"The Poor Can Buy Barbie Dolls"

When thousands of our farmers are committing suicide, when millions of ourwomen and children are facing hunger and starvation, a leading economist said,"The poor can buy Barbie dolls". This statement was made when I was on a T.V.panel with him to discuss and debate the impact of the removal of importrestrictions (Quantitative Restrictions or QRs)

We were discussing the disastrous impacts of free flow of products intoIndian markets on small scale producers and farmers. A video clip had been shownof the 100,000 lock makers in Aligarh whose units were being shut down as cheaplocks from China were flooding our markets. Import of agricultural commoditieslike edible oils have already destabilised the agricultural economy and with 147more agricultural items removed from the restricted list, other sectors will behit.

The removal of QRs has been celebrated by the media as a consumers bonanza.Sample some of the headlines - "Johnie Walker, fine wines in 2 weeks", "Theconsumer bonanza", "The Indian consumer has finally been crowned king" -"The brands India will be wearing -- Overcoats: Dolce & Gabbana, Scarves:Hermes, Belts: Calvin Klein, Skirts: Margaretha Ley Escada, Pullovers: Chloe,Diamond Necklaces: Van Clef and Arpels".

The diamond laden lady is not the typical Indian consumer. Most Indianconsumers are already consuming less than their basic needs required, aslivelihoods are destroyed, incomes disappear and purchasing power evaporates.Cereal consumption has declined by 12% in rural India during a decade ofreforms. As imports further destroy livelihoods, especially of the poor, theirconsumption levels will further fall. No one is addressing the decliningconsumption of the poor as imported goods drive out domestic production andlivelihoods. And when the issue of survival of the poor was raised, our worthyeconomist stated seriously, "the poor can buy Barbie Dolls".

It is this mindset of elite India blind to the growing hunger and destitutionof the people of this country, but enthralled by the junk that can now beimported, which is fooling the country about the reason and impact of liftingQRs. Among the unrestricted imports are carcasses of sheep and goats, offal(animal waste parts) of chicken, sheep, turkeys, ducks, geese, rabbits, hares,swine.

We have opened up our markets to meat imports when Europe is in crisisbecause of Mad Cow Disease and the Foot and Mouth Disease. More than 500,000animals are being killed and burned.

The U.S. Centre for Disease and Prevention (CDC) in Atlanta has calculatedthat nearly 81 million cases of food-borne illnesses occurs in the US everyyear. Deaths from food poisoning have more than quadrupled due to deregulation,rising from 2000 in 1984 to 9,000 in 1994. Most of these infections are causedby factory-farmed meat. CDC estimates there are nearly 20,000 cases of poisoningby the mutant E. Coli 0157.H7. This mutant bacterium was unknown before 1982 andcontamination of meat by E. Coli 0157.H7 results from sloppy high-speedslaughter and processing industry.

The so called Hazard Analysis Critical points (HACCP) is in reality a TrojanHorse for deregulation which has resulted in removing 1400 food inspectors,leaving food safety in the hands of the factory-farming industry which producesfood hazards in its rush to slaughter more animals faster. A few high-speedslaughter operations have driven out thousands of small packers out of business.

The US slaughters 93 million pigs, thirty seven million cattle, two millioncalves, six million horses, goats and sheep and eight billion chickens andturkeys. Now the giant meat industry of US, including the disreputed meat giantTyson, wants to dump contaminated meat produced through violent and cruelmethods on India, a predominately vegetarian society.

Fewer employees were slaughtering more animals and the worker turnover ratein high-speed plants is nearly 100 per cent per year according to the UnitedFood and Commercial International Union. Workers in America’s slaughterhousescall working in the meat industry worse than slavery.

Factory farms and slaughter houses are prisons for animals and humans.Article XX of the GATT allows the exemption of WTO rules relating to prisonlabour (Article XX (e)). On grounds related to products of prison labour theremoval of restrictions on imports from the US should be immediately stopped.

The Government’s announcement that the Prevention of Food Adulteration Actwill be used to ensure "Biosecurity" under free import conditions is farfrom reassuring. PFA is an outmoded food law, designed before the age of MadCows, prions and GMOs. The Government has so far failed to pass a law drafted bythe Social Welfare Ministry for labelling of vegetarian and non-vegetariancontent in food items. It has not shown the will to protect public health or thecitizens' right to know. It cannot guarantee food safety in the face of importsthrough the instruments it has offered. The "Licence Raj" has not ended. Ourpublic health is being put in the hands of corrupt inspectors who will givelicenses for the import of the most hazardous food stuffs without blinking aneyelid. Art XX allows for bans on imports and this is the route that should beused for agricultural products that carry risks for animal or human health.

The Government has also announced that it will import sensitive items throughState Trading Agencies. However, soya oil and palm oil which are alreadyflooding our markets are not on the list of canalised imports. Further, while thebound rate for tariffs on edible oil imports is 300%, the government has keptthe tariff for soya oil abnormally low at 45%. This benefits not the Indian farmer, but the seedgiant Monsanto and the grain giant Cargill. 

Theannouncement of a "war room" might reassure some people. But suchmilitaristic metaphors could only emerge from thinking which sees economics andtrade as war. Tragically, the EXIM policy has declared a war against thehardworking people of India, but the "war room" will fail to see the victimsof this war, as millions are pushed into hunger and destitution. The problemwith the free trade logic is that it puts trade above people's lives andshifts government focus from the welfare of people to the promotion of exportsand imports. The EXIM policy makes this singular focus that neglects people butprotects trade very evident. The economy of a billion peopleis being destroyed with a pathetic target exports by 2005, accounting for 1% ofglobal trade.

In any case, the rush to remove QRs is not justified. India’s tradingpartners had accepted the deadline of 2003. Only the U.S. had called for removalof QRs by 2001. In Oct 1997, the United States initiated action at the WTODispute Settlement Body ("DSB") to establish a Panel to examine thisdispute. In its request, the United States considered that quantitativerestrictions maintained by India including, but not limited to, the more than2,700 agricultural and industrial product tariff lines notified to the WTO inAnnex I, Part B of WT/BOP/N/24 dated 22 May 1997, appeared to be inconsistentwith India’s obligations under Articles XI:1 and XVIII:11 of GATT 1994 andArticle 4.2 of the Agreement on Agriculture. Furthermore, its contention wasthat the import licensing procedures and practices of the Government of Indiawere inconsistent with fundamental WTO requirements as provided in Article XIIIof GATT 1994 and Article 3 of the Agreement of Import Licensing Procedures.

The DSB established the Panel on 18 November, 1997, with the following termsof reference:

To examine in light of the relevant provisions of the covered agreementscited by the United States in WT/DS90/8, the matter referred to the DSB by theUnited States in the document and to make such findings as will assist the DSBin making the recommendations or in giving the rulings provided for in thoseagreements.

In other words, the US demanded a much shorter phase-out period for theremoval of Quantitative Restrictions.

In April 1999, the WTO Panel ruled in favour of the US. The Panel chose toonly take in to account the IMF position that India’s balance-of-paymentssituation was not such as to allow maintenance of measures such as QRs for BOPpurposes and therefore India was not justified in maintaining its existingmeasures on the pretext of BOP problems.

The Government of India at this stage did not raise any arguments by way ofexerting its rights as a founding member of the WTO, premised on the probablerecurrence of BOP problems due to increase in imports.

The Panel asked the parties to negotiate a new implementation/phase-outperiod. The Panel also recommended that DSB ask India to bring the measures atissue into conformity with its obligations under the WTO Agreement.

In May 1999, India notified the DSB of its decision to appeal against certainissues of law in the Panel Report and filed a notice of Appeal with the WTOAppellate Body.

In August 1999, the Appellate Body rejected India’s appeal. Among otherthings the Appellate Body upheld the Panel’s finding that it was competent toreview the justification of India’s balance-of-payments restrictions underArticle XVIII:B of the GATT 1994.

In September 1999, the Indian Government indicated to the US that it requiredmore than the normal 15-month period to remove QRs. However, the latter did notagree to this time schedule, though all other trading partners did.

In December 1999, by the exchange of letters between two trade bureaucrats,Susan Esserman of the US Commerce Department and N.N. Khanna of the IndianMinistry of Commerce, an agreement between the two governments was executed tothe effect that:

(a) on or before April 1, 2000 India may notify to the United States a listing of up to but no more than 715 items of the 1,429 items on which India currently maintains quantitative restrictions, and with respect to the up-to-715 items so notified, the reasonable period of time shall expire on April 1, 2001 and

(b) with respect in all the other items, the reasonable period of time shall expire on April 1, 2000.

This agreement in effect drastically shortened the phase-out period to 2001by which date all QRs on 1,429 items would be lifted. This is despite the factthat the European Union and other countries had agreed to a phasing out ofimport restrictions by March 2003. But the Indian Government, bowing to pressurefrom the US, advanced the lifting of QRs by three years.

However, the U.S. is itself violating international obligations such asbacking off the Kyoto Protocol to regulate CO₂ emissions though it is thebiggest polluter. Responsibility is a two-way lane. And the lack of responsibilitybeing shown by the U.S. in respecting international commitments should have beenused by India to gain space in setting policy that ensures her people’ssurvival. In any case, India is arguing for maintaining QRs in the review of theAgreement on Agriculture. It should have maintained QRs as a right.

India is also arguing for a livelihood and food security exemption from therules of the Agreement on Agriculture. Instead of defending the livelihoods andfood security of the country, the Commerce Minister has threatened the survivalof the Indian people, especially the farmers twice over - firstly, throughremoving restrictions on imports and secondly by announcing an agribusinesscentered export oriented policy for agriculture. This "farm-to-port" exportpolicy is a recipe for corporatisation of Indian agriculture. It will undermineour food security. Farmers loose markets by imports of artificially cheapproducts due to removal of QRs. They will loose their land, their water, theirhomes as corporations take over Indian agriculture to grow flowers andvegetables and fruits and shrimps for exports, with state support.

The Commerce Minister has through his EXIM policy committed India’smarkets, soil and water as public subsidies to global corporations.

Barbie dolls might flood super market shelves soon - but how will the poor befed if they have no livelihoods? How will farmers survive when both markets andresources have been snatched away from them?