six-fold.
In 1995, the EU and the United States promised to abolish all quotas that restricted exports of textiles and clothing from poor countries could sell. But to date, the EU and the United States have killed quotas only on goods that developing countries do not export, such as parachutes - yes, parachutes. Many doubt that rich countries, after 10 years of stalling, have the courage to abolish these quotas come January 2005.
When developing countries talk about the need to discuss "implementation issues" in the WTO negotiations, it's their polite way of saying: "Will you please stick to your promises?"
Contrary to popular perception, the 1999 trade meeting in Seattle did not fall apart because of protests. …