Memorandum submitted by Friends of the
Earth
"It will come as no surprise to you if I
say that there is not much excitement among developing countries
in Geneva regarding the prospects of a new trade round. Indeed,
there is hardly any excitement at all anywhere in the world about
this perspective." Rubens Ricupero, Secretary General UN
Conference on Trade and Development speaking at Columbia University
(opening remark), New York, 23 July 1999.
1. INTRODUCTION
AND SUMMARY
1.1 Friends of the Earth welcomes the opportunity
to offer its views on the Millennium Round to the Environmental
Audit Committee. Friends of the Earth is the UK's leading environmental
public-pressure group and a member of Friends of the Earth International—the
world's largest environmental network with almost a million supporters,
and member groups in 61 countries. Our views on the Millennium
Round reflect the concerns of our partner groups throughout the
network—in both Northern and Southern countries—regarding
the impact of a new round. This evidence was prepared by Ronnie
Hall, Duncan McLaren and Tim Rice of the Sustainable Development
Research Unit.
1.2 Governments will meet at the World Trade
Organisation (WTO) Ministerial Conference in Seattle in November.
The European Union has been at the forefront of initiatives to
launch a new, comprehensive round of trade negotiations and the
European Council of Ministers has supported such an aim. The EU
argues that eight rounds of trade talks have made a major contribution
to global prosperity, development and rising living standards.
But the global economy now faces lower growth which can be stimulated
by further trade liberalisation and expansion. As the world's
largest exporter, the EU's trade prospects could be improved through
greater market access and stronger multilateral rules. Financial
and economic crises—in particular in Asia—have also
put the world economy under great pressure which the EU believes
can best be relieved through further liberalisation. Thus the
EU is seeking a multilateral agenda embraced within a new round.
However, many developing countries are openly against the idea.
Decisions on these issues will be taken at November's WTO Ministerial
Conference.
1.3 Friends of the Earth (FOE) is opposing
the proposal for a new round. This is because FOE does not believe
that such a "Millennium Round" could possibly promote
either sustainable societies or development, for a number of reasons.
1.4 Firstly, trade liberalisation has and
is now being pursued as a goal in itself rather than a means to
an end. This is wrong for two important reasons. Firstly, the
theory is flawed, a fact recognised by a number of eminent economists
but not yet acknowledged by governments. Secondly, the negative
impacts of trade liberalisation are now becoming obvious and are
being felt by the majority of the world's population. As a result
civil unrest and opposition is becoming increasingly widespread
(and it is not a result of lack of information). The WTO is the
institutional embodiment of this theory. A proposal which aims
to expand significantly its remit and power is therefore unacceptable
(See Section 5).
1.5 Secondly, the WTO, like the GATT before,
has an extremely poor track record when it comes to the environment
and social concerns. All disputes relating to the environment
have been resolved in favour of trade interests, regardless of
who the complaining parties have been. Apart from an increased
level of consultation, the WTO has shown no regard whatsoever
for its preambular reference to the "optimal use of the world's
resources in accordance with the objective of sustainable development".
The WTO's Committee on Trade and the Environment (CTE) has achieved
nothing of any note. It would be highly inappropriate to continue
to build on the WTO, when it has these major shortcomings (See
Section 3).
1.6 However, Friends of the Earth (FOE)
understands that the European Union and Japan may wish to see
as many issues as possible on the agenda, in order to obtain compensatory
benefits for further reform of their agricultural systems. FOE
does not feel this is a justifiable reason for promoting a round
given the potential ramifications of the new issues so far mentioned,
some of which are highly dubious (See Section 5).
1.7 Thirdly, the Uruguay Round is not yet
complete. Firstly, some developing countries have yet to fully
implement their commitments. And industrialised countries have
not yet met their commitments to helping developing countries
(for example, compensation to Net Food Importing Developing Countries)
or opening their own borders. As a result, developing countries
are extremely reluctant to proceed with any new issues as recent
developments in the WTO show. The EU should not exert undue influence
on countries that do not wish to proceed. It is highly inappropriate
to move forward while the Uruguay Round is incomplete and its
impacts have not been assessed. Secondly, there is already an
in-built agenda, also from the Uruguay Round, which includes agriculture,
services and Trade-Related Intellectual Property Rights (TRIPs),
which promises to be extremely controversial in itself. Even if
governments confined themselves to the built-in agenda it is highly
unlikely that any conclusions could be reached in the three years
suggested. We do not foresee negotiations becoming easier to complete
by adding further controversial issues.
1.8 Fourthly, the negotiations will be heavily
influenced by the political power balance in the WTO which has
meant in general that trade has been liberalised where there are
benefits to northern TNCs—such as in industrial products;
and trade in other areas has been regulated in ways that benefit
the same companies—such as in the TRIPs and Agricultural
Agreements (ie, in agreements where deregulation would not be
of benefit to them). We are concerned that the WTO continues to
listen to companies but civil society appears to have less legitimacy
(See Section 6).
1.9 Fifthly, the European Union's proposal to
discuss a limited number of environmental issues in the WTO will
not address the concerns of least developed countries and NGOs.
Indeed, it seems unlikely that such an agenda would get past the
negotiating table in Seattle in any substantive form. It is also
a great shame that richer countries have refused to address any
of the environmental concerns of poorer countries (for example,
the Biosafety Protocol or the TRIPs Agreement), thus giving "environment"
a bad name in the WTO. It is also possible that any further negotiations
on environmental issues could worsen rather than strengthen the
status of the environment (especially given the agenda of industry,
for example on eco-labelling) It is also telling that the European
Union is conducting a Sustainable Impact Assessment of the proposed
Round, but has refused to support a review of the Uruguay Round
outcomes. A review of the past is essential. How else can the
real value or otherwise of developments to date be known (See
Sections 3 and 5)?
1.10 A key fact is that citizens from the
North and South have all realised they are losing out. Although
it may be a case of North versus South amongst governments this
is not the perception amongst citizens.
2. THEORY AND
IMPACT OF
TRADE LIBERALISATION
2.1 Since the late 18th century, various
economists, businessmen and politicians have argued against intervention
in international trade. Protectionism, they say, stifles international
trade and is uneconomic, inefficient and leads eventually to job
losses; instead they argue for what they call "free trade"
or "trade liberalisation". The theory on free trade
was further developed by David Ricardo's theory of comparative
advantage. This theory has more or less become gospel amongst
many economists, and the WTO calls it ". . .arguably the
single most powerful insight in economics.".1
Free Trade Theory is Incorrect
Comparative Advantage
2.2 The theory of comparative advantage,
which underpins trade liberalisation, is flawed. This fact is
recognised by a number of eminent economists but not yet
acknowledged by governments. According to the theory of comparative
advantage, the most efficient and mutually beneficial form of
production and exchange occurs when states specialise in goods
in which they have the largest comparative advantage (or smallest
disadvantage) and use the revenues from exports to purchase imports
of goods in which they have less advantage. However, this line
of argument assumes capital is immobile and will be invested in
the most efficient form of domestic production. Insofar as capital
is not immobile, the theory will not work in practice.
2.3 In the 1990s, capital moves around the
globe at the touch of a button. In 1997, some $400 billion was
transferred internationally as direct investments and short-term
(often speculative) capital now totals more than $2 trillion annually
(the combination of international investment and short term capital
flows in 1997 was equivalent to 38 per cent of gross domestic
investment). The currency crisis that hit South East Asia in 1997
saw massive "capital flight", with the Malaysian stock
market losing 40 per cent of its value (some M$250 billion) in
just six months.
2.4 Respected economists and writers Herman
Daly and John Cobb have criticised academic economists and free
market proponents for failing to re-examine comparative advantage
theory saying: "They have suppressed recognition of the fact
that the empirical cornerstone of the whole classical free trade
argument, capital immobility, has crumbled into loose gravel".2
Capital mobility replaces comparative advantage with absolute
advantage, in which some countries can lose out completely. Governmental
officials supporting free trade have yet to grasp this fact of
life.
Level Playing Fields
2.5 One of the most oft-quoted phrases in
the free trade lexicon is that it provides a "level playing
field" for international trade. This is highly misleading.
Level playing fields are only relevant in competition between
equals—there is no point in Doncaster Rovers regularly competing
on the same playing field as Manchester United. Yet small scale
producers are expected to compete in the global economy along
with the likes of Microsoft, Monsanto and Mitsubishi even though
there are massive differences in wealth and power and assymetries
in information which mean that consumers do not necessarily choose
the best (or even cheapest) products. In other words, even the
argument that consumers gain from the "level playing field"
is flawed as a result of these assymetries which, according to
contemporary (Nobel-prize winning) economic theory, tend to generate
sub-optimal outcomes and require state intervention to correct.
Gross Domestic Product
2.6 The "freeing of trade" has
been accompanied by global economic growth (albeit unevenly distributed)
as measured by Gross Domestic Product (GDP). However, GDP is seriously
deficient as a measure of "social welfare" or "development"
because it reflects peoples' income rather than their real quality
of life. GDP counts the cost of health care, pollution clean-up
and the renovation of habitats as positive contributions to the
nation's wealth. This was recognised by the Environmental Audit
Committee's report, The Greening Government Initiative which
called for an alternate index; "We consider that a new single
measure of welfare could play a very useful part in increasing
awareness of the different elements that contribute to the well-being
of society and to the achievement of sustainable development."3
Thus GDP can continue to rise, yet peoples' quality of life can
deteriorate. This helps to explain the apparent contradiction
of rising GDP in many countries and the sharp increase in criticism
being levelled at the WTO.
2.7 This is one reason why trade liberalisation
as negotiated through the WTO contributes to unsustainable rates
of resource use because the costs of excess resource use are not
reflected in GDP.
Trade Liberalisation has had Serious and Widespread
Negative Impacts
Inequality
2.8 Trade liberalisation is associated with
increasing inequality both between and within countries. United
Nations Development Programme (UNDP) figures show that in 1960,
the 20 per cent of the world's population living in the richest
countries were 30 times richer than the poorest 20 per cent. By
1997, they were 74 times richer.4 According to UNDP: "The
imbalances in economic growth, if allowed to continue, will produce
a world gargantuan in its excesses and grotesque in its human
and economic inequalities".5
2.9 According to UNCTAD "The big story
of the world economy since the early 1980s has been the unleashing
of market forces . . . The "invisible hand" now operates
globally and with fewer countervailing pressures from governments
than for decades . . . Since the early 1980s the world economy
has been characterised by rising inequality and slow growth".6
2.10 Trade liberalisation directly benefits
those already trading and enjoying economies of scale. There appears
to be no evidence to support the "trickle down" theory
that this wealth is then passed on to the rest of society. As
Michael Jacobs concludes: "The theory that wealth would automatically
`trickle down' from the rich to poor has been proved simply wrong:
rather, it now appears that wealth can circulate and expand within
geographical and economic class boundaries to the exclusion of
those outside."7 Shockingly, 1.3 billion people are still
obliged to manage on less than one dollar a day.8
2.11 In the 1990s, the richest 20 per cent
of the world's population has 95 per cent of all commercial lending,
94 per cent of all research and development, 86 per cent of world
gross national product, 82 per cent of world trade, 81 per cent
of all domestic investment; 81 per cent of all domestic savings
and 68 per cent of all Foreign Direct Investment (FDI). In contrast,
the poorest 20 per cent has only 1 per cent of world GDP and 1
per cent of FDI. 9,10
The Peace Myth
2.12 The United States Trade Representative
(USTR) Charlene Barshefsky (1998) stated that, "The GATT
. . . [has] provided a `political' framework that helped instil
peace and democracy . . . The past half century has made the world
far more prosperous, secure and peaceful . . ." 11. This
assertion, based on the belief that the Second World War was in
part a result of protectionism in the 1930s, cannot be supported.
Since the end of the War, the number of armed conflicts in progress
world-wide rose from around five to a peak of 51 in 1992, dropping
to 37 in 1995. In total it is conservatively estimated that upwards
of 25 million people have been killed in wars since 1945. On top
of this, it is estimated that the deaths of one and a half billion
people have been indirectly caused by war since 1945. Contrary
to the views of the USTR, the world has not become more secure
and peaceful. If anything increasing inequality between and within
countries has led to further insecurity.
Winners and Losers
2.13 Trade liberalisation does not, as is
often claimed, benefit all. The main winners from trade liberalisation
so far have been developed countries (in particular the EU, the
USA and Canada), transnational corporations, the already rich
and wealthy, those with access to information and the owners of
large farms. The main losers include developing countries, the
poor, employees, subsistence and small farmers, women, and those
without access to information.
2.14 The negative impacts are widespread
and varied. There is also a lack of information since there has
been no comprehensive review of existing trade rules and agreements.
However, here are a number of telling statistics:
— Between 1975 and 1997 (using 1987
US$), GDP per capita in industrialised countries increased by
approximately 50 per cent. Conversely, per capita GDP for least
developed countries fell by approximately 15 per cent. 12 Between
1970 and the mid 1990s, least developed countries (LDCs) suffered
a cumulative decline of 50 per cent in their terms of trade (ie,
the revenue from a given volume of exports purchases a smaller
quantity of imports). 13 LDCs have only 0.3 per cent of world
trade even though they have 10 per cent of the world's population.
14
— In the 1960s and 1970s, the Philippines
became one of the top four timber exporters in the world. In the
process, 90 per cent of its forests have been lost. The country
is now a timber importer with 18 million impoverished forest dwellers,
an external debt of nearly $40 billion in 1995 (up from $17 billion
in 1980) and over one third of the population still living below
the poverty line.
— Road transport is a major contributor
to air pollution and climate change. Every year, nearly three
million people die from air pollution globally. It has been estimated
that truck transportation in North America is likely to increase
seven fold between 1995 and 2005 as a result of the North American
Free Trade Agreement (NAFTA) a rate of increase likely to far
exceed any improvement in the pollution efficiency of truck engines.
15 It has been suggested that the proposed Trans European Network
will lead to the social demise of 1,000 small villages throughout
Europe. 16
— The FAO has estimated that the food
import bill for low-income food deficit countries will be $9.8
million higher in 2000 compared to 12 years previously (an increase
of 55 per cent) and of this increase, $3.6 billion will be a direct
result of the last Uruguay Round of trade negotiations. 17 Since
1996, a further eight million people have joined the 826 million
already facing starvation. 18
— Small farmers are being displaced
(and at best taken on as small-holders in poor conditions, with
unfair contracts and without compensation) as land is increasingly
turned over to production for export. For example, land under
soya production in Brazil has jumped from 200,000 to two million
hectares in Brazil in the last 30 years. Similarly, Indonesia
plans to increase land under palm oil development from 2.5 million
hectares to seven million (and possibly even nine million) hectares.
In the US, the average size of a farm tripled between 1935 and
1987 and small farms are now disappearing at a rate of 33,000
per year. 19
— Global consumption expenditure has
increased on average 3 per cent annually since 1970, although
this figure hides significant imbalances. Consumption in Africa
is now 20 per cent lower than it was in 1980. Basic needs—such
as adequate nutrition, literacy and information—are not
being achieved. For example in Sub-Saharan Africa, between 1970
and 1995, per capita consumption of paper actually decreased from
2.2 to 1.6 kilograms per annum whilst calorie intake in 1995 was
still below the daily minimum calories requirement of 2,300. 20
— In the Wassa Fiase area of Ghana,
said to have the single largest concentration of mines in the
African continent, people have reported being evicted from their
homes and farmlands by soldiers making dawn raids to claim land
for use as mining concessions. They are paid little or no compensation,
yet this primarily agrarian community has lost its main source
of food and income. Ghana's Economic Recovery Programme was launched
in 1983 and has seen over US$2 billion foreign investment in the
mining sector. In Indonesia, the operation of the Grasberg copper
and gold mine has been described as representing one of the world's
worst known cases of environmental degradation and human rights'
abuses. Over 100,000 tonnes of ore tailings are dumped into rivers
every day. Villagers have been forcibly resettled including 2,000
people in 1998 alone. 21
— UNEP has confirmed that tropical
forests and marine fisheries have been seriously over-exploited
and that globalisation is also leading to species invasion. The
global marine catch has nearly doubled between 1975 and 1995.
Over-fishing for export-led development now means that 60 per
cent of the world's ocean fisheries are at or near the point at
which yields start to decline. 22 Similarly, 56 million hectares
of forest was lost globally between 1990 and 1995. Demand for
wood continues to increase; the global production of wood products
is now 36 per cent higher than in 1970. The recent analysis of
the conservation status of 10,000 tree species (out of an estimated
world total of 100,000) found that over half were globally threatened
as defined by the International Union for the Conservation of
Nature and Natural Resources (IUCN). 23 The increase in global
trade of wood products has stimulated the invasion of alien species
often with dramatic ecological impacts; the US has recently restricted
imports of packing materials due to the high occurrences of the
destructive Asian long thorned beetle. 24
— Trade sanctions, as authorised by
the WTO Dispute Settlement Body, are hitting small businesses
very hard throughout Europe. The sectors targeted have nothing
to do with the original complaints (ie, bananas and hormone treated
beef). For example, two companies in the UK—Beamglow and
Arran Aromatics (manufacturing folding cartons and bath products
respectively)—have been seriously affected by sanctions
under the "banana wars". Turnover is down, jobs may
well have to be lost and the situation is causing anxiety and
uncertainty amongst employees.
2.15 Friends of the Earth believes these
trade-related impacts can only be aggravated by further liberalisation
under the built-in agenda or especially by the inclusion of new
issues and sectors in the WTO (see New Issues below).
Mergers and Acquisitions
2.16 Trade liberalisation and an emphasis
on export-led development has been accompanied by a marked trend
towards concentration of business within larger producers. For
example, in the food and non-food commodity sectors, it is now
the case that: 25,26
— five corporations now market 60-90
per cent of all wheat, maize and rice (ie staples);
— five corporations control over 75
per cent of the cereal trade;
— three corporations control 80 per
cent of the banana trade;
— three corporations control 83 per
cent of the cocoa trade;
— three corporations control 85 per
cent of the tea trade; and
— five corporations are responsible
for 70 per cent of tobacco production.
2.17 Contrary to the claimed benefits of
trade liberalisation (see WTO preamble below), this trend can
have a direct negative impact on employment. For example, after
one merger, between BP and Amoco, 7,000 redundancies were announced.
Moreover, in 1998 BP-Amoco axed a further 3,000 jobs because,
despite the fact that it still made a massive $4.5 billion profit,
this was a drop from $6.5 billion the previous year. In 1999,
BP-Amoco acquired American oil company Arco resulting in a further
2,000 job losses.
2.18 UNDP has attributed increases in inequality
in OECD countries, which grew between the 1980s and early 1990s,
particularly in the UK, Sweden and the US, to job losses, job
insecurity and cross-border mergers and acquisitions. In the UK
the number of families below the poverty line increased by 60
per cent in the 1980s. 27
2.19 Friends of the Earth is concerned that
the outcome of planned talks on investment and competition may
be further mergers and acquisitions (see New Issues below).
3. THE WTO'S
TRACK RECORD
3.1 The specific impact of GATT rules and
the World Trade Organisation itself is difficult to assess, partly
because there has been no comprehensive assessment of impacts
of the Uruguay Round agreements to-date; and partly because the
WTO is such a new organisation. However, a depressingly predictable
picture is beginning to emerge, particularly as a wide range of
measures promoting the protection of the environment and the promotion
of development are successfully challenged in disputes at the
WTO.
Impact of the Uruguay Round
3.2 One key fact about the impact of the
Uruguay Round is certain. WTO members knew that the Least Developed
Countries and Net Food Importing Developing Countries (NFIDCs)
would face problems because of the WTO's Agreement on Agriculture
(because of higher food import bills, price instabilities and
reduced availability of food aid). The FAO calculated that the
food import bill for low-income food deficit countries would be
$9.8 billion higher in 2000 compared to 12 years previously (an
increase of 55 per cent) and of this increase, $3.6 billion would
be a direct result as a result of the Uruguay Round. 28 More recent
studies have confirmed the deteriorating position for NFIDCs;
between 1993-94 and 1997-98, the cost of cereal imports increased
by 47 per cent. 29 At the conclusion of the Round, governments
agreed to compensate affected countries but this promise has never
been fulfilled.
The WTO's Track Record
3.3 The first paragraph of the Agreement
Establishing the World Trade Organisation, agreed at the conclusion
of the Uruguay Round, lists those societal objectives that the
WTO should take into account: "Recognising that their relations
in the field of trade and economic endeavour should be conducted
with a view to raising standards of living, ensuring full employment
and a large and steadily growing volume of real income and effective
demand, and expanding the production of and trade in goods and
services, while allowing for the optimal use of the world's resources
in accordance with the objective of sustainable development, seeking
both to protect and preserve the environment and to enhance the
means for doing so in a manner consistent with their respective
needs and concerns at different levels of economic development".30
3.4 The WTO has not successfully delivered
on these objectives. For many sectors of society standards of
living are going down (see examples above). Friends of the Earth
is not aware of any subsequent activities of the WTO that have
led to the protection and preservation of the environment. On
the contrary, a series of disputes demonstrate the extremely negative
impact that WTO rules have had so far on health, development and
the environment. All such disputes have been settled in favour
of trade concerns (and thus it would seem that the UK Government
is wrong to claim that the WTO's Dispute Settlement Body can come
to an "impartial judgement".31 Recent and current examples
include:
Asbestos (health)
3.5 Canada has challenged a French law banning
the manufacture, import and sale of asbestos, arguing that the
French ban cannot be justified on health grounds and is harmful
to Canada's economic interests (Canada is the world's leading
asbestos exporter). The EU says there is no safe exposure level
for chrysotile asbestos, which it plans to ban across the EU in
January 2005. But Canada's asbestos industry claims that the product
can be used safely if recommended control and management practices
are followed. The WTO's decision is due in spring 2000. 32
3.6 The relevance of this particular case
may hinge on the fact that the governments involved seem to be
arguing about the validity of various research reports. Presumably,
this means that the WTO's dispute panel could find themselves
in the position of examining and evaluating scientific research
with a view to making decisions that have a direct bearing on
appropriate health protection measures in specific countries.
Bananas (development)
3.7 In 1997 the United States successfully
challenged the European Union's preferential treatment of banana
imports from African, Caribbean and Pacific (ACP) countries, arguing
that the EU's preferential quota system was incompatible with
WTO rules since it discriminated against Latin American banana
producers. In April 1999, the WTO authorised $191.4 million dollars
worth of sanctions against various EU businesses, including batteries,
bath products and folding cartons. The cashmere industry in the
Scottish Borders had been on a previous US list of sectors to
be targeted for sanctions but was omitted due to some astute lobbying
by the British Government.
3.8 Meanwhile, the European Commission has
been attempting to develop a banana import system that would satisfy
the challenging countries (and WTO rules), yet still benefit the
200,000 Caribbean farmers whose livelihoods are at stake. However,
this seems to be a losing battle, as it increasingly seems that
a tariff-only system will be put in place, which Caribbean farmers
believe will not keep their fruit competitive in the European
market. 33
3.9 It cannot be left unsaid that in 1998,
Carl Lindner of Chiquita Brand Fruit, producers of bananas in
Latin America, gave US$0.5 million to the US Democrats. Within
days, the US challenged the EU's banana import regime. 34 This
is widely considered to have influenced the US's decision to take
the issue to the WTO.
Beef-hormones (health)
3.10 The EU's 11-year old ban on imports
of beef produced using a range of growth-promoting hormones has
also been successfully challenged in the WTO by the United States
and Canada, on the basis that the EU does not have the scientific
evidence required to support the ban. As a result, the US has
been authorised to apply sanctions of US$116.8 million a year
and Canada CDN $11.3 million sanctions a year.
3.11 Typically, sanctions are targeted to
exert maximum pressure on selected governments. In this case,
tariff levels are expected by some to force affected products
out of the market and have caused consternation in affected countries
like Denmark and Germany (pork and other meat exports), France
(mustard, cheese, truffles and other gourmet products) and Italy
(canned tomatoes and fruit juice). The UK, on the other hand,
has managed to avoid sanctions since it has voiced its opposition
to the European hormone-beef import ban and is therefore not seen
as a target.
3.12 Reactions to this dispute demonstrate
how highly charged world trade disputes are becoming. In France,
farmers have responded furiously to sanctions, particularly those
applied to Roquefort cheese production, and demonstrations have
involved damage to a half-constructed MacDonalds restaurant and
the imprisonment of several protesters. Moreover, the leader of
the French farmers, Jose« Bove«, was released after
a number of weeks to a chorus of sympathetic comments from French
Ministers, including the Prime Minister Lionel Jospin, who is
reported to have commented that "Mr Bove«'s cause is
just". The agriculture minister, Jean Glavany, who has invited
Mr Bove« to attend the Seattle meeting, reportedly said:
"Today, for the first time, we are in step with public opinion.
There's a national consensus about bad food. People realise we
need a different international logic than the economic, social
and environmental dumping of modern agriculture. We have to change
the WTO so that it respects people's cultural choices, does not
destroy the world's peasantry and guarantees fair trade for all."
35
3.13 This dispute has caused anger on the other
side of the Atlantic too. Angry gourmet food lovers in the US
are lobbying Congress and Hilary Clinton to get supplies of their
favourite foods, including Roquefort cheese, back on the shelves.
36
3.14 Hormone-treated beef makes cattle grow
and fatten faster and thus has contributed to the over-production
of beef in the US. Although the European Union has stood its ground
for some time now, there are rumours that the Commission is now
preparing to concede that it may have to lift the ban on one or
more of the hormones in question, since it seems that the scientific
studies it has been relying on are not appropriate and it will
not be able to provide the information required by the WTO. 37
Electroscrap Law (environment and health)
3.15 A Brussels law firm, Hunton and Williams,
has advised the US electronics industry that proposals by the
EC's environment directorate (DGXI) for an EU law banning the
use of lead and mercury in electrical and electronic equipment
would break international trade rules and would be "an invitation
to further trade disputes", since proper disposal would negate
the hazards presented by these metals. It remains to be seen
whether this will stop the Commission in its tracks, as did a
previous study concerning an EC proposal to require a minimum
of 5 per cent recycled plastic in electrical and electronic equipment.
38
Shrimp-turtle (environment)
3.16 Seven species of sea turtles are currently
recognised. All seven species are included on the Convention
on the International Trade in Endangered Species (CITES) Appendix
I and all appear in the International Union for the Conservation
of Nature (IUCN) Red Data List of threatened species. According
to research published by the US Government, and by the IUCN, the
main threat to the survival of these species is the incidental
mortality in nets used by shrimp trawlers in the open sea. The
USA thus enacted legislation to require domestic shrimping fleets
to use turtle excluder devices (TEDs), inexpensive, effective
devices that allow turtles, but not shrimp, to escape from nets.
The law also required other shrimp-producing countries to show
a regulatory programme and incidental mortality rate comparable
to that of the USA as a condition for market access for imports
of shrimp into the US.
3.17 Malaysia, Thailand, Pakistan and India
were unhappy with the US legislation and, after failed negotiations
during 1996, in early 1997, all four lodged complaints with the
WTO. The US argued that the embargo should be exempted under Article
XX allowing, amongst other things, measures for the protection
of animal life and natural resources. The WTO Dispute Panel ruled
that the measure at issue is not within the scope of measures
permitted under Article XX. The US appealed this decision, and
also modified the law so as to allow in shipments of shrimp from
non-approved countries if those shipments were certified as being
caught in a manner that did not threaten turtles.
3.18 The Appellate Body of the WTO ruled
that the measure, as modified, was not incompatible with Article
XX of the WTA because it related to the conservation of an exhaustible
natural resource. It did, however rule that the way in which the
measure had been implemented was discriminatory. For example,
some countries in the Caribbean had received a longer period to
phase in the requirements than had some Asian countries.
3.19 The original Panel decision interpreted
Article XX very narrowly, maintaining that the US's measure itself
was "arbitrary" and "unjustifiable". The Panel
in essence created a new standard by finding that the extraterritorial
scope of the US law threatened the trading system. It maintained
that when a Member invokes Article XX it still, ". . . must
not frustrate or defeat the purposes and objectives of the General
Agreement and the WTO Agreement or its legal obligations under
the substantive rules of GATT by abusing the exception contained
in Article XX." The Appellate Body on the other hand gave
tentative approval to the law in its modified, "shipment
by shipment" form. The Appellate body did second guess the
way that the law was applied. In response, the US government has
changed some of the procedures of the law.
3.20 It is important that the law's original
purpose not be overlooked in the legal minutia of this case.
The best way to protect migratory species like sea turtles
is an international agreement. Unfortunately, the governments
involved have not reached an agreement. Where there are not internationally
agreed rules, the question becomes whether governments can take
action to protect species in the global commons. In this case,
the US law did change the behaviour of some shrimping fleets,
and did save turtles, without imposing large costs on developing
countries. Although there was a mixed decision in the case, it
does underscore that it is problematic for a trade institution
like the WTO to have the final say on the appropriateness of democratically
enacted conservation measures.
Venezuelan gasoline (environment)
3.21 It is somehow fitting that the very
first dispute case decided by a WTO panel was over a challenge
to an environmental law. US legislation attempting to reduce air
pollution in its worst affected cities become the first casualty
of the WTO's new enforcement powers.
3.22 In 1994 the US environmental protection
agency (EPA) issued regulations under the Clean Air Act requiring
a 15 per cent increase in the cleanliness of gasoline sold in
cities with air pollution problems. Due to difficulties in getting
reliable data on some gasoline refineries, the regulations divided
producers into two categories. Producers for which there was adequate
data had to make the 15 per cent improvement from their gasoline's
actual quality in 1990. Newly established US refiners and foreign
refiners (for whom it was difficult for EPA to verify data) had
to make the 15 per cent improvement from a baseline of the average
US gasoline quality in 1990.
3.23 Foreign producers unsuccessfully lobbied
against this rule in the US. When it was adopted, Venezuela, supported
by Brazil, challenged the rule in the WTO. They argued that it
violated the national treatment requirement of the GATT by treating
foreign producers less favourably than most US producers. The
Dispute Panel and the Appellate Body both agreed with Venezuela,
ruling that the regulation was incompatible with the GATT.
3.24 As a result the US changed the regulation
to give foreign refiners an option of using either the US 1990
average or an individual baseline. While establishing this new
rule, the US EPA acknowledged that it "creates a potential
for adverse environmental impact." 39 This is because foreign
producers will only choose the individual baseline if it allows
them to ship dirtier gasoline into the US than they would have
been allowed under the average baseline. The principle of national
treatment may have been upheld, but real people's health is negatively
impacted as a result.
The WTO and Other Multilateral Trade Agreement
3.25 In spite of claims that no multilateral
environmental agreements have ever been challenged in the WTO,
it is also the case the WTO rules have had a marked effect on
some international agreements and ongoing negotiations designed
to protect the environment and promote development.
The Biosafety Protocol
3.26 In February 1998, representatives from
174 countries gathered in Colombia to finalise a Biosafety Protocol
that would regulate the transfer and handling of genetically modified
organisms (GMOs). But as a result of the efforts of what was known
as the "Miami" group of countries (the United States,
Canada, Argentina, Uruguay, Australia and Chile) the talks collapsed.
This was in spite of the fact that the United States is not a
signatory to the umbrella Convention on Biological Diversity and
was only attending the talks as an observer.
3.27 The Miami Group of countries export
genetically-modified crops and their aim was to make sure that
trade was not disrupted by any Protocol. The Miami Group wanted
the Protocol to apply only to GMOs that are deliberately released
into the environment, such as seeds for planting. Thus they argue
that all commodities (over 90 per cent of world trade in GMOs)
should be excluded (since they are to be eaten and not released
into the environment). They also strongly opposed plans to label
GM crops. The Miami group clashed with the European Union over
whether WTO rules should take precedence over the rules of a Protocol.
Since the European Union and G77 group of developing countries
refused to accept the Miami Group's proposals the talks became
deadlocked.
3.28 The head of the U.S. delegation to
Colombia confirmed that one of his main objectives was "to
avoid undue interference with world trade because this is as much
a trade agreement as an environmental agreement." 40
3.29 An official with Mexico's Pulsar Group,
one of the world's leading seed producers, was critical of developments
pointing out that the talks had "been converted into negotiations
over international trade, not about safeguarding biodiversity."
41 Negotiators met again in Vienna, from 15-19 September, to try
to restart the talks. Although the governments re-confirmed their
political will to conclude a Protocol no major break-though was
reported. 42
The Lome« Convention
3.30 The Lome« Convention is an agreement
established in 1975 between the European Community and African,
Caribbean and Pacific (ACP) countries, to promote the economic,
cultural and social development in ACP countries, many of which
are former European colonies. There have been a number of revisions
to the Convention, the last in 1995.
3.31 However, negotiations now underway
to agree "Lome« V" are proving much more controversial.
The problem is that the WTO has ruled that the favourable trade
terms the EU affords ACP countries are not in line with international
trade rules. Whilst the existing Lome« IV Convention has
been permitted to continue by virtue of annual waivers granted
by the WTO, there are now moves afoot to ensure any successor
agreement conforms to the rules.
3.32 One option that has been proposed by
the European Commission is the establishment of reciprocal free-trade
areas to be phased in over five years beginning in 2000. Thus
development preferences will be entirely replaced by trade agreements.
43
4. THE BUILT
IN AGENDA
4.1 There are a number of WTO reviews and
negotiations due in 1999 and subsequent years that will take place
whether or not there is a Millennium Round that brings new issues
into the WTO. This built-in agenda was never intended to be part
of a new round. In fact, governments signed up to these commitments
as part of the last Uruguay Round of trade negotiations.
4.2 The "built-in" agenda includes
further trade liberalisation negotiations in agriculture and services;
and reviews of:
— the Agreement on Trade-Related Aspects
of Intellectual Property Rights (TRIPs);
— the Agreement on Trade-Related Investment
Measures (TRIMs);
— the Agreement on Technical Barriers
to Trade (TBT); and
— the Dispute Settlement Understanding
(DSU).
4.3 The SPS Agreement includes a provision
for governments to examine the Agreement after five years and
thus is included in this section.
4.4 This agenda promises to be extremely
controversial in itself. Even if governments confined themselves
to the built-in agenda it is highly unlikely that any conclusions
could be reached in the three years suggested.
Agriculture
4.5 There is no doubt that agriculture,
food and food security will be the main foci of the forthcoming
negotiations, whether or not other issues are brought in to create
a comprehensive round. The Cairns group of countries (which consists
of Australia, Canada, New Zealand and a number of developing countries
including Brazil, Malaysia and Thailand) is targeting European
and Japanese agricultural subsidies. A second key focus is the
insistence—particularly from the US—that biotechnology
be included for the first time. 44 It now appears that the US
will seek to address biotechnology within the existing framework
of the AOA (and not as a separate agreement, or as part of a set
of provisions in the SPS Agreement) (see below). 45
4.6 These are issues of significant concern
for people living in all parts of the world. People in the "South"
are losing their access to land, fisheries and other natural and
genetic resources, primarily as a result of the WTO's Agreements
on Agriculture and Aspects of Trade-Related Intellectual Property
Rights (see TRIPs below). People in the "North" are
also deeply concerned about the quality of food produced and traded
by agribusiness (affected by the workings of the SPS Agreement);
and about the health their own rural communities (also affected
by the AOA).
4.7 However, by proposing a Millennium Round,
the EU appears to believe it can benefit its service sector in
return for limited further concessions on the highly sensitive
issue of agriculture and further reform of the Common Agricultural
Policy. In other words, the more issues that are on the table
for negotiation the more possibilities there are for alternative
concessions in other sectors. If this is an accurate assessment
of the EU's strategy, FOE believes it is unacceptable given (a)
the abysmal track record of the WTO, as described in this evidence
and (b) the fact that the EU cannot maintain current levels of
subsidies for financial reasons as the various accession countries
join the Union.
4.8 However, in this context, it is interesting
to note that the UK Government clearly supports "further
fundamental reform of the EU's Common Agricultural Policy (CAP)".
46 From FOE's perspective, the question is not whether, but how
production subsidies should be reduced. In our view an orderly
transition to sustainable agriculture systems would involve lower
production subsidies but would also require targeted support
for rural communities and sustainable agricultural practices,
which would not necessarily survive a WTO challenge.
The Agreement on Agriculture (AOA)
4.9 The aim of the Agreement on Agriculture
(AOA), first negotiated during the Uruguay Round, is to reduce
agricultural support and protection to correct and prevent distortions
in world agricultural markets. It is a very complex agreement,
but covers three main areas: market access, domestic production
subsidies and subsidised exports.
4.10 From the beginning the AOA was slanted
in favour of large farms and developed countries. The "reference
years" chosen for the calculation of cuts in domestic production
and export subsidies were such that the EU and the USA were not
required to make many changes to their existing regimes. However,
developing countries with little or no existing subsidies were
prohibited from providing new subsidies above a maximum level.
Overall, this allowed the industrialised world to maintain high
export/production subsidies while preventing the developing world
from implementing their own.
4.11 The AOA also requires WTO members to
convert all non-tariff barriers to imports into "equivalent"
tariffs (commonly known as "tariffication") and then
to reduce these tariffs. Since the industrialised countries had
much greater non-tariff barriers and were able to convert these
into prohibitively high tariffs, they act as a highly effective
barrier to many imports from developing countries. The developing
world, on the other hand, had fewer non-tariff barriers and thus
implemented fewer tariffs.
4.12 Agriculture is the only sector of world
trade where dumping is accepted in the rules. Other parts of the
WTA contain "anti-dumping" provisions. This omission
of agriculture from anti-dumping provisions has a major impact
on the developing world. It means countries have no recourse to
the WTO dispute settlement mechanism when cheap, subsidised food
is dumped on their markets, disadvantaging domestic farmers and
food production.
4.13 Developing countries have "special
and differential treatment" whereby they can provide various
subsidies to farmers—such as for investment or to low-income
producers—but they cannot exceed 1992 levels. Such subsidies
are never likely to reach the $19,000 per annum that the EU and
US still pay each of their farmers (on average). 47
4.14 Furthermore, trade liberalisation under
the AOA does very little to encourage food production in developing
countries for their own domestic consumption. Indeed, the disciplines
on import controls and domestic support hamper any moves in this
direction.
4.15 Not all subsidies are prohibited. The
AOA allows forms of direct payments that are not linked to production,
or prices that are not deemed to be trade distorting. These are
commonly known as the "Green Box" (ie measures such
as environmental payments, rural infrastructure or insurance schemes)
and the "Blue Box" (headage and acreage payments rather
than production). Whilst reducing the direct incentives for over-production,
on balance the support system continues to favour large farms
at the expense of the small because many payments are related
to the size of farm. Large farms tend to be more intensive producers,
benefiting from new and higher yielding crop varieties and agro-chemicals,
further damaging the environment.
4.16 Under the Common Agricultural Policy,
the EU has one of the most heavily protected markets and subsidised
production systems in the world. Recent, very limited reforms
to the CAP means that the EU will need to maintain a number of
key provisions in the AOA, particularly a "successful defence
of the `Blue box'".48 Not surprisingly, the EU will also
be negotiating for a renewal after 2003 of the peace clause (which
calls upon WTO members to exercise due restraint and not to challenge
support measures of others if they are kept below 1992 levels)
and the special safeguard provisions (which allows domestic markets
to be protected against large rises in import volumes or a sharp
fall in world prices but the provisions can only be applied to
products that have been subject to tariffication).
Services
4.17 The General Agreement on Trade in Services
(GATS) is intended to secure the progressive removal of measures
which discriminate against foreign service suppliers through rounds
of negotiations.
4.18 As far as the next round of services
negotiations (known as GATS 2000) is concerned, it is not yet
clear which industrial sectors governments will decide to include.
However, there has been a suggestion from the United States that
all service sectors should be considered. 49
4.19 Leon Brittan, the previous EC Commissioner,
also appears to be promoting liberalisation of a wide range of
service sectors, including "in politically difficult . .
. sectors". If such a broad approach is adopted it could
have extensive (although so far unknown) environmental and developmental
implications, with areas such as health, education, the film industry,
broadcasting, tourism, and energy and water services up for liberalisation.
4.20 This is in sharp contrast to the official
EU position outlined in "Frontier-free Europe" (July
1999) which is that "WTO rules must still allow countries
to pursue their domestic policies in areas such as public health
and the environment".50 Commission officials have also told
Friends of the Earth that they do not support liberalisation in
areas such as public health and education services. Whether this
is negotiable in view of their intent to defend the Common Agricultural
Policy is not clear.
4.21 Health provision certainly seems to
be a key area of interest for the US's Coalition for Service Industries
who are lobbying for the "the maximum liberalisation of services
in the shortest time" and focuses on the "entire spectrum
of geriatric services". This may well have implications for
health care provision in the UK. 51
4.22 Furthermore, France has asserted its
commitment to maintaining protection for the French film industry.
Since France withdrew from the OECD's negotiations to establish
a Multilateral Agreement on Investment causing the negotiations
to collapse, for just this reason, this is likely to be a key
factor in the EU's negotiating position.
Intellectual Property Rights (IPRs)
4.23 Traditionally, trade liberalisation
has been associated with deregulation. However, the opposite is
the case with intellectual property rights (IPRs) protection.
The TRIPs Agreement lays down a set of rules stipulating how governments
must regulate to protect various aspects of intellectual property
including patents, copyrights, designs and trade marks and affects
a diverse array of sectors including pharmaceuticals, computer
programming and transgenic crops. Few would argue that some form
of regulation is needed to facilitate fair trade, such as allowing
inventors to benefit from their inventions, to clamp down on counterfeit
goods or permitting musicians to benefit from their compositions.
However, the standards have been derived from industrialised countries
legislation which is far tighter than most developing country
legislation, bringing with it conflicts of interests and needs.
4.24 Proponents of the TRIPs Agreement claim
that it will promote technology transfer as knowledge-based companies
invest in developing world resources. This is not being borne
out in reality. Instead of promoting a freer flow of ideas and
technology, strong IPR laws allow companies to have greater control
and maintain a tighter grip over knowledge. As the Third World
Network concludes; "TRIPs is. . .not a step towards "free
trade". It is the reverse: it restricts rather than promotes
technology flow, giving a boost to monopoly practices instead
of curbing them." 52
4.25 The TRIPs Agreement impacts on peoples'
ownership of and access to food and seeds and has the potential
to significantly reduce genetic diversity. It permits northern
TNCs to claim traditional plant varieties or plant uses as "inventions"
that must be respected the world over. TRIPs and the use of patents
expropriates knowledge from farmers and indigenous peoples in
developing countries who, in many cases, have been cultivators,
researchers and protectors of plants for thousands of years, commonly
referred to as "biopiracy". Biopiracy is not the result
of the absence of IPR systems in the developing world but a direct
consequence of the imposition of western style IPR systems (based
on the US patent regime) through the TRIPs Agreement.
4.26 Under WTO enforced patent law, Monsanto
has the right to take farmers to court if they collect and use
seeds from its patented plant varieties. In the USA, Monsanto
has opened more than 475 such "seed piracy" cases nation
wide. Monsanto's "terminator gene" technology that makes
plants sterile would have helped the company to enforce its patent
rights. However, even if Monsanto keeps its voluntary pledge not
to commercialise this technology, the promotion of patented varieties,
backed by legal action, could pose a significant threat to food
security in the developing world. Approximately 1.4 billion people
around the world depend on farm-saved seed for their food security.
4.27 However, the US now wants TRIPs off
the Seattle Agenda despite being "built-in" for review
under the previous Uruguay Round. The US—who want to extend
the TRIPs Agreement to include full life-form patenting—is
now concerned that the review might lead to a backsliding of current
commitments and an extension of the phase-in period for developing
countries. 53 Several developing countries are now suggesting
that TRIPS take into account the effect of other international
treaties—such as the Biodiversity Treaty and that IPR disciplines
cover "indigenous knowledge". Other developing countries
also want to consider an expansion of "geographical indications"—normally
applied to wine and distilled spirits—to cover such items
as handicrafts and textile designs.
4.28 The TRIPs Agreement was one of the
most fiercely contested issues in the Uruguay Round. Despite the
many concerns from developing countries, the Agreement—reached
largely between a few industrialised countries—was presented
as part of the overall "Uruguay Round package" that
the developing world had to sign up to. It will be interesting
to see if the US manages to avoid the built-in agenda negotiations
in direct opposition to other countries.
Technical Barriers to Trade Agreement (TBT)
4.29 The Technical Barriers to Trade or
TBT agreement covers any procedures or standards that might be
deemed to interfere with international trade. This includes packaging,
marking and labelling standards, and thus eco-labels. This agreement
is also up for review this year. The UK Government remarks that
"technical barriers remain a major impediment to international
trade." 54
4.30 The Confederation of British Industry
urges WTO members to establish that TBT rules apply to eco-labelling
and to clarify the extent to which private eco-labelling rules
should be covered by the agreement (which would bring well-established
initiatives such as the Forest Stewardship Council scheme under
the remit of the WTO). 55 Similarly, in the run up to Seattle,
the International Chamber of Commerce has lobbied against eco-labelling
requirements, arguing that they hinder free trade.
4.31 Friends of the Earth is concerned about
the implications of both the review, the UK Government's statement
and the views of industry for eco-labels, the labelling of organic
and food free of genetically-modified organisms, and fairly traded
products. For example, the US opposes, with Canada (a Cairns Group
member) the labelling of GM foods, arguing that they are substantially
equivalent to traditional foodstuffs (ie, "like products").
The EU, Japan, Australia and New Zealand all have GM labelling
requirements and a legal case under the Religious Freedoms Act
is pending in the US which might require some labelling there.
The Centre for International Environment Law has reported that
labelling of food containing GMOs should be compatible with WTO
rules because they are "unlike" their non-GMO counterparts
but this view might be contested by industry. WTO tests for likeness
include consumer taste and habits, physical characteristics and
the products' properties, nature and qualities. 56
Sanitary and Phytosanitary Agreement (SPS)
4.32 The SPS deals with food safety and
standards and permits the WTO to determine what international
and potentially even domestic measures are necessary to protect
human, animal or plant life or health. Members are "encouraged"
to use international standards where they exist, although they
are allowed to maintain higher domestic standards if there is
"scientific justification" or as a consequence of an
"appropriate risk assessment".
4.33 The SPS has already been invoked by
the WTO when ruling on food issues, most notably the EU ban on
the imports of hormone-treated beef due to consumer and health
concerns (see disputes, above). The SPS requires that appropriate
risk assessment, involving an analysis of the available scientific
evidence, must be undertaken before action (ie a import ban) can
be taken. If the risks are unknown, and thus little or no scientific
evidence exists, the precautionary principle—which the EU
argued in the beef-hormone case—cannot be used despite the
fact that the principle is now widely recognised in international
law. The WTO Appellate Body ruled that the precautionary principle
cannot be used to override the risk assessment clauses in the
SPS Agreement. Therefore, at best a limited precautionary approach
can be adopted within the scope of the SPS; "provisional
measures" can be adopted where information is not sufficient
provided that the additional scientific evidence for a more objective
risk assessment is obtained in a reasonable period of time (Article
5.7).
4.34 In addition, the TBT (see above) requires
that internationally accepted standards must be used where they
exist. The Codex Alimentarius Commission (a body set up by the
FAO and WHO and sets international standards for food) had controversially
already adopted standards accepting residue hormone levels in
meat thus further undermining the EU position. Like all institutions
associated with the WTO, the influence in Codex of TNCs is strong.
Food safety issues and concerns are being marginalised in the
interest of free trade. The beef-hormones case is being seen as
a "dry-run" for a potential dispute over genetically
modified organisms (GMOs) where the same issues of scientific
uncertainty, corporate interest and public taste would once again
arise.
4.35 Whilst the US has affirmed five basic
principles behinds its policy on biotechnology—an arm's
length regulatory process, consumer acceptance; fairness to farmers;
corporate citizenship; and fair and open trade—it is clear
that its (unofficial) position is that it will not let other nations
hide behind unfounded scientific claims to block further commerce
in agriculture. Central to this position is the SPS Agreement.
US Industry lobby groups are also firmly behind this position.
The US believes that biotechnology and the SPS will be the most
difficult stumbling blocks in the next round. The US (with Canada)
opposed at the recent G8 the setting up of a Global High Scientific
Council for Food Safety arguing that food safety should be negotiated
within the WTO. It now appears likely that the US will not seek
to address biotechnology within the SPS Agreement; they are keen
to preserve the "science-based focus" of the Agreement
and thus limit further application of the precautionary principle.
57
4.36 The UK government points out that "The
extent to which the SPS Agreement might feature in a new Round
is not yet clear, but at present we see no need to amend it."
This could be one of the surprises in store for Seattle, given
volatile transatlantic disputes centring on the interpretation
of the "provisional measures". For example, FOE and
other NGOs have been advised that there is a good, clear legal
basis for a moratorium on the trade in GM seeds under Article
5.7 of the SPS Agreement.
Trade-Related Investment Measures (TRIMS)
4.37 Efforts to include investment in the
WTO began even before the WTO was established. During the Uruguay
Round negotiations some countries advocated expanding the traditional
GATT focus on trade in goods to cover investment. This was done
in a small way in the Agreement on Trade-Related Investment Measures
(TRIMs). The TRIMs agreement is a WTO agreement that bars countries
from imposing several kinds of performance requirements (conditions)
on foreign investors. Under TRIMs, governments can not require
corporations to export a minimum percentage of finished products,
or to use a minimum percentage of domestically-produced components.
4.38 TRIMs obligations start applying to
developing countries in 1999-2000. Already, countries such as
India and the Philippines have sought additional waivers, arguing
that domestic content requirements are important development tools.
4.39 The TRIMs agreement is due for review
as part of the built-in agenda. Friends of the Earth is concerned
that this review could be used to introduce an agreement similar
to the Multilateral Agreement on Investment into the WTO by a
less obvious route, particularly if investment per se is rejected
as a "new issue" (see below). We note with interest
that the UK Department of Trade and Industry (DTI) has commented:
"We do not see the current TRIMs review as a vehicle for
work on non-trade related performance requirements" but still
hopes "to achieve some modest expansion".58 We are curious
to know what this might entail.
5. THE PROPOSED
NEW ISSUES
Reasons for a Round
5.1 Although developing countries have a
range of views it generally seems to be the case that they are
opposed to bringing new issues into the WTO. During the G77 meeting
in Marrakech in September, the Chairman of the G77, Mr Clement
Rohee, Foreign Minister of Guyana, said that the WTO's Seattle
Conference should focus on a process of what he called the Three
Rs, or "review, repair and reform" of the WTO: "For
most developing countries the globalisation process of rapid trade,
financial and investment liberalisation has not fully lived up
to its promise despite the adoption of profound structural reforms
and macroeconomic measures. Attempts to respond to the demands
of the western-driven market-based globalisation process, on the
basis of individual capacities, have only served to atomise the
developing world whilst making countries ever more vulnerable
to pressures from the most powerful players in the international
order, whether these be states or TNCs. The current global agenda
is almost bereft of the concerns of the South." 59
5.2 Given these strong objections and bearing
in mind the wide-ranging concerns outlined above, it seems reasonable
to question both the motives behind the Millennium Round proposal
and the potential impact of proposed new issues.
5.3 Friends of the Earth's understanding
is that the European Union and Japan are concerned about the impact
of WTO agriculture negotiations that will take place anyway. However,
both would benefit from the liberalisation of services, since
both have large service sectors. It is possible that in order
to avoid having to make major concessions in agriculture in order
to gain in the field of services, they have come up with the idea
of introducing as many new issues as possible into a new, comprehensive
Millennium Round. This device could help to deflect attention
from agriculture and might allow them to make concessions in alternative
areas. Or it might permit the EU to wring some concessions out
of the US in return for changes in agriculture and possibly public
services (see Services, above).
5.4 A similar theory has been suggested
by Mr S Narayanan, Indian Ambassador to the WTO, who has suggested
that selling the benefits of the proposed investment agreement
might be the only way EU governments could "sell" any
support cuts in agriculture to their strong agricultural lobbies.
He pointed out that: "This kind of argument is not fair from
our point of view".60 FOE concurs with this. It is entirely
inappropriate to add new issues to a system that is failing people
and their environment so badly, whatever the strategic reasons.
5.5 This kind of strategic thinking could
be the reason why the UK Government support for a Round is based
on nothing more than estimated increases in world income. 61 Since
no review of the existing system has been undertaken it is impossible
to know whether this view is justified or not. In conjunction
with developing country opposition to new issues, it also casts
doubt upon the Government's call, at the 1999 Labour Party conference,
for a "comprehensive trade round that fully takes into account
the trading interests of poorer countries". In particular,
the evidence of increased inequality, outlined above, suggests
that for the Millenniun Round to be a "development round",
as advocated by Clare Short, would require dramatic changes in
its agenda and mechanisms. Whilst FOE is broadly sympathetic to
the concept of a "development round", we remain highly
sceptical of the capacity of the WTO to negotiate or implement
such a concept.
5.6 The US on the other hand has different
conditions to deal with. In order to finalise a deal in the WTO
the US Government requires "fast-track" authority from
Congress (which means Congress can only vote "yes" or
"no" to the final package and is unable to unravel the
agreement). However, "fast-track" has been increasingly
difficult for the US Government to acquire in recent years and
would require an additional effort on their part. Furthermore,
the US is not as vulnerable as the EU and Japan in terms of potential
commitments it might be required to make during a round. It would
be much easier for the US Government to deal with issues on a
sector-by-sector basis and the US has been predictably lukewarm
about the prospects of a Round. But it still wants several new
issues to be negotiated.
Proposed New Issues
5.7 The current potential list of new issues
comes primarily from the European Union. There are a number of
additional issues, such as forestry, labour and biotechnology,
that might be added by the United States.
Investment
5.8 Investment is an especially contentious
issue after the demise of the Multilateral Agreement on Investment.
Investment negotiations are likely to focus on stripping away
the controls that countries place on inward investment (like joint
venture requirements) and on the use of natural resources (such
as forests and minerals), rather than confirming and supporting
the kind of latitude needed to pursue a range of goals (eg environmental,
social or developmental).
5.9 The financial crisis of the past two
years provides clear evidence that sustainable development is
impossible in a climate of boom and bust economic instability.
Economic liberalisation and speculative investment flows set the
stage for crises in which poverty has increased and government
spending on social welfare programmes and environmental protection
has been slashed. In this context it is disturbing that some Northern
governments are seeking to negotiate an investment liberalisation
agreement in the WTO. Such an agreement could further interfere
with the development of regional economies; reduce the responsibilities
of investors at the local level; and further reduce the South's
bargaining power to obtain developmental benefits from inward
investment.
5.10 Furthermore, deregulating foreign investment
is not necessarily the key to attracting foreign direct investment
(FDI). China, for example, attracted a staggering 40 per cent
of all FDI inflows to developing countries in 1996. China is not
renowned for its deregulatory approach to investment. FDI is much
more likely to be attracted to countries with a large market,
basic infrastructure and good skills base. Deregulating investment
is a side issue as far as attracting investment is concerned.
5.11 Rubens Ricupero, Secretary General
of UNCTAD recently commented that "so far there is no empirical
evidence to suggest that developing countries are necessarily
better off in terms of attracting and retaining quality FDI within
the confines of multilaterally agreed disciplines in investment
. . . What is evident . . . is that the existence of investment
rules will do little to tackle the problem of distribution of
the potential gains from trade and FDI. Investment tends to concentrate
where capital is already present. Thus, imbalances between and
within countries—imbalances that have been sharply exacerbated
as a result of globalisation and liberalisation—will not
be affected by the absence of investment barriers, as some of
its proponents have suggested." 62 FOE would go further to
suggest that inequalities in FDI might even increase under a multilateral
agreement.
5.12 Trade flows are valued at around $7
trillion annually, whilst foreign investment generates $9.5 trillion
in annual sales by overseas affiliates of multinational corporations.
Thus an agreement on investment would have the affect of substantially
increasing the power of the WTO, cementing its transformation
from a body dealing mainly with trade to an institution with oversight
of many economic, social and environmental decisions. Friends
of the Earth believes this would be highly inappropriate given
the WTO's track record in terms on the environment and development.
Investment should not be addressed as a new issue.
5.13 Investment plans at the WTO have been
influenced by the fate of a parallel investment process at the
Organisation for Economic Cooperation and Development (OECD),
a grouping of 29 of the world's industrialized nations. In 1995
the OECD started negotiating an investment liberalisation agreement
called the MAI. MAI supporters, especially the US, believed that
the OECD could produce a stronger investment agreement (in terms
of protecting corporations) than was possible at the WTO. MAI
negotiations ceased in 1998 due to disagreements between governments
and pressure from civil society groups. The end of the MAI gave
proponents of investment negotiations at the WTO, such as the
European Union, Japan, and Canada, new energy.
5.14 Currently, the strongest proponents
of WTO investment negotiations include the European Union, Japan,
Canada, Switzerland, Hong Kong, and Korea. Switzerland has proposed
broad negotiations that could lead to an agreement like the MAI.
The other governments that have proposed negotiations have suggested
less ambitious objectives. Less ambitious in the sense that they
would be "bottom up" (countries commit some sectors
for liberalisation) rather than "top down" like the
MAI (where liberalisation covers all sectors except where a government
takes a specific reservation.) Most current proposals would also
exclude investor-state dispute resolution.
5.15 However, investment negotiations are
opposed by a number of developing countries, including India,
Egypt, and many African countries. In the middle are many Latin
American and Asian Countries, which may be willing to negotiate
on investment but have not prioritized it. The US is so far undecided.
The US may prefer to negotiate limited rules on transparency,
and to expand the TRIMs agreement to outlaw more kinds of performance
requirements. However, the US could agree to broader negotiations
on investment as part of a deal over the negotiating agenda.
5.16 Given the European Union and the UK's
support to date for investment as a new issue, FOE is very interested
to note the following remark from the Department of Trade and
Industry: "The main question is whether this constitutes
a high priority for action at a multilateral level, given the
large and growing network of bilateral agreements touching on
this matter that already exist." 63 We hope this is an indication
that the UK will reject investment as a new issue.
Competition
5.17 The process of trade liberalisation
so far, has facilitated what is, in our view, "unfair competition",
pitting local producers against TNCs in areas where the capacity
to pay for advertisers, marketers, lawyers, lobbyists and other
such services determines success. In other words, liberalisation
has facilitated the extension of monopolistic economic environments.
Thus rules to rein in the power of monopolistic TNCs, and ensure
truly fair competition would, in theory, be desirable.
5.18 However, Friends of the Earth is concerned
that any new negotiations on competition will actually focus on
"fair" market access for foreign firms, rather than
beginning to control the current spate of mergers and acquisitions
which has led to some of the problems identified above. In other
words, competition could simply be another means of introducing
investment-related issues into the WTO, with consequences that
would be likely to benefit rich Northern TNCs rather than the
poor South.
Government Procurement
5.19 Government procurement is particularly
significant for some of the poorest developing countries, where
the government is the main economic agent (a significant proportion
of GDP is being handled via government contracts). Developing
countries are suspicious of any discussions that could lead to
deregulation and the prohibition of their right to control government
procurement. However, the industrialised countries are keen to
gain market access for industry in the developing world by forcing
government procurement decisions to be "non-discriminatory"
and subject to the WTO's binding dispute resolution system.
5.20 Government procurement could also be
an issue of concern for local authorities in the UK. Whilst it
is difficult to predict the precise nature of investment liberalisation
or government procurement negotiations, should they go ahead,
there is certainly a possibility that any such negotiations could
eventually undermine local or national government mechanisms to
protect local economies and the environment, including procurement
conditions, which remain, despite requirements for compulsory
competitive tendering in many functions. At worst, there could
be a risk of local authorities being drawn into international
legal disputes and massive compensation payments, which would
undoubtedly see off all but the bravest of legislators.
Trade Facilitation
5.21 Trade facilitation negotiations are
intended to dismantle the bureaucratic hurdles importers have
to jump. Whilst this sounds reasonable, from the environmental
perspective, such negotiations could be significant if they focus
on removing "bureaucratic" health and environmental
regulations enforced at borders. The UK Government has stated
that "It is not about removing justifiable controls."
64 FOE hopes this is indeed the case but recognises that there
have been previous disagreements over justifiable controls in
other areas—such as food standards (see above).
Electronic Commerce
5.22 Electronic commerce negotiations will
focus on duty-free market access for products sold via the Internet,
favouring the high-tech industrial North but disadvantaging importing
countries (who won't be able to raise revenue/protective taxes
on the back of such duty-free imports which would therefore be
likely to displace dutiable imports, reducing government revenues).
This could widen the gap between the rich North and poor South
even further, both in terms of gains to industry and benefits
for citizens. The average Bangladeshi citizen would have to spend
eight years' income to afford a computer. 65
Labour
5.23 Current negotiations to include labour
as an issue seem to be in disarray at present. Labour's champion,
the United States has largely backed off, and rather than advocating
discussions on labour rights and standards at Seattle, is now
pressing for increased co-operation between the WTO and the International
Labour Organisation. This would enable the US to avoid a battle
with developing countries over the inclusion of what they see
as a protectionist "social clause" in the WTO yet give
the impression of listening to their trades unions.
Forests
5.24 Forests are under severe pressures
world wide. Just over one fifth of the world's original forests
remains in large, relatively undisturbed ecosystems. 66 These
large boreal and tropical forests, along with remaining forest
lands in other countries, are vital sites of biological diversity.
Many indigenous peoples also depend on intact forests for their
traditional livelihoods. Trade-related activities such as logging,
mining, and large-scale energy and infrastructure projects are
the leading threats to these frontier forests. Many of these projects
are effectively subsidised by export credit agencies in the North
in the interests of Northern-based TNCs' exports of machinery,
technology and in some cases, arms. 67
5.25 Trade and investment liberalisation
in the forest sector can also increase deforestation. For example,
current US proposals on eliminating tariffs on wood and paper
products in the WTO have been predicted, by industry, to increase
consumption by 3-4 per cent. 68 Trade rules can also interfere
with forest protection policies such as preferences for local
ownership; labelling of sustainably cut timber; and controls on
the introduction of invasive species that threaten forests.
5.26 It has been reported that, in order
to demonstrate a "win" to the US Congress before the
vote on whether to give the President "fast-track" rights
for WTO negotiations, the US administration is seeking a pre-Seattle
settlement on forest products liberalisation. The US Government
is therefore in the process of pushing sectoral negotiations to
reduce tariffs on forest-products to zero and discuss non-tariff
barriers like certification.
5.27 This is a potential threat to schemes
like the Forest Stewardship Council (FSC) if discussions on non-tariff
barriers encompass eco-labelling (a long-standing target of the
US forest products industry). There is also the likelihood that
the eradication of tariffs may lead to increased wood consumption
and the prohibition of new government tariff schemes to promote
more sustainable forest management.
5.28 The inclusion of forests in a new and
comprehensive round would be a serious problem for environmental
groups, since it is much harder to persuade governments to drop
an issue if they are under pressure to conclude an entire round
of trade negotiations without rocking the boat.
Biotechnology
5.29 It seems fairly certain that trade
in biotechnology will be on the WTO's agenda. It now appears that
the US will attempt to deal with the issue in the context of agricultural
negotiations. This is dealt with in more detail under the Built-in
Agenda (see Section 4).
Environment
5.30 The European Union is proposing that
the WTO discuss a limited number of environmental issues in the
WTO. The EU's proposal covers multilateral environmental agreements;
the relevance of processing and production methods; eco-labelling;
and the precautionary principle. However, there seems to be no
intention to review the fundamental conflicts outlined in this
paper; and no guarantee that negotiations would improve the status
of the "environment". On the contrary, any WTO negotiations
on environmental issues could be used to reinforce the effective
primacy of global trade rules.
5.31 It remains to be seen whether the EU's
environmental proposal survives the negotiating table in Seattle.
It could simply be used by the EU as a negotiating "chip"
to be discarded when convenient. It will also face staunch opposition
from a number of developing countries who have little faith in
the motives of Northern governments. It is notable that richer
countries have refused to address or give way on many environmental
issues of concern to poorer countries (in particular in relation
to intellectual property rights and trade in genetically modified
organisms and products).
5.32 Southern and Eastern African governments
have the following view on trade and environment: "Trade
and environment should be discussed in the context of sustainable
development. African countries are as concerned as others about
the environment but insist that the issues be tackled with due
balance to environmental protection and trade promotion for sustainable
development. African countries are against the use of trade measures,
especially unilateral measures, for narrow protectionist purposes.
We are also against attempts to prevent multilaterally agreed
environment measures to deal with genuine environmental problems
such as the trade in hazardous wastes and products, and measures
to promote biosafety, through the fallacious claim that such legitimate
measures are against WTO rules. Furthermore, developed countries
must meet their commitments on financial aid and technology transfer
to African countries to enable more environmentally sound development,
including for exports products." 69
5.33 We also note that, although the European
Commission has initiated a Sustainable Impact Assessment (SIA)
of the proposed Round, it appears to have no intention of agreeing
to a review of the current state of affairs in relation to the
WTO. FOE can only conclude that the SIA is a public relations
exercise.
6. THE UNDUE
INFLUENCE OF
TNCS
6.1 Whilst member governments make up the
composition of the WTO, TNCs play a very influential role in what
is negotiated and decided. Arthur Dunkel—former GATT chief—is
reported to have raised concerns that the views of the business
leaders in the ICC were remarkably similar to the same views of
their governments in trade negotiations. This led him to question,
"Who is driving the process in trade policy—governments
or the business community?" 70
6.2 At the international level are two very
important lobby groups; the International Chamber of Commerce
(ICC) and the Transatlantic Business Dialogue (TABD). The ICC
calls itself the world business organisation for promoting trade
and investment; it was one of the main proponents of the MAI;
it has over 7,000 members including all the largest TNCs; it has
access to high-level decision makers and influence within the
WTO (Arthur Dunkel, the former Director General of the GATT is
also the chair of the ICC Commission on International Trade and
Investment, is a registered WTO dispute panellist and on the Board
of Nestle). In the run up to Seattle, ICC members have met with
for example the German Chancellor, pushing for the new issues
proposed by the Commission (investment, government procurement,
trade facilitation) and making sure that multilateral environmental
agreements and eco-labelling do not hinder free trade.
6.3 The TABD involves over 100 corporate
leaders advising both the highest levels of the EU and US administration
on trade policy and on the companies' positions regarding the
WTO negotiations. Their priorities for WTO mirror the EU position,
namely a comprehensive round including new issues such as investment.
TABD conferences bring together corporate leaders, the WTO Director-General
and the Commission's Commissioner for Trade. The EU and US co-chairs
to the TABD participated at the US-EU Summit in May 1997. The
structure of the TABD is broken down into "issue groups"
(for example, in the chair for the EU and US on the agriculture
and biotechnology issue group are representatives from Unilever
and Monsanto respectively). The TABD and the European Commission
have recently made the dialogue between the two even more formal;
for each TABD issue group, there is a designated high-level person
in the European Commission to act as a contact point, no doubt
to discuss trade policy and negotiations.
6.4 In the US, the private sector plays
a pivotal role in trade negotiations through the mechanism of
advisory committees. According to the USTR, this process has been
extremely successful during the Uruguay Round and the Asia-Pacific
Economic Co-operation (APEC) initiatives. The primary objectives
of the private sector advisory system are:
— to consult with the US government
on negotiation of trade agreements;
— to assist in monitoring compliance
with the agreements; and
— to provide input and advice on the
development of US trade policy.
6.5 At one level is the Advisory Committee
on Trade Policy and Negotiations (ACTPN), appointed by the President.
The committee has 45 members from representative elements of the
US economy with international trade interests. Its mandate is
to provide overall policy guidance on trade issues. This committee
has the ear of the President; around 19 members belong to TNCs
such as Monsanto, Eastman Kodak and IBM. At the next level are
the policy advisory committees to the USTR in the specific areas
of industry, agriculture, labour, defence, services, investment,
environment and intergovernmental affairs. There are also sectoral
advisory committees—so-called Industry Sector Advisory Committees
(ISAC) for Trade Policy Matters, which are composed of experts
from their respective fields. All these committees advise the
highest positions in the USTR including Carlene Barshefsky.
6.6 In the US, corporate lobby groups are
also very influential. For example, BIO representing the biotechnology
industry; or the Intellectual Property Committee which brought
together 13 major US corporations (including Monsanto, DuPont
and General Motors) and was instrumental in getting TRIPs onto
the GATT agenda. Transatlantic Business Dialogue (TABD) is also
influential (see below). Many corporate lobby groups sit on the
advisory committees.
6.7 In the EU, the process is no less formal.
Many play an important role but a number appear to have greater
influence on trade talks with the Commission:
— The Investment Network (IN) is comprised
of such companies as Fiat, ICI, Daimler, Carlsberg, British Petroleum,
Rhone-Poulenc and some other 50 corporations which was established
to identify the priorities for these corporations in any WTO investment
agreement. The Network had its first meeting with the Commission
in late 1998 to establish "consultation and partnership with
European business interests over investment issues".71
— The European Services Network (like
the IN) was established on the encouragement of the European Commission
"to advise EU negotiators on the key barriers and countries
on which they should focus on in these negotiations [on the General
Agreement on Trade in Services]". The impetus behind the
ESN was clearly the pivotal role that companies played in another
network—the Financial Leaders Group (FLG)—which assisted
and worked closely with the Commission on the Agreement on Financial
Services. Not surprisingly, the (co)-Chairman of the FLG and the
ESN is the same person—Andrew Buxton, Head of UK based Barclays
Bank. Clearly, their influence and power over trade talks within
the Commission is considerable; Leon Brittan confirmed at the
first meeting of the ESN in January 1999: "You [the ESN]
are the driving force of the consultation system which we have
established; my door is open for any matters of concern".72
— The European Roundtable of Industrialists
(ERT) has pushed for investment liberalisation for a long time.
Its members include the largest TNCs in Europe—including
BP Amoco, Renault, Philips, BT, Unilever, Rhone-Poulenc,
Fiat, ICI, Royal Dutch Shell, Bayer and Carlsberg. Its main objective
has been to get investment into the WTO. To this end, the ERT
has established a working group on foreign economic relations.
At its head is Peter Sutherland, former GATT Director General
and now chairman of BP Amoco. The ERT has already indicated its
willingness to work with the Commission and is sending a delegation
to Seattle to assist the Commission in the preparation of investment
in the WTO. 73
6.8 Other influential lobby groups in the
EU include the Union of Industrial and Employers Confederations
of Europe (UNICE) which has regular meetings and contacts with
the Commission.
6.9 Again, formal links exist in Japan between
companies and government officials. This is conducted through
Keidanren (the Japan Federation of Economic Organisations representing
the business Community). They have various Committees such as
Trade and Investment (in 1998, the chair was the CEO of Mitsubishi),
the Committee on Environment and Safety (chaired by the Chairman
of Nissan) and Comprehensive Strategy (chaired by the Chairman
of Toyota).
6.10 Specific companies are also involved
in lobbying:
— Robert Shapiro, chairman of Monsanto
is the chair of the President's Advisory Committee for Trade Policy
and Negotiations (ACTPN) which gives recommendations on US Trade
Policy. The US Trade Representative for much of the Uruguay Round,
Mickey Kantor, is now a Board member of Monsanto. He will be serving
as trade counsel for the US wheat industry at the Ministerial
Conference in Seattle. Monsanto staff have constantly exchanged
positions within US regulatory bodies; the FDA official responsible
for US labelling policy was Michael R Taylor who, before moving
to the FDA, was a partner in the law firm that represented Monsanto
in the approval for Posilac, the Bovine Growth Hormone. He has
since moved back to work for Monsanto.
— Some of the world's largest companies—including
Microsoft, Boeing, Bank of America, Ford Motor, General Motors,
Hewlett Packard, Procter and Gamble and Weyerhauser—are
paying hundreds of thousands of dollars for privileged access
to key ministerial and other negotiators at the Seattle Ministerial
Conference. This is being organised by the Seattle Host Organisation
co-chaired by Bill Gates. The companies' sponsorship will enable
them to "become part of a process to develop substantive
business input to the WTO through a series of business programs".
In addition, they will be able to attend receptions and dinners
for heads of states, ministers and delegates with preferential
seating. 74
6.11 Friends of the Earth is particularly
concerned with the involvement of industry, the way they drive
the agenda, the fact that their voices are loud enough to be heard,
yet for some reason civil society groups appear to have less legitimacy.
The WTO is for trade, therefore listens to traders, however fair
they try to be about it. There is an imbalance.
7. STOP THE
ROUND
7.1 Many Friends of the Earth International
member groups have signed onto the "Statementfrom members
of International Civil Society Opposing a Millennium Round or
a New Round ofComprehensive Trade Negotiations". This statement
has now been signed by 1,114 organisations fromover 87 countries
(the full text and an updated list of signatures can be found
at http://www.foe.co.uk/camps/sdru/stopround.html).
7.2 This statement states that "we
oppose any further liberalisation negotiations, especially those
which will bring new areas under the WTO regime, such as investment,
competition policy and government procurement. We commit ourselves
to campaign to reject any such proposals. We call for a moratorium
on any new issues or further negotiations that expand the scope
and power of the WTO. During this moratorium there should be a
comprehensive and in-depth review and assessment of the existing
agreements. Effective steps should then be taken to change the
agreements. Such a review should address the WTO's impact on
marginalised communities, development, democracy, environment,
health, human rights, labour rights and the rights of women and
children."
7.3 FOE believes that it is entirely feasible
to stop the Round. As detailed above many developing country governments
are extremely unhappy about the prospect of bringing new issues
into play. The French environment minister has also made no secret
of her concern and her support for a review of the existing agreements:
"There are in my opinion two absolutely necessary conditions
to the success of the future multilateral trade negotiations.
First is to ensure the transparency of the negotiations (parliament
should be consulted at an early stage of the negotiations). The
second absolutely necessary condition to the commitment of the
future round of negotiations, is that a serious, exhaustive and
critical assessment of the agreements signed in Marrakech be drawn
up." 75
7.4 We also note increasing civil unrest.
Protests at the Geneva Ministerial in 1998; at the G8 Economic
Summit in Cologne in June; in London in the summer of 1999; and
in France in response to the US sanctions on French exports of
gourmet foods all demonstrate the absolute frustration that ordinary
people are beginning to feel. This frustration is likely to trigger
further protests in Seattle in November.
8. CONCLUSIONS
8.1 In conclusion, Friends of the Earth
would like to suggest that the Environmental Audit Committee might
wish to raise the following questions in conducting this inquiry:
— Does the UK Government support a
review of the Uruguay Round and how would it rectify the findings
of the review? If it does not support such a review, what was
the rationale behind such a decision?
— How does the UK Government plan to
make the Millennium Round a "development round"? What
difficulties does it foresee promoting this view to the European
Union and the WTO?
— How does the UK intend to evaluate
the success of any round in development terms?
— What is the UK Government's position
on services, particularly in respect to the National Health Service
and education? Can the Government confirm that they will oppose
any moves to negotiate the status of public services in the Millennium
Round?
— What is the UK's position on environmental
issues, not just regarding the relationship of trade with existing
Multilateral Environmental Agreements but also the environmental
aspects of World Trade Agreements (ie the TRIPs) and the Biosafety
Protocol?
— What is the UK's position on agricultural
subsidies and their strategy for these subsidies within a Millennium
Round?
— What meetings have the UK Government
and UK negotiators had with industry and industry lobby groups
regarding a new round and what were the outcomes?
September 1999
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