Focus on Trade is back on line, bringing you regular updates, reports and analysis from the WTO ministerial in Geneva, the climate talks in Copenhagen, and many moments and places in between.
IN THIS ISSUE
The 7th Ministerial of the World Trade Organisation has come and gone in Geneva, Switzerland. Although billed as a non-negotiating Ministerial, its opening was preceded by developing countries holding press conferences discussing the possible conclusion of the long stalled Doha Round of Negotiations in 2010 and many rumours circulating about side meetings of negotiators. The opening was also met with protests and actions by movements, civil society organisations and trade activists who declare that Doha is the problem and not the solution to the crisis. In the end, the Geneva ministerial seemed like the last hurrah for a failed system, where trade negotiators valiantly tried -- against all evidence -- to gather momentum for further trade liberalisation. What planet are they living on? Indeed, what planet will be left if they continue with this madness. Next week, we move to Copenhagen when the song sounds very much like the one in the WTO, although we can be sure that the movements on the street will sing a very different tune.
GOVERNMENTS: LISTEN TO YOUR PEOPLE! ABANDON DOHA, CONFRONT THE CRISES!
Statement by members of the Our World is Not for Sale Coalition
G20 MUTES ITS DEMAND AT THE COST OF ITS FARMERS
Afsar Jafri
INDIA TURN-AROUND AT THE DOHA TALKS
Benny Kuruvilla
ASIAN FISHERS PROTEST WTO’S ENCROACHMENT ON THEIR LIVELIHOODS
Joseph Purugganan
GOVERNMENTS: LISTEN TO YOUR PEOPLE! ABANDON DOHA, CONFRONT THE CRISES!
Statement by members of the Our World is Not for Sale Coalition*
The 7th Ministerial Meeting of the World Trade Organisation (WTO) was held in Geneva in the midst of multiple crises, when people all over the world are demanding that governments take decisive action to protect their livelihoods from the dangers of corporate led globalisation. The failure of deregulation and liberalisation that the WTO locks in through its trade regime are all too evident to the ordinary people in the world. That this Ministerial was a non-negotiating meeting, is a reflection of the massive resistance to the WTO trade regime from workers, farmers, fishers and social movements from across the world. Trade ministers did not come to Geneva empowered with a popular mandate to move forward the negotiations. But in an inexplicable but expected disconnect to the realities back home, many of them have called for a speedy conclusion to the Doha Round in 2010.
Fifteen years after its inception, the WTO is further away than ever from an equitable, just, rules-based multilateral trading system that can foster development. Since its launch eight years ago, it has become progressively more evident that the Doha Development Round is completely antagonistic to the real priorities of peoples in developing countries. Instead, the demands of the global powers continue to set the agenda for trade negotiations and are doing so in a climate of fear where the 'blame game' has become the order of the day. Any country that is not prepared to support the speedy conclusion of the Doha Round is in danger of being blamed for the failure of the multilateral trading system.
The WTO is not a solution to the multiple crises that the world is facing. On the contrary, evidence shows that WTO trade rules are more a cause of and will exacerbate the current food, financial and climate crises. If the the main purpose of this ministerial meeting was to examine the role of the WTO in the current global economic environment, then governments must:
- immediately halt all negotiations on the Doha Round;
- reverse WTO commitments and reject progressive liberalization;
- conduct comprehensive development audits of the impacts of WTO trade on local and national economies;
- in collaboration with national constituencies, develop new trade rules that will ensure food, financial, economic, climate and environmental security;
Governments: listen to your people! Abandon Doha! Confront the Crises!
* http://www.ourworldisnotforsale.org/
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G20 MUTES ITS DEMAND AT THE COST OF ITS FARMERS
Afsar Jafri*
The G20, an alliance of 23 WTO member countries on agriculture led by mainly India and Brazil, representing 51% of the world population and 63% of the world’s farmers, reflected their great helplessness and inertia to take on US protectionist practices and sought an easy route to deal with it by calling for an “urgent” conclusion of Doha Round even though their fundamental demands are not addressed in the current negotiating text. The communique issued after the G20 Ministerial meeting in Geneva on 29 November, says that “concluding the Doha Development Round would result in a triple win: (i) strengthening of the confidence in the multilateral trading system; (ii) guarding against the rise of protectionism; and (iii) contributing to boost the global economy while reducing its asymmetries.” It further says that “the Ministers of the G20 called for urgent action on the Doha Round...there is urgent need to translate political statements into concrete engagement in Geneva in order to accomplish the shared objective of concluding the Round in 2010...the only way to achieve this objective is to seek convergence on the basis of the draft modalities texts of December 2008.”
This is a big shift in the G20 position since its formation in 2003, just before the 5th WTO Ministerial in Cancun. This is the first G20 communique in last six years which is quite hushed in its basic demand for “effective” reduction of subsidies in developed countries, mainly the US and European Union (EU). Ironically, the G20 communique does not make any of its fundamental demands regarding Special & Differential Treatment, especially Special Products (SP) and Special Safeguard Mechanisms (SSM), which the G20 has been associated with. SPs and SSMs are ostensibly intended to protect the interests of the vast masses of poor peasantry in developing countries, but it seems that the G20 is willing to accept the watered down, inadequate and ineffective SP and SSM provisions outlined in the Chair’s text in December 2008.
The G20 Ministerial meeting on 20 July 2008 in Geneva had stated that “the developed countries are accountable for the main distortions and restrictions in agriculture trade and policies” and called for “achieving ‘effective’ cuts in the Overall Trade-Distorting Domestic Support (OTDS)”. They also “underscored the importance of making Special and Differential (S&D) treatment operative and integral to the negotiations in the three pillars... and emphasised the vital role of SPs, in addressing the food security, rural development and livelihood concerns of developing countries, and of the SSM.” However what they accepted under the December 2008 text is a complete turn around.
The December 2008 text provides for a 70% reduction in allowable subsidies in the US which would bring down, if the US agrees to this, subsides to $14.5 billion from the present allowable level of $48.7 billion under the Agreement on Agriculture (AoA). But the actual current level of such subsidies was only around $8 billion in 2007, thus allowing the US to double their subsidies from the actual level of subsides. The worst is that all this “reduction” will not at all affect the burgeoning subsidies under the so-called “green box” (estimated currently at $50 billion and constitute around 80% of the total subsidy bill of USA) which is not subject to any reduction commitment.
Even the safeguard provisions on the SPs are quite watered-down from the G20's original demand for 20% of the tariff lines to be self designated as Special Products. The current negotiating draft provides for only 12% of tariff lines being eligible to be treated as Special Products and of these, only 40%, i.e. only 5% of the tariff lines, to be subject to no tariff cut and remaining 60 % i.e. 7% of tariff lines to be subject to an average of 19 % cut. In the Indian context, out of the approximately 700 tariff lines in agriculture, only 35 lines would be subject to no tariff cuts and 49 lines subject to a tariff cut of 19 %. Commenting on this provision of December text, Mr. SP Shukla of the Indian Peoples Campaign against WTO said “considering vast multiplicity of India’s agricultural product range and the crucial importance of these products for livelihood, the range of protection available is too narrow and too weak.”
Moreover, the conditionalities for the use of ‘price based’ and ‘volume based’ SSM as protection mechanisms are designed in such a way that it makes them ineffective in case of import surges. Instead of being flexible and practical for developing countries, the December text puts several conditions which would make it impossible for the importing countries to impose any extra tariffs if they feel that the cheap imports would affect their domestic farm sectors and impact livelihoods, rural development and food security of the people. Some of these conditions are quite problematic, for example, the volume based SSMs can be used only for two consecutive periods; the application of SSMs will only be on Most Favoured Nation (MFN) tariff level only; the volume and price based SSMs cannot be used for en route shipments; the volume based SSMs will be applicable only when the domestic price crashes down; the maximum period of volume based SSM is 4-8 months only; the maximum number of tariff lines which can avail the SSM provisions is just 2.5 %; and the uppermost limit for the price based SSM remedy are the tariffs which countries bound during Uruguay Round. These conditions makes the SSM a extremely weak “safety net” for the millions of low income and resource poor rural households in the developing countries who have very little ability to absorb price fluctuations and a flood of subsidised imports of agricultural products. Further, these condition-ridden provisions do not respond to the original demand of the G33 which asked for an “effective, flexible, practical and operable” special safeguard mechanisms. On the other hand the developed countries have crafted a more flexible and practical special safeguard provisions (SSG) for themselves which is mainly “price based” and does not have any such cumbersome conditions for its effective operation.
The farmers and civil society groups present in Geneva are quite upset with the positions of G20 and G33 member countries on the December 2008 text. They placed their trust in the proposed instrumentalities of Special Products and Special Safeguard Mechanism but what is on the table is inadequate to provide any protection to the poor farmers in developing countries who are affected by cheap subsidised imports from developed countries. Their major concern is that the recent Delhi Ministerial in September 2009 took a decision to negotiate only that part of the December 2008 text which has not yet been agreed to and are still under brackets. Unfortunately a very small part of the SSM text in bracketed which means that most provisions and conditionalities on the SSM have been agreed and will not be opened up for any further discussion during the Doha Round negotiations. For example the price based SSM provisions are not bracketed at all and hence there will be no further discussion on that, even though countries like Philippines are trying hard to open up the discussion.
Farmers and civil society groups are also concerned that the developing countries have made their commitment to cut their agriculture tariff by 36 % but there is no final commitment from the developed countries on the elimination or even substantial reduction of their agricultural subsidies. And if the Doha Round is concluded, and the possibility is that this will be whenever US decides to move, with the truncated and ineffective provisions on SP and SSM, the developing countries will have no bargaining chip to demand for any further reduction in any kind of subsidies of the developed countries. This will be suicidal for the agriculture and agriculture based economies of the South and the fundamental imbalances among WTO members will persist for ever.
Afsar Jafri is a research associate with Focus on the Global South and he can be reached at a.jafri(at)focusweb.org. The G20 is a group of 46 developing countries in the WTO.
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INDIA TURN-AROUND AT THE DOHA TALKS
Benny Kuruvilla*
Led by Minister Anand Sharma, the Indian trade delegation to the 7th WTO Ministerial Conference is getting an unusually cool reception here in Geneva. And this is not just from the social movements, trade unions and civil society organisations gathered here with a clarion call for ‘WTO turn-around’. Many smaller developing countries that have previously looked up to India as a moral leader of the South are disappointed with the Indian turn-around, albeit in the wrong direction.
India’s volte-face on the Doha Development Round began with the change in guard at the Ministerial level. Veteran Minister Kamal Nath was traded in for Sharma a relative novice. The latter is under strict instructions from the Prime Ministers office to undo the so called ‘damage to India’s global image’ caused by Nath’s steadfast refusal to agree to the conclusion of the Doha Round citing the disastrous consequences for India’s marginal and vulnerable farmers. Sharma on the other hand has been more than gung-ho about its conclusion. He convened a WTO mini-ministerial meeting at Delhi in September 2009, which was protested by more than 50,000 farmers, workers and left political parties and labelled undemocratic and against the interests of the developing world.
Minister Sharma then endorsed the controversial December 2008 texts in agriculture and industrial tariffs. Both texts were dramatically criticised and rejected by his predecessor when they were introduced in July 2008 because of their inability to protect the interests of India’s farmers and workers. Since then, the twin crises of food and finance have further accentuated the vulnerability of farmers and workers. Food policy analyst Devinder Sharma reports that farmer suicides have increased with some 900 cases reported from the Vidarbha region in western India since January 2009. The count is also rising in the states of Orissa and Andhra Pradesh. Economist C P Chandrasekhar writes that a labour bureau sample survey late last year, covering eight sectors including textiles, metals, mining, automobile, gems and jewellery, construction, transport and the information technology industries, showed that over a half a million jobs were lost and this is expected to rise.
Analysis of the current negotiating texts show that farmers and workers will be worse off with the proposed drastic cuts in tariffs coupled with weak and ineffective safeguards to prevent import surges. There is no logic in India’s now zealous acceptance of the current texts except that it wants to be seen as a responsible global player and curry favour with the USA.
But even that defies logic. The US Trade Representative (USTR) Ron Kirk comes to Geneva with strict instructions from an anti-trade US Congress to not negotiate. Kirk does not have fast-track authority to ink a Doha deal and is unlikely to get it anytime soon. With ambitious bail-out packages that violate its WTO commitments and a farm lobby that won’t agree to even a meagre cut in subsidies, the US is hard put to show a pro WTO liberalisation face at the Ministerial meeting. Sharma should be closing ranks with other developing countries to expose the hollow rhetoric of the US administration.
India’s position is even more baffling in the services negotiations. At the last WTO Ministerial in 2005 in Hong Kong India supported the text on services or Annex C of the Ministerial declaration citing huge potential gains in the movement of highly skilled professionals to markets such as the USA. The futility of its aggressive stance on the General Agreement on Trade in Services (GATS) was exposed with the financial crisis as several thousand H-1B visas are lying vacant in the current financial year. India now seems reconciled to getting little in terms of offensive interests in the GATS but continues to press forward on controversial issues such as domestic regulation still alluding to the mirage of gains through the movement of skilled labour. Analysis by the Geneva based South Centre warns that disciplines on domestic regulation will conflict with the right to regulate, especially in critical areas such as finance. In fact India should have taken the lead in exposing the USA for its hypocrisy in demanding financial de-regulation in developing countries while re-regulating back in Wall Street.
Sharma’s naivety in international negotiating politics was further evident when he curtly refused a request by representatives of Indian farmers, unions and civil society organisations to meet them for a briefing on the Indian position. On the other hand South African Trade Minister Rob Davies met with several trade unions at the ILO and was unequivocal in his rejection of the current industrial tariffs text as it failed to meet the test of creation of decent work for his citizens. Davies urged his fellow ministers to use the current impasse in the Doha Round to reflect and start a dialogue on fundamental reform of the WTO. Sharma would do well to use this non-negotiating Ministerial to get some training on the sticky terrain of global trade politics and spending time with Davies would be a good start.
* Benny Kurruvilla is a research associate with Focus on the Global South and he can be contacted at bennyk(at)focusweb.org
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ASIAN FISHERS PROTEST WTO’S ENCROACHMENT ON THEIR LIVELIHOODS
Joseph Purugganan*
GENEVA. November 30, 2009 --- Undeterred by the rain and the cold Geneva weather, subsistence fishers from Southeast Asia led a protest outside the WTO conference centre demanding an end to disastrous trade policies that have threatened the livelihoods of fishers and the poor across the region.
Parading around a traditional fishing boat that they used in fluvial protests in Lake Geneve two years ago, the fishers from the Southeast Asian fishers for Justice Network (SEAFISH) voiced their strong objections to the on-going negotiations in the WTO that aim to liberalise the fisheries sector.
“We are here to dramatise the plight of the small fishers of Asia whose living conditions have been made worse by trade and development policies that prioritises the needs of the export markets while opening up the domestic market to cheaper fish imports” asserted Ruperto Aleroza, a fisherfolk leader from the Philippines.
The liberalisation of the fisheries sector is being discussed in the Non-Agricultural Market Access (NAMA) negotiations under the WTO, where Member countries are trying to strike a deal to slash tariffs on a whole range of non-agricultural products and to bind these rates under a multilateral agreement.
In the Chair’s text on the draft modalities released in December 2008, which has become the basis for continuing negotiations, it was reported that apart from a few outstanding issues like on sectorals and preference erosion, that the NAMA text is almost complete.
The critical issues surrounding the coefficient for tariff reductions and the flexibilities for developing countries for example seemed to have already “stabilised” around certain numbers and ranges. The discussions on the coefficient have settled on the following figures: 8% for developed countries and 20-25% range for developing countries; and there seems to be general agreement already among Members to adopt the approach, which faced strong opposition previously, that links the coefficient to the flexibilities.
These numbers however are completely unacceptable to the small fishers.
“The NAMA negotiations have gone from bad to worse. The demand of developing countries for greater flexibilities, which is completely consistent with the development objectives of the talks has been seriously undermined by the current negotiating text” said Aleroza. Furthermore he added that “these negotiations have not taken into account the extreme poverty and inequality that persists in the fisheries sector in the Philippines and across Asia. We are therefore calling on governments to defend our fishing grounds and protect our livelihoods against the encroachment of the WTO.”
So while the negotiators and diplomats iron out the technical details on the remaining outstanding issues, and issue political statements in support of the early conclusion of the Doha Round, small fishers across Asia continue to manifest and shout out their opposition to the WTO and its liberalization agenda wherever their boats take them.
* Joseph Purugganan is a research associate with Focus on the Global South and he can be contacted at josephp(at)focusweb.org
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Focus on Trade is a regular electronic bulletin providing updates and analysis of trends in regional and world trade and finance, the political economy of globalisation and peoples resistance, and alternatives to global capitalism. Nicola Bullard edits Focus on Trade. Your contributions and comments are welcome. Write to n.bullard@focusweb.org
Focus on Trade is translated into Spanish. If you would like to receive the Spanish edition, contact n.bullard(at)focusweb.org.