As the Hong Kong WTO meeting spins...
Dec 16, 2005 2:19 PM, By Bill Gillon
“Can you spin it?” appears to be the only really important question in Hong Kong as trade ministers from around the world and emboldened non-governmental organizations apparently wish to “spin” the WTO right into the ground. The press spin has increased as the week drags on, making progress difficult for the WTO member countries. Diametrically opposed quotes from the same interest are as common as the protesters who line the streets every day.
U.S. cotton programs have been a focal point again and have been alleged to be responsible for suicide, poverty, death and destruction the world over. As such, it has been receiving the lion’s share of spin. For example, on Tuesday, least developed countries (joined feverishly by the EU) stated that the meeting must conclude with duty free, quota free access for least developing countries. Nothing less would do. On Thursday, however, when Ambassador Portman announced the U.S. would provide duty free, quota free access for cotton exports from West African countries, and challenged other cotton importing countries to do the same, the reaction was less than positive.
“Well, that is a negotiating ploy,” said EU Trade Minister Peter Mandelson, “It is a gigantic great smokescreen behind which they think they can dodge their responsibilities to cotton growers in Africa.” Oxfam International, an organization that has pushed for duty free, quota free access for least developed countries and has also touted the efficiencies of cotton producers in West Africa, was reported to have said that access to the United States market was not of much use to a group of countries not competitive enough to export there, even with unfettered access. “The problem for West African cotton farmers is not market access….”
It is so bad that when the U.S. announced its plans for more market access for African countries, EU officials were reported to run among reporters to pitch their opinion that these partial measures were not enough. The EU, it seems, is so committed to the African farmers that it is volunteering to do their press for them.
The impact of U.S. cotton policy is restated daily in the press and in the spin rooms with a stunningly broad range of data that often does not come close to reality. For example, it was reported that an African cotton producer with 15 hectares of cotton can sell the cotton for only 50 cents a kilo on the world market, grossing $200 in annual income and a $20 profit. But, world cotton prices are $1.24 per kilo and if that farm made average African yields, its gross returns should exceed $6,000.
Oxfam issued a long report blaming the U.S. cotton program for low cotton prices in China. The report failed to note, however, that current cotton prices in China are about 25 cents a pound higher than world prices.
The spin is not confined to cotton. The EU, while concerned about poor cotton producers, stated it would not improve its agricultural market access offer because it was waiting for other poorer nations to offer to lower their barriers to industrial goods and services. EU Agriculture Commissioner Mariann Fischer Boel complains that the US should move forward with a commitment to end its cotton subsidies and stop dumping cotton on world markets, while simultaneously refusing to agree even on a date to end EU direct export subsidies – which normally involve the EU spending around $3 billion annually to “dump” (its word) a multitude of products onto the world market. It also wants to end in-kind food donations made to poor countries.
Meanwhile, some of the same developing countries that demand duty free, quota free access to developed country markets are objecting to duty free, quota free treatment if it would erode preferences they currently have into the EU banana market.
The EU’s Mandelson sways from refusing to negotiate greater access to the EU agricultural market to complaining that ambition for the round is going backwards. He arrived in Hong Kong having announced the EU would not come forward with any new offers on agricultural market access and complained later that there “couldn’t be any less negotiation.”
While the spin continues in earnest every day here in Hong Kong, there are some serious negotiations going on behind closed doors and U.S. cotton has a direct interest in their outcome. The pressure to reach an “early harvest” for cotton in Hong Kong is intense and unending. While Ambassador Portman apparently agreed to duty-free, quota-free access for cotton from West African countries, he has so far stood firm in resisting the calls for an early harvest. His stance may well serve to save the WTO process from devolving into a commodity-by-commodity negotiation – a result that would severely handicap the ability of the WTO to handle broad-based trade policy.
The “spin” makes the Hong Kong meeting look like a circus, and it is to some degree. But the intensity of U.S. efforts to craft some sort of promising document must be taken seriously.
Bill Gillon is an attorney in Memphis, Tenn. An expert on cotton and trade issues, he attended the WTO Ministerial Conference in Hong Kong as a representative of Farm Press Publications. He can be contacted at bgillon@gillonlaw.com
