Friday, December 18, 2015

Free Trade or Fair Trade

Social movements have long criticized the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT), where rich countries consolidate power and rig trade rules in their favor, at the expense of the developing world. Perhaps the best example of this is the issue of cotton subsidies. The US chooses to protect the interests of 20,000 rich cotton growers at the expense of the lives and livelihoods of millions of farmers and their children in West Africa.

Cotton is a major source of livelihoods for poor farmers in the West African countries of Burkina Faso, Mali, Benin and Chad, known in WTO negotiations as the Cotton 4 (C-4). They have been feeling the direct impact of the subsidies provided to cotton growers in the United States, which suppress cotton prices and result in lower incomes for African cotton farmers. Over a decade ago, the US agreed to resolve the issue of cotton subsidies 'ambitiously, expeditiously and particularly'. But the US did not take action. Instead, it took advantage of its financial and political power, choosing to ignore the impacts it was having on the lives of some of the poorest people on the planet. Even a case brought by Brazil at the WTO, could not stop the US from artificially suppressing cotton prices. And at this year's talks, the US refuses to even discuss the issue of cotton.

In fact, Brazil won a case against the US cotton subsidies at the WTO, yet the richest country in the world is successfully playing with the rules. While promoting itself as WTO compliant, the US supports its cotton growers to the tune of $1.5 billion annually as estimated by International Centre for Trade and Sustainable Development. This suppresses world cotton prices at least by 7% - or a loss of $3.3 billion for cotton producing countries. Among them are the four poorest countries in West Africa, which will lose $80 million per year.

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