Mandelson's spin puts Doha development round at risk

By Alex Singleton | 7 December 2005

Peter Mandelson says that Gordon Brown is "over the top" and "missing the point" in his demands for free trade in agriculture. According to Mandelson:

"The Chancellor needs to ask himself who he thinks he's going to benefit as a result of that. Because the most poor and needy developing countries - who depend on one or two, or just one commodity for their agricultural exports and trade - depend on the maintenance of tariffs, some degree of protection and managed trade," he said.

"Because if you remove that management then you're also in the process removing the preferential access that those poorer developing countries get to our developed markets, so he needs to ask himself, in calling for that, who he will be benefiting.

"It won't be poorer needy developing countries I can assure you."

Mandelson is portraying his stance as helping the poorer developing countries against the richer developing countries. That's a nice line, but it doesn't add up. The simple truth is that the European Union has failed to offer enough to get a deal in Hong Hong. The US Congress will not agree to a deal brought back by President Bush unless real concessions have been won from the EU (or "blood on the floor" as the Americans call it). If the EU's prevents an agreement in Hong Kong, as appears likely, exactly how is Mandelson acting in the interests of "poorer needy developing countries"?

Oxfam's head of research Duncan Green says Mandelson's subsidy cuts are pure spin anyway, arguing that the EU's apparent subsidy cut wouldn't be effective since this cut was purely on the "bound", not the applied, level. Further, Green argues that if there was a genuine possibility of real cuts occurring, the EU would simply start "box shifting" subsidies into categories exempt from reduction commitments.

In Mandelson's fictional world of "managed trade", everything would no doubt be wonderful. But the reality is that the EU's past approach to such preferential access has been, in a word, cynical. The Everything But Arms Agreement offered tariff free access to some developing countries (on all products but arms... and also bananas, rice and sugar). Yet the countries on the scheme are the ones without the capacity to do much exporting. On the other hand, Ghana and Botswana, which have been doing well, are excluded. Does imposing trade barriers against these countries really count as "trade justice"? Does holding down the developing countries fortunate to have experienced some decent growth - like India and China - count as compassionate? There are, let's face it, 160 million Chinese people living on under $1 a day.

The privileged access offered by the Lomé convention, which gave ACP (Africa, Caribbean and Pacific) countries access to EU markets, saw the beneficiaries' share of the EU market drop from 8% in 1975 to less than 3% by the time of the Cotonou agreement. Mandelson's fondness for such types of managed trade is foolish.

Mandelson's appointment as EU trade commissioner was promising. The anti-capitalist World Development Movement attacked his appointment and his "established reputation as an arch free trader". Sadly, far from being a free trader, the only thing he has been promoting is spin.