WTO Ministerial Conference: Steps for inclusiveness and sustainability?

The Trade Ministers of World Trade Organisation’s 159 Members are meeting these days in Bali, Indonesia, in the organisation’s 9th Ministerial Conference. After an announcement by WTO Director General, Roberto Azevêdo, that the negotiations in Geneva were not fruitful, the Ministers are expected to continue negotiating in three areas: on food security, LDC package and trade facilitation even though a negotiating ministerial was not foreseen and many delegations do not have their main negotiators in Bali. The International Trade Union Confederation (ITUC) and its Global Unions partners published today a statement on the WTO Ministerial Conference encouraging governments to only sign a deal that takes steps towards the implementation of the developmental mandate of the Doha Development Agenda, strengthens food security and assists the economies of Least Developed Countries (LDCs).

“An agreement on agriculture that would protect governments’ power to purchase food from farmers and enact food programmes will have great impact on the most vulnerable of people – one billion of those depend on subsistence agricultural activities” said Sharan Burrow, General Secretary of ITUC.  However, in its current form, the so-called ‘peace clause’ would only be a temporary measure, which is a prize too high in exchange for a binding Trade Facilitation Agreement.

The Global Union Statement further calls WTO Members to conclude an ambitious agreement on development considering the 88 proposals that appeared earlier in the negotiations to make Special and Differential Treatment principles more operational and effective. Such an agreement, together with a package for Least Developed Countries that allows duty-free quota-free access to products and preferential treatment of their services, would be significant steps to the implementation agenda of Doha’s mandate. The global union movement and civil society have repeatedly called for an agreement on the basis of an already-negotiated package of policies for the LDCs.

Agriculture, development and trade facilitation are not the only issues discussed at Bali. The negotiations for an expanded Information Technology Agreement (ITA-II) collapsed and no new date for the restart of negotiations has been announced. However, the Ministers will most probably discuss this issue and decide on the way forward. Earlier this year, a broad coalition of trade unions and civil society organisations addressed a letter to the negotiating Members of the ITA-II that warned developing countries of possible erosion of domestic manufacturing and loss of growth potential in higher value-added segments of information technology manufacturing.

Over 50 civil society groups propose Alternative Trade Mandate

Today, a European alliance of over 50 civil society organisations has launched the Alternative Trade Mandate, a proposal to make EU trade and investment policy work for people and the planet, not just the profit interests of a few. The launch was taking place as EU trade ministers and the European Commission are leaving for the World Trade Organisation (WTO) negotiations in Bali next week. “The current trade and investment regime, imposed by the EU and the WTO, isn’t working. Prising markets open for global agri-business is wiping out small farmers and is a major cause of hunger. The deregulation of financial services through free trade agreements impedes tough regulation of the financial sector, paving the way for the next disastrous financial crisis. We need to break away from this corporate driven agenda,” said Charles Santiago, a member of the Malaysian parliament, who was in Brussels to support the launch of the Alternative Trade Mandate.

The new 20-page mandate proposes that core principles such as human and labour rights and environmental protection should drive EU trade policy. On several areas, such as food, work, money and raw materials, detailed proposals for change are outlined. One proposal is for the EU to become more self-sufficient in protein and oil crops as alternatives to imports of (genetically-modified) soybeans, palm oil and agro-fuels, which are devastating for the environment and small farmers in the global south. The mandate also calls on the EU to hold European corporations accountable for human rights violations, environmental destruction, tax avoidance and tax evasion elsewhere.

The mandate also proposes a new process for initiating, negotiating and finalising trade and investment agreements, giving national Parliaments and civil society a stronger role and thereby rolling back policy-capture by big business.

“EU trade deals are negotiated behind closed doors in the interests of a few rich corporations. The people who are affected by these deals have never been asked what they really need. We want an open and democratic process, controlled by the people of Europe and their elected representatives, rather than unelected technocrats and corporate lobby groups,” said Pia Eberhardt from Corporate Europe Observatory, a member of the Alternative Trade Mandate Alliance. The proposals outlined in the Alternative Trade Mandate were developed in a four-year process, with public workshops held all over Europe and which engaged a wide range of civil society groups from both within and outside the EU.

A seriesof papers with more detailed proposals on several pressing issues accompanies the main text. The proposals will form the basis of an EU-wide campaign to make trade and investment work for people and the environment, which will first focus on the European elections next May, asking parliamentary candidates to pledge support for the Alternative Trade Mandate. “At a time of multiple global crises, the European Parliament needs MEPs who will stand up for trade rules that work for people and the planet. We need MEPs who will bring trade deals out of the shadows and into the light. We call on MEP candidates to stand up for democratic trade and investment rules that serve people, the economy and the environment at large – not just the profit interests of a few,” said Amélie Canonne, co-ordinator of the Alternative Trade Mandate Alliance.

● Find more >>> here.

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G20 Labour and Finance Ministers: Change of tone or will policy action follow?

International unions welcomed the statements of G20 Labour and Finance Ministers following their first joint meeting in Moscow but warned the crisis of unemployment and inequality has reached critical levels and requires an urgent action plan to drive investment and create jobs. According to Sharan Burrow, General Secretary of International Trade Union Confederation, the shared concern about the worsening jobs outlook voiced by both Labour and Finance Ministers should be a warning to G20 Leaders meeting in St. Petersburg in September to deliver a plan for investment and job creation. Over 200 million unemployed, growth forecasts down, families struggling to put food on the table with low wages, yet there is no sense of urgency amongst our leaders. “G20 leaders must acknowledge the urgent need to take action to address rising unemployment and inequality,” said Sharan Burrow.

“Year after year the social and economic situation for working people has deteriorated; however, government policies of  the G20 countries are failing.  Having Labour and Finance Ministers meet is a first step to getting them to work together towards policy coherence and should be continued under the Australian Presidency of the G20,” said John Evans, General Secretary, TUAC. “Rising unemployment and inequality are unacceptable. The downgrade of growth forecasts for G20 economies and the decrease in income-led demand is withering our economies. We therefore need a clearer commitment to a Jobs and Investment Plan into green, inclusive, fair and sustainable growth, with macroeconomic changes away from austerity towards demand-enhancing policies,” said John Evans.

“While the failed policies of austerity have attacked fundamental labour market policies, G20 Labour and Finance Ministers have recognised for the first time that implementing labour market and social investment policies that support aggregate demand and reduce inequality with social protection, a minimum wage and national collective bargaining systems will support economic growth and employment.  Yet in reality too many structural policies by national governments contradict this,” said Mr Evans.

While Labour Ministers showed support for aggregate demand to drive economies, Finance Ministers do not recognise people-centred recovery, which shows that much more is needed to achieve real coordination of policy. The Labour Ministers’ communiqué makes progress on monitoring commitments – which is absent from the joint communiqué, as well. “The world needs an effective G20 with a commitment to people not just financial markets. The hope of working people and their families lies in rebuilding trust – this requires jobs. Success lies with economies where strong employment, fair wages and social protection drive growth,” said Sharan Burrow.

EU banking structure reform is overhyped

The Hamburg based World Future Council (WFC) responded to the public consultation on a reform of the structure of the EU banking sector.

Key messages of the WFC response in brief:

● The separation of banking activities cannot efficiently cope with severe problems like high leverage and excessive risk taking. It can only flank and should not neglect effective measures such as debt brakes for the financial sector, a preventive testing of financial innovations (finance TÜV) and a scalable financial transaction tax to slow down systemically risky volatility.

● There is neither evidence nor plausibility that the reduction of intra-group subsidies through separating deposits from trading activities will lead to shrinkage of the financial sector. Banks refinance themselves primarily, if not solely, through lending activities within the financial sector. Pro-cyclical and opaque credit intermediation chains and overly complex financial innovations make appropriate risk premiums impossible.

● Possible shifts to non-bank finance must not serve as an excuse for weak bank regulation but rather be integrated within an overall approach. This is exactly the purpose of debt brakes for the financial sector, a finance TÜV and a scalable financial transaction tax.

● In view of the limited impact of ring-fencing or separating banking activities as such, full ownership separation such as in the Glass Steagall Act of 1933 is the clearest approach.

Please find the complete response >>>here.

US spending cuts will hit also the South

The government spending cuts in the United States as the President and Congress fail to reach a deal will be felt not only by Americans but also the developing countries. This comes at a bad time as the rich economies are already on a downward path. Last week, the Organisation for Economic Cooperation and Development, the group of 34 rich countries, said that the gross domestic product of its members fell by an annual rate of 0.6% in the last quarter of 2012. The European Commission, meanwhile, predicted that the Euro-zone economies would contract by 0.3% this year, which could prove to be optimistic given the recent political uncertainties in Italy. The spending cuts in the US would add to the contractionary trend in the rich countries.

The continuously weakening of the Western economies will have adverse effects on exports, tourism, workers’ remittances and incomes in developing countries. There is another and more direct dimension to the “sequestration” on the developing world. The government’s spending cuts will affect the budget for aid given to poor countries and to development programmes such as provision of medicines and food, according to a report by the Inter Press Service (IPS).

The new secretary of state, John Kerry, revealed that the State Department and its aid agency USAID, would have to cut US$2.6bil (RM8bil) from their 2013 budget. The cuts would include $200m from humanitarian assistance and $400m from global health programmes. For example, the US would reduce its contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria by $300m this year, meaning there will be less medicine donated to poor countries. Kerry has written to Congress stating that this reduction would reduce the United States’ ability to provide food assistance to two million people and USAID would have to cease, reduce, or not initiate assistance to millions of disaster affected people, and would “gravely impede” efforts at reducing AIDS-related and child deaths.

The IPS report also quoted Jeremy Kadden of InterAction (an alliance of NGOs aiding developing countries) as saying: “These cuts will cost lives. We’ve made very significant progress over the past 10 years, with real people improving their lives, and this would set that process back enormously, devastating actual people on the ground.” He estimated that the budget cuts would lead to some three million children losing access to the basic education they currently receive; two million people would suffer reductions in or stop receiving food aid, while 600,000 children would lose nutrition assistance. Unlike in the United Kingdom, where the Cameron government decided not to cut its aid budget despite huge slashing of the overall government budget, there is no exemption for overseas spending in the US sequestration exercise.

The poor in America will also be affected. About 600,000 low-income women and children will stop receiving food aid. Also affected in the $26bn cut in domestic programmes are health, education, drug enforcement, national parks and Hurricane Sandy relief. Low-income families will also be affected by a cut in public housing subsidies, which could hurt about 125,000 poor families, according to The Guardian. The National Institutes of Health, which will suffer a 5% budget cut, is cancelling hundreds of research grants. Another $16bn in mandatory spending will be cut, including in medicare, agriculture programmes and unemployment benefits.

* Excerpt of the weekly ‘Global Trends’ column of Martin Khor >>> here.

The Big 10: Behind the Brands campaign

The social and environmental policies of the world’s ten biggest food and beverage giants are not fit for modern purpose and need a major shake-up, says international agency Oxfam. The “Big 10” food and beverage companies – that together make $1bn a day – are failing millions of people in developing countries who supply land, labour, water and commodities needed to make their products. Behind the Brands – part of Oxfam’s GROW campaign to fix the broken food system – for the first time ranks the agricultural policies, public commitments and supply chain oversight of Associated British Foods (ABF), Coca Cola, Danone, General Mills, Kellogg’s, Mars, Mondelez, Nestlé, Pepsico and Unilever.

ABF (19%), Kellogg’s (23%) and General Mills (23%) scored most poorly. They have weaker policies than Coca-Cola (41%), Unilever (49%) and Nestle (54%) for example. “Some companies recognize the business case for sustainability and have made important commitments that deserve praise” says Jeremy Hobbs, Executive Director for Oxfam International. “But none of the ten biggest food and beverage companies are moving fast enough to turn around a 100-year legacy of relying on cheap land and labour to make mass products at huge profits, with unacceptably high social and environmental costs. No company emerges with a good overall score. Across the board all ten companies need to do much more. ”

The Behind the Brands campaign reveals:
● While some of the “Big 10” have publicly committed to women’s rights, none have committed to eliminating discrimination against women throughout their supply chains.
● None of the companies have adequate policies to protect local communities from land and water grabs, despite all of them sourcing commodities plagued by land rights violations, such as palm oil, soy and sugar. Not one company has declared ‘zero tolerance’ against land grabs in their supply chains
● All ten companies are overly secretive about their agricultural supply chains, making their claims of ‘sustainability’ and ‘social responsibility’ difficult to verify. Nestle and Unilever are most open about the countries they source from, but no company is providing enough information about their suppliers.
● Companies are generally increasing their overall water efficiency but most have failed to put policies in place to limit their impact on local water sources. Only Pepsi has publicly recognized water as a human right and committed to consult local communities. Nestle has developed guidelines for its suppliers to manage water and was ranked top for policies on water.
● All of the companies have taken steps to reduce direct emissions, but only five – Mondelez, Danone, Unilever, Coca-Cola and Mars – publicly report on agricultural emissions associated with their products. Unilever alone has committed to halve its greenhouse gas footprint by 2020. None have yet developed policies to help farmers in their supply chains to build resilience to climate change.
● None have publicly committed to pay a fair price to farmers or fair business arrangements with them across all agricultural operations. Only Unilever – which is top-ranked for its dealings with small-scale farmers – has specific supplier guidelines to address some key issues faced by farmers.

According to Oxfam, it’s time these companies take more responsibility for their immense influence on poor people’s lives. 80% of the world’s hungry people work in food production and these companies employ millions of people in developing countries to grow their ingredients. They control hundreds of the world’s most popular brands and have the economic, social and political clout to make a real and lasting difference to the world’s poor and hungry. “Analyzing their social policies is an important first step. These policies indicate a company’s intent to do good. They are ultimately how consumers and producers can begin to hold them to account. No brand is too big to listen to its customers. If enough people urge the big food companies to do what is right, they have no choice but to listen. By contacting companies on Twitter and Facebook, or signing a petition to their CEO, consumers can do their part to help bring lasting change in our broken food system by showing companies their customers expect them to operate responsibly.”

The ‘Behind the Brands’ campaign has been launched in more than 12 countries including the US, Mexico, China, Brazil and across Europe. Its first public action will target Nestle, Mondelez and Mars for their failure to address inequality faced by women who grow cocoa for their chocolate products. Oxfam is urging the three companies to do more to know and show how women are treated in their supply chains, create an action plan to address inequality for women in their supply chains and engage in advocacy to influence other powerful actors to do the same.

Oxfam has engaged with all 10 companies during the last year who have cooperated in providing data to inform this scorecard. The scorecard will be updated if companies change their policies. Oxfam rated the companies on their policies on seven topics: how they ensure the rights of the workers and farmers who grow their ingredients, how they protect women’s rights, management of land and water use, climate change and the transparency of their supply chains, policies and operations. It did not review other important policies such as those dealing with nutrition, tax and waste, for example.

>>> More information about the campaign >>> here.
>>> Download of the study >>> here.

European perspective on post-2015 goals

The European Commission has published a Communication this week, proposing a change to the EU’s global poverty strategy after 2015 by integrating environmental sustainability and poverty eradication efforts into a single agenda. With the Communication, entitled A decent life for all: Ending poverty and giving the world a sustainable future, the Commission is reclaiming a role in the ongoing debate aiming at a new generation of development goals for the time after 2015 when the MDGs expire. The document should ensure a unified EU positions in the negociations.

However, after the recent cuts in the development budget of the block NGOs remain sceptical. For CONCORD, the European confederation of Relief and Development NGOs, representing over 1,800 NGOs to the European institutions, the EU is is right to recognize that development and environmental sustainability are two sides of the same coin. Yet CONCORD Director, Olivier Consolo can find only few new proposals for “how we’ll actually achieve sustainable development that benefits everyone and especially the extremely poor”. “The Commission also wants an agenda whose goals apply globally, not just to developing countries, which is welcome” says CONCORD. “However more clarity is needed on what changes the EU and richer countries would have to make themselves to fulfil this agenda.” CONCORD believes the Communication is extremely light on accountability mechanisms to ensure leaders and countries fulfil their commitments. The poverty and sustainability challenges set out in the Communication need to be met with real commitment to the changes needed if the EU wants to be taken seriously by the international community.

In September 2013, a UN special event will take stock of the efforts made towards achieving the Millennium Development Goals (MDGs), discuss ways to accelerate progress until 2015 and start exchanges on what could follow after the MDG target year of 2015. The UN Secretary General Ban Ki-moon asked the UN High Level Panel on the post-2015 development agenda to which European Commissioner for Development Andris Piebalgs is a member, to prepare a special report, to be presented by the end of May.

EU budget talks in Brussels: Aid under threat

Today and tomorrow, EU leaders meet in Brussels to decide the EU budget for 2014-2020, including the proposed €51bn of EU development aid to the world’s poorest. According to NGOs like BOND or ONE, EU aid works. Between 2004 and 2009, it helped enrol more than 9 million children in primary education, vaccinate 5.5 million children against measles, and connect more than 31 million people to clean water. If the proposed €51bn EU aid budget is adopted, in the next 7 years 15 million more children could be enrolled in school, 9 million more could be vaccinated and 51 million more people could be connected to clean water. But proposals for European aid are under serious threat.

At the last summit in November, proposed development assistance to the world’s poorest was slashed by €6.1bn. And some leaders want to make even deeper cuts that could take funds below current spending levels. Ahead of this week’s critical talks, ONE members from all over Europe have been rallying to ask European leaders to protect lifesaving EU aid at the proposed levels. In the next step of its Lifesaver campaign, ONE estimated that it would cost just 3 euro cents (or 2 pence) per week, per EU citizen to reverse proposed cuts to aid for the poorest. ONE members have therefore decided to make their small change count! In the UK, over 2000 ONE members have asked for postcards to send their 2 pence to Prime Minister David Cameron urging him to protect proposals for lifesaving EU aid in the budget negotiations. In Germany, ONE members have sent postcards to Chancellor Angela Merkel, adding their 3 cents. In Brussels, the team collected by hand over 230 postcards for President of the European Council, Herman Van Rompuy including around 60 Brussels-based interns and young professionals who came to our meet-up last week. In France, as part of the French version of ONE’s Lifesaver campaign, “sauveteur du siècle”, ONE members have mailed more than 500 postcards to President François Hollande, urging him to make sure that, in Winter sales season, EU leaders don’t try to make savings on the back of the world’s poorest.

In parallel, ONE also estimated how much it would cost each government per year to reverse the cuts to the proposed €51bn for EU aid. For Germany that’s €174m, for the UK €113m and for France €154m – peanuts compared to overall annual government spending.