Challenge at Cancun

THE SCENARIO is now a familiar one. While members of the World Trade Organisation meet to expand free trade agreements, a motley band of protestors meet outside to vehemently condemn the globalisation movement as designed to benefit rich countries at the expense of the poor. The WTO meeting which opened yesterday at the Mexican beach resort of Cancun has attracted the same mixed bag of demonstrators, only this time the authorities have confined them to areas from which they cannot disturb or disrupt the proceedings. However, the question remains, who has it right about free trade? Is it, as the protestors claim, a devilish device created by First World countries to exploit the backwardness and vulnerability of the Third World? Or is it an arrangement by which all countries, rich and poor, will benefit, creating an economic sea change, so to speak, in which all boats will rise?

If we look for a consensus among the world’s leading economists we will find most of them in favour of, at least, the ideal or rather the concept of free trade, since it is an established fact that nations create wealth by trading among themselves, and the freer and more extensive the process becomes then, clearly, the greater the wealth created by the participating countries. But while we may not quarrel with that theory and while we may even accept the fact that the world economy has grown significantly since the start of the movement, it is obvious to us that the free trade deck is still heavily stacked against the poor and developing countries. We may even find cause to be cynical in the fact that some of the First World countries, who are the most ardent advocates of free trade, still indulge in a range of protectionist measures, granting huge subsidies to farmers and other producers together with export incentives as a result of which they are able to dump their products on the world market at such cheap prices that local Third World farmers cannot compete.

This is a dishonest and hypocritical travesty of the whole concept of free trade. If the banana and sugar producers of the West Indies must lose the concessions they traditionally enjoyed in Europe and elsewhere, why should farmers in the developed world continue to benefit from such massive subsidies and incentives, robbing farmers in poor countries of competing on a level playing field? It is estimated that the United States and European Union countries subsidise their farmers to the tune of US$350 bllion every year, a large chunk of which farmers in Third World countries could be earning if they were able to  compete according to the same free trade rules. The stage then has been set for one of the most significant meetings of the World Trade Organisation, a virtual showdown between rich and poor countries over the most vexing issue of the free trade movement. The First World nations cannot expect to play it both ways, to have their cake and eat it too. The WTO must have the courage to tell them so and demand the appropriate changes.