TWN Info Service on WTO and Trade Issues (June06/29)

29 June 2006
 

NGOS SAY Mini-Ministerial not legitimate

More than 100 civil society organizations have denounced the mini-Ministerial meeting to be held in Geneva in the next days as not legitimate as it does not allow for the effective participation of all Ministers.

The NGOs have asked the Trade Ministers at the WTO to object to the legitimacy of the Mini-Ministerial, and also to reject any attempt by the WTO Director-General Pascal Lamy to draft his own text. The NGOs also made a call to "bury the Doha Agenda" and start with a new approach to the multilateral trading system.

Among the signatories to the letter are Action Aid International; Africa Europe Faith and Justice Network (AEFJN); ATTAC; Berne Declaration; Center of Concern/US; Gender and Trade Network; Focus on the Global South; Friends of the Earth International; Institute for Agriculture and Trade Policy; Institute for Global Justice; Public Services International; SEATINI; and the World Development Movement.

Below is a report of the NGO letter.  It was published in the SUNS of 29 June.

With best regards
Martin Khor
TWN

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Mini-Ministerial not legitimate, says NGO letter to Ministers

By Kanaga Raja (SUNS): Geneva, 27 June 2006

A group of over 100 civil society organizations has denounced the mini-Ministerial meeting to be held in Geneva in the next days as not legitimate as it does not allow for the effective participation of all Ministers.

The NGOs have asked the Trade Ministers at the WTO to object to the legitimacy of the Mini-Ministerial, and also to reject any attempt by the WTO Director-General Pascal Lamy to draft his own text. The NGOs also made a call to "bury the Doha Agenda" and start with a new approach to the multilateral trading system.

The NGOs have sent a letter stating this to Trade Ministers gathering here in Geneva to discuss modalities for agriculture and non-agriculture market access (NAMA). Copies were also sent to Lamy and the Chairs of the agriculture and NAMA negotiations.

Among the signatories to the letter are Action Aid International; Africa Europe Faith and Justice Network (AEFJN); ATTAC; Berne Declaration; Center of Concern/US; Gender and Trade Network; Focus on the Global South; Friends of the Earth International; Institute for Agriculture and Trade Policy; Institute for Global Justice; Public Services International; SEATINI; and the World Development Movement.

The letter made the following three basic demands:

''1. Object to the legitimacy of the June mini-Ministerial and withdraw support. As a basic rule of democracy, and out of respect for the WTO's procedures and mandate, any Ministerial called by the WTO Secretariat must allow for the effective participation of all Ministers.

2. Reject any attempt by Director-General, Pascal Lamy to draft his own text for Ministers' consideration.

3. Start now with a new approach to the multilateral trading system. The Doha Agenda should be buried. New rules should focus on policies that promote human  rights and people-centered ecologically sustainable development.''

The NGOs said that ''As civil society members from all over the world, we are appalled at the direction of the current WTO negotiations. Launched in 2001 as a 'Development Round,' the current negotiations now preclude any possibility of benefiting the majority of the world's people, particularly those living in impoverished developing countries. Instead, many of the proposals on the table will radically foreclose domestic policy options for developing countries.''

Developing-country proposals that attempt to regain some of that policy space are consistently rejected by the major powers, particularly the US and EU, it adds.

''Rather than building a multilateral trading system that guarantees human rights, promotes sustainable economic growth and ensures access to decent employment while protecting our shared environment, the current negotiations are set to dramatically curtail this vital agenda.''

The letter charges that attempts by the EU, US and the Director-General to cast the Doha Agenda as a multilateral effort to advance development are completely hypocritical, adding that they fly in the face of recent independent projections of what this agenda will bring for developing countries. "To try to push such an agenda to conclusion through a mini-Ministerial, in which a majority of WTO members will not be represented, can only do further damage to the WTO's legitimacy."

The letter also outlines the reasons for the three demands.

A series of economic reports on the projected outcomes of the Doha Round from the World Bank, the UN and several think tanks including the Carnegie Endowment for International Peace predict that most of the gains expected under the Doha proposals will flow to the developed world. The remaining gains are distributed among a few exporters from middle-income developing countries. The majority of the population in African countries, other LDCs, and many other developing countries are projected to lose.

The letter cites the Carnegie Endowment for International Peace as saying: ''Bangladesh, East Africa, and the rest of Sub-Saharan Africa are adversely affected in every Doha scenario modelled, regardless of whether the ambition is modest or high''.

Also, the European Commission's own Sustainability Impact Assessment concludes that ''in Sub-Saharan Africa, for example, poverty may worsen as they stand to lose economically from trade liberalization and face severe supply side constraints''. This is an unacceptable outcome from multilateral talks, the letter adds.

The NGOs also highlight "severe problems" with the three areas of negotiations: agriculture, non-agricultural market access (NAMA) and services.

Many developing countries agreed to launch new talks in the WTO to redress imbalances in the Agreement on Agriculture (AoA). But instead of using the review of the AoA to address the livelihood and survival needs of hundreds of millions of family farmers worldwide, agriculture talks have focused on expanding global markets for exporters from developed and to a lesser extent developing countries.

''While the promises from the last round of increased market access to developed countries for some developing countries remain unrealised, we know that uncontrolled imports of agricultural products into local markets in developing countries is having a devastating effect on local livelihoods,'' the letter says.

The benefits from the promised market access, wherever it has been fulfilled, have not reached the majority of the population including small family farmers, peasants and agricultural workers that have instead been displaced and pushed out of the market (including the domestic market), by the exporting agribusiness sector that benefits from such market access.

At the same time urgent agricultural trade problems are not addressed in the negotiations. Dumping of agricultural exports originating in the US and EU continues, driving down world prices for crops that the poor depend on, such as cotton, maize, rice, poultry, dairy, and sugar.

Simulations by WTO members illustrate that the offers by the US and EU to reduce their domestic support will not actually change current spending levels. And while the market distorting activities of state trading enterprises are under scrutiny, the much greater power of a small number of agribusiness firms in a number of commodity markets is left unchecked.

The NGO letter says that the G33 proposal on Special Products and Special Safeguard Mechanism - supported by a broad alliance of over 100 WTO member countries - built upon the established set of food and livelihood security and rural development criteria to define appropriate mechanisms for developing countries to protect their agricultural sectors from these distortions, but the proposal is being resisted by the major powers.

A recent proposal by the African Group on how to manage trade in agricultural commodities offers a way forward to address the crisis in agriculture within multilateral trade rules. The proposal emphasizes the need to ensure stable, equitable and remunerative prices for commodity producers and to deal with structural oversupplies in commodity markets, with measures including taxes on exports and other export restrictions to promote development. The letter stresses that the African proposal is one of the few serious attempts to realize the original promise of the Doha Agenda as a positive contribution to development.

In the negotiations under NAMA on natural resources (or raw materials) and industrial tariffs, the tariff cuts proposed by developed countries will have a significant and detrimental long-term effect on the industrial base of developing countries and the environment. Since developing countries' bound tariff rates are significantly higher than those of developed countries, the effect of the proposals now on the table would mean much higher percentage cuts in developing countries' tariffs than in those of developed countries - directly contradicting the negotiating mandate, which was to require less than full reciprocity in reduction commitments from developing countries, the letter says.

It cites South Africa's Congress of South African Trade Unions (COSATU) as warning that the proposals could leave countries, ''seriously de-industrialised'',  becoming producers of primary products with the loss of jobs and wealth that the loss of value-added activity entails.

COSATU's conclusions are substantiated by the Carnegie report, the letter adds, which finds the poorest developing countries and regions - Bangladesh, East and Sub-Saharan Africa - ''actually lose unskilled jobs in manufacturing industries'', as well as ''market share in some or all manufactured products''.

In addition, developing countries will lose through the drastic cuts in tariff revenues, estimated to be worth some $63.4 billion in the industrial sector alone. This loss is ten times greater than the projected gains for developing countries as a whole from the Doha Round ($6.7 billion).

The letter also says that de-industrialization combined with the proposed complete or sharp tariff liberalization of natural resources under NAMA (which also covers fisheries, forestry and mineral resources) could also push countries into increasing dependence on commodity exports.

Most commodity exports generate small returns. Diverting natural resources to exports can cause severe negative economic effects on poor communities. For example, 350 million people live in or next to dense forests and 60 million indigenous people are directly dependent upon forest resources. Some 30 million people are directly employed in small-scale artisanal fishing. All these livelihoods are jeopardized by efforts to appropriate the natural resource base for export.

According to the letter, the services talks are also anti-development. The pressure from the developed countries to get developing countries to liberalise services continues unabated. The demandeurs are asking countries to remove market access restrictions on foreign companies and to deregulate domestic service sectors to allow foreign corporations to operate without restriction in domestic markets.

Yet most experiences of services liberalization in developing countries to date - in water, energy, health, education, financial services and retail distribution - have been negative. Public access to privatised services is often diminished while the quality of service is compromised and local employment declines. Despite these experiences, developed countries continue to pressure for further liberalisation of services under the GATS.

''We are also concerned that some developing countries targeted for services demands have indicated they will bind some of their service sectors that have been liberalized outside the WTO framework. We strongly disagree with such a course of action: not only will this curtail the policy space of governments to regulate their service sectors in the future, but such offers are made in return for what are actually empty offers from developed countries in agriculture'', said the NGOs.

They also challenge the "fuzzy math" of the $2.8 billion in the ''Aid for Trade'' scheme by the developed countries to help address the ''adjustment costs'' - such as the short-term increases in unemployment and the destruction of some industrial sectors - in the developing countries, which they say double counts old money to create acceptance of the liberalization imposed by the Doha Agenda.

''We are completely opposed to the current Aid for Trade mechanism, the content and timing of which will be tied to recipients' acceptance of the liberalization imposed by the Doha Agenda. The exchange is absurd: money will not buy back policy space; nor is there even new money on the table. Instead, donors propose to simply repackage existing development assistance commitments, diverting yet more money to trade facilitation."

''The current Doha package is a bad deal. It serves the private interests of the biggest corporations...It fails to respond to public priorities for trade: full employment under decent conditions, sustainable management of our natural resource base, the generation of domestic capital to build virtuous economic circles in poor countries, the need to curb dumping of under-priced agricultural commodities in world markets, the market distortions created by monopoly and oligopoly power exercised by a small number of firms in many sectors of the global economy,'' the letter says.

''It is time to start now with a new approach to the multilateral trading system. The Doha Round should be buried, starting by withdrawing support and objecting to the legitimacy of the June Mini-Ministerial, and opening the way for new rules that focus on policies that promote human rights and people-centered ecologically sustainable development,'' the letter concludes.