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Global Trade Watch E-Newsletter #40 - June 2006

NB: This is an archived newsletter. Information may no longer be current, and links to other sites may not always work.


1) News from Global Trade Watch
2) Good News for (a) Change
3) Upcoming Events
4) Take Action!
5) Global Trade News



* Editorial: G20 Meeting in Melbourne: Time to Stop Destroying Developing Economies

Almost one year ago, in our June 2005 e-newsletter, we editorialised about the damage that the World Bank and IMF’s policies have done to countries across the world. In November this year, Australians will have a unique opportunity to push for changes to these damaging policies when the “G20” group of nations meets in Melbourne.

The G20 is a group of industrialised and large developing nations. Finance ministers from these nations will be in Melbourne to discuss the global economy, and the first item on the G20’s agenda will be “Reform of Bretton Woods Institutions” (the IMF & World Bank), including “how countries can continue to reform key global economic institutions like the International Monetary Fund (IMF) and World Bank.”

This will be a key point at which to push for specific reforms of these institutions, particularly their imposition of “Structural Adjustment” policies on developing countries which have destroyed industries, caused unemployment, wreaked havoc on the environment and massively increased the debt burden for the poor.

As a matter of course, these structural adjustment programs include:

- A reduction in government spending - usually cutting services such as health, education and welfare, with the aim of controlling inflation.
- Privatisation and deregulation of public enterprises - with the idea that markets would be more efficient at allocating national resources.
- Import and investment liberalisation - cutting tariffs and reducing investment regulation
- Currency Devaluation - with the aim of making exports (to service foreign debt) cheaper, and imports more expensive
- Reductions in wage levels and workers’ protections - to increase employment and attract investment

These policies have been imposed on over 100 developing countries since the 1980s, and are widely seen as being a major cause of poverty, inequality and environmental destruction in many countries.

Demands for reform of the IMF and World Bank to end conditionality and structural adjustment policies have been commonplace among those directly affected by their policies, in scores of countries. But in recent times, these calls have also been echoed in the halls of power in Washington and London.

Following the 1997 Asian Financial Crisis (largely induced by IMF-imposed structural adjustment) the US Congress commissioned a review of IMF, World Bank, WTO and regional development bank policies. The “Meltzer Commission” reported back to Congress in 2000, calling for massive reform of the IMF and World Bank.

Among other recommendations, the Commission called for the IMF to end long-term and ‘structural adjustment’ lending altogether. This would include an end to “detailed conditionality (often including dozens of conditions) that has burdened IMF programs in recent years and made such programs unwieldy, highly conflictive, time consuming to negotiate, and often ineffectual.” Neither the Clinton nor present Bush administration has acted on the Meltzer Commission’s recommendations regarding the IMF.

Five years later, British Prime Minister Tony Blair’s “Commission For Africa” report made a similar call, strongly criticising the IMF and World Bank for their policies in Africa, asserting that “evidence shows that IMF and World Bank economic policy in the 1980s and early 1990s took little account of how these policies would potentially impact on poor people in Africa”. The Commission called for an end to the use of most conditions in IMF loans to African countries, recommending that “both the Bank and the Fund need to micro-manage less and reduce the amount of conditions they place on poor countries.”

Remarkably, the British government has responded to the recommendations of the Commission, and has taken strong action to relax structural adjustment conditions in its own aid programs. The new program was announced in March in a UK Department for International Development report entitled “Partnerships for Poverty Reduction: Rethinking Conditionality”. The report finds that “some conditionality has promoted reforms that have made poor people worse off” and quotes Tanzanian President Mkapa as saying “Development cannot be imposed. It can only be facilitated. It requires ownership, participation and empowerment, not harangues and dictates.”

According to the report, the only conditions which the British aid program will now impose on recipients will be pressure to avoid high levels of corruption or human rights abuses. Perhaps most importantly, the report calls on the IMF and World Bank to follow the UK’s lead in removing privatisation and market liberalisation conditions from their programs.

But these high-level calls for an end to damaging structural adjustment conditionality have so far fallen on deaf ears. The IMF & World Bank continue to push their loan conditions on the most vulnerable countries. So when the G20 nations meet in Melbourne in November, Global Trade Watch will be one of many groups pushing their finance ministers to accept these demands for reform of the IMF & World Bank. The fate of millions of people rests on winning this fight.

* GTW E-Newsletters on the Web

Some subscribers have contacted us about problems they have had accessing links in this e-newsletter. If you are experiening problems, please be aware that each monthly e-newsletter is available on our website, with all active links - a link to the site appears at the top of each newsletter we send you. You can also access copies of previous e-newsletters on the site here.



* South American Ministers vow to avoid “TRIPS-plus” measures

In recent times, the US government has used bilateral free trade agreements (FTAs) to bully smaller countries (like Australia) to change their “intellectual property” (patent) laws to push up the price of medicines. The point of this is to enrich the large US pharmaceutical companies, but the effect has been disastrous, particularly for poorer countries where paying more for medicines literally means the difference between life and death. The FTA rules go even beyond the much-criticised rules in the WTO’s “TRIPs” (intellectual property) agreement, and are referred to as “TRIPs-plus” rules.

So the good news is that the Ministers of Health of ten South American countries met recently at the World Health Assembly and issued a joint declaration, committing themselves to avoid "TRIPS plus" provisions in bilateral and regional trade agreements.

The Ministers said there was a significant increase in drug prices as a consequence of the patent system, leading to the worsening of the problem of access to essential drugs.

The “Declaration of Ministers of South America over Intellectual Property, Access to Medicines and Public Health” was adopted in Geneva on 23 May by the Health Ministers of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela.

The effect of the declaration will be to save literally millions of lives across South America by keeping medicine prices down. Read more here.



* Please email in your upcoming events!



* Tell the Australian Government: Stop forcing open developing country markets!

The Australian government has been using the current WTO negotiations to push poor countries to open their markets to big corporations from the rich world. Tell them to stop! Send an email here.

* Don't Buy Nestle Until Nestle Buys Fair Trade!

As a leading exporter of cocoa from the Ivory Coast, Nestle has also been implicated in the ongoing abuse and torture of child cocoa labourers. But rather than embrace Fair Trade as a comprehensive and proven solution to child labour abuse, Nestle continues to hide behind its failed and floundering industry protocol and refuses to source any portion of its cocoa from the only farms that can be proven not to have employed abusive child labour - those that are Fair Trade Certified. Send a message to Nestle to demand justice for cocoa child laborers.

* Control the Arms Trade: Add your face to the Million Faces petition!

Lack of controls on the arms trade is fuelling conflict, poverty and human rights abuses worldwide. Every government is responsible. The Control Arms campaign is asking governments to toughen up controls on the arms trade. Our Million Faces petition is collecting photos and self portraits from around the world to reach our goal of one million faces by June 2006. We will use these faces to send a powerful, global message of support to the world's governments for an International Arms Trade Treaty. Be one in a million. Join us today. More...




* Time for a New Trade Agenda (May 26) - The Doha round of trade liberalization negotiations is in deep trouble, and with good reason. Though positioned as a “development” round intended to benefit the world’s poorest countries, it in fact does little in that regard. On close examination Doha turns out to be a Trojan horse that pushes the type of trade liberalization that has made globalization so deeply unpopular and unfair. More...

* Brown defies France with call to put CAP into trade talks (May 22) - Britain will make a fresh effort today to break the deadlock in the global trade talks when Gordon Brown warns that the huge scale of western farm subsidies is harming development in the world's poorest countries. More...

* No WTO deal better than a bad deal, says Indian Minister (May 5) - India's Commerce and Industry Minister Kamal Nath stressed on 25 April in Geneva that the WTO talks must not violate cardinal development principles. "Anything that violates the cardinal principles and mandate, then there is nothing to negotiate," he told a media briefing. "No deal is better than a bad deal." More...


* FTA breakthrough firms with China (May 29) - AUSTRALIA'S ambitions for a breakthrough trade deal with China that includes agriculture, services, government procurement and investment have firmed up in talks in Beijing. China's chief negotiator for a free trade agreement with Australia, Zhang Xiangchen, has told The Australian that all these sectors were now on the table. More...

* Australia at your service, but China still cagey (May 27) - AFTER a year of skirmishing, Australia's free trade discussions with China are taking shape, with China agreeing in principle to include the sensitive areas of government procurement and investment in any agreement. More...

* Thai Court asked to throw out FTA with Australia (May 25) - FTA opponents yesterday asked the Constitution Court to annul the Thai Australian Free Trade Area agreement (Tafta) on the ground that the Thaksin government entered into it unconstitutionally two years ago. More...

* FTA flags offshore processing of Aust blood supplies (May 15) - In a world where everything seems to have been reduced to a commercial transaction, it's remarkable to think that Australia's blood supplies still come from voluntary donations. But that tradition could be about to change thanks to the free trade agreement signed with the United States. The fear there is that this could be the first step towards paying for blood. More...

* Treasury dismisses bilateral free trade deals in Asia (May 14) - Australia's Treasury has dismissed the Australian Government's quest for bilateral free trade deals in Asia, saying that there are no clear benefits. More...

* Drug subsidy appeal to test new review (May 8) - AN AMERICAN drug company will challenge Australia's refusal to grant prescription subsidies for an $850-per-month osteoporosis drug, in the first test of review measures demanded by the US under the free trade agreement. More...

* US drug company appeals PBS decision (May 8) - It's just over a year since the Australia US Free Trade Agreement came into force, opening the door for US drug companies to force a review of decisions about which drugs are subsidised by the Australian Government. Now that power is being used by the US drug company Eli Lilly. More...


* Take the IMF off Life Support (May 26) - As economists and politicians debate what to do about the latest challenges facing the IMF, civil society groups have a straightforward answer: take the IMF off life support. More...

* Despite Debt Relief, Poor Nations Back In the Red (May 23) - A new report by the self-auditing arm of the World Bank has painted a grim picture of the results of a decade-long plan by the Bank and the International Monetary Fund (IMF) to give the world's poorest nations debt relief. The report says that in half the countries that received debt relief under the programme known as the Highly Indebted Poor Countries (HIPC) initiative, debt has in fact climbed back up to where it was before the debt relief plan. More...

* IMF in Iraq: The Second Invasion (May 20) - In return for a US$ 685 million loan from the International Monetary Fund (IMF), Iraq has accepted a package of economic "reforms," including an end to fuel, food, and health subsidies. For a country suffering the humanitarian consequences of a decade of economic sanctions and the ongoing US occupation, food rations and fuel subsides have helped millions of Iraqis to survive. Despite rising unemployment, malnutrition, and inflation, IMF officials have pointed to Iraq's growing economy as a sign of "success." More...

* When two poor countries reclaimed oilfields, why did just one spark uproar? (May 16) - On the one hand, you have a man who has kept his promises by regaining control over the money from the hydrocarbon industry, in order to use it to help the poor. On the other, you have a man who has broken his promises by regaining control over the money from the hydrocarbon industry, in order to buy guns. The first man is vilified as irresponsible, childish and capricious. The second man is left to get on with it. More...

* "Over-optimistic about trade liberalisation": World Bank trade evaluation (Apr 8) - In the most comprehensive evaluation ever conducted of the World Bank's work in trade, the Bank's Independent Evaluation Group (IEG) has found that the Bank neither fully understood the implications of its "narrow focus on trade liberalisation", nor did enough to strengthen trade capacity on the ground. More...


* The Scariest Predators in the Corporate Jungle (May 18) - The world's oil, gas and mining industries account for nearly two-thirds of all violations of human rights, environmental laws and international labour standards, according to a soon-to-be-released United Nations study. "The extractive industries -- oil, gas and mining -- also account for most allegations of the worst abuses, up to and including complicity in crimes against humanity," says the interim report titled "Promotion and Protection of Human Rights". More...

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