New York Times seeks a just global trade. But not fair only for America, it should be equally fair for the rest of the world.

The New York Times is right. In an editorial of April 19, 2014: This time, Get Global Trade Right (See link here: http://nyti.ms/1niE8x1) the newspaper finally admits the fault it made in assuming that lowering trade barriers would benefit the economy and the consumers."Those gains have not been as widespread as we hoped, and they have not been adequate to assist those who were harmed."

This belated realisation has already done immense damage to millions of livelihoods lost not only in the United States but more so elsewhere. It is here that I agree with the newspaper when it says: it is appropriate to take stock of what we have learned in 20 years since the passage of NAFTA and use that knowledge to design better agreements. But there is a catch here. Designing better agreements should not only be to ensure that the US benefits from the global trade treaties, but everyone across the table also benefits equally.

I agree that increased imports from China has resulted in a 44 per cent decline in manufacturing jobs between 1990 and 2007, but what about the damage to the Mexican labour markets and the farming sector? What about the jobs lost on both side of the border, the destruction of the Mexican farm economy by cheaper imports, and the resulting loss to livelihood security of millions plus the environmental damages that accrues, including large scale deforestation to enhance area under cultivation for corn? A Carnegie Endowment study points to 766,000 jobs eliminated in the first 7 years of NAFTA.

Let's move away from NAFTA. A newspaper report published in the Hindustan Times Chandigarh edition (April 24, 2014) titled Foreign apples poll issue in HP tells how Himachal Pradesh, the land of apples in India, is under threat from imported apples. Imported apples mainly come from China, US, New Zealand, Chile, Iran and Afghanistan. China alone exported 77,560 metric tonnes of apples to India in 2012-13. So while imported apples are flooding the Indian markets, the Indian apple growers are faced with a livelihood threat. Similarly, I don't see any justification in why China has become a major apple exporter to the US cornering close to 45 per cent of its domestic market whereas inferior quality Washington apples are flooding the markets elsewhere.

Even President Bill Clinton had apologised for flooding Haiti with cheaper American rice since the early 1990s thereby destroying Haiti's ability to produce rice for itself. This is what he told the US Senate Foreign Relations Committee March 10, 2010: "It may have been good for some of my farmers in Arkansas, but it has not worked. It was a mistake." (Read my Huffington Post article: When will America Opens Its Markets, Mr Obama? http://huff.to/1iTH7J00

But has America drawn any lessons? The answer is a big No.

In a study I did for Aprodev in Nov 2005 entitled Trade Liberalization in Agriculture: Lessons from the First 10 Years of WTO (http://aprodev.eu/files/Trade/Devinder%20study%20-%20Final.pdf)
I had explained how cheaper and highly subsidised agricultural commodities from the US, Canada and the European Union (and also the other Cairns Group members) had destroyed agriculture in developing countries driving out millions of small farmers from agriculture to look for menial jobs in the cities. Some other studies have shown that since the time Structural Development Programme was launched by IMF/World Bank (followed by the WTO era) 105 of the 149 Third World Countries had become food importing countries. The only two big gainers were North America and European Union. And let's not forget, importing food is importing unemployment.

Did the WTO do anything to remove the imbalances and make trade fair for everyone across the hemisphere? Didn't the office of the US Trade Representative in fact make it still worse?

Anyway, returning back to the NYT editorial I feel heartened that it talks of imposing intellectual property rights in a manner that it doesn't destroy the ability of Peru for instance to use generic drugs. But I expected NYT to strongly rebuke the US Administration for invoking Special 301 clause with impunity against all those countries (including India) which wants to protect its poor populations from the killing ways of the US drug industry. Take the case of a patented cancer drug Glivec for which Novartis has lost the battle in the Indian Supreme Court. I am aware that the Time magazine had hailed imatineb (Glivec's active ingredient) as a 'magic bullet' for curing cancer but the Supreme Court had in a landmark judgement struck down the patent application. In India, Glivec costs around $ 1,900 per month compared to $ 175 for the generic versions that companies like Cipla makes. (Novartis Loses Glivec Patent Battle in India http://on.wsj.com/QDyGHu).

Let me now draw the attention of NYT editorial writers to the highhandedness with which the US pushed aggressively for taming the Indian food subsidies, calling it trade distorting. Everyone knows that India has the largest population of hungry in the world. feeding these poor is not an easy task and certainly cannot be left to market forces. The US would know better since it is also struggling with the rising food subsidy bill (under SNAP) to feed its 47 million hungry. America provides 385 kg of food support every year (including cereals/grains) to its hungry millions, under food stamp, mid-day meal programme etc. In 2012, it’s food subsidy bill stood at $100 billion, up from $90 billion in 2010. Against this, India promises to provide 60 kg of wheat/rice/millets to its 830 million hungry. The total financial outlay for food security in India is about $20 billion or Rs 1.25 lakh crore. The US is objecting to India’s food subsidy but has no problem with its own food subsidy which is five times more than India.

There are at least 14 agricultural commodity trading groups which have written to the USTR expressing their unhappiness over the failure of US Govt to bring Indian food subsidies under the chopping block. They are not happy with the 4-year grace period that India has been able to wrest at the Bali Ministerial in December. They have said very categorically that the decision will negatively impact their commercial interests (Read my analysis Bali Ministerial: The very future of Indian Agriculture is at stake. http://devinder-sharma.blogspot.in/2013/11/bali-ministerial-very-future-of-indian.html).

What is good for America is certainly not good for the World. Let global trade treaties therefore be beneficial to all and sundry, and should not be dictated by the power of the powerful. While NYT is rightly worried at the decline in employment in America, please don't forget that the billions who are being pushed out of jobs in the developing world are also human beings. Add to this the deteriorating environment, the rise on greenhouse gasses and the resulting global warming. The cost of an unjust and iniquitous global trade is too heavy for the global community to be a mute spectator. I hope the NYT stands out as the voice of the voiceless across the globe. More power to your  pen.    

Free trade helps the rich, not the poor

In recent days, US President Obama is leading a campaign to complete the Doha Development Round at the earliest. His allies of course are very excited, and stand up behind him. They are the real beneficiaries, and so therefore have to aggressively push for free trade. Unfortunately, there is no such thing as free trade. It is a clever term coined to cover-up for an unjust and unethical trade paradigm that is economically unsound and benefits only the rich.

As I wrote in my earlier blog post, Obama is a prisoner of the corporate world. Only the mainline media refuses to acknowledge that, and for obvious reasons. As we all know, the mainline media is corporate controlled and so therefore no difficult questions have to be asked.

With economists on their side, the rich and industrialised countries are desperately trying to open up the developing countries.

This was evident when Obama led the tribe at G-20. As The Guardian says: Obama's free trade conversion is a depressingly short term manoeuvre Barack Obama backed a return to the Doha free trade talks at the G20 summit, but the deal on offer benefits only big business, the west and a handful of powerful interests in developing countries.

The Guardian (Nov 15, 2010) has a full page article today entitled: "Obama's free trade conversion is a depressingly short term manoeuvre." I am bringing the full article for you. It is time you understood how the democratically-elected leaders end up serving only the rich and the crooked. you will now see Prime Minister Manmohan Singh likely to open up for FDI in multi-brand retail. He is simply misleading the country by saying that FDI in retail will help the farmers. Actually, he is doing to oblige the US/UK, and is of course under pressure from Barack Obama as well as David Cameron.  

"Obama's free trade conversion is a depressingly short term manoeuvre".

By Phillip Inman

In the dying hours of the G20 summit, US president Barack Obama backed a new round of free trade talks with a view to putting a bill before Congress next year.

What persuadid him? Was it a chat with David Cameron and Angela Merkel? The pair lobbied hard throughout the summit to revive the Doha round of talks on lowering protectionist barriers, started almost 10 years ago in the capital of Qatar.

Or was it a collective desire on the part of all the G20 leaders to deflect criticism over their almost total lack of agreement on important subjects like the prospect of a currency war?

Perhaps it was the forceful editorial in the Wall Street Journal a day before the summit urging Obama to smash trade barriers to drive growth and solve the problems of competitive currency devaluations and global imbalances between rich and poor.

Obama's last minute support appeared to wrong-foot the new top-table countries China and Brazil, which up to that moment had spent most of their time berating Washington for the Fed's decision to switch on the printing presses and inject $600bn into the US economy.

If you would believe Cameron, Merkel and the Murdoch-owned WSJ, free trade is a panacea for all the world's ills. Not only does it give African and other poor nations access to European markets, they say, it also allows capital to flow to where it will be used most efficiently. So western countries will invest in poor countries where there are readily available pools of cheap labour and resources – not to exploit them, but to raise their living standards.

Cameron and Merkel often point to the example of South Korea – how it transformed itself over a mere 30 years into a rich nation, almost all through "free" trading with the rest of the world. That same could happen in Africa, south and central America, former soviet bloc countries and neglected parts of Asia, they say.

Obama's overnight switch of tactics was designed to leave countries that artificially depressed their currency (China) and those that imposed capital controls (Brazil) flapping to find a coherent argument against the logic of globalisation.

It is another depressingly short term tactic that lacks strategic sense, unless we consider the US president has allowed himself to be captured by the interests of big business and those countries, including our own, with an ever growing need for cheaper raw materials and virgin markets. Let's face it, this is what they mean by free trade.

Obama will, no doubt, have listened to those who say protectionism awaits those who block globalisation.

It's true that China heavily restricts access to its markets to protect important industries and employment. There are few opportunities for western, or even other Asian, businesses in the fast growing cities of China's prosperous south and east. A minority stake or partnership is as much as most can expect.

While markets are opening, hence Tesco's multi-billion pound investment in China, the pace is painfully slow.

David Cameron said without progress on lowering trade barriers, the situation would reverse, with terrible consequences for everyone. He promised Chinese premier Wen Jiabao he would force Brussels to consider lowering its trade barriers on Chinese goods as a start along the Doha road. Once Beijing sees the benefits of free trade, it will come to the Doha talks with a more open mind, or at least a weaker argument against lowering some of its own barriers.

Germany is all in favour now its powerhouse economy has successfully driven down wages to a point where it is a super-competitive exporter with much to gain from lower barriers on manufactured goods.

The British also see trade as a route out of the crisis, though more on the services side. (It is noteworthy that Cameron emphasised the export potential of the creative industries as much as manufacturing in his China and G20 speeches last week).

Even president Jacob Zuma of South Africa has converted to the cause. As Cameron's new best friend, they lobbied at Seoul for a free trade area for Africa as another boost to Doha.

Yet there is little reason to accept this kind of turbo-charged capitalism if you are poor or need to defend a welfare state that needs time to undergo reform.

In the latter category, the French are classic objectors. Like most western countries France has adopted "free trade" policies when they disproportionately benefit. It knows that while some of its manufacturing is world class, much of it is woefully inefficient compared to rivals in Asia.

When unemployment is high and looks like remaining that way, the benefits of building Chinese cars in Lyon for Chinese companies will not look so great compared to the havoc it could wreak, wiping out big names like Renault and Peugeot Citroën with unmatchable levels of investment.

The Anglo-German argument has little sympathy for western nations unable to afford welfare provision or maintain jobs in a globalised world. They must cut wages, as the Germans have, or cut welfare – the preferred British route.

The argument that the poor will gain is also flawed. War on Want, among other anti-poverty campaign groups, has consistently argued that free trade is a misnomer for rampant pillaging of third world assets.

There was a campaign to gather developing nations together to fight the west and the big mining companies, manufacturers and banks that wanted a bigger slice of their cake.

But today the world is fractured again. China and Brazil have little in common with their neighbours, which fear them as much as they do the west. In Africa, Zuma wants free trade because he thinks South Africa is like Germany and in pole position to dominate the region economically, which means politically too.

For Zuma, like Merkel, free trade is something their countries are poised to exploit, with bigger banks and more sophisticated manufacturers. South Africa also has a services industry that its neighbours lack. Faced with a choice of investment from China, Europe and the US, African nations could increasingly turn to a smiling Zuma, especially if a local free trade zone makes South African goods and services cheaper. Britain, with strong South African links, would benefit.

Academic assessments agree that the Doha deal on the table will mostly benefit the world's richest countries, along with certain export sectors in powerful developing countries.

The World Bank's analysis shows that 80% of gains from the Doha round will go to high-income economies, and that China, Thailand, India, Indonesia, South Africa, Argentina and Brazil will scoop up almost all the rest.

Sub-Saharan nations and Bangladesh figure on the list of losers.Maybe Obama's mid-term election loss was the turning point. It seems to have robbed him of any fight, and handed those countries that are emerging from the financial crisis with healthy balance sheets and the political structure to compete a chance to consolidate their power.

Obama's visit: Fate of Millions of Farmers Hangs in Balance

From: Economic Times, Nov 9, 2010
http://bit.ly/bBHGLX

He came, he spoke, and he got 54,000 jobs. This was on Day One of his India visit. By the time he flies out of New Delhi on November 9, US President Barack Obama would have charmed his way through to force open Indian agriculture to American corporations . And therein hangs the fate of millions of small and marginal farmers.

Top on the agenda is the push to make Prime Minister Manmohan Singh allow the entry of multi-brand food retail. “Agriculture sector needs well functioning markets to drive growth, employment and economic prosperity in rural areas,” says a discussion paper drafted by the Department of Industrial Policy and Promotion sometimes ago. Nothing could be further away from truth, but then the G-20 has made it obligatory for member countries to open up for big retail.

Nowhere in the world has big retail helped farmers. In the US, despite the growth of big retail like Wal-Mart and Carrefour, farmers number has dwindled and come down to such a low level that America has stopped counting its farmers since the 2000 census. Meanwhile, hunger has broken a 14-year record, and poverty is on an upswing. In Europe, notwithstanding the presence of Tesco, one farmer quits agriculture every minute. For India too, multi-brand retail will be the beginning of the end for Indian farmers. No assessment has ever been made of the extent of job losses in the farm sector as a result.

If big retail in food is capable of raising farm incomes I see no reason why the US should be providing monumental subsidies to the tune of $307 billion for five years, beginning 2008. The same holds true for Europe where farmers survive because the Common Agricultural Policy (CAP) bails them out with direct income support. In both Europe and America, nearly 80% farm subsidies go to the big corporations. Neither the World Trade Organisations (WTO) nor has the US Fed ever tried to rationalise these wasteful farm subsidies.

It is primarily because of such huge farm subsidies that global food prices slumps thereby pricing out the Indian farmers. An UNCTAD-India study had conclusively shown that if the Green Box subsidies were to be withdrawn, the US agriculture would collapse. The US is therefore trying to pierce open the developing country agriculture essentially to sustain its own economy.

President Obama has made this abundantly clear when he repeatedly talks of seeking more market access from India. Unfortunately, Manmohan Singh has never sought reciprocity. I wonder how many more human lives are required to be sacrificed before the most powerful person on earth takes notice, and revive global farming by encouraging low external-input sustainable agriculture.

When will America open its markets, Mr Obama?

I have a great respect for US President Barack Obama. I admire his intellect, and of course his ability to mesmerise the audience with his brilliant expositions. I know he stands tall, and exudes confidence and hope.

There is no denying that in today's world where political leaders are merely rubber stamps for business and industry, Obama does have the ability to chart out a new pathway. But the more I see him hardselling the unwanted merchandise from the US corporations, the more I feel sad. As much as he may want us to believe in the ideals of Mahatma Gandhi and Martin Luther King, the fact remains that he himself is no where even remotely closer to following what the 'global hero' (as he calls Gandhi) had preached.

Obama is in reality a prisoner of the corporate world. Knowingly or unknowingly, he is trapped in a vicious cycle of economic growth that is plundering the natural resources and making this planet inhospitable.  

The sooner the US President sheds the black corporate robe that keeps him chained to promote unsustainable economic growth, the better it would be for a world that is looking up to him as perhaps the lone saviour who has the ability to stem the rot. I only hope that like his predecessors he too does not disappoint. Only history will tell.

When he told a group of students in Mumbai yesterday: "Well, if our country is open to everybody, countries that trade with the US have to change their practices," I think he was merely echoing what the business leaders accompanying him had briefed him. This is where the President has been wrongly informed. This is where he is behaving more like a salesman for the corporates whose arm-twisting antics in WTO and numerous bilaterals being signed world over have still not opened up the kind of market they always dream.

Let me take this opportunity to draw attention to two contentious areas of free trade: agriculture and pharmaceuticals. It is here that US is trying every trick of the trade to stop imports. It is here that the US is refusing to open up its markets, and its policies are actually killing farmers in Africa, Latin America and Asia.

1. Former US President Bill Clinton had recently apologised for flooding Haiti since early 1990s with cheaper American rice, which had destroyed Haiti's ability to feed itself. If Mr Obama is presented with the stark facts of how unjust has the WTO been so far, I am sure he would like to apologise for what the US has done to harm developing country agriculture and food security. This is what Bill Clinton had said: “It may have been good for some of my farmers in Arkansas, but it has not worked. It was a mistake.

Clinton—now a UN special envoy to Haiti—told the US Senate Foreign Relations Committee March 10, 2010. “I had to live everyday with the consequences of the loss of capacity to produce a rice crop in Haiti to feed those people because of what I did; nobody else." [read the fill report at http://devinder-sharma.blogspot.com/2010/05/bill-clinton-apologises-for-flooding.html

2. In 2001, nearly 25,000 US cotton growers received roughly $3.9 billion in subsidy payments, for producing a cotton crop that was worth only US$ 3 billion at world market prices (One Arkansas cotton grower received US$ 6 million, equal to the combined annual earnings of 25,000 cotton farmers in Mali). It's also more than the gross domestic product of several African countries and three times the amount the US spends on aid to half a billion Africans living in poverty. In 2002, direct financial assistance by a number of exporting countries, including China, European Union and the US, to the tune of 73 per cent of the world cotton production, destroyed millions of livelihoods in West African countries (Benin, Burkina Faso, Mali, and Chad). India and Pakistan too have been forced to lower import duties, allowing a surge of cotton imports thereby pushing farmers out. [read my article The Great Trade Robbery, available at: http://www.countercurrents.org/en-sharma020903.htm]

And what did the US do, Mr President? Instead of doing away with cotton subsidies, it actually bribed Brazil, which had won a case against the US in the WTO dispute panel. It offered to subsidise instead Brazil's rich cotton growers to the tune of $ 147.3 million a year. This is a small fee to ensure that Brazil keeps its mouth shut, which also means that the US can continue to distort the global cotton market by the huge subsidies it provides to its rich and pampered cotton growers. [read my analysis: http://devinder-sharma.blogspot.com/2010/04/us-bribes-brazil-with-147-million-in.html]

3. Although 80 per cent of US monumental agricultural subsidies go to the agribusiness industry, the US continues to increase its farm support. This makes the international prices slump as a result of which US farm produce becomes 'competitive.' A recent UNCTAD-India study had categorically brought out that if the US were to do away with its Green Box subsidies, its farm output would dip by over 40 per cent. This will bring in cheaper food exports from developing countries. Mr President, it is the massive subsidies you dole out for your agribusiness companies that the US market becomes inaccessible. On top of it, US has thrown in non-trade barriers to keep the agricultural imports out.

4. You want India to provide more market access. What you probably are not aware is that India has already gone in for an autonomous liberalisation and has opened up its market. This happened in March 2008 when George Bush wanted India to open up, before the US could reciprocate. The import tariffs for the most important farm commodities have already been brought down to zero. Wheat import tariff is zero, rice is at zero (whenever US asks us to do), maize is at zero, pulses is at zero, edible oils is practically zero (or 7.5 per cent as the case may be for some categories), what further reduction do you expect now?

India opened up, but the US did not reciprocate. The US in fact approved the US Farm Bill 2008 that makes a provision for an additional farm subsidy of $ 307 billion for the next five year. Come on, Mr President show us that you mean business, and that you follow ethics and justice in trade. When will you start reducing agricultural subsidies so as to provide market access for developing country agricultural products?

5. You want us to accept GM foods. You also want India to open up for the agricultural commodities. What you are probably not aware is that it is because of the industrially produced food that US today supports the sickest population on earth. US has more people living with Alzheimer, dementia, cancer, allergies, autism, APHD, and diabetes than any other country in the world. As far as GM foods are concerned, please tell which laws in the US makes it mandatory for the companies to do safety tests. The bio tech companies do their own tests, evaluate their results, declare the crops safe, and all that the regulators do is to stamp the approval.

Why do you want India to import such unhealthy foods, just because it benefits US corporations?

6. A sick nation needs affordable medicines. No one knows it much better than you. But as Health GAP (Global Access Project) states: "The US as well as European countries are also challenging India to grant monopoly protection to the data that drug companies use to obtain regulatory approval for a medicine. This measure, called "data exclusivity," would undermine cost cutting generic competition by delaying the entry of generics to market. Data exclusivity is not required by the World Trade Organization?but pharmaceutical companies have pushed aggressively for it. India's refusal to create a regime of data exclusivity was another feature of its Special 301 Report listing.

As a result, India's ability to make low cost, generic versions of newer medicines is under threat, and U.S.-funded AIDS treatment programs will be forced to waste money procuring more costly medicines. Isn't it time that you provide more market access for generic drugs from India, which alone produces 80 per cent of world's requirements of cheaper drugs?

Mr President, providing more market access for agriculture and pharmaceuticals by the US too is a 'win-win' situation. Try that, and I can assure you much of your problems in health and unsustainable farming would be taken care of. Michelle Obama has already shown the way by turning White House lawns organic, and also by launching a nationwide campaign to reduce diabetes among children. You will helping her, as well as billions across the world by providing more market access for agriculture and pharmaceuticals.

Obama's India visit: Where India fails

One thing that I admire about American President's is that they know what they want. In the last 10 years or so whenever I have read about an American President visiting China, India, Vietnam, Indonesia and other countries, I have always noticed that before the US President leaves the American shores, he would announce that he is going to return with so many jobs.

President Obama is no exception. And within hours of reaching India, he managed to bag 53,000 jobs for America. By the time he flies out of New Delhi on Nov 9, I am sure he would have added another 50,000 or so.

When was the last time you heard the Indian Prime Minister say so. Except for the use of usual cliches like ' it is a goodwill visit' and 'the visit will strengthen the ties,' I don't know what our successive Prime Ministers have achieved all these years from such state visits. Except for a few business deals, I think successive Indian Prime Ministers have actually failed the nation. Prime Minister Manmohan Singh is no exception.

Compare this with China. During the term of President Clinton, he made a statement that the US will not trade with China because of its bad human rights record. Within a day or so the big US corporations made life tough for Bill Clinton, but more significant was the courage and political statesmanship shown by the then Chinese President. I remember watching the BBC World TV Beijing correspondent asking the question to the Chinese President. His reply was: "Trading with America, we never trade with America for the last 4000 years. So how does it matter."

The US has never again brought up the human rights issue.

Remember Manmohan Singh's visit to G-20 Summit in Toronto after the Bhopal gas tragedy court verdict. He didn't even have the courage to talk about justice for Bhopal victims when he met President Obama in Toronto. What can you expect from such spineless leadership.

President Obama knows what he wants. He wants India to provide more market access for the American manufacturing and agricultural products. And he wants India to provide jobs in America. He has come to sell American hardware, and with India Inc. in tow, he knows he will get what he wants.

The tragedy is that India does not even know what it needs to get from America. If you have been following the endless debates and discussions on the TV, it is obvious that we are a confused nation. Most of the experts on the show are not talking business, but giving us a feel of how much they know about strategic relations. This is because they are completely cut-off from the realities of the ongoing economic developments that are shaping the upheavals in the global economy.

I was therefore very surprised when I heard a Mumbai student (when interviewed by a TV journalist today) as to what he intends to ask President Obama when he meets the generation next on Sunday morning. He replied that he is going to ask about the unjust TRIPs and TRIMs agreements which are heavily loaded against the developing countries, and which would lead to the rich becoming richer and the poor being driven to the wall.

I bet the correspondent didn't know anything about TRIPs or TRIMs !

No wonder, while the US has come with a laundry list, India has no such shopping list. Except for the controversial issue of outsourcing (which is nothing compared to market access that India should be seeking in the US), there is nothing that seems to be on the radar screen. If you have no shopping list, you have no reason to complain later.

US knows where it has to walk the extra mile for its own strategic business interests. India does not even know how to take advantage of the huge market that it can offer to the American corporations. We are on a position of strength. Even if America has the sophisticated technology (not much of it is actually required in India), it desperately requires customers to buy it. Otherwise it is only a matter of time before the American company pulls down the shutters in the absence of buyers.

Remember George Bush when he came to India in 2006. Media had played up the story of the US willing to allow imports of Indian mangoes. In return, the US had wanted access for selling its Harley-Davidson motorcycles. What is little known is that while India lowered the emission norms to allow the sub-standard motorcycle into India, the US has still not softened the sanitary and phytosanitary standards that blocks the entry of mangoes.

India is a Mango Republic.