A public interest group in the US accuses the World Trade Organisation of launching a coup against democratic governance worldwide as, by its rulings - and even threats of challenges before it - the trade body causes countries to roll back social policies won after decades of citizen activism.

By Danielle Knight

October 1999

Washington: The World Trade Organisation (WTO), founded five years ago to enforce rules governing global trade, instead had launched a coup against democratic governance worldwide, a leading WTO critic declared on 13 October.

'In the WTO forum, global commerce takes precedence over everything - democracy, public health, equity, the environment, food safety and more,' said a report from Public Citizen, a public interest group founded by consumer advocate Ralph Nader.

'Under this new system, many decisions affecting people's daily lives are being shifted away from our local and national governments and, instead, are being made by a group of unelected trade bureaucrats sitting behind closed doors in Geneva,' Nader said.

The 229-page report, titled Whose Trade Organisation?: Corporate Globalisation and the Erosion of Democracy, warned that, as a result of WTO rulings - and even threats of challenges before the trade body - countries had rolled back social policies won after decades of citizen activism.

Domestic regulations, challenged before the trade body primarily by corporate interests, had been found to be barriers to free trade, said the report released in advance of the WTO's ministerial summit, scheduled to be held from 30 November to 4 December in Seattle, Washington.

'This is not free trade,' said Joan Claybrook, president of Public Citizen. 'It's corporate-managed trade...that concentrates more and more power in the hands of fewer and fewer powerful corporate CEOs.'

Countries that are signatories to the trade body are allowed to challenge other countries' domestic laws, if they feel those laws violate the principles of free trade.

Once the WTO dispute panel, which hears the challenges, rules against a country's law, that nation must either repeal the regulation or face perpetual fines to the country that brought the challenge before the trade body.

'The WTO's five-year record looks like a quiet, slow-motion coup d'etat against democratic and accountable policy-making and governance worldwide,' declared Lori Wallach, director of Public Citizen's Global Trade Watch.

WTO rules go way beyond basic trade principles, such as treating domestic and foreign goods the same, and impose value judgements on how much environmental or food safety protection a country will be allowed to provide, said the report.

It listed about 100 domestic regulations which have been challenged, or threatened to be challenged, before the trade body.

The United States initiated about half of the challenges and, unlike many developing countries, the United States had the economic resources to aggressively pursue and defend numerous challenges before the WTO, said Claybrook.

After one such US challenge, Guatemala weakened its implementation of the UN Children's Fund (UNICEF)/World Health Organisation Code on the Marketing of Breast Milk Substitutes, which banned infant formula packaging depicting plump, healthy babies.

The Code was created to ensure that illiterate mothers did not associate the formula with healthy infants, because many infants had become ill or had died after drinking formula diluted with contaminated water.

Health experts were also concerned the advertising would sway mothers away from breast-feeding.

The baby-food manufacturer Gerber, however, threatened to bring the case before the trade body, noting that a fat baby's face was part of its trademark and was protected by WTO intellectual property rules.

'Faced with the threat, Guatemala exempted imported products from its labelling law,' said the report.

In another case, South Korea weakened its food-safety policy in order to avoid a US challenge on its 30-day shelf-life limit for meat. Seoul authorities agreed to shorten the duration of Korea's produce-inspection process, allowing fruit and vegetables to be sold before the results of safety tests were complete.

US health and environmental regulations have also been challenged at WTO hearings.

When Mexico threatened to enforce a ruling under the 1991 General Agreement on Tariffs and Trade (GATT, the treaty that lay the groundwork for the WTO), the United States gutted provisions of the Marine Mammal Protection Act that were designed to protect dolphins from tuna-fishing nets.

'For the first time in 20 years, tuna caught in nets placed around schools of dolphins will appear in US supermarkets - and will bear the "Dolphin-Safe" label that consumers have come to know and trust,' said Public Citizen in its report.

Several new challenges have recently come before the WTO, the report said.

On behalf of the auto industry, for example, the United States and the European Union (EU) have threatened to challenge Japan's new automobile fuel-efficiency rules enacted to comply with its obligations under the Kyoto Protocol, the international treaty seeking to curb heat-trapping 'greenhouse' gas emissions.

'Should this case move to a formal WTO dispute panel, it would be an important test case for the WTO legality of actions taken under an international environmental agreement,' Public Citizen said.

In another threat made in early 1999, the US government also challenged the EU over its regulation on pollution caused by the electronics industry, saying that may violate WTO rules governing environmental policy.

On behalf of the American Electronics Association the United States claimed that an EU proposal to ban certain heavy metals in electronics equipment, to require a certain amount of recycled content and shift the cost of clean-up and disposal from the public to the electronics manufacturers, was illegal under WTO rules.

The report also criticised the secrecy surrounding the trade body's proceedings and rulings. Members of the press, the public, advocacy groups, and even state attorney generals representing their own laws that are being challenged, are not allowed to observe the closed tribunals and hearings of the dispute panels, the report said.

'There is no freedom of information law, no independent appeal, and public transcript,' said Nader. 'We have bound ourselves to tribunals that would be unconstitutional and illegal in this country.' - Third World Network Features/IPS


About the writer: Danielle Knight is a correspondent for Inter Press Service, with whose permission this article has been reprinted.