NGOs and trade unions unhappy with new WTO proposal

International civil society organisations and trade unions have been sharply critical of a new proposal at the WTO to unblock global trade negotiations this week. According to Oxfam, the proposal continues to offer too little and cost too much to developing countries to constitute the basis for a development deal. "We acknowledge progress in the agricultural text, which goes further than what the EU and US have proposed so far, though as always the devil will be in the detail of negotiations still to come," said Celine Charveriat of Oxfam's Make Trade Fair campaign. Oxfam believes that the overall cost to developing countries of opening their agricultural and industrial markets remains far too high in return for the modest reforms in agriculture in rich countries.

These new numbers would leave rich countries' trade protections largely intact, while forcing many developing countries to face severe adjustments costs and failing to create for them new opportunities. The text proposes caps on trade-distorting agricultural support of $13-16.4bn for the US and €16.5-27.6 bn for the EU. "This is a step in the right direction, but this is very unlikely to bite into actual spending. On average, the US spent $15.4bn between 1995 and 2005. Unless severe caps are put on specific products, these new figures would mean that dumping of cheap produce, which is so damaging to developing countries, will not be eliminated," Charveriat said. Developing countries, with very large agricultural populations, will have to make deeper cuts to their farm tariffs than rich countries did during the previous round. The only silver lining is that some countries will be partly exempted.

The new modalities, put on the table by the chair of the NAMA (non-agricultural manufactured goods) negotiations, ignore the numerous concerns that the International Trade Union Confederation (ITUC) and many of its affiliates have expressed on NAMA over the past couple of years. "We cannot support a trade deal that systematically ignores the interests of workers world-wide and undermines the developmental needs of developing countries", says Guy Ryder, General Secretary of the ITUC. "We need to see a balanced outcome of the negotiations that advances development in developing countries, whereas this proposal will simply aggravate existing imbalances." The proposals for a "coefficient" for developing countries of between 19 and 23 will have serious impacts on employment and industrial development in a large number of developing countries at a moment when the creation of decent work poses a major challenge. A coefficient of around 20 will lead to average tariff cuts of around 60% for developing countries and will bring maximum tariff levels for all tariff lines down to levels of around 12%, a level so low as to undermine prospects for industrialisation and diversification in many developing country economies.