Cancún's False Promise: A View From the South

In discussions about the World Trade Organization talks at Cancún last September, the voice of the economic North is often heard loudest ("Don't Cry for Cancún," January/February 2004). The economic South deserves the chance to speak too.

RICH MAN IN HIS CASTLE

There is no doubt that the collapse of the talks was not good news for poor countries. But there are times when a bad deal is worse than no deal at all. Cancún was just such a case. The only positive thing for the poor to have come out of the talks was the unprecedented show of unity among developing countries. I hope this unity is sustainable, and I urge rich and powerful countries to try to direct it toward constructive outcomes rather than undermine it.

Developing countries went to Cancún with two main objectives. The first was to dismantle agricultural subsidies and other tariff and nontariff barriers placed on certain agricultural and processed products in which we have a comparative advantage. We hoped, in line with the Doha Development Agenda (the November 2001 document laying down priorities for the current round of global trade talks), that Cancún would lead to measures promoting fair trade and thus diminish our overreliance on aid and encourage economic growth.

Our second aim was to deny the consensus needed to proceed with the so-called Singapore issues: investment, competition, government procurement, and trade facilitation. This position was not, as many commentators have argued, a knee-jerk rejection. Rather, we had reasoned concerns about whether the World Trade Organization was the best venue, and Cancún the best time, to discuss the issues in question. In any case, although disagreement over the Singapore issues was the trigger for the collapse at Cancún, the dispute over agricultural subsidies was at least as much to blame for the impasse.

Cancún came at a time when it was increasingly unreasonable for rich countries to ask poor ones to open up their markets while simultaneously delaying the gradual dismantling of their own agricultural production subsidies and export credits. A key Doha principle was that trade policies should be evaluated on the basis of their impact (positive or negative) on poor countries' chances of attaining the Millennium Development Goals (MDGs), which were unanimously adopted by the UN in 2000. Based on this measure, countries in the North clearly should have produced a timetable for dismantling agricultural subsidies and other trade barriers, which have an unambiguously negative impact on the South.

As a politician, I understand the pressures of constituencies. But I do not think that the interests of the small farming base in rich countries should have priority over the interests of much larger agricultural constituencies in poor ones. In Tanzania, almost 80 percent of the population is employed in agriculture. These people deserve assured and sustainable incomes, and they deserve to have their rural way of life preserved. Civil society in rich industrialized countries may already argue the case of poor countries. But governments there must do more to explain to their farmers that agricultural protection in its present form eats away the already meager incomes of the poor in the developing world.

LITTLE TO SHOW

Over the last decade, an unprecedented global consensus has formed around liberal political and economic governance frameworks. This trend can be attributed largely to the absence of a viable alternative system since the end of the Cold War. But if today's global system of governance is to be sustainable in the long run, it must also be seen by the countries that participate in it to have inherent strengths of its own. Pushed to the limit, poor countries will always see other alternatives, because anything is better than nothing.

I appreciate the international recognition that Tanzania has earned by embarking on far-reaching political and economic reforms. But these reforms will be politically sustainable only if they take place in a global context that fairly rewards commitment to open political and economic systems, in both rich and poor countries. How otherwise can I convince a Tanzanian coffee grower that a more open global trading and investment regime is good for her, if today she earns only a fraction of what she used to earn before the onset of deregulation and open markets? According to statistics from the International Coffee Organization, the ratio of earnings between coffee-producing countries and retail sales in consuming ones was 1:3 in the early 1990s. In other words, for every dollar a farmer earned, traders and firms further up the value-adding chain received three dollars. Today, the ratio is a whopping 1:13.

Similarly, how can I convince a Tanzanian dairy farmer, who keeps a few cows but cannot sell his milk because the market is flooded with subsidized imported milk, that an open market is better than a closed or regulated one? While he sweats to eke out a living from one U.S. dollar a day, cows in countries of the Organization for Economic Cooperation and Development are subsidized by anything between one and seven dollars a day. If I cannot convince these people, from where will I draw a mandate for further deregulation and liberalization in my country?

MAKING IDEALS COUNT

All this does not mean that Doha should be pronounced a hollow gospel. The world can still have a global trading system that is both open and fair, that rewards initiative and entrepreneurship, that helps to finance development, and that can earn the support of Tanzanians and other people living in the developing world.

But to achieve this turnaround, governments committed to the Doha spirit must focus on making coherent and coordinated trade policy that is consistent with the MDGs. As such, the North should take the lead in opening up markets: trade protectionism must no longer take away with one hand what is generously given by the other in aid. Like me, many leaders in the developing world recognize the benefits of a multilaterally determined and governed open trading system. But we want the richer part of our world to ensure that such a system is tangibly beneficial to the large agricultural constituencies in our countries.

For the last two years, I have been privileged to work with a diverse group of distinguished personalities from government, academia, business, labor, and civil society in the World Commission on the Social Dimension of Globalization, which I was honored to co-chair with President Tarja Halonen of Finland. The broad goals of the commission are to identify policies for globalization that reduce poverty, foster growth and development, and widen opportunities for decent work; to identify policies that can make globalization more inclusive and fair; and to assist the international community in forging greater policy coherence to advance economic and social goals. We have tried to look at the social dimension of globalization in the lives and work of people by consulting stakeholders at national, regional, and global levels in both rich and poor countries.

President Halonen and I, together with Juan Somavia, director-general of the International Labor Organization, formally launched the report in London on February 24, 2004. It looks at both perceptions and facts and seeks to identify innovative ways of making the economic, social, and environmental objectives of globalization coherent, sustainable, and mutually reinforcing.

I urge leaders in both developed and developing countries to look at it.* If we work together, we can make the world a place of hope for everyone, rather than a place of despair and desperation for the majority.

Benjamin William Mkapa is President of the United Republic of Tanzania.

* The final report of the Commission on the Social Dimension of Globalization can be found at www.ilo.org/public/english/wcsdg/.