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9-Misc: On the WTO GMO case and U.S. double standards

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TITLE:  As Accusations Fly, Poor Nations Suffer
SOURCE: The Washington Post, USA, by Clyde Prestowitz
DATE:   June 8, 2003

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   "It is these sorts of American inconsistencies and double standards, far
    more than envy of our success or hatred of our freedoms, that cause
    alienation from America and that make the United States appear to many
    abroad as a rogue nation."

As Accusations Fly, Poor Nations Suffer

'Why do you see the speck in your brother's eye, but do not notice the
log in your own eye? -- Matthew 7:3'

In the wake of Sept. 11 and the bitter international debate over the war
in Iraq, Americans wondering why much of the world sees the United States
as a kind of rogue nation have cited foreign envy of U.S. success and
foreign hatred of American freedom. While these might be factors, what
irks foreigners most is not our values or our achievements. Rather it is
the fact that what we do is often at odds with what we preach.

Take President Bush's recent Coast Guard Academy commencement address. In
it, he charged that the refusal of the European Union to certify imports
of new U.S. strains of genetically modified crops had perpetuated famine
in Africa. He alleged that the EU had a moratorium on such crops, thus
discouraging African nations from adopting, and benefiting, from them.
The speech followed the filing of a formal U.S. complaint on the matter
with the World Trade Organization (WTO).

While there is no doubt that EU agriculture policies badly need reform,
one of the main causes of hunger and poverty in Africa lies much closer
to home -- U.S. subsidies for our own farmers.

Cotton is a prime example. In the West African countries of the Niger
River's northern delta, cotton is the main cash crop, and cotton farming
provides employment to more than 2 million people and sustenance to
several times that number. But with world cotton prices down 10 percent
from last year's 30-year low, people can barely survive. Extended
families of 20 to 30 are trying to live on annual earnings of less than
$2,000. Schooling and even minimal health care have become unaffordable
luxuries. As a result, many families are leaving for the crowded Muslim
quarters of Europe's large cities while fundamentalist Islamic clerics
from the Middle East are coming to West Africa and finding more and more
listeners. Fearing this trend, the United States has begun to promote aid
and open trade. In Mali, for example, it now spends about $40 million a
year on educational, health and development programs. But this doesn't
come close to offsetting the two-thirds drop in cotton prices since 1995.

Meanwhile, half a world away in the Mississippi Delta, American growers
are thriving. At first glance, the reason seems obvious. In Mali, farmers
hitch their one-bladed plows to oxen and take two weeks to till 10- to
20-acre plots from which the cotton is eventually picked by hand. In
contrast, the Mississippi Delta growers tend giant spreads of 10,000
acres or more in air-conditioned tractors using global positioning
satellite systems to determine the proper amount of fertilizer to apply
to sprouting seedlings. No wonder U.S. cotton growers have an average net
household worth of nearly $1 million. Sad though it may be, it would seem
that oxen and plows on tiny plots are just no match for tractors and
satellite systems on huge spreads.

In fact, however, the U.S. growers are the higher-cost producers. All
that high-tech equipment is expensive. Delta land is irrigated, and the
seed is priced at a premium because it is genetically modified to resist
pests. Then there are expensive fertilizers and defoliants. In all, it
costs 82 cents to produce a pound of cotton in Mississippi versus only 23
cents a pound in Mali. So why are the Americans expanding their acreage
while the Malians fight to survive? In a word: subsidies. A few days
before the oxen were roped to plows in Mali last year, Bush signed into
law a piece of legislation that greatly increased last year's $3.4
billion in subsidies to America's 25,000 cotton farmers. This year, some
of these farm families can expect to receive nearly $1 million just in
subsidies. Thus, the U.S. government is subsidizing American farmers to
produce more and more cotton that will further depress world prices and
further impoverish families in West Africa -- precisely what the
president accused the Europeans of doing.

African cotton farmers aren't the only victims of U.S. agricultural
policies. The North American Free Trade Agreement (NAFTA) was signed in
an effort to stimulate Mexican economic growth and thereby stem illegal
immigration. But exports for one of Mexico's main crops, sugar, are
severely restricted by U.S. quotas that limit imports from Mexico to only
7,258 metric tons of raw sugar. Thus, while American consumers pay four
times the world price for their sugar, Mexican sugar farmers, like West
African cotton growers, face penury and hunger. At the same time, heavily
subsidized U.S. corn exports threaten to drive Mexican campesinos off
their land and into the dangerously hot trucks of the smugglers who ship
illegal immigrants across the U.S. border.

The case of Brazil provides further examples. The largest country in
Latin America, Brazil has been struggling to achieve economic growth and
to overcome the legacy of mismanagement left by authoritarian
governments. It has democratized, liberalized, deregulated, and adopted
prudent economic and monetary policies in accord with Washington's
demands. The United States has a big stake in Brazil's eventual success
and has been proposing to help by including Brazil in negotiations for a
Free Trade Area of the Americas. At the same time, however, U.S.
agricultural subsidies and quotas on imports of citrus fruits restrict
trade in about two-thirds of the products Brazil might be able to sell in
the U.S. market.

Then there is the issue of implementing international trade rules. In the
formal complaint it just filed, the United States is asking the WTO to
impose penalties on the EU for maintaining the alleged moratorium on
import permits for genetically modified crops in violation of WTO rules.
While the U.S. charges are legally correct and justified, Europeans
marvel at the chutzpah that allows the United States to file WTO
complaints while failing to implement WTO rulings against objectionable
American practices.

For example, the United States has long had a program allowing special
tax treatment on profits from certain kinds of exports. In response to EU
complaints, the WTO has twice found this treatment in violation of WTO
rules and directed the United States to alter the practice. Yet, to date,
the practice has not been changed. Europeans find this particularly
maddening because they are making efforts to fix their moratorium
problem. Indeed, EU Trade Commissioner Pascal Lamy told me in a recent
meeting that new import permits will probably be issued by year's end.
Yet Europeans see little reciprocation on the U.S. side.

Mexicans also scratch their heads in response to U.S. complaints about
the Europeans. Under NAFTA, Mexican truckers were supposed to be able to
drive freely anywhere in the United States. But after 10 years, they
still are prevented from doing so. The NAFTA dispute settlement panel has
found the United States in breach of its obligations under the treaty and
has urged it to come into compliance. Instead, fears (whether rational or
not) in border states of unsafe or inadequately inspected Mexican
vehicles have caused U.S. authorities to drag their feet in a European-
like shuffle.

It is these sorts of American inconsistencies and double standards, far
more than envy of our success or hatred of our freedoms, that cause
alienation from America and that make the United States appear to many
abroad as a rogue nation.

-- Clyde Prestowitz <> was counselor to the secretary
of Commerce in the Reagan administration. His book "Rogue Nation:
American Unilateralism and the Failure of Good Intentions" has just been
published by Basic Books.


European NGO Network on Genetic Engineering

Hartmut MEYER (Mr)
Kleine Wiese 6
D - 38116 Braunschweig

phone:  +49-531-5168746
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email:  genetnl(at)