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August 12, 2008

Local food security concerns explain Chana's tough stance at failed WTO talks

China's tough stance at the 'Doha' trade talks in Geneva has less to do with political posturing than with the country's long-standing obsession with food security, experts have suggested.

Jettisoning a long period of silence at the Doha rounds, China joined hands with developing nations and let disagreement over agricultural tariffs derail the dialogue.

"Recent food riots in several countries have made Chinese leaders realise even more than before that food security must be resolved internally," Meng Zhou, a Beijing-based independent researcher suggested in a column in the Xinjingbao newspaper. "If food supply is dependent on imports then you can never guarantee social stability and even national sovereignty can be jeopardised. It serves to explain the much harder line taken by China at the trade negotiations this time."

Chen Taifeng, China studies scholar at Qinghua University, concurred. "Skyrocketing food prices have made developing countries very nervous," he said. "Before it opens its agricultural markets entirely, China needs guarantees that it can rely on safeguard mechanisms to protect its own farm produce.''

The Geneva talks broke down in late July after member countries could not agree on a proposal to allow developing nations to use special safeguard tariffs to shield their farmers from floods of cheap imports.

With its huge exports, China has benefited generously from liberalised trade, which has delivered markets for its cheap manufactured goods. At previous talks of the so-called Doha development round Beijing had chosen to remain a low-profile participant if not a silent observer of the bargaining between rich nations and the developing world.

But in a sign of deep anxiety over food security, this time around China shared India’s opposition to a Doha deal that New Delhi had argued would hurt its millions of poor farmers. The move comes amid mounting challenges for Beijing to feed its 1.3 billion people against shrinking arable land and water shortage.

Wealthy nations led by the United States have blamed India and China for not ceding enough ground at the trade liberalisation talks and thus blocking solutions to recent food shortages and a continuing spiral of soaring food prices. The U.S. trade representative, Susan Schwab, said it was "unconscionable" that developing countries were clinging to such protectionist attitudes.

"In the face of the food price crisis, it is ironic that the debate came down to how much and how fast nations could raise their barriers to imports of food," she was quoted as saying.

But China has pointed a finger at developed countries for killing the talks, saying it is unfairly maligned by the West. Commerce minister Chen Deming told the official newspaper of the communist party, the People’s Daily, that China should not be blamed for the failure of the WTO talks.

"We are a new member of the WTO, and must still enjoy treatment as a new member," he said. "The collapse of the talks has nothing to do with China". Chen, who represented China at the Geneva talks, described the failure of the negotiations as a "heavy blow." In his initial statements after the foundering of the talks, Chen had blamed the U.S. saying that "after satisfying its own demands the U.S. had demanded from the developing world a price as high as heaven."

The U.S. had objected to the details of a "special safeguard mechanism", designed to protect farmers in the developing world against temporary surges in cut-price imports of cotton, rice and sugar.

China has long insisted on protecting the livelihoods of its subsistence farmers. The country has between 750 and 800 million farmers -- nearly double the entire population of the European Union. The majority survive on two dollars a day.

"It is unfair to pitch wealthy farm owners of the West, regularly subsidized by their countries’ finance ministries, against the millions of unprotected small-size farmers of China," argued Meng Zhou. "Farmers and agriculture are still the pillars of many developing countries’ economies. In the West though, peasants represent only a fraction of the population and agriculture accounts for only a small portion of the rich nations’ GDPs".

Editorials in some Chinese newspapers have accused the U.S. of "hypocritical compromises" negotiated at the Doha round tables. The U.S. agreed to cap its trade-distorting farm subsidies at 14.5 billion dollars but an editorial in the "21st Century Business Herald" said the compromise was "meaningless."

"As the world’s most efficient grain producer whose exports account for 40 percent of the global grain exports, the U.S. is the biggest beneficiary of soaring food prices," the paper said. "The U.S. has calculated rightly that high grain prices would offset the decrease in its agricultural subsides. In fact, last year the U.S. spent only 9 billion (dollars) on such subsides".

Chinese academics predict high food prices would continue for at least another 10 years. Last month the State Council, or China’s cabinet, approved a mid- and long-term grain security plan that aims for the country to be 95 percent self-sufficient in grain over the next 12 years.

The plan outlines a state goal of reaching annual grain output above 500 million tonnes by 2010, and increasing production to more than 540 million tonnes a year by 2020.

After years of debate, Beijing gave the green light, last month, to a controversial plan to cultivate high-yield and pest-resistant genetically modified (GM) crops designed to boost the country’s agricultural productivity.

"Departments must fully understand the importance and urgency of this significant project and waste no time to implement it," said a circular posted on the website of the State Council.

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