Protectionism and Poverty

For the 900,000 residents of the oilrich monarchy of Qatar—independent from Britain only since 1971— Doha is a thriving capital city, a modern business, education, and media center that serves as the headquarters of the influential Al Jazeera television network.

For Qatar’s sizable population of Catholic guest workers—estimates vary from 60,000 to 100,000, all whom are ministered to by six priests—Doha has become a relative beacon of tolerance in the traditionally Wahhabi Muslim nation. Fifty-six-year-old Emir Sheikh Hamad bin Khalifa al Thani, who overthrew his father in 1995, donated land for the construction of the nation’s fi rst parish.

For international media and the Holy See alike, however, Doha is primarily a reference to a round of trade negotiations begun in 2001, one that held much promise for improving trade opportunities for the world’s poorest farmers until the collapse of the latest session of negotiations this summer.

THE CHURCH AND TRADE

Pope Leo XIII’s landmark 1891 encyclical Rerum Novarum marked the rise of a body of social doctrine that has consistently defended private property and contract rights while subordinating these rights to the universal destination of material goods. Pope Leo observed that contracts freely entered into by employers and workers do not always conform to the demands of justice because of the two parties’ unequal positions. Applying this principle to the realm of trade, Pope Paul VI taught in his 1967 encyclical Populorum Progessio that free trade “certainly can work when both parties are about equal economically; in such cases it stimulates progress and rewards effort…. But the case is quite different when the nations involved are far from equal. Market prices that are freely agreed upon can turn out to be most unfair…. In order that international trade be human and moral, social justice requires that it restore to the participants a certain equality of opportunity.”

With increasing frequency, pontiffs and Holy See diplomats have seen the protectionism of wealthy nations as a major barrier to this equality of opportunity. In his 1987 encyclical Sollicitudo Rei Socialis, Pope John Paul II called for “the reform of the international trade system, which is mortgaged to protectionism and increasing bilateralism…. The international trade system today frequently discriminates against the products of the young industries of the developing countries and discourages the producers of raw materials.”

By granting to poor nations the collective clout they do not have in bilateral or regional trade negotiations with wealthy nations, the formation of the World Trade Organization in 1995 was viewed as an opportunity to redress this situation. Meeting in Qatar’s capital in November 2001, the world’s trade ministers launched the Doha Development Round of trade negotiations. In preparation, the Vatican’s Secretariat of State outlined the Holy See’s position:

The Doha Conference is planned to take place at a moment in which the world is challenged by new tensions. It is thus more urgent than ever to ensure that the outcomes of the conference mark a clear step on the path to a new and more inclusive vision of world trade, in which all can take part effectively on an even footing…. The wealthier countries have been able to maintain strong legal protections precisely in those economic areas in which poor countries could be competitive (e.g., agriculture, textiles, and other laborintensive industries). Both justice and long-term economic effi ciency require that the international trade system restore to all its participants the highest achievable equality of opportunity by eliminating, within the shortest possible period, tradeand production-distorting export subsidies, and providing ample market access on a sure and predictable basis to products in which the poorest countries have comparative advantage…. The developing countries should [also] avoid the temptation of taking a crude protectionist path.

Offering a concrete example of the harmful effects of agricultural subsidies on the world’s poorest nations, Bishop Thomas Wenski of Orlando, chairman of the United States Conference of Catholic Bishops’ Committee on International Justice and Peace—which has consistently supported the Holy See’s position on the issue—told CWR that “some experts estimate that US subsidies to cotton depress the global price of a bale of cotton by 12 percent on average. That may not sound like much when cotton is sold for 72 cents a pound, but for poor farmers in West Africa, a few cents here and there can add up to medicine for a sick family member or school fees to send another child to school. Subsidized cotton from the US can even put them out of business altogether.”

At the conclusion of the meeting in Doha, the world’s trade ministers agreed to a declaration that placed poor nations at the center of the subsequent negotiations.

FROM DOHA TO GENEVA

In 2003, as the world’s trade ministers prepared to meet in Cancun, the Secretariat of State issued a statement that summarized Catholic social doctrine on trade and called for practical implementation of the sentiments manifest at Doha.

Patrick Nicholson, head of communications for Caritas Internationalis—the Vatican-headquartered umbrella organization of 162 national Catholic charitable agencies—attended both the Doha and Cancun meetings and told CWR the latter was “disastrous.” The BBC reported that “the main sticking point—after four days of wrangling—was the refusal of rich countries to cut huge subsidies they give to their farmers.”

Two years later, as the world’s trade ministers prepared to meet again in Hong Kong, a newly elected Pope Benedict emphasized the importance of the Doha Development Round and urged the world’s wealthier nations to make concessions. “In a few days,” he wrote in a message to the gathering, “many of the participants in this conference will be meeting in Hong Kong for negotiations on international commerce, particularly with regard to farm products. The Holy See is confi dent that a sense of responsibility and solidarity with the most disadvantaged will prevail, so that narrow interests and the logic of power will be set aside. It must not be forgotten that the vulnerability of rural areas has signifi cant repercussions on the subsistence of small farmers and their families if they are denied access to the market.”

In his address to the Hong Kong conference, the Holy See’s representative, Archbishop Silvano Tomasi, criticized protectionism, called for a “fair system of trade rules,” and urged wealthy nations to increase development aid to poorer ones.

Lower-level World Trade Organization negotiations took place in Geneva in 2006 but proved unsuccessful. In his January 2007 “state of the world address” to the diplomatic corps, Pope Benedict pleaded:

Once again I invite the leaders of the wealthiest nations to take the necessary steps to ensure that poor countries, which often have a wealth of natural resources, are able to benefi t from the fruits of goods that are rightfully theirs. From this point of view, the delay in implementing the commitments undertaken by the international community during the last few years is another cause of concern. So it is to be hoped that the trade negotiations of the Doha Development Round of the World Trade Organization will be resumed, and that the process of debt cancellation and reduction for the poorest countries will be continued and accelerated.

Talks later that year in Potsdam, reported Reuters, were unsuccessful because wealthier nations were hesitant to reduce agricultural subsidies, while developing nations bristled at demands for deeper cuts to their own trade barriers.

In the meantime, the 110th US Congress spent much of its 2007-2008 session discussing the text of a farm bill that would guide US agricultural policy until 2012. International relief organizations lobbied for the reduction or elimination of US cotton subsidies; an Oxfam America study estimated that “substantial reform of American cotton subsidies…could lead to increased income to feed an additional million children for a year or pay school fees for at least two million children living in extremely poor West African cotton growing households.”

Congress instead voted to enhance US cotton subsidies, and President Bush vetoed the $290 billion farm bill, calling it “inconsistent with our objectives in international trade negotiations.” By margins of 317-109 in the House and 80-14 in the Senate, on June 18 Congress overrode President Bush’s veto. Catholic senators of all stripes, from Senator Joseph Biden (D-DE) to Senator Sam Brownback (R-KS), voted for the override. Only fi ve of out of 26 Catholic senators supported the president’s veto.

GENEVA

With the Bush administration viewed worldwide as more supportive of the Doha Development Round than the next administration will likely be, trade talks that took place in Geneva from July 21-29 took on an added sense of urgency. When talks failed, most blamed a disagreement between the US and India over the extent to which poor nations could protect their farmers from import surges. The EU’s trade commissioner, while praising President Bush’s veto, blamed the American Congress for passing “one of the most reactionary farm bills in the history of the US,” the Financial Times reported.

A day later, Archbishop Tomasi, the Holy See’s representative in Geneva, told Vatican Radio that the failure to reach an agreement would prove particularly harmful to

some of the Western African countries that have not reached an agreement on the question of cotton and the cotton exports they need in order to support the poor farmers who live on a subsistence agriculture. Another case is the exportation of bananas and other tropical fruits; all this now is still back on the negotiating table and it will take, who knows, a year? Two years? But in the meantime it is the poor people who can barely survive on the cultivation of these products who will suffer.

Two days after Archbishop Tomasi’s comments, Catholic News Service—a division of the US Conference of Catholic Bishops—published a story with the remarkable headline, “Collapse of talks seen as step toward better future for poor nations.” Dominican Sister Maria Riley, senior advisor of the Global Women’s Project at the Center of Concern, told CNS, “Poorer countries are exercising their power and saying, ‘No, until we get a better deal.’ Poorer countries like India and China are emerging and flexing their muscles. It’s evening the playing fi eld. It’s a move to a much more diplomatic system.”

Caritas Internationalis’ Patrick Nicholson countered, “I think the key to Sister Maria Riley’s quote was the need to get ‘a better deal.’ Of course, a deal which maintains the status quo or further damages the livelihoods of the poorest would be something we’d lobby against. But the collapse of a deal which could have saved lives and improved the future for millions of poor people if it had delivered its objectives set out in Doha has to be seen as a bad thing for development. That this collapse comes about in part because of the intransigence of some of the most powerful trading blocks is deplorable.”

Acknowledging her disagreements with Archbishop Tomasi’s analysis, Sister Riley told CWR:

I, of course, cannot speak for Archbishop Tomasi, but yes, I do have a different assessment. The editorials from the papers in the US, Europe, and the other industrial countries decried the collapse of the talks and its purported negative impact on the world’s poorest people. I believe that opinion is shaped by a commitment to trade liberalization as the key to poverty reduction. There is little to no evidence of that. Even the World Bank is now disputing that more trade automatically leads to poverty reduction. My assessment arises from listening to the voices of those who have suffered the failures of the current trade model, mostly from people in developing countries, and from economists who have seriously crunched the numbers and are convinced that the current direction of the Doha Round will not lead to development.