TWN Info Service on WTO Issues (July04/21)
28 July 2004
Third World Network
NGO Briefing on Developed Countries’ Tactics to Split Developing Countries
Below please find a report in the SUNS (South-North Development Monitor) on a press briefing held by NGOs in Geneva on 26 July 2004 regarding tactics used by developed countries to try to divide the developing countries in their WTO positions and negotiations.
It is reproduced with permission of SUNS. For permission to re-circulate or re-use it, please contact firstname.lastname@example.org
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North attempts to split developing-country alliances
Published in South-North Development Monitor (SUNS) 27 July 2004
Rich countries are continuing to bribe, bully and threaten developing countries in the WTO to get their own way over global trade talks, the development agency ActionAid stated in a new report released Monday on the eve of the meetings of the WTO General Council, which is aiming to reach agreement on a framework for restarting the Doha Round negotiations.
The report ‘Divide and Rule: the EU and the US response to developing-country alliances at the WTO’ looks at what happened at the WTO Ministerial in Cancun and how both the US and the EU have used bullying and arm-twisting tactics since Cancun to try and split the developing country alliances such as the G90, the G20, the G33 and the African Group and force their own interests at the expense of the poor countries.
At a press briefing Monday, Chakravarthi Raghavan, Chief Editor of the South-North Development Monitor (SUNS) said that as early as 1986 he had witnessed this kind of tactics and relationships in an attempt to push the developing countries back into the colonial era of economic relationships.
Since then things have improved in one sense but has created problems in another sense. On the one side, the numbers of journalists now taking interests in these matters and following them in great detail have increased.On the other side, there is a plethora of information that is misleading due to the unavailability of the full picture of what is going on inside.
Non-transparency has become translucent, he added, and it’s difficult for the public to know. But apart from the question of external transparency, there is also the question of internal transparency in that delegations also do not know what goes on.
He cited the example of the current NAMA talks in which the NAMA Chair is holding consultations individually and with small groups of countries, showing them proposals to elicit their views, but not giving them the paper, with the result that delegations could not even consult their capitals. This is a difficult process but now parliamentarians, activist organizations and others have become conscious of what is going on at the WTO in the interests of big corporations, and are determined to prevent it.
Aftab Alam Khan, head of ActionAid’s Food Rights Campaign said that “it is time for radical reform at the WTO. Poor countries should remain vigilant and united during the General Council meeting. The draft negotiation framework clearly favours the rich. Developing countries withstood the dirty tricks of the EU and US during the last Ministerial in Cancun. If there is no agreement this week, rich nations and the WTO itself will have once again failed to deliver any benefits for the world’s poorest people.”
Khan cited several ways in which developing countries are subject to the arm-twisting and blackmailing practices of the EU and the US such as through cuts to aid budgets or the blocking of essential loans and debt relief that is crucial for the weakest economies. Tanzania and Kenya were among countries threatened in the run-up to Cancun; loss of trade preferences, especially the cancellation of market access preferences for key exports; and personal attacks against delegates that persist in defending their own country’s interests against the demands of richer countries and these threats have been followed up in the past with pressure on developing countries to dismiss ‘troublesome’ ambassadors from their positions, as was the case with Dominican Republic’s ambassador at the WTO, Dr Frederico Cuello.
Khan also accused Japan of trying to influence the developing countries through the aid it provides to them and said that these bullying tactics give rise to an unfair agreement. Both the rich countries and the WTO have not moved away from the Uruguay Round. And their mind-set is still based on those negotiations, and they are adopting the same practices.
Developing countries now have a better understanding of WTO issues and greater political power, Khan said, which the developed countries are failing to recognize.
Due to the unfair agreements, people in developing countries are struggling with their lives and livelihood, Khan said, noting that due to subsidized sugar exports of the EU, some 36,000 poor people have lost their livelihoods in Swaziland. In Ghana, poor women farmers are not able to sell their tomatoes due to cheap subsidized imports from Italy. Moreover, in India, farmers are not able to feed themselves due to trade liberalization policies and the Tamil Nadu state has introduced programmes to feed farmers.
Khan said that there has been propaganda in the last few weeks in the press that the failure of the General Council would be due to the poor countries. This was not true, he said. If there is no agreement, the blame will not be on the poor countries but on the WTO system because the system would not be able to deliver a good, just and fair agreement for poor countries.
Khan added that poor countries should not be pressurized over achieving consensus and that the WTO is over-emphasizing the issue of consensus. In the Uruguay Round consensus was reached on agriculture but the poor countries have suffered from that and these countries are still struggling for the last three years on the reform of that agreement.
Raghavan said that if there is no agreement reached at the WTO, the future career opportunities of a few people will be lost, but not international trade nor does he accept the argument of WTO Director-General Supachai Panitchpakdi that if there is no agreement, the negotiations won’t resume for years. He added that in fact this might be good in that, easier issues could then be taken one by one, and negotiated.
Far from pursuing a development round at the WTO, the world’s most powerful nations have turned against the needs of poor countries. The EU, US and other rich countries have succeeded in their endeavour to protect their agricultural sectors, while ignoring the demands of developing countries, ActionAid said.
During the Cancun Ministerial, the bullying and arm-twisting tactics of the EU and the US seriously backfired when, in the face of intense pressure, developing countries formed alliances, such as the G20, G90 and G33, to defend their trading interests. Unwilling to accept this shift in power dynamics, developed countries, such as the US, adopted a ‘divide and rule’ response, with a series of aggressive attacks, designed to undermine the new alliances and pick off countries.
Since Cancun, ActionAid said, there has been a renewed set of attacks against developing countries. Countries have been threatened with loss of trade preferences or exclusion from free trade negotiations with the US if they do not leave the G20. Most recently, the tactics of rich countries have changed and attempts to break countries away from the G20 have been replaced with a more sophisticated variant of the ‘divide and rule’ strategy, trying to set developing country alliances against one another.
ActionAid added that the EU’s proposal to the G90 in May 2004, offering a ‘round for free’, is an empty offer aimed at causing friction between developing country alliances.
The ActionAid report points to the dual approach, of a more subtle EU and more out spoken US, in trying to undermine developing country unity. In the words of an Asian delegate interviewed for the report: “The EU might be digging your grave but will be smiling at you. The US will dig the grave, but with a grave face.”
The report cites how the US was also prepared to use more ‘devious’ methods to undermine the position of developing counties. It refers to Uganda, for example, where Rosa Whitaker, the former US Assistant Trade Representative for Africa, was working as an advisor to Uganda’s President Yoweri Museveni, as well as other African leaders, in the period prior to the Cancun ministerial, with particular reference to Uganda’s attempts to benefit from the US AGOA. When Whitaker heard of the positions that the Uganda delegation would be supporting along with other African countries at Cancun, she warned Museveni that this would be considered hostile to US interests, according to the ActionAid report.
Museveni duly told the Uganda delegation not to ally itself with the African position at Cancun.
Raghavan said a few weeks ago the Los Angales Times had run a story about Rosa Whittaker, namely that even when she was Assistant USTR, looking after Africa and AGOA, and in violation of US laws on conflict of interest, had set up a consultancy and lobby firm, and had formed local partnerships in some African countries with personalities related to or close to those in authority. He cited one or two countries including Uganda where this had happenned.
The report also said that both the EU and the US went on the offensive in the immediate aftermath of Cancun, blaming the G20 for the blockage in the WTO negotiations. Among the G20, India and Brazil were singled out for “particularly vicious treatment.”
Attempts to break down the G20 membership continued after Cancun with most extreme pressure being exerted on those countries aiming to negotiate FTAs with the US. Guatemala, Peru, Ecuador, Colombia and Costs Rica all left the G20 in the weeks following Cancun in response to threats that their trading arrangements with the US would be jeopardized if they continued as members.
However, according to the report, the attempts to contain the G20 were limited in success. Tanzania and Zimbabwe joined the group as new members in December while Thailand and the Philippines have resisted the pressure on them to leave.
The ActionAid report calls on all WTO members to address the negotiation procedures of the WTO as a matter of urgency. With specific regard to the General Council meeting, ActionAid recommends that: WTO members stop using political, economic or personal threats against other members in order to manufacture consensus in international trade negotiations; and transparency of WTO meetings, such as the General Council, is guaranteed as far as possible: meetings are open to all members, are minutes are taken and all meetings of exclusive groups in ‘green rooms’ are discontinued.
At another press briefing by several NGOs, including the Institute for Agriculture and Trade Policy (IATP), Focus on the Global South and SEATINI, Chandrakant Patel of SEATINI said that his organization had sent a letter to ministers in the African region and elsewhere setting out its views on the draft text.
The letter says that the draft text is flawed, as it does not provide the necessary balance between the positions of developing and developed countries. Whilst there is considerable degree of specificity concerning issues of concern to developed countries, those of concern to developing countries are treated in a vague and non-committal fashion.
Patel said that the draft text further contributes towards efforts now underway to drive a wedge between the positions of the G90 and the G20.
Referring to arbitrarily defined categories of countries such as ‘preference dependent’, ‘commodity dependent’ and ‘small and vulnerable countries’, the text gives the impression that special measures will be enacted in favour of such categories. This is highly unlikely and misleading, and possibly subject to legal challenges within the WTO, he said.
Patel added that the WTO recognizes only two categories and they are the least developed countries (LDCs) and the net-food-importing-developing-countries NFIDCs.
Aileen Kwa of Focus on the Global South, a Bangkok-based NGO, introduced a new international initiative called the Agriculture Trade Initiative from the South (ATIS) that aims to provide an alternative vision of collective self-reliance of the South; elaborate directions for agriculture trade that are feasible and desirable; and to mobilize peasant farmers, agricultural producers and workers threatened by the Agriculture Agreement and to put pressure on governments at the WTO to adopt strategies and stances that safeguard and further their interests.
The initiative is by a group of concerned people from countries that are members of the Group of 20 within the WTO.
The ATIS also released a statement signed by among others, Walden Bello (Focus on the Global South), Alejandro Nadal (Mexico), Tahir Hasnain (WTO Watchgroup, Pakistan), Yash Tandon (SEATINI), S.P. Shukla (Former Indian Ambassador to the GATT, and a former member of India’s Planning Commission) and Devinder Sharma (Forum for Biotechnology and Food Security, India).
In its statement, ATIS rejects the basis of the Agreement on Agriculture and appeals to the G20 countries to: reinstate Quantitative Restrictions (QRs); and continue the process of negotiations launched by the Group of 77 in their ministerial meeting in New Delhi in 1985.
Known as the Global System of Trade Preferences among developing countries, these negotiations offer a comprehensive multilateral framework for developing countries to strengthen their mutual trade and economic cooperation.
Meanwhile, a group of parliamentarians, political representatives, organizations and individuals numbering about 160, mainly from India, but also from Europe and North America have addressed a letter to the Chair of the Special Session of the Committee on Agriculture, Ambassador Tim Groser of New Zealand stating that each nation should have the right to protect its agriculture.
The letter said that food is a basic human right and therefore not just like any other commodity. Almost 90% of the agricultural products in the world are consumed domestically and thus in practice remains outside of international trade while only 10% is traded internationally.
The letter calls for measures to restore import protection through quantitative import restrictions or tariffs. This will be an effective measure for each country to secure special strategical products and will serve as the special safeguard mechanism to protect rural livelihoods.
It also calls for protection of farmers’ income by state support on products for domestic consumption, but not on products for export or products that ends up on the world market, as well as elimination of export subsidies, export credits and credit insurance. There is a need for an effective system of market regulation and supply management that stops dumping.