HEADLINE: Rich Nations Are Criticized For Enforcing
Trade Barriers
BYLINE: By EDMUND L.
ANDREWS
DATELINE: WASHINGTON, Sept. 29
BODY: For all the polite nods toward
the protesters outside, those in charge of the World Bank and the International
Monetary Fund offered few apologies this weekend for the many failed attempts to
increase prosperity in the world's poorest countries.
Reflecting the views of their biggest shareholders -- governments of
the world's richest countries, led by the United States -- both institutions
continued to push poor countries to take steps to stimulate business: privatize
industry, improve financial management, embrace free trade.
But as the two institutions wrapped up their annual meetings here
today, people inside and outside the elite gathering attacked what some
described as a major hypocrisy of the rich countries: their own continued
barriers to imports, particularly of agricultural products and textiles.
James D. Wolfensohn, president of the World Bank, accused
wealthy countries of "squandering" $1 billion a day on farm subsidies that often
have devastating effects on farmers in Latin America and Africa.
Stanley Fischer, who was the fund's deputy managing director in the
1990's, said protectionist policies by the United States, Europe and Japan were
"scandalous."
Oxfam International, a nonprofit group
focused on world poverty problems, issued a scathing report in which it charged
that subsidies to big American cotton farming operations were wiping out African
rivals.
The criticisms are not new. But they are more
intense this year, and they carried a special sting for the United States.
Earlier this year, Congress passed and President Bush signed a bill that
authorizes more than $100 billion in farm subsidies over the next eight
years.
"It is hypocrisy to encourage poor countries to
open their markets while imposing protectionist measures that cater to powerful
special interests," said Nicholas Stern, chief economist of the World Bank.
Mr. Stern estimated that the average cow in Europe
received about $2.50 a day in subsidies, and that the average cow in Japan
received nearly $7 a day. By contrast, he said, 75 percent of the people in
sub-Saharan Africa live on less than $2 a day.
On
Friday, just as financial leaders from the Group of 7 major industrialized
nations were about to meet, Brazil filed a legal complaint against American
cotton subsidies at the World Trade Organization.
Brazilian officials contend that American cotton subsidies contributed
heavily to a downward spiral in cotton prices that cost Brazil $640 million last
year. India, another big cotton producer, estimated that American subsidies
eroded its export revenues by $1 billion last year.
The
Bush administration agrees in principle with the goal of reducing subsidies,
which encourage overproduction and tend to depress prices, as well as tariffs
and quotas that block imports.
In July, not long after
Congress passed the new farm bill, the United States trade
representative, Robert B. Zoellick, proposed that countries around the world
agree on a sharp reduction in both kinds of protection. Because the plan calls
for even deeper cuts in Europe than in the United States, American farm groups
say they support it.
Protectionism in wealthy countries
has a disproportionately large effect on poor countries, because the biggest
barriers are on farm products and labor-intensive products like textiles.
According to the World Bank, exporters from Bangladesh pay
about as much in tariffs to the United States as exporters from France do.
Oxfam, which analyzed the effect of American cotton
subsidies on African producers, estimated that American cotton subsidies
eliminated 1 percent of the total economic output in three impoverished African
nations -- Burkina Faso, Mali and Benin.
Mali lost
about $43 million as a result of plunging cotton prices, which was significantly
more than the $37 million in foreign aid it received from the United States.
Over all, according to Oxfam, the American government spends three times as much
on cotton subsidies as it does on foreign aid for all of Africa.
Other economists caution that farm subsidies are not the only reason
for declining commodity prices. Prices for many other commodities have plunged
in the last two years, partly because of the weak global economy and partly
because of the rise of new producers.
Uganda, which has
been diligently rebuilding its economy, has been battered by a huge decline in
world prices for coffee -- its biggest export. But the International Monetary
Fund and the World Bank can put much more pressure on poor countries than on
rich ones to open up markets.
"The I.M.F. tells the
United States that it should drop its subsidies too," noted Mara Vanderslice, a
spokesperson for Jubilee, an organization that campaigns for debt relief. "But
the United States doesn't borrow any money from the I.M.F., so it doesn't have
to listen."