From Tuesday to Friday next, trade ministers of the 134 member-countries of the World Trade Organisation (WTO) will meet to agree an agenda for the "Millennium Round" of global trade negotiations. Ireland will be represented by the Minister of State for Labour, Trade and Consumer Affairs, Mr Tom Kitt. As a small open "Celtic Tiger" economy, which a decade ago was the slowcoach of Europe, this State knows more than most the value of trade.
Global trade has grown 17-fold since 1951, production has more than quadrupled and per capita incomes have doubled, but so has inequality. The wealth of the richest 20 per cent of the world's population is 82 times that of the poorest 20 per cent, as against 30 to one in 1960. The WTO is responsible for enforcing an ever-lengthening list of international trade agreements. To do this, it has "teeth" - crucial decisionmaking and arbitration powers - which allow it to overrule governments and in so doing to affect the livelihoods of millions.
Where arbitration fails, a WTO disputes panel can license retaliation by one country against another in the form of punitive tariffs. For example, last April the US was allowed to levy 100 per cent additional duties on nearly $200 million of EU imports. This was because the WTO, following a US complaint, ruled that the EU had not moved far enough in removing its preference for Caribbean bananas above those produced in Latin America.
Yet trade liberalisation re mains very uneven. Many of the poorest developing countries, which are highly dependent on agriculture, have opened their agricultural markets. Often this was the result of economic policies imposed by the International Monetary Fund rather than WTO rules. Yet EU members have been able to protect and subsidise their agriculture under the Common Agricultural Policy, with the bulk of benefits accruing to larger rather than smaller farmers.
The governments of many developing countries had hoped that the WTO, by introducing a rules-based procedure, would help weaker states negotiate better deals with powerful industrialised nations. Key areas are the food and textiles trades, where the estimated cost of developed country protective measures against developing nations is about $700 billion.
On paper the WTO is a democratic organisation based on one member one vote. In reality it is far from being a level playing field. Key decisions are taken by the "quad" - Japan, the EU, US and Canada - while developing countries have found themselves swamped by the bureaucracy involved in endless negotiations. The US has 250 negotiators in Geneva (and flies in experts as required); Bangladesh has one. Twenty-nine of the least developed countries have none.
Although the WTO allows "special and differential treatment" for developing countries, in practice it remains unduly influenced by large trans-national corporations. These companies, rather than countries per se, dominate trade and account for half the world's 100 largest economies. Their power was illustrated in the EU-US banana dispute. The US does not grow bananas, so why did it make such a complaint? The answer is that US corporations dominate the banana trade in Latin America.
A "built-in agenda" for Seattle has already been decided. This covers agriculture, services and intellectual property rights. However, the EU, is arguing for a much broader agenda, including areas such as investment and competition policy (the ability of governments to control cartels and monopolies) as well as labour and environmental issues. Some have commented that the EU's agenda would truly be a "millennium" round and would take another millennium to complete. And they argue that failure to agree an over-ambitious agenda may well be self-defeating, as it could arouse self-interested protectionism and an increase in trade disputes.
So what path should be taken to ensure that the outcome of Seattle promotes trade yet also advances sustainable development and livelihood security, particularly in the world's poorest nations? Trocaire is making six key recommendations.
No New Issues: The push for deregulation and the expansion of WTO powers has gone too far, too fast. The time has come for a "freeze, review, revise" approach. Instead of introducing new issues into the next round, the WTO should review what it has achieved to date, assess how the poor have fared after the Uruguay Round and take on board the growing criticisms of its performance.
The poor should come first: This round should be turned into a "development round" which gives priority to ensuring that global trade systems help, rather than harm, the world's poor. The WTO should follow the recently announced strategy of the IMF and the World Bank by making poverty reduction an explicit objective of its work. Social impact assessments should become a central part of all discussions of trade reform.
Life patenting should not be allowed: there should be no extension of the notion of intellectual property to the patenting of life forms. This is especially vital in terms of the patenting of seeds, which farmers in the developing world have spent generations nurturing and which form a crucial part of their livelihoods.
EU negotiators should be made more accountable: the trade directorate (DG1) of the EU appears to be unable to consider a wider range of issues. To address this deficit, its work should be shadowed by groups of officials from member governments on development, labour, environment and consumer affairs.
The WTO should be restricted to trade issues: the "grey area" of non-tariff barriers has allowed the WTO to stray into areas such as public health in which it has little competence. The WTO should not seek jurisdiction over national environmental, health or labour laws. These should remain the prerogative of national governments and the specialist international bodies, such as the World Health Organisation and the International Labour Organisation.
Increased democracy at the WTO: Developing country governments should be given a proper voice in WTO decisions. The WTO should encourage wider participation from civil society groups in all its member-states. Otherwise, there is no countervailing force to the huge power of trans-national corporations, particularly in relation to the global trade in food, where five companies now control almost the entire genetically modified seed market.
Maura Leen is policy analyst with Trocaire and can be contacted at: maura@trocaire.ie