What position shall the Palestinian Authority take regarding the WTO Agreement on Agriculture?
December 8,
2005
Preamble
A few days
ago, the Minister of National Economy in the Palestinian
Authority announced the news about the WTO decision to accept
Palestine as an observer at the 6th Ministerial
Meeting, which will be held on December 13-18, 2005. Being
accepted as an observer in this multilateral trade event implies
that Palestine is negotiating the WTO observer membership. This
thing was confirmed by the Minister Deputy when he declared that
the MNE is preparing the necessary documents and papers that are
required to join the WTO membership.
At the first
glimpse, a Palestinian citizen feels very proud of the growing
global recognition of Palestine as a nation state. Perhaps,
he/she is right to feel so though substantial elements of
political and territorial sovereignty do not exist and one still
questions whether the Oslo Agreement, the Road Map and the ICJ
advisory opinion on the Wall will realize a Palestinian viable
state with a territorial integrity. We agree with the Minister
that this international platform that oversees the rules of
trade worldwide will expose the Palestinian experts to rich know
how and knowledge of the mechanisms of the multilateral trade
negotiations. Additionally, Palestinian experts will become
familiar with the far reaching implications of the international
trade regimes on Palestine. We join our voice to the Minister’s
wishing that this decision would lead to the integration of the
Palestinian economy into the global and regional economy system.
As such, the Palestinians can strengthen their economic position
and achieve profits through drawing foreign investments and
capitals.
However, we
need to look carefully at the long term consequences of our
looked-forward membership in the WTO on the Palestinian economy
particularly on agriculture. We have to realize that we shall
have to pay a certain price for abiding by the international
obligations and requirements imposed by the free market
mechanisms. The WTO policy of trade liberalization may bring
benefits for a certain number of commodities but at the same
time it might cause great injustices and distortions to some
other commodities particularly agricultural produces. It is
legitimate for us and all of the other actors to pose the
following question to the Palestinian Authority. To what extent
shall the farmers, rural women, and food producers benefit/ lose
out of the WTO membership?
About the
WTO:
The World
Trade Organization (WTO) was created in January 1995 with the
mandate of issuing rules of trade between nations. At its heart
are the WTO agreements, negotiated and signed by the bulk of the
world’s trading nations and ratified in their parliaments¹.
Since
establishment and up till February 2005, 148 member states
joined the WTO in addition to Saudi Arabia which was recently
recognized an official member. All members have joined the
system as a result of negotiation and therefore membership means
a balance of rights and obligations. They enjoy the privileges
that other member-countries give to them and the security that
the trading rules provide. In return, they had to make
commitments to open their markets and to abide by the rules².
It is worth
noting that Israel is a member of the WTO since 21 April, 1995.
As mentioned
above, on December 13-18, 2005, the 6th WTO
Ministerial meeting will be held in Hong Kong for further
discussions on the ongoing multilateral trade negotiations,
which collapsed in the 5th Cancun Ministerial in 2003
because of the disagreement among members regarding the
Agreement on Agriculture (AOA). Since then, the major problem
centered on the blockage that the AOA has created for the
negotiations in other sectors. The WTO Director-General, Pascal
Lamy, said that an intensive consultative process in the past
few days has produced a second in response to a clear message
from ministers that they expect to receive a “workable basis”
for the deliberations in Hong Kong³.
Meanwhile,
pressure and lobby actions persisted against the WTO Agreement
on Agriculture by the civil society organizations, networks and
activists from around the world from developed and developing
countries highlighting the negative and positive implications
that the AOA may have on the developing countries’ economies and
on the poor people in the first place.
AOA Impact
on Palestine:
In the
following few pages we wish to look at some of the implications
of the agricultural trade liberalization in the context of the
WTO Agreement on Agriculture.
The
strategic vision of the Palestinian Authority is to create a
Palestinian economy compatible with the multi-lateral trading
system as announced by the Ministry of National Economy (MNE)
indicates a Palestinian commitment to respond to the standards
and structural adjustments that the WTO and MTS stipulate.
Therefore, if the AOA is ratified in Hong Kong, then Palestine
will abide by it even though we are not yet a WTO member. In a
workshop held by the Economic Committee of the Palestinian
Legislative Council on economic policies, the MNE announced its
willingness to meet the WTO membership requirements.
All these
preparations and announcements take place at the time many
challenges face the Palestinian economy, particularly the
agriculture sector and the agrarian trade.
The
Palestinian economy has suffered, and still suffers, from many
problems and distortions as a result of the systematic policies
that Israeli occupation authorities implemented to restrain and
subjugate the Palestinian economic growth in various sectors to
the sole interests of the Israeli economy. For over three
consecutive decades, Israel undermined the capacity of the
Palestinian people to achieve livelihoods, food security and
economic prosperity. It deepened the imbalance in trade exchange
with the Palestinian territories. The Palestinian economy have
been suffering drastically from the Israel’s dumping of goods
especially agricultural products at prices far below the costs
of production that Palestinian farmers and producers could not
put up with. In the same time, Israel restricted the movement of
man and goods and banned it on roads and tunnels which Israel is
constructing bypassing the Palestinian communities.
The
Palestinian economy is enormously vulnerable because it depends
mainly on the substantial external grants and assistance
reaching to US$532 million in 2001 and $467 million in 2002
on one hand.
The poor performance of the Palestinian Authority and the weak
domestic investment and inadequate budgetary allocations have
increased the vulnerability of our economy particularly the
supply capacity and domestic output in terms of quality and
comparative advantage.
This
de-facto situation leaves the Palestinian territories severely
affected by the imposed policies especially at this stage of
legal vacuum and lacking of national and domestic regulations
that can support domestic production and strengthen local
trading corporations and marketing cooperatives as counterforce
to the powerful foreign companies in particular the Israeli
firms.
In this
context, we are exceptionally concerned with the implications of
the trade liberalization policies on the Palestinian agriculture
which plays a central role in achieving food security and
employment opportunities for the Palestinians. Additionally, it
is considered the most important source of sustainability for
many Palestinian industries such as food, fodders, leather,
shoes, soap, furniture, and cosmetics. Agriculture employs 16%
of the Palestinian workforce and guarantees work for more than
39% of those who work in informal sectors. Moreover, more than
17% of the Palestinian families cultivate their lands and raise
animals for their survival. “The agriculture sector generates
approximately 25% of all Palestinian exports; major agricultural
exports are fruits (72% of the cultivated area), olives and
olive oil, strawberries, vegetables and, more recently, cut
flowers. The Food Processing sector is one of the most rapidly
developing sectors in the Palestinian economy. Local market
share increased from 25% in 1996 to 30% in 1997 – an increase of
20% in market share for local producers”
If the AoA
is ratified and implemented by the WTO member states, the WTO
rules and disciplines will be applied in Palestine, by virtue of
the Paris Protocol signed between the PLO and Israel in 1994.
Then the Palestinian Authority will be forced to formulate its
relevant laws and regulations in conformity with these rules,
not responding to the real interest of the Palestinians.
Consequently, this will undermine the inherent rights of the
Palestinians to formulate their laws without the conditionality
of an international/ foreign regulatory agent. We should be
aware of the consequences of rules that emerge from a situation
of power imbalance. For example, article VIII of the Paris
Protocol set rules regarding agriculture. Both signatory parties
to the agreement have to respect and apply them in their own de
facto contexts. However, these rules make it complicated for the
Palestinian farmers and agribusiness firms to establish ground
for a strong economy because of the agreement obligations pose
technical challenges which do them harm. They are unable to
challenge the powerful agricultural and food production players
in Israel like Agresco, Hazera’, Ein Bar, Hadar and others.
Thus, the Israeli firms’ oligopoly continues in the Palestinian
market. In the meantime, the decrease in the farmed land caused
by the construction of the wall on expropriated Palestinian
fertile land curtails the Palestinian ability to produce
sufficient food. As such, Palestinians’ vulnerability
exacerbates.
This de
facto- situation can be even worse with the implementation of
the AOA across the world. The AOA will facilitate access of
transnational corporations (TNCs) to the Palestinian economy and
increase the global control on agriculture and food production
system. This will result in weakening the capacity of the
Palestinian producers especially vulnerable sector groups such
as farmers and women. And it will endanger the livelihoods of a
majority of the working people who are dependent on agriculture
particularly women who are engaged in subsistence agriculture.
Consequently, it will undermine farmers who are a vital actor in
rural economies as they generate local capital and employment
and ensure food security. It will be difficult for farmers to
stay in business. Farmers will be pushed out of local markets
and off their land. If domestic crop production falls, the
country will depend on the fluctuated prices and availability of
imports.
Allowing the
multinational and transnational food monopolies access to the
Palestinian market may have devastating environmental effect in
terms of biodiversity and the health of the entire population if
some of the genetically modified crops especially staple foods
such as wheat succeed to reach the country without the
supervision of the Palestinian Authority. As a matter of fact,
we don’t know if the food aid that arrives from the States is
genetically modified or not. It is well known that the
Palestinian Authority does not have full sovereignty over
imports, which come through Israeli ports and inlets.
Trade
liberalization and the AOA may lead to disastrous consequences
on Palestinian rural women. Although 60% of the work associated
with cultivation and food production in Palestine is done by
women, the latter are more vulnerable because of lacking the
assets, services and financial support, they have less access to
global market and their weak bargaining power do not enable them
to resist shocks caused by trade liberalization. Women and men
have different capacity to respond to trade policy changes,
therefore shifting from subsistence to non-traditional
agricultures and to production for the external market (export-
oriented crops), which require increasing products standards are
problematic for women whose farms are small and under-resourced.
Consequently, this can undermine household food security and
create more constraints for women. On the long run this
shift will lead to poverty, insecurity, and powerlessness.
Conclusion:
We would
like to wish the Palestinian delegation to the 6th
Ministerial meeting successful deliberations with the various
global trade actors. However, they must keep in mind the losses
that the Palestinian economy including farmers, women and small
producers may suffer from if the Palestinian Authority has to
introduce economic adjustments in response to the requirements
of the multi trade system. The Palestinian Authority must be
aware of the cost of losing the preferential access that
Palestinian exports such as olive oil, vegetables, fruits and
flowers has to the European, US and Arab markets if agricultural
tariffs are deeply cut.
We encourage
the Palestinian Authority to hold talks with the different
stakeholders including civil society organizations, farmer and
women cooperatives, producer unions, and the private sector.
Such broad participation can stop the Palestinian Authority from
taking unilateral decisions that might harm the majority of the
population.
http://www.wto.org/english/thewto_e/whatis_e.htm
http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
http://www.wto.org/english/news_e/news_e.htm
Some of the conditions stipulated by the WTO in terms of
agriculture agreement are: withdraw domestic subsidies, abolish
import controls on agriculture, reduce agriculture tariffs, etc.
International Monetary Fund, West Bank and Gaza: Economic
Performance and Reform under Conflict Conditions, Washington,
D.C., September 15, 2003.
Ministry of
National Economy, http://www.mne.gov.ps/descodefault.aspx.
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