TWN Info Service on Trade and WTO Issues (July08/35)
24 July 2008
Third World Network

Trade: Bolivian leaders object to WTO's Green Room process
Published in SUNS #6524 dated 24 July 2008

Geneva, 23 July (Riaz K. Tayob) -- Bolivia may be a small country, but at the current WTO talks, it is making an impression larger than its size. It has voiced opposition to the non-democratic process at the present week of WTO talks, and has informed WTO Director General, Pascal Lamy, that it did not agree with the negotiation and decision-making process.

At the press briefing on 22 July, Mr. Pablo Solon, the Trade Advisor to the Bolivian President, said his country was not seeking to be part of the exclusive Green Room but was objecting to the exclusive Green Rom process itself.

At the WTO's present meetings, the negotiations are taking place in a Green Room' to which 30-40 members are invited. On Wednesday, an even smaller group of 7 members took over the negotiations as even the Green Room was suspended.

The outcome of the Green Room discussions are to be presented to a formal meeting of the Trade Negotiations Committee (TNC) scheduled for Saturday.

Mr. Solon said Bolivia had three main areas of concern in the negotiations, the process, substantive issues and gaps or missing issues in the negotiations.

On process, Solon said Bolivia could not agree to the Green Room process. Solon said that he made it clear to Lamy that his objection was not because Bolivia wanted to be part of the privileged group of countries in the Green Room. Bolivia was against the Green Room process in principle.

He portrayed the Green Room process as a group of these privileged WTO members climbing Mount Blanc and looking down over Geneva and relating to other members how Geneva looked from high up. Bolivia, he said, would prefer it if all members climbed the mountain together.

Solon said Bolivia was very concerned about what will transpire at the end of the week. It would be unacceptable for Bolivia that revised texts would appear on Friday and the countries not in the Green Room would have 24 hours within which to agree to a text at the Saturday TNC meeting.

Solon emphasised, we cannot build consensus with a "take it or leave it" formula.

On substance, developed countries are giving "water" implying that the commitments have limited value. [Water in WTO parlance refers to commitments by countries that, for instance, limit the maximum allowed subsidy but do not cut into the actual subsidies paid to farmers; or that cut bound/maximum tariffs but do not affect the tariffs actually applied/used].

Developed countries are giving "water" in agricultural subsidies while they expect developing countries to make actual commitments in the NAMA negotiations, said Solon. Developing countries are asked to reduce tariffs while the US had offered to reduce its Overall Trade Distorting Support to USD 15 billion. Solon said in 2007 the US paid about USD 7bn, so with this offer they are not going to reduce anything in reality.

In the NAMA negotiations, some developed countries will reduce their tariffs, in percentage terms, less than even Small and Vulnerable Economies (SVEs), Solon said. Developed countries will cut tariffs by between 25 to 30 percent while developing countries are asked to cut between 40 and 60 percent. It is unfair that developed countries make cuts that are half of what developing countries are obliged to make.

On the Special Safeguard Measure (SSM) in agriculture, Solon said there are proposals to put so many limitations that it would be worse or less effective than the existing safeguard (the SSG) which is available mainly to developed country producers.

On services, Solon said the Chair of the negotiations is trying to get approval for a new text, even though there is no mandate for such a text to declare maximum liberalisation commitments. Bolivia, which opposes this text, instead sought to exclude basic services, which it regards as human rights, from the General Agreement on Trade in Services (GATS). Human rights, he said, cannot be part of bargaining in trade negotiations.

On intellectual property, Solon said the TRIPS agreement states that members "may" exclude patentability of some life forms. Bolivia wants to change the agreement to replace "may" with "must" to have a clear prohibition on the patenting of life forms. The future of humanity depends on this struggle, Solon added, and this is crucial for Bolivia and was the vision of indigenous peoples all around the world.

Solon said it was also important to secure a clear interpretation of General Agreement on Tariffs and Trade (GATT) article XXIV, the regional integration clause. Developed countries cannot ask for reciprocity in bilateral or regional trading arrangements from developing countries if at the WTO the principle is less than full reciprocity. Reciprocity then is not acceptable in bilateral and regional agreements that developed countries demand, for instance, in the Economic Partnership Agreements of the EU.

The missing issues, or the gaps in the discussions, at the WTO, Solon said, relate to the food and energy crises and climate change. Free trade would worsen the food crisis, and was not the answer. States need to have the right to guarantee food in adequate quantities and prices.

Solon reported that on climate change, Bolivia's President Evo Morales, in a recent letter to Lamy, that imported food may be cheap if the environmental costs are not taken into account. If these costs are taken into account, then the conclusion was that it is healthy to prioritise what is locally produced. Foreign trade is a complement to local production and policies should not favour foreign markets over domestic ones, Solon said.

An open letter by President Evo Morales of Bolivia was also distributed. Mr. Morales said that the WTO negotiations have turned into a fight by developed countries to open markets in developing countries to favour their big companies.

The agricultural subsidies in the North will not only continue but will actually increase, as demonstrated by the US 2008 Farm Bill, even as the developing countries will lower tariffs.

As for industrial products in the WTO negotiations, developing countries are being asked to cut their tariffs by 40% to 60% while developed countries will, on average, cut their tariffs by 25% to 33%.

For countries like Bolivia the erosion of trade preferences due to the overall lowering of tariffs will have negative effects on the competitiveness of its exports.

"In the negotiations, there is a push towards the liberalization of new services sectors by countries when we should be definitely excluding basic services in education, health, water, energy and telecommunications from the text of the WTO's General Agreement on Trade in Services. These services are human rights that cannot be objects of private commercial relations and of liberalization rules that lead to privatization," said Mr. Morales.

"The deregulation and privatization of financial services, among others, are the cause of the current global financial crisis. Further liberalization of services will not bring about more development, but greater probabilities for a crisis and speculation on vital matters such as food.

"The intellectual property regime established by the WTO has most of all benefited transnational corporations that monopolize patents, thus making medicines and other vital products more expensive, promoting the privatization and commercialization of life itself, as evidenced by the various patents on plants, animals and even human genes.

"The poorest countries will be the main losers. The economic projections of a potential WTO agreement, carried out even by the World Bank, indicate that the cumulative costs of the loss in employment, the restrictions to national policymaking and the loss in tariff revenues will be greater than the "gains" from the "Development Round".

After seven years, the WTO round is anchored in the past and out of date with the most important phenomena we are currently living: the food crisis, the energy crisis, climate change and the elimination of cultural diversity. The world is being led to believe that an agreement is needed to resolve the global agenda and this agreement does not correspond to that reality. Its bases are not appropriate to resist this new global agenda.

Studies by the FAO point out that with the current forces of agricultural production it is possible to feed 12 billion human beings, in other words, almost more than double the current world population. However, there is a food crisis because production is not geared towards the well-being of humans but towards the market, speculation and profitability of the big producers and marketers of food.

To deal with the food crisis, it is necessary to strengthen family, peasant and community agriculture. Developing countries have to recover the right to regulate our imports and exports to guarantee our populations' food supply. We have to end consumerism, waste and luxuries. In the poorest part of the planet, millions of human beings die of hunger every year. In the richest part of the planet, millions of dollars are spent to combat obesity. We consume in excess, waste natural resources and we produce the waste that pollutes Mother Earth.

Countries should prioritize the consumption of what we produce locally. A product that travels half around the world to reach its destiny can be cheaper than other that is produced domestically, but, if we take into account the environmental costs of transporting that merchandise, the energy consumption and the quantity of carbon emissions that it generates, then we can reach the conclusion that it is healthier for the planet and for humanity to prioritize the consumption of what is produced locally.

President Morales proposed the following:

-- Guarantee the participation of developing countries in all WTO meetings, thus ending exclusive meetings in the "green room".

-- Implement true asymmetric negotiations in favour of developing countries in which the developed countries make effective concessions.

-- Respect the interests of developing countries without limiting their capacity to define and implement national policies in agriculture, industry and services.

-- Effectively reduce the protectionist measures and subsidies of developed countries.

-- Ensure the right of developing countries to protect their infant industries, for as long as necessary, in the same manner that industrialized countries did in the past.

-- Guarantee the right of developing countries to regulate and define their policies in the services sector, explicitly excluding basic services from the General Agreement on Trade in Services of the WTO.

-- Limit the monopolies of large corporations on intellectual property, foster the transfer of technology and prohibit the patenting of all forms of life. +