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Poor Nations Air Subsidies Gripe

Green Beans and Walnuts with Lemon Vinaigrette, Bon Appetit, Nov. 2009
Bon Appetit/Elinor Carucci
Trade ministers from some of the poorest countries pleaded for an end to cotton subsidies, claiming the aid has thrown their nations into poverty and despair.

Cotton is the most high-profile of the problems bedeviling the World Trade Organization at its weeklong meeting that started Wednesday as it negotiates rules to liberalize agricultural trade, which most agree is key to progress toward a larger treaty.

"If nothing is done urgently and solidly, this could lead to the total loss of revenue for our producers, an increase in poverty and the destruction of our economic system," Benin's Trade Minister Fatiou Akplogan said.

Protesters, led by farmers from around the globe, also staged angry demonstrations Wednesday. They threw rocks, bottles and flaming signs at police, who pushed them back with tear gas and nightsticks. One man, a former South Korean lawmaker Lee Kyung-Hae, fatally stabbed himself in the chest to show his anger over WTO policy.

Lee was well-known to WTO officials and envoys after a two-month, one-man protest outside the organization's Geneva headquarters earlier this year. He also attempted suicide in the lobby of the building in 1990, when he plunged a knife into his stomach.

Cotton represents 40 percent of export earnings for Benin, but farmers are receiving less and less money for their crops because of the huge subsidies paid by richer countries to their farmers, Akplogan said.

Benin is one of four countries that are calling on governments to agree to the total phasing-out of cotton subsidies during the WTO meeting. Until the subsidies are gone, African nations say they should be compensated for their losses.

Almost half of global domestic cotton subsidies are paid by the United States to its producers — around $2.2 billion in 2001-2002.

Payments in the United States have had the "perverse effect" of making cotton a more profitable crop than products like soy beans, Mali Trade Minister Choguel Maiga told the meeting.

The United States stresses that subsidies are not the only problem. The cotton trade is also affected by import tariffs that are sometimes as high as 100 percent, lengthy customs procedures, complicated labeling requirements and policies that promote the development of manmade fibers.

"We recognize that cotton is fundamental to a number of economies, particularly in Africa," said Deputy U.S. Trade Representative Peter Allgeier. "We are engaged in discussions with the four countries, and we are looking with them at the entire situation that affects the trade in cotton."

China is the second-biggest subsidizer, with payments of about $1.2 billion in the same period. The European Union spent only $700 million, but cotton is only produced in Greece and Spain, making EU subsidies the highest per pound of cotton in the world — up to 180 percent of the global price.

EU Trade Commissioner Pascal Lamy said he had "sympathy" for the problem of African cotton farmers but stressed that the 15-nation bloc produces less than 3 percent of world cotton and is the world's largest importer of cotton.

The WTO meeting marks the halfway stage in the body's attempts to agree to a new treaty to liberalize trade by the end of next year.

Governments also must move ahead with talks in other areas like reducing tariffs on industrial goods, improving access for service industries and deciding whether to start new negotiations in the controversial area of investment rules.