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WTO Think-In

During the 1990s India witnessed its fastest rate of economic growth since independence in 1947, but large swaths of the country were left untouched by this transformation. What India has witnessed through free trade rules promoted by the WTO is an all-round lopsidedness in economic policy making, whose defining feature seems to be an exclusion of the majority.

The WTO and corporations would argue that trade liberalization is the key to ending hunger. They assert that the way to achieve food security is not by helping farmers to grow more food for local markets, but rather by boosting international trade. Their argument is based on several assumptions:

Assumption #1 : More trade equals higher national income and food security.

This may sound good in theory, but in fact trade liberalization has resulted in an India where the war on poverty did not fail?but rather has been called off. While agricultural exports from India have increased by more than 70 percent during the last decade, India's food prices have increased by at least 63 percent, putting them beyond the reach of

the poor. The per-capita consumption of cereals has dropped by over 14 grams per person per day since the late 1980s. The intake of lentils, the only protein source for many of the poor, has dropped even more sharply.

Assumption #2 : Trade-induced higher national income eventually trickles down.

In 1994, the unionized sector in India was estimated at about 17 percent of the total workforce (which basically constitutes the middle class, estimated to be between 150 and 200 million). Yet with the recession in the last decade, plant closures, nonpayment of wages, and temporary and permanent layoffs have meant that the lower middle class has not been compensated for inflation. In fact the Indian middle class is being restructured. The lower end is being clipped off, while incomes at the upper end have increased remarkably. The evidence for trickle-down is nonexistent.

In addition, liberalization of trade has resulted in food dumping, which destroys the economic base of poor farmers in food-importing countries. As early as 1965, researchers concluded that dumping of food grains in India in the name of food aid had driven down the price of domestic wheat and curtailed native production.

Those of us who are concerned about growing hunger are still awaiting the implementation of the 1948 Universal Declaration of Human Rights, which guarantees everyone an adequate standard of living, including the right to be able to feed oneself. It is essential that all trade agreements be subordinate to human rights and national constitutions. There must be clear and binding language that gives legal precedence over trade agreements to each country's domestic constitutions, as well as to international conventions and treaties on human rights and the environment.