URFIG Document - Analysis about WTO-EU
The Reasons to Oppose a New Round
In the
aftermath of the Third UN Conference on the Least Developed Countries, the EU
Commission DG Trade organised in Brussels a three day seminar (21-23 May 2001)
for a group of journalists from LDCs on « Global Trade and the LDCs :
the EU position ». The focus was given on the EU position for a new round
at the WTO. Only one opportunity was given to the non-profit movement to express
its opposition to the new round. Dr Raoul Marc Jennar was invited in the frame
of a session of this seminar dedicated to a discussion with the « civil
society » (the 3 other people in the panel expressed the views of the
business). Here is the presentation our colleague made on Tuesday May 22.
* * *
Why
more than 1.500 non-profit organisations from all over the world, working on the
field in areas like development, health, education, environment, consumerism,
agriculture, citizens and women’s rights, are against the new round of trade
negotiations at the World Trade Organisation (WTO) proposed by the European
Union ? Why do a huge number of developing countries express the same opposition ?
That’s what I intend to explain. Explainations lie in the existing agreements
(1) and in the new proposed issues (2) as well.
1.
The existing agreements signed at Marrakech at the end of the Uruguay
Round are not fully and properly implemented. The critical issue of the
implementation of the existing agreements requests first of all a review of the
way they are implemented and an evaluation of their social and environmental
impact. The second necessary step is the revision of these agreements
accordingly with the evaluation. And the third step is the reform of the
institutional procedures within the WTO and that means a full reform of this
body. We do believe that there is a need to proceed to such evaluation and
adaptation of the international trade system before moving forward. This is a
precondition prior to any negotiations on new issues.
1.1.
Five years of implementation of the existing agreements provide for a
clear indication that this implementation is far from being balanced.
As it was said by Ambassador of Egypt to the WTO, Mr. Fayza Aboulnaga,
« During the Uruguay round we were
promised the moon, but what have we got today ? »
1.2.
At the signing of the
Marrakech Agreements, it was agreed that analysis of the results of the Uruguay
Round would lead to an evaluation that never occurred. Why ? Because this
analyses provides two critical indications :
a)
the content of the different agreements exposes an imbalance of rights
and obligations to the detriment of developing countries,
b)
the implementation of WTO rules is leading to unequal competition.
Let’s
take examples :
1.3.
The WTO agreement on Agriculture organises a competition between
agricultural products subsidised (directly or indirectly) in the North and
non-subsidised products from the South. On one side, Europe and the United
States have the right to support both exportation and domestic production and
are authorised to put restrictions on imports and, on the other side, developing
countries have been forbidden to introduce such measures. On one side, around
300 billion US dollars of agricultural subsidies, on the other side, nothing
(OECD data). The unfairness of this competition is increased by the obligation
to import 5% of the agro-business consumption.
1.4.
The WTO agreement on Intellectual Property Rights (TRIPS) is marked by an
extreme imbalance between holders of intellectual property rights and the rights
of users and of society as a whole. 95 % of the patents are from the North. But
the WTO rules are imposed to all. This agreement violates the International
Covenant on Economic, Social and Cultural rights which protects the sovereignty
of the people on their natural resources. As it has been stipulated by the UN
Sub-Commission on Human Rights, « since
the implementation of the TRIPS Agreement does not adequately reflect the
fundamental nature and indivisibility of all human rights, including the right
of everyone to enjoy the benefits of scientific progress and its applications,
the right to health, the right to food and the right to self-determination,
there are apparent conflicts between the intellectual property rights regime
embodied in the TRIPS Agreement on the one hand and international human rights
law on the other. » (UN, Economic and Social Council,
E/CN.4/SUB.2/RES/2000/7).
1.5.
The WTO Agreement on Textiles and Clothes was said to achieve a full
liberalisation in this sector over a period of ten years. But the USA and the EU
were and still are protected by the authorization to fix quotas and
restrictions. No progress has been made by the developed countries on the
opening of their markets. This agreement is one of the most unbalanced WTO
agreements : it does not contain any explicit sanction against an importing
country and it contains a mechanism for the benefit of the textile sector in
developed countries. The USA and the EU refused competition in this sector and
used safeguard mechanism such as anti-dumping actions. The EU forced Bangladesh
to withdraw hundreds of export licences and this kind of EU partnership led to
the lost of hundred of thousands of jobs in this country.
1.6.
Market access, reduction of tariff barriers, subsidies, anti-dumping
actions, services, there are many other issues which offer ground for a crystal
clear demonstration of the very imbalanced nature of the WTO Agreements. The
last I want to underline is the WTO itself. This institution lacks transparency,
accountability and democracy. The most important decisions are taken during
informal meetings between a small number of countries led by the EU, the USA,
Japan and Canada. This is the so-called « green room method ».
Access to information and participation in the various committees create an
imbalance for a large number of South countries that have not enough human
resources to deal with daily negotiations on a wide range of issues with high
technical profile. Trans-national corporations supply the delegations from
industrialised countries with a lot of analysis and recommendations. The WTO
concentrates legislative, executive and judicial powers without democratic
control. The rulers are also the judges. The Dispute Settlement Mechanism lacks
independence and is failing to guarantee a genuine trade justice to weak and
poor countries. This is why Indian Ambassador to the WTO, Mr Narayanan said that
“the greatest challenge is to ensure
that the rules based WTO system that the WTO is supposed to be is really
operating as a rules based system instead of operating as a power based system.”
The WTO secretariat is far from being neutral. Let me give you an example :
despite the fact that a large number – maybe the majority, we will check in a
near future – of Member States is not in favour of a new round of trade
negotiations, the WTO Director general, Mr Mike Moore, is campaigning all over
the world for a new round. All the WTO staff is mobilised for this campaign. But
the WTO Director general never received this mandate. This is WTO style
democracy ! .
2.
Last March, in Geneva, the Ambassador of Zimbabwe to the WTO, Mr.
Boniface Chidyausiku, said that the implementation of the existing agreements is
“on the top of developing countries
agenda and decisions.” But if the implementation of the six years old
agreements is the first reason for most of the developing and the least
developed countries to – at the very least -
express reluctance to the EU option for a new round, the EU proposed new
issues are increasing this reluctance. There is a long list of so-called “new
issues” proposed by developed countries which want to link trade – and that
means trade measures and sanctions – with several economic and non economic
areas. In particular, the European countries want to brought under the trade
rules issues which are not trade issues like investment, competition, government
procurement and environment. The major push for this new round is coming from
the EU because , as observed by Pakistan’s Ambassador to the WTO, Mr Munir
Akram, “the European Union was arguing
that to compensate for their loss in agriculture, they need gains in other areas
like investment and competition policy.”
2.1.Indeed,
the EU wants to introduce new rules that give new rights to foreign investors,
“making easier, as underlined by
Martin Khor, director of Third World Network,
to enter countries and to operate freely.” The EU is proposing a diluted
version of the rejected OECD Multilateral Agreement on Investment.This new
version, introducing options and steps, paves the way to the old one. At the end
of the day, “developing countries will find increasingly difficult to defend the
viability or to give preferences to local investors, firms and farmers which are
all much smaller than the trans-national companies.”(Martin Khor).
2.2.
On competition policy, as underlined by Mr Nathan Irumba, Uganda’s Ambassador
to the WTO, “developing countries need domestic competition policies, not an
international one which would not help them.” The EU is pushing for a new
agreement that will prohibit in developing countries domestic laws and
regulations favouring local firms on the ground that these laws and regulations
are against free competition. How is it possible to ignore the final consequence
of a system of equal trade rights between giant international corporations and
local enterprises ? No doubt that
the competition policy the EU wants to impose
will lead foreign monopolisation of developing country markets.
2.3
Government procurement are not directly trade issues even if they may have
relationship to trade. On government procurement, the aim of the EU is to bring
spending policies, decisions and procedures of all countries under the umbrella
of the WTO. The foreigners will enjoy equal rights than locals. This proposal
will remove the rights of governments to reserve
some of its business to local firms. It will destroy an important
instrument for assisting local firms for national development and for
socio-economic objectives. Even if, as a first step, only a provision on
transparency is imposed, it will mean that countries will be obliged to submit
draft laws and regulations to the WTO. It is the end of national sovereignty not
for peace or solidarity, but for profit purposes. Once again, the WTO is used as
a tool to force developing countries to enter in a corporate led system.
2.4
Western countries bear the highest responsibility for the ecological damage.
They want now to link trade measures to the environment. They want to impose
concepts like internationalisation of environmental costs, eco-dumping and
processes and production methods. These concepts are inter-related. The main
question is whether all countries are expected to adopt the same standards or
whether standards should correspond to the different levels of development. The
implementation of a single standard would be inequitable as poorer countries
would have their products made uncompetitive. Policies and measures to resolve
environmental problems should be negotiated in international for a and
agreements. Not within the WTO. Environment is not a trade issue.
3 .I
would like to end this presentation by refuting several EU and WTO assertions
that belong to disinformation and manipulation.
3.1.
It is said that the EU is willing to meet the expectations expressed by
developing and least developed countries in the frame of a new round. But such
statement doesn’t reflect the exact will of the EU Commission. In a
communication to the EU Council of Ministers, on the issue of improving the
functioning of the WTO, the Commission declared that “such
institutional questions could be considered within the context of, or in
parallel with the New Round of Trade Negotiations but should not hold up the
launching of the Round. This is the number one priority for the trading system.”
(EU Commission, Note for the attention of the 133 Committee. Improving the
functioning of the WTO : suggestions for a way forward. DG Trade I, 25 January
2000).
3.2.
It is said that a new round is the only way to meet the expectations of
developing countries. It is not true. From a legal point of view, there is no
need to decide on a new round (with new issues) when one will to change the
existing agreements.
3.3.
It is said that without a new round, the whole trade system will collapse. It is
pure blackmail. Was there a collapse after Seattle ? The lack of new round
doesn’t make invalid the existing agreements and, according to these
agreements, negotiations on agriculture, services and intellectual property
rights will continue.
3.4.
It is said that without a new round poor countries will not be able to deal with
the coming recession. There was no recession before Seattle, but the EU asked
for a new round. I don’t think that to have more issues under WTO rules
decreasing the sovereignty and the strength of the States will increase the
cacapicity of poor countries to face a recession
3.5.
It is said that without a new round poor countries will become poorer. But there
is no need to have a new round to reduce the imbalanced implementation of the
existing WTO agreements and create opportunities for the poorest to become less
poor.
3.6.
A new round is not a legal option. The is nothing in the existing
agreements that obliges Member States to start a new round. A new round is not
an economical option.There is no need, from an economical point of view, to
increase the number of issues under WTO rules if the will is to achieve a fair
implementation o the existing agreements. The new round is a political option.
As Pakistan’s Ambassador said, “the
conditionality of a new round is a political condition”, a statement
jointed by the declaration of the Zimbabwean Ambassador : “the
preparations and agenda for a new round and the preparation and agenda for the 4th
ministerial conference (which will take place next November in Doha, Qatar)
were separate issues and should not be mixed.”
As a
conclusion, I will give, once again, the word to an envoy from the South who
underlined the hypocrisy of industrialised countries when they ask for a new
round. Ambassador Ransford Smith, from Jamaica said, last March, “when
times are good for the global economy, we are told “we need a new round to
prevent a relapse into protectionism” ; when times are bad, we are told “we
need a new round to counter protectionism and to lift the global economy out of
the doldrums.” The question might be : when exactly will we not need a new
round ?”
Dr. Raoul Marc JENNAR
(All the quotations without specific references to sources are from South-North Development Monitor - SUNS, 16 March 2001 – suns@igc.org)