Fair Trade Deal

Another round of talks is underway at the 6th World Trade Organization Ministerial Conference in Hong Kong with an air of cautious optimism prevailing as Trade Ministers from 149 member countries attempt to give a push to reaching an agreeable formula on a long list of contentious issues pitting the developed and developing countries against each other. The deal that countries like India want from the Hongkong meet is as simple as it comes such as addressing on food and livelihood concerns of the poorer countries. But this may be easier said than done given, the continuing differences between developed and developing nations on the contentious issue of agriculture and farm subsidies. 

The appeal coming from the United Nations Secretary- General Kofi Annan urging wealthy countries to set an unambiguous date to end “trade-distorting subsidies” and take other steps to give market access to developing countries, especially in agriculture to allow trade to improve living conditions around the world, in short sums up the expectations of the developing countries. The very essence of the General Agreement on Tariffs and Trade (GATT) which was established to pursue the objective of free trade through the removal or reduction of trade barriers must not be lost sight of. 

It is somewhat disconcerting to note that whenever the newly industrialized nations have challenged the competitive strength of the richer countries, they have immediately retaliated by imposing both tariff and non-tariff barriers. The huge subsidies in Agriculture being given to farmers in developed countries has had a deteriorating effect on the livelihood of poor farmers and goes against the very spirit of the GATT. 

The present trade rules are way too familiar with the discrimination meted during the colonial era. The end result has been the easy access to cheap raw materials of third world countries for the industrialized west. Later, they have found a convenient dumping market for their finished goods. For the powerful countries this is what free trade is all about while for the majority it measures up to less access to markets and more protectionism.

By such intentions, the developing countries are fast losing faith in the multilateral forum provided by the WTO. It only confirms the fear that rich countries are only there to impose rather than treating their counterparts from the third world countries as equal and legitimate partners. The discriminatory trade regime being played out in the name of globalization must stop and for this, the onus is on the G-8 countries to show political courage in dismantling those structures which is detrimental to free trade practices. While the level of trade has definitely gone up in terms of percentage but in real terms it remains highly asymmetrical and unfavorable against the developing economies. This is because of the double standards of the few who demand free trade abroad but practice protectionism at home. It would be in the interest of all those concerned for the global economy to break the deadlock at the earliest by working on a tariff reduction formula that will enhance a truly free trade regime and removing protectionism that only stunts economic growth and harm developing countries the most. The Hongkong Ministerial Conference more than anything else should reinvigorate the mantra that countries can prosper together only through a vibrant trade relationship, which is fair and balanced.