A new global trade deal is likely to exacerbate poverty and hunger rather than solve the current food crisis, ActionAid warns today ahead of crucial trade talks at the WTO in Geneva (Monday 21 July).
"The number of hungry rose to more than 950 million people this year and a WTO deal will only add fuel to the fire," said Aftab Alam Khan, ActionAid’s trade campaign co-ordinator in Geneva. "That's why we’re saying, 'No deal is better than a bad deal.'"
"Hunger is on the march worldwide and a free trade deal at the WTO will only make things significantly worse for the very poorest," he added.
Ministers from up to forty countries are due in Geneva for 'make-or-break' talks to finalise a deal on the 'Doha' round of global trade talks. WTO chief, Pascal Lamy, has described it as 'the moment of truth' and negotiations are seen as the last chance to finalise an agreement before the US elections later this year.
The WTO talks – which started in Doha in 2001 – involve agreements to liberalise global markets in agriculture, services and manufactured goods.
"In 2004, the US promised to deal with the plight of poor African cotton farmers," said Angela Wauye, ActionAid’s Food Rights Coordinator in Kenya.
"Four years down the line, what’s happened? Millions of poor cotton farmers have lost their livelihoods.
"African countries should never again be deceived by claims of a development outcome," added Wauye, who will be in Geneva next week lobbying for change.
As part of our HungerFREE campaign, we're calling on governments to deliver on their commitment to halve hunger by 2015 and we're highlighting three reasons why a WTO deal would fail to resolve the food crisis:
1.Food production systems dismantled while food import bills more than double
Two decades of trade liberalisation have undermined and helped to dismantle local food production systems in poor countries.
In the 1960s, poor countries had an overall agricultural surplus of $7 billion, but by 2001, they had an overall deficit of $11 billion, and growing.
Now poor countries are extremely vulnerable to the volatility of the global market. Food import bills have more than doubled since 2000 and the Food and Agriculture Organization said this year, they could be 25 per cent higher than last year, using up revenue that could have been spent tackling hunger.
Poor countries need flexible trade policies to ensure their farmers can integrate into local, regional and global markets, promoting agricultural production in the long term.
The Doha deal fails to provide sufficient safeguard mechanisms to protect and develop national food production system in developing countries.
2. Poor countries would be worse off
The existing Doha deal is skewed in favour of developed countries. According to the most recent July draft text, major developing countries would have to cut tariffs on industrial sector goods by an average of around 60% while major developed countries would have to reduce their tariffs by an average of less than 30%.
In agriculture, although developed countries have enjoyed safeguards on more than 4,000 products, the recent July text proposes a very limited number of products for developing countries (only 10 -18 % of tariff lines) with extremely weak protection.
Dramatic cuts in industrial tariffs would also result in huge job losses and estimates say China, India and Brazil would lose over 100,000 jobs in the car industry alone. UNCTAD predicts poor countries will lose $63 billion in government revenue from lower import duties on manufactured goods as a result of a WTO deal.
Such results would not only worsen poverty but also impact adversely on the food crisis as governments will have to rein in spending on key areas, such as health, education, food aid, social protection and hunger safety nets.
3. No checks on biofuel food price rises or speculators
In the long run, a Doha deal will fail to solve the food crisis because liberalisation fails to help developing countries build up their agriculture, but in the short run, it will create new problems such as the loss of tariff revenues and higher unemployment. It won’t, however, tackle the real drivers behind the food crisis, such as biofuels policy and speculation.
Reports estimate that biofuels could account for between 30-75 per cent of the rise in staple food prices. But the WTO deal is unlikely to tackle US subsidies and tariffs, and won’t touch EU targets encouraging the expansion of biofuels.
Similarly it has been widely agreed that futures markets and speculation have a fundamental role in the upward drive of food prices. But a Doha deal cannot regulate the markets or speculation.
WTO chief Pascal Lamy’s claim that the Doha round will solve the food crisis is sounding rather hollow.