The WTO 6th Ministerial:
People Power vs.
Corporate Power
A
grand global fight looms in Hong Kong in December—a fight between the rich
corporations and governments of the First World, and the vast number of
people in the Third World worst hit by the W.T.O.
By Joseph Yu
Ibon Features
Posted by Bulatlat
With two failed ministerials out of five,
the World Trade Organization (WTO) faces a crisis as it prepares for its
Sixth Ministerial Conference on Dec. 13-18 in Hong Kong.
The U.S.
and European Union (EU) need to close an agreement in December to open new
markets for their agricultural and industrial overproduction and stave off
their intensifying economic crisis.
The Ministerials, held every two years,
are the WTO's highest decision-making body. Their purpose is to enable
trade ministers to make decisions on how to move forward on any of the
multilateral trade agreements. But ministerials in
Cancun and Seattle have ended in deadlock as developed and underdeveloped
countries have failed to reach an agreement on vital issues.
A third ministerial collapse would present
rich countries with the almost impossible task of salvaging the WTO.
Hence, a grand global fight looms in Hong Kong between First and Third
World countries, and between transnational corporations (TNCs) and the
vast number of people worst hit by the WTO.
The 'Doha Development
Agenda'
Set to be discussed in Hong Kong is the
"Doha Development Agenda", which was launched at the Fourth Ministerial at
Qatar in 2001. The Fifth Ministerial held in Cancun in 2003 was supposed
to have concluded the current round of negotiations under the Agenda but
it collapsed as WTO members failed to come to an agreement on key
negotiating issues.
The Doha program includes the mandated
review of the Agreement on Trade-Related Intellectual Property Rights
(TRIPS), the renegotiation of the Agreement on Agriculture (AoA) and the
General Agreement on Trade in Services (GATS), as well as negotiations on
non-agricultural market access (NAMA) and the four Singapore Issues
(investment, competition policy, government procurement and trade
facilitation).
The completion of the Doha Agenda is being
promoted by the WTO and its supporters as necessary to enable the
multilateral trading system to work for the poorest countries. But past
experience has shown that the WTO's major agreements have merely served to
strengthen the monopoly power of the world's largest corporations, many of
which are based in the U.S..
Intellectual Property
One notorious example of how the WTO
upholds corporate power is the TRIPS agreement, which corporations are
using to deny poor countries access to low-cost generic versions of
patented medicines. Although TRIPS allows compulsory licensing and
parallel importing in the name of promoting public welfare, these have
been challenged before the trade body by the big drug companies.
For example, South Africa imports cheap
AIDS drugs from India, which produces generic versions of such medicines
for a fraction of what is charged elsewhere. The U.S. pharmaceutical
industry is threatening to challenge this practice before the WTO. If
successful, millions of sick people in poor countries may be unable to
afford much needed medicines.
Further, since intellectual property as
defined by TRIPS allows plant varieties to be patented, the agreement
undermines the food security of poor countries by exacerbating the already
limited access to food and seed by poor farmers.
Under the TRIPS, local farmers must pay
annual fees to use seeds patented by corporations, even if such seed
varieties were the result of cross-breeding by farmers' ancestors. Farmers
who plant for their own and their family's consumption can hardly afford
to pay licensing fees and this would effectively deny them the right to
use these seeds.
Agriculture
Among the most contentious negotiations in
the Hong Kong ministerial will be those regarding agriculture. A deadlock
in talks over agriculture liberalization was one of the major reasons for
the collapse of the Cancun Ministerial.
Under the AoA, border protections other
than set tariffs are prohibited, and even these tariffs have to be reduced
progressively. The AoA also requires WTO member-countries to allow minimum
market access for each individual agricultural product. Rules were also
created under the agreement for domestic support and the reduction of
export subsidies.
The restructuring of global agriculture
under the AoA is premised on the theory of comparative advantage, which
says that free market competition will result in each country specializing
in a product that it can produce efficiently and at a competitive cost. In
a globalized marketplace then, each country will be able to export the
product it specializes in and import what it needs from other suppliers.
However, a decade after the multilateral
trade body was founded, agricultural subsidies in First World countries
have remained high while elimination of quantitative restrictions and
tariff cuts around the world have facilitated a dramatic increase in
dumping of agricultural commodities in Third World markets. Hence, the WTO
regime has proven to be a mechanism for developed countries to open
Third World markets to their imports, to the benefit of giant agribusiness
corporations.
Majority of Third World
countries are basically subsistence agrarian economies. A large number of
the populace in these countries relies on agriculture as their major
source of food and livelihood. These farming families are threatened by
the influx of cheap agricultural imports brought about by liberalization.
A study conducted by the Institute for
Agriculture and Trade Policy reported that the U.S. has been dumping five
major agricultural commodities in the world market: corn, wheat, soybeans,
cotton and rice.
Another study estimates that
underdeveloped countries lose over $40 billion of net agricultural exports
and $24 billion in agricultural and agro-industrial income annually
because of subsidies and protectionism by rich nations. In Asia,
underdeveloped countries lose some $6.6 billion from agriculture as a
result of developed countries' protection of their farm sectors.
This has driven millions of poor
subsistence farmers off their lands, while small agricultural producers
fall into bankruptcy in the face of competition from dumped products.
Thus, liberalization leads towards concentration of land in the hands of a
landowning elite, the marginalization of small farmers, growing peasant
landlessness and the indigenous peoples' loss of control over their
ancestral lands.
Services
The growth of the global services sector
presents a lucrative opportunity for transnational corporations (TNCs):
for instance, world expenditures on water now exceed $1 trillion annually;
on education, over $2 trillion; and on health care, over $3.5 trillion.
From 1990 to 2000, commercial services exports, monopolized by TNCs, grew
seven percent. In 2004, the value of global exports of commercial services
reached $2.1 trillion, a 16% increase from the previous year.
Hence, it should not be surprising that
rich countries like the U.S. and EU are aiming to further open up the
services sector of Third World countries through the GATS agreement. GATS
is the first and only set of multilateral rules governing international
trade in services. Its scope is such that it covers all services and
applies most favored nation (MFN) treatment to these.
This has raised concerns that the reach of
the GATS could extend even to vital public services such as education and
health, leading to their commercialization. Commercialization means that
user fees will be raised to "cost-recovery" levels, putting these services
out of reach of the poor.
Locally, this trend can already be seen in
the privatization of water services in Metro Manila. When private
concessionaires Maynilad and Manila Water took over the operation of
services from the state-owned Metropolitan Waterworks and Sewerage System
(MWSS) in 1997, basic tariffs were at P4.96 and P2.32, respectively. By
2004, rates had grown to P16.18 and P10.43, or increases of 226% and 350%
respectively.
NAMA
The reduction of tariffs on industrial
goods has actually been part of the original purpose of the General
Agreement on Tariffs and Trade (GATT), the multilateral trade agreement
that eventually gave birth to the WTO. However, it was during the Fourth
Ministerial Conference in 2001 that WTO members launched multilateral
trade negotiations to expand liberalization on industrial products. These
negotiations are known as the non-agricultural market access or NAMA.
However, it is clear that industrialized
countries will be the biggest winners if tariffs on industrial goods were
reduced or eliminated since they are among the largest traders in
manufactured goods. In 2002, the EU and the U.S. jointly accounted for
more than half of world exports and imports of manufactures.
First World TNCs are also among the most
active in lobbying heavily for the elimination of tariffs in manufactured
goods. As a United Nations report on the NAMA talks in the WTO points out,
"the most obvious objective of governments in these negotiations is to
create improved market access opportunities for their exporters."
But the reality is that many Third World
industries remain at the simple processing/assembly stage. They are simple
processors of raw materials or subcontractors of foreign corporations who
assemble semi-processed inputs imported from other TNC subsidiaries.
Exposing these nascent industries to an
onslaught of finished imported products resulting from liberalization
would kill them or force them deeper into dependence on foreign corporate
interests.
It should also be noted that the scope of
NAMA also extends to fish and fish products, thus also threatening to
affect the livelihood of fisherfolk in poor countries.
Singapore Issues
The Singapore Issues refer to four working
groups set up during the WTO Ministerial Conference of 1996 in Singapore,
which consist of investment protection, competition policy, transparency
in government procurement and trade facilitation. Most developing
countries were unconvinced of the necessity of negotiating multilateral
rules on these issues, which they see as being of primary interest to
developed countries.
On investments, for example, the EU is
pushing for the inclusion in the WTO agreements of new trade rules that
would provide foreign investors new rights to enter countries more easily
and operate more freely. On competition policy, the EU is also advocating
a new agreement that would restrict domestic laws or practices in
developing countries that favor local firms, on the ground that they are
inconsistent with free competition.
On government procurement, the U.S. wants
an agreement to liberalize procurement to give their companies the right
to have a large share of the lucrative business of providing supplies to
and winning contracts from the public sector in developing countries. On
trade facilitation, the U.S. and EU are demanding the removal of other
hinderances to trade such as bureaucratic processes and red tape.
Avoiding "Failure"
With both developed and developing
countries still widely divergent in their views, it seems clear that the
Hong Kong ministerial may once again end in a deadlock. Thus, the WTO is
scrambling to try and save Hong
Kong from being termed a "failure".
At a "super Green Room" meeting held early
November attended by Ministers, and/or officials and Ambassadors of 28
delegations, participants significantly scaled down their expectations of
the outcome of the
Hong Kong ministerial. This scaling back of goals represents a setback in
the timetable for completing the negotiations by end-2006. In September,
WTO Director-General Pascal Lamy had set the target that two-thirds of the
Doha round agenda should be completed in Hong Kong.
This was generally understood to mean that
full modalities (negotiating frameworks including approaches, formulae and
numbers) for agriculture and NAMA would be agreed upon, and clear progress
attained in other areas such as services, special and differential
treatment for developing countries, implementation issues, trade
facilitation and intellectual property.
With Hong Kong
expected to miss this goal, there is now expectation that another
ministerial would likely be held in early 2006 to finish what could not be
completed in December.
Unrest over the WTO
It is clear that trade liberalization has
not benefited the world's poorest people, and in fact, has even driven
many of them deeper into poverty. This is why there is growing widespread
unrest against the WTO.
The multilateral trade body has already
seen two dramatic upheavals in Seattle and Cancun, with the strong
possibility of a third this December in Hong Kong. These breakdowns
represent real victories for the people's movements that have mobilized
against WTO-mandated trade liberalization to assert their countries'
rights to economic sovereignty and genuine development.
People's movements have succeeded in
influencing public opinion against liberalization under the WTO by
exposing the skewed nature of the trade negotiations, which blatantly
favor the rich countries. They have also helped strengthen the opposition
of Third World governments to being
railroaded into making a deal, contributing to the ministerials'
breakdowns.
But a third collapse in Hong Kong would not represent a decisive people's
victory against corporate-led globalization. Even if trade talks broke
down, the corporations would still maintain their immense economic power
and their stranglehold over the world economy. Only constant vigilance and
a continued struggle by people's groups would reverse the spread of
neoliberal globalization and uphold the economic sovereignty of the
world's developing countries. IBON Features/Posted by Bulatlat
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