Building capacity to help Africa trade better

Community groups call for fairer trade rules at WTO meeting


Community groups call for fairer trade rules at WTO meeting

Community groups call for fairer trade rules at WTO meeting
Photo credit: Mark Kelley

Today, Trade Ministers from only 35 countries will attend a “mini-Ministerial” in Morocco which is intended to solidify the agenda for the upcoming 11th Ministerial Conference of the 164-member WTO (MC11) to be held December 10-13, 2017 in Buenos Aires, Argentina.

Members of 300 civil society organisations from over 150 countries have sent an urgent letter to the Members of the World Trade Organisation, raising concerns about a dangerous new agenda being pushed by some WTO members under the rubric of ‘e-commerce’.

The letter was organised by the global Our World Is Not for Sale (OWINFS) network and signed by the Australian Fair Trade and Investment Network (AFTINET), a network of 60 community organisations and many more individuals advocating for fair trade based on human rights, labour rights and environmental sustainability.

The letter urges Trade Ministers not to support proposals on e-commerce, trade in services and fishing subsidies which would benefit global corporations but reduce the ability of governments to regulate in the public interest. 

It also calls on governments to positively support proposals which will reduce unfair agricultural export subsidies in industrialised countries and enable food security measures to be taken by developing countries, and to support the greater flexibilities for developing countries which were supposed to be in the original WTO Doha development agenda.

Dr Patricia Ranald from AFTINET said, “We urge the Australian government not to support rules which would restrict their ability to guarantee effective data privacy rules and to regulate essential services in the public interest.

“The government should support food security measures and greater flexibilities for developing countries.”

An extract from the letter appears below.

What Should Be on the Agenda: Fixing Bad Existing Rules Not Expanding Them

Both e-commerce rules and domestic regulation disciplines would amount to an expansion of the WTO. But the vast majority of WTO members have argued that existing unfair and damaging rules must be fixed before the WTO can be expanded. This fight was at the heart of the last Ministerial in Nairobi, which concluded with ambiguous language acknowledging that some countries wanted to bring in other issues, while others (the overwhelming majority) want to continue with the unfinished development agenda that had been the reason they had agreed to the Doha Round.

Unfortunately, some WTO members are obstinately refusing to move forward on what should be the core agenda: to fix the unjust rules that hinder global efforts to ensure true food security, sustainable development, access to affordable healthcare and medicines, and global financial stability, outlined in the Turnaround Statement of the global Our World Is Not for Sale (OWINFS) network, endorsed by hundreds of civil society groups from around the world. At a minimum, in Buenos Aires, WTO members should focus on transforming the global agriculture rules that restrict developing countries from ensuring food security for their populations (while allowing big  agribusiness nearly limitless public subsidies) and increasing flexibilities for developing countries to be able use trade for their own development.

Agricultural Rules Must Prioritize Food Security and Food Sovereignty

The top priority for a genuine development agenda would be transforming the current rules on agriculture. Unbelievably, it is the rich countries, not the poor, which are currently allowed to subsidize agriculture under WTO rules – even in ways that distort trade and harm other countries’ domestic producers. The tens of billions of dollars of subsidies allowed in developed countries per annum encourage overproduction and artificially depress world prices, wiping out farmers’ livelihoods in countries that should be benefitting from global agricultural trade or production for domestic consumption. Thus, a major outcome in Buenos Aires should be to reduce the amount of subsidies under the “domestic support” negotiations – including subsidies in the so-called “Green Box” category of subsidies when these actually have trade-distorting impacts.

Given the existing subsidies, developing countries should also be able to increase tariffs to protect domestic production when faced with import surges. Unfortunately, some countries are opposing negotiations towards a workable “Special Safeguard Mechanism (SSM)” for developing countries. An outcome on SSM – unconditioned on further tariff cuts – at the upcoming Ministerial would greatly enhance developing countries’ ability to achieve food security, promote rural development and safeguard farmers’ livelihoods – and would be a step towards removing WTO constraints on Food Sovereignty.

By contrast, most developing countries are only allowed miniscule subsidies. But the SDGs entreat countries to increase investment in sustainable agriculture. Also, there is growing acceptance of the “right to food” as a human right. One of the international best practices for supporting farmers’ livelihoods, ensuring food security, and promoting rural development is “public stockholding,” in which governments guarantee farmers a minimum price for their production, and distribute that food to hungry people within their own borders. But these programs, implemented in dozens developing countries, often run afoul of WTO rules – even though the agriculture supported is not traded in global markets.

The majority of WTO members have agreed that domestic public stockholding programs should not be constrained by antiquated WTO rules. But the changes have been steadfastly blocked by the United States, the EU, Australia and other big agribusiness exporters. And now reality is being turned on its head as China and India are being accused of being the biggest subsidizers, when their payments per farmer on a per capita basis remain miniscule – only a few hundred dollars per farmer, as compared to tens of thousands for the United States.

WTO members agreed to find a permanent solution to the public stockholding programs by December of this year. Unfortunately the positions of countries representing big agribusiness exporters have remained entrenched. In Buenos Aires WTO members must deliver a positive resolution on the public stockholding issue that allows all developing countries to implement food security programs without onerous restrictions that are not even demanded of developed countries’ trade distorting subsidies.

More Flexibility for Development Policies

Along with transforming the global rules governing agricultural trade, developing countries have long advocated for other changes to the existing WTO to increase flexibility for them to enable them to enact policies that would promote their own development.

The group of 90 developing countries has made concrete proposals for changes to existing WTO rules that would remove some WTO constraints on national pro-development policies. Many of them are updated versions of the “Implementation Agenda” that have formed the basis of developing country critiques of the existing WTO since the time of its foundation. These include, for example, changes to allow developing countries to promote domestic manufacturing capabilities, stimulate the transfer of technology, promote access to affordable medicines, and safeguard regional integration. Many of these proposals parallel the civil society demands encompassed in the OWINFS Turnaround Statement. The G90 proposals should be accepted in the Buenos Aires Ministerial as proposed – without being conditioned on further market access concessions from developing countries.

Even in an area that all WTO members should be able to agree on – ensuring benefits for Least Developed Countries (LDCs) – there is no consensus yet. Although it was a priority mandate, the small LDC package agreed in the WTO Ministerial in Bali in 2013 is not yet operationalized. This includes ensuring 100 percent Duty Free, Quota Free market access for LDCs’ exports; simplification of the Rules of Origin that define how much of the value of a product has to be produced in the country to qualify for reduced-tariff benefits; and providing actual binding commitments for the LDC services waiver (which allows developed countries to provide market access in services for LDCs without offering reciprocal access to other countries – a “flexibility” which has proven almost impossible to utilize). It also includes mandated reductions in the subsidies that the US and the EU provide to cotton producers – which enrich a few thousand there, but that have unfairly decimated production of hundreds of thousands of cotton farmers in Africa. This modest LDC package must be strengthened and made operational by the time of MC11.

Much is at stake this December in Buenos Aires. We believe in a democratic, transparent, and sustainable multilateral trading system, and do not want to see the WTO depart even further from that ideal. The secretive and anti-democratic practice of negotiating behind closed doors with only certain powerful members, and then bringing massive pressure to bear on developing countries to accept another bad deal, which has characterized the WTO since its inception but has become even more pronounced in the last two Ministerials, must be abandoned in favour of a transparent and member-driven process that leads to outcomes that are consistent with the multilaterallyagreed Sustainable Development Goals.

Will members agree to a harmful new mandate on e-commerce and new rules limiting the democratic oversight over services regulations? And new rules on fishing subsidies which end up harming poor fisherfolk? Or will members act in the interest of their citizens and change course at the WTO, removing WTO constraints over domestic policies that promote food security and development, and supporting LDCs in their efforts to increase their share of global trade?

We urge you to make the right decision for a positive outcome at the upcoming MC11 in Buenos Aires.


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