Seattle provides opportunities for developing nations

by Gumisai Mutume

Mexico City, Aug 25 (IPS) -- The World Trade Organisation's (WTO) ministerial meeting in Seattle in November gives developing nations another opportunity to rally together and reverse harmful trade regimes rather than accept a new round of negotiations.

The conference will see the culmination of a campaign by more than 500 non-governmental organisations in more than 60 developing countries such as Egypt, India, Malaysia, South Africa and Kenya.

They are opposing a proposal by the European Union (EU), Japan and the United States to open a new round of negotiations which would add new issues to trade regimes that already disadvantage developing countries.

"African ministers of trade, should call for a review of the WTO rather than discuss an agenda with new issues," says Mohau Pheko, the Chief executive of an African trade consultancy - Motheho Integrity Consultants.

"Africa has made far more concessions than they have received," he says. "Most of the concessions and commitments have come from African countries and very few from industrialised countries.

"It therefore would be prudent for Africa to let the agreements with far-reaching implications consolidate, before embarking on new areas of trade negotiations in the WTO."

Developing countries, which make up the bulk of WTO's 135 members, have been sceptical of the organisation's "millennium round" of talks - fearing it will be used by richer nations to promote their demands to link trade, labour and environmental issues.

The South wants to focus on implementing current trade commitments rather than taking on new ones.

According to Pheko, if Africa and the rest of the developing world do not object to a new round with new issues they will continue to negotiate as victims, with no power. As underdogs, they would be colluding with the narrow interests of transnational corporations (TNCs) who are behind WTO calls for further liberalisation, he says.

The rules of the WTO, signed in 1994, cover trade areas such as food, environmental standards, regulation of services such as transport, how governments can use taxes, copyright, patent law, agricultural policy and more.

Still hanging are issues such as anti-dumping practices skewed in favour of richer nations, a dispute settlement process, greater access by developing countries to markets in developed countries and a review of the Trade Related Aspects of Intellectual Property Rights (TRIPS) due this year.

Despite likely controversy, western powers are pushing for rules covering new areas such as investment, with the intention of opening up national economies to increased levels of foreign investment.

Under the proposed regimes, local governments would have significantly reduced control over inward investment and TNCs would enjoy increased rights and legal status.

The big powers also are seeking to remove bureaucratic obstacles to international trade under the competition policy. If this is brought to the negotiating table it may attach to the treaty further environmental safety, health and labour standards which developing countries may not be ready to enforce.

Big trading nations also are pushing for a situation in which government procurement procedures are opened up to foreign tender notes Mohau, a trade economist advising governments, parliament, and NGOs on trade, gender and economics.

"This is significant for many developing countries, some of whom have government procurement contracts worth up to 70% of their gross domestic product, which they need to control in order to direct the sustainable development of their economies," she says.

TRIPS, another issue of importance to farmers in developing countries, is being pushed forward to next year due to delays by the United States. Under TRIPS, countries are obliged, to an extent, to privatise bio-diversity.

The experience of many developing countries with the treaty involves a situation where huge claims to legal monopoly have been placed on their genetic resources by TNCs. The South has been pushing arguments over the legality of such patents raising ethical and religious concerns.

For example, Islamic legal theory contains at least one major stumbling block for the implementation of intellectual property regimes.

"The premise that all property belongs to Allah and that man is simply the earthly custodian of this property in many ways prevents implementation of a person-property regime of monopoly required for exploitation of intellectual property," notes Grady Miller, British Trade Policy Counsellor.

"Other developing countries have encountered although not necessarily completely solved this problem. The former Soviet- bloc countries used compulsory licensing (type of nationalisation) as a way of avoiding personal exploitation of inventors of intellectual property," Miller says in a report to the Arab Planning Institute on new economic developments and their impact on Arab economies.

Developing countries also are concerned at the rate of tariff reductions.

As an example, initial assessments show that Kenya would have benefited more if the reductions in tariffs on goods of export- interest to it were either the same, or higher, than those on the goods of export-interest to developed countries.

Goods of export-interest to Kenya such as leather, coffee, tea and tropical fruits had their tariffs reduced by an average of 30% against 56% reduction in the tariffs on products of export- interest to developed countries, says a Kenyan discussion document.

"Agriculture is one of the most important sectors in the Kenyan economy. Kenya has certain major concerns regarding the implementation of the provisions of the agreement on agriculture," notes the document - to be presented in Seattle.

East Asia however is divided on whether to support further liberalisation of agricultural markets. Northeast Asia, particularly Japan and South Korea, are opposed to more liberalisation because it would mean the extinction of their small rice farmers.

"Indeed, it is said that Japan's rationale in supporting the EU's position for a new round of comprehensive negotiations is to give it flexibility in defending agriculture," says Walden Bello co- director of the Bangkok-based NGO, 'Focus on the Global South'

"A comprehensive, multi-sectoral round would enable it to trade concessions in, say, industrial tariffs in exchange for yielding few or no concessions in agriculture."

Southeast Asia on the other hand is part of the "Cairns Group" - an informal bloc of big and medium-sized developed and developing country agricultural exporters, including Argentina and New Zealand. They want broader and faster liberalisation of agricultural markets through increased market access, an end to export subsidies and a decrease in production subsidies in the North.

"Interestingly," observes Bello, "the Southeast Asian governments find themselves on the same side as the United States, which has formed a de facto alliance with the Cairns Group to put pressure for market-opening on Japan and South Korea and the ending of direct-income subsidies for EU farmers."

"In a classic instance of double standards, the US Department of Agriculture has stoutly defended its own forms of direct-income subsidies for its farmers, but the Cairns Group countries seem unwilling to challenge Washington," points out Bello.

The Southeast Asian position is also seen as serving the interests of organised lobbies of cash crop exporters and processors like Malaysian palm oil plantations, Philippine coconut oil exporters and the Bangkok-based middlemen in the Thai Rice industry.

"The vast majority of unorganised small farmers in these countries, who do not have political clout are harmed by this position, for the quid pro quo of greater market openings for products like palm oil and coconut oil in the North is even greater liberalisation of sectors like rice and corn in Asia, where small farmers are concentrated," says Bello.

Other issues that should be high on the list of developing countries include the Dispute Settlement Process and the anti- dumping agreement.

The above article by the Inter Press Service appeared in the South- North Development Monitor (SUNS) .