The UN’s ambivalent and contradictory message on trade

The UN is walking a fine line between the pro- and anti-new WTO round camps - a delicate balancing act embodied in an ambivalent and contradictory message by the UN Secretary-General accompanying the recent release of a report which castigates the iniquities of the multilateral trading system.

by Chakravarthi Raghavan

GENEVA: The new programme of trade negotiations launched at Doha holds “great promise,” UN Secretary-General Kofi Annan suggested on 11 April in a brief message on the occasion of the launching in Geneva of Oxfam International’s “fair trade” campaign with a report that blames the state of the world’s poor and of developing countries on unfair and rigged WTO trade rules that enable the rich countries to rob the poor nations.

Annan’s message was read on his behalf by the Deputy Secretary-General of the UN Conference on Trade and Development (UNCTAD) Carlos Fortin at an Oxfam media event for releasing the report at UNCTAD here.

The message was ambivalent and contradictory, showing the difficulties faced by the UN system in attempting to back the campaigns of leading NGOs against the unfair multilateral trading system and the WTO’s “anti-development” new trade negotiating round, while at the same time voicing support for the new trade negotiations launched at the Fourth WTO Ministerial Conference in Doha.

Rigged rules

The Oxfam report itself, in an executive summary that had been available in advance for several weeks to the UN and UNCTAD, without mincing words, blames the state of the developing countries and of the poor everywhere on the rich nations and their rigging up the trading system and its rules to enable them to keep their own markets closed to the exports of developing countries even as the World Bank and the IMF, through their loan conditionalities, pressurize developing countries to open their markets at breakneck speed, often with damaging consequences for the poor communities.

The report blames the international community for not seriously addressing the problems of low and unstable commodity prices that consign millions of people to poverty, and for leaving powerful transnational corporations (TNCs) to engage in investment and employment practices which contribute to poverty and insecurity, unencumbered by anything other than weak voluntary guidelines (in the UN’s Global Compact).

The report says: “The World Trade Organization is another part of the problem. Many of its rules on intellectual property, investment and services protect the interests of the rich countries and  powerful TNCs, while imposing huge costs to developing countries.”

“The WTO’s bias in favour of the self-interest of rich countries and big corporations raises fundamental questions about its legitimacy,” Oxfam said in the report, which identifies the extent of the trade protection against developing countries practised by the major trading entities, blaming the EC as the most closed and protected of all.

In a press release, the WTO Director-General Mike Moore welcomed the Oxfam report and its call for developed countries to make greater efforts to open their markets. The calls in the report for land redistribution, greater development funding, infrastructural development and guidelines for TNCs were outside the WTO’s mandate, he said. Moore also found the attacks in the report on the WTO rules on trade-related aspects of intellectual property rights (TRIPS) as rather odd, given the Doha declaration on TRIPS and Public Health, and insisted that Oxfam’s view that the General Agreement on Trade in Services (GATS) would require developing countries to privatize public services, including water supply, was untrue.

On democratization, Moore claimed that all critical decisions were made on the basis of consensus, ignoring the fact that at Doha both Moore himself and the Chairman of the Conference had joined in manipulating the consensus (including through the exclusive “green room” negotiating process on the last day and night).

Straddling both camps

“Make trade fair” could be a UN theme, and several of the messages and warnings in the Oxfam report represent common goals of the international community and should  be translated into actions  by governments and other actors throughout the world, Annan said in his message. He also spoke about how “trade is a powerful force for development and poverty reduction” - in effect embracing the slogans of the WTO, IMF and World Bank.

And two paragraphs down in his single-page message, Annan straddled both camps and said: “The new programme of trade negotiations launched at Doha last November holds great promise. This opportunity to address the special needs of developing countries and to build a fair, rules-based predictable multilateral trading system must not be missed. One key to success will be to eradicate not only trade imbalances, but also the disparity in negotiating capacity that keeps developing countries from playing a full role in shaping new trade rules.”

In the aftermath of Doha, a number of British charities and a wide swathe of civil society organizations in the North and the South have scoffed at the view that the negotiations launched at Doha constitute a “Development Round”, and have instead dubbed it an “Everything But Development Round.”

Indeed, at Doha, and subsequently at New York in the run-up to the Monterrey Conference on Financing for Development, the developing countries in the Group of 77 refused to accept an EC formulation to declare the negotiations launched at Doha as a “Development Round”.

This, however, has not stopped Moore and the WTO secretariat he heads from putting “Doha Development Agenda” on the WTO website and the WTO mastheads for press releases.

International organizations, including the UN and its system agencies, as intergovernmental processes are undoubtedly reflections  of the power play of the powerful countries, and find it difficult in the current situation to express their own views, though the UN Charter requires them to do so.

However, in trying to associate themselves with and to be seen to be providing support to such civil society campaigns even as they embrace and evocate the corporate agenda, the UN system is in danger of losing public credibility and support.

The Ambassador of Brazil Luiz Felipe de Seixas Correa, who also participated in the event, said that from Brazil’s perspective, the outcome of Doha was positive from a general and specific viewpoint, that Brazil was gratified that a new round of trade negotiations has been launched, and that in the negotiations Brazil would pursue its specific interests in areas such as agriculture, rules negotiations on anti-dumping and subsidies (in particular export credits), implementation and intellectual property, among others.

Seixas Correa welcomed the emphasis by Oxfam and others on the critical importance of agriculture in the new round, and the important role that NGOs could play by bringing to public attention the rigged rules and double standards.

The Brazilian envoy also suggested that there were a number of items in the Doha Ministerial Declaration that present developing countries with opportunities to correct present imbalances and deal with inequities, mentioning in this connection the inclusion of implementation issues, the specific work programmes on special and differential treatment for developing countries, and the establishment of working groups to study the relationships between trade and transfer of technology and between trade, debt and finance.

The Oxfam campaign, launched simultaneously in several industrialized and developing countries, emphasized its main policy goals to be:

   *  improving market access for poor countries and ending the cycle of subsidized agricultural over-production and export dumping by rich countries;

   *  ending the use of conditions attached to IMF/World Bank programmes which force the poor countries to open their markets regardless of the impact on the poor;

   *  creating a new international commodities institution to promote diversification and end over-supply, so as to raise price levels consistent with a reasonable standard of living for producers, and changing corporate practices to make them pay fair prices;

   *  establishing new rules on intellectual property rights to ensure that poor countries are able to afford new technologies and basic medicines, and that farmers are able to save, exchange and sell seeds;

   *  prohibiting rules that force governments to liberalize or privatize basic services vital for poverty  reduction;

   *  enhancing the quality of private-sector investment and employment standards;

   *  democratizing the WTO to give poor countries a stronger voice, and

   *  changing national policies on health, education and governance so that poor people can develop their capabilities, realize their potential and participate in markets on more equitable terms.

Oxfam gave three factors which motivated its campaign:

   *  the existing trade system is indefensible and no civilized community should be willing to tolerate the extremes of prosperity and poverty that are generated by the current trade practices, and no one should accept the abuse of power, injustice and indifference to suffering that sustain such practices;

   *  the enlightened self-interest of the rich nations themselves to ensure that the developing world is able to share in the rising prosperity and wealth, and

   *  the conviction that change is possible. (SUNS5098)                                  

From Third World Economics No. 278 (1-15 April 2002)