Fair Globalization Means Free Trade in Agriculture
Marcus Vincius Pratini de Moraes is the minister
and food supply of Brazil.
Brasilia-Much has been said and written about globalization, both
from the perspective of those who view the process as the unavoidable
result of integration of economic production on a planetary basis, as
well as from the critical standpoint of those who consider that globalization
will significantly increase concentration of political power and economic
prosperity within a small number of countries, further marginalizing the
The noisy and sometimes violent demonstrations that we have recently witnessed
at many international gatherings should not be interpreted as romantic
moves or as the result of organized action by extreme radicals. Although
we cannot accept that violence replace civilized and democratic exchange
of views, demonstrations do reflect the controversies stirred by globalization.
They call for a more responsive and serious consideration on what is generating
this "malaise" with regards to globalization.
From the perspective of Brazil, globalization-while an inescapable reality
resulting from an evolutionary process-must follow generally agreed governance
rules to ensure that the process leads not only to a more equitable distribution
of benefits among countries, but also to a widespread perception that
this goal can actually be achieved.
If one shares a genuine concern about a more equitable distribution of
the benefits of globalization, there needs to be a serious discussion
on liberalization of trade in agriculture.
Agriculture cannot continue to be subjected to "special rules"
that maintain inefficient production thanks to heavy subsidies granted
by national treasuries. If we want to ensure that developing counties
benefit from the results of globalization, we must ensure that their farm
exports remain competitive in the international market.
Brazil's treasury cannot compete with those of developed economies that
grant subsidies to agricultural exports. The Organization for Economic
Cooperation and Development (OECD) estimates that more than $360 billion
in agricultural subsidies were given in developed countries last year.
This represents roughly $1 billion a day.
Many will hastily argue that trade liberalization alone will not help
solve the problems faced by the net food importing countries or by those
facing serious hunger. But heavy subsidization in rich countries not only
depresses commodity prices but also enhances dependency of developing
countries and discourages new investment in expanding agricultural production
in less developed ones.
The resistance by some developed countries to the idea of achieving a
widespread liberalization of agricultural trade "demoralizes"
the very concept of trade liberalization.
On the one hand, developing countries are given lessons on the benefits
of opening up their markets, reducing their tariff rates and liberalizing
their services sector. But the same countries that preach the opening
of developing countries' economies resist clearing the barriers that restrict
access to their markets for agricultural exports from developing countries.
Globalization cannot be acceptable if it perpetuates ever more asymmetrical
gains for the developed countries, increasing their opportunities for
exports of high-technology products and widening their access to the services
sector in developing countries, while agriculture is kept apart. And ever
more sophisticated mechanisms of protection and additional subsidies to
agriculture are proposed on the grounds of "preserving green landscapes,"
"enhancing small family farming," "keeping mountain pastures"
or "ensuring food security."
Over the last two decades Brazil has developed one of the most efficient
agricultures in the world. We rank as the leading world producer of sugar
cane (334.5 million tons), oranges (19.4 million tons) and coffee (3.3
million tons). We also rank as the second largest producer of soybeans
(30.8 million tons), corn (32.4 million tons), beef (6.4 million tons)
and poultry (4.4 million tons).
We have also made huge efforts to increase the quality and sanitation
of our agricultural products. We have managed to eradicate foot and mouth
disease (FMD) in southern, central and eastern Brazil. This means that
80 percent of our national cattle herd is now free from FMD. The classic
swine pest has also been eradicated.
Yet, despite all our efforts, our export performance has been hindered
by a growing array of ever more sophisticated barriers:
--In spite of its position as the largest orange producer, Brazil's exports
of orange juice face stiff tariffs in the US market ($418 per ton);
--Despite the fact that Brazil has attained the highest productivity standards
in sugar cane production, we still face serious difficulties in the heavily
regulated international sugar market. Access to the US market is limited
by import quotas. In Europe, high levels of subsidies given to beet sugar
producers simply render exports of Brazilian sugar to African countries
-- Heavy subsidies to poultry exports in Europe also displace competitive
Brazilian exports into third markets;
--Despite the fact that Brazil has eradicated FMD from the most important
breeding areas, our exports of fresh and chilled beef are still barred
from a number of markets.
--Exports of tropical fruits are also hindered by "sanitary"
barriers in industrialized markets.
Brazil obviously acknowledges the need to ensure high standards to protect
consumers' health, but a zero-risk policy hampers access of competitive
products from developing countries to the markets of developed countries.
Over the last few years, the Brazilian economy has undergone deep and
far-reaching reforms to ensure its competitive integration in the international
economy. We have managed to reduce inflation, to stabilize our economy
and to open our market to competition. Since 1994, our trade deficit has
grown to billions of US dollars.
But we have reached the limit.
We have to harvest the results of all efforts spent in the pursuit of
economic stability and modernization of the economy. Brazil must now improve
our agribusiness trade balance in order to be in a position to honor our
external financial commitments.
Coming from a developing country that has been asked in a Uruguay Round
to make important concessions to benefit exports of industrial products
and services from rich and developed countries, I must confess my extreme
difficulty in understanding why there is still so much resistance to liberalizing
trade in agriculture.
Trade liberalization of agriculture is mandatory to ensure that developing
countries benefit equitably from globalization.
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