WTO Turnaround 2013: Food, Jobs and Sustainable Development First – Statement

October 2013

After more than three decades of experience with a corporate-led model of globalization, it is clear that this particular model of globalization has failed workers, farmers, and the environment, while facilitating the vast enrichment of a privileged few. The emergence of the global financial and economic crises of the last five years have exposed many negative impacts of policies, such as: deregulation of the financial sector resulting in financial collapse and job loss; commodification of the agricultural markets resulting in food price volatility and hunger; “race to the bottom” liberalization policies for production leading to deadly calamites, such as the collapse of the factory in Bangladesh where more than 1000 textile workers perished; intellectual property monopolies limiting global access to life-saving medicines; and corporate-trade-expansion (rather than trade-for-development) policies exacerbating the climate crisis. Despite this incredible harm, these liberalization, deregulation, and corporate monopolization policies form the backbone of the current global trade system, consolidated by the World Trade Organization (WTO) since 1995.

The emergence of the global financial, food, economic, and other crises – which the WTO’s privatization and liberalization rules contributed to, and failed to prevent – provides an opportunity to reflect on the serious problems endemic to the particular model of globalization that the WTO has consolidated globally. Unfortunately, within the WTO, there exists a colossal failure to recognize the WTO’s contribution to the global crises, and instead many members have worked to maintain the focus on increasing corporate trade without regard to the human or environmental costs. Thus, within the WTO, some members – representing their corporate interests– are even seeking to expand these failed policies in the run-up to the upcoming 9^th Ministerial meeting of the WTO, which will take place in Bali, Indonesia, December 3-6, 2013.

While the global framework of these rules is set by the WTO, these same policies also appear in an even more extreme form, in regional and bilateral so-called Free Trade Agreements (FTAs) that have led to job loss, food price volatility, and increased foreign corporate control over public services and natural resources. These FTAs and the proliferation of Bilateral Investment Treaties (BITs) have led to an explosion of “investor-state” cases, where many health, safety, and environmental laws have been attacked by transnational corporations at private courts, resulting in awards in the billions of dollars from taxpayers to corporations.

Given this situation, the Our World Is Not for Sale (OWINFS) network asserts that the global trade framework must work for the 99%: it must provide countries sufficient policy space to pursue a positive agenda for development and job-creation, and must facilitate, rather than hinder, global efforts to ensure true food security, sustainable development, access to affordable healthcare and medicines, and global financial stability. And it must privilege global agreements on human rights and environmental sustainability over corporate profit. Thus, a completely new institution, with a central mandate of setting trade rules that allow countries to pursue trade for sustainable development while disciplining corporate behavior, must be created.

In addition, in the interim, serious changes must be made to existing WTO policies, in order to allow countries more policy space to pursue urgent solutions to these key global challenges. And immediately, the negotiations towards the upcoming Ministerial must be overhauled to reflect the need for a radical shift in the agenda.

Current WTO Scenario: Wrong Direction, Wrong Proposals

After many failed Ministerial meetings and nearly twelve years of negotiations, the Doha Round of WTO expansion is at a crossroads. Developed countries have pushed aside agreements to negotiate on key developing country issues intended to correct the imbalances within the existing WTO, which formed the basis of the development mandate of Doha.

Even worse, developed countries appear to be re-packaging the same liberalization and market access demands of their corporate interests to create a “new trade narrative” towards gaining agreements at the upcoming 9^th Ministerial in Bali. These include an agreement on Trade Facilitation, which would place excessive implementation, regulatory, human resources, and technological burdens on developing countries, while resulting in more imports into than exports from developing countries. At the same time, developed countries have failed in their obligations to ensure appropriate levels of Special and Differential Treatment (SDT) within the Trade Facilitation negotiations themselves, particularly with regards to technical and financial assistance.

At the same time, developed country corporate interests continue to marginalize the ongoing demands of developing countries in towards the Bali Ministerial. It is outrageous that rich countries oppose a proposal by the G33 group of 46 countries, to allow developing countries to subsidize poor farmers to grow food for their populations at risk of hunger. Likewise, demands by LDCs for a simple package of policies to allow them to improve the results of their participation in global trade should be approved and implemented immediately, not be pushed to the side or held hostage for other concessions by developing countries.

Thus, if there is to be any agreement for the upcoming 9^thMinisterial at Bali, it must begin to rebalance the inequities of the past, such as agreement to the G33 proposal for Food Security, a strong LDC package, as well as a strong SDT package. A binding agreement on Trade Facilitation would be a tremendous step in the wrong direction.

It is of deep concern that developed countries have already launched negotiations on their post-Bali agenda, including towards an expansion of the plurilateral Information Technology Agreement (ITA). An expansion of the ITA would achieve many of the liberalization goals of developed countries from the Non-Agricultural Market Access negotiations in the Doha Round, and would have a negative impact on the ability of poorer countries to develop their technological sectors. They have also launched plurilateral negotiations on services, called the Trade in Services Agreement (TISA). The creation of a radical services FTA like the proposed TISA would result in the deregulation and liberalization of many private and public services in developing and developed countries alike. It would also reduce pressure on developed countries to concede many changes to the existing WTO demanded by developing countries in the negotiations. These two proposed agreements represent more of the failed model of liberalization and deregulation, and are opposed by civil society organizations in participating and non-participating nations, in developed and developing countries alike.

Any post-Ministerial agenda agreed to at the upcoming 9^th Ministerial in Bali should not focus on “more-of-the-same” corporate agendas.

Thus, the Our World Is Not for Sale (OWINFS) network asserts that in addition to a long-term transformation of the global trade and economic architecture, immediate changes must be made to WTO in order to provide countries more policy space to pursue a positive agenda for development and job-creation, food security, sustainable development, access to affordable healthcare and medicines, and global financial stability.

The basic principles and goals underlying the WTO must be overhauled, many current WTO policies must be fixed, and many aspects of the 2001-launched Doha Round agenda must be changed. Specifically, we call on governments to transform the global trade regime through the following:

1. We Demand Jobs and Industrial Development Policy Space

Following the global financial and economic crisis, the situation of unemployment has deteriorated even further in rich and poor countries alike. Yet rather than prioritizing job-creation, the WTO framework focuses on reducing tariffs and forcing workers to compete in an uneven playing field, resulting in further erosion of jobs, rather than on using trade to increase employment. Even worse, Doha Round proposals would slash tariffs in developing countries even more than in rich countries; this would further erode decent jobs in key industries. Already vulnerable developing countries should not have to “pay” for fixes to the current global trading system with offering more market access, which would destroy their prospects for industrial development.

            -Any current or future agreement must focus on using trade to expand employment, such as through the Decent Work Agenda, and protecting policy space of countries, rather than just cutting tariffs.

            -The expansion of the Information Technology Agreement (ITA) must be abandoned.

            -In any future negotiations in Non-Agricultural Market Access (NAMA), the Swiss formula should be abandoned; talks must be based on the mandate of Less Than Full Reciprocity; discussions on sectorals must be voluntary; manufacturing jobs should not be “traded off” for agricultural jobs, and there should be no anti-concentration clause, as countries must maintain the flexibility to protect vulnerable and labor-intensive sectors.

            -We call for Impact Assessments with regards to NAMA talks. We need assessments on the qualitative and quantitative aspect of any future potential WTO agreements on employment and also the environment. 

2. We Demand the Right to Protect the Policy Space for Development

Trade must be available to developing countries to be utilized as a tool for development. Trade is not the goal per se. If the actual result of trade under the current or proposed rules hinders the ability of poor people and poor countries to develop, then new rules are needed. Starting well before the 2001 Doha Round, developing countries have put forward myriad proposals in the WTO that would allow them to access the benefits of trade while maintaining policy space for development. These include the original proposals, referred to as the “Implementation Issues,” drafted more than a decade ago and submitted an as alternative to the Doha Round agenda, that are designed to fix the asymmetries and biases of the Uruguay Round. In addition, the trade concerns of the Least Developed Countries (LDCs) should not fall victim to the extreme demands of the rich countries for more market access in the emerging market nations. Developing countries have put forward proposals that would allow the LDCs to safeguard development policy space while gaining the benefits of trade. In addition, the negotiations on Trade Facilitation, if implemented as they are currently negotiated, would place undue financial, human resources, and technology burdens on developing countries, and result in far more facilitation of imports than exports. Thus:

            -The proposed agreement on Trade Facilitation should be voluntary for developing countries. The proposals on Special and Differential Treatment (SDT) in these negotiations must be strengthened and completed, including technical and particularly financial assistance, to developing countries’ satisfaction, before any binding commitments on Trade Facilitation are requested of them.

            -The proposed LDC package, including Duty-Free Quota-Free access for LDCs, and a fair and immediate resolution to the demands of the cotton-producing countries, and a services waiver for LDCs, should be adopted whether or not a complete Doha package is finalized.

            -Implementation Issues must be restored as the main focus for the WTO for the years following the 9^th Ministerial Conference. A real development agenda, which has been missing from negotiations at the WTO, would focus on reforming rules on intellectual property, services and goods, so that they are more helpful for development.

            -The thorough re-negotiations of a full range – not a limited set – of proposals to ensure SDT for developing countries should be prioritized as the key aspect of any forward negotiations.

            -If LDCs pursue accession into the WTO, their entry must not be conditioned on market access demands, but should be able to accede on terms that allow them to use trade according to their development needs. These terms should not go beyond those applied to original LDC Members of the WTO. 

3. We Demand Financial Stability Rather than Financial Deregulation

The deregulation and liberalization rules of the WTO in the financial services sector helped set the stage for the debacle of the global financial crisis. Yet, while the G20, most governments and even the IMF have recognized the need for financial re-regulation in the wake of the financial crisis, the WTO’s General Agreement on Trade in Services (GATS) rules can actually hinder financial regulation efforts; and current proposals in the GATS negotiations would established additional limits on domestic regulation and extend the coverage of deregulation requirements. Immediate changes are needed to current GATS rules regarding financial services, and no further deregulation or liberalization of financial services should be undertaken within the WTO. In addition,

            -Countries should not take any additional commitments for liberalization of trade in financial services within GATS negotiations or through the proposed plurilateral Trade in Services Agreement (TISA).

            -Existing and proposed GATS rules should be reviewed in light of the financial crisis, and then clarified and/or modified in order to ensure policy space for all countries to use macroprudential measures, such as capital controls and financial transaction taxes, as well as to implement other financial regulatory and prudential measures.

            -It is not appropriate within the context of the WTO or TISA to elaborate or adopt disciplines on domestic regulation in the accountancy sector agreed to before the financial crisis, or to adopt or elaborate any other disciplines on domestic regulation.  

4. We Demand Access to Health and Affordable Medicines before Patent Monopolies

Advocates for access to health care and affordable medicines gained an important victory in 2001 through the adoption of the Doha Declaration on Public Health and the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. This declaration reaffirmed the flexibilities contained in the TRIPS agreement and its use to address the public health needs of WTO member states. However, the negotiations that followed the Declaration that were to have facilitated export of medicines under compulsory licensing for countries having insufficient or no manufacturing capabilities concluded without establishing a workable mechanism to translate the agreed rights into real access. Thus, public health has suffered due to the complex and stringent patent monopolies that are prioritized above ensuring access to medicine. Thus:

-Member states must review the August 30^th decision of 2003 to waive Article 31 (f) of TRIPS and the subsequent decision to amend the TRIPS in 2005, and improve these decisions to make them workable.

-Members should agree to a permanent moratorium on non-violation TRIPS complaints.

            -Members must make permanent the waiver of TRIPS obligations for LDCs, as long as they are LDCs, without any conditions, including allowing LDC members to roll back existing TRIPS implementation. 

5. We Demand Trade Rules that Support Food Security and Sovereignty

Another global food crisis has again highlighted our broken system of trade in food, which exposes farmers to floods of imports when prices are too low (often due to unfair export subsidies in rich countries) while at the same time expanding the ranks of humans suffering from hunger when food prices spike. This volatility is a result of excessive speculation in the commodities markets, and global food rules – written largely to satisfy corporate agribusiness – that treat food as a product for corporate profit instead of a Human Right. It is time for a fundamental transformation of the food system, and the following changes to the WTO are essential for a global system that would ensure Food Sovereignty and Food Security to develop:

            -Developing countries should have the right to subsidize food for the poor, including through direct payments to poor farmers, as proposed in the current negotiations by the G33 to promote Food Security.

            -Developing countries should have the right to raise tariffs and use other measures to protect farmers’ livelihoods, rural development, and food security. This ability, called the Special Safeguard Mechanism (SSM) in the WTO, must be far more flexible than is reflected in current WTO proposals for it to be useful in achieving food security. No additional commitments on Agriculture should be made of LDCs.

            -Developing countries should be able to exempt products from any potential future tariff cuts as they deem necessary to protect farmers’ income, food security and rural development; the Special Products designation in the WTO must be expanded. We reject any standstill on tariffs in agriculture.

            -Export subsidies should be disciplined, including so-called “Green Box” subsidies.

            -Trade rules must be modified to facilitate proper regulation of commodities to prevent excessive speculation and volatility in the global markets.

            -Special attention should be paid to banning subsidies of agro-fuels, as they have diverted land away from food production and aggravated ecological degradation. 

6. We Demand Protection of Biodiversity and the Banning the Patenting of Life

One of the important outcomes of the Doha declaration is to examine the relation of TRIPS agreement with the UN Convention on Biological Diversity (CBD). Ten years of deliberation has led to concrete proposals to amend the TRIPS agreement to prevent biopiracy.

-Members should amend the TRIPS agreement to require disclosure of country of and proof of prior informed consent and fair and equitable benefit sharing.

-The mandatory review of the patenting of life obligation under article 27.3 (b) of the TRIPS Agreement must be completed. The long pendency of the mandatory review cast doubts on the rules-based approach. We reiterate the call for a ban on patenting of life forms as many developing countries have proposed. 

7. The WTO Is Not the Venue to Establish Climate Change Policy

Putting climate change on the agenda of the WTO would represent a grave danger to climate stabilization, as WTO rules structurally favor the increasing of trade flows – a huge contributor to the greenhouse gases that cause climate change – over environmental sustainability. While several aspects of current WTO rules should be altered to allow more policy space for countries to protect the environment and pursue sustainable development policies, other multilateral agencies are far more appropriate venues for the discussion of and implementation of rules related to the global climate than the WTO.

-TRIPS rules should be altered to allow countries to negotiate additional flexibilities to the intellectual property regime, regarding technology transfer, including in other multilateral venues.

-Climate change policies should not be subject to challenge through the WTO’s Dispute Settlement Mechanism.

-No new “climate change” agenda should be introduced at the WTO. 

8. We Demand the Right to Regulate Essential Services

The existing GATS rules should not be the basis for liberalization. By conflating liberalization and deregulation, the GATS Market Access rules prohibit public interest regulations that apply equally to domestic and foreign firms to promote financial stability, consumer safety, public health, environmental quality and educational access. The GATS contains additional limits on domestic regulation with respect to qualification requirements and procedures, technical standards and licensing requirements.

-Any plurilateral agreement on services, such as the Trade in Services Agreement (TISA) should not be expand the deregulatory requirements that already exist in the GATS, and should not be used as a basis for any multilateral services negotiations.

-Public services in particular must be excluded from any services agreement with a broad and authentic carve-out.

There are many more changes that must be made to the global trading system, including a fundamental review, abrogation, or transformation of bilateral and regional trade and investment agreements. The above represent immediate changes that must be made to the WTO to provide more policy space for countries to implement solutions towards resolving the global crises for the benefit of all. 

OWINFS is a global network of over 200 civil society organizations from more than 50 countries. For more information, contact OWINFS at djames@cepr.net. 

Initial endorsers as of October 28, 2013 include: