Agenda to Bring New Corporate Issues into the WTO is Defeated, But So Are Developing Countries’ Demands for More Policy Space for Development

December 22, 2015

Deborah James
Huffington Post, December 22, 2015

See article at original source.

Nairobi, Kenya – At the first ministerial meeting of the World Trade Organization (WTO) in Africa, it was clear that the majority of members opposed further WTO expansion, and fortunately the effort by some developed countries to impose new pro-corporate issues on the agenda was defeated. However, the 162 WTO members also failed to affirm the importance and focus of having a true “development round,” a promise made in 2001 in Doha and the core mandate of the Doha Round.

However, rich countries have never agreed to any of the development-centered proposals in the 14 years of the Round, which remains unconcluded. The blame for this lies with those who rejected the development proposals, rather than with the aspiration that privileges development needs over just expanding trade.

The majority of members demanded changes to existing WTO rules that constrain development, and in particular to the unfair agricultural rules that limit support for small farmers and food security in Africa and Asia. Unfortunately, the U.S. and other rich countries blocked progress on these life or death issues for some of the most vulnerable countries in Nairobi, as they have at every other ministerial meeting.

African members and other Least Developed Countries (LDCs) were excluded from the real negotiations, and the principal imperative to affirm the development mandate was blocked by only a few members. This revealed once again how the WTO model of global trade rules is inadequate to address the real economic crises of our times.

Negotiators must now return to Geneva and redouble their urgent efforts to change WTO rules that constrain the ability of countries to achieve food security through supporting domestic agricultural production, as demanded by the recently approved Sustainable Development Goals (SDGs) of reducing poverty and eradicating hunger.

Since the WTO’s founding in 1995, most developing countries have realized that the institution was set up to favor the transnational corporate interests of developed countries, rather than to promote development-centered policy. Over the last 20 years, developing countries have suffered under a WTO system that constrains them from using policies that developed countries successfully implemented for their development. Poorer nations have thus long advanced proposals for more flexibility in the global rules to allow for national policies that promote food security, jobs, and sustainable development.

Two-thirds of WTO members made concrete proposals to allow them the flexibility to pursue such policies, including promoting infant industries to create jobs and foster small businesses, in order to reduce unemployment and poverty. Grouped together under the umbrella of “Special and Differential Treatment,” these proposals were strenuously opposed by the United States, and ended up being simply ignored in Nairobi.

At the same time, developing countries have long demanded changes to international rules on agricultural trade. Wealthy countries are still allowed to provide tens of billions of dollars in trade-distorting subsidies to agribusiness exporters at the expense of small farmers around the world. Yet developing countries are only allowed to provide minimal supports to their farmers.

The SDGs affirm the need for developing countries to invest in small farmers and promote local, resilient agricultural production in order to improve rural livelihoods and provide domestic food security. This is an urgent global priority because 20,000 people die every day from hunger and poverty-related diseases. But poor countries will not be able to address this food security crisis and significantly reduce hunger if WTO rules restricting needed domestic investments are not changed. Last year, WTO members failed to reach agreement to change these restrictions, as the U.S., along with the EU, Japan, and Australia opposed it, leaving an unsatisfactory interim band-aid in place.

Meanwhile, developing countries face surges of imported, often subsidized agricultural products, which have devastating effects on local food production. Developing countries have sought to protect their domestic producers from subsidized imports, by using the same policies available to rich countries to do the same. Unfortunately, these rich countries were only willing to consider discussing such protections if developing countries first opened their markets to more imports, which would negate the point of the protections the poorer countries need for their sensitive markets.

WTO members were able to agree on some disciplines on the advantages that developed countries provided to their agricultural exporters. But these “export competition” policies are not the source of most trade-distorting subsidies. It is the subsidies and other advantages labeled under “domestic supports” that cause the most damage to developing-country farmers, and they continue unabated.

The LDCs in the WTO also sought more flexibility in the rules so that they might participate more in the global economy and use trade for development. Yet again, the U.S. and other developed countries gave little heed to their demands, agreeing on only a few provisions of tiny economic significance.

U.S. efforts in the Nairobi Ministerial focused on bringing a new corporate wish list of issues into the WTO, including issues previously rejected by developing countries (in the 2003 ministerial), regarding investment, competition policy, and government procurement, as well as issues from other agreements, such as cross-border data transfers. India and African and other developing countries were successful in blocking the introduction of a mandate for these issues, although the U.S. is working overtime to convince the public and media that the door for these issues was actually opened.

The U.S. and the EU will continue to push regional comprehensive deals such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), along with agreements on specific issues such as the Trade in Services Agreement (TISA). But far from being consigned to the margins of global trade, the hard fight put forth by rich countries in Nairobi demonstrates the seriousness with which they take the WTO as a forum for multilateral rulemaking.

The global civil society network that opposes WTO expansion, the Our World Is Not For Sale (OWINFS) network, also advocates for a multilateral trading system, and OWINFS members from 25 countries organized in Nairobi for a more positive outcome. Our vision, however, is for a multilateral system that is sustainable, socially just, democratic and accountable; the current WTO is a long way from that.

Those who desire economic justice must advocate for immediate changes to the WTO, to relieve the suffering of the poorest and most marginalized peoples. At the same time, we must advocate for a transformation of the global trade system to one that promotes food security, jobs, and sustainable development. Given the way things are currently going at the WTO, it will be a long struggle indeed.

Deborah James facilitates the global campaign against WTO expansion for the global OWINFS network, and is the Director of International Programs for the Center for Economic and Policy Research in Washington, DC.

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