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TWN Info
Service on WTO and Trade Issues (May21/03) Washington DC, 3 May (D. Ravi Kanth) – More than 200 international civil society organizations (CSOs) have issued a clarion call “for the transformation of the World Trade Organization into a completely new framework for international trade that is fit for the 21st century – which means it puts people and the planet first.” In the face of the incalculable damage created “by the regime of hyper-globalized trade, investment, and supply chains that the World Trade Organization has championed and implemented during its 25 years of existence, (which) is on the verge of collapse,” the CSOs, drawn from labour, environmental, consumer, and other organizations, underscored the need for a systemic change at the WTO in addressing the COVID-19 pandemic. “The COVID-19 pandemic has exposed how the WTO model exacerbates insecurity, inequality and instability,” the CSOs argued. It is time to ensure that “legitimate global commercial rules facilitate the improvement of the livelihoods, health and well-being of all people around the world and the long-term survival of the planet.” Also, it is well established that “the WTO system has not met these goals: It was never fit for purpose and certainly is not now.” The WTO is now mired in an existential crisis as it has “failed to make people’s lives better, but in many countries it has done significant damage by empowering pharmaceutical, agribusiness, financial and other corporate interests in high-income countries to dominate economies to the detriment of workers in both high and low-income countries.” It is also well known that “the negotiating and enforcement functions are paralyzed, and the divisions were spotlighted by the former WTO Director-General’s early departure,” the CSOs argued. The CSOs, which include Third World Network, African Aid International, Action Aid International, Arab NGO Network for Development, and Caribbean Policy Development Center among others, argued that they had predicted back in 1995, when the WTO came into existence, that it has “functioned to establish rules for the world economy that mainly benefit large transnational corporations at the expense of national and local economies, workers, farmers and indigenous peoples, our health and safety, and the environment.” “Without a labour protection floor, a race to the bottom has repressed wage growth and increased precarious work,” the CSOs said. In her statement on 16 April, the US Trade Representative (USTR) Ambassador Katherine Tai acknowledged that the “race-to-the-bottom” trade policies, which successive US administrations pursued as a Mantra, seem to have had a deadly impact on environment and climate change. “For too long, we believed that trade liberalization would lead to a gradual improvement in environmental protection as countries grew wealthier from increased trade flows,” the USTR said. “But the reality is that the system itself creates an incentive to compete by maintaining lower standards. Or worse yet, by lowering those standards even further,” Ambassador Tai added. Last week, the United Nations Conference on Trade and Development (UNCTAD) issued a report on “Reforming the International Trading System for Recovery, Resilience and Inclusive Development”. (See SUNS #9337 dated 30 April 2021.) That report has offered new developmental pathways and the narrative centred around the trade and climate change linkages in the World Trade Organization. The 24-page UNCTAD report, authored by former South Africa’s trade minister Rob Davies, Richard Kozul- Wright, Rashmi Banga, Jeronim Capaldo, and Katie Gallogly-Swan draws attention to the trade liberalization policies followed during the last 200 years, particularly during the past 40 years, that wreaked havoc across countries. Against this backdrop, the CSOs pointed out that “the climate, biodiversity, and poverty crises have been ignored, the needed solutions constrained by “trade” rules.” The trickle-down policies based on the neo-liberal framework has contributed significantly to the “rise in inequality within and between nations, as governments have been stripped of essential tools to pursue the well-being of their peoples and address the negative impacts of hyper-globalization.” Further, as the UNCTAD study showed, the so-called global value chains, which are an offshoot of hyper- globalized trade liberalization promoted by the WTO, “have undermined numerous countries’ fights against the global COVID-19 pandemic,” the CSOs observed. The COVID-19 pandemic has exposed the “black hole” of value-chains in which “countries cannot make or obtain masks, test kits, ventilators, medicines and other necessary equipment.” That the WTO rules “have prioritized large corporations’ demands to concentrate global production to maximize their profits and banned countries’ use of policy tools to ensure local production capacity and diversity of import suppliers,” is well established. The CSOs said the “WTO intellectual property rules that are designed to maximize pharmaceutical corporations’ profits instead of public health have driven up prices for medicines that are essential to combat COVID-19 in scores of countries and could become a barrier to equitable and universal access to vaccine and treatment supplies.” With the damage created by the former WTO Director-General to the multilateral trading system, and who “abruptly departed, the systemic crises at the WTO came into the open,” the CSOs said. According to the CSOs, “the WTO’s dispute settlement system, whose tribunals have often ruled that governments must change legitimate public policies meant to promote public health, encourage development, protect the environment and fight climate crisis, or face potentially crippling trade sanctions, was derailed at the end of 2019.” They argued that the WTO’s “negotiating function has been on the ropes since the first failed attempt to launch a new round at the 1999 Seattle WTO Ministerial meeting, (where) developing country consensus demands were ignored, but attempts by rich countries to bully through an agenda opposed by most nations also failed.” The CSOs argued persuasively that, in the “so-called Doha “Development” Round (that) was launched in 2001, invoking the need for unity in the face of the 9/11 attacks in the United States, the developing countries were promised that their need to use trade for development would be central, but in the intervening 19 years, the same WTO expansion agenda that most countries have always opposed has been prioritized and the development agenda sidelined.” In the face of the crises created by Northern countries that made the WTO dysfunctional, “rich and powerful states have resorted to plurilateral negotiations of new rules that prioritize corporate rights and profits.” According to the CSOs, “those rules are facing stiff opposition whether promoted at the WTO or elsewhere, and their failures provide further evidence of a paradigm that has no legitimacy.” With the Trade in Services Agreement (TiSA) and the Transatlantic Trade and Investment Partnership (TTIP) having collapsed altogether and with the Trans-Pacific Partnership (TPP) agreement’s failure to secure a US congressional majority for the year after it was signed as well as India’s decision to withdraw from the Regional Comprehensive Economic Partnership (RCEP), there is little support for these failed agreements. “Instead of learning from these mistakes, or acknowledging the chasm between promised positive WTO outcomes and reality, powerful interests at the WTO are doubling down to push more of the same,” the CSOs alleged. It appears like “a parody of the parable that when one only sees nails, the answer is always a hammer, the WTO answer for COVID-19 is to maintain and expand the same failed liberalization policies, including an entirely counterproductive, new tariff-zeroing pact for COVID-19-related goods,” the CSOs criticized. They castigated the powerful countries’ attempt to steam-roll domestic regulation of trade in services through the pandemic, notwithstanding the concentration of services firms posing a major impediment to timely and cost- effective procurement and distribution of essential goods. The CSOs said that negotiations to limit regulation and vetting of foreign investors have continued, “despite a clear need for production of personal protective equipment (PPE) and medicines to be diversified.” In a similar vein, “negotiations that would give Big Tech more control over peoples’ data and the digital economy that WTO member countries explicitly rejected are continuing at a time when most people and governments are clamouring for serious checks on Big Tech and their unaccountable control of data,” the CSOs observed. Drawing attention to the original global trade body – the International Trade Organization (ITO) that was envisioned in the Havana Charter of 1948 in response to the horrors and chaos of World War II – the CSOs said the ITO “focused on full employment, limiting corporate concentration, fair competition, protections for workers and standards to ensure currency and other related policies did not distort trade.” “The very different vision for a rules-based global trading system – updated to recognize the climate crisis, systemic inequality, and the unaccountable power of Big Tech – remains attainable, but only if countries agree that global trade rules are supposed to work for people around the world, not the world’s largest corporations.” Therefore, “the choice is not between the status quo or no trade,” the CSOs said, arguing that “is a straw man hawked by those who want nothing to change. Change is happening.” In short, “the question is what multilateral framework can be inclusive, promote real sustainability, human rights and prosperity for all, and deliver the benefits of expanded trade to most people, while also providing our elected representatives the policy space to promote the public interest.” “One example is the Geneva principles for a global Green New Deal,” the CSOs said, adding that “we call on governments to grasp this opportunity for transformational change.”
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