Trade Before Freedom: Seattle Prepares for Battle
The European Union has agreed on Commissioner Pascal Lamy's negotiating mandate for the ministerial conference of the World Trade Organisation (WTO). The mandate may be summed up as agreement to an all-round liberalisation of trade, but with some restrictive clauses concerning respect for cultural diversity, the precautionary principle and dialogue with the International Labour Organisation (ILO) on minimum social standards. In other words, free trade remains the rule and derogations the exception. The dismal legacy of five years of trade deregulation since the 1994 Marrakesh accords should be enough to call the principles of the WTO into question. Europe refuses to do so, even though millions are mobilising in Seattle and around the world.
The ministerial conference of the World Trade Organisation (WTO), which opens on 30 November in Seattle, is being blandly presented as a straightforward negotiation on international trade in goods and services where everyone will obviously have to make a few concessions. Just as, not so long ago, they told us the Multilateral Agreement on Investment (MAI) was just a legal and technical device of no real consequence. But the WTO message is not getting through and demonstrations are planned to greet the delegates from 134 countries and the lobbyists from the multinationals.
Europe has already had to contend with bananas, hormone-fed beef and genetically modified organisms (GMOs), all of which have helped mobilise opinion against the tyranny of an international organisation that thinks it is a cut above everyone else. How have things come to such a pass?
Since 1947 the General Agreement on Tariffs and Trade (GATT) (and the ambassadors of its 'contracting parties') had been working discreetly to get customs duties on all kinds of goods reduced. Following the eighth round of talks, the Uruguay Round (1986-93), that work at last came to fruition. In March 1994 ministers gathered in Marrakesh to sign the document that created the WTO. Its 800 pages (several thousand with the annexes) gave world trade a framework far more constraining than the feeble GATT.
In the background the lobbyists of the transnational corporations, who had long had the ear of the official negotiators, rubbed their hands with glee: the WTO now gave them the ideal tool to complete their globalisation and impose new rules - their own rules - on all human activities now defined as objects of 'trade'.
The WTO, which unlike GATT has the status of an international organisation, has 134 member states and some 30 observers. Compared with the World Bank or International Monetary Fund its 650 strong secretariat is small. Its new director-general, appointed after bitter and unseemly confrontations, is Mike Moore from New Zealand. In three years' time he will be replaced by Thailand's Supachai Panitchpakdi who will complete the remainder of the six-year term.
The WTO's headquarters on the shores of Lake Geneva are now home not only to GATT, which is still responsible for liberalising trade in goods, and also a dozen other agreements. Among the most important of these are one on agriculture and the General Agreement on Trade in Services (GATS), which alone covers more than 160 sectors and sub-sectors, including education, health and the environment. (1) The agreement known as TRIPS governs intellectual property, including bio-technology and the patenting of micro-organisms and microbiological processes, while that known as TRIMS is concerned with 'trade-related' investments.
One of the WTO's main tasks, the elimination of non-tariff barriers to trade, is performed in part through two other agreements that have only the semblance of being technical. The agreement on technical barriers to trade (TBT) and the one on sanitary and phytosanitary measures (SPS) each claim to 'harmonise' standards and rules for the protection of the environment, public health and consumers. In practice, this 'harmonisation' imposes ceilings that have the ultimate effect of reducing all national laws, especially the most effective ones, to the lowest common denominator and of dispensing with the precautionary principle. Anyone who refuses to import a particular product on the grounds that it may be hazardous to health or destructive to the environment must provide scientific proof. The producer has no need to demonstrate that what he sells is harmless. One of the key battles between the WTO countries will be over the principle: on whom does the burden of proof lie? What is the status and what are the limits of science when doubts remain?
The formidable Dispute Settlement Body (DSB) that crowns the WTO structure is the fount of both its executive and legal power. Formerly, when GATT wanted to penalise a country that was not playing by the rules, every member had to agree, even the one that was to suffer the penalties. As a result it carried very little authority. The WTO with its implacable discipline is quite the opposite. If its DSB orders sanctions, the members, including the plaintiff, must be unanimous if they are not to apply. Hence the United States' undeniable right to penalise roquefort, foie gras and other Dijon mustards by imposing prohibitive customs duties. If the Europeans refuse to import hormone-fed beef despite the WTO's ruling, no matter. They must then compensate the US and Canada every year for their lost earnings. In a game of mutual reprisals, these countries choose the products they will impose a heavy duty on so as to make a recalcitrant adversary think.
An End to "Protection"
The conditions under which the WTO's panels, which have settled more than 170 disputes so far, are appointed are obscure. The names of the 'experts' who sit on them and who meet behind closed doors and hear no outside witnesses are not made public. This impenetrable procedure is astonishingly quick: disputes are generally settled in 12 months, 18 at the most. Canada, the world's biggest asbestos producer, hoped to take advantage of this to force Europe to import the carcinogen again: the panel's decision was to have been announced at the start of December, just as the Seattle ministerial conference opens. Strangely enough, it has been put back until March 2000.
Without warning, the WTO has in this way created an international court of 'justice' that is making law and establishing case law in which existing national laws are all 'barriers' to trade and is sweeping aside all environmental, social or public health considerations.
In so doing, it is merely following the broad principles that govern all its activities. For example, the most favoured nation clause demands equality of treatment for similar products from different member countries. On that basis, with the banana decision, the WTO was able to deny the European Union the right to have a foreign policy. In the WTO's eyes, a banana is only a banana, be it from Ecuador or the former European colonies, the so-called ACP countries (Africa, Caribbean, Pacific). So much for the Lomé Convention and Europe's favourable treatment of former colonies.
The national treatment clause prohibits any discrimination affecting products of foreign origin, especially on the basis of the human or ecological conditions under which they were produced. In other words, no account may be taken of the 'processes and methods of production' (PMP). The only exception to this rule is goods manufactured by prisoners. But no reference may be made either to sustainable development or to human rights, and trading partners may not be rewarded or punished on the basis of their respect for those ideas. The article on 'eliminating quantitative restrictions' penalises quotas and the refusal to import or export. This provision could invalidate many multilateral environmental agreements (MEA) and a number of social conventions.
How, indeed, are we to prevent trade in endangered species or toxic waste? How can we limit exports of cereals when there is a national food shortage, or of tree trunks when the forests are laid waste? The agreements on technical barriers and sanitary and phytosanitary measures reinforce this legal arsenal. In this light, an incalculable number of national standards, rules or laws could easily be classed as 'barriers to trade'.
These are just a few of the pitfalls along the road to the meeting of the WTO's supreme body, the ministerial conference in Seattle. The previous conferences (Marrakesh in 1994, Singapore in 1996, Geneva in 1998) have set the agenda: to review the agreements on agriculture, services and, in theory, intellectual property. Seattle will decide the precise content of what Sir Leon Brittan has pompously termed the Millennium Round.
It is planned to conclude the round with a global agreement in three years' time. The talks will move liberalisation forward and prevent any backtracking; that is how the WTO does things. And the US is reluctant to see the TRIPS agreement and the GMO controversy reopened, especially as the African countries have declared their opposition to the patenting of life in an unprecedented approach to the WTO secretariat.
A battle to the death is looming between the Cairns Group of major agricultural exporting countries (including Argentina, Australia and Brazil) and the US, on one hand, and Europe and Japan, which are considered too protective of their farmers, on the other. For the Cairns Group there are only agricultural products that must be allowed to compete like any other merchandise. Under pressure from France, the EU stresses the 'multifunctionality' of agriculture as protecting diversity, the environment and rural life. US producers, on the other hand, are urging their government 'to resist efforts to introduce the concept of multifunctionality'. (2)
We do not yet know the order in which the many fields covered by the agreement on services will be tackled. If the word 'horizontal' is heard, however, it is time to show one's claws: in WTO parlance it means that a liberalisation measure accepted in one field must be extended to all. A liberalisation applied to banks or insurance companies, for example, would also have to be applied to education and health.
If governments have their priorities, business has its own. The US Coalition of Service Industries (USCSI) stresses distribution, finance, information technologies, telecommunications, tourism and health. Opposite, presided over by the chairman of Barclays Bank, the European Service Leaders' Group (ESLG) is concerned with 21 sectors. As a service to the ESLG the Brussels commission has set up an electronic system enabling European negotiators to consult the business community quickly. (3)
The US Coalition of Energy Services is calling on the US special trade representative and chief negotiator, Charlene Barshevsky, to get their activities added to the agreement on services, where they do not yet appear. With its 27 members representing hundreds of billions of dollars, not to mention kilowatts and therms, the coalition looks like getting its way. Brazil, France and Norway, which still regard these areas as public services, have been identified as 'possible opponents'. (4)
On the eve of the Seattle talks nobody knew what other sectors might be added to this supposedly 'built in' agenda (agriculture, services, intellectual property). The Europeans want the list to be as long as possible: investment, public contracts, 'facilitation' of trade, competition policy, environment, labour law, special treatment for the countries of the South. For the Europeans, anything is useful in establishing a better balance of power with Washington and reducing the pressure they fear on agriculture.
Cautiously, the US negotiators prefer not to include investment for the time being, lest they reawaken the citizens' movement that scuppered the Multilateral Agreement on Investment (MAI) in October 1998. In any case, a good agreement on services - with the right to a commercial presence - would itself open up many advantages for investors. Neither do the Americans want electronic commerce: they want this virgin sector, still free of regulation, to remain a green pasture of zero customs tariffs. Public contracts, which account for around 15% of most countries' gross national product (GNP), are clearly a juicy target that the US would like to see included in the talks, but it may have to make do with a working party, with liberalisation coming later.
On the other hand, the US will be adamant that the so-called accelerated tariff liberalisation (ATL) initiative should be placed on the agenda, defining as it does eight disparate fields where zero tariffs should quickly become the norm. Alongside jewellery, toys or medical equipment we find - much more worryingly - forestry and fishery products, fields where zero tariffs would accelerate the destruction of these non-renewable resources. In this, Washington has the support of all the member countries of the Asia-Pacific Economic Cooperation (APEC), which together account for 60% of world trade. And no-one will be surprised to find that this ATL initiative has given rise to another business coalition including Dow, Dupont, Kodak, General Electric and the American Forest and Paper Association. (5)
Millions of Opponents
Where are the countries of the South in all this? The EU is constantly saying that they deserve special care. While waiting to see whether anything will come from these fine words, many of them still have no ambassador to the WTO and they complain that they have often made concessions without getting anything in return, especially in the field of textiles and clothing. Their priority is to see the commitments already given to them in the Uruguay Round enacted. There will be time for other subjects later. They are also suspicious of the European and North American desire to discuss, directly or indirectly, ecological or social clauses (such as compliance with the basic conventions of the International Labour Organisation). They see this as protectionism in disguise, possibly wiping out the only real advantages the poor countries enjoy.
The international movement that brought down the MAI has very quickly mobilised again against a WTO that is fundamentally antidemocratic and destroys both freedoms and the environment. Often accused by the partisans of free trade of wanting to take the world back to the 1930s and the trade wars - if not to war pure and simple - the movement replies that international trade needs rules, but not those of the WTO. There is another international law, that of human rights, multilateral environmental agreements and labour law, to which trade should be subordinate. The economy should serve the people and their natural environment, not the other way round. Too much liberalisation spells death to freedom.
More than 1,200 organisations in 85 countries are demanding that no new area be brought under WTO jurisdiction and that there be a moratorium on talks until the organisation's operation and achievements have been unpicked and fully evaluated - with the full and total participation of the people. A historic change is under way at the very heart of the globalisation process: millions of people are mobilising, nationally and internationally, around a subject that is apparently technical, complex and remote. Several tens of thousands of them will be in Seattle, for the biggest demonstration seen in the US since the Chicago Democratic Party convention in 1968.
The organisers' instructions to the demonstrators are very strict: no violence towards people or damage to property; no drugs or alcohol; always stay in an 'affinity group' of five to 20 people with clearly defined responsibilities in the event of arrest or provocation. A lawyers' collective will assist any who might be taken in for questioning by the various forces of order who are literally on a war footing: the secret services, FBI, Bureau of Alcohol, Tobacco and Firearms, Federal Emergency Management Agency, the county sheriff and the Seattle police have all put tight defences in place against this giant street procession whose weapons will be scaling buildings, banners, teach-ins and street theatre.
The protesters are united around one certainty: the need to fight for each other, failing which all will be defeated. Farmers will not be concerned just about agriculture, film-directors about films or consumers about health. The problem isn't beef, bananas, cultural diversity or the patenting of life: the problem is the WTO.
1. See list of services in Susan George, Globalising Designs of the WTO, Le Monde diplomatique, English edition, July 1999.
2. Letter from US Wheat Associates to Charlene Barshevsky, 23 July 1999.
3. Gats 2000: "Opening Markets for Services", undated European Commission document (DG 1).
4. Letter from the US Energy Services Coalition to Ambassador Barshevsky, 11 June 1999; "US to press for new energy agenda in services negotiations", Inside US Trade, Washington, DC, 11 June 1999.
5. Letter from the ATL Coalition to Barshevsky, 6 August 1999.
Translated by Malcolm Greenwood
Copyright 1999 Le Monde diplomatique