Green MEPs endorse ‘shrink or sink’ of WTO

by Chakravarthi Raghavan

Geneva, 20 July 2001 - “The time has come to acknowledge the crises of the international trading system and its main administering institution, the WTO (and) replace this old, unfair and oppressive trade system with a new, socially just and sustainable trading framework for the 21st Century,” the Greens/EFA group of the European Parliament have said in a statement adopted 27 June.

In their statement and position document, the Greens have said no new comprehensive round of multilateral trade negotiations on issues such as foreign direct investment, government procurement, ‘transparency’ or biotechnology should be launched at Doha.

Rather, said the Green/EFA MEPS, the unfinished business of implementing the Uruguay Round commitments on market access, technical assistance and capacity-building and the introduction of institutional reforms should all be satisfactorily completed “without linkages to any further new liberalisation measures.”

The Greens also called for independent review of each existing WTO agreement for an in-depth evaluation of its economic, social and environmental impact, and reorient each agreement to place “true sustainable development, including poverty reduction” as its main purpose.

In taking this view, the Greens/EFA MEPs have endorsed the “WTO: Shrink or Sink,” declaration and sign-on document of the international coalition of civil society groups, calling for a roll-back of the power and authority of the World Trade Organization (WTO).

In their statement (the full text can be found in the SEATINI Bulletin Vol. 4 No. 13), the Green MEPs have set out a 10-point reform programme for the WTO.  The MEPs also cite the Charter adopted by the Global Green Conference (Canberra, April 2001), which commits the international Green movement to support “the abolition of the WTO, unless it is reformed to make sustainability its central goal, supported by transparent and democratic processes and the participation of representatives from affected communities.”

An overview of their statement (and a briefing paper), notes that the concept of the WTO enshrined in its Marrakesh charter is itself a contentious one, since “the objectives and implementation of unfettered globalization run counter to our aim of working towards a world that is socially just and environmentally sustainable ... a just, sustainable and environmentally-friendly world.”

The WTO system conflicts with the Green perspective that decisions to achieve such goals should be taken at local or regional levels wherever possible, and economic activity carried out closest to the population it serves. The ability of communities, whether local, regional or national, to protect their social and ecological values and culture systems is threatened by a “one world” trade system.

At present, few political leaders question the idea that the purpose of a national economy is first and foremost to be internationally competitive within a global market. Achieving this goal is supposed to provide the levels of economic growth that will then make social and environmental improvements possible.

“The fact that this has never worked for the majority of poor people is ignored by policy makers and business leaders. Indeed, the insecurity inherent in today’s globalised economy is adversely affecting even the more comfortable sections of society in industrialised countries and there is a growing body of critical public opinion which questions the objectives and impact of corporate globalization. ...a more socially just and sustainable alternative would be a set of mutually reinforcing policies which have, as their goal, stronger and more diverse local economies, with high environmental, social and democratic standards - not just for Europe, but for all regions of the world.”

“The interests of the disadvantaged, whether in the ‘rich’ North or the ‘poor’ South, require a far greater degree of special protection than is accorded by the neo-liberal free-trade model represented by the WTO.”

Citing the UNCTAD Trade and Development Report 2000, the Green MEPs add: “...  the cards are stacked against developing countries they lack the technical and administrative capacity (and perhaps don’t have enough lawyers or corporate lobbyists) to make the system work to their advantage.”

“Moreover, it is important to challenge the prevailing orthodoxy that trade liberalisation automatically results in the most efficient international allocation of resources, promotes international allocative efficiency via comparative advantage and therefore increases economic welfare.”

“Today’s reality, however, is one of imperfect competition and under-development in many countries. These and other “distortions” limit the applicability of the liberal model to generate economic welfare for the majority, simply as a result of the “opening up” of markets. Other, more balanced, solutions urgently need to be found.”

A further fundamental fault line in the WTO process is the complete lack of popular democratic legitimacy for its treaties or parliamentary scrutiny of its actions. As an example, the European Parliament is effectively excluded from the EU decision-making process in international trade relations, “serving only a decorative role in the institutional framework”. There is no provision in any of the WTO Agreements envisaging the creation of any [supranational] parliamentary scrutiny or control of its activities.

The global financial architecture developed since the Bretton Woods institutions were created in 1944 has consistently placed a pre-eminent emphasis on economic values. “The WTO extends this bias to global trade values. Social, public health, labour and environmental concerns, and the need for poverty reduction and debt eradication, although belatedly acknowledged, are treated as optional extras that can somehow be bolted on to the existing, non-transparent and non-democratic, structures.”

Citing the 1995 claim of then WTO Director-General Renato Ruggiero that the WTO was “writing the constitution of a single global economy,” the MEPS underlined that what was not said was that this “constitution” was designed to create a comprehensive trade promotion and liberalisation regime without the checks and balances, separation of executive and judicial powers, democratic and legislative accountability, protection of minorities and other essential guarantees, which are indispensable elements of a modern constitution.

If the constitution of a global economy is intended to serve 140 or more sovereign member states, “the institutional architecture needs to be constructed with a degree of care and sensitivity which is manifestly lacking from the WTO.”

Although the WTO is perhaps the most visible vehicle of multilateral trade globalization, it is not the only [and, some would argue, not even the most important] one. The EU itself, by origin a ‘common market’, the NAFTA and the recently agreed FTAA that is to come into force in 2005, and other existing or planned regional trade blocs are keystones in the global trade and power game and the WTO cannot be understood, reformed or even deconstructed in isolation from the actions of these major players.

The Green MEPs also note the “parallel network of non-trade multilateral agreements”, emerging under UN auspices - the Convention on Biological Diversity and the Cartagena Biosafety Protocol, the 1992 Climate Change Convention and the 1997 Kyoto Protocol, and the talk of creating a ‘World Environment Organization’ at the Rio+10 world summit in 2002.

But the international challenge is not just to agree more treaties or to create more global organisations but to determine how these non-trade treaties (multilateral environment agreements-MEAs) can be implemented in a way which effectively counter-balances the free-trade agenda exemplified by the WTO so that social, public health, labour and environmental concerns are given priority, their rightful place at the top of the so-called “hierarchy of norms” and that such MEAs are not only fully enforceable but that the values which they seek to protect are built into policy-making at every level of society and within each institution and are protected from challenge by the WTO system.

The Green MEPs stress that their 1994 vote against the WTO was even more valid now than then. The politics of the WTO contradict the principles of the Greens’ programme for a fair, ecological and social trade.

“Therefore, we support the abolition of the WTO, as set out in the Global Greens Statement from Canberra.” But that is a longer term strategy. Meanwhile, to reduce the worst effects of the WTO in the short-term, the Green/EFA MEPs have presented a 10-point comprehensive proposal for WTO reform:

1.No Comprehensive Round of new multilateral trade negotiations on issues such as foreign direct investment, government procurement, ‘transparency’ or biotechnology to be commenced in Qatar.

The unfinished business of implementing the Uruguay Round commitments on market access, technical assistance and capacity-building and the introduction of institutional reforms have all to be satisfactorily completed without linkage to further new liberalisation measures. Where there are ongoing negotiations and reviews, as in the cases of the agreements on Agriculture, Trade in Services, Intellectual Property, “there should be no further liberalisation until and unless the strategic objectives of these agreements have been re-written.”

2.Each existing WTO agreement must be independently reviewed to provide an in-depth evaluation of its economic, social and environmental impact to date and re-oriented to place true sustainable development, including poverty reduction, as its primary purpose. The necessity tests in the Technical Barriers to Trade and other Agreements (which can be used to overturn governmental non-trade restrictions if they are judged by the WTO to be more trade-restrictive than strictly necessary to fulfil a legitimate objective) need to be replaced by sustainability tests. Social and ecological justice should precede economic and trade justification.

3.Public policy issues must be protected from attack by commercial trade agreements, in particular in areas such as health and safety, education, culture, energy, food and water security, social and public services, public transport, environmental and animal protection. These must not be subject to international free trade rules which over-ride non-trade policy objectives.  Priority must be given in international law to the application of multilateral Treaties and Agreements which protect social, labour, environmental and other non-trade issues, including any future agreement on the mandate and authority of a World Environment Organisation, so that international trade rules become subsidiary to them.

4. Developing and least-developed countries, which make up a substantial majority of the WTO membership, must be given their rightful place in the trade network. They require continuing special and different treatment to take account of their relatively weak position in the international trading system. The concept of Fair Trade requires that trade rules should also recognise and respect fundamental human and workers’ rights, including the rights of indigenous peoples. Local producers, particularly those who cultivate basic food commodities, should be guaranteed to receive an equitable price for their produce.

5.Meaningful democratic control of the WTO must be established. People must have the right to self-determination and the right to know and decide on international commercial commitments. This requires that decision-making processes in negotiations and enforcement within international commercial bodies should be democratic, transparent and inclusive (internal transparency), and a genuine legislative scrutiny by elected representatives of member countries be established (external transparency).

The negotiating mandate for all trade deals should be explicitly set in advance by national or regional parliaments and that the results should be reported back to those bodies so that their conformity with the terms of the mandate can be judged.

6. Reform of the objectives of the Agriculture Agreement has to go hand-in-hand with reform of the EU’s Common Agriculture Policy, and both need re-orientation away from the ‘trade in quantity’ approach towards a sustainable and integrated rural policy, emphasising the identity of local/regional food production and distribution and food/water security and sovereignty.

“It is extremely unlikely that this can be achieved in the WTO context and consideration should be given to transferring international responsibility for agricultural development to an independent forum, building on and developing the mandate and democratic structures of organisations such as the UN Food and Agriculture Organisation (FAO) in Rome.”

7.Human Needs cannot be treated as mere Commodities. The patenting of life forms including micro-organisms must be prohibited in all national and international regimes... Article 27.3b of TRIPs must be renegotiated to achieve this. The right for farmers to re-use saved seed free from patent or other contractual restrictions must be re-established. Biopiracy or theft of traditional knowledge must be made legally actionable. The Trade-Related Intellectual Property Agreement (TRIPs) has also to be re-negotiated to allow governments to limit or deny patent protection on life-saving medicines in order to protect public health and safety.

8.The Disputes Settlement Mechanism needs to be removed from the auspices of the WTO and transferred to an independent or UN-supervised body, to avoid the WTO acting as both judge and jury in trade disputes. Respect for the principles of sustainable development must be at the forefront of all dispute settlements.

9. The International Monetary Fund, the World Bank and the regional development banks must convert the debts owed to them by poor countries into regional investment programmes for sustainable development. The use of structural adjustment programmes to force trade liberalisation on developing and emerging countries must be stopped. The emphasis thus needs to be moved away from considerations of pure competitiveness between nations, towards re-building local and regional economies across the world.

“Governments must negotiate, through the UN system and with full democratic participation, a binding and enforceable agreement to ensure that corporate conduct is socially and environmentally responsible and democratically accountable.”

10. A moratorium is needed on further Plurilateral, Regional and Bilateral Trade Deals.

Each of the dominant developed countries is now engaged in a race to tie up trade deals with a range of ‘partners’ (including non-WTO members) on all those trade issues which either remain outside the WTO agreements or where the agreements are regarded as too commercially weak, as in the case of the proposed FTAA rules on foreign direct investment or the EU’s policy of imposing stronger intellectual property clauses on weaker trading partners. – SUNS4941

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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