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PRESS BRIEFING
World Trade
Organisation
THE
MILLENNIUM ROUND
From November 29th to
December 3rd 1999, Seattle will host the
Third Ministerial Meeting of the World Trade
Organisation (WTO). This meeting will
determine the future direction of world trade
policy. In particular, it will consider
whether or not to begin a new "Millennium
Round" of trade negotiations.
Although the Millennium
Round is being promoted as a 'win-win'
initiative by the European Union, there is
widespread concern about the economic, social
and environmental impacts of:
-
existing WTO rules and agreements
(particularly in relation to resource
consumption, health, agriculture,
employment, patents on life and
intellectual property rights); and
-
new 'Millennium Round' issues and
concerns (especially in relation to
biotechnology and investment).
This concern is shared by
many governments and civil society groups
around the world and tens of thousands of
demonstrators are expected to converge in
Seattle to voice their opposition to a
Millennium Round.
Trade disputes between the
US and the European Union over bananas and
hormone-treated beef, and the recent collapse
of international negotiations to regulate
trade in biotechnology products, illustrate
the very real impacts of the WTO. A further
row is now threatened over trade in
genetically-modified food and crops.
Friends of the Earth (FOE)
is one of more than 1,100 groups, from 87
countries around the world, opposing the
European Union's proposal to start a new
round of negotiations. Given its track
record, no new issues should be brought into
the WTO. The scope and power of the WTO
should not be expanded by including new
issues such as investment, competition and
government procurement. Governments meeting
in Seattle should heed the voices of workers,
farmers, environmentalists, churches and
development and women's groups and agree to
an independent review of the global trade
system. Trade needs to be both sustainable
and equitable.
What is the WTO?
After World War II, a
concerted effort was made to set up
international institutions to manage the
global economy. This effort resulted in the
formation of the World Bank, the
International Monetary Fund (IMF) and also
the General Agreement on Tariffs and Trade
(GATT) - a set of rules governing
international trade and a forum for agreeing
cuts in border taxes/tariffs.
Since the formation of the
GATT in 1947 there have been eight ‘rounds’
of trade negotiations. The last and most
important was the ‘Uruguay Round’, which took
place between 1986 and 1994. This brought
agriculture, services, intellectual property
rights and investment under the umbrella of
the WTO. It also focused on the removal of
"non-tariff barriers" (NTBs), which can
include environmental and health
standards.
The Uruguay Round also led
to the formation of the WTO, a recognised
intergovernmental body responsible for
monitoring and enforcing the new set of
global trade rules known as World Trade
Agreement (WTA). The WTO currently has 134
members. China is negotiating with a view to
joining before the meeting in Seattle.
How does the WTO work?
The WTO's highest
decision-making body is the Ministerial
Meeting which is scheduled to take place
every two years. Between ministerials the WTO
is run by its General Council comprised of
ambassadors from the member states. The
ambassadors and the WTO's secretariat are
based in Geneva.
The WTO’s main functions
are:
• administering the
WTA;
• providing a forum
for trade liberalisation
negotiations;
• handling trade
disputes; and
• monitoring national
trade policies.
In practice, the most
important of these is the dispute settlement
system, which is legally binding and which
allows for financial retaliation by states
whose rights have been infringed. This is
what gives the WTO its power.
What’s wrong with the
WTO?
The aim of the WTO is to
deregulate international trade. WTO rules
therefore seek to limit the ability of
Government to impose either tariff or
non-tariff barriers to trade between member
states. This approach is based on the belief
that 'free' trade will benefit all countries
and that resulting wealth will 'trickle-down'
to all sectors of society. However, these
assumptions are wrong. The theory of
comparative advantage has been debunked by a
number of eminent economists; and the global
gap between the richest and poorest continues
to increase. Job security and employment
rights are also diminshing, as companies and
capital move with increasing ease between
countries.
WTO agreements on
agriculture and intellectual property rights
have had particularly dramatic impacts on
farmers and rural and indigenous communities
around the world. The WTO's Agreement on
Agriculture (AoA) is heavily biased in favour
of agribusiness and large farms, particularly
in the richest countries. Small farmers in
the North and the South have suffered as a
result of the AoA, and the rights and
respected traditions of communities that have
bred locally-appropriate crop varieties are
blatantly disregarded. Instead the TRIPs
agreement attempts to impose intellectual
property systems that threaten the culture
and livelihoods of such communities.
Negotiations to remove
non-tariff barriers (NTBs) can also have
wide-ranging environmental impacts, since
NTBs can be held to include many national and
international health and environmental
safeguards. Examples are:
-
international conventions on trade in
endangered species (CITES) and ozone
depleting products (the Montreal
Protocol)
-
controls on tropical timber
imports
-
minimum recycling standards
-
energy efficiency rules
-
food safety regulations
The WTA includes an
agreement on "Sanitary and Phytosanitary
Standards" (SPS), which constrains
governments' ability to impose domestic
environmental and public health controls. On
the basis of the SPS agreement, the WTO
refused to back EU action to restrict imports
of US hormone-treated beef, despite growing
concerns over public health implications. The
US has also blocked progress on a "Biosafety
Protocol" to the Biodiversity Convention
(which was intended to allow states to place
certain restrictions on trade in
genetically-modified organisms) partly
because some other governments refused to
acknowledge that WTO rules should govern the
Protocol.
The WTO is not an equal
club. It is heavily biased in favour of rich
and powerful countries, and in favour of the
interests of multinational corporations. Most
trade negotiations are conducted in secrecy.
Agreements are frequently made between
developed countries (particularly the 'Quads'
- Canada, the EU, Japan and the US) and then
presented as a fait accompli to others. In
effect, developing countries often face an
ultimatum - accept an agreed package of trade
proposals or face isolation in the global
economy.
Earlier this year, the
major US banana multinational Chiquita -
whose bananas are grown mainly in Latin
America - gave a $500,000 donation to the US
Democratic Party. The US Government
subsequently lodged a complaint with the WTO
about the EU’s banana import regime, which
favours poor growers in the Caribbean. The
Seattle Host Organisation (SHO), an
industry-led group responsible for the
logistics of the Seattle meeting, has been
selling access to ministers in return for
high levels of sponsorship for the Seattle
Ministerial. The SHO is chaired by Bill Gates
of Microsoft and Phil Condit of Boeing
In the UK, the principal
losers from world trade rules are small
farmers (disadvantaged by subsidies that
favour larger farms); workers (whose job
security and employment rights are being
continuously eroded); small businesses (who
are required to compete with large
transnationals and who may be subject to
trade sanctions); and consumers (who are
increasingly under pressure to accept food
and other imports they do not want)
What is the Millennium
Round?
The Millennium Round is an
attempt to begin another "comprehensive
round" of trade negotiations, which would add
new
issues to the WTO’s existing rules
and remit. A certain number of negotiations
have already been planned, including
agriculture, services, investments, standards
and intellectual property rights (most of
which are likely to be highly controversial,
potentially leading to further reform of the
EU's Common Agricultural Policy; and the
deregulation of education, health and water
services, for example). The new issues are in
addition to these 'built-in agenda'
items.
The Millennium Round
proposal was initiated by the EU, with
support from Japan, Canada and some Latin
American countries. The intention is to push
for even more "deregulation" in a number of
areas, including:
C
foreign direct
investment
C
government procurement
C
competition policy
C
trade facilitation
C
electronic commerce
Investment discussions
could focus on removing the controls that
governments place on inward investment,
including joint venture requirements. This
could hit developing countries, as could
restrictive rules on government procurement
(in many of the poorest developing countries,
governments are the main economic agents).
The deregulation of government procurement
also has the potential to constrain local
authority purchasing decisions in the UK.
The EU want to discuss
environmental issues in the Millennium Round,
and the US wants to discuss minimum labour
standards. However, many experts predict that
these plans will either be dropped in the
course of negotiations or used to enforce the
primacy of global trade rules over all other
legislation on environmental and employment
standards.
The US administration also
appears to be seeking to score a PR success
with Congress, before the Seattle
Ministerial, by getting agreement on
liberalising trade in "forest products". This
news has been greeted with horror by
campaigners to save the world’s dwindling old
forests. Any attempt to restrict "non tariff
barriers" to the wood trade could hit the
Forest Stewardship Council and its
certification scheme, currently the only
reliable guarantee that wood products are
from sustainable sources.
Can the Millennium Round
be stopped?
Yes.
A number of Governments
have made clear their opposition to bringing
any new issues into the WTO as part of a
Millennium Round. These include Bangladesh,
Colombia, Egypt, India, Pakistan and various
Southern African countries. The US Congress
may fail to give the fast-track negotiating
authority needed for agreement. France has
made it quite clear that it will not give up
its 'cultural exemption' under any
circumstances.
NGOs across the world
played a key role in stopping the attempt to
reach agreement on the Multilateral Agreement
on Investment (MAI), which would have sharply
restricted the right of Governments to place
environmental or social conditions on inward
investment. At least 1,100 NGOs from 87
countries around the world have signed a
statement opposing the Millennium Round. (The
statement can be viewed at
http://www.foe.co.uk/camps/sdru/stopround.html)
Friends of the Earth wants
to see a major review of the existing world
trade rules, with a view to making them
environmentally sustainable and socially
fair. There should be no new issues and no
Millennium Round.
In addition, Friends of
the Earth is calling on governments to:
-
prevent local, national and
international environmental and social laws
from being weakened because of trade
rules;
-
agree to a moratorium on WTO challenges
to environmental protection and health
standards until the precautionary principle
and the need for high environmental and
social standards is recognised;
-
state that multilateral environmental
agreements to take precedence over WTO
rules;
-
oppose the patenting of life;
-
improve democracy and transparency in
the trade system; and
-
in parallel, reject export-led
development policies, forgive bilateral
debt and agree to substantial multilateral
debt forgiveness for the poorest countries
by the year 2000.
Friends of the Earth will
be in Seattle throughout the Ministerial
meeting. We can be contacted at any time for
advice, news and opinion on the WTO and the
Millennium Round.
Contacts:
Ronnie
Hall 0171 490 2665 (UK)
Tony Juniper 0171 490 0336
(UK)
Ian Willmore 0171 566 1648
(UK)
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