From Doha to Cancun
by Sean McDpnagh SSC
Trade Negotiations:
From Doha to Cancún
BY Sean McDonagh SSC
In September 2003 Trade Ministers from counties who are members of the World Trade Organisation (WTO) will meet in Cancún, Mexico to continue the new round of trade negotiations that began at Doha in 2001. Wealthy countries want to give additional powers to the WTO itself and they also want to further liberalize global markets.
Many poor countries as well as non-government organisations (NGOs) and missionary groups from the North and South are opposed to expanding this free-trade agenda. They want the ministers at Cancún to rewrite key agreements within the WTO which are contributing to global poverty and environmental degradation. These protesters are not opposed to global trade. They are aware that trade could play a significant role in alleviating poverty for the 1.2 billion people who are forced to live on less than one dollar a day. But they argue that the present rules of trade, as enshrined in the WTO, actually benefit the rich and often undermine or destroy the livelihood of the poor and are wreaking havoc on the planet's ecosystems.
In particular these groups are lobbying for major changes in the Agreement in Agriculture (AoA), the General Agreement on Trade and Services (GATs) and the agreement on Trade Related Intellectual Properties (TRIPs). (1)
Agriculture
Negotiations on the future of agriculture are taking place on a number of fronts. Even as negotiations on agriculture are on-going within the WTO European ministers had one eye on the mid-term review of the European Union's Common Agricultural Policy (CAP) and what the implications for agriculture will be as the European Union expands to include countries like Poland.
At the moment subsidies for agriculture in First World countries runs at a staggering $350 billion dollars a year. (2) This allows European countries and the US to produce food cheaply and dump it on Third World markets. A few examples will suffice. It costs Europe 50 per cent more to produce sugar from beet than Third World farmers from sugar cane. Despite this, Europe is selling sugar all over the world because it blocks cheap sugar from tropical countries with high tariffs from entering the European market and it subsidises its beet farmers to the tune of $1.5 billion per year. The United States, the self-styled champion of free-trade, uses import quotas and price support to thwart poorer sugar-producing countries exporting sugar into the US market. The loss to poor cane-sugar producing companies is estimated to run to $1.4 billion. (3) Cheap US rice is now poised to under cut local rice farmers in the Philippines driving them from the countryside into over crowded cities. Since joining the WTO the Philippines has lost hundreds of thousands of jobs in the agricultural sector. In the early 1990s the Philippines had a modest agricultural trade surplus. This has now turned into a deficit. The lands that once grew staple food, like rice, root crops and vegetables now grows luxury crops like pineapple and coffee for First World consumers. This is a recipe for hunger and famine as it completely undermines food security in Third World countries. Furthermore, because there is such competition among Third World countries the price they get for their produce is falling. Coffee, for example, is at a 30-year low due to over production. Comments about the unfairness of the WTO policies are no longer confined to left-of-centre politicians. Former President Fidel Ramos pushed through liberal economic policies in the early 1990s. Today he blames the rich nations for their unfair trade practices. In a recent interview Mr. Ramos said he was taken aback by the unwillingness of rich countries to devise a competitive level playing field. "Poor people cannot afford to be on the short end of this deal for long. Poor people are in real need, they are dying". (4)
In the run up to Cancún development groups are lobbying their Trade Ministers to:
1. Promote policies at the WTO which allow greater freedom to Third World countries to provide for the food security needs of their people by protecting their agricultural sector and markets from the predatory policies of large multinational agribusiness corporation. This will mean that the ministers must take seriously the so-called 'Development Box'. This would allow for a series of exemptions aimed at protecting food security in poor countries.
2. Export subsidies, whether by way of export credits or export subsidies must be eliminated immediately.
3. There must be and end to the dumping of agricultural produce on Third World countries. So called price support systems that foster over production and intensive, petrochemical agriculture must be eliminated.
4. Third World producers must have improved access to First World markets. It is important that hidden measures like sanitary requirements are not used in a protectionist way.
The General Agreement on Trade and Services (GATs).
The current provisions of GATs has opened up many areas of Third World economies to powerful corporations. They are now permitted to bid for public services like education, health care and the provision of water and sewage.
One of the best known examples of the negative impact of GATs was the privatization of water in Cochabamba. In 1999 World Bank, which has championed privatization globally, threatened to withhold $600 million in debt relief unless the government of Bolivia privatised its water facilities. In response the government handed over the inadequate water system of Cochabamba to a company called Aguas Del Tunari. This company was a joint venture between Bechtel, a US giant construction company, and United Utilities, a British company. Within a month water bills jumped by 35 percent. Demonstrators drawn from unions, student and environmental groups took to the streets in Cochambamba and paralyzed the city. Over the next few months scores of people where injured and 6 people were killed. After months of rioting Aguas del Turani officials fled the city. At an emergency meeting government officials rescinded the contract and declared that Aguas del Turani had abandoned their 40 year contract worth a whopping $2.5 billion. The water facility has now reverted to public ownership, but Betchel are suing the Bolivian government for $25 million to cover their development costs in Cochabamba. (5) Curtis Runyan believes that "privatization schemes around the world have resulted in drastic rate increases, significant job cuts, fewer environmental safeguards, dropped conservation initiatives, and halted services to poor or remote communities". (6)
There are thousands of other examples around the world where GATs has promoted corporate profits rather than met peoples' basic needs. The demand here is to:
I. Rewrite GATs in order to protect Third World Countries from the predatory activities of northern TNCs in the fields of education, finance, media, water and sewage services. The European Union with the support of the United States wants to further liberalise GATS to force governments to give corporations, even those with appalling social and environmental records, the automatic right to invest in any WTO country. This would also stop national governments from passing any law that would place conditions on foreign investment such as:
1.1 - the need to employ local labour,
1.2 - use local resources.
1.3 - put a cap on profits leaving the country.
1.4 - give corporations the right to sue governments for any breach of the agreement they believe to have occurred.
2 - Expansion of GATS in the area of Government Procurement Agreements.
2.1 - make it compulsory for governments to give corporations the automatic right to compete for government contracts in every WTO country.
2.2 - Ban conditions being imposed on foreign multinational corporations that do compete such as the employment of local people or the use of local and sustainable-source resources.
2.3 - Force governments to treat foreign corporations as favourably as they treat domestic firms in the contract awarding process.
2.4 - Finally, the corporations want the new agreement on trade facilitation that would force governments to remove any remaining impediments to the physical trade in goods. This process will weaken legitimate customs controls and facilitate the transmission of animal diseases. Lax customs were responsible for the 2002 foot-and-mouth outbreaks in Britain, Ireland and France.
At Cancun, Third World, poor countries want governments to require the WTO to enforce the principle of Special and Differential Responsibilities. This would allow poor countries to protect their infant industries against multinational giants and protect their farmers. Unless this happens farmers and businesses in poor countries will be driven out of business by cheap imports. This will keep their economies in a poor, dependent position.
3. Often the requirements of the WTO agreements and multilateral environmental agreements such as the Kyoto Protocol clash. Governments have agreed to decide which have precedence in such situations. Corporations want to make sure that the WTO agreements are given priority. The ramifications for the environment could be disastrous. In the wake of the UN Conference on Sustainable Development in Johannesburg in August 2002 the editorial in NewScientist wrote "Imagine a tough new body - let's call it the World Environment Organisation - that could hand down such rulings in the interest of global sustainability. It could fine countries or companies that wreck rainforests, send noxious clouds across borders or renege on Kyoto commitments. Cynics might say that governments would never give up such powers to an international body. But look ata what they gave up to the WTO in the interests of free trade. It can be done but this week world leaders missed the chance to create such a body". (7) Sadly for governments and corporations free-trade is more important than a healthy environment.
Trade Related Intellectual Properties (TRIPs)
The TRIPs provisions of the WTO allow corporations to put patents on medical treatments and living organisms, including plants, animals and human genes. During the past 2 years the destructive impact of TRIPs has been exposed in the way transnational pharmaceutical companies have refused to make life-saving drugs available for the 30 million people who are suffering from HIV AIDs in Africa. These companies even took the government of South Africa to court in order to protect their patents, even though there are 4 million people with HIV AIDs in that country. At the Doha meeting of the WTO the US delegation was forced to allow countries to buy generics drugs for AIDs patients at a fraction of the cost of the patented medicine. After all the US government had threatened to overrule a patent on an anthrax medicine after 12 people in the US had died from anthrax. At Doha negotiators from other countries were asking, are the lives 12 US citizens more important than 30 million Africans? Since the Doha meeting the US, after strong lobbying by American pharmaceutical giants, has refused to relax global patents on a full range of life-saving drugs. (8) Patenting of living organisms will also legalize biopiracy and give biotechnology companies the opportunity to accumulate vast profits from the world's biodiversity and local expert knowledge of plants. Biopatenting will lead to corporate ownership of the food chain and will result in destructive monocrop agriculture.
This is already happening. For example Monsanto and DuPont now control 75 per cent of the Brazilian corn market. Since 1997 Monsanto's share of the maize seed market has gone from zero to 60 per cent. The speed at which this extraordinary control was achieved by buying up local seed firms. There is a real fear that what has become known as the five 'Gene Giants' ( Monsanto, DuPont, Dow Chemical, Novartis and AstraZeneca) are acting as a informal cartel and keeping the price of farm inputs, like seeds, much higher than they should be. Furthermore, their aggressive expansion into Third World countries will give these five Western transnational corporations a strangle hold on the food chain of the world. This is a recipe for disaster.
The Cancún negotiations must promote the:
1. Immediate and full implementation of the Doha Declaration on Public Health in order to ensure that Third World Governments are allowed to produce and import generic drugs to meet their public health needs.
2. The most pernicious aspect of TRIPs is, of course, Article 27.3 (b). This article promotes the patenting of living organisms. By patenting seeds and animals a handful of agribusiness TNCs aim to control the staple crops of the world. This will bring them huge profits. Unfortunately, it will bring hunger and starvation to millions of people and completely undermine their food security. As a country that suffered a traumatic famine just over 150 years ago, Ireland ought to show leadership in promoting policies that promote food security.
3. Article 27. 3 b must be rewritten to ban patents on all life forms.
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1. For more background on GATT/WTO read my book, Passion for the Earth, 1994, Chapman, London, pages 16 - 38. For TRIPs see my booklet ,The Scramble to Patent Life Will Devalue all Life. See also www.tradejusticeireland.org I would recommend very strongly a book by the Cambridge economist Ha-Joon Chang, Kicking Away the Ladder, 2002, Anthrem Press, London. In his historical analysis of how countries progressed economically, beginning with England, Chang shows that none of the present-day industrialized countries followed the neo-liberal economic advice that global institutions like the World Bank, IMF, WTO and G7 have given to struggling poor countries during the past two decades. It is another example of do what we say, not what we did. The beauty of the book is that its analysis is rooted in a historical critique of how countries developed economically in the past two centuries. In contrast much of the current good economic policy rhetoric is based on ideology.
2 "Food and Trade", Earth, The Guardian in association with Action Aid, August 2002, pages 8- 39.
3 Sweet Surrender, (editorial), Guardian, August 29, 2002, page 14.
4 The Rigged Trade Grame (op. ed.), The New York Times, www.nytimes.com/2003/07/20/opinion/20UN1.html page 1 and 2.
5 Curtis Runyan, Privatising Water, WorldWatch, January/February 2003, pages 36-38.
6 . ibid. page 37.
7 The Party's over: Have we got what it takes to deliver on the promises made at Joburg?, NewScientist, September 7, 2002, page 3.
8 Larry Elliott and Charlotte Denny, "US wrecks cheap drugs deal", The Guardian, www.guardian co. uk./international