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.

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More than 250 Economists Call for Trade Reforms to Allow Capital Controls

In a letter delivered 31 January, more than 250 economists urged the Obama administration to reform US trade rules that restrict the use of capital controls. The statement reflects growing consensus among economists that capital controls, while no panacea, are legitimate policy tools for preventing and mitigating financial crises. Signatories include several economists who have been generally supportive of free trade but are critical of the capital control restrictions (e.g., Arvind Subramanian, Senior Fellow of the Peterson Institute for International Economics and Nancy Birdsall, President of the Center for Global Development), as well as former IMF officials (e.g., Olivier Jeanne of Johns Hopkins University) and a Nobel laureate (Joseph Stiglitz).

The United States has trade or investment agreements with 52 countries that restrict the use of capital controls and allow private foreign investors the right to sue governments that violate these restrictions. Several additional deals are in the works, including:
* U.S.-South Korea free trade agreement. Status: pending congressional approval.
* Trans-Pacific Partnership. Status: Trade negotiators from the United States and eight other countries will meet for a 5th round of talks in Chile on 15 February.
* Investment treaty with China. Status: The U.S. government is expected to soon complete a review of its model Bilateral Investment Treaty (BIT), which will accelerate negotiations with China, India, and several other countries. Presidents Obama and Hu “reaffirmed their commitment” to these ongoing negotiations in a 19 January joint statement.

Kevin Gallagher, Boston University professor and research associate at the Global Development and Environment Institute at Tufts University (GDAE), and Sarah Anderson, director of the Institute for Policy Studies Global Economy Project, initiated the statement. In 2009, Gallagher and Anderson examined this issue as members of the Investment Subcommittee of the State Department's Advisory Committee on International Economy Policy. “It’s in the US interest to allow other governments the authority to apply sensible capital controls,” says Anderson. “In a globalized world, expanding the policy options to combat financial crisis makes sense for US businesses, workers, and the environment.” “US trade treaties are inconsistent with the emerging consensus in the economics profession and among the international financial institutions that capital controls are a legitimate part of the toolkit,” says Gallagher. “The US and its trading partners should have all the possible tools available to prevent and mitigate future financial crises.”

>>> Click here for the full statement and list of endorsers.

Civil society and trade unions on EU-India Free Trade Agreement

As the EU-India Summit meets in Brussels today, civil society organisations and trade unions have reiterated their views on a draft free trade agreement. A broad civil society alliance called on the European Commission and the Indian Government to immediately halt the ongoing free trade negotiations between India and the EU. More than 240 concerned civil society groups signed an open letter, in which they warned that the talks would damage the livelihoods of millions of people in both India and Europe, exacerbating poverty and undermining economic and social development.

The proposed agreement would undermine people’s rights to food, to health and to gender just and social development. “The EU persistently puts pressure on India to open up its market to European dairy and meat products, while the EU continues to export these products at prices far below production costs with the help of subsidies”, said Armin Paasch, trade expert of the German Catholic Bishops’ Organisation for Development Misereor. “Around 90 million people are working in the dairy sector in India, most of them being small scale farmers or herders and 70 percent being women. Their livelihoods would be severely threatened if subsidized EU exports are permitted to flood the Indian market”, said Paasch.

Tightened intellectual property rights (IPR) would limit India’s ability to provide affordable medicines for the treatment of HIV-AIDS, malaria and cancer, not only for Indian patients but worldwide. “It is outrageous for Europe to undermine the Indian drug industry’s capacity to provide affordable and safe medicine to the poor. Despite massive protests the EU continues to insist on data exclusivity and other provisions, which would hinder timely production and delivery of generics”, said Rebecca Varghese Buchholz, trade policy advisor at Traidcraft, UK. “This example illustrates the corporate capture of the negotiation agenda: public health objectives are pushed aside in the interest of pharmacy industry profits.”

Representatives from Indian and European civil society groups claim that the behind-closed-door negotiations must be made more transparent – and be accountable to wider interests in society. “The EU-India summit is another example of the lack of transparency and undemocratic nature of the negotiations. Neither civil society groups nor Members of the European Parliament are allowed to attend the annual summit of political leaders from either region. At the same time, the 11th EU-India business summit will be held bringing together the European and Indian high level business and political representatives to network and shape a joint agenda,” explained Ska Keller, Member of the European Parliament. “This is unacceptable; the broad resistance against the FTA shows that people on both sides are no longer willing to leave the decision-making on their future in the hands of the business and political elite.”

The EU-India summit coincides with the official international human rights day. As civil society, “we believe that December 10 presents a timely opportunity to halt free trade talks until coherence of all provisions with human and women rights obligations can be guaranteed”, urged Barbara Specht, advocacy officer of the gender network WIDE. “Instead of profit interests the negotiations should be guided by gender and social justice and sustainable development objectives.”

“As we have said since talks started in 2007, any agreement must contain a comprehensive and effective chapter on sustainable development entailing the commitment of both parties to the attainment of decent work, including respect for fundamental workers’ rights,” insisted ITUC General Secretary Sharan Burrow. “A social chapter is essential so that an agreement could lead to growth, development and the creation of decent and productive employment,” stated ETUC General Secretary John Monks. “And trade unions must have rights and mechanisms to be able to raise issues under the procedures of the agreement.”

“The impact on the textiles sector stands to be particularly great unless effective measures to protect workers’ rights,” said ITGLWF General Secretary Patrick Itschert. “Our Indian and European affiliates are united in insisting on a strong social chapter.” Trade unions are also concerned at proposals to include provisions on the temporary cross-border movement of workers in the agreement – unions have always stated that trade agreements should not contain provisions to regulate migration. Should any such articles nonetheless be included, these must provide for full respect for national labour law and existing collective agreements in order to ensure that migrant workers receive employment conditions no less favourable than those of nationals.

NGOs warn trade ministers not to undermine climate talks

International NGOs such as development agency Oxfam welcomed a long overdue meeting of trade ministers in the sidelines of the UN Conference on Climate Change in Bali over the weekend to discuss how trade policies can contribute to, and not undermine, action on climate change. The meeting has been convened by the Indonesian government. Trade ministers from 30 countries, including the US, EU, Brazil, India and China, will discuss cross-cutting trade-related climate issues such as the liberalisation of "climate-friendly" technologies, and "mutual supportiveness" between the WTO and the UNFCCC regimes. However, the meeting has been seriously compromised by a proposal from the US and EU that uses the climate crisis to push for their trade liberalisation schemes heavily criticised at the World Trade Organisation (WTO). This is a double whammy for poor countries. Not only are poor people bearing the brunt of climate change caused by industrialised nations, but rich countries are now also seeking to boost their exports by opening up developing countries' markets.

The US and EU have billed their proposal to eliminate tariff and non tariff barriers on a range of goods and services that can have environmental uses as bold and new, but according to Oxfam, it is neither. "The UN conference on climate change is being used as a pretext to dust off old proposals that haven't gotten anywhere at the WTO," said Barry Coates, Executive Director of Oxfam New Zealand in Bali. "A high priority for action on climate change is support of developing countries to access affordable and clean technology and to develop technology that is most appropriate to the challenges they face. But rich countries have done little to honour their commitments." The proposal would open up developing country markets to goods that are mainly produced in rich countries. The list contains products and services, such as medical, surgical or laboratory equipment and sanitation services, with uses that extend beyond environmental benefit and certainly beyond reducing greenhouse gas emissions. Also, green technologies developed in rich countries can be too expensive and are not always the most appropriate for developing countries.

Friends of the Earth International President Meena Raman said: "This informal trade ministerial taking place behind closed doors on the sidelines of climate talks is deeply worrying. What the climate negotiations need is trust and transparency. The World Trade Organisation's anti-poor, anti-environment agenda must be kept out of the UN climate process." The proposal of the United States and the European Union tands to benefit business interests especially in rich countries rather than people affected by climate change in the developing world, according to FOE International. Meena Raman added: "Technology transfer is not about reducing trade barriers. If the EU and US were serious about helping developing countries tackle climate change, they should be radically reducing their own emissions and living to up their obligations by paying their climate debts. This includes the costs of adaptation and mitigation, including technology transfer and forest conservation. Instead, we see them pushing intellectual property rights onto the poor that block the transfer of desperately needed environmental technology."

The WWF urges the need to explore how the global financial and trade systems can contribute to combating climate change. Global financial and trade systems are important but only means to sustainable development and serve those larger objectives of common global concerns. Those include to overcome effectively the current climate crisis which if not effectively addressed will put the world and especially its most vulnerable communities into jeopardy. Communities and countries who should ideally benefit from global trade and finance transactions. The WWF recognizes that this was the original idea behind the initiative by the Indonesian Government to organize dialogues between selected ministers of trade and finance on climate change issues. The WWF is, however, concerned that governments are not ready to have such a free exchange of ideas, rather it seems that certain governments will try to misuse the climate talks to further their usual agenda on e.g. trade issues as reflected in some of the Doha and other disputes.

In order to achieve the goal of addressing climate change trade and finance ministers should clearly frame the discussion in terms of finding ways and means to address climate change through financial and trade mechanisms in a way that promotes sustainable development and equity. The WWF proposes the following issues:

1. As an outstanding and urgent issue for the current negotiations, technology and finance for Mitigation and Adaptation are key Building Blocks for a post-2012 global climate framework. Without speedily scaling up the efforts to provide substantially new and additional resources to developing countries, support for a truly global low carbon trajectory and meeting the needs of the poor will fail. Therefore, industrialized countries’ Trade and Finance ministers need to provide adequate and predictable mechanisms required in the context of a Bali Mandate and beyond. Equity, fairness, monetary capacity and current as well as historic responsibility for greenhouse gas emissions requires this as a fundamental non-negotiable precondition for global trust and confidence building among all nations, a prerequisite for success for the next two years of climate negotiations which need an encouraging sign by the rich countries’ F & T ministers at the Bali talks.
2. Trade policies can be used to increase the market share of energy efficient and low carbon technologies such as renewable energies. Policies should then be implemented in such a way that it reflects global priorities rather than narrow national (or regional) interests. The EU decision to limit the import of low cost energy saving light bulbs from China on the basis of “anti-dumping” is an example of how policy should not be implemented.
3. Proposals should be developed in cooperation between proponents from Annex 1 and non-Annex 1 countries in order to increase the potential to reflect common interests. The proposal by the U.S. and EC for Liberalizing Trade in Environmental Goods and Services in the WTO Negotiations enforces polarization between Annex1 and non-Annex1 countries where transcendence is needed.
4. Public subsidies of fossil fuels contribute to a lock-in into a carbon-intensive energy system. It is therefore necessary to start a process to shift public investments away from fossil fuels towards low carbon, highly-efficient and sustainable technologies. This should occur while ensuring that the cost is not shifted onto the poor who are often dependent on fossil fuel energy for daily needs.
5. Public financial institutions should reflect the interests of broad society. Internationals Financial Institutions and Export Credit Agencies should therefore phase out investments in fossil fuels and increase investments in energy saving, renewable energy and sustainable low carbon technologies.
6. The democratic control of public finance managed by International Financial Institutions and Export Credit Agencies should be strengthened. This should happen through an increased role for national parliaments and increased public participation and transparency (good governance).
7. Public procurement can make an important contribution to stimulating green technologies to move out of the start-up phase. Governments should move to 100% green procurement.