What's Going on at the WTO? : Opportunities and Risks Before the 9th Ministerial Meeting
Written by Deborah James, Director, International Programs at the Center for Economic and Policy Research
Last week was a doozy on the trade scene in the United States, with Congressional opposition to Fast Track and the Trans-Pacific Partnership (TPP) erupting from bothRepublicans and 151 Democrats. Intellectual property texts leaked by Wikileaks revealed the United States trying to limit internet freedom while arguing for trade restrictions that wouldjack up medicine prices; the AARP is outraged.
Another set of "trade" negotiations are occurring parallel to these, and they will have even more impact on most developing countries. The Ninth Ministerial Meeting of the World Trade Organization (WTO) will take place in the Convention Center on Bali in Indonesia, December 3-6th of 2013. While the agenda has been narrowed from the original mandate of the so-called "Doha" Round of the WTO, decisions made there will still shape the future of the global trade system. And in all likelihood, a majority of the decisions could well be made this week, in order to avoid a "failed" Ministerial like those at Seattle (1999), Cancun (2003), and Hong Kong (2005).
After more than three decades of experience with a corporate-led model of globalization, it is clear that this particular globalization has failed workers, farmers, and the environment, while facilitating the vast enrichment of a privileged few. The emergence of the global financial and economic crises have exposed many negative impacts of policies, such as: deregulation of the financial sector resulting in financial instability; commodification of the agricultural markets resulting in food price volatility and hunger; "race to the bottom" liberalization policies resulting in inequality and wage stagnation; intellectual property monopolies limiting global access to life-saving medicines; and corporate-trade-expansion (rather than trade-for-development) policies exacerbating the climate crisis. Despite this incredible harm, these liberalization, deregulation, and corporate monopolization policies form the backbone of the current global trade system, consolidated by the WTO since 1995 (1).
Given this history of damaging WTO impacts, there has never been a better time to "Stop the Expansion of the WTO and Shut Down the Corporate "Trade" Attack: Food, Jobs, Peoples' Rights and Sustainable Development First!" The Our World Is Not for Sale (OWINFS) network asserts that the global trade framework must work for the 99%: it must provide countries sufficient policy space to pursue a positive agenda for development and job-creation, and must facilitate, rather than hinder, global efforts to ensure true food security, sustainable development, access to affordable healthcare and medicines, and global financial stability. And it must privilege global agreements on human rights and environmental sustainability over corporate profit.
Unfortunately, that is not the direction the negotiations are heading towards Bali.
Bali Package: We Demand Food Security, Not More Liberalization
After many failed Ministerial meetings and twelve years of negotiations, the Doha Round of WTO expansion is at a crossroads. Developed countries have pushed aside agreements with developing countries to negotiate issues intended to correct the imbalances within the existing WTO, which formed the basis of the development mandate of Doha. Even worse, developed countries appear to be re-packaging the same liberalization and market access demands of their corporate interests to achieve new agreements at the upcoming Ministerial in Bali.
This includes an agreement on Trade Facilitation. Rich countries, with their allies in the World Bank and World Economic Forum, have worked through the year to try to "sell" a Trade Facilitation agreement as a "win-win" for development. But the deal would bind developing countries to the customs and port-of-entry policies and procedures that rich countries have implemented over many decades to their own advantage, imposing excessive regulatory, human resources, and technological burdens on developing countries.
At the same time they have been unwilling to commit to providing resources for poor countries to modernize their facilities, meaning that these countries would have to prioritize computerizing their customs offices over their schools, and improving infrastructure at ports rather than at hospitals. Many anti-development aspects of this proposed Trade Facilitation agreement are elaborated in a letter to WTO members that was endorsed by nearly 200 global networks and civil society organizations.
At the same time, rich countries continue to marginalize the ongoing demands of developing countries towards the Bali Ministerial. It is a little-known but outrageous asymmetry in the current WTO rules, that while developed countries are allowed to massively subsidize their agriculture (to the tens or hundreds of billions annually), only 17 developing countries are allowed to subsidize over a minimal amount. The UN Special Rapporteur on the Right to Food criticized the current WTO agricultural rules in advance of the last WTO Ministerial through a stinging report, "The World Trade Organization and the Post-Global Food Crisis Agenda: Putting Food Security First in the International Food System," which ruffled quite a few feathers at the WTO.
Now India, the country with the largest number of poor farmers, is embarking on the most far-reaching Food Security program in the world, attempting to not only provide subsidized food to the poor, but to ensure that the food is purchased at fair prices from extremely poor farmers. Unfortunately, this program - in contrast to the food stamp program of the United States - would run afoul of WTO limits on developing country agricultural subsidies.
Thus, in the last year, India has courageously led a coalition including Indonesia, the Philippines, and dozens of other developing countries, demanding that WTO rules change to allow them to subsidize farmers producing food for domestic consumption, so that they can reach their national Food Security goals. It should be noted that these aspirations are also shared by the global community through the United Nations' Millennium Development Goals, 1.C: "Halve, between 1990 and 2015, the proportion of people who suffer from hunger."
Unsurprisingly, the United States has consistently spoken out against this proposal, and flatly refused to negotiate on it. Thus the current debate focuses on a potential "Peace Clause" - meaning that countries agree not file disputes against each other in the WTO, on the rules in question. Of course, the proposed Peace Clause only makes sense if it is in effect until a permanent solution could be agreed upon to change the rules. While the U.S. argues for permanent rules on Trade Facilitation, it only wants a Peace Clause of a few years, and even then with so many conditions as to invalidate its usefulness! This is a truly evil position of the U.S. in the negotiations, and one which should have advocates of the Right to Food, and Food Sovereignty, and just about anyone against people dying of hunger, united in a clarion call for immediate change.
Unfortunately, nearly every U.S. agricultural commodities exporter endorsed a letter sent last month to USTR Froman, urging him to block the proposal, and to advocate for further agricultural liberalization instead. (A House and Senate leadership letter, described below, did as well.) Fortunately, Indian farmers have been putting pressure on their government, having sent a letter last week opposing a short-term Peace Clause: "[k]nowing the hardening positions, it does not make sense for India to trade off the very survival of its 600 million farmers and 830 million hungry for the sake of a successful Doha Round." And global civil society is rallying support for the farmers as well.
One more aspect of this debate exposes even further its absurdity. The other main proposed change to agricultural rules for the Bali package asks developed countries to reduce their export subsidies - meaning subsidies that directly distort trade, not the subsidies for domestic consumption - by half. As of now, the U.S. and European Union are refusing to reduce their own export subsidies, while refusing to allow developing countries even a bit of wiggle room in their domestic support for Food Security. The hypocrisy is scandalous.
The third aspect of the so-called Bali package involves proposals put forth by the Least Developed Countries (LDCs), led by Nepal, to improve the results of their participation in global trade. These should be approved and implemented immediately. The issues that are less economically impactful, or are non-binding, are close to being resolved. (This includes non-binding guidelines on simplified Rules of Origin, and the option for developed countries to provide LDCs with a waiver on the Most Favored Nation conditions on LDC services exports, which was granted two years ago, and which no LDC has yet been able to utilize.) The issues that are more economically impactful have yet to be agreed. (This includes gaining Duty Free, Quota Free market access for 100 percent of LDC exports; and an agreement to abolish subsidies that vastly distort the cotton industry, wreaking havoc on the lives of millions of farmers across Africa; the U.S. cotton industry won't allow it.)
The development advocates, environmental groups, trade unions, farmers, and consumer organizations that work together on the WTO through the global Our World Is Not for Sale network (OWINFS) are demanding, along with the vast majority of WTO members that any agreement for the upcoming 9th Ministerial at Bali must be centered on the G33 proposal for Food Security, and a strong LDC package, and must forego a bad deal on Trade Facilitation.
The geopolitical context will be quite different for this Ministerial than previous ones. The last few Ministerials have been held in Geneva, as host countries fear massive civil society resistance. This year's host, Indonesia, typically a strong advocate for agricultural reform, has advocated instead for a "successful" conclusion. The United States still opposes any concession that does not also force the "emerging market" countries to concede - although their impoverished populations dwarf those of the majority of poor countries. But the newDirector General of the WTO hails from Brazil, traditionally a leader of the G-110 alliance of developing countries in the WTO, and thus its strength has been somewhat tempered while DG Azevêdo pushes for a deal, according to sources in Geneva.
Fortunately, the LDC Group and the Africa Group (led by Tanzania) have maintained strong stances. And while the African, Caribbean, and Pacific (ACP) Group's position has been weakened by an over-reliance on advice from developed country advisers, last month they issued a strong statement calling for a "meaningful, balanced" outcome at Bali. A group of Latin American countries, including Argentina, Bolivia, Cuba, Ecuador, Nicaragua and Venezuela have shown leadership in the negotiations. And the scandals of the National Security Agency (NSA) of the United States spying on trade partners to get a leg up on the negotiations cannot be ignored.
Post-Bali Agenda: Wrong Direction
At the same time they have blocked a development-focused agenda for Bali, developed countries have already launched negotiations on their post-Bali agenda, including towards an expansion of the plurilateral Information Technology Agreement (ITA). An expansion of the ITA would achieve many of the liberalization goals of developed countries from the negotiations on tariffs on goods in the Doha Round. The Chairman and Ranking Member of both of the Senate Committee on Finance and the House Ways and Means Committeesent a letter last week to U.S. Trade Representative (USTR) Michael Froman, outlining their priorities for the Ministerial, which focused on Trade Facilitation and the ITA equally. But the main beneficiaries would be corporations, which is why industry groups like the Telecommunications Industry Association are pushing it. But it would have a negative impact on the ability of poorer countries to develop their technological sectors. That's why163 international and national trade unions and civil society allies, led by the International Trade Union Confederation (ITUC), have raised a series of concerns about the ITA, particularly for developing countries.
They have also launched plurilateral negotiations on services, called the Trade in Services Agreement (TISA). The creation of a radical services FTA like the proposed TISA, advocated for by global banking, investment, accounting, energy, telecoms, transport, and otherservices corporations, would result in the deregulation and liberalization of many private and public services in developing and developed countries alike. It would also reduce pressure on developed countries to concede many changes to existing WTO demanded by developing countries in the negotiations. These two proposed agreements represent more of the failed model of liberalization and deregulation, and are opposed by civil society organizations in participating and non-participating nations, in developed and developing countries alike, as demonstrated by this letter from 345 groups, including 42 major international networks and led by the Public Services International (PSI) global trade union federation, opposing the TISA.
Civil Society Action for a New Focus, New Directions
In their statement in advance of the Bali meeting, "Time to Dismantle WTO Inequality," the Africa Trade Network (ATN) hit the nail on the head for concise recommendations. For the 9th Ministerial, WTO members should agree to make the necessary changes to current agricultural rules that would allow developing countries to pursue Food Security, and agree to the modest demands of the LDCs - without having to "pay" for those corrections with new liberalization commitments on Trade Facilitation. They should also agree to a post-Ministerial agenda that does not focus on "more-of-the-same" corporate wish lists of the ITA and TISA.
Instead, immediate changes must be made to WTO policies in order to provide countries more policy space to pursue job-creation, food security, sustainable development, access to affordable healthcare and medicines, and global financial stability. Many of these changes are outlined in the WTO Turnaround Statement of the OWINFS network, endorsed by over 245 organizations from more than 105 countries.
The WTO Turnaround agenda also points to another truth: in the long run, a completely new institution, with a central mandate of setting trade rules that promote sustainable development while disciplining corporate behavior, must be created.
Members of OWINFS, ITUC, PSI, the ATN, the Arab NGO Network on Development, the Pacific Network on Globalization, LDC Watch, the ACP Civil Society Network, the Third World Network, and other coalitions will be traveling to Bali to put pressure on their governments during the 9th Ministerial, December 3-6th. They have monitored, educated, and organized all year against Trade Facilitation, the proposed ITA expansion, and the proposed TISA, and in favor of the LDC package and changes to the agricultural rules in favor of Food Security. Now OWINFS will bring more than 70 economic justice advocates from Brazil and India, Nepal and the Philippines, Uganda and Ghana, Tanzania and Zimbabwe, Lebanon and Australia, and the United States and Norway - 33 countries all told - to organize pressure on negotiators.
Local Indonesians will be leading education and action efforts. The Indonesian Peoples' Alliance, which will be holding a Peoples' Global Camp Against WTO and Neoliberalism, complete with marches and rallies alongside plenaries, workshops, sectoral events, and a solidarity cultural night. The Gerak Lawan anti-neoliberal and anti-imperialist coalition in Indonesia will hold an End WTO-Bali Week of Action, including a youth caravan, an economic justice assembly, global day of action, peoples' tribunal, and more. The national coalitions bring together farmers, trade unionists, development advocates, environmentalists, women's and youth groups, and more, in a country that has long been affected by the negative impacts of corporate globalization.
It is certainly not lost on people in Southeast Asia, that the WTO's corporate trade model has contributed to global inequality, wherein some consume far more than their share of resources, resulting in climate change - while others still struggle to feed their families, and suffer the impacts of extreme weather events like Typhoon Haiyan.
We look forward to a future in which the negative impacts of corporate trade are understood, and the geopolitical dynamics have shifted, and governments are held accountable to their peoples, and civil society engagement is strengthened, so that of different vision of global trade governance can be put into place that truly benefits the poorest while enabling sustainable development for all.
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1. While the global framework of these rules is set by the WTO, these same policies also appear in an even more extreme form, in regional and bilateral so-called Free Trade Agreements (FTAs) that have led to job loss, food price volatility, and increased foreign corporate control over public services and natural resources. And the recent proliferation of Bilateral Investment Treaties (BITs) has led to many developing countries being taken to private courts by transnational corporations, resulting in the overturning of many health, safety, and environmental laws, as well as awards in the billions of dollars from taxpayers to corporations.