The Guardian November 7, 2001


WTO: TNCs versus the people (Part 4)
Doha: North versus South

by Anna Pha

Despite all their efforts, the United States, the European Union (EU) and 
other Western governments are battling to avoid another Seattle at the 4th 
World Trade Organisation ministerial meeting which is due to commence in 
Doha (Qatar) on November 9. They suffered a humiliating defeat at Seattle 
in December 1999, when the countries of the South rejected proposals for a 
new round of negotiations.

The South had the support of hundreds of thousands of demonstrators on the 
streets of Seattle and at protests around the world.

Since this defeat the industrialised countries have continued to push for a 
new round of negotiations on new issues at the WTO while steadfastly 
refusing to address the many issues raised by the South at Seattle.

In the lead-up to the Doha meeting the US and the EU have used every trick 
in the book to try to buy off, frighten and stand over and split the unity 
of the South.

A ministerial meeting of the least developed (49 poorest) countries held in 
Zanzibar, Tanzania, July 22-24, was unanimous in declaring that they were 
not ready to launch a new trade negotiating round at the Doha ministerial.

It is one of a number of recent meetings at which the countries of the 
South have come together to discuss the issues concerning them.

More than 100 participants from the missions of over 50 developing 
countries, officials from the UN and other international organisations took 
part in a meeting organised by the Third World Network (TWN), in September 
last year in Geneva.

Speaking at the TWN conference, Malaysia's Ambassador, M Supperamanian, 
said that the Seattle WTO conference had proved that the developing 
countries' interests are now a major factor in deciding the WTO's future 
course of action.

"Rather than accept as a fait accompli negotiating issues initiated by 
others as in the past, developing countries are now pushing forth their own 
agenda. This is a vital development in the history of multilateral trade 
negotiations, which should be accepted as being in everybody's interest", 
said the Malaysian Ambassador.

The developing countries are angry over the failure of the Uruguay (GATT) 
round of agreements to be fully, fairly and properly implemented.

Implementation issues

There is strong opposition and resistance to the introduction of new issues 
or a new negotiating round, before these various "implementation" issues 
are resolved.

The developing countries took a strong position at an informal session of 
the WTO Council for Trade in Services on February 20 this year, when they 
rejected a WTO secretariat draft of guidelines and procedures for services 
negotiations.

Their representatives spoke for the Group of 24 developing countries, the 
African Group, and the Caribbean Community and Common Market (CARICOM)  
accounting for 70 WTO members.

There are a number of unresolved issues regarding the implementation of the 
Trade Related Intellectual Property Rights Agreement (TRIPS), the Trade 
Related Investment Measures Agreement (TRIMS), the General Agreement on 
Trade in Services (GATS), and the agreements on trade in agriculture and 
clothing and textiles 

There are also objections to the way in which the WTO operates. The big 
powers make the decisions in secret in "the green rooms". The WTO's 
disputes mechanisms undermine the sovereignty of third world countries, and 
the Western dominated WTO refuses to give recognition to concessions they 
have made under pressure from the International Monetary Fund (IMF) or 
World Bank (WB).

They lack the necessary technical and financial resources to be able to 
negotiate in a meaningful manner, and the so-called "special and 
differential treatment" that developing countries were supposed to receive 
is being wound back.

The industrialised countries are trying to make the resolution of these 
"implementation" problems conditional on acceptance of a new round of 
multilateral negotiations covering such areas as government procurement, 
investment and competition policy.

What the developing countries are demanding now should have been delivered 
as part of a previous deal when they reluctantly agreed to the introduction 
of TRIPS, TRIMS and GATS in the Uruguay negotiating round.

"Why should the South take on five or six new issues and undertake 
obligations on them in order to get something that was promised before?", 
asks Chakravarthi Raghavan, Chief Editor of the "South/North Development 
Monitor, ("Third World Economics: 1-15/2/01).

Promises not delivered

The imbalances arising out of the implementation of the WTO agreements are 
striking.

Far from assisting the development of Third World economies and encouraging 
foreign investment and trade, the majority of these countries have suffered 
growing inequalities with barriers to their exports, floods of imports and 
in many cases, little or no investment.

The Africa Group at the WTO, which constitutes 41 African countries, 
remains economically marginalised with less than two per cent of world 
trade and a very small proportion of foreign investment.

The economies of Latin America, which has undertaken extensive WTO/IMF 
style "reforms", grew by an average of 3.2 per cent during the 1990s, 
compared with 5.5 per cent during the '50s to '70s when the public sector 
played a major role.

Instrument of globalisation

"The major developed countries are using the WTO aggressively as an 
effective instrument of globalisation. They have thus far succeeded to 
great extent: (i) opening the markets of developing countries for their 
goods and services; (ii) protecting the rights of their intellectual 
property, e.g. patents and copyrights, said Bhagirath Lal Das, formerly 
India's Ambassador to GATT (Third World Economics 1-15/6/01).

"They have extracted concessions from the developing countries in all these 
areas without themselves giving any meaningful concessions to the latter. 
All this will have a serious adverse impact on the production, trade and 
technological development of the developing countries.

"Indeed, the impact has already been felt in several developing countries 
in many areas", said Bhagirath Lal Das.

At a WTO TRIPS Council meeting on September 19, a group of almost 50 
developing countries from Africa, Asia, Latin America and the Caribbean 
supported the demand that nothing in the TRIPS agreement should prevent 
member countries from taking measures to protect public health.

TRIPS has been used by the large pharmaceutical corporations to prevent 
governments from taking measures to ensure poor people have access to 
essential medicines at affordable prices.

The US has backed its pharmaceutical corporations, steadfastly refusing to 
agree to public health taking priority over intellectual property rights 
(profits).

Developing countries are also opposed to the use of TRIPS to patent life-
forms, and facilitate the biopiracy of native and cultivated plant 
varieties of third world countries and Indigenous peoples.

The patenting of life forms endangers the future of small farmers, of 
environmentally sustainable agriculture, and the biodiversity of crops.

There is wide-spread agreement amongst developing countries, NGOs and other 
groups around the world that the TRIPS agreement should be modified to 
ensure the primacy of public interests over the security of private 
intellectual property rights.

The corporations of the US, the EU, Canada and Japan are likewise the main 
beneficiaries of TRIMS and GATS, as they dominate in financial, banking, 
electrical, telecommunications, health, education and other services.

Third world exports, such as clothing and textiles and agriculture have not 
received similar benefits from industrialised countries.

As Tanzania's President Mkapa said at a recent meeting of some developing 
countries in Kampala, "When the OECD countries subsidise agriculture at 
more than US$300 billion a year, how can my country's peasant farmers enter 
a 'level playing field'? It is nonsense.

"If you invite me to a level playing field, it's like shackling my feet and 
asking me to enter a boxing ring."

"It is common in our countries to see vendor after vendor with full trays 
of vegetables", said Nelcia Robinson of the Caribbean Gender and Trade 
Network in Trinidad and Tobago.

"They are unable to sell because imported food is much cheaper."

A leading Ugandan sugar producer pointed out that the import duty for sugar 
was 151 percent in the US, 176 per cent in Western Europe, and 278 per cent 
in Japan.

"In Uganda the rate is only 25 per cent and yet we are told to reduce it, 
and this will effect the 250,000 people involved in sugar in the country. 
It is a sad story", said the businessman.

Chakravarthi Raghavan made the point at a conference organised by the Third 
World Network that if the South does not speak up, then the developing 
countries whose economic sovereignty has already been jeopardised might 
soon lose their political sovereignty as well.

There is a great deal of consternation amongst developing countries over 
the undemocratic way in which the WTO operates.

They are particularly angry over the way the Director General, Michael 
Moore has been calling selective meeting and travelling around the world to 
push a new round of negotiations on new issues while there are still very 
serious differences between countries over current questions.

Third World countries feel they were mislead over meaning of the agreements 
that they signed.

The ambassador from India at the Third World Network Conference said that 
in is country's experience, where there were ambiguities in agreements or 
declarations, "it is developing countries who suffer".

"We will not accept any language which is not supposed to mean what it 
says, and which is not supposed to say what it means", he said.

New issues

The North's agenda includes agreements on competition policy, transparency 
in government procurement, investment, trade facilitation, electronic 
commerce, industrial tariffs, and the inclusion of labour standards and 
environmental protection clauses in agreements.

The proposals on government procurement are a fore-runner to giving foreign 
corporations equal rights with domestic corporations and the public sector 
when governments provide or purchase supplies and services.

Many governments still give preference to the public sector or to domestic 
corporations.

Many governments still give preferences to the public sector or domestic 
suppliers.

Many governments still give preference to the public sector or to domestic 
corporations.

The aim of negotiations on investment is to open up the economies of Third 
World countries to unrestricted foreign investment by US, EU and Japanese 
transnational corporations (TNCs).

The proposed agreement would give TNCs the right to move investment capital 
and profits in and out freely and to be treated in a similar fashion to 
domestic companies when it came to receiving government economic support 
such as tax incentives.

Erosion of sovereignty

It would amount to a very severe erosion of sovereignty, in effect 
depriving governments of basic controls necessary for economic, 
environmental, cultural and social development.

It would be a major setback for a government attempting to make economic 
policy and handle economic crises or other developments in the interests of 
its people.

In particular, government attempting to develop economies would lose 
control over which areas were developed, what investment took place, what 
was exported, what was imported and would lose the ability to give 
preference to domestic industries, job-creation programs, or environmental 
projects.

It would also severely restrict indigenous rights.

Competition policy is also aimed at facilitating the entry and operation of 
foreign corporations into Third World countries.

It would be used to deregulate and open up areas of the economy and the 
public sector (e.g. health and education) to foreign private investment. It 
is a mechanism for privatising public services and government functions.

There is a drive supported by trade unions in the West for the inclusion of 
labour standards clauses in the various WTO agreements.

There is also a push for similar provisions regarding environmental 
standards in exporting countries.

This push is not based on some new-found belief in labour rights or 
environmental protection by the transnational corporations or Western 
governments, such as the US or the EU.

The US and EU governments are under considerable political pressure at home 
and are looking at using such clauses to find a way of excluding clothing, 
textile, agricultural and other third world exports when they are 
eventually forced to reduce the high tariffs and subsidies, mentioned 
earlier.

Under the WTO laws the US or EU could point to short-falls in labour or 
environmental practices and retain, as retaliatory measures, their present 
highly restrictive tariffs or other measures that disadvantage exports from 
Third World countries.

It is the height of hypocrisy that these countries at the beck and call of 
transnational corporations to trample over environmental and labour rights 
around the world are now demanding their inclusion in the WTO agreements.

If they were really genuine about protecting labour, social or human 
rights, they would support the signing of the Kyoto Agreement, they would 
support the right of people to cheap affordable medications, they would 
support the rights of indigenous people, and WTO disputes committees would 
not be debating whether asbestos was safe for importation.

That is not to deny the importance of these questions, which should be 
dealt with at the appropriate bodies, such as the ILO and the United 
Nations and Kyoto, instead of being used to further disadvantage and 
inhibit the development of the developing countries.

The South is more united than ever in defence of the rights of Third World 
countries, and in resisting the wider agenda that was pushed at Seattle and 
is once again before a ministerial meeting, at Doha.

* * *
Next week: the movement against the WTO and the alternative.

Back to index page