WTO Must Be Inclusive

Published on 16th December 2015

Global Civil Society letter on the Nairobi Ministerial of the World Trade Organization (WTO)

Dear Members of the WTO,

As members of 460[1] civil society organizations including trade unions, environmentalists, farmers, development advocates, and public interest groups from over 150 countries, we are writing today to express extreme alarm about the current situation of the negotiations in the WTO. We urge you to take seriously the need for the upcoming Nairobi Ministerial to change existing WTO rules to make the global trading system more compatible with people-centered development, and to forestall efforts by some developed countries to abandon the development agenda and replace it with a set of so-called “new issues” that actually are non-trade issues that would impact deeply on domestic economies and constrain national policy space required for development and public interest. 

Governments from around the world recently endorsed the Sustainable Development Goals (SDGs) negotiated through the United Nations. These include key goals such as reducing poverty and inequality; eradicating hunger; and ensuring universal access to essential services such as health care, education, water, and energy. In order to achieve these goals, countries must have the policy space to invest in domestic agricultural production to achieve food security and food sovereignty; to regulate the financial sector to ensure financial stability; to scale up public provision of essential services to guarantee education, health, water, and energy access; to harness the power of government procurement to promote small and medium enterprises (SMEs); to utilize tax revenues, including tariffs, strategically to foment sustainable development and the creation of jobs with decent work; and to ensure that foreign investment serves the interests of the national development plan. However, this policy space is currently constrained by existing WTO rules which the vast majority of WTO members, which are developing countries, have been demanding must be changed, and are further threatened by an effort by a tiny number of developed countries to replace the development mandates with “new issues” designed to further increase transnational corporate profit margins.

As civil society organizations, we have witnessed firsthand in our communities the negative impacts of 20 years of some existing WTO policies which have largely favored the interests of the developed world over the development interests of the developing world. This has particularly led to rising inequalities both within and among countries; the contributions of increased trade to climate change; the financial deregulation that led to the 2008 global economic crisis and the ongoing crises of food insecurity and joblessness, to name a few.

Many of our organizations have called repeatedly for the WTO to be replaced with an institution that regulates corporate trade for the benefit of workers, farmers, communities, and the environment, rather than disciplining states for the narrow goal of increasing trade. At the same time, we must ensure that the WTO’s model of restricting national policy space in favor of corporate trading rights must not be expanded, but rather pruned back. That is why it is so urgent at this time to ensure that the Nairobi Ministerial deliver on removing WTO obstacles to development by fulfilling the development mandate in terms of strengthening and making effective the Special and Differential Treatment (SDT) for all developing countries, and affirming developing countries’ rights to food security, while forestalling the corporate agenda of abandoning development in favor of a corporate wish list of “new issues.”  

Success in Nairobi: Fulfilling the Development Mandate by Strengthening SDT for All Developing Countries, Removing WTO Obstacles to Food Security, and Operationalizing Benefits for the Least Developed Countries (LDCs)

This year, a group of 90 (G90) developing countries made concrete proposals for changes to existing WTO rules that would remove some WTO constraints on national pro-development policies. Many of these proposals parallel the civil society demands encompassed in the Turnaround Statement endorsed by hundreds of civil society groups from around the world. Reports from Geneva indicate that a tiny number of high-income WTO members are attempting to decide for themselves which developing countries should be able to utilize these flexibilities, dividing developing countries according to non-existent, subjective criteria and attempting to treat so-called “emerging markets” as if they were already developed.

This approach has no basis in WTO law, in development policy, nor in economic reality. In fact, 70 percent of the world’s poor live in so-called “middle income” countries; narrowing the scope of the G90’s special and differential treatment proposals would condemn a billion people to living under WTO rules inappropriate for their level of development, without the flexibilities and policy space requisite for their countries to achieve the multilateral SDGs. For those reasons, SDT should be strengthened and made operational for all developing countries, while providing additional flexibilities to LDCs that attend to their specific development, financial and economic needs. The WTO Ministerial will be a failure for development if the full package of G90 proposals for all developing countries is not agreed to in Nairobi.

Even worse, just one WTO member – the United States – appears to be not only refusing to agree to the full G90 package, but also working to ensure that the development mandate in the WTO is permanently abandoned. While a lack of agreement on the G90 package of proposals by Nairobi would indicate a failure of the Ministerial from a development perspective, the abandonment of the entire development mandate would lock out the potential to fulfill this mandate in the future, thus locking the world into the existing inequalities and imbalances forever – at the behest of one member of the WTO, an institution that claims to operate by consensus.

Likewise, many of those same impoverished people in developing countries and LDCs alike continue to suffer from food insecurity. Since the Bali Ministerial in December 2013, developing countries and anti-hunger advocates and farmers around the world (including in the United States) have worked to ensure that developing countries would be unshackled from WTO rules which severely constrain their ability to invest in public stockholding programs, even though such investments are explicitly called for in the SDGs in order to reduce rural and urban hunger. WTO members agreed to find a permanent solution to the issue of public stockholding for food security by December 31, 2015. The G33 group of 45 developing countries has made a workable proposal to remove limits on developing countries’ investing in their own food security by categorizing public stockholding for food security in the so-called “Green Box,” and this must be adopted by the Nairobi Ministerial. The WTO Ministerial will be a failure from a development perspective if this simple step towards food sovereignty is not agreed to in Nairobi.

In one of the most hypocritical positions in the history of global trade negotiations, some developed countries are not only opposing the right of poor countries to feed themselves, but also refusing to reduce domestic supports on exported agricultural production that damages other countries’ domestic markets. In fact, the promise to reform global agricultural trade was the primary reason that developing countries even agreed to launch the Doha Round. Fourteen years later, some developed countries continue to subsidize agricultural exporting corporations in ways that damage farmers in developing countries, whose governments are not allowed (or cannot afford) such subsidies. We support the concept of food sovereignty, in which countries should be allowed to undertake domestic supports of agricultural production, but no country should be allowed to export subsidized food in a way that damages other countries’ markets. The WTO Ministerial will be a failure from a development perspective if the disciplining of domestic supports that damage other countries’ markets is not agreed to in Nairobi.

At the same time, the havoc wreaked on developing country agricultural markets due to dumping of subsidized products calls out for an immediate solution. The G33’s proposal to create a Special Safeguard Mechanism (SSM) that would allow developing countries to protect their food security, farmers’ livelihoods, and rural development, would be another important step towards restoring countries’ food sovereignty that has been so eroded by the current imbalances in the WTO rules. The WTO Ministerial will be a failure from a development perspective if a workable, practical SSM along the lines of the G33 proposal is not agreed to in Nairobi.

Even in the area that all WTO members should be able to agree on – ensuring benefits for the LDCs – consensus has not yet been reached. Although it was a priority mandate for the post-Bali period, the small LDC package agreed in Bali has yet to be operationalized, including ensuring 100 Duty Free, Quota Free (DFQF) market access for LDCs exports; providing actual binding commitments for the LDC services waiver, and full simplification of the Rules of Origin (RoO). In addition, cotton farmers in Africa have been damaged for years due to the subsidies that rich countries have agreed to discipline in an “expedited” manner. The WTO Ministerial will be a failure from a development perspective if the disciplining of subsidies in cotton is not agreed to in Nairobi, along with the operationalizing of all aspects of the full LDC package.

Introducing a Corporate Wish List of “New Issues” Must be Off the Table at Nairobi

We can all agree that global trade has evolved significantly since the Doha Round was launched in 2001. Unfortunately, many workers and farmers are still laboring under the rules negotiated in the mid-1990s – to which many developing countries and civil society around the world objected at the founding of the WTO. It is vastly inappropriate to mandate negotiations on new issues to the benefit of the financial, technology, and logistics corporations a few WTO members without first addressing the inequities and imbalances in the current WTO rules.

Many of these issues have been explicitly rejected by the WTO membership in the recent past, particularly the so-called “Singapore issues,” including investment, competition policy, and transparency in government procurement. Civil society has long opposed the international investment agreements (IIAs) which privilege foreign investors over citizens, communities, the environment, and the public interest generally, whether they appear in bilateral, plurilateral, or multilateral forums. Multiple governments have taken heed of the explosion of cases brought by investors against sovereign governments, and are re-shaping national investment rules to ensure that they benefit the national interest. During this time of shifting public debate on the negative impacts of such agreements, it is outrageous to think of allowing this ejected topic back into the WTO.

Similarly with the topics of competition policy and opening up government procurement to foreign corporations, which are advantageous predominantly to corporate interests. Government procurement is an important engine for local development and for addressing inequities within countries, and these goals should take precedence over opening markets for transnational bidders. These are not primarily trade issues and they must not be allowed on the agenda – and there is not even any legal basis in the WTO to bring them in until after the development demands of developing countries have been comprehensively addressed.

Likewise there appears to be an effort by some developed countries to bring issues that many developing countries, and civil society around the world, have rejected in bilateral or plurilateral so-called free trade agreements (FTAs) into the WTO. This appears to include the idea of giving new “rights” to advanced technology corporations to unlimited cross-border data transfers through e-commerce talks. A few members also appear interested in imposing on the WTO membership including disciplines (constraints) on state-owned enterprises (which can be a key engine of domestic economic growth in many countries), and other so-called “new issues” which have yet to be defined by members seeking the mandate nonetheless to discuss them. The WTO Ministerial will be a failure from a development perspective if “new issues” – including under the sneaky rubric of “discussions on global value chains (GVCs) or the digital economy” – are agreed to in Nairobi as part of the post-Ministerial agenda.

Civil society has long witnessed and condemned the unfair negotiations process in the WTO, in which the positions of powerful members are given predominance over the positions and needs of the vast majority of members who are developing countries, while the interests of workers, farmers, and the environment are shunted to the background in favor of corporate profit objectives. It is most unfortunate that under the current leadership, this phenomenon appears to have become even worse, even though the Director General hails from a developing nation.

Nairobi will be a crucial arbiter of the future of the global trade system. Will the WTO continue business as usual, in which the corporate interests of the powerful countries dominate, and the development mandate is abandoned in favor of talks on liberalization of new issues? Or will the WTO members heed the needs of the LDCs; of the poor in all our countries; of farmers struggling to make a living; of workers seeking decent work; and of the environment for our common stewardship?

For the Ministerial to “work” for food, jobs, and sustainable development, the necessary outcome is clear: the transformation of the gross inequities in the global agricultural system must begin, including: removing WTO obstacles to public stockholding for food security; a concrete and workable SSM; and disciplining domestic supports and export competition. Across the WTO, development demands must be met, including the full scope of the G90 proposals for all developing countries, and the operationalizing of the LDC package. The corporate and rich country government agenda of permanently abandoning the development mandate must be forestalled, along with the imposition of a set of already-rejected or ill-defined non-trade “new issues.”

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