December 2000

W.T.O. NO BETTER A YEAR AFTER SEATTLE

It has been one year since the Seattle debacle, when the World Trade Organisation’s ministerial conference collapsed without any results on 3 December last year. Since then, the WTO has been grappling with the loss of prestige and public credibility. The developed countries which in the past dominated the WTO are still refusing developing countries’ requests to improve its rules and processes. The following article reviews the situation one year after Seattle.

By Martin Khor

Third World Network Features

One year has gone by since the collapse of the World Trade Organisation’s ministerial conference in Seattle from 29 November to 3 December last year. Tens of thousands of citizens from around the world had protested against the WTO at Seattle and had made the call of ‘No new round, instead turnover.’

By this they meant that the trade ministers should not launch a new round of negotiations that would expand the mandate of the WTO to deal with yet more issues.

Instead, they should focus on redressing imbalances and flaws in existing WTO rules and agreements. Otherwise, the WTO could generate more problems, such as threatening jobs in poorer countries and damaging the environment.

Many developing countries at Seattle were also asking developed countries to agree to reviewing the WTO’s rules and wanted the WTO to first clear up the problems of implementation of its rules.

They were also frustrated with the undemocratic nature and lack of transparency in negotiations and decision-making.

The combination of NGO protests and developing countries’ unwillingness to go along with a declaration they had little part in drafting led to the Seattle meeting’s collapse and the erosion of the WTO’s credibility.

Since Seattle, protests have intensified against the kind of ‘globalisation’ being promoted through the WTO, the International Monetary Fund and the World Bank.

Almost 1,000 NGOs around the world have signed on the post-Seattle NGO statement ‘WTO: Shrink or Sink!’, which urges the WTO to reduce its role to a suitable range of genuine trade issues and to correct the flaws in agreements such as agriculture, intellectual property and investment measures.

Despite the outpouring of public concern, the major powers that control the WTO have chosen not to reform the organisation, but instead try to stick to business as usual.

They have also redoubled their attempt to launch a new round. This has continued to cause frustration among NGOs and many developing countries.

After the Seattle debacle, the developed countries and the Secretariat said they would improve the WTO’s battered image through ‘confidence-building measures’. This implied taking the developing countries’ grievances seriously.

But one year later, there has been little or no progress. Major developed countries have not shown any seriousness in addressing developing countries’ plight and have rejected their continued appeals for reviewing the WTO agreements.

True, the WTO members have been holding special general council sessions aimed at dealing with issues faced by developing countries in implementing the WTO agreements.

But these appeals have met with either no response or a cold response from the developed countries.

Since the ‘grace period’ expired at the start of 2000, the negative effects of having to implement the flawed agreements will now begin to ‘bite’ painfully, and the ill-effects will worsen as the implementation proceeds.

Developing countries have asked that as the implementation issues are being discussed, developed countries should not take them to a dispute panel for not following certain rules.

Although the developed countries had at one stage seemed to agree to such a ‘moratorium’, more cases have in fact been brought against developing countries. This has caused the latter to be even more disillusioned and has added to the breakdown of the ‘confidence-building process’.

Furthermore, concerns that the WTO rules will lead to serious problems, including threats to farmers’ livelihood and national sovereignty and misappropriation of traditional knowledge of local communities through ‘biopiracy’, have not been addressed.

Instead, they have been intensifying efforts to launch a new round, to forge more agreements in new areas such as investment, government procurement, competition, labour and environment.

The US and the European Union are trying to bridge their own differences and once they succeed in doing that, they will use their combined might to push a new round as early as 2001, when another WTO ministerial meeting has been scheduled.

The major powers have also increased the pressure on developing countries to take on new onerous obligations on these ‘new issues’ through regional and bilateral trade agreements.

The present agriculture negotiations have not produced any positive results. Farmers in developing countries are facing threats as cheaper imports flood their markets.

Developed countries have not responded to the call by many developing countries that they be allowed to take measures to control food imports or to increase domestic subsidies to farmers.

Moreover, developed countries show no signs of being willing to reduce their very high subsidies and tariffs.

At the present services negotiations, developed countries are putting intense pressure to have all countries accelerate their liberalisation. They are using concepts such as ‘domestic regulations’ and methods such as reclassification of services to reduce the ability of governments to regulate their services sector.

NGOs are also very concerned about the intrusion of the WTO into national policies on essential services such as health, education and provision of water, and they want these sectors to be ‘off limits’ but the negotiations continue to treat these as any other areas for market opening and liberalisation.

In relation to the WTO’s agreement on intellectual property (known as TRIPS), developing countries have requested for the transition period to be extended until the present mandated process of reviewing the agreement is completed.

Many developing countries have also put forward concrete proposals for amending TRIPS to prevent the patenting of life forms and to allow developing countries the right to protect the rights of local communities so that their resources and knowledge will not be patented by big companies.

So far there has been negative response from developed countries. Instead, hundreds of cases of ‘biopiracy’ are taking place.

Many developing countries have also asked for more time to comply with the WTO’s prohibition against using investment measures such as ‘local content policy’ (that requires projects or industries to make use of local materials). They want the WTO to relax the implementation schedule for developing countries as a whole.

So far, developed countries have insisted that each request for extension be treated on a case-by-case basis. Onerous conditions have been placed on some developing countries requesting extension. Complaints have also been lodged against some of the countries.

In the past year, the dispute settlement system has been shown to be seriously flawed. In some cases, the panels and the appellate body have strayed beyond their area of jurisdiction into law-making, which is the task of the WTO members (through the general council or ministerial conference).

Many of their decisions have also been against the legitimate interests of developing countries. There is some evidence of the excessive influence and role of the WTO Secretariat in the dispute settlement process.

NGOs are taking action to show their concern about the lack of reform.

They want the deadline for developing countries to implement the WTO agreements to be extended until the implementation issues are settled.

They want developed countries to be more sincere, sympathetic and responsive to the requests made by developing countries to review and amend the rules in several agreements and they should not pressure developing countries to further liberalise their agriculture and services sectors. - Third World Network Features

About the writer: Martin Khor is Director of the Third World Network.

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