page 5

issue 103
august 2003  

business rules: who pays the price?

According to WTO spin, we are all winners from ‘free trade’. Rich and poor alike, those in the global North and South all benefit from the breaking down of trade barriers through the WTO and regional trade agreements like the Free Trade Area of the Americas (FTAA). Critically, pro-‘free trade’ governments claim that what is good for big business will also be good for people and their environment.

The reality is vastly different: all too often, communities and the environment are the losers from trade ‘liberalization’. Communities’ interests are ignored, as they have no access to negotiators deciding on rules and agreements, and the environment loses as the protection of our natural resources is seen as inferior to international trade and investment flows.

Within the WTO, the United States, Japan and the European Union are the most powerful players. Transnational corporations have direct access to all three, particularly through influential corporate lobby groups. The immense financial and political muscle of corporates, combined with the status accorded them by ‘free traders’, allows them to influence both the WTO Secretariat and key governments, promoting WTO rules that protect and advance their interests.

a look behind the scenes: corporates and the wto
The case studies we present demonstrate how corporations are instrumental in developing WTO agreements that have detrimental impacts on people and their environments. The transnationals featured in this publication include Pfizer, Suez, Halliburton, Monsanto and Exxon Mobil. The corporate lobby groups include the International Chamber of Commerce (ICC), Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Industry Organization (BIO), the European Services Forum (ESF), the US Coalition of Service Industries (USCSI), the National Foreign Trade Council (NFTC) and the American Farm Bureau Federation (AFBF)

We focus on the impact that these corporations and lobby groups have on people and the environment in four key areas: food, health and environmental standards, access to essential medicines, control over foreign investment and access to essential services.

The dispute over genetically modified foods in the WTO highlights a wider battle concerning the freedom of countries to decide upon their food, health and environmental regulations and reject food imports accordingly. As far as medicines are concerned, we look at the pharmaceutical industry’s highly effective campaign to use the WTO to undermine access to essential medicines in the South. In relation to investment, the experiences of communities under the North American Free Trade Agreement (NAFTA) raise grave doubts about the wisdom of expanding the WTO’s mandate to include an investment agreement that will take away communities’ control over corporate investments in their region. And finally, the ‘liberalization’ of services, through WTO’s General Agreement on Trade in Services (GATS), is an outstanding example of the way in which corporations are successfully influencing the WTO at the expense of local communities and their access to essential services like water and electricity.

undermining food and the environment

Farmers and consumers in Europe and around the globe will be the big losers if the US succeeds in its push to force-feed GMOs to the world. The US agribusiness lobby, which includes giants like Monsanto and the American Farm Bureau Federation, are key players who are pressuring the US government to challenge the European Union’s restrictions on GMOs in the WTO. The case studies about the Starlink corn scandal and corn contamination in Mexico illustrate that strong national and international precautionary measures must be prioritized and protected from trade interests.

Furthermore, in a move that threatens effective international action on climate change, corporate lobby groups are supporting a push by some governments to undermine Multilateral Environmental Agreements (MEAs) through the WTO. In addition, the US corporate lobby in particular is spearheading a campaign to use the WTO to undermine the precautionary principle, which is a key aspect of sound environmental policy. At stake is the implementation of the recently ratified Biosafety Protocol and a host of national food and health standards designed to protect consumers and the environment.

limiting access to medicines

Access to medicines is essential to human health, and as such, the decision by the WTO to ensure access to essential medicines must be applauded. Subsequent lobbying by the powerful pharmaceutical industry, however, has restricted the reforms with the result that many people in the South will lack access to the medicines they need.

pushing for an investment treaty

Our concerns about the proposed WTO investment agreement are highlighted in a description of the experience of the communities along the beautiful Baja coast in Mexico. Their livelihood, which is based on tourism, is threatened by a giant Shell gas project. This project will destroy the natural beauty of the area and also threaten the local grey whale populations. The dangers posed by a WTO investment agreement are also evident in NAFTA’s strong investment provisions, which tobacco giant Philip Morris has threatened to use as part of its successful campaign to block changes to Canadian tobacco labeling laws. Both Shell and Philip Morris are active members of the International Chamber of Commerce, one of the most vocal proponents of a WTO investment agreement.

‘liberalizing’ services around the world

The potentially devastating impacts of the ‘liberalization’ of services are demonstrated by the experiences of several communities. In Uruguay, people are suffering from price hikes and poor water quality as a result of the privatized water services operated by Suez. In Bogota, Colombia, a privatized energy scheme operated by Endesa is causing similar problems of diminishing levels of service. In Peru, Halliburton’s Camisea gas project is threatening the well being of local indigenous people and endangering an extremely sensitive ecological area. Working through lobby groups, all of these companies have been vocal proponents of services ‘liberalization’ in the WTO’s GATS negotiations.

no new negotiations !

This publication highlights only a selection of the issues and stories about the devastation caused by current ‘free trade’ agreements. In other publications, we have described other fundamental problems with the ‘free trade’ agenda (see our website and www.corporateeurope.org). Friends of the Earth International and Corporate Europe Observatory believe that there is enough evidence to stop further negotiations and call for an independent assessment of the impacts of ‘free trade’. We call on governments to reconsider the current economic system and the way we measure human well being, and to ensure local control over our economy and environment. .