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GATT

GATT

Reporting on the negotiations on the Uruguay Round of the General Agreement on Tariffs

and Trade (GATT) has concentrated on sticking points between the U.S. and the European

Community and threats of trade sanctions over agricultural subsidies.

The differences between these giant trading blocks have raised the specter of the

unthinkable-the breakdown of the multilateral trading system that for all its flaws

has brought some economic prosperity to the poorest nations since 1945. But there

has been little analysis of the implications of the Uruguay Round for the world's

poor, the four billion people who share about 20 percent of the planet's wealth and

15 percent of its trade.

For the past ten years falling commodity prices on world markets have made the livelihoods

of small farmers in the developing world more precarious-the new GATT rules promise

to push most of them over the edge as U.S., Japanese and EC agribusiness moves in

to produce crops more efficiently, intensively and cheaply. And this culture and

environmental impoverishment may even show up on the balance sheets as an increase

in GDP in the short term, given the illogical double accounting method of assessing

economic activity!

Theoretically it looks like a fair swap-industrialized nations relax their trade

barriers to allow greater access to their markets, while these northern nations may

expand into protected areas long denied them. In the "new free trade world"

agreement conditions governing investment, mining, manufacturing and services such

as banking, patents and transport are to be scrapped or reduced. Third world nations

will be unable to protect scarce resources; will be powerless to prevent cheap imports

distorting their markets, and will have to pay more for technology and drugs.

Only belatedly are the implications of the new rules-which include agricultural produce

for the first time-being looked at from the perspective of the developing world.

The GATT has not addressed its two most pressing problems-world debt and commodity

prices. Kevin Watkins, an Oxfam policy adviser, says that "for the most part,

the poor nations have been extras during the GATT negotiations. While the show can't

go on without them, nobody is remotely interested in what they have to say."

The ecological effects of the trade round have been ignored by GATT, whose environmental

committee has met only once since 1945! Last year, under pressure from U.S. and EC

environmental groups, it hastily drew up a report which concluded that "any

country would be able to set high standards as long as they don't impede free trade"

and that increased trade allows "the opportunity to spend more on the environment".

Critics of the agreement counter that the experience of almost all developing countries

over the past 40 years is that increased trade damages the environment, necessitating

that more and more be spent on environmental protection.

Already for Cambodia the environmental costs of deforestations are escalating as

water ways clog up and spawning grounds for fish in the Tonle sap are reduced. According

to UNDP's John Dennis, a flash flood in 1991 caused U.S. $150 million in damage to

farms and fisheries and "did more damage in 24 hours than the value of all the

timber that had been extracted".

The Uruguay Round will allow "free trade" considerations to dictate that

harmful products or industrial processes may not be banned by any country's policies

in pursuit of its people's welfare. If GATT is approved, according to Randy Hays

of the Rain Forest Action Group in the U.S., it" could force nations to open

their markets to everything from unsustainably harvested timber to produce grown

with 50 times the West's acceptable level of DDT.

While there are no agreed world food standards, years of progressive consumer laws

in the U.S. and Europe-which have been hard won by concerned citizens-are threatened

by the agreement. A "lowest common denominator" approach is expected. As

an example of what can happen, the recent U.S.-Canada Free Trade Agreement has already

forced Canada to lower its pesticide regulations, drop a bar on irradiated food and

allow more smelter emissions.

GATT limits on countries' right to control imports is based on its "ideology"

that nations should build up food security on world markets rather than their own

farmers' capacity. This is in the interests of multinational grain corporations,

but for poor countries with little or no foreign exchange to buy imported foods the

resultant undermining of the livelihoods of small-scale, under financed farmers will

force them into burgeoning cities, increasing economic dependence on rich nations.

The new government of Cambodia will have to make many decisions on the development

of the country, taking into account the fragile nature of its alluvial flood-plain

agriculture on which over 80 percent of its rapidly growing population depends; its

potential fisheries resource; drinking water sources; the role of forests in flood

control, and hydropower options.

Teddy Goldsmith, editor of Ecologist magazine in Britain, describes the Uruguay Round

the dawn of a "new colonialism" led by the world's 500 multinational corporations,

which control 70 percent of the world's trade. In "the purely selfish, short-term

financial interests of these corporations, "he says," human, social and

environmental imperatives will be ruthlessly and systematically subordinated."

Robin Davies (Post Vol. II, No.9) argues forcefully that Cambodia should join GATT,

stating membership would prevent Cambodia "losing its economic sovereignty"

; ensuring "that its voice will be given equal weight, that commitments it makes

will be matched by its partners", and that GATT is", an international,

multilateral organization with built-in devices for safeguarding the interests of

the weak against strong countries.

These extravagant claims are patently untrue and read strangely in the light of the

one sentence with which Mr. Davies informs your readers of GATT's proposed new rules:

"The organization is currently in the throes of working through the mammoth

seven-year-old, 108-nation Uruguay Round of multilateral negotiations, the largest,

most critical event in trade history."

I am surprised that you, sir, would allow so much of your valuable space to be taken

up with urging Cambodian membership of an organization without any examination of

the issues or debate on the alternatives.

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