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.

Inequality overshadows WTO Ministerial

The international trade union movement has warned of growing social unrest and increased social hardship if trade liberalization continues against the backdrop of harsh unemployment and austerity measures. Ten years since the Doha Round of trade talks opened in 2001, the global economy has witnessed a food crisis, a climate crisis, a financial crisis and a severe jobs crisis. “The existence of the WTO has done nothing to prevent trade imbalances growing to unsustainable levels accompanied by dangerously widening income inequality,” said Sharan Burrow, General-Secretary of the International Trade Union Confederation (ITUC).

The deal on the table at the 8th meeting of Trade Ministers in Geneva 15 -17 December 2011 will not help trade to drive economic recovery, employment creation and genuine economic development, and ultimately puts the multilateral trading system at risk. The trade union delegation attending the talks will be monitoring a number of issues up for negotiation by Ministers and will aim to maintain policy space and to keep new issues such as the Singapore issues (investment, competition policy and government procurement) out of the WTO negotiations. According to ITUC, the talks should provide a package for Least Developed Countries to have duty free and quota free market access for all products, the elimination of cotton subsidies and a waiver for commitments in services.

The ITUC is calling for an evaluation of the Doha round outcomes to assess its impact on providing decent work, improved living standards and diversifying the economies of developing countries. “Without measuring the impact on developing countries and workers, it makes little sense to move forward with trade liberalization. The developmental mandate of the Doha agenda must be reaffirmed if the round is to be concluded.” said Sharan Burrow.

* Find the Global Union Statement of Priorities for the 8th WTO Ministerial Conference >>> here.

WTO Ministerial was a missed opportunity

The seventh WTO Ministerial Conference turned out to be a missed opportunity in addressing the serious challenges facing women and men in the global economy. It turned out a missed opportunity to promote a new model of multilateral trading system that addresses livelihood, employment, decent working conditions, food security, climate change and gender inequalities. Ministers of the 153 WTO Member States reassembled on 30 November to 2 December in Geneva for the seventh Ministerial Meeting under the theme of “The WTO, the multilateral trading system and the global economic environment.“ Despite eight years of ongoing negotiations on the Doha Round – the Ministerial was not a defining moment for coming closer to its conclusion. In addition, no major decision on the future of the WTO was taken.

While most governments paid lip-service to a swift conclusion of the Doha round in 2010, they showed no real political commitment and failed to provide concrete proposals on how to overcome the existing deep differences. On these parameters, the proposed stock-taking Conference in the first quarter of 2010 is nothing more than a PR exercise to affirm that the Doha round is not dead and the WTO as an institution still has some relevance. The WTO, and its Doha expansion agenda, is not appropriate to help resolve the current global economic challenges.

Unfettered trade liberalisation and market opening – embodied by the WTO – have not worked to promote human well-being for all – instead there is vast evidence of the contrary. The fact that most Ministers failed to recognise the link between neoliberal trade policies and the multiple crises facing the world today – including food, financial, economic, employment, climate and social crises – is cause for serious concern. At the Conference, Ministers discussed world trade in abstract terms as opposed to deliberating on the impact of trade liberalisation on sustainable livelihoods of women and men, food security and employment. The Conference, therefore, failed to examine how the structure and the content of the WTO could be changed to address these global challenges.

NGOs and social movements from all parts of the world used the Ministerial meeting to jointly discuss alternative proposals to the neoliberal trade agenda. Together they put forward the claim that a new model of governing multilateral trade must be developed, which shifts away from the neo-liberal trade model embodied by the WTO to allow for space for alternative, heterodox and feminist economic and development approaches. These approaches make the crucial link between economic and social policies, focus on people's needs, rights and livelihoods, including the empowerment of women, social justice and equality as well as an equal distribution of resources and power and put the social reproduction side of the economy at the core.

As a part of Geneva Trade and Development Symposium, WIDE, together with WEED, War on Want and Seattle to Brussels Network organized a session entitled “Trade, employment & Global Europe – looking beyond a ‘social clause’. Panel discussion evaluated critically current free trade policies that continue to dominate world trade and threaten to put millions more in rich and poor countries alike out of work and highlighted the importance of the links between trade and gender in these discussions.

>>> WIDE Statement

Oxfam reacts to WTO judgement on US cotton subsidies

The United States this week has lost a battle in its dispute over cotton subsidies with Brazil at the World Trade Organization (WTO), said international organization Oxfam. The WTO confirmed the injury caused by these subsidies and authorized Brazil to retaliate against the US. “American farm policy is broken and bloated, and now other sectors of the US economy may suffer as Brazil retaliates,” said Gawain Kripke, policy director for Oxfam America. Total direct support to cotton production hovered over $3bn in the 2008-2009 growing season, or an equivalent of 50 cents per pound of actual production, according to the International Cotton Advisory Committee.

“The global trading system depends on countries obeying rules and submitting to orderly dispute resolution,” said Kripke. “Thus far, the US has ignored the ruling of the WTO adjudication and continues large subsidies for cotton production. If the US continues this way, the integrity of the multilateral trade system is at stake.” An Oxfam study found that with a complete removal of US cotton subsidies, the world price of cotton would increase by 6-14%, resulting in additional income that could feed an additional million children for a year or pay school fees for at least two million children living in extremely poor West African cotton growing households.

The longstanding dispute started in 2002. In 2005, the WTO ruled that US cotton subsidies harmed Brazilian cotton farmers and violated WTO rules, but the US did little to abide by the ruling and reduce its trade distorting subsidies. In September 2006, Brazil asked for a WTO “compliance panel” to determine whether the US has done enough to comply with the ruling and the WTO confirmed that the US has failed to reform its agricultural subsidies enough to comply. The recent ruling confirms that Brazil is entitled to start retaliation procedures, and possibly cross-retaliate by lifting intellectual property protections.

Collapse of Doha: Time for a paradigm shift

The Doha Round of trade negotiations has collapsed once again, perhaps definitively this time. Whatever should come next, it is clear that the new dynamics in the World Trade Organisation (WTO) mean that developed countries can no longer force through a bad deal. The breaking point in the end was the conditions under which the Special Safeguard Mechanism (SSM) could be used. The SSM provides countries with the right to increase tariffs to curb an import surge in order to protect a domestic industry from short-term swings in global markets, which is a crucial instrument for developing countries to promote their food and livelihood security and rural development. Whilst China and India vigorously defended the right of developing countries to use the SSM, the US condemned their position as placing the talks in the ‘gravest jeopardy’.

Civil society organisations and social movements have asserted over the last months and weeks that the Doha deal as it was proposed would not solve the food and energy price crisis and would in fact exacerbate it by making food prices more volatile and increase developing countries’ dependence on imports; it would furthermore severely restrict the policy space open to developing countries for pursuing agricultural and rural development. As highlighted by Bernd Nilles, Secretary-General of the Catholic solidarity network CIDSE in Brussels, “the right to protect small agricultural producers in developing countries was the litmus test of the Doha Round negotiations ability to deliver development outcomes.”

Whilst the collapse of the Doha Round has demonstrated once again the weaknesses of the WTO, it also showed the increased representation and weight of developing countries such as India and Brazil and that their interests can no longer be overruled. According to a CIDSE statement, the importance of a multilateral trading system should not be undermined as bilateral and regional trade agreements result in the implementation of advanced liberalisation arrangements, previously rejected at the WTO, that often have even more serious negative implications for developing countries. Rather than a return to rhetoric, CIDSE calls on governments and on EU Trade Commissioner Peter Mandelson to now break away from a ‘business as usual’ approach in order to negotiate trade agreements that are equitable and socially just.

Cotton subsidies: US must react to WTO Panel

The US must act immediately to reform its trade distorting cotton subsidies, otherwise its credibility as an international trading partner will be undermined, and significant damage will be done to the multilateral trading system, said Oxfam in response to a WTO panel ruling that confirmed that the US has failed to reform its program sufficiently. The US is still paying billions of dollars of such subsidies to its cotton farmers, despite having lost a WTO case against Brazil in 2005, with no encouraging signs of reform coming from the US Congress. There is little time for the US Congress to make more meaningful reforms to agricultural subsidies in order to comply with international trade rules before facing possible retaliation from Brazil.

"This ruling reinforces the need for reductions in US cotton subsidies in both the context of the Doha Round and the 2007 Farm Bill," said Isabel Mazzei, head of the Geneva office of Oxfam International. "The US cannot continue to ignore the WTO and the effects of cotton subsidies on global markets and, ultimately, the livelihoods of poor farmers in the developing world." In 2005, the WTO ruled that US cotton subsidies violate WTO rules and gave the US until September 2005 to reduce them. In response, the USDA agreed to reform export credit programs to comply with the ruling, and Congress eliminated the Step 2 cotton export subsidy program in 2006. But these programs represent only 10% of the overall cotton subsidy programs and some of the most trade distorting programs, like the counter cyclical payments were left untouched. In September 2006, Brazil asked for a WTO "compliance panel" to determine whether the US has done enough to comply with the ruling. This week, the WTO has confirmed that the US has failed to reform its agricultural subsidies enough to comply.

According to a recent study conducted by Dan Sumner and others at the University of California Davis for Oxfam, reforming US cotton subsidies would increase world cotton prices by 6-14%, resulting in additional income that could feed an additional million children for a year or pay school fees for at least two million children living in extremely poor West African cotton growing households. A typical cotton-producing household in West Africa has about 10 family members, an average life expectancy of about 48 years and an adult literacy rate of less than 25 percent. Cotton is often the only source of cash income for these families who live on less than $1 a day per person.

EU appeal at WTO Panel seeks to weaken Brazil’s green laws

Anti-poverty and green campaigners have called on the European Commission to withdraw a challenge it is mounting to health and environmental protection measures in Brazil. The Commission is appealing against a recent World Trade Organisation report into a dispute over a Brazilian ban on imports of retreaded tyres. Brazil has argued that the large quantity of tyre waste it has to deal with each year create a risk of soil, groundwater and air contamination. Tyre waste also increases the likelihood of diseases, especially in a tropical climate. A panel set up by the WTO has found the restrictions on retreaded tyres are “provisionally justified” as they are needed to protect humans from malaria and other illnesses carried by mosquitoes. But the Commission is arguing that banning retreaded tyres from the EU is discriminatory as Brazil imports them from its neighbouring countries.

Jürgen Maier from the German NGO Forum on Environment and Development argues that the EU’s position in this case “does not make sense”. In a letter to Peter Mandelson, the European commissioner for trade, he pointed out that the EU has defended its own environmental and public health standards at the WTO in disputes relating to hormone-treated beef, asbestos and genetically modified foods. “Instead of appealing, the Commission should support Brazil and other developing countries to implement efficient measures for the responsible management of used tyres and other hazardous waste,” said Maier.

In an open letter to the European Commission's Trade Commissioner Mandelson, CIEL and WWF Europe express their concern about the EC's decision to appeal the WTO Panel report in the Brazil-Retreaded-Tyres dispute. In their letter, CIEL and WWF urge the EC to either withdraw their intention to appeal or, at a minimum, to focus any appeal narrowly to avoid compromising the ability of WTO Members to protect life, health, and the environment. In addition, because of the undeniable public importance of this case and precedent-setting effect any Appellate Body decision will have, the two groups ask that an appeal in this case be conducted in a transparent and open manner. The most effective way of achieving this is by posting pleadings (including with respect to appeals) on the official governmental web site contemporaneously with their being filed with the WTO, and by web casting hearings in real time.

Indian ruling against Novartis: Victory for public health

This week’s verdict by an Indian court against the Swiss pharmaceutical giant Novartis is an important victory for global public health, according to aid agencies CARE International and Oxfam International, and the church-based advocacy network, the Ecumenical Advocacy Alliance. The decision will protect India’s special role as the world’s leading provider of affordable medicines to the poor. The agencies welcome Novartis’s response that it is unlikely to appeal the ruling. Novartis had challenged a law that allows India to refuse a patent for an existing medicine when it had been modified only slightly.

Novartis and the pharmaceutical industry have been given a clear message to respect developing countries’ legal right to use the World Trade Organization TRIPS (trade-related intellectual property) safeguards to strike the right balance between protecting public health and intellectual property, the agencies said. The right of all WTO members to use the flexibilities and safeguards in the TRIPS Agreement to promote “access to medicines for all” was confirmed in 2001 (the Doha Declaration). Since then, however, rich countries and big pharmaceutical companies have sought to prevent or limit their use by developing countries, endangering the well-being of poor patients everywhere.

India – known as the ‘pharmacy of the developing world’ due to its massive generic drug production industry – supplies most of the world’s affordable generics to developing countries where patented medicines are priced out of most people’s reach. More than two-thirds of generic medicines exported from India are sold in developing countries at a fraction of the cost of patented brand medicines.

This week’s ruling comes at a time when patentability criteria are under examination in other countries as well, for instance the United States. Recognizing that patentability criteria which lead to the granting of frivolous patents can hinder innovation and access to new products rather than promote it, the US Supreme Court has recently ruled in favour of stricter criteria. – The provision in Indian law under challenge by Novartis constitutes an important public health safeguard in TRIPS. Developing countries should be commended for using this and other safeguards to promote access to affordable medicines for their populations. Recent examples include the issuance of compulsory licenses by Brazil and Thailand, and the introduction of a new, pro-health intellectual property law in the Philippines.

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.