WTO’s 20 years of servitude to TNCs and Monopoly Capitalism
Posted on 17 December 2015
Peoples Coalition on Food Sovereignty (PCFS) Statement
15 December 2015
Agriculture has always been on top of the World Trade Organization’s (WTO) agenda from the very start. Since it was created two decades ago to replace the GATT, WTO’s trade liberalization policies immediately found its way to open up agricultural trade markets in the Global South. Being the primary economic sector of the developing world, efforts to cut down tariffs on agricultural goods while allowing rich countries to dump heavily subsidized products devastated local economies and pushed the people – peasants, farmers, fisherfolk, indigenous people, rural women and youth, to deeper poverty.
Before the WTO was established, agricultural trading from developing countries reached an overall trade surplus of US$6.7 billion. Nearly all of the ten most traded agricultural commodities are essentially produced by the developing world. For many of these countries, agricultural trade was their main source of foreign exchange. The systematic removal of protective trade barriers in the agricultural sector of the Global South however led to massive distortions in global trade.
By 2001, export revenues of developing countries producing coffee and sugar suffered due to the drop in prices of its main exports. At the same time, locally produced goods fell off the market due to the unfair competition with cheap imported products. As such, developing countries were forced to reduce their overall foreign exchange availability and depress rural wages resulting in increased rural poverty. This underlined the importance of undistorted agricultural trade for overall economic development.
As the prices of agriculture commodities for export from developing countries continued to drop, the influx to the local market of agricultural imports from developed countries that are highly protected and heavily subsidized rapidly increased. Developing countries found it increasingly difficult to compete with subsidized surpluses of commodities disposed specifically by OECD countries such as the EU and the US.
By the end of the 1990s, agricultural trade deficit in 49 Least Developed Countries (LDCs) has increased so rapidly that import transactions have twice surpassed export flows. According to FAO, 2030 prospects of this trend show no sign of abating. The agricultural trade deficit of the group of LDCs is expected to widen further and will increase at an exponential rate over the next 30 years. Indeed, the WTO’s Agreement on Agriculture (AoA) institutionalized plunder and trade-‐distorting policies of the OECD countries instead of addressing the fundamental concerns of developing countries. Worse, its role in the Globalization of the world economy, liberalization processes, and measures to attract foreign direct investment (FDI), structural adjustment policies played a crucial role in expanding the power and profit of transnational companies.
Furthermore, WTO viciously imposes rules that are disadvantageous to developing countries which they are obligated to follow as dire consequences await if such rules were not observed. Pro-‐corporate tribunals within and outside of the WTO including NAFTA’s notorious investor state-‐dispute settlement (ISDS) clause allowed companies to sue governments in international court, practically undermining the power of local courts and the sovereignty of countries.
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