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Global Trade Watch E-Newsletter #36 - Dec 05/Jan 06
NB: This is an archived newsletter. Information may no longer be current, and links to other sites may not always work.
* Report from the WTO Ministerial in Hong Kong
In case you missed it (the Australian media hardly reported it) the World Trade Organisation (WTO) had its biannual ministerial in mid-December in Hong Kong. The WTO’s 150 member countries gathered to finalise what was billed as a “development round” - that is, a round of negotiations aimed at helping the world’s poorest countries out of poverty. But even before the meeting, this goal seemed unlikely, with the World Bank estimating that even a “successful” round would only result in 70% of the gains going to a small group of rich countries, and developing countries getting about one cent per day per capita. Needless to say, the meeting was not a success, and the world’s poor got an even worse deal than that.
With about 8,000 farmers, workers students and other protesters from across the world descending on Hong Kong for the week - and demanding that “no deal is better than a bad deal” - the pressure was on the rich countries which control the WTO’s agenda to produce some sort of outcome which at least looked like it would address the concerns of the world’s poorest. The actual outcome of the ministerial meeting did nothing of the sort.
Despite the fact that almost every developing country went to Hong Kong declaring that there must be changes to the US & EU’s massive farm subsidies which depress world price and displace poor farmers, there was almost no change. The EU agreed to end “export subsidies” of 1 billion Euros (and only by 2013), but will keep a further 90 billion Euros of other subsidies. The US agreed to end export subsidies for cotton, but will keep nearly $4 billion of other cotton subsidies, and US$70 billion of other subsidies.
In return for these almost-invisible gains, developing countries agreed to new methods of negotiations (plurilateral, sectorial and modal) to force them open up their service sectors - like health care, education and water provision - to US & EU service corporations. These rules, contained in new “Annex C” of the GATS, were written by the chair of the negotiations before the ministerial, with no input from the WTO’s membership. Yet they were adopted almost unchanged, even when over 100 developing countries pushed for an alternative text. The new GATS rules will force countries - including Australia - to enter into negotiations to deregulate and liberalise services, even if they don’t want to.
Worried that the developing countries would withdraw from the talks altogether, the rich countries have offered the 50 “least developed” countries two a “carrots” to get them to agree to a deal patently against their interest. The first carrot is a series of “Aid for Trade” bribes Check the fine print, and much of this money is either relabelled money which had already been pledged, or is in the form of loans which will just increase the debts of the world’s poorest. The second carrot is an offer of duty-free and quota-free access for their products to the US and EU by 2008. But a huge loophole, exempting the most “sensitive” 3% of products means that the decision will have little impact for most producers.
Even with these retrograde agreements, most of the substantial decisions have been put off for negotiation in Geneva during 2006. This further limits the input that the poorest countries - many of whom can’t afford to have negotiators in Geneva - can have on the deals.
In a speech during the WTO conference, Nobel Prize-winning economist Joseph Stiglitz said that since the WTO’s establishment 10 years ago, 70% of economic gains have accrued to the wealthiest nations, while 49 of the poorest nations are worse off. It doesn’t look like the next 10 years will be any better.
But outside the WTO ministerial, social movements and NGOs from around the world met at protests, forums and workshops throughout the week. The mood outside was generally upbeat even as it became apparent that the WTO meeting, even if it didn’t totally collapse, was an obvious failure. Perhaps the WTO’s failure was actually a small success for groups fighting for fair and just trade, highlighting as it did the the bankruptcy of the WTO process and the need for a totally new system for regulating global trade.
A selection of the best media and NGO coverage of the WTO ministerial is below in the “Global Trade News” section below. For more detailed info on the ministerial negotiations, you can read full reports from Oxfam the Third World Network or ITCSD. You can read the Hong Kong ministerial declaration here.
* The World Trade Organisation: An Australian Guide - 2006 Edition
Want to know what the WTO is and how its affects you? Just before the WTO’s Hong Kong ministerial, GTW released the 2006 edition of our popular booklet: “The WTO: An Australian Guide”. The guide is an easy-to-read summary of the global trading system and the impacts of the various WTO agreements, and how they affect people and environments in Australia and internationally. If you haven’t already done so already, please email us and we’ll post you a hard copy free.
* One Year on: US-Free Trade Agreement hurting Australia
One year into the US-Australia Free Trade Agreement, evidence is growing that the nay-sayers of 2004 were right - the FTA is bad for Australia’s economy. The first 10 months of “free trade” in 2005 saw Australian goods exports to the US decrease by 4.7%, while imports from the US rose 5.7%, adding over $1 billion to the trade deficit. The figures would have been even worse if not for a decline in the value of the Australian dollar over the period. Following the negotiations on the FTA, GTW was one of many groups claiming that it was a big win for the US and a big loss for Australia in almost all areas. But while the Howard government still claims that its predicted benefits will emerge at some point in the distant future, Australia’s trade deficit with the US continues to grow at over $10 billion annually. At the same time, the Victorian government complained to Canberra that under the “free” trade agreement, US car manufacturers were still managing to limit Australian exports to the US.
In other FTA news, US pharmaceutical companies are demanding changes to Australian laws when the trade agreement is reviewed in February. They want the rules imposing big fines for “evergreening” - filing dodgy patent claims to keep cheap, generic drugs out of the public’s hands - scrapped. They would be the only winners from a change, while every Australian would be a loser. Yet the Howard Government looks like giving in to their demands.
For full coverage of the latest on the FTA, check out our updated FTA Media Archive here.
* UN Treaty on Cultural Diversity finally approved
After two years on negotiations, the 148 countries which make up the UN Educational, Scientific and Cultural Organisation (UNESCO) voted overwhelmingly to approve a new a new global convention for the protection of cultural diversity.
In recent years, there have been worries that World Trade Organisation (WTO) rules on audio-visual services (GATS) would stop countries protecting their own cultural practices (music, film, dance etc), and lead to a “coca-colonisation” of cultures as US entertainment corporations moved in. But the new convention stands in stark contrast to the GATS, giving national governments the right “to formulate and implement their cultural policies and to adopt measures to protect and promote the diversity of cultural expression".
This clearly returns sovereignty over regulations on cultural matters to national governments, instead of the unelected bureaucrats at the WTO. It’s a win for the billions of people who participate in hundreds of thousands of different cultures around the world, and a loss for the big entertainment corporations in the US.
* Please email in your upcoming events!
* Back to Work in the WTO, With Empty Hands (Dec 30) - The article looks at the ongoing negotiations inside of the WTO after the disillusioning outcome of the Ministerial Conference in Hong Kong. The transfer of the General Council presidency to a rich country will diminish poor countries' chances to see any substantial progress within the Doha Round. To make things worse, rich countries plan to eventually focus all their power on service liberalization while overlooking the never-ending standstill in agricultural trade negotiations. More...
* Much Ado About Nothing (Dec 24) - We were made to believe that everyone cannot be fooled all the time. Ten years after the World Trade Organisation (WTO) came into existence, and looking at the outcome of the sixth Ministerial Conference at Hong Kong, it is time to bury the age-old adage under the heaps of trade drafts. More...
* Quietly trading away our rights (Dec 20) - The deal patched together at the World Trade Organisation ministerial meeting in Hong Kong at the weekend is widely seen as a face-saving exercise designed to save the talks from collapse. And there is doubt that the many remaining areas of disagreement can be sorted out by the target date of the end of next year. More...
* The WTO’s raw deal (19 Dec) - As the EU and the US have made abundantly clear throughout the WTO's sixth ministerial in Hong Kong, when it comes to the scramble for the global economic pie, he who forks hardest laughs longest. Aid agencies point out that all the rhetoric about rich countries graciously correcting the injustices in the system of global commerce without requiring anything in return from developing countries has proved to be wholly bogus. More...
* Development Left Behind in WTO Agreement in Hong Kong (Dec 18) - A watered down agreement announced late last night by the World Trade Organization (WTO) at the Hong Kong Ministerial reflects the struggles of a deeply flawed Doha Round that is far off-track, according to the Institute for Agriculture and Trade Policy. More...
* Appalling Hong Kong trade deal threatens people and environment (Dec 18) - Although a face-saving deal was reached on trade issues in Hong Kong, the global trade system remains in crisis. Today's agreement contains proposals that will further threaten the global environment and the livelihoods of the worlds' poorest people. More...
* Cards always stacked against the poor (18 Dec) - The Doha Development Round of WTO negotiations was supposed to be precisely that - a chance to put the needs of developing nations at the centre of trade reforms in a bid to ease poverty and provide increased opportunities for the world's poorest. But with negotiations stuttering into the final day and NGOs fighting for workers' rights, farmers in developing countries say the talks have been hijacked by self-centred rich nations. More...
* TRIPS Health Amendment Evokes Harsh NGO Reaction, Industry Caution (Dec 7) - An amendment to a World Trade Organization agreement for public health purposes was harshly criticised by non-governmental organisations and greeted with caution by the pharmaceutical industry. NGOs said the access-to-medicines deal that was reached by WTO members on 6 December was hastily agreed and would make permanent a flawed agreement. It would make "access to affordable medicines even more bleak," said Medicines Sans Frontieres (MSF) in a statement. More...
* The WTO: food for thought? (Dec 05) - The World Trade Organisation should be setting firm rules in agriculture - which is more important to poor countries than to rich ones - to ensure a sustainable future. But the developed nations want ‘access to markets’ and are using reform of their farm subsidies as a bargaining chip to increase their exports of services and industrial goods. More...
* BILATERAL AND REGIONAL FREE TRADE AGREEMENTS NEWS *
* Thai trade deal to be challenged (Jan 11) - Australia's trade relations with Thailand are in doubt as a constitutional court challenge against the countries' free trade pact looms in Bangkok. A Thai parliamentary committee found that the FTA signed with Australia and the current negotiations with the US were unlawful. More...
* Free trade free-for-all (Jan 7) - A year on, the United States trade agreement is proving to be neither free nor fair. More...
* Done like a dinner on free trade deal (Jan 6) - To laugh or to cry? That is the question. Do you laugh at the increasingly ludicrous attempts by defenders of the US-Australia Free Trade Agreement to explain away the results of the FTA's operation since it came into effect last year? They demonstrate that, as forecast, the FTA is a winner for the US and a dud for Australia. Or do you cry for fear that those same defenders will fail the most basic test of human intelligence by refusing to learn from mistakes irrespective of the empirical evidence? More...
* Warning: giving in to the US may have serious side effects (Jan 4) - Australia's enlightened policy on pricing medicines is under threat from a US-led global drugs industry which is hungry for profits. More...
* Drug companies pressure Govt to review FTA (Jan 3) - The Government will review provisions within the FTA with the US that were designed to keep the cost of pharmaceuticals down. At present, large fines can be imposed on drug companies that seek to extend the life of patents by making small changes in the drug and applying for a new patent. This practice is referred to as 'evergreening' and it means the patent never expires. Critics argue that if evergreening is not embargoed, consumers will be paying much, much more for their medicines. More...
* WORLD BANK / IMF NEWS *
* IMF Occupies Iraq, Riots Follow (Jan 3) - The IMF is joining the US in occupying Iraq, argues this article. The Fund is "extorting" money by tying a debt-forgiveness deal to the privatization of the domestic market (particularly petroleum products). These measures, raising prices of public transportation and cooking gas, worsen social and political conditions in Iraq. More...
* IMF Debt Relief Welcomed as "First Step" (Dec 21) - The IMF, following the promises of the Group of Eight in July 2005, offered a 100 percent debt cancellation for 18 "heavily indebted" countries. More countries might eventually qualify for debt relief, the Fund also announced, but only if they demonstrate "satisfactory progress in a few policy areas." Fearing that the IMF could tie debt relief to economic benchmarks, anti-debt campaigners urge further actions to eliminate all forms of debt for poor countries. More...
* Deadly Delays: How IMF and World Bank Economic Conditions Undermine Debt Cancellation (Dec 05)- This report by the Jubilee USA Network analyzes economic policies of the International Monetary Fund (IMF) and World Bank in four countries: Zambia, Cameroon, Malawi, and Nicaragua. The report finds that impoverished countries continue to face serious delays in receiving debt cancellation due to their failure to implement controversial and often harmful economic policies of the IMF and World Bank. Such one-size fits all economic policies have undermined health and other social sector programs that are urgently needed to help fight HIV/AIDS. Read the full report here...
* OTHER GLOBAL TRADE NEWS *
* Overseas competitors eat into food production (Jan 13) - Australia will continue to gradually lose a large proportion of its $73 billion food production industry as producers buckle under the weight of import competition. More...
* Our final goal must be to offer a global new deal (Jan 11) - Having taken the first steps to make poverty history, we must ensure 2005 is remembered as the start of something - not the end. We must learn from our achievements and failures, not least the depressing lack of final agreements on trade. More...
* Below a Mountain of Wealth, a River of Waste (Dec 27) - The closest most people will ever get to remote Papua, or the operations of Freeport-McMoRan, is a computer tour using Google Earth to swoop down over the rain forests and glacier-capped mountains where the American company mines the world's largest gold reserve. With a few taps on a keyboard, satellite images quickly reveal the spreading soot-colored bruise of almost a billion tons of mine waste that the New Orleans-based company has dumped directly into a jungle river of what had been one of the world's last untouched landscapes. More...
* Two countries, one booming, one struggling: which one followed the free-trade route? (Dec 12) - A look at Vietnam and Mexico exposes the myth of market liberalisation. More...
* They bleat about the free market, then hold out their begging bowls (Dec 13) - It's not just the common agricultural policy: the entire corporate sector relies on state handouts that dwarf their profits. More...
* Globalization Failing to Create New, Quality Jobs or Reduce Poverty (Dec 9) - Neoliberal globalization is failing "to translate into new and better jobs that lead to a reduction in poverty" says a report from the International Labour Organization (ILO). According to ILO's figures, half the world's workers do not enjoy decent work conditions, and cannot lift themselves above the poverty line. The report points out that world leaders have still not made poverty reduction a priority. More...
* The Tyranny of Free Trade (Dec 8) - A new report by Friends of the Earth International. Through a series of a dozen case studies from Denmark to Indonesia, the report highlights the environmental and social impacts that current "free" trade policies have in essential areas including forests, fisheries, food, minerals, water and biodiversity. It asserts that. intensive agricultural practices and liberalized international trade are leading to social disruption, environmental damage and even hunger, particularly in developing countries. Read the full report.
* China Copes with Globalization: A Mixed Review (Dec 05) This new report by the International Forum on Globalization gives a "mixed review" to the impact of China's economic policies on the nation's people and natural resources. The report documents "several indicators" of problems in China including dramatically growing economic inequality, the adverse impacts of privatization on workers, environmental damage, and the decline of rural areas and farmers. The report also documents the growth of "alternative voices" within China including the nation's environmental movement, a rural reconstruction movement, and a coalition of intellectuals known as China's "New Left." Full Report.
* Help stop the privatisation of Ghana’s Water
With your help the Ghana National Coalition against the Privatisation of Water (NCAP) has successfully forced several companies to withdraw their bids on the Ghana water privatisation project AND stalled the project for 4 years. Now, we are calling on you again to take one more action to stop the final bidding companies from privatising Ghana’s water. Click here to take action and save Ghana's water.
* Email George Bush and help African Farmers
E-mail George Bush and demand he implement the recent legally binding WTO ruling, which will help West African farmers and their families work their way out of poverty. Click here.
* Tell Nestle to End Child Slavery on Cocoa Farms
In addition to being one of the largest chocolate companies in the world, Nestle S.A. is also one of the largest importers of cocoa from regions affected by child slavery. Nestle USA is a subsidiary of Nestle S.A. which through Nestle Cote d'Ivoire owns administrative offices and sales outlet in the Cote d'Ivoire. Click here to fax Nestle USA CEO Joe Weller today and demand they take their responsibility for child slavery on their farms seriously by using fair trade certified cocoa.
* The Transnational Institute is a worldwide fellowship of scholar-activists which monitors the a host of international issues, including the WTO and neo-liberal economic policies.
"Trade relations can no longer he based solely on the principle of free, unchecked competition, for it very often creates an economic dictatorship. Free trade can be called just only when it conforms to the demands of social justice. The more the rights and needs of the poor and the weak are taken into account, the greater becomes the possibility for justice and peace in our world, two indispensable conditions for sustainable development and for the alleviation of poverty. These two goals constitute a common ambition to which all [WTO] members can aspire as the negotiations go forward: This is a guide for the road ahead."
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