In the last issue of the Union Farmer Quarterly, we looked at the overall process by which the upcoming WTO negotiations will be conducted. WTO members have had a series of preparatory meetings in Geneva leading up to the Ministerial Conference. ⁽¹⁾The preparatory work has [unfolded] in three phases: issue identification (until February); proposals (February to late fall); preparation of recommendations (a 'Seattle Statement) to Ministers (early Fall to late November).

In this issue, we'll look at the position that the Canadian government is putting forward, the impact on farmers, and farmer and civil society responses to the WTO.

The Canadian Position

[I]n order to exert a strong influence at the negotiating table, Canada must have a strong, unified and credible position ... One, it is a position that reflects the broad trade interests of all of Canada's agriculture, and agri-food sector, across all regions and all commodities, from farm-gate to plate. Two, it is a position that recognizes that Canada has a fundamental interest in a rules-based international trading system. And three, it is a position that gets the most out of the inescapable international trend towards reduced agricultural trade barriers and distortions." ⁽²⁾

"As we look ahead to a new set of negotiations at the WTO, let me outline six areas that will be crucial in framing the debate: assessing where we have come from; recognizing the new dynamic that all trade is now local; promoting Canadian values abroad; addressing the need for further negotiations; deciding how these negotiations should proceed and what they should cover; opening up the process." ⁽³⁾

Minister Marchi's speech, quoted above, is entitled "Canada and the World Trade Organization: Opening Opportunities to the World." There is little doubt that Canada will go to the WTO negotiations with an eye to gaining market access for Canadian exports. Minister Vanclief is equally clear. We are a nation of exporters; our economy is heavily dependent on exporting:

• 40% of our GDP and one in three jobs depend on our ability to sell our goods and services abroad;
• between 1992 and 1996, our exports grew roughly four times faster than our GDP ... [creating] more than 1 million new jobs - 450,000 of which were created in the last year ... .
• Machinery and equipment have become our top exports, overtaking commodities, which have fallen from 60% in 1970 to 35% in 1997. ⁽⁴⁾

In the same speech, Marchi states that "Time magazine has called Canada an 'exporting superhero', and our annual trade figures look like the graphs for one of those outperforming mutual funds." That export superhero has his foot firmly planted on the necks of farmers. Not only are they not benefiting - they are being killed, and they want to know why.

As Minister responsible for trade, Marchi 'suggests' that government consider the following points in the WTO negotiations:

• Further reductions to tariffs on industrial goods, particularly those that prevent our products from competing in foreign markets, and the possible elimination of so-called nuisance tariffs - those below 2 percent;
  
  
• Addressing non-tariff barriers that impose unnecessary bureaucratic costs on our exporters, including issues deal-ingot with standards, customs valuations and rules of origin;
  
  
• Curbing the abuse by foreign competitors of antidumping, countervailing duties and safeguard actions;
  
  
• Extending the coverage of rules on the services trade, with a particular emphasis on professional services;
  
  
• Bringing agricultural trade more fully under the rules, including eliminating all export subsidies;
  
  
• Expanding trade rules to respond to modern ways of doing business internationally in such areas as intellectual property, electronic commerce, transparency in government procurement and investment and competition policy;
  
  
• Exploring ways to ensure that trade rules fully take into account and fully respect sound cultural environmental and labour policies; and, finally
  
  
• Ensuring that governments retain the ability to regulate for reasons of public health, consumer safety, social policy and other legitimate public interest.

In the past year, the Senate Standing Committee on Foreign Affairs and International Trade conducted a series of public meetings across Canada. Stakeholders and interested parties were invited to make submissions to the committee. There were 425 individual appearances before the committee. Of those, 12 were firms; 88 were industry organizations; 26 were governments; 61 were academics, researchers and professionals; 85 were civil society; and 64 were individuals. Their report was released in June 1999. ⁽⁵⁾ The report offers five recommendations specifically related to agriculture and agri-food issues:

1. Canada should open the discussion in the upcoming multi-lateral trade negotiations on agriculture by demanding that all signatory countries begin by respecting their current obligations;
   
   
2. Canada should also make sure that the new rules on agricultural trade are transparent and apply equally to all countries according to their respective commitments;
   
   
3. Canada should endeavour to maximize access for Canadian farm exports, but without jeopardizing its ability to maintain orderly marketing systems or its flexibility in developing national farm support programs, and especially without using agriculture as a whole or a specific agricultural product as a bargaining chip.
   
   
4. The Committee endorses the Canadian trade position of using science as the ultimate reference for sanitary and phytosanitary measures, and in the area of agricultural biotechnology, particularly in the case of genetically modified organisms. However, given the impasse sometimes created by the absence of consensus on how to interpret the precautionary principle, and the negative impact that this could have on Canadian farmers, the committee recommends that the Canadian Government carefully analyze emerging trends in the area of assessment of risks associated with biotechnology.
   
   
5. The stakeholders in the agriculture and agri-food sector, as well as all other affected sectors and Parliament, should be regularly consulted on possible changes in Canada's initial bargaining strategy in order to analyze the impact of the proposed changes.

It is clear that the government position on agricultural issues is 'more of the same.' 'Industry' will be the big winners. Suppliers of raw product will have no choice but to knuckle under to corporate interests thinly disguised as 'market' pressures. David Korten states that if gross corporate sales are considered equivalent to the GDP of countries, 51 of the world's 100 largest economies are corporations. Regarding the distinction between centrally planned and market economies, he makes this comment:

"The proponents of capitalism continuously tell us that market economies are more efficient and responsive to consumer needs than centrally planned economies. But the economy internal to a corporation is not a market economy. It is a centrally planned economy - centrally planned by corporate managers to maximize financial returns to themselves and their shareholders ... Ironically the global victory of capitalism is not a victory for the market so much as it is a victory for central planning. Capitalism has simply shifted the planning function from government - which in theory are accountable to all their citizens - to corporations - which even in theory are accountable to their shareholders." ⁽⁶⁾

If this is indeed true, then we have a case of the pot calling the kettle black. As governments move away from 'central planning' for simply regulating economies, corporations - those who accuse us of unfair trading rules and lobby for their abandonment - are themselves adopting and practicing those very rules.

Farmers adversely affected

"Expectations of the Uruguay Round agricultural agreement were high, as this passage from a report to the Ministers on its impact indicates: "Canadian farm production and processing volumes will not be greatly affected by this agreement. Price impacts, in contrast, are expected to be important for the grain sector and the hogs/pork sector, but not for the supply-managed sectors ... .[Farm income impacts], which combine the volume and price impacts, are likely to be significantly [positive] for the grains and hogs/pork sectors, negative for the dairy and eggs sectors, and negligible for the other major sectors." ⁽⁷⁾ .

This optimistic prediction is false. Farmers have not seen the benefits of free trade, nor does it seem likely that they ever will. While Canada has been among the most prompt to meet their commitments to eliminate or reduce agricultural support programs, farmers have seen commodity prices crash and input prices rise. Subsidies continue, but their payment falls solely on the shoulders of farm families already stressed beyond tolerance. Farmers used to joke among themselves that they worked off-farm to subsidize their "habit" of farming. Now, however, that is the real life experience of too many farm families. One measure of the change in support level relative to total production for Canadian farmers is the Producer Subsidy Equivalent (PSE), ⁽⁸⁾which dropped from 31% in 1992-94 to 20% in 1997. The US PSE fell from 21% to 16%, while in the EU, the measure dropped from 48% to 42%. ⁽⁹⁾

Aggregate PSE's "mask reality" in some sectors. In 1997 the PSE for Canadian wheat was 10%, while in the US and EU, the PSE's were 32% and 36%, respectively. When the total value of the PSE is considered, the differences are even more marked. The value of Canada's 1997 PSE for wheat was CDA$15/MT; the US was CDA$72/MT and the EU, CDA $116/MT. Obviously, Canadian farmers are not doing well. Their profitability has not kept pace with exports and their rural communities are suffering.

Some countries are talking about the 'multifunctional nature of agriculture.' They believe that the upcoming negotiations must address more than just market share. Instead, they want food security, vertical integration, sustainable management, biodiversity, and rural development to be considered as concerns equally important to market access. In addition to these multifunctional aspects, the EU will come to the table prepared to defend their farmer-centred model of agriculture. Who is at the centre of the Canadian model of agriculture? It certainly is not farmers. It is the agri-food industry: sellers of seed and chemicals; buyers of underpriced raw product.

State trading enterprises targeted

Article XVII of the GATT 1994 sets out disciplines with respect to the activities of state trading enterprises (STEs). Although the Uruguay Round did not impose new disciplines on state trading it did establish an Understanding on the Interpretation of Article XVII of the GATT 1994. The Understanding requires that Members notify their STEs in accordance with the following working definition:

"Governmental and non-governmental enterprises, including marketing boards, which have been granted exclusive or special rights or privileges, including statutory or constitutional powers in the exercise of which they influence, through their purchases or sales, the level or direction of imports or exports. Canada notified the Canadian Wheat Board, the Canadian Dairy Commission, the Freshwater Fish Market Corporation, the Ontario Bean Producers' Marketing Board and the provincial liquor boards." ⁽¹⁰⁾

All of these STEs are under threat at the upcoming round. The United States is committed to "opening state trading enterprises to public scrutiny."⁽¹¹⁾

Although the US is also concerned with Canadian dairy marketing boards⁽¹²⁾, they are paying more attention in this upcoming round to STEs. The one whose loss will cause Western farmers the most pain is the CWB. The US offers the following analysis of the role why export STEs must be brought under discipline in world markets:⁽¹³⁾

• There is a lack of transparency in the pricing and operational activities of agricultural STEs which makes it hard to assess that the same trading privileges are extended to all member countries. As well, several countries (China, Taiwan, Russia, Vietnam) that use STEs are seeking to join the WTO, but very little is known about the functioning of their STEs.
  
  
• The chief concern with export STEs is "whether they use their exclusive power of domestic monopsony (operating as the sole purchaser of domestic production ) and/or export monopoly (operating as the sole exporter of domestic supply) to engage in unfair trading competition." The question is raised: Do STEs win sales because of true competitive advantage or because of practices such as excessive price cutting?"

It seems all too obvious that any marketing tool for which benefits accrue to farmers rather than one of the half-dozen transnational corporations that are wrapping up control of the whole food system is not acceptable. Clearly, farmers are not the central players in the Canadian vision of agriculture and agri-food.

Accessing Information

In order to have any hope of influencing global negotiations on food and agriculture, citizens need to know what is happening. The Canadian government has been a leader in lobbying for greater transparency and access to information by civil society and its representatives. Still, however, even though "the WTO is probably the most important organization in the world if you want to learn about international trade and try to influence how it functions ... . [i]t is not easy for private citizens and organizations (NGOs) to follow what the WTO is doing or to influence what it will do."

To help citizens understand how to access information on the WTO, the Centre for International Environmental Law has published A Handbook for Obtaining Documents From the World Trade Organization.⁽¹⁴⁾

Responses from civil society

We are all getting smarter at operating in the new global trade environment. The defeat of the MAI by citizen outrage indicates that ordinary people and their organizations can do more than just offer "input" to global dialogs. We now know that we can significantly "impact" and even halt their progress. But like the phoenix rising from the ashes, the MAI will re-emerge in some form in the upcoming negotiations. We cannot rest on our laurels.

The Council of Canadians and similar organizations were born in urban centres, and now provide both urban and rural activists with a forum to concentrate their efforts. But, one of the most difficult groups to organize is farmers. These tend to be rugged individualists who are used to doing it all themselves. In conjunction with this reality, is the fact that Canadian farmers constitute an increasingly small percentage of the population - we're now down to less than 4%.

How can 4% of even the most easily organized population influence systems that seem dead set on making them contract employees who bear all the risks of producing food in the rain, wind and the sun, and who receive none of the benefits of quadrupled export trade in agricultural goods and services?

We have figured out a way. Our 4% can join with the 50% of world's population that still farm in the rest of the world. In 1993 that is exactly what happened. Via Campesina is a farmers' and farm workers' movement that includes farmers and farm workers from every continent. In India alone, the Via Campesina encompasses organizations whose total membership is millions of farmers and farm workers. In Canada, the organization representing farmers in Via Campesina is the National Farmers Union.

Through Via Campesina, farmers have set their sights on participating in global dialogs and being part of the decision-making bodies whose decisions profoundly affect them, their families, their communities and their nations. One of Via Campesina's first activities was to develop a statement outlining their common vision of global agricultural policy (see pg. 21). It's an ambitious program, but one that is making headway. Representatives of the movement are commonly invited to meetings of the World Bank and other global structures.

In Canada, the NFU recognized that ensuring food sovereignty, security and safety was so important to all citizens, that for the first time in its history, it sought the support of urban dwellers through its Food Safety Campaign. The response has been very positive. Canadians are worried that the continued industrialization of agriculture threatens not only their food safety, but the very environment in which we all live. Proprietary agricultural research does not allow experimental results to be subjected to peer review by fellow scientists. We are supposed to believe what we are told, and not expect to have any recourse - a very odd assumption for a democratic nation. In fact, that is exactly what we are fighting for - democratic input into and influence on global processes. Only when those global processes are democratized, can its proponents truly say that they are working for the benefit of citizens.

Stop Agricultural Negotiations in the World Trade Organization (WTO):
We demand food sovereignty for all peoples, access to land and the right to produce

Via Campesina demands a worldwide audit on the serious consequences resulting from the inclusion of agriculture in the GATT/WTO agreements. The fundamental objective of GATT to liberalize agricultural trade is restructuring food production and distribution worldwide, shifting control over a basic human right out of the hands of people and their governments. It is unacceptable that the rules for the production of food are being dictated according to a so-called "free trade" agenda.

The loss of national food sovereignty within the WTO system is dangerous and unacceptable. Via Campesina strongly objects to the conduct of negotiations in agriculture under the terms of the World Trade Organization. The WTO policy is, above all, organized in the interests of multinational companies that dominate international trade, destroying our capacity of food production, our communities and our natural environment.

International trade must serve society! Trade has to respect the food sovereignty of each country which requires access to and the use of land by peasants, small and medium-sized producers and indigenous peoples.

Liberalization of markets under the terms of the World Trade Organization has the following unacceptable consequences:

1. Destruction of food production capacity in some regions, couple with surpluses in others. Structural adjustment programmes, shifting domestic production to intensive production for exportation are accelerated under the terms of the WTO and force millions of peasants, small and medium-sized farmers and indigenous peoples into bankruptcy. In India, in the state of Andhra Pradesh, more than 400 producers of cotton committed suicide in the winter of 1998 because they were living a hopeless situation.
   
   The WTO policy which permits dumping drives intensive production deliberately creating surpluses in some regions, while in others it produces social disasters such as unemployment, rural exodus, social depression, violence and suicides. It is also leading to irreparable damages to the environment including loss of soils, biodiversity, contamination of land, air and water.
   
   There are many examples of food dumping, especially on the part of the USA, EU and other Industrialized countries into less-industrialized countries. This disruptive practice is legalized in the "Blair-house" agreement of the WTO. Equally damaging is the dumping, often in the form of social dumping, of products that characterizes the trade from some southern countries.
   
   
2. Increased ruthless expulsion of rural people from the land into cities because of this "liberalization". Currently there is heavy pressure from deregulation of investment policies (MAI). Such a policy will be disastrous for the management of natural resources necessary for food production. Governments will no longer have the possibility of managing land tenure and land use which will facilitate the corporate take-over of land further limiting access for farm families and indigenous communities. Worldwide millions of peasants have been forced to leave the land, including two million in Brazil alone in recent years.
   
   
3. Some countries and corporations are seeking legislation allowing biopiracy in the WTO through imposing patents on life (Intellectual Property Rights on the genes from plants, animals, parts of human beings). Everywhere in the world, from Brazil to Europe, there is heavy corporate lobbying for this right to control the forms.
   
   
4. Through the World Trade Organization, corporations are imposing genetically-engineered and hormone-fed animals products on consumers. For example European markets are being forced to accept genetically-modified soya from Monsanto and hormone-fed meat and dairy products against people's wishes.
   
   
5. Exclusive and undemocratic negotiations of the WTO. The agreements are defined by big industrialized countries (U.S.A., EU, Canada, Japan, etc.) and multi-national corporations with little participation of other countries and social movements. The future of this planet cannot be left in these hands. These entities are acting without any responsibility or accountability thereby degrading both people and natural resources.

1. Remove all negotiation n the area of food production and marketing from the WTO.
2. Create genuine international and democratic mechanisms to regulate food trade while respecting food sovereignty in each country.
3. Stop all discussion on the Multilateral Agreement on Investment.
4. Proceed with an indepth analysis of the consequences of the Marrakesh agreement for food production, peasants, small farmers and indigenous communities.
5. Secure food sovereignty in each and every country giving priority to food production for its people, social aspects and environment.
6. Cancel the obligation of accepting the minimum importation of 5% of internal consumption. All compulsory market access clauses must be canceled.
7. Give to each country the right to define its own agriculture policy in order to meet its international needs. This includes the right to prohibit imports in order to protect domestic production and to implement Agrarian Reform providing peasants and small to medium-sized producers with access to land.
8. Stop all dumping. Protect the production of staple domestic food.
9. Prohibit biopiracy and patents on life (animal, plant, parts of human bodies) including the development of sterile varieties through genetic engineering.
10. Allow countries the right to establish food quality criteria appropriate to the preferences of its people.

Footnotes:

1. Canada's Trade Agenda. An Infoexport fact sheet. January 1999.
   
   
2. The Hon. Lyle Vanclief, Minister of Agriculture and Agri-Food, Montreal, 4 November 1998
   
   
3. The Hon. Sergio Marchi, Minister of for International Trade, Ottawa, February 9, 1999
   
   
4. The Hon. Sergio Marchi, Minister of for International Trade, Ottawa, February 9, 1999
   
   
5. Canada and the Future of the World Trade Organization: Advancing a Millennium Agenda in the Public Interest. Ninth Report of the Standing Committee on Foreign Affairs and International Trade. Bill Graham, M.P., Chair.
   
6. Life after Capitalism. A presentation for Edmonton, Calgary and Saskatoon. David Korten. November 1998.
   
   
7. Agriculture and the upcoming multilateral trade negotiations: Canada's Difficult mission. Jean-Denis Frichette. Economics Division. 22 February 1999.
   
   
8. Agriculture and the upcoming multilateral trade negotiations: Canada's difficult mission. Jean-Denis Frichette. Economics Division. 22 February 1999. PSE's are calculated by finding the lowest price in the world at which a commodity is produced (adjusted for transportation costs), and assuming that anything above that level produced elsewhere receives a subsidy. This calculation assumes that if production in all but one location failed, that remaining producer would be able to fill all the demand for product with no change in price or cost of production.
   
   
9. Agriculture and the upcoming multilateral trade negotiations: Canada's difficult mission. Jean-Denis Frichette. Economics Division. 22 February 1999.
   
   
10. State Trading Enterprises. Agriculture and Agri-food Canada: Trade Topics.
    
    
11. Daily Report for Executives. By Chad Bowman. Wednesday, April 21, 1999.
    
    
12. As a result of the last round of trade negotiations, marketing boards formerly protected by import quotas have seen those quotas converted to tariffs. There is a process by which those tariffs will be reduced and eliminated, thus opening the domestic market to imports.
    
    
13. State Trading Enterprises: Their Role in World Markets. Agricultural Outlook. June 1997. Economic Research Service/USDA.
    
    
14. A Handbook for Obtaining Documents From the World Trade Organization. L. Brennan Van Dyke & John Barlow Weiner. Centre for International Environmental Law. More information on this subject is available in The WTO Decision on Document Restriction, a publication written by L. Brennan Van Dyke and John Barlow Weiner for the International Centre on Trade and Sustainable Development. Their home page can be found at

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