The Gatt Deal: Seeds sown for clashes with the Third World
Wednesday 15 December 1993
Developing countries, led by India and Malaysia, have complained that the agreement has not gone far enough and that rich nations are prepared to concede far more to each other than they are to poorer nations. The developing countries want a strong multilateral trade organisation to act as a court of appeal in disputes with the United States and the European Union.
Apart from these anxieties, this Gatt round demonstrated that since the last round of supranational trade talks in the late 1970s, most poor countries have developed their economies sufficiently to enjoy new trading opportunities. It shows that the Third World is not an undifferentiated economic condition embracing Asia, Africa and Latin America. Under the new agreement, Asia's cheap skilled labour will attract foreign investment and its textiles will find new markets. Latin America and the Caribbean will attract outside investment in new industries and find it easier to export manufactured goods.
Only Africa does not have the means to exploit the opportunities for trade. There are no new markets for the continent's primary products, which continue to fall in price. Africa's few manufactured goods are mainly exported to Europe under the Lome Convention, but this quota system will be dismantled under the new Gatt deal and Africa may lose out to comparable goods from Asia or Latin America.
A recent report by the Organisation of Economic Co-operation and Development and the World Bank predicts a fall in the price of cocoa and coffee, products which some African countries depend upon for foreign exchange. The report says that the coffee price will fall by 6.1 per cent by 2002 and the price of cocoa by 4 per cent. These price falls will cost Africa pounds 2bn a year by that date. The report forecasts a global rise in the price of some foodstuffs which may hurt some African countries dependent on food imports. It predicts that farmers in developing countries will not be able to benefit from this price rise unless they improve yields.
Calling for compensation for the world's poorest countries that lose out in the new Gatt, a recent Christian Aid pamphlet says that the terms of trade have turned against Africa so severely that in 1992 it had to export 37 per cent more of its products than in 1980 to buy the same amount of imports. Christian Aid calls on the European Union to protect the poorest members of the Lome Convention from the effects of the new Gatt.
Sheila Page, Research Fellow at the Overseas Development Institute, says: 'Africa is not going to gain . . . It is not exporting anything which is likely to gain in price. Every other region is likely to gain from the Gatt but Africa will be standing still - and will therefore be falling further behind. Its only hope is that there will be a more imports of primary products, but even if that happens their price won't go up as much as other goods.'
The global patenting of seeds and plants may have more serious long- term implications for less developed countries. The example of the Neem tree in India illustrates the potential clash between chemical and agricultural giants in the United States and Europe, and traditional farmers in Africa, Asia and Latin America. In July thousands of farmers in Bangalore took to the streets to protest against the US chemical firm, W R Grace and Co, because the company had patented pesticides from the Neem tree. These trees have been planted and tended for centuries for agricultural and medicinal purposes.
The farmers argued that Grace's patent on the tree, which could become a global patent under the new Gatt, will prevent them using it. Grace and Co argued that their products from the tree were 'sufficiently new' to warrant a patent. The issue has implications wherever traditional medicines are used. There are fears that by registering these plants, multinational companies could prevent their use by local people or their development by local scientists.
The patenting of plants is crucial in agriculture. According to a report by the Overseas Development Institute, productive or pest-resistent strains of seeds have been developed by co-operation between commercial plant-breeders and local farmers. That co-operation is under threat because under global patent laws provided for in the new Gatt, small farmers in developing countries will have to pay royalties on seeds developed by seed companies and will not be allowed to resow commercially produced and patented strains or even strains mixed with patented brands.
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