The
Preamble of the Declaration has no legal effect. That means it can be used to make lots of promises that don’t
have to be delivered and provides a safe place to mention issues the WTO
doesn’t want to address anywhere that really matters.
Building
on the Declaration that set up the WTO it also serves as an ideological mission
statement for the WTO and the next steps it is promoting. Trade liberalization
is hailed as central to economic recovery, growth and development throughout
the world, especially for poorer countries. There is no questioning the
economic model. The only response to
deepening challenges from outside and within is to promise, yet again, greater
internal transparency and effective participation - behaviour that was notably
absent from the preparatory and formal stages of the meeting itself. Indeed,
Jim Sutton threatened to lead the charge for a change in WTO rules if the
requirements of consensus and member participation blocked agreement on a new
round!
The
overall tenor of the preamble shows how little they understand about opposition
to the WTO. In their minds, people simply don’t understand that it’s good for
them . . . .The preamble repeats past promises of improved dialogue with the
public - although references to ‘civil society’ seems to have disappeared. This
suggests that even the tame NGOs they invited into dialogue were not tame
enough. Governments are urged to sell the free trade model more effectively at
the national and international levels. New Zealand’s Labour-led government is
doing its bit by supporting the recently established Trade Liberalization
Network; its stated purpose, along with its clones throughout the world, is to
propagandize the free trade utopia.
The
Declaration talks of a Work Programme - code for a limited new round of
negotiations (just as the Free Trade and Investment Agreements with Singapore
and Hong Kong became Closer Economic Partnerships). This had been promoted as a
‘development round’ to address the concerns of poorer countries. The Preamble continues this deceit,
promising to put poor and poorest countries at the heart of the work programme
so they can secure a share in world growth ‘commensurate with the needs of
their economic development’. In reality, the final work programme sidelines the
concerns of poor countries, while the primary objectives of the major powers
are pushed to the fore.
The
Preamble reiterates the WTO’s founding commitment to work alongside the IMF and
World Bank to achieve ‘greater coherence in economic policy-making’. In other
words, the WTO remains committed to the structural adjustment/free trade agenda
promoted by the IMF and the World Bank. This is the same agenda that has
produced growing inequalities and deepening poverty in many of the world
poorest nations, and further concentration of wealth and power in
transnationals and their parent countries.
The
side issues of environment were strengthened at the last minute, as part of the
compromise with the European Union (EU).
Sustainable development is located within an economic regime of open
markets that is fundamentally unsustainable and a set of agreements that
require environmental measures not to be discriminatory or disguised barriers
to trade. Reducing these barriers - rather than genuine concern for the
environment - forms the basis for proposed negotiations (discussed below). This
was a defeat for the poorer countries, who believe that environment issues have
no place in an international trade agreement and that any rules would be used
against them, rather than the major causes of environmental damage that are
created by the richer countries.
Strong
resistance from poorer countries (backed tacitly by the new US administration)
to proposals to introduce rules on labour standards into the WTO did succeed in
limiting the issue to the Preamble and reiterating the position adopted in
Singapore that this was primarily an issue for the ILO. So the so-called
‘labour’ or ‘social’ clause is effectively off the WTO agenda. This will force
the ICFTU and union bodies that have focused most of their energy on this issue
- and largely ignored the broader challenges the WTO poses for employment,
workers and unions - to rethink their goals and strategies - not before time.
New
members, especially China and Chinese Taipei are welcomed - a development which
will have huge ramifications for their own people and for the balance of power
within the WTO. Accession of least developed countries is to be fast tracked -
which is ironic, given they are the countries that have been the biggest losers
under the WTO.
The
Work Programme covers a number of specific issues:
The
original Uruguay Round agreement on agriculture required a ew round f
negotiations to extend agreement to begin by 2000. These were moving very
slowly. The Doha meeting was seen as an essential catalyst.
Agricultural
exporting countries want to broaden the scope of the mandated negotiations.
Governments such as New Zealand’s, who only see the WTO as a means of opening
agricultural markets, need something to justify their continued commitment to
the WTO and revitalize flagging support for the free trade agenda.
Meanwhile
a number of European governments also want to reduce the expensive agricultural
support packages provided by the Common Agricultural Policy (CAP). They see the
WTO as a way of claiming they have no choice. A broader round that covers a
number of issues allows them to secure as many concessions to their broader WTO
agenda as possible in return for minor moves on their part. At home, they can
justify these concessions on agriculture by claiming to have secured major
benefits and new market openings in other areas. This wheeling and dealing was
a feature of the Uruguay Round, and framed the final deal that served the
interests of the major powers and left the poorer countries as impotent
by-standers. Despite determined moves by those countries, the last minute deals
with the EU saw them sidelined again.
The
key words in the Declaration are: ‘Building on the work carried out to date,
and without prejudging the outcome of the negotiations we commit ourselves to
comprehensive negotiations aimed at: substantial improvements in market access;
reductions of, with a view to phasing out, all forms of export subsidies; and
substantial reductions in trade-distorting domestic support’. This promises a
re- run of the Uruguay Round. The EU relies heavily on export subsidies;
Ireland and France especially would not promise to eliminate them. The US relies
more on domestic subsidies; indeed, Congress has voted to increase them by 64%
in the next 10 years. Neither will give these up without a dog fight, including
against each other. The wording proposes negotiations ‘without prejudging the
outcome’.
It
also sets no time frame for eventual phasing out of export subsidies.
Any
apparent concessions will require major gains for their transnationals in other
sectors. Even then, any real change is likely to be an illusion. Agricultural
subsidies in OECD countries have doubled since the Uruguay Round agreement came
into effect. Against this backdrop, claims that these new negotiations will
produce a level playing field for New Zealand farmers and a bounty for the New
Zealand economy can be seen as unsubstantiated propaganda.
The
preoccupation with agricultural free markets excludes any deeper questions
about the model of agriculture, food production and rural communities that the
WTO promotes. The Declaration promises to take non-trade concerns into account
and give poorer countries special and different treatment. Yet it is driven by
efficiency and profit maximization. The WTO model has no place for genuine
environmental sustainability, food security, rural and regional development,
small and family farmers, or the cultural and social dimensions of agriculture.
Instead, it favours major agribusinesses whose integrated production ranges
from control over seeds, contracts with growers, financing of production,
international marketing and retailing. Their interests extend beyond
agriculture to the other WTO negotiations on services, investment and
intellectual property rights. These conflicts will continue to underpin the
agriculture negotiations, and are as relevant to Aotearoa/New Zealand as to any
other country.
The
new negotiations cover manufactured goods as well as special rules about
textiles. The declaration proposes to reduce tariffs further and bind countries
to a maximum permitted level. New Zealand’s current bindings would allow for
the reintroduction of a reasonable level of tariffs (except for imports from
Australia and Singapore because of the bilateral zero-tariff agreements with
them). It seems likely that the government will try to bind future New Zealand
governments to continue with zero tariffs, with the possible exception of
textile, clothing and footwear. The negotiations will also try to impose
further restrictions on what are called non-tariff barriers. This means
domestic rules, such as labeling or standards that are alleged to (and
sometimes do) discriminate against goods produced overseas. This reduces each
country’s ability to set its own rules - something we already experience with
Australia’s control over food labeling and standards.
Negotiations
have been underway since early 2000 to extend the scope and tighten the rules
in the General Agreement on Trade in Services (GATS) which was created in the
Uruguay Round. Governments are expected
to commit more services to coverage by its rules, and agree to new disciplines
on the kind of domestic regulation of services that will be permitted. Because
these new negotiations were built into the Uruguay Round agreement, they were
independent on the outcome of Doha. Like agriculture, they were moving very
slowly. There was a strong sense that unless they formed part of a larger round
involving other issues, allowing governments to trade-off services against say
agriculture or textiles, they might not get far. The drawback for the major
powers who want to open markets to their services transnationals is that they
might have to wait until the end of the negotiations on all issues. It is
likely that they will try to expedite agreement on those aspects that benefit
them, while delaying any that don’t.
There
is no attempt to address criticisms that new negotiations were meant to take
place only after an assessment of the impact of existing commitments. Nor was
there any reference to the controversy over the meaningless exemption for
services provided in the exercise of government authority, and the recent
resolution by the UN sub-commission on human rights that affirms the
fundamental importance of the delivery of basic services as a means of
realizing human rights.
The
Doha outcome will add momentum to the GATS negotiations. It will also fuel growing opposition to the
GATS which has centred on the subordination of public services, utilities and
such essentials as water to free trade rules. Indeed the negotiations on trade
and the environment specifically authorize and encourage negotiations on
environmental services (see below). Local governments have also been opposing
their coverage by these rules. The backtracking on patents for medicines (see
below) shows it is possible to put the WTO’s juggernaut into reverse. This is
likely to provide a basis for demands that public services and local government
are removed from the WTO regime and the right of governments to choose their
preferred policies, irrespective of trade rules, is restored.
The
main Declaration, and a separate accompanying declaration on access to
medicines, appears to recognise that public health should take priority over
patent rights. If it really does mean this, it will be a major victory for
poorer countries and activists who have campaigned internationally on this
issue. It would also be a huge defeat for the transnational pharmaceutical
companies. It also has implications for the mega-companies in food production,
media and entertainment, high and bio-technology, pharmaceutical and defence
industries that have driven the TRIPS agreement who sense that this is
potentially the beginning of the end for the agreement. If drugs can be carved
out, why not seeds or products that have cultural significance or knowledge
that should belong to all? However, the change may not be as potent as it first
appears. There has been no amendment to
the TRIPS agreement itself. The declaration merely indicates the way it should
be interpreted.
Other
aspects of the TRIPS negotiations again reflect major power priorities.
Proposals to extend protections for geographical names are specifically tied to
wines and spirits, a major EU concern.
Protections for other products of interest to poorer countries are
treated as an implementation issue, despite current controversies such as
attempts by US companies to patent Basmati and Jasmine rice.
The
conflict between TRIPS and international negotiations to protect biodiversity,
and opposition to the patenting of life forms, are marginalized; they are
simply matters to be ‘examined’. So, too, is the protection of traditional
knowledge and folklore. This is likely to intensify existing campaigns against
TRIPS by indigenous nations, opponents of genetic engineering and rural
communities.
This
signals a major defeat for poorer countries, and provides for the back door
revival of the Multilateral Agreement on Investment (MAI). It looked for a
while as if the investment and competition issues (known as the Singapore
Issues) would simply be left as a matter for continued study by specialist
working groups. Part of the last minute trade-off with the EU was the inclusion
of a promise to enter negotiations on these issues.
An
investment agreement would open countries to foreign direct investment and
provide enforceable rights for foreign investors. Competition policy would complement this, because real
competition can only occur in countries that have very limited domestic capital
if foreign investors are allowed to enter the market. It may also undermine
agricultural produce marketing boards used by many countries to improve the
bargaining position of their farmers.
These
negotiations will build upon the existing protections for foreign investors
contained in the WTO agreements on services and ‘Trade-Related Investment
Measures’, which prohibits requirements such as local processing of resources,
use of locally produced inputs or location in specific regions. They will also
take account of existing bilateral and regional investment arrangements,
including the infamous investment provisions in NAFTA that have been used to
strike down measures designed to serve national environmental, health and
safety and public service goals. Indeed, NAFTA will be the ‘high quality’ model
that richer capital exporting countries are aiming for.
The
wording is intended to secure initial buy in to negotiations and defuse
opposition from poorer countries and social movements who defeated the previous
attempt to create a multilateral agreement on investment at the OECD. The
negotiations on both investment and competition are not scheduled to begin
until after the next WTO ministerial meeting. That meeting has to be held
within two years and will be required to approve the ‘modalities’ for the
negotiations by ‘explicit consensus’. In theory that means that every member
must positively agree. In practice, much of the real work will already have
been done and poorer countries still face enormous pressure to agree in return
for supposed concessions on other areas of concern. Indeed the U.S. insists that the declaration launches
negotiations in those four areas but that ministers will make decisions on the
subject matter and methods of negotiations at their next conference in 2003.
The Declaration promises support to poorer countries to help them participate,
and says the WTO will work alongside UNCTAD in doing so. There are also
suggestions that it will work in the way GATS has, of progressively adding onto
a core agreement rather than going for the ‘big bang’ agreement at the outset.
It
seems unlikely that this will defuse opposition. Indeed, the resurrection of
the MAI through the WTO is likely to intensify opposition to the WTO and
provide a catalyst for the re-activation of the international networks that
were successful at the OECD.
The
proposed negotiations on government procurement are more limited.
Negotiations have been approved, but only on the transparency of procurement policies and practices. Even this will cause problems for poorer countries which have limited capacity and will create the expectation of future negotiations on requiring non-discrimination between local and foreign suppliers (known as national treatment) for government procurement by central and local government.
This
section of the Declaration and an accompanying document promise to address the
major concerns which poorer countries, especially the ‘Least Developed
Countries’ have about the Uruguay Round agreements. They face problems being
able to implement their commitments, and object that the major powers have
failed to live up to theirs. There have been lots of similar promises in recent
years that have come to nothing.
In
particular, there is no commitment to the early phase out of controversial
textile and garment quotas which are the major barriers to exports by poorer
countries into the US and European markets. Nor is there any genuine commitment
to address the abuse of anti-dumping powers by the US. Paradoxically, even the
weak promises to examine the anti-dumping powers have provoked a backlash in
the US. This means that President Bush is likely to be denied the ‘fast track’
authority he is seeking from Congress that would limit them to voting on the
results of the round as a package deal, and not pick it apart.
Some
countries, notably India and the poorest countries that are known as Least
Developed Countries (LDC), were holding out for these to be addressed before
any agreement to launch a new round. They had to settle for a Declaration that
includes strong language, but provides no guaranteed outcomes. The recent
regrouping by poorer countries suggests they will fight hard on this issue and
build on the pressure they have begun to assert in recent years, in the face of
threats, obstruction and last minute manipulation by the major powers.
Poorer
countries have strongly opposed attempts to introduce enforceable environmental
standards through the WTO because they are likely to be used against them
without addressing the broader environmental concerns, such as unsustainable
production and greenhouse emissions by the US and EU. This paragraph is another
major concession to the Europeans who have been pushing environmental issues
onto the WTO agenda, mainly to placate their strong domestic lobby. The US has
supported the move for similar reasons. But the proposals are far from
environment-friendly.
There
is a promise to negotiate ‘without prejudging the outcome’ on the relationship
between WTO rules and multilateral environmental agreements. There will be
strong resistance to attempts to weaken the WTO’s dominance over all other
agreements. A second, very worrying aspect is the promise to negotiate on the
reduction or elimination of tariff and non-tariff barriers to environmental
goods and services. This includes water, waste disposal, sewage, toxic waste
dumping, transportation and disposal of hazardous substances. This complements
attempts by the transnationals and their governments to secure the application
of free trade rules to these services through the GATS negotiations and the
investor protection aspects of an investment agreement. Any of these changes
could effectively remove the ability of governments to impose whatever controls
they consider appropriate on environment- related goods and services.
The Committee on Trade and Environment will oversee this process and report to the next WTO ministerial meeting with recommendations for future action. It is instructed to special give attention to three factors: (i) the effect of environment measures on market access and the benefits of eliminating or reducing those measures which restrict and distort trade; (ii) relevant provisions of the TRIPS agreement; and (iii) labeling requirements for environmental purposes. The emphasis again - especially in (i) - is on removing restrictions to trade, rather than removing dangers to the environment.
The
Work Plan promises to examine issues relating to the trade of small, vulnerable
economies, such as the Pacific Islands. But the goal is to integrate them fully
into the free trade system, not to create a sub-category. This raises serious
concerns for the many South Pacific states that are currently negotiating their
accession. Indications are that they
have little understanding of the implications of complex agreements on
intellectual property, services, agriculture and goods, let alone the capacity
to participate in new complex negotiations on a broad range of issues that will
seriously affect them.
The
meeting agreed to create a special working group on the relationship between
trade, debt and finance. The goal is not to find a genuine solution to external
indebtedness. Rather it aims to strengthen the integration of the WTO, IMF and
World Bank and safeguard the free trade system from the effects of financial
and monetary instability - a ‘solution’ that seems destined to deepen to the
debt crisis. Another working group was established to examine the relationship
between trade and technology.
Following
on from this is an ominous instruction to work with other agencies to ‘support
domestic efforts for mainstreaming trade into national plans for economic
development and strategies for poverty reduction’. In other words, capacity
building is designed to ensure that the domestic policies of poorer countries
comply with the free trade rules. Priority assistance will be given to ‘small,
vulnerable and transition economies’ that have no representation in Geneva.
Support will come from the International Trade Centre that has been set up to
train technocrats in the free trade ‘orthodoxy’.
A
special Trade Negotiations Committee will establish the negotiating mechanisms
and supervise the overall negotiations. Its first meeting must be held by 31
January 2002. The next WTO ministerial meeting, which must take place within
two years, will ‘take stock of progress’, provide any political guidance that
is required and take decisions. They have set a deadline for concluding the
negotiations of 1 January 2005. When the results in all areas have been
established, a Special Session of the Ministerial Conference will be held to
adopt them.
The
negotiations are presented as a package deal, known as a ‘single undertaking’,
and appear to include those that are already underway on services and
agriculture. This maximizes the potential for trade offs between different
issues. In the Uruguay Round that meant that nothing was agreed until
everything was agreed. However the
Declaration makes provision for the implementation of agreements that are
reached at an early stage. That will be portrayed as a device to ensure that
poorer country concerns can be addressed at an early stage. But it will also
allow the major powers to secure what they refer to as an ‘early harvest’,
something the US is especially keen about. That way if the overall negotiations
collapse they have been able to secure at least some outcomes of benefit to
them.
The
scene is set for an intensification of opposition to the WTO. The new issues are provocative to poorer
countries and to those who believe that global free markets give privilege to
the wealth and power of the transnational corporations in ways that are anti-
democratic, unsustainable and intensify inequalities within and between
countries.
According
to veteran WTO commentator Chakravarthi Raghavan ‘the way the Harbison-Moore
proposals for the organization of the work programme and negotiations are set
up, with the ability to add, improve and change along the way, this text is
nothing but an open-ended invitation for open-ended negotiations for global
government (on behalf of foreign corporations).’ (www.twnside.org.sg/title/ignored.htm)
Walden
Bello from Focus on the Global South and Anuradha Mittal of Food First predict
that the outcome will prove a Pyrrhic victory for the big trading powers:
The
combination of developing country resentments inflamed by the Doha process, a
deep global recession brought about by the indiscriminate locking together of
economies by accelerated trade and financial liberalization, and reinvigorated
civil society resistance to corporate driven globalization, cannot but erode
the credibility and legitimacy of the institutional pillars of free trade like
the WTO. And without credibility and legitimacy, institutions, not matter how
seemingly solid they may seem, eventually unravel. At the conclusion of the
Fourth Ministerial, Director General Mike Moore thanked the delegates for
‘saving the WTO’. The end result may well be, instead, the accelerated decline
of the WTO.