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French Version

Exporters losing ground in fight for global share (Daily Star)

Local exporters losing ground in fight for global share
While developed countries protect markets with tariffs, Lebanon is doing little to promote its own industries

Last year, Lebanon’s agricultural and agro-industrial imports were nearly 20 times its exports. Could these figures be turned around once Lebanon joins the World Trade Organization (WTO)? It certainly wouldn’t be easy.

Developing countries, who make up the majority of World Trade Organization members, are still battling with a few rich developed countries who dole out over $300 billion each year in agricultural subsidies to their farmers.

In Lebanon, the priorities are clear. Farmers will not get big subsidies. The country’s major subsidy program, Export Plus, will end in 2004 and it is not yet clear if the government will maintain it if the government joins the WTO, even though it is allowed to keep the subsidies with a few technical changes. “Unfortunately, Lebanon has started to implement laws as if it is already a member of the WTO,” said head of the Lebanese Farm Workers Union, Hassan Abbas. He believes most agricultural exports enter Lebanon at very low tariff rates.

Farmers and industrialists alike say the government should impose tariffs on imports to protect their goods, as production costs in Lebanon are high. “Lebanon suffers from high production costs because of government policies that allow firms to monopolize the import of agricultural equipment, seeds and fertilizers,” said Abbas, referring to government protection of exclusive importers of agricultural equipment. The government introduced a bill last year pledging to stop protecting exclusive importers as of beginning of 2004. “We need to impose tariffs on imports to put our costs on par with imports,” said Abbas. Abbas and many other farmers say they will take to the streets to voice their concerns to protect their livelihood.

“The government is responsible for protecting local production,” said Abbas. Farmers are not the only ones who fear the onset of global trade.

“We are already scared the Greater Arab Free Trade Area (GAFTA) will have a negative impact on our agricultural sectors,” said Samir Shami, an official at the agricultural ministry in charge of WTO talks. “If opening up to a few Arab countries will harm us, how about the rest of the World?” GAFTA will enter into force in 2005.

Neither the government nor the ministry has so far devised a plan to deal with WTO membership and decide what agricultural goods to protect and what policies to adopt to make the sector more competitive.
“We could use the Association Agreement with the European Union (EU) as a starting point because we know what the negative points are,” said Shami, who helped negotiate the agreement with the EU last year. The agreement grants immediate access and tariff reductions to a range of Lebanese agricultural goods, and entered into force this March. “The European agreement has positive points, but we have not been able to increase our exports because we did not conduct a study on what the obstacles to exports are,” said Shami.

The result is a small increase in agricultural exports to the European Union’s 280 million-strong population. The EU gave Lebanon a five-year grace period to reduce its tariffs on European agricultural imports. “All concessions are useless if the grace period does not help us build a more productive sector,” said Ziad Abdel-Samad, head of the Arab Network of Nongovernmental Organizations for Development.

Shami said Lebanon’s agriculture sector has yet to cater to the taste of European markets and it may have trouble exporting to WTO members for that reason too.

The government’s haphazard agricultural policy is also exacerbating farmers’ inability to get rid of surplus production. “The government eliminated sugar subsidies in 2001 without providing an alternative,” said Shami. “Farmers who used to plant beetroot haphazardly switched to potato, increasing our production and compounding the problem of selling surplus potatoes.”

Shami says farmers need more than agreements, they also need the means to export goods to foreign markets. “We need an export-promotion body. We need to study what consumers in the markets we are entering want,” he said.

Beirut 22-09-2003
Dania Saadi
The Daily Star

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