The Doha talks have ended, not unexpectedly without a successful conclusion. From a Caricom point of view, the spectacle of a lowering of tariffs on ACP banana exports to Europe as one of the lynchpins on which the success of the talks seemed to depend, was not a welcome one. Caribbean banana exporters will have breathed a sigh of relief as that particular bargaining stake did not have to come into play.
But agricultural or farm imports and exports remained to the end a significant part of the negotiations. They dramatically pitted the United States and Europe against the new big players, China and India, who were fearful of having cheaper farm products from the subsidized agriculture of the Western industrialized economies flood their markets and run their farmers out of business.
So in a sense, this most recent phase of the Doha talks reflected the continually visible new economic encounter between the traditional post-war economic powers and the so-called emerging economies. That encounter has been seen previously in the victory of Brazil and other countries at the WTO in respect of their efforts to penetrate Western markets, particularly in respect of sugar and cotton exports. And it has been visible too in the insistence of Russia, not a member of the WTO, that the terms of trade of commodities, and the influence of emerging economies particularly in respect of oil and gas exports, should reflect a new balance among the world’s countries, and not the old balance of, let us say, the pre-1990’s post-war period.
But what has all of this really got to do with us? The Brazilian victory at the WTO has already demonstrated the fragility of the developing countries (G77) grouping, to the extent that there is now a prioritizing of emerging economies’ interests focused on penetration of markets particularly in the industrialized world.
The old UNCTAD arena does not seem to be proving able to balance interests among the diversity of states/economies that have characterized the grouping, and to provide the various participants with satisfactory outcomes to these global talks.
Instead, as Brazil has hinted to us, it is necessary for developing countries to find new ways of providing value-added from the old commodities like sugar; and that their prising open of the industrial markets now is a prerequisite for ensuring markets for the new derivatives. The issue is posed as to whether the products of small economies can stand on their own, particularly in the sphere of traditional agriculture; or whether the limited economies of scale available to, in particular, smaller economies, have to be broadened or extended through different ways of utilizing their traditional exports. Thus both Guyana and Jamaica are being induced to turn sugar cane not into sugar, but into ethanol. And the banana producing countries are being urged to find alternative uses for their bananas.
It is, in that regard, interesting that Dr Marshall Hall, long-time Executive Chairman of Jamaica Banana Producers, recently advised in his William Demas Lecture at the last annual meeting of the Board of Governors of the Caribbean Development Bank, that his company has, for some time now, been involved in a major diversification within bananas and beyond bananas; and a diversification also in terms of both its location of banana production and its location of production of new banana-derivative products. And this implies in part also, a diversification of the locations of employment.
Hall’s description of the JP experience is worth quoting at some length: “JP sold its banana ripening business in the UK and today banana-growing accounts for less than 10% of its revenues. In Jamaica, in addition to employing approximately 1,000 employees in banana-growing, the company has opened a banana chips plant employing over 100 workers, with plans for growth. To ensure flexibility of supply, it has invested in growing and banana-food operation in Central America. In its UK diversification JP benefited from grants from the EU to locate its juice establishment in Wales… JP brought jobs to Wales… JP now has over 600 employees in Wales.”
Another way of saying all this would be to observe that, in today’s economic integration vocabulary, JP as a company (not a country), has redefined its relevant economic space, and come up with a cross-country single economic space necessary to maintain its own viability. And it is noticeable that, in the context of this approach the company employs almost as many workers in Wales as it employs in banana growing in Jamaica.
While all may not approve of this approach as a whole, what it suggests is that a certain degree of modernization of country economies has been going on in terms of finding ways of getting around the protections of other economies, including the developed ones. Observers have been pointing out also that while the Doha talks have been dragging on, a variety of bilateral agreements have been negotiated, particularly by the United States in this hemisphere, and that it is within the present framework of trade rules that large economies like China, as well as small economies like Singapore, have made impressive gains in this era of globalization. Indeed the London Financial Times has gone as far as saying, as the Doha talks collapsed last week that, “Doha addresses the world of the late 1990’s when food prices were low, concern over global warming muted and the US and the European Union massively outpunched the likes of China, India and Brazil in economic and diplomatic heft.”
From a Caribbean point of view, we can say that the promise of stable marketing arrangements for our bananas in the current sense, has no long-term future. The reprieve from the failure of Doha is strictly temporary.
From the sugar perspective, it will be obvious to large land-area countries like Guyana that new relationships of production and export will have to be found, probably through finding new economic spaces and common production locations with its neighbour Brazil. Can this apply to rice as well?
We then still have the rationalization of our trade relationship with the United States to bring to a conclusion, conscious of the fact that our Caribbean neighbours in Central America and the Dominican Republic have settled their concerns in this regard. We should be clear in our minds that a mere extension of the CBERA/CBTPA arrangements will not suffice for the long term.
Further, finding new arrangements to permit appropriate and viable air transport arrangements for our tourism is a vital necessity, as open skies become the order of the day and air transport continues its rationalization. This obviously requires both public and private sector diplomacy and negotiation
And finally, in consonance with countries seeking new types of free trade and integration relationships, Caricom needs to be thinking of our long-term future within the wider Caribbean or Antillean region as Cuba evolves, the DR reaches out in all directions and the United States itself seeks, as it will in spite of current protectionist trends, to redefine and extend the concept of North America to include this Basin.
This agenda will have to be carried out within the context of the WTO as it exists, whether or not there is a successful Doha round in the post-US elections near future. So, as Sir Shridath Ramphal has recently warned again, in these geographical spheres as in others, we will need a diplomacy of ally-seeking among the G77, regardless of its increasing diversity. It is for us to find the right allies.
