NGOs oppose another WTO round

by Gumisai Mutume

Washington, 12 Oct (IPS) - As the momentum builds up in the North for a new round of World Trade Organisation (WTO) negotiations, non-governmental activists from key countries in the South are in turn raising their voices in opposition.

WTO Director-General Mike Moore, pushed by a number of industrialised nations, is gunning for a new round of negotiations soon, which he dubs the “Development Round”. The urgency of a new round has been heightened by the failure to bring new issues into negotiation at the WTO Seattle summit last year.

Although no fixed date has been set for new negotiations, the WTO is proposing that the issues include new rules and regulations on investment policy, government procurement, competition policy, industrial tariffs, trade facilitation, electronic commerce and environmental and labour standards.

Developing countries, still grappling to comply with changes to domestic legislation emanating from standards set in 1994 at the Uruguay Round, would be set back further by another regime of taxing rules, notes Anuradha Mittal of the Institute for Food and Development Policy in California.

“The time has come to step back from this mania for free trade at any cost, assess the damage and seek a new start.

“The goal is not to stop trade, but trade bills and treaties designed to favour the wealthiest and most powerful corporations at the expense of everyone else are wrong,” notes Mittal.

The Institute for Development Policy recently released a collection of essays from activists and scholars in developing countries opposed to globalisation and its expression within institutions like the WTO. It includes contributions from Chile, India, Nigeria and South Africa, among others.

The articles in the collection, titled “Views from the South - the effects of globalisation and the WTO on Third World countries”, detail the effects of the international financial institutions on developing countries and demand profound changes to these institutions.

For instance, Martin Khor of the Malaysia-based Third World Network says under a new round, rich nations will push for rules that give new rights to foreign investors and compel member states to further liberalise their trade regimes and relax restrictions on capital flows.

He says the European Union (EU) is pushing for a new agreement that would look unfavourably on domestic policies that protect small local firms, charging that these create a barrier to foreign competition.

Rich nations would also like to bring policies on government spending, decisions and procedures under the WTO umbrella, “where the principle of ‘national treatment’ - foreigners to be treated on par with nationals - will apply”, notes Khor. This would see bids for government contracts, supplies and projects opened up to foreign competition. This is significant because government procurement expenditure in some countries is worth more than imports.

Adding his voice to the debate, Bangkok-based co-director of Focus on the Global South, Walden Bello, says by enshrining free trade as the principle of the global trading system, the WTO represents the defeat of everything the South has been fighting for at the UN Conference on Trade and Development (UNCTAD).

At UNCTAD, developing nations have been pushing for fair commodity price agreements, trade preferences to leverage their access to markets of the North and the use of trade policy as a bargaining tool for industrialisation and technology transfer from richer nations.

Yet in a study released in June, the WTO maintains that poor people within a country generally gain from trade liberalisation and that liberalisation is generally a strongly positive contributor to poverty alleviation as it allows people to exploit their productive potential.

The WTO study, titled “Trade, Income Disparity and Poverty”, concurs with a recent World Bank report, “Growth is Good for the Poor”, which uses data from 80 countries over four decades to conclude that openness boosts economic growth and that the incomes of the poor rise one-for-one with overall growth.

“We are committed to negotiations in agriculture and services, sectors which cover over half the world’s economy,” noted Moore in a recent statement. “Many of our critics would rather we did nothing. They claim we do enough harm as it is. How wrong they are.”

WTO critics argue that under the new standards of global free trade, there are few controls on the massive transfer of money across the world, one of the key components destabilising currencies and countries.

Chile, Malaysia, China and Russia are notable among a number of countries that are trying to put in place ‘speed-bump’ policies. These require foreign investors to leave their funds invested in those countries for a certain period of time and are designed to resist financial domination by Northern bankers and corporations.

“But most of these efforts are furiously targeted for destruction by proposals in the new Millennium Round that Mr Moore cynically says the Third World is seeking,” notes Jerry Mander, president of the International Forum on Globalisation, an alliance of activists, scholars and economists formed to stimulate new thinking in response to globalisation.

“In fact the WTO is seriously entertaining the revival of many aspects of the already discredited Multilateral Agreement on Investment (MAI), though these elements are now carved up into smaller, disguised pieces.”

Formal negotiations towards a controversial MAI at the Organisation for Economic Co-operation and Development (OECD) began in 1995, but they ceased without any agreement being concluded.

Without an MAI, weak nations are still able to use a few tools, such as tax breaks, preference for government contracts and requirements for a certain percentage of domestic ownership, which have given small producers a fighting chance against global enterprises. These measures had been targeted for removal under the MAI and NGOs charge that they are now also proposed for review under a new round.

One of the consequences of liberalisation has been a surge in cheap imports in developing countries, threatening to put farmers out of business, noted a review of liberalisation carried out by the Association of World Council of Churches Related Development Organisations in Europe published in August last year.

The study, “Trade and the Hungry: How International Trade Is Causing Hunger”, notes that cheap food imports have demoralised small-scale farmers. Having produced maize, rice, soybeans, rabbits, sheep and goats, the farmers cannot obtain economic prices for them, even in village markets.

Dot Keet, senior researcher at the Centre for Southern African Studies at South Africa’s University of the Western Cape, says the experience of weaker nations with WTO mechanisms such as the Dispute Settlement Understanding (DSU) has not been as positive as promised under the Uruguay Round.

Keet says because of the complexity of the issues and the procedures, stronger countries and companies have the capacity to prolong the dispute panel processes; “weaker complainants can be irreparably damaged in the interim, even if the WTO panel eventually rules in their favour”.

She says weaker countries are manifestly reluctant to pursue official DSU processes through the WTO, “at one level owing to their lack of legal expertise and to the vast costs entailed in hiring international legal experts and researchers”.

However, at an underlying level, the caution may also be influenced by an apprehension about possible indirect reprisals by their stronger adversaries in other spheres such as development assistance, should formal procedures be instituted against them. .

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