Are the WTO Talks in Trouble? Don't Bet on it

August 24, 2005 10:05 | by Roelien Knottnerus

GATS platform activist looks at the state of play in Geneva and says "Stop the WTO corporate agenda before Hong Kong!"

At the end of July, the WTO General Council convened amidst a sense of urgency that significant progress was needed in the trade liberalisation negotiations to secure a successful conclusion of the Doha Round in Hong Kong in December.



However, concerns among civil society organisations that the July Council of the WTO would see a completion of the July Approximations and bring the Doha Development Round closer to a devastating conclusion failed to materialise. The negotiations in the critical areas of agriculture, non-agricultural market access (NAMA) and services (GATS) had apparently deadlocked once again. Or had they? Civil society campaigners monitoring the WTO proceedings felt that the sense of crisis that seemed to pervade the proceedings was a trumped-up affair, to increase the pressures on developing countries to assent to an agreement in the run-up to Hong Kong that would be completely against their development interests.



Call for strong campaigning

Whether the outcomes of the July General Council must be interpreted as a setback on the road to Hong Kong, or as clever political scheming, the pressure will be on for the next General Council in October.Now is the time to intensify campaigns against trade liberalisation and step up lobbying efforts. The WTO General Council in October - where most of the groundwork for Hong Kong will be done - must not be allowed to pass unnoticed. The General Council of Peoples - an assembly of NGOs and social movements from around the world meeting in Geneva in July to monitor the WTO proceedings - states: 'With December's Ministeral Meeting in Hong Kong in view, WTO members are speeding up negotiations to ensure a successful outcome. The collapse of the trade talks in Cancun still in mind, the WTO changed their negotiating strategy. Negotiators will seek to resolve major conflicting issues in Geneva during General Council Meetings - thus avoiding the public scrutiny and popular pressures that contributed to previous deadlocks.'



The General Council of Peoples intends to keep the WTO under constant popular pressure and calls for massive local and international mobilisation against the WTO corporate agenda surrounding the WTO General Council in Geneva on 19-20 October.



Focus on the Global South urges to make this not just a Northern effort: Northern NGOs should actively seek and facilitate Southern NGO and activist input to help persuade developing countries' WTO delegations to stand their ground and not give in to the pressures from developed countries backed by corporate lobby groups.



State of Play

The way the WTO negotiations are going, continues to show that the Doha Round is far from a development round. The negotiations have increasingly dropped all pretence of a development perspective, with developed countries openly pursuing their offensive interests.

Dutch trade minister Brinkhorst indicated at a parliamentary hearing on trade that the Doha Round would only be successful if it took into account differences in interest, emphatically including the offensive interests of developed countries.



Rich countries keep pushing for unrestricted free trade, particularly in industrial market access (NAMA) and services (GATS), in the interest of their corporate sector with its strong market power. They largely ignore developing countries legitimate demands for emergency safeguard measures and the right to regulate in the interest of national (social) policy objectives. If the rich countries continue to push their offensive interests in NAMA and GATS, while giving little to nothing in agriculture and ignoring other poor country development concerns, it would be better that the developing countries reject a deal in Hong Kong, like they did in Cancun. No deal is better than a bad deal.



The EU Agenda: NAMA

NAMA aims to reduce tariffs for industrial exports and will have serious consequences for development, employment and the environment, particularly in developing countries. Led by corporate interests, the EU is currently advocating a Swiss-formula approach to tariff reduction in NAMA - reducing higher tariffs more than lower ones, to the detriment of developing countries who are deploying high tariff walls to protect their infant industries from aggressive TNC competition. This is counter to a development agenda. Liberalisation of trade in manufactured products will erode developing countries' industrial base, which will be unable to hold its own in the face of fierce competition from global players well-established in international markets. The elimination of tariffs will deprive developing countries of necessary protection, with local industries being forced out of business. Therefore, the NAMA negotiations need to be stopped, activists in Geneva said.

For more information on NAMA, see website



An interesting report on why NAMA is anti-development and the myth of delivering development through industrial trade liberalisation, is Action Aid's Bound and Tied: The Developmental Impacts of Industrial Trade Liberalisation Negotiations at the World Trade Organisation



The EU Agenda: Benchmarking proposal in GATS

Worldwide, the corporate lobby in services has been complaining about the poor quality of (revised) GATS offers, which, they say, fail to provide new liberalisation and open new trading possibilities. According to the European Services Forum and the Global Services Coalition this is unacceptable. They claim the Doha Round cannot be successful without substantial progress in services and demand meaningful offers from a "critical mass" of WTO members, that will 'as a starting point, capture existing liberalization, with a view toward broadening and deepening commitments, in all modes of supply, across as many service sectors as possible'. The services industries' lobbying groups demand 'bold action' to address the 'services crisis'.



And the EU was quick to deliver. To speed up the negotiations, the European Commission has proposed the introduction of so-called benchmarks to measure and compare the extent and quality of market opening in developing countries and further increase pressure to liberalise. On the 24th of June, the Commission floated its so-called non-paper on benchmarking for a select group of 11 countries, without first clearing it with member states.

At the July General Council, the EU said: 'For Hong Kong, we need to achieve modalities with a similar level of specificity in services as for agriculture and NAMA. The request-offer method of negotiating has not generated meaningful results.'



The EU benchmarking proposal, which would compel countries commit to quota from a pre-determined list of services (sub)sectors as well as setting a minimum level of liberalisation for such GATS commitments, has been widely condemned as it breaks with the existing positive-list approach of the GATS. Currently, WTO members are free to decide which sectors - if any - they wish to bind under the GATS. This is unacceptable, and the benchmarking approach should be ruled illegitimate in further GATS-negotiations.



Developing countries not only wish to maintain full flexibility in deciding their GATS commitments. They also link any progress in services to rich country concessions in areas critical to their needs, such as agriculture and mode 4, which covers the cross-border movement of individuals to provide services. Furthermore, they want to see their concerns over domestic regulation and emergency safeguard measures addressed.



In GATS, deregulation and liberalisation are threatening to take precedence over social, environmental and development concerns and objectives. GATS currently only allows for domestic regulation that is 'no more burdensome than necessary' to facilitate free trade. Developing countries - in the interest of a balanced social and economic development - are demanding an emergency safeguard mechanism and a right to regulate in the interest of national policy objectives.



In the interest of development, the GATS should be amended to allow governments to withdraw from their GATS commitments and guarantee their right to take regulatory measures without the possibility of legal action under WTO rules. In the same way, governments should be free to determine, regulate and support their public services. In sensitive sectors, foreign service suppliers must not be allowed to use the WTO as a tool to force or maintain market access and/or require compensation if their operations are curtailed.



Agriculture


Agriculture continues to be the main stumbling block on the road to Hong Kong. In July, there was a complete failure to agree on tariff reduction on agricultural produce and the elimination of rich countries' domestic subsidies which lead to the dumping of surplus production and the undercutting of developing country producers. Development issues such as special and differential treatment and the consequences of preference erosion for LDCs also remained unresolved.



Here again, campaigners point to the corporate agenda behind the WTO talks. It is all about market power, and it's not just the GATS and NAMA negotiations that are corporate-driven, campaigners at the General Council of Peoples said. 'There is a corporate agenda behind agriculture. A few large companies are dominating the food trade. Small farmers are forced out of business everywhere due to concentrations in agriculture and industrialised, mechanised farming being favoured over traditional farming methods.'



Schisms in developing countries' opposition?


The WTO is not the only arena where the Doha Development Agenda was recently being pushed as an engine for development. In Gleneagles in June, the G8 and 5 emerging economies reached agreement to inject new political momentum into the Doha round negotiations agreeing that 'there should be outline agreement across the entire range of Doha issues by the Hong Kong meeting in December, with final agreement on the Round in 2006'.

Tony Blair commented that all parties 'were clear on the overriding importance, for global growth and to help combat poverty, on real progress now to unlock the Doha negotiations'. Blair stated he believed the trade talks could now be moved forward with a redoubled political commitment. Se more information on this website



In an earlier version of the G8 fact sheet on trade - now removed from the G8 website - these five countries were named as Brasil, India, South-Africa China, and Mexico. This is a worrying list, as Brasil and India were until now leading the developing countries opposition. And South Africa - which as yet has not issued a GATS offer - is deemed crucial for obtaining the desired 'critical mass' in services. (China has little to lose in this round - as a newly acceded WTO member no further concessions are expected of them - and was therefore always an unpredictable factor.)



If the rich countries have indeed succeeded in splitting the developing countries' resistance and prising their staunchest and most influential advocates away from them - there were rumours flying around in Geneva that India had been 'bribed' with some (minor) concessions in mode 4 - , this lends increasing realism to nightmare scenarios of a deal in Hong Kong.



Free trade is not a tool for development


The WTO continues to portray trade liberalisation as a tool for development, despite overwhelming evidence that free-trade policies are more often than not detrimental to the poor. A recent survey on trade liberalisation by Egor Kraev once again shows that free trade is in fact damaging to poor countries and - based on World Bank and IMF figures - outlines the extent of the damage done for 32 of the world's poorest nations.



The British NGO Christian Aid subsequently used Kraev's data to calculate the losses for the sub-Saharan African countries. These amount to a staggering 272 billion US dollars. In their report The Economics of Failure: The Real Cost of Free Trade for Poor Countries, Christian Aid wryly notes: 'Had they not been forced to liberalise as the price of aid, loans and debt relief, sub-Saharan African countries would have had enough extra income to wipe out their debts and have sufficient left over to pay for every child to be vaccinated and go to school.' Christian Aid is not arguing that countries which liberalise do not grow, or that some people in them do not become less poor - but they are saying that without liberalisation, growth could have been higher and poverty reduction faster.



Trade liberalisation is not the key to poverty reduction. Free trade is first and foremost in the interest of big corporations with established market power, against which cottage and infant industries in developing countries are defenceless, in all the WTO key negotiating fields - agriculture, manufactured goods and services - alike.

'Expansive promises about the potential of trade liberalisation through the WTO have failed to materialise in terms of more and better jobs and higher growth either worldwide or in developing countries', says the Global Unions Group in a statement to the WTO. 'Many developing countries that undertook trade liberalisation in line with the policies recommended by the WTO, as well as by the international financial institutions, found deindustrialisation to be the outcome, as their domestic industries collapsed in consequence.' See this website




















































This article first appeared on the TNI Website on 18 August The site also contains Are the WTO Talks in Trouble? Don't Bet on It' by Walden Bello and Keeping the Spotlight on Geneva in which Focus on the Global South's Jacques Chai Chomthongdi calls for strong political campaigning to put pressure on the WTO.



See also

http://www.spectrezine.org/weblog/index.php?p=70

http://www.spectrezine.org/global/Dupret.htm