Tuesday, 7 November 2006

WTO Hatches Deal in Hong Kong
[courtesy of Kairos]

Negotiating teams from the 149 member states of the World Trade Organization (WTO) converged in Hong Kong December 13-18, 2005, for the 6th Ministerial Conference. The last two attempts at moving global free trade forward had ended in spectacular failure: Seattle in 1999 and Cancun in 2003. The clock was ticking. The legitimacy of the WTO – indeed the very idea of free trade – was on the table. A third failure could cause a fundamental shift for the future of globalization. In this pressure cooker scenario, on par with a thriller, the week-long meeting was full of intrigue, uncertainty, conflict, manipulation, posturing, deception, and – sometimes – action. The exact outcome was never quite clear, the storyline taking a different path with each new storyteller. In fact, the ending – after a week’s worth of high drama – was superficial at best, in true Hollywood fashion. Regardless, there is cause for concern. The tepid deal hatched in Hong Kong validates the current unjust institution. Most disturbingly, it brings with it new dangers, new ways to cement global corporate power at the expense of people, communities and the environment. Prologue: Ready for Landing As the time arrived to get on the plane to Hong Kong was fast approaching, a flurry of activity took place in Geneva. As in previous Ministerial Conferences, the Chairs worked behind closed doors with a “selected group of countries” until the 11th hour, patching together a draft Ministerial Declaration by early December. This Declaration relied on each Negotiating Chair (Agriculture, NAMA, and GATS) submitting their Report as an Annex to the Declaration. As negotiating teams landed in Hong Kong and made their way to the spectacularly glossy Hong Kong Convention Centre, past the shiny, bountiful shopping boutiques of Prada, Cartier, and Yves St. Laurent, it was far from clear that the meeting would result in a deal. More than anything, the legitimacy of the WTO hung in the balance. Having so much to lose, the US, EU, Canada and others were determined to salvage the flagging institution while many feared that the narrow self-interests of some Southern countries would dominate the negotiations, resulting in a bad deal for all. At the same time, thousands of activists from around the globe also arrived in Hong Kong and marched in the first of several protests planned throughout the week. Having no real opportunity to have their voices heard behind the barricades, the opposition was strong on the streets of Hong Kong. Kong Yee Sai Mau! (No WTO!) The pressure was on. The final curtain opened as the lights went up on this high-stakes drama. ACT I: Hong Kong, China, 2005 The 6th Ministerial Conference opened with a rousing speech from WTO Director-General Pascal Lamy. This was countered by a rousing demonstration of activists who seized the opportunity to remind negotiators of the undemocratic nature of the talks and the billions of people whose lives are impacted by back-room deals. Lamy, however, insisted on the so-called participatory nature of the WTO: “You all have the right to speak, the right to agree, the right to disagree. In sum in spite of all criticism, the WTO decision-making process is democratic.” (WT/MIN (05)/13 page 2-3) The US and the EU were crystal clear from the outset that if they were to “give in” on agriculture they would need to get something in return in Services or NAMA. Yet their obligations under agriculture were pre-existing obligations stemming from the Uruguay Round in 1994. To now turn them into a negotiating item, making them a trade-off to ensure further liberalization under Services and NAMA, was absurd and fundamentally unjust. Canada’s position was disappointing but not surprising. Although Minister of International Trade Peterson had repeatedly committed to a defensive position vis-à-vis preserving Canada’s supply management system and state trading enterprises, Canada went into Hong Kong with an aggressive agenda on NAMA and Services. Peterson stated: “In NAMA we seek real improvements in market access,” and on services, added, “Canada feels that a plurilateral negotiating process can improve the quality of offers….” (WT/MIN (05)/ST/20, page 1) The Canadian government was clearly choosing to advocate for corporate interests searching for expanded markets over a development agenda. High drama at its finest The WTO is incredibly undemocratic in countless ways. The very nature of the Conference is a no-holds barred, no-sleep fest where major decisions are made late into the night by whomever is left standing in the ‘invitation-only’ Green Room. It has the air of a buddy-buddy old boys club that you are either in or want to be in. Jokes are made about the lack of sleep and number of coffee cups consumed. The Green Room itself, a negotiating tactic recognized to be counter to consensus decision-making, is now spoken about openly and figures as the butt of many jokes. It is scandalous that decisions impacting the lives of billions of people are made in a pressure cooker that literally relies on negotiators sleep-deprived capacity to function in order to make a deal. As a result, although the Global South came to Hong Kong with alternative proposals and demands, very few of them made their way into the draft texts or the text that ultimately was agreed upon. According to KAIROS partner Tetteh Hormeku of Third World Network Africa, the Less Developed Countries (LDCs) submitted several hundred proposals on agriculture, only five of which made it into the official text for discussion. The G20 submitted a market access proposal; the G90, the ACP (Group of 77 from the African, Caribbean and Pacific Regions), and others presented proposals on different aspects of negotiations including agriculture, services, and NAMA. On NAMA, Venezuela, Namibia, Argentina and South Africa wrote a joint letter demanding that flexibility be treated as a separate issue from the formula reduction. In Services, another group of countries, the Philippines, Kenya, Venezuela, Mauritius, and South Africa, highlighted the undemocratic nature of the process by which Annex C which allows for sectoral and plurilateral negotiations was included in the Hong Kong Declaration. The LDCs held firm on the need for Duty Free, Quota Free access for their goods while CARICOM (Caribbean Community) demands centred on the precariousness of small economies within global trade, emphasizing the need for Special and Differential Treatment. Indonesian Trade Minister Mari Pangestu, spokesperson for the G33 countries, consistently emphasized their key demands for Special Safeguard Measures and Special Products in agriculture, two policy tools that would enable Southern countries both to impose border restrictions on goods coming in and also exempt key products from liberalization. Yet, in the upside down world of global free trade, the selection of proposals – deciding which letters become official correspondence and which ones don’t – and the weight given to negotiating positions was clearly skewed in favour of Northern positions, which in large measure were designed to secure markets for the most powerful global actors, the multinational corporations. Act II: Negotiations reach a climax At the mid-point, the stalemate was at its peak, the tension was palpable and something had to give. Thus, on December 16th, the G20, G33, the ACP, LDC Africa group, Small Economies and the G90 held a historic press conference announcing their newly formed alliance, the G110 (Group of 110 countries). They declared that by coming together they would harmonize their negotiating positions for the first time. The group issued a statement reiterating their now joint support for (a) the complete elimination of export support measures by 2010; (b) the importance of Special and Differential Treatment in agricultural negotiations; (c) the role of Special Products and Special Safeguard Mechanisms as a means of addressing food security, rural development and livelihood concerns of developing countries; (d) LDC duty-free and quota-free market access; and (e) specific measures to provide adequate responses to the issues raised by small, vulnerable economies. (Joint Statement Dec.16th, 2005) Speculation was immediate and fierce. What did the future hold for the negotiations? The combination of so little movement and so much frustration was reaching a climax. As the spokesperson for each group within the G110 rose and linked their arms in an act of solidarity, observers were sure that the constantly turbulent WTO was on its way to another spectacular crash. Meanwhile, on the streets of Hong Kong, each day brought with it a number of workshops on alternatives, demonstrations and protests. The strongest voices on the ground came from Via Campesina, the small farmers and farm workers grassroots movement. The media focused its attention on the Korean farmers who came to Hong Kong in large numbers. From the first day of protest, they were well-organized, vocal and provided strong leadership. They repeatedly highlighted the forced exclusion of those impacted most by these policies. As the Ministerial Conference opened, numerous men and women jumped into ice-cold water and tried to gain access by swimming to the Convention Centre. On December 17th, they led the march to the Convention Centre, attempting to push past police into the inaccessible meeting. Their courage on the front lines was an amazing display of sheer determination stemming from their understanding that this was a life and death issue. In recent years, thousands of farmers, facing overwhelming despair, have killed themselves; others have felt compelled to kill themselves to call attention to the death facing all farmers and to demand action. That night, police used brute force, rubber bullets, tear gas, and attack dogs to squelch dissent. Hundreds of people were arbitrarily arrested, denied food and water and held without charges. To date, three of those prisoners remain in jail. Addressing accusations against Via Campesina of violence, Jose Bove charged: “The WTO is institutional violence. The WTO is killing farmers. We are fighting for our lives.” That same day, inside the Convention Centre, the first revised Text was received by the Heads of Delegation (HoD) Meeting. Its lack of movement on the Development Round triggered a strenuous critique. Incredibly, the agriculture discussions had barely moved, with no end date for export subsidies, no agreement on the cotton issue, and no clear integration of Special and Differential Treatment disciplines (SDT). The ACP issued a clear rejection of the Swiss formula on NAMA, which would force countries with higher tariffs, namely the Southern countries, to undertake deeper cuts than countries with lower tariff starting points, namely the Northern countries. In Services, several countries expressed concern about the Annex C text, both for the blatantly undemocratic way in which the text was introduced as well as its content which made a commitment to plurilateral negotiations. Canada, as one of the supporters for the new text and consistent with its short-sightedness regarding possible implications for Canadians, was a strong advocate for its full acceptance. Passion, anger, and concern were evident in the powerful comments coming from the South. On behalf of the LDCs, the Zambian representative declared “development at a deadlock” adding that “the text is not positive enough for the LDCs. There are 700 million people living in the LDCs and they represent less that 1% of trade. How can this be delayed!” Saint Lucia, on behalf of the Caribbean countries, stated: “The text is unsatisfactory and lacks a clear development focus … this text can mean food on the table of our families or not, education or not, healthcare or not.” The Zimbabwean representative, the last to speak, best summed up the deal by stating, “Someone said we needed a platform, we hope it will not propel us into a pond full of crocodiles.” (Informal report on HoD Meeting) Act III: The Hollywood ending And so amidst an air of acute disagreement, high tension, and melodrama the bets were in favour of collapse. Yet, somehow within the next half dozen hours an agreement was hatched and dispatched. And that agreement – for the most part – stayed the same as the original text, committing countries to plurilateral negotiations in Services, the harsh Swiss Formula of tariff reduction in NAMA negotiations and making a few “debateable” gains were had by the Global South which upon closer scrutiny are clearly not firm concessions. 2013 is the date for export subsidies but the declaration states that this date will be confirmed when modalities are complete. The cotton agreement talks about export subsidies but not domestic subsidies, the most problematic and highest quantity while duty-free and quota-free market access for LDCs commitment does not go far enough because the declaration only states “on a lasting basis.” Moreover, duty-free and quota-free market access will be provided for at least 97% of products originating from LDCs. Again this apparent gain is countered by the reality that the remaining 3% will enable Northern countries to protect against key products produced by Least Developed Countries and open their markets to those products that are only nominally produced When it came time to accept the deal, it seemed only two countries were courageous enough to go against the ‘big boys’ and voice their concerns. Much to the chagrin of Conference Chair Donald Tsang, Cuba and Venezuela rose to express their concerns in the form of exceptions. As to others, even if they wanted to disagree, the pressure was on, particularly from the new Quad members Brazil and India, for everyone to accept the deal. Consequently it would be too politically costly for Cuba and Venezuela to derail the week’s product by themselves. They had to go along but they did so reluctantly, articulating exceptions in both the NAMA and GATS sections of the Ministerial. At the closing session they requested that the exceptions form part of the final document, hoping that the legal standing of the exceptions would lead to a future favourable outcome for the Global South. Where was the historic Group of 110 countries who had vowed to stick together and harmonize their positions? Where were the African voices – those who may have received some immediate gains but at what future cost? Perhaps everyone was just plain exhausted; perhaps they put vast amounts of trust in Brazil and India; perhaps because so much was made of the lack of movement in agriculture that once there was movement there was no way NOT to accept the deal, regardless of the cost. Or perhaps, at the end of the day, the pressure and political cost was simply too high. And so a deal that never should have been, materialized from Hong Kong right on schedule on December 18, 2005. Epilogue: Destination unknown Chairman Tsang’s gavel banged one final time, signalling the end of the 6th WTO Ministerial. The Doha Development Round and indeed, the WTO had been saved – barely. Any hopes for gains in the development agenda though, have once again been reduced to nothing more than rhetoric. Disturbingly, this Ministerial Declaration provides a dangerous new platform for future negotiations, even though there is still so much that has yet to be accomplished within the current agenda. In order for the Doha Development Round to be completed successfully a real deal on modalities – spelling out and agreeing to the frameworks and formulas – needs to be accomplished by the deadline date of December 2006. In the meantime, within member countries there is still a lot of concern and disagreement on many aspects of the AoA, GATS, and NAMA agreements. Without doubt, Hong Kong dramatically increased the level of solidarity, accountability, and harmonization among Southern countries as they worked to define and shape their relationship in the context of global power. The WTO urgently needs to be put on its head. It needs to be dismantled and replaced with an alternative model that places people, communities and the earth at the centre. Communities need to have policy flexibility and sovereignty: the right to choose their own development path – a path that recognizes the role that women play in the formal and informal economy and is ecologically sound. Such globalization would be intentionally global by building community, solidarity and alternatives across race, class, sectors, and borders. Such globalization would lift up and share ‘on the ground’ alternatives and support Southern positions that are of the people and for the people. Each Ministerial brings with it new signs resistance to the Northern corporate agenda, particularly in Latin America, but elsewhere too. People whose lives have been decimated by neo-liberal globalization and free trade are electing governments that they see as responsive to their needs. These governments and the G110 alliance have the potential to derail the WTO and demand a new way forward for global trade. The turbulent flight of the WTO plane has landed it back in Geneva once again. Typical of any major Hollywood epic, as this one came to a close it laid the groundwork for its sequel. The passengers are all at home unpacking what was gained, what was lost and how to move forward. A pivotal shift to a just trading system or a final cementing of corporate rights hangs in the balance. People and movements the world over rise early to strategize, resist, pressure, and transform the corporate agenda of the WTO as the stage lights go down, and the curtains are drawn for a brief intermission.

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