World trade talks – WTO tells civil society: Come to sunny Qatar
November 6, 2001 – The World Trade Organisation will be holding its fourth Ministerial Conference in Doha, the capital of gulf state Qatar, from Friday 9 to Tuesday 13th November. The talks will see attempts by both the United States and European Union to launch a “new round” of trade negotiations, to extend the remit and powers of the WTO. The last attempt to do this, in Seattle in 1999, collapsed in the face of determined opposition from developing countries and civil society. It is clear that one reason why Doha has been selected as the venue for the talks was to discourage protestors from attending.
But Friends of the Earth International will be present throughout the talks, and our experts will be available for comment and analysis in both Doha and London.
What is the WTO?
The last “Uruguay Round” of trade negotiations led to the formation of the WTO in 1995. The previous General Agreement on Tariffs and Trade (GATT) was an agreement between contracting parties and served as a negotiating forum. By contrast, the WTO is a recognised international body with ‘members’, which is responsible for monitoring and enforcing the World Trade Agreement (WTA) which sets out the legal basis for trade policy. By 2001, the WTO’s membership stood at 142 countries.
The WTO is responsible for administering the WTA and subsidiary agreements. According to the WTO Secretariat, it has three main objectives:
• “…to help trade flow as freely as possible,
• to achieve further liberalisation gradually through negotiation, and
• to set up an impartial means of settling disputes”.
The WTO has no official mandate to protect the environment, fight poverty or to provide sustainable development.
The fourth ministerial
The WTO’s highest decision-making body is the Ministerial Meeting which takes place approximately every two years.
Both the United States and the European Union are hoping that this Ministerial will succeed where Seattle failed, by launching a new comprehensive round of trade liberalisation negotiations (although important differences remain between the two blocs on a range of subjects).
In addition, WTO members are already mandated to renegotiate and review a number of existing agreements (this is known as the “built-in agenda”). This agenda includes ongoing talks on both agriculture and services.
Issues: Who wants what
The EU: A comprehensive ‘new round’ is once again being promoted by the EU, with the support of other countries including Japan, Korea, Switzerland and Norway. The EU wants a comprehensive round to include new issues such investment, competition, government procurement, trade facilitation and the environment.
Another reason why the EU wants negotiations to be comprehensive is its position on agriculture. The EU will resist calls for substantial reductions in subsidy support to this sector, because it wishes to defend the grotesquely expensive and environmentally damaging Common Agricultural Policy. If the EU makes any concessions on agriculture (which it may be prepared to do since the CAP will require radical reform to cope with EU enlargement), it will seek to ensure that it gains advantages in other areas – such as support for the inclusion and prioritisation of new issues such as investment and the environment.
The US: The US favours a new round but remains undecided as regards which new issues should be brought within the remit of the WTO. This change of emphasis originated during the run-up to the Genoa G8 Summit and Climate Change talks in Bonn in July 2001. The US agreed to support the EU’s call for a new trade round (and not to block moves to include investment) in order to smooth transatlantic relationships, following the US’s rejection of the Kyoto Protocol and its announcement of plans to develop a missile defense system (‘son of star wars’). More lately, the US has been more vociferous in favour of a new round, citing further trade liberalisation as a means to tackle global recession.
Other Major Developed Countries: Japan is in favour of a new round and wishes to bring new issues – such as investment – into the WTO. Canada, New Zealand and Australia are all members of the Cairns Group – a collection of developed and developing agricultural exporting countries that favour further trade liberalisation (particularly in this sector) and are generally in favour of a new round with the inclusion of new issues. However, they reject the EU’s proposal on the environment.
Developing Countries: Developing countries, on the other hand, have a different list of issues they want addressed in Qatar. In general, they are opposed to the EU’s ‘new issues’. Instead they want their commitments to existing agreements reviewed. Many developing countries have insisted that an ‘implementation agenda’ is an essential precondition to any new round of talks. They argue that these implementation issues should also address the fact that poor countries have simply not enjoyed the supposed
benefits expected of ‘free trade’.
The Draft Ministerial Declaration for the 4th Ministerial: The Chair of the General Council and Secretariat of the WTO have produced a draft Ministerial Declaration, supposedly a neutral negotiating text based on all members positions and proposals. This declaration will then be further negotiated and agreed (or otherwise) at the Ministerial. In the run up to the Ministerial, two drafts have been published (late September and late October). The first continued to prioritise developed country positions, but largely excluded the environment. Developing countries were generally unhappy with the text because it did not give adequate consideration to implementation issues.
The second draft has been even more contentious. It effectively initiates negotiations on all the new issues – including competition, investment, transparency in government procurement and trade facilitation (but again largely excludes the environment). Developing country interests have once again been marginalised.
What will happen?
There is now the possibility that Governments will not be able to agree a negotiating agenda at Qatar given the increasingly polarised positions of developed and developing nations. The scene is undoubtedly set for Seattle Mark II.
However, developing countries are under intense pressure from developed countries not to reject the latest declaration. Governments may decide that they simply cannot afford a second failure after the debacle at Seattle, and they may also come under pressure to make “progress” as a response to the events of 11th September.
At this stage, it is virtually impossible to predict what might eventually be proposed. For example, a limited round – say confined to market access and industrial tariffs – would almost certainly be opposed by developing countries and by the EU (who would then have fewer bargaining ‘chips’ to play off against any concessions in agriculture).
What should happen?
Much of the rhetoric from Northern country politicians and bureaucrats promoting a new trade round is bogus. There is no equality between rich and developing countries over trade rules. For example, developing countries are commonly required by international financial institutions to open their domestic markets to foreign competition, for example in the agriculture sector. But both the European Union and the United States maintain vast subsidy systems for their own agricultural producers (most of which goes to large-scale intensive farming) as well as barriers to imports from developing countries. Total agricultural subsidy in the EU and US every year is greater than the annual GDP of the whole of Africa!
The free trade rhetoric of Northern countries over the last twenty years, together with the conditions for assistance set by international institutions such as the IMF and World Bank, have resulted in gross increases in inequality between and within countries, the destruction of local agriculture and other forms of production in developing countries, and widespread environmental damage. Until the US, EU and other rich countries in the developed world acknowledge this failure, there is little hope of real progress.
What is needed is fair and sustainable trade, that benefits everybody and allows countries to set and maintain proper minimum social and environmental standards nationally and internationally. There is nothing in the record or remit of the WTO to suggest that the organisation is capable of producing such an outcome.
Friends of the Earth is calling for:
• a block on plans to expand the scope and power of the WTO;
• a full evaluation of the impact of existing trade rules on sustainable
• a fundamental revision of the regulations governing world trade in
order to promote sustainability (For example trade rules should allow a
proper role for local, national and international developmental,
environmental and social laws and regulations).
Tony Juniper (FOE EWNI) 07712 843207 (mobile)
Bertram Zagema (FOE Netherlands: Milieudefensie) 0031-6-29593877
Alexandra Wandel (Friends of the Earth Europe) 0049-172-748 39 53
Vice Yu (FOE Iinternational) WTO Project Officer 0041-79-2375626
Ronnie Hall 01243 602756
07967 017281 (mobile)
Tim Rice 0207 566 1603
Ian Willmore (FOE Press) 0207 566 1649
07787 641 344 (mobile)