WORLD BANK/TRADE: Rich countries need to give the poor ones a break on agriculture, Uri Dadus, top trade specialist with the World Bank tells Deagláde Bréadún, Foreign Affairs Correspondent.
Rich countries such as the US, Japan and many European states were guilty of a lack of consistency in their approach to international trade, a senior World Bank official, Mr Uri Dadush, said in Dublin.
The rich countries of the North wanted free access to markets in developing countries but their agricultural subsidies placed Third World exporters of farm produce in the South at a disadvantage.
A French national, with an economics Ph.D. from Harvard, Mr Dadush is director of the World Bank's International Trade Department and also heads the Development Prospects Group, which analyses global economic developments and their effects on developing countries.
He is the chief author of the bank's Global Economic Prospects (GEP) 2005 report, which is being officially launched tomorrow in Paris and Washington.
While World Trade Organisation (WTO) multilateral negotiations face difficulties, there is an upsurge in bilateral and regional trade agreements. Among other things, the bank's report addresses the question: Will the proliferation of these agreements pose risks to the multilateral trading system, and, if so, how can these be managed?
"I have no doubt," says Mr Dadush, "that one reason that you have this proliferation of regional trade agreements is disappointment with the slow pace and low level of ambition and unwieldiness of the multilateral process."
After the "debacle" of the international talks at Cancun in September 2003, where 150 trade ministers met for six days but failed to reach agreement, Mr Dadush says the Geneva Agreement at the end of last July means "the talks are now certainly alive".
"What was very important about the Geneva Agreement is that it established a framework for negotiating agriculture, which is by far the biggest stumbling-block today on the way to a multilateral trade agreement."
The other big stumbling-block was the fact that "many developing countries, particularly the poorest countries, are not convinced that undertaking significant commitments in the context of multilateral trade negotiations is a wise policy for them".
I put it to him that farmers in the developed world were highly-dependent on these subsidies. "Many people think of farmers these days as the small family farm barely eking out an existence, etc. Actually, the statistics say that relatively little of these subsidies goes to those kinds of farms and a large proportion of the subsidies go to very large farms operated on an industrial scale, often making millions of dollars of revenue.
"The second point is that the farmers are not the only ones who are affected by international competition and trade.
"From the point of view of developing countries, they see that they are opening their markets to manufactured products and services and service-providers, whether it's banks or insurance companies or telecommunications companies from the North and that is of course affecting their businesses.
"They are letting in these companies and, in order to buy the products, they need to export, they need to sell something."
The developing countries were lifting tariffs: "Developing countries have reduced their tariffs by about 20 percentage points, from something like 29 per cent to 9 per cent in the last 20 years. So there has been a very major liberalisation that has happened, on the part of developing countries.
The sector where you have seen the smallest progress in terms of liberalisation, and also in terms of changing market shares globally, is agriculture."
Third World countries were facilitating the entry of big multinationals to their markets but weren't getting a quid pro quo in terms of access to the agriculture sector in the developed world: "And very often, these are the products that these countries can sell. These countries are not sophisticated enough to get into a lot of manufactured products."
Mr Dadush says it should cut both ways: "It's a question of consistency. And it's a very important issue because the poor in developing countries are hugely and predominantly in rural areas.
"They depend on agriculture for their livelihood. And trying to bring these countries into the world trading systems, integrating (them) into the world trading systems, requires that they adopt these policies of integration and trade liberalisation and all the complementary policies that go with that. But it's virtually impossible to convince them to move in that direction, at least in the context of multilateral negotiations, if the industrial countries are viewed as being hypocritical."
But he quibbles with my suggestion that the World Bank was "solidly on the side" of the developing countries: "Not on the side of developing countries, if I might correct, on the side of development. It's not quite the same thing."
He said there was a lot at stake: "We are no longer in a world of walls. We are in a world where every one of our jobs directly or indirectly depends on the capacity to sell to markets and buy from markets around the world.
"We're just too closely-knit now to entertain a world where anything goes in world trade. You have to have rules."