Statetemet by Civil Society organisations on the WTO negociating situation and on food and financial crises
Version 2a
STATEMENT BY CIVIL SOCIETY ORGANISATIONS ON THE WTO NEGOTIATING SITUATION, AND ON FOOD AND FINANCIAL CRISES
1. The WTO’s Doha Round negotiations are at a crucial stage. At this time, we need to re-affirm the centrality of development concerns and the interests of developing countries in any outcome of the Round. It should be remembered and reaffirmed that the objective of this Round is not market access per se, and especially not market access for developed countries, but the reorientation of the multilateral trading system so that it will contribute to the development of developing countries.
2. As the Development Declaration of the ACP Group, African Group, LDC Group, Bolivia and Venezuela stressed in their document (WT/L/687 dated 12 July 2007): “For the developing countries, what matters in this Round is the content of the agreements, which must translate into positive outcomes for our trade and trade balance, improvement in production and supply capacity, and increased employment and incomes of our people. These are among the development yardsticks by which proposals, negotiations, modalities and texts have to be assessed.
3. We are concerned about moves by some quarters, including the Director General of WTO and the European Trade Commissioner, to rush to conclude the Doha Round as soon as possible. We are especially concerned about plans to hold a Mini Ministerial meeting in May or June, and a super Green Room meeting of senior officials before that. The promise made by developed countries at Doha in 2001 has been betrayed in the current trade offs. What is now on the table is not a development package.
4. These are our concerns:
-- The time is not right to hold a “horizontal process” or Ministerial. There are too many areas on contention in agriculture, NAMA, services, etc.
-- The main proposals on the table lack development content. Instead, developing countries will be on the losing end in agriculture and industrial products, as well as services, based on these proposals. Developed countries would have to make small commitments, they would also not make much in terms of development obligations, but developing countries would have to cut their tariffs very steeply in NAMA (60-70% in many cases) and also very significantly in agriculture (36% on average compared to 24% in the Uruguay Round).
-- The process of starting a “horizontal process” and a super Green Room of a few senior officials and later a few Ministers is top-down, exclusive, lacks transparency and is fraught with the possibilities of pressures and manipulations. The legitimacy of whatever is the outcome will be questioned.
-- The US domestic situation means there is no confidence that any commitments it makes can be honoured. Trade authority lies with Congress, and there is now no fast track authority for the President, nor will there be for the rest of President Bush’s term. Thus whatever deal is concluded would have to pass on to the next President and Congress. There would also need to be a new fast track authority. There is great doubt whether any commitments made today will be agreed to by the new US government and Congress. The US now cannot make commitments that can be honoured It is logical that the talks be put on the back burner and the situation can be reviewed when the new Administration and Congress settle in.
Governments have to ensure the content of the proposals and draft texts conforms to the development interests of developing countries. Content cannot be sacrificed for timelines. It is more important to get the agreements right than to meet deadlines. Therefore the WTO members should not be rushed into agreements on modalities. We maintain our stand that “no deal is better than a bad deal.”
We are concerned about the process of calling a “Ministerial.” Unlike a full Ministerial, this “Ministerial” is expected to be attended by only 20-30 Ministers. (1) How are decisions taken on the scope, nature and participation of the horizontal process? (2) Which countries are invited to the meetings? On what basis are they selected? (3) If a country is not selected, can it request to participate in the process? If yes, what is the procedure? If not, why not? (4) Will the proceedings of the horizontal process and its Green Room meetings be made known to the whole membership and to the public? By what method, and at what time? (5) How will the public and all WTO members be ensured that they can know the options and outcomes and can participate in the decisions?
On the US situation, recent events (including the US-Colombia FTA bill) make clear that the present Administration will not have a fast track authority. This makes it difficult for US trade partners to have confidence that what the US negotiators commit can be honoured. No one knows what may happen if a Doha agreement is initialed by the present US President and passed on to the next President.
The conclusion of a Doha Round on present terms will also worsen the present food crisis and financial crisis, and not help solve these problems, as claimed by some quarters.
The food crisis is mainly caused by supply not meeting increased demand, a drastic reduction in domestic food production and sharp price increases of imported food linked to speculation on the world's food market. In particular, many developing countries have been pressured to reduce their applied tariffs on food products and to dismantle government support (such as subsidy of inputs, infrastructure and marketing assistance) due to World Bank and IMF policies. This allowed the massive inflow of food products including those that are heavily subsidized by rich countries and thus artificially cheapened. The Doha Round will worsen this situation by reducing developing countries’ tariffs further by an average 36%. Developed countries meanwhile will be able to retain their high domestic subsidies by “shifting boxes”, as many of the supposedly non-distorting Green Box subsidies have been found to be in reality distorting, and there is no plan to limit or eliminate these subsidies. Many of the LDCs or small economies that do not have to reduce tariffs or by as much as other developing countries meanwhile face higher tariff cuts through the EPAs.
To resolve the food crisis, developing countries need to produce more food. They can do so through having higher tariffs to enable local farmers to compete with imports, especially when high subsidies in imports continue. This includes explicit protection of domestic policy space for developing countries to strengthen the livelihoods of small producers. There must be a review of the Doha proposals in light of this paramount priority to ensure developing countries can produce their own food, and not just rely on imports.
The Doha Round would also worsen the financial crisis through the pressures put on developing countries to open their financial services to foreign financial institutions. The practices and financial instruments of these institutions are now recognized as causing the financial crisis. Through the GATS negotiations, developing countries are pressurized to commit to liberalise. This liberalisation of finance can lead to the further spread of harmful financial practices and instruments to developing countries, and thus magnify the world financial instability and crisis. FTAs (incuding EPAs) will worsen this problem through the services and the investment chapters, that enable unregulated inflows and outflows of funds.
We therefore request the following to the governments
1. There should be no rush to convene a Mini-Ministerial at the WTO. The Doha talks can proceed a little more towards new papers on agriculture and NAMA, and then they can be put on the back burner, with all the proposals to be on the same status when talks actively resume after the new US administration and Congress are established.
2. The development content of the proposals on the table must be carefully assessed, and this development content must be expanded until it reaches an adequate level.
3. The food crisis highlights the need for developing countries to expand food production and increase `self-sufficiency to a high degree. Food products in developing countries should not be subjected to further tariff reduction, in the light of this food crisis. An effective agricultural special safeguard mechanism should be established for developing countries, as soon as possible, without waiting for the conclusion of the Doha Round.
4. Given the link between financial deregulation and liberalization and the global financial crisis, the WTO should consider suspending negotiations on liberalizing financial services in the GATS.
5. Reforms are urgently needed to the policies of international financial institutions, to stop their policy advice and conditionalities that pressure developing countries to lower their agricultural tariffs and to abandon or reduce government support to farmers.
6. Existing FTAs (including EPAs) that pressure developing countries to lower their agricultural tariffs and to liberalise their financial sector should be reviewed. FTAs and EPAs that are being negotiated should not pressure developing countries to cut their agricultural tariffs or to commit to liberalise their financial markets.
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This statement was first formulated at Accra on the occasion of UNCTAD XII. Several CSOs are still considering associating with this statement, and will sign on later. The original sponsors of the statement include:
