MEDIA RELEASE: 28 November 2005
“If you were to ask me what title I would give this draft ministerial text, it would be ‘I’ll give you an empty development package in exchange for your agricultural, industrial, and services markets’.” Aileen Kwa, Focus on the Global South.
The draft text for the coming Hong Kong Ministerial Meeting of the World Trade Organization (WTO), released by Pascal Lamy over the weekend (26 November), poses serious threats to the economic well being of developing countries while promising them few, if any, benefits.
This was the opinion of two trade specialists following the release of the text by the WTO secretariat.
Services Text Poses Grave Threat to Developing Countries
“This services text is a milestone on the slippery slope to eventual mandatory and irreversible liberalization of services. Developing countries should reject it.” Aileen Kwa.
Kwa pointed out that if the text is endorsed during the sixth WTO ministerial meeting, which takes place Dec. 13-18, it would be the “big trophy” for the developed countries and a major setback for developing countries.
“The greatest threat to developing country interests is the services text,” said Kwa. “It is not presented as a report of the Chair, like the other negotiations, but as a mandate to ‘intensify the negotiations’ along lines that contravene the General Agreement on Trade in Services.”
She pointed to Paragraph 7 in Annex C, which endorses the “plurilateral” approach to complement the current informal request-offer approach of GATS, where one country may request another country to open up several service sectors but the requested government is also free to offer only those it is willing to open up or even not to make any offers at all. The text subverts this flexibility, since it stipulates that the requested countries “shall enter into plurilateral negotiations.” This would go a long way towards converting the negotiations into formal sectoral discussions along the lines of negotiations in Telecoms and Financial Services after 1997, where the room for maneuver for developing countries would be severely reduced.
The goal in subverting GATS flexibilities, says Kwa, is to “come up with a framework of regulatory commitments that all negotiating parties sign up to. Once that is achieved, this will be enshrined as the base line for sectoral commitments in the WTO against which the offers of all members, including those not participating in the plurilateral discussions, would be judged.”
Agriculture and NAMA Texts Unbalanced
“The text refers to several formulas for liberalization, but the various formulas only vary on how fast de-industrialization will take place.” Jacques Chai Chomthongdi, Focus on the Global South
Also objectionable is the draft text’s summaries of the negotiations in agriculture and non-agricultural market access (NAMA).
According to Jacques Chai Chomthongdi, the text “is biased toward developed country positions.” He points out that, among other disturbing elements, the text “endorses the expanded Blue Box demanded by the US, which will allow it to house an additional $5 billion of farm support legislated in its Farm Bill, which will nullify the cuts it has offered in other domestic subsidies.” Also unmentioned is any reform of the Green Box, to which the European Commission is transferring many of its subsidies.
“Nor is there any reference to a schedule for phasing out export subsidies, one of the so-called ‘concessions’ of the EU in the July 2004 Framework Agreement of the WTO General Council—not even the range of dates!” he pointed out. The “Blue Box” and the “Green Box”, which were institutionalized during the Uruguay Round, house various kinds of dumping-promoting subsidies that are, for specious reasons, exempted from elimination of significant reduction.
Chomthongdi characterized the NAMA text as essentially reflecting the conflict between developed country efforts to radically bring down the industrial and manufacturing tariffs of developing countries and the increasingly desperate efforts of the latter to defend themselves.
“Because developing countries maintain substantially higher tariff rates than developed countries owing to their efforts to develop their industries, they will lose out under any of the formulas mentioned in the Chairman’s report.
“The grave imbalance of gains and losses among developed and developing countries shows that NAMA should not have been included in this round of negotiations in the first place,” he concluded.
Empty Development Package
“The developing countries have nothing to gain and everything to lose with this draft declaration. They should reject it.” Jacques-Chai Chomthongdi
Kwa also dismisses the “development package” offered by the draft text as nothing but a move to distract the African and least developed countries (LDCs) from the main draft ministerial text’s agenda of facilitating the domination of the agriculture, industry, and services of the developing world by northern transnational corporations.
“How can we talk about the Doha Round being a ‘development round’ when the prime topic of interest to developing countries, special and differential treatment [S&D] is so marginalized in the text, which refers to the S&D negotiations simply as a ‘review’?” she asked. S&D refers to the principle that countries should be treated in qualitatively different terms when it comes to trade liberalization owing to their different levels of development.
“The draft talks a lot about ‘aid for trade,’” Kwa notes. “But really, this is a bribe for the developing world since the aid is mainly meant for ‘capacity building” to speed up the trade liberalization demanded by the developed countries.”
Note to Journalists – the complete paper from which this release was drawn is available at http://www.focusweb.org/content/index.php?option=com_content&task=view&id=695&Itemid=36
For more information or to arrange an interview, please call Aileen Kwa (Geneva) on +41 79 625 8536, Jacques-Chai Chomthongdi (Geneva) + 4178682 4052 or Brett Solomon on (Bangkok) +66 7 059 1713