Trade advocacy led to sugar victory

Bil­lion-dol­lar gains from advo­ca­cy on the trade rules affect­ing cot­ton was the sub­ject of my post yes­ter­day. A sim­i­lar sto­ry emerges from the cam­paign by Aus­tralia, Brazil, Thai­land and oth­er sug­ar pro­duc­ers to put an end to EC export sub­si­dies on sug­ar. Not all advo­ca­cy cam­paigns lead to such­large wins on a glob­al scale … or even to suc­cess. But there is much more going on than you might real­ize The Com­mis­sion’s “recommendations”:, after los­ing an appeal in WTO, to cut the sub­si­dies fur­ther and faster (by 39% by 2009) than planned poten­tial­ly adds bil­lions to the export earn­ings of busi­ness­es in those coun­tries that have car­ried on the fight since the late 1970s, when Aus­tralia and Brazil first chal­lenged the EC sug­ar regime. Esti­mates of the gains vary: Oxfam “claims”: that the export sub­si­dies cost Brazil, India, South Africa and Thai­land about $800 mil­lion in lost exports in 2002. In Aus­trali­a’s case, the “indus­try estimates”: that every quar­ter of a cent added to the world price adds $30 mil­lion to export rev­enues. So if the world price rose by 10% that’s $120 mil­lion gain to Aus­tralia every year. This is a mod­est expec­ta­tion giv­en that the World Bank “estimates”: that full reform of the mar­kets would see prices rise by 40 per­cent from the depressed 2004 lev­els. As is the case with “cotton”:, the returns from this decades-long advo­ca­cy campaign—that isn’t over yet—are so big that the ROI for the farm­ers in the “Glob­al Sug­ar Alliance”:, even con­sid­er­ing the costs of a such a long cam­paign, must be stratos­pher­ic: cer­tain­ly much high­er than the return on plant­i­ng sug­ar. Of course, not all trade advo­ca­cy cam­paigns in WTO are like­ly to offer equal rewards: these two vic­to­ries unwind absurd­ly large resource mis­al­lo­ca­tions. Some advo­ca­cy cam­paigns that make it to the table in WTO are wres­tled to a stand­still on behalf of oppos­ing com­mer­cial inter­ests with no obvi­ous win­ners. The terms of the 2004 WTO “agreement”: to open up export sup­ply of ‘com­pul­so­ri­ly licensed’ patent­ed med­i­cines are tied up in knots of con­di­tions and cod­i­cils designed to make com­mer­cial exploita­tion dif­fi­cult (the WTO set up a spe­cial web­site for noti­fi­ca­tions of such licens­es: but none has been report­ed). The Boe­ing-Air­bus dis­pute seems head­ed for a sim­i­lar fate, offer­ing nei­ther side a clear return from expen­sive dis­pu­ta­tion. But rich rewards are plau­si­ble in many small­er, hard­ly-noticed cam­paigns of busi­ness groups in devel­op­ing coun­tries over the past decade to fund and to fight cas­es on prej­u­di­cial anti-dump­ing or safe­guard actions or to access tar­iff pref­er­ences on an equi­table basis or to cut the costs of the arbi­trary appli­ca­tion of stan­dards. How many cam­paigns? Just look “here”: at the WTO’s top­ic index of dis­putes since 1995. All—except for a hand­ful about reg­u­la­to­ry details— rep­re­sent the defense of some com­mer­cial inter­est or oth­er; either of pro­duc­ers or con­sumers. All of the rest are the cul­mi­na­tion of a cam­paign by some pri­vate inter­est to secure gov­ern­ment sup­port for a chal­lenge. That’s the catch, of course. There is no pri­vate access to deci­sion-mak­ing in WTO. Although it’s a safe bet that there a com­mer­cial inter­est behind every trade mea­sure and behind every effort in WTO nego­ti­a­tions or dis­putes to change some aspect of the sys­tem, busi­ness advo­cates must first find effec­tive sup­port from gov­ern­ments. The incen­tive to do so is that the oppor­tu­ni­ty for sub­stan­tial returns to advo­ca­cy by pri­vate inter­ests in the glob­al trad­ing sys­tem is far from exhaust­ed. There is a strong prospect of even more aggres­sive action giv­en the scale of the ben­e­fits now being won and the com­mer­cial inter­ests of law firms and oth­ers who ser­vice the advo­ca­cy process. Also, con­trary to its rep­u­ta­tion, the WTO pro­vides a prospec­tive envi­ron­ment for advo­ca­cy; it is a mine of infor­ma­tion on the trade poli­cies and mea­sures of Mem­ber gov­ern­ments and sur­pris­ing­ly will­ing to coop­er­ate with non-gov­ern­ment advo­cates through an out­reach pro­gram that also runs an ‘in-reach’ ser­vice to Mem­bers’ del­e­ga­tions. My e‑book, Glob­al Trade Advo­cate, which you can sam­ple or buy here “on my site”:, con­tains more details, more exam­ples from around the world, and more in-depth advice on how you can estab­lish and man­age an advo­ca­cy cam­paign to get a bet­ter deal from the glob­al trad­ing sys­tem for your interests.

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