What was the historical cost to the countries like ours of being involved in 'free trade' as defined and implemented by the colonizing powers? I am here not talking of the well known costs by way of the genocide and decimation of entire peoples, their numbers running into millions, involved in colonial conquests. I would like to focus on the mechanisms of free trade in more recent times.
 
There have been two very important types of cost historically, which have again come to the forefront in the present era of loan-conditional liberalization and WTO discipline : the first is the re-emergence of an inverse relation between agricultural exports and domestic food availability, and the second is de-industrialisation. To understand the first type of cost we have to conceptualise tropical land as akin to a non-renewable resource. Usually it is the fossil fuels alone and the minerals which are thought of as being non-renewable. But we have to recognise that land is not homogeneous in productive capacity, and that the earth's bio-diversity and botanic diversity is concentrated in the tropical lands. It is clear that there is a limited supply of these lands, for unlike in the 19^th century when cultivable wastes existed, by now there are no open frontiers, the limits of physical expansion have been reached and only the vast tropical rainforests remain whose ongoing destruction carries serious adverse  environmental implications. In big countries like India and China total cultivated area is no longer expanding, in fact it is shrinking. Our land now is virtually like a non-renewable resource. It is not completely non-renewable: sown area can still be expanded if enough investment is pumped in, especially into irrigation. But the regime of neo-liberalism is precisely one of macroeconomic contraction, 'withdrawal of the state' and falling productive investment, and in this context tropical land must be conceptualized as non-renewable.
 
But the global asymmetry of demand, established over two centuries ago, continues: the world's rich countries which account for 75% of global income although they have hardly 16% of world population [7], cannot produce in their own countries anything but a small fraction of the highly diversified consumption basket on which their populations have come to depend, and  they want access to our more productive, bio-diverse but limited lands on the one hand, and on the other hand access to our markets for the few primary goods they can succeed in producing,(notably foodgrains), and for their manufactures. Their high living standards are crucially dependent on the physical availability of our products. A typical Northern supermarket in W. Europe or USA carries on average 12,000 items of food alone in raw and processed form [8] and at least 60-70 percent of the items have a wholly or partly tropical to subtropical import content. If these goods  were to disappear from the supermarket shelves the standard of life of Northern populations would plunge to a near- medieval level, that prevalent three hundred years ago.
 
The solution developed earlier under colonial and imperial systems where there was direct political control, was simple: first, protect metropolitan industry through trade barriers to the inflow of cheaper manufactures based on ample supply of raw materials, from countries like ours;  second, promote in the colonies the export of the wage-goods and raw materials required for running metropolitan industries; third, keep the colonial markets completely open to the flooding in of manufactures from the metropolis, and fourth, monopolize invisible incomes (at that time, from shipping and financial services). This remains the basic agenda of the advanced imperialist countries today although the economic mechanism has changed to debt-conditional policies and a trade discipline operating through international organizations, (while invisible incomes have changed to modern forms of financial and communication services, the electronic entertainment industry, and returns to research in pirated bio-resources). Advanced countries continue to protect their own producers, continue to demand that we export tropical primary products or at most simple labour-intensive manufactures and continue to seek market access for their manufactures, their surplus temperate crops and for invisible services.
 
As regards the costs of these policies, in particular the second one, to the subjugated nations then (and the developing nations today), the single most important in my view, is the fact that nutrition levels of our people were lowered and in extreme cases mass starvation resulted. An inverse relation necessarily developed between primary product exports and food consumption of the colonized populations. While demanding an increasing supply of the products of tropical lands, the foreign rulers did not put in adequate investment to raise productivity, hence increasing primary exports could only take place by diverting land and resources away from producing the necessary food consumption of the people. In every single case of export of primary products to advanced countries the per head food consumption of local producers fell. Considering Ireland as a colony of Britain we find that the Irish tenants, who were "pauperized beyond belief" (Hobsbawm in Industry and Empire 1969), were obliged to export wheat and livestock products to Britain to pay high rents to their English landlords, while they themselves had to live on potatoes; in the great 1847 famine one million Irish died out of the 6 million total population i.e one sixth of the population perished, and still the primary exports  continued. [9] This is undoubtedly the greatest recorded famine in history, more severe in its impact on a given population, than the Bengal famine of 1770 which had carried away one-tenth of the population. Looking at the data for Java under the Netherlands we find that per capita foodgrains output fell by about 20% from 199 kg. annually to only 162kg. between 1885 and 1940, while sugarcane and rubber production rose 762% and 332% respectively [10], and on a per capita basis rose by 380% and 166%. The volume of exports rose 3.7 times in the half century after 1890. (See Tables 1a and 1b) Colonised Korea under Japan was forced to export foograins, viz. rice and by the second war over half of its output was going to Japan, while Koreans were forced to eat millets and suffered a nearly one-fifth decline in per capita calorie intake over a mere quarter century.[11] Colonised India had a growth rate of exportable commercial crops  which was over ten times higher than the growth rate of foodgrains, indeed the foodgrains output almost stagnated. The per capita food production fell by nearly 29% in the inter-war period in British India, and by as much as 38% in Eastern India (termed 'Greater Bengal in the data source); since there were little or no net imports the availability declined also to the same degree. I have argued in a critique of Amartya  Sen's theory, that it was the increased vulnerability resulting from lowered nutrition, as a direct result secularly falling per capita food output arising in turn from colonial export policy (a fact totally ignored by him), which accounts for the extent of the toll in the Bengal famine of 1943, though the proximate cause of the toll itself was wartime deficit financing.[12]
Table 1a >> Table 1b >>
 
Nothing can be more immoral than the fact that the North sustained its own high consumption and low-inflation growth literally at the expense of squeezing the living standards of millions of subjugated people, to the extent of precipitating mass famine in many cases. [13] I may add that all this was not possible without the willing collaboration of comprador elements within the third world populations, those who identified their interests with the powerful rulers and in the way they lived their lives, betrayed their own countrymen. That element too remains unchanged today: power will always attract the opportunists and the servile persons who have no scruples in identifying themselves with what they consider to be the 'winning side' and by their servility hope to gain, and do indeed gain very materially.  In the charge of intellectual servility I would include all those globalized Indian academics today many of whom are intelligent enough to know very well what the real economic mechanisms are, but who find it impolitic to ever mention it in their  writings, because their objective is to be acceptable to and to be lionized by the powerful North-dominated academic establishment.
 
I would argue that the costs of the 'free trade' instituted under loan conditional trade liberalisation in India from 1991 and accelerated after the signing of GATT 94, are exactly the same as in colonial times. They are the same because the agenda of imperialism is the same although conditions are so different. Plus ca change, plus c'est la meme chose as the French say: the more things change the more they remain the same. For, the dependence of Northern populations on Southern bio-diversity has increased, not declined, despite sporadic attempts to find laboratory substitutes for natural tropical products; hence the present WTO regime insists on the prising open of third world land in order to alter cropping patterns and increase exports of those primary products which advanced countries cannot produce themselves, [14] and prise open third world markets to free imports of the wheat and processed dairy products of which they have a  glut.
 
The second great historical cost of 'free trade' to our economies has been de-industrialization. Forcibly open and trade liberalized economies like ours and other subjugated countries too, underwent a destruction of their traditional manufactures and the occupational structure moved towards higher dependence on the primary and tertiary sectors. This resulted from one-way free trade, viz. a situation where the North protected its own industry by various means and opened up the subjugated markets of the third world countries. To use a memorable phrase that Keynes had once used, describing a situation where a country insists on exporting to another the good that the second country also produces, thereby the North 'exported its unemployment' to other countries. [15] That agenda too remains unchanged : market access is a prime objective of the earlier and ongoing loan conditional liberalization and of the present WTO regime which is its continuation. Although on paper the provisions on market access are to be applicable to all countries, in practice steps are taken to ensure differential market access, viz, opening the advanced country door a very little to third world exports of manufactures but forcing open the third worlds' doors wide to unrestricted inflow of advanced country  manufactures. This has already resulted in substantial de-industrialization in many Latin American and SSA countries in the last two decades and the process is now underway in India as well.
 
Let me, to begin with, take up the first great cost of present-day one-way free trade namely, falling food output per head and falling nutrition levels in developing countries, and then go on to discuss de-industrialization briefly. As we know agriculture was included for the first time in the Uruguay Round of negotiations leading up to the signing of GATT 1994. The  trade-related intellectual property rights and trade-related investment measures also carry important implications for primary sector trade. What was the basic objective of including agriculture whereas it had never been included earlier?
 
The reason does not have to do only with intra-Northern trade, despite the wrangles between USA and the European Union over subsidized output, which have been much publicized. All Northern countries made sure that they did not have to reduce subsidies at all (by using a trick brought out by Table 2, which we discuss a little later). I believe that the most important impetus lay in two developments: first, the loss of export markets for foodgrains by the advanced countries of N.America and W.Europe owing to the economic collapse of Russia and Ukraine as well as Eastern Europe, and hence their desperate desire to seize new Asian markets; and second, the rapid growth of monopoly in the already concentrated structure of the big transnational agri-business  corporations. The first, the loss of E European and Soviet markets in the early nineties was very substantial, amounting to around 28 m.t of grain exports in the early nineties, and gave an urgency to the targeting of Asian markets - first the S E Asian markets and now India. For this it was necessary for the advanced countries that all independent systems of domestic food grains procurement and maintenance of buffer stocks by third world governments should be dismantled and they should turn into food importers from the global market. The Philippines provides a case study of the success of this strategy: its public procurement and distribution system was wound down in the early nineties under loan-conditional pressure and it turned into a substantial net grain importer.
Table 2 >>
 
Some 85% of the global trade in foodgrains was accounted for by the advanced countries organised in the OECD on the eve of GATT 94. Both the specific provisions of loan-conditional liberalisation, and the provisions relating to agriculture in GATT 94, have been tailor made and designed for this purpose: it attacks input subsidies, attacks subsidies for stock holding and general subsidies to the consumer.[16]  The small print of the Agreement has been written in such a way (allowing cash to be paid to farmers under 'green box' and other provisions) and such prior measures have been taken that advanced country subsidies have remained almost unchanged while third world subsidies have declined.
 
The second development was the growth of monopoly through mergers and take-overs in the already oligopolistic sphere of global agro-business corporations, in the course of the late seventies and the decade of the eighties. These are now giant vertically integrated companies each with a wide range of interests ranging from pesticides, fertilisers, genetically engineered seeds, farm machinery, plantation production for export, exportable crops acquisition through contracts, and operation of agro-processing and livestock industries. The existing international agreements on plant-breeders' rights have been found to be inadequate by these corporations, which have their eye on the immense gene pool which tropical bio-diversity represents, which though located in developing countries, they see as providing the free raw material  for their laboratory research leading to highly profitable potential applications in the sphere not only of agriculture and pest control but also medicines, cosmetics, health foods and so on. Companies like Monsanto took a very active part in mobilising other TNC executives, formulating the TRIPS provisions and lobbying the US government to incorporate the precise provisions they wanted. The provisions of the TRIPS agreement in relation to bio-resources are tailor made and designed to introduce into new regions and strengthen elsewhere the monopoly control of these giant TNCs, over drugs, chemicals, and bio-technology comprising new varieties of plants including genetically modified varieties,and over genetically modified organisms in general. [17]
 
The traditional rights of local plant breeders are not the issue at all; modification of the existing patent laws are sought solely to extend the period of monopoly that a patent confers, and to restrict the ease with which others can at present reproduce the patented product. Given that the entire process of research by the TNC's is based upon the pirated genetic materials from third world countries over which then a monopoly is instituted, and is to be enforced by international policing organisations like the WTO which is answerable to no general body of nations, the  authoritarian implications are clear. These are dangerous developments for the third world countries given the background of the already existing trend of falling per head food output in such a large part of it owing to an enormous primary export thrust under loan-conditional trade liberalisation.
 
The Latin American and Sub-Saharan African countries had been implementing structural adjustment programmes and trade liberalisation for a decade and half before India did and the results have been plain to see. Mexico which had pioneered high-yielding wheat varieties turned into a net foodgrains importer by the eighties and has been experiencing falling per head output of maize and beans at the same time as it has turned into a tropical agricultural annexe for supplying beef products and fruits and vegetables to supermarkets in the USA. The effects of cattle-raising for supplying the US market has been devastating for the Central American countries like El Salvador and Honduras.
 
The Sub-Saharan African countries engaged in a primary exports thrust in the eighties very successfully - the exports have been growing at minimum rates of 6 to 14 percent annually- but at what cost? The per head foodgrains output has fallen all through the eighties and continues to stagnate in the nineties. In 1992 I carried out a fairly painstaking calculation using the UN data for all 46 countries of SSA for cereals plus tubers and plantains which showed that in the six most populous countries, accounting for over three-fifths of the population, cereals output had fallen by 33 percent in the second half of the 80's and the all-food output had fallen by one-fifth. For the entire region cereals has declined by 16.6 percent and for all food  it has declined by nearly 12 percent. Since the initial per head cereal all foodgrains output was already low by Indian standards - only 156 kg.gross annually per head - the level after falling, was only 137 kg. by 1990 and the situation has not improved since. It is no wonder that large area of SSA are on the verge of famine.
 
It is often argued that the inverse relation does not matter for exchange earnings from primary exports can be used to import food. But whether this is so, depends on the terms of trade. The absolute unit dollar price of primary exports declined by nearly half in the 80's alone owing to the fact that dozens of  developing countries were made to competitively devalue and deflate their economies while engaging in a competitive export thrust, under loan-conditional programmes overseen by the Fund-Bank. After a brief two years of improvement the decline continued in the nineties at a slower pace.
 
A subsequent calculation of availability by adding on food aid and imports shows that it was insufficient to maintain nutrition levels, for calorie intake per head has declined for four out of six most populous countries and is stagnant for one, (showing a rise only for Nigeria which is exceptional in being an oil exporter. See Table 3). These four are precisely the countries which had gone in for a successful export thrust under intensive adjustment programmes. Their primary exports have been growing at between 8 to 14 percent annually (the inverse relation between their primary exports and domestic food production was pointed out in an earlier article of mine). [18] Since the unit dollar value of their exports have been declining however their foreign exchange earnings hardly rose at all. It is little wonder that it was some of the African countries who, given their long and bitter experience of liberalization, were at the forefront of the anger against the WTO  regime at the Seattle meet.
Table 3 >>

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