Kenya: Social Forum Best Placed to Question World Order

Source:The East African Standard (Nairobi) @ http://allafrica.com/stories/200701221639.html (external link)

COLUMN January 22, 2007 Posted to the web January 22, 2007

Paul Odhiambo Nairobi

America, Europe and Africa are gathered in Nairobi for the World Social Forum (WSF).

Top on the agenda are issues that plague the majority of the world's population - conflicts, wars, poverty, environmental degradation, debt burden, gender disparity and unfair trade practices. During the launch of the WSF at Nairobi's Uhuru Park last Saturday, free trade model imposed by the IMF, World Bank and major economic powers was one of the key issues that delegates spoke against.

While trade is ideally seen as a critical tool for development and growth, the multilateral trade system under the World Trade Organisation (WTO) does not seem to promote development and economic growth in developing countries. The frequent collapse of trade talks has shown that the big powers - US, EU, Canada and Japan - advocate free trade, but practise protectionism when their interests are at stake.

Some of the critical issues for Africa and the rest of the developing world in the WTO include agriculture, Non-Agriculture? Market Access (Nama), trade services, intellectual property rights, cotton and development. During the Hong Kong Ministerial Conference in December 2005, Trade ministers and diplomats pledged to eliminate export subsidies by 2013.

The wealthy nations were also expected to accelerate cuts to other forms of government farm support. It was also agreed that comprehensive draft schedules for negotiations should be submitted not later than July 31, last year.

But this never happened due to the collapse of the talks in Geneva at the end of July. The main stumbling block has been the extent to which the US and the EU cut agricultural protectionism. Farm subsidies and export support distort international prices of agricultural goods, tremendously affecting many African countries that rely on agricultural trade. Agricultural support in developed countries also leads to dumping of cheap products in Africa. This results in loss of market for agricultural exports and a negative impact on food security.

The negotiations on Nama are also critical to African countries. Their outcome will affect industrial development in the continent. WTO members are expected to reduce and eventually eliminate tariffs on industrial products.

Revenue loss imminent

The developing countries are opposed to drastic removal of tariffs as this might stall and reverse industrialisation efforts in their countries. Removal could also erode Government revenue base significantly. This might undermine African governments' ability to provide basic services such as health, education and infrastructure. Analysts observe that infant domestic industries in Africa could collapse if rapid trade liberalisation is "forced" through removal of import duties.

Blatant opening up of Africa's markets could also lead to flooding of manufactured goods from developed countries. This has happened before. Due to liberalisation under the IMF and World Bank's Structural Adjustment Programmes of the 1980s, many factories collapsed in Kenya - especially textile, clothing and leather - leading to loss of jobs and increase in poverty. The collapse of textile sector also affected hundreds of thousands of cotton farmers whose livelihoods were put at risk.

Critics of the General Agreement on Trade in Services argue that opening up trade in services and subjecting it to competition will not lead to greater equality among nations or eradicate poverty in Africa.

Liberalisation benefits the rich Due to their overwhelming economic advantage, rich nations stand to gain most from further liberalisation of the services' sector.

Liberalisation of services in health, education, water and electricity supply will make them less accessible to majority of the people. Enormous pressure on African countries to liberalise in many service sectors where they cannot compete could also destroy infant local service industries.

The Hong Kong meeting agreed that rich nations eliminate all forms of export subsidies on cotton last year. The developed countries would give duty and quota free access for cotton exports from the Least Developed Countries. The cotton subsidies have depressed international markets, rendering farmers in West and Central Africa - Mali, Benin, Bukina Faso and Chad - poor.

Cotton is also crucial in East Africa where thousands of farmers have depended on the crop until the farming declined in the 1980s. Intellectual Property Rights were brought into the multilateral trade regime for the first time in the Uruguay Round (1986-1994) due to pressure from multinational corporations in the pharmaceutical and information technology industries.

Access to medicine critical

The firms claimed that they experienced huge loses due to inadequate protection of intellectual property in other countries. One reason African countries have been against the TRIPs is its implications for access to medicines and public health.

The monopoly of pharmaceutical firms in producing drugs have had an adverse effect on fighting diseases such as malaria, tuberculosis, and HIV/Aids. Medicine prices are so high that majority of people in developing countries cannot afford them.

Interestingly, Swiss pharmaceutical company Norvatis is challenging a public health safeguard enshrined in India's Patent Act. If Norvatis succeeds, then the era of India being a producer of affordable generic medicines could come to an end. India's affordable drugs are used in the developing world.

As delegates gather in Nairobi for the World Social Forum, it is time the international community took seriously factors that undermine social justice, international solidarity and development.

It is time people asked whether multilateral trade under WTO champions just and fair trade policies that benefit all, especially poor farmers in Africa. The forum must insist on just and fair trade policies.

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