Leading article: A shaming history of cowardice and self-interest


The leaders of the world's richest nations are all in favour of free trade. But only when it suits them. In sectors such as manufacturing and services, the great trading blocs of Europe, America and Asia are generally happy to allow the unimpeded exchange of goods and skills across national borders. But there is a shameful exception: agriculture.

Here, free trade simply does not exist. For a variety of political and cultural reasons, Europe, the US and Japan subsidise their farmers and refuse to open their domestic markets properly to produce from the developing world. It is this agricultural protectionism - more than perhaps any other single factor - that keeps those in the most deprived regions of the world in poverty.

Yesterday, world trade talks began in Hong Kong with the stated goal of eradicating this grotesque anomaly. Let the representatives who are meeting on the shores of the South China Sea this week be in no doubt that a failure to make significant progress would be an unforgivable betrayal of the world's poorest people.

Most developing nations derive the bulk of their national income from agriculture. As long as their produce remains shut out of rich markets by prohibitive tariffs - and as long as subsidised food surpluses from the developed world are dumped on their doorstep - farming in these places will never be profitable and there will never be sustained economic growth.

Agriculture is the one of the few means such nations have - at present - of earning a living. All the "historic" aid and debt relief programmes to ease the plight of the poor that have been announced by rich nations this year pale into insignificance when set against the enormous potential of trade liberalisation to reduce global poverty. It is a disgrace that the self-interest and political cowardice of the leaders of rich nations have been an obstacle for so long.

Not everyone recognises this. Some reputable aid agencies think that small developing countries will actually lose out from free trade, and warn that the biggest beneficiaries will be larger agricultural producers such as Brazil. They predict that a general reduction in trade barriers will erode the preferential deals that certain small countries currently enjoy with richer nations.

This has some truth in it. Liberalisation will certainly have some malign affects in the short-term. The process is likely to cause severe economic dislocation in some smaller nations. For that, it would only be right for rich nations to give compensation to ease the pain of transition. But it would be wrong to infer from this that a global system of agricultural protectionism is preferable to free trade. The present system of bilateral trade deals has hardly delivered global prosperity. And such preferential deals that exist have encouraged poor nations to focus on crops that can be highly vulnerable. They have also created specialisations in sectors in which countries have no competitive advantage. The only long-term sustainable way to help the poor of the developing world is to let the market decide.

Yet, depressingly, the politicians are already back-pedalling. An agreement was originally predicted for the end of this year. Now the goal is apparently to make a breakthrough late next year to allow the US Congress to ratify it by July 2007. Hopes for the dismantling of the European Common Agricultural Policy - essential to any global liberalisation of agriculture - are also dwindling. Meanwhile, the world's poor continue to suffer due to discrimination practised by the world's richest economies. How much longer will the poorest people on the planet have to wait for a transparent and equitable trading system?

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