Home Page Index Go to Bottom

Dennis Small

Dumping has been a routine way whereby the powerful manipulate market forces in their own interests. Cheap food can be offloaded on certain countries for political ends or to create markets for future commercial sales. This has long been the practise of the United States (US) in the Third World. Such "dumping" can, of course, be simply for reasons of economic convenience. One of the arguments used to sell the GATT Uruguay Round Agreement on Agriculture was that it would substantially reduce the problem of "dumping". It was hoped by various interests, including the New Zealand government, that the new Agreement would moderate the competition between the US and the European Union (EU) and so reduce disruption to international markets. But the last minute deal between the US and the EU in December, 1993, just before the finalisation of the GATT Uruguay Round, considerably watered down the terms of the Round's Agreement on Agriculture to the benefit of big-power politics. This deal enabled the round to then be wrapped up, showing again who really defines and enforces the meaning of "free trade". US "deficiency payments", its main means for dumping food on world markets, and EU compensation payments, had already been allowed under another earlier amendment to the draft GATT Agreement on Agriculture. This amendment was the so-called "Blair House" accord of November, 1992.

As a consequence of the last-minute deal at the end of 1993, the EU will now dump an extra 36 million tons of wheat and 1,250,000 tons of beef abroad over a 6 year period, damaging and destroying local food production wherever it goes. This last-minute deal allowed EU surplus stocks and food aid to be excluded from all calculations meant to implement value and volume reductions of subsidised food exports. As well, the time frame for reduction in volume of exports was altered, increasing the quantities allowed. The Blair House "peace clause" between the Eu and the US was also extended from 6 to 10 years. This peace clause prevents the two parties from challenging in the GATT/WTO each other's domestic support measures like deficiency payments and compensation payments. In a world where transnational corporations rule the commodity markets and agri-business means giant conglomerates like Cargill, Nestle and Unilever benefit at the expense of most of the global population, free trade agreements are rigged in ways that ultimately guarantee the loss of food security for more and more people. Helping reverse this condition should be a development priority into the 21st century for us all. In particular, it would certainly be very useful to focus some concerted strategic attention on the role of the New Zealand government. Since New Zealand continues to play a key part in the free trader Cairns Group within the GATT/WTO system such attention is long overdue.

Source: Pacific World, Nov. 1995.

Home Page Index Go to Top