Back on track: Leaving the detour Guyana And The Wider World
Stabroek News
March 31, 2002

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Over the past eight Sundays, this series took a detour exploring the Enron affair and its implications for globalisation and the lessons to be learnt from these by us in Guyana and the wider Caribbean. Preceding the detour we had covered some ground in our assessment of the WTO, paying particular attention to its effects on global trade in services, the fastest growing segment of the international economy. It was my intention before the detour to move next to consider the WTO and global trade in agriculture. Beginning today we revert to the original path.

This resumption of the original course does not imply that the Enron affair and its aftermath are over. Far from it, over the past week, even as this article was being prepared, significant developments occurred. Thus the much talked about Campaign Finance Reform Bill was passed in the United States. The break up of Andersen accelerated. Not only are its overseas collaborating networks rapidly spinning off, but also its CEO has resigned. Meanwhile, the remaining Big Four accounting firms are undertaking massive damage control, as changes to US law, which will severely affect them, are now almost certain. Going much further than the Bush's ten proposals considered last week, there are calls for anti monopoly action against the Big Four, and a break up of the high degree of concentration in the accounting market. Further, the Enron effects on financial markets continue to spread and disrupt expectations of an early return to business as usual.

Recall: agriculture

As we are resuming the original course, the time is perhaps opportune to briefly recall those areas of global agriculture, which we have already covered in the series and to take stock of where we are in our understanding of the concept of globalisation.

Two important aspects of global agriculture were discussed at some length in the series. The first was our discussion of global food security. At that time we examined, among other things, the state of global food supply and consumption, as well as projections for the next decade and a half. The likelihood of achieving global food security, one of the United Nations Millennium goals, is in jeopardy, if present global trends continued.

Second, we had also examined results from the on going global project to assess the carrying capacity of global ecosystems. Its first Report entitled: 'People and Ecosystems: The Fraying Web of Life,' sought to highlight the crisis conditions facing the carrying capacity of global systems to feed, clothe, and house the world's peoples. The project is a collaboration of important global agencies, like the World Resources Institute, the International Food Policy Research Institute, and the World Bank.

Taking stock of globalisation

While the series had started with an extended examination of the concept globalisation, over time we became aware of the amazing range of concerns encompassed by this concept and the enormous interest this phenomenon has attracted worldwide. One by product of all this (and perhaps a contributory factor to it) is that the meaning of globalisation has become so extremely varied that some question is functionality.

As we have noted some persons interpret globalisation as the "multiplication and intensification of economic, political, social and cultural linkages among people, organisations and countries at the global level." Others however, focus mainly on the economic dimension of these linkages. Yet others place emphasis on the level of 'practice' and 'behaviour.' To these persons globalisation is the international consequences of the behaviour of individuals, groups and countries. For example the global effects of HIV/AIDS, or September 11, 2001, or global warming. To these persons there is also the recognition of a rapidly growing tendency towards worldwide/ universal practices, for example, democracy, law, and institutions.

All interpretations however, recognise the twin roles of policy (liberalisation) and technology in the process. In the latter regard emphasis is placed on information, communications, transport, social and economic organization, and biotechnology. Developments in these areas along with policy changes to reduce barriers have helped to make the world more a ˘global village÷ than it has ever been.

The harsh reality which confronts us, however, is that, despite support for globalisation, liberalisation, free trade, and the end to protective barriers as espoused by the rich countries, they presently subsidise their own agriculture to the tune of US$1 billion per day, thereby robbing poor countries of sales in their markets. Despite pledges made several decades ago to transfer between 0.7 and 1 per cent of their GDP to the poor developing countries in order to support their development and transformation, the richest of these countries, the United States, gives only 0.1 per cent of its GDP as official 'aid.' The European Union gives about 0.33 per cent. The consequence is that the 'aid' which is given is much less than the value of the loss of export opportunities for poor farmers in the developing countries.

The WTO process

This takes to the heart of today's topic. The fundamental problem facing global agriculture is that agriculture commodities more than any other set of global products and services, are treated as political items. Strategic, political, cultural, and a host of non economic/non market elements interfere with the production and sale of agricultural commodities, and indeed the rural rural economy worldwide. This reality reflects the fact that the original GATT, which preceded the WTO, had so many loopholes in it that no one pretended that it was intended to service agricultural trade in the way it did for manufactured products.

Thus under the GATT countries were actually permitted to use import quotas and to subsidise their agriculture! This gave enormous international support to the proliferation of non tariff measures as the norm, with the consequence that agricultural trade became highly distorted with the routine application of non commercial criteria in all countries.

In the face of these circumstances, it is not surprising that the primary objective of the WTO/Uruguay Round was to introduce some 'order' to global agricultural trade through bringing to an end the 'legitimate' use of non tariff measures in agricultural trade. In other words the goal was, in the first stance, to legitimise only market oriented policies and through this means to reform agricultural trade, making it more predictable and less susceptible to arbitrary intervention.

Next week we will continue this discussion.