Why Asian groups are campaigning against a new Round

Participants from 50 citizen groups, mainly from Asia, met at  a workshop on economic crisis and people's response on 9-11 August 1999 in Manila. One of the main issues discussed was the WTO and why a new Round should be rejected. This article by a leading Filipina journalist captures the ideas and spirit of that workshop.

by Pennie Azarcon-de la Cruz

TRADE and investment, as defined by the World Trade Organization, has become more than an economic issue. Agreements made under the 134-member global trade body affect a country's environment, its women, farmers, workers, as well as its indigenous people and their culture. Governments should therefore review the implementation of existing WTO agreements before discussing new issues for possible inclusion under the WTO system during the trade body's Third Ministerial Meeting in Seattle this November.

This was the recommendation made by members of an international civil society, which met recently to discuss the impact of globalization and liberalized trade policies on various sectors during a three-day "Workshop on Economic Crisis, Social Consequences and People's Responses." The workshop was organized by the Third World Network, a Malaysia-based international NGO concerned with development issues and the Baguio-based Tebtebba Foundation, which promotes the rights of indigenous folk.


"We call for a moratorium on any new issues or further negotiations that expand the scope and power of the WTO," Martin Khor, TWN director, said in a statement signed by different NGOs from China, Korea, Malaysia, Thailand, the Philippines, Indonesia, India, Pakistan, Bangladesh, Colombia, Ghana and Kenya.

The moratorium should make room for "a comprehensive review and in-depth assessment of the existing agreements" to be conducted with the full participation of civil societies, and with the objective of taking " effective steps to change the agreements," the statement added.

In a follow-up forum on the same issues two days later, Rep. Wigberto Tanada assured Khor and Tebtebba executive director Victoria Tauli-Corpuz that he would work on a possible meeting between House officials, the Executive, and representatives from various sectors to look into existing WTO agreements. Tanada added that he has sponsored two House resolutions (HR 766 and 1039) precisely to ask the House Committee on Economic Affairs as well as the Committee on Agriculture and Food Security in Congress to do an inquiry into WTO issues in aid of legislation. The Quezon representative also deplored the lack of government transparency on WTO, saying there should be greater public disclosure on the extent of the country's commitment to the world trade body. The government's chief negotiator on WTO agreements is Trade Undersecretary Lilia Bautista.

Task-force on WTO

In the same forum, Agrarian Reform Secretary Horacio "Boy" Morales disclosed that the government was putting together an inter-agency task force to study WTO-related issues. But definitely, Morales said, the Philippine government won't agree to a new WTO proposal that seeks to open government procurement or bidding for government contracts to foreign contractors and suppliers.

The WTO has sought the inclusion of three new issues in the Seattle meeting: foreign investments, competition and government procurement. The TWN and other NGOs have thumbed down the three, on grounds that they would again favor the rich and industrialized countries while adversely affecting developing countries. "It is all a matter of interpretation," explains Khor. Unfortunately, he added, the interpretation that often prevails is that of the developed countries which, he said, "have been pushing economic and social policies across the world, which they've planned for developing countries."

Bhagirath Lal Das, the former Director of the UNCTAD (UN Conference on Ttrade and Development) pointed out that the main objective of such agreements "is to open new markets since in most industrialized countries, there are no new consumers, they have zero population growth." Meanwhile, he added, investors need to place their capital in more profitable ventures overseas, since loan interests back home are low and banks hardly earn from lending out to their nationals.


"Trade lib is not about liberalization but about protectionism when it suits rich countries," Khor said. He cited the proposal on investments which, he said, would push for greater rights among foreign investors under the Multilateral Agreements on Investment. "Based on the investment model being advocated, foreigners and foreign firms would have full rights to own land and real estate and to receive government aid, subsidies and contracts, just like the locals. Further accompanying measures also give them the right to full profit repatriation as well as changes in tax and company laws to remove existing favorable treatment to local investors."

This, Khor said, would kill some local businesses which might have been weakened by a country's colonial history, and thus need a longer period for capacity building. The NGOs noted that while foreign investments may provide new jobs, they also run many local businesses to the ground, resulting in job losses and shrinking local capital.

Similarly, noted the workshop participants, the issue of competition seeks the same rights and protection for foreign firms as those provided local businesses by the host governments. Again, this is the North's interpretation of "equal competition and non-discriminatory treatment," said Das.

An agreement on government procurement meanwhile means that government projects would now be open and accessible to foreign bidders and contractors, a sizeable business, "considering that up to 30% of a country's GNP go to government projects," Das pointed out. Added Khor: "This is not a trade issue. This is a matter of domestic spending!"


Already, the workshop participants noted, the countries that have entered into WTO agreements are bearing the brunt of the downside of globalization.

Citing the case of the Philippines, Tauli-Corpuz revealed that "under the Mining Act of 1995, some 12 million hectares of land--about 40% of the total land area of the country-- are now covered by applications for mining operations." More than half of these lands are occupied by indigenous peoples, who have been driven away and marginalized, their communities dispersed and their culture destroyed. Resistance to this loss of land has typically been met with militarization, she said.

Food security has also been threatened, added this Kankan-ey native, who cited Republic Act 7900 (High Value Crops Development Act of 1995), which provides incentives to agri-business corporations that shift to export-crop production. The result: vast tracks of land devoted to staple crops have been converted to high-value export crops such as oil palm, mango, pineapple, cutflowers, asparagus, etc. "This has also concentrated land ownership in the hands of a few landowners and corporations," Tauli-Corpuz observed. The repeal of the Seed Industry Development Act, which prevented the importation of seeds produced locally, has also enabled a few big corporations to have significant control over rice and corn-seed production, she added. This, she said, has undermined women's roles as seed-keepers and impoverished farmers further.

The environment has suffered as well, noted Prof. Raymundo D. Rovillos, Tebtebba's research coordinator . The mining activities have intensified, polluting land and the river systems with chemical wastes and tailings, while the clearing of lands for cash-crop plantations and related infrastructure have resulted in deforestation, the loss of forest cover and erosion. Biodiversity is likewise in peril, as the forests are lost, and pharmaceutical multinationals race to co-opt and patent useful herbs and indigenous technology under the TRIPS (trade-related intellectual property rights) agreement.


The issue over patenting is particularly disturbing, Khor said. Proponents of the need to patent new technology have said that paying for the use of such inventions reward innovations, while generating revenues for further research. The original intention is also to prevent pirates from passing off inferior products as cheap substitutes. Actual implementation however differs vastly, said Khor. "Patent laws enable foreign firms to capture more profits through royalties or the sale of its restricted technology products," he noted, while restricting competition by preventing potential rivals from developing a similar technology. The result is monopoly and correspondingly higher prices. What happens, Khor noted, is that developing countries are asked to open their borders to more imports and foreign investors, while developed countries keep their technology locked in.

Khor and other workshop participants also expressed alarm over TRIPS article 27.3 (b), which permitted the patenting of life. "Our proposal is to amend this clause to exclude patenting of life, as in "Members must exclude, or Members may exclude...from patentability living organisms including plants, animals, microorganisms and their parts as well as biological, microbiological and non-biological processes."

Life forms belong to everybody, not to a few who can manipulate their genetic composition, the group noted. Environmentalists in the workshop also fear that "genetic engineering could present lack of controls and accountability in bio-technology research and application, accelerate biodiversity loss and threaten natural ecosystems."

Just as alarming, noted Khor, is the tendency of most NGOs and civil societies to fling their favorite issues at the world trade body, which admittedly, has more clout than the United Nations in enforcing its policies. "Sometimes, out of frustration over the UN's lack of enforcement capability, NGOs turn to the WTO whose dispute settlement system gives it the power to enforce trade sanctions and impose tariffs on violators." This is a wrong move, the TWN head said, "We must not empower the WTO further by throwing our issues at them."

By asking the trade body to use as leverage such contentious issues as labor standards, animal rights, women's rights, children's rights, human rights, clean air and the environment, civil societies are giving the WTO more power to define what can be part of trade agreements, and penalize violators accordingly, Khor warned.

"It is always a matter of interpretation: The western countries are the number one violator of the environment because of their over-consumption, but the WTO will look at it from the micro level: your firm is polluting the rivers more than mine, so you should be penalized. The same is true with labor standards. We cannot match theirs at this point, but for most developing countries, the right to work takes primacy over working conditions."

Admittedly, said Khor, liberalization can bring some benefits to some developing countries, "but only that that already have strong manufacturing export capacity who will benefit from the lowering of the North's industrial tariffs."


Aside from pushing for a "review and repair of existing agreements," the workshop participants suggested various ways to deal with the adverse realities of globalization. Das suggested "the setting up of a commission or institution that would orchestrate a study of WTO issues, and play the role of government's watchdog in the Seattle meeting. It may advise government and make known its advice to the public to generate discussion on the issues."

The group also agreed on the need to popularize the often tedious technical terms that make WTO issues the turf of trade officials and negotiators. "There is a need to upgrade the economic literacy of NGOs, including farmers' groups, women's organizations, trade unions, and environmental groups," the workshop participants said.

As for their world trade body, the civil societies proposed the need for "more transparent, open, participatory and democratic discussions, negotiations and decision-making, with all WTO members present during negotiations. The practice of small informal groups making decisions for all Members, as happened in the Singapore meeting, should be discontinued." The body also suggested that "any proposals for rules and new agreements should be made known in their draft form to the public at least six months before decisions are taken so civil societies in each country can study them and influence their Parliaments and governments."

Pennie Azarcon-de la Cruz is the editor of the Sunday magazine of the Philippine Daily Inquirer, one of the bestselling newspapers in the Philippines. The above article appeared in the 27 August issue of the paper.