Future of WTO Negotiations Hangs in the Balance at G20 Trade Ministers' Meeting
Director, International Programs
Center for Economic and Policy Research
On July 19, Trade Ministers from the G20 group of countries -- including Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, the Russian Federation, Saudi Arabia, South Africa, Turkey, United Kingdom, the United States and the European Union (EU) -- will convene for their annual meeting in Sydney, Australia.
Decisions taken at the G20 are not binding on members, which is why the gathering has lost steam from its origins in the aftermath of the global economic crisis. But the meetings can be used to build consensus toward positions that can be brought back to forums where decisions can be enforced, such as the World Trade Organization (WTO). And this is exactly what the United States plans to do.
At the WTO Ministerial last December in Bali, members agreed to the first expansion of the WTO since its coming into existence in 1995. The new agreement on "Trade Facilitation" would set binding rules on customs procedures and trade operations that would demand huge investments from developing countries and Least Developed Countries (LDCs) to modernize and streamline - according to U.S. and EU standards -- their port operations. This means that while we still don't have binding international rules on, say, the right to water, corporations would have the "right" to have their products exported into developing countries quickly, easily, and cheaply. That's why nearly 200 organizations around the world opposed the agreement when it was being negotiated last year.
The TFA would also divert limited resources away from priority development needs such as health, education, and domestic infrastructure investments in LDCs and developing countries. Developed countries refused to make binding commitments on financial support during the negotiations. The World Bank announced on July 17 that it would make available, through its Trade Facilitation Support Program (supported by Australia, the EU, the U.S., Canada, Norway and Switzerland) an embarrassingly paltry $30 million for over 100 developing countries to assist them in implementing the TFA. The amount is dwarfed by the announcement of a $50 billion New Development Bank and a $100 billion Contingent Reserve Arrangement (CRA) this week by the BRICS (Brazil, Russia, India, China and South Africa.)
The outcome of the Bali negotiations, as we predicted last fall, was heavily tilted in favor of market access demands that benefit developed-country exporting and importing corporations. The issues of urgency for developing countries, such as the G33 (a group of 46 developing countries with large populations of agricultural producers) proposal to allow developing countries to invest in Food Security, were sidelined. (This proposal was supported by the former U.N. Special Rapporteur on the Right to Food, Olivier de Schutter, in his outgoing publication in May.) The proposals to benefit LDCs were concluded only in "best endeavor" language (meaning that they're not binding on members).
Since the Bali Ministerial, however, developing countries and LDCs have fought to ensure that the new TFA only "enters into force" when their development demands -- to change the most harmful aspects of existing WTO rules -- are also agreed. The Africa Group, along with the LDC group (led by Uganda), the ALBA Group (Venezuela, Cuba, Ecuador, and Bolivia) and leaders on the issue including India and South Africa, have excellent legal standing to link the two issues, as this is how any Early Harvest is contemplated in the Doha Declaration.
Outrageously, the new Director General of the WTO, Brazil's former Trade Minister, Roberto Azevêdo, has joined with officials from the U.S., Japan, the EU, and other developed countries, to put immense pressure on developing countries and LDCs to "give in," and accept that the only "Early Harvest" from the Doha Round will be the TFA.
In a brazen move, the United States has even threatened not to renew the trade preferences for African countries in the African Growth and Opportunity Act if they don't allow the TFA to enter into force -- after spending most of last year trying to spin negotiators that the TFA would primarily benefit Africans!
If the TFA enters into force as a stand-alone, it will be even harder to ensure that the development demands- - many of which are similar to those of civil society such as changing agriculture rules to allow developing countries to invest in agricultural production of small farmers for food security - are ever taken up by WTO members. The U.S. and other countries have made it eminently clear that they intend to abandon the development agenda once they achieve a binding deal on Trade Facilitation.
At this point, India seems to be maintaining its position - but it will then be blamed by the U.S. for blocking a deal, rather than the U.S. taking the blame for cynically achieving corporate trade expansion goals under the guise of a "Development Round."
Of course, this is still a long way off from our collective demand for a completely new trade system focused on food, jobs, and sustainable development. But we cannot hope to implement that vision if the WTO expands its corporate agenda even further this year.
That's why more than 170 civil society organizations and trade unions from more than 150 countries, coordinated by the Our World Is Not for Sale (OWINFS) network, sent a letter yesterday to WTO members urging them to condition the entry into force of the Trade Facilitation Agreement to the completion of the development mandate.
The G20 - with an assist from global corporations in the B20 -- must not be utilized by rich countries, the corporations they represent, and Director General Azevêdo to pressure developing countries to agree to trade deals that are against their interests.
A final decision on the issue is set to be taken at the upcoming General Council meeting of the WTO, on July 24-25.
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Deborah James is the Director of International Programs at the Center for Economic and Policy Research, and facilitates the WTO campaign of the OWINFS network.