G8: no mandate to take world trade negotiations forward; Development and Environment NGOs as well as trade unions warn of de-industrialization and environmental destruction as a result of cuts in industrial tariffs

(Berlin, 14th July 2006). Leading industrial powers will aim to move forward the global trade negotiations, which failed at the World Trade Organisation (WTO) in June, when they meet at the G8 summit in St. Petersburg, Russia, from tomorrow. Development and environment groups as well as trade unions condemn this as illegitimate. At a major conference of trade experts in Berlin, they warn against blind further market openings, which could undermine development, employment and environmental protection.

Michael Frein, trade expert of the Church Development Service (EED): "Any WTO related result in St. Petersburg would be completely undemocratic. More than 90 per cent of WTO members are not present in St Petersburg; but they, too, deserve a voice on the future of world trade."

The trade negotiations aim to create further "market access" for agriculture as well as industrial goods. The impacts of the cuts in tariffs in industrial goods are too little known and will be negative, a conference concluded in Berlin. The current Non Agricultural Market Access (NAMA) negotiations at the WTO are a disaster for development and environment according to the conference jointly organized by Oxfam, Greenpeace, the Protestant Development Service (EED) and WEED (World Economy Environment and Development) in cooperation with the German Metalworkers Union (IG Metall).

Developing country representatives voiced deep concerns at the current direction of the WTO negotiations: "For most developing countries a drastic cut of industrial tariffs would simply be a disaster. Instead of development, such cuts would risk deindustrialization" argued Mr Goh Chien Yen, trade expert of Third World Network from Malaysia.

Goh quoted worrying examples: When Ivory Coast cut their industrial tariffs by 40% in 1986, the chemical, textile, shoe and car production sectors simply collapsed. But developed countries are asking even for even more now. Goh: "What is on the table is unprecedented historically. Developing countries such as Brazil, India, Indonesia, Pakistan or Paraguay, are asked to cut their industrial tariffs by up to 70%."

Trade unions at the conference warned that tariff reductions in industrial goods would risk aggravating unemployment in the developing world. Senegal, for example, lost one third of its jobs in the industrial production sector, when they liberalized their industrial good markets in the 1990s.

The environment is also being sold out, when tariffs on "indsutrial goods" are cut, as the WTO considers natural resources such as fish and forests as "industrial goods". "It is a farce that the WTO is treating forests as if they were cars.", said Hapsoro from Greenpeace South East Asia. Lower tariffs mean lower prices; and lower prices will increase demand for unsustainable sourced timber. "Plans for forest liberalization at the WTO must be abandoned in light of the proven negative social and environmental impacts" concluded Hapsoro.