[R-G] Inside the WTO's Collapsed Deal - Ellen Gould for thetyee.ca

[tchilds at resist.ca]

This is pretty good news..  Oh how pleasing it is to read "failure" when
hearing about the the collapse of the tyrannical agenda within the WTO's
'back room boys.'   Nice homework done here by Ellen Gould.  tc
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http://thetyee.ca/Views/2008/08/04/WTO/

Inside the WTO's Collapsed Deal
.
World's poor dodged disastrous policies when world trade talks failed.

By Ellen Gould
Published: August 4, 2008


TheTyee.ca

On July 21, the World Trade Organization held yet another meeting billed
as a "do or die" effort to pull off a new global trade deal. Since the
Doha round of talks were launched in Qatar seven years ago, trade
ministers have met five times to work on an agreement. The ministerial
meeting held last summer was charged with a sense of urgency, with
warnings that this might be the last chance to hammer out a deal. So the
hype about how this summer's meeting represented a "moment of truth" for
the negotiations seemed like an overused ploy to get negotiators to
resolve their differences.

Lucky Break for Harper
Basically sidelined from the negotiations along with the majority of WTO
members, the Canadian government did not have to show its cards as the
trade talks crumbled. If the negotiations had not foundered on the issue
of how to safeguard farmers from surges in agricultural imports, Canada's
delegation could have been caught in a politically dicey position over
agricultural marketing boards.

The Wheat Board is one of the last obstacles to total dominance of world
grain markets by agribusiness and was targeted by the U.S. and the E.U.
for elimination in the Doha round. Saskatchewan's agriculture minister
undermined Canada's negotiating position by stating publicly in Geneva
while the talks were going on that Canada might have to make concessions
in this area. But while the Harper government has demonstrated its
hostility to the Canadian Wheat Board, it would probably be loathe to go
into an election this fall having just traded away the dairy and poultry
marketing boards supported by farmers in Quebec and Ontario.

Trade Minister Michael Fortier asserted at the negotiations that "our
position on supply management will not change," but this assertion did not
have to be tested since the key players walked away from the table.

-- Ellen Gould

This time, though, negotiators' inability to reach a deal seems more
serious, with key figures appearing genuinely deflated at the outcome. WTO
Director General Pascal Lamy said that "there is no escaping the fact that
this meeting has failed," and that the multilateral trading system came
out of it "dented."

Negotiators behaving badly

The recriminations over who was to blame for the failure were so venomous
that they may poison the atmosphere for a resumption of multilateral talks
for some time to come. The American negotiator claimed negotiators had
actually reached an agreement but that two of the seven members of the
core negotiating group -- a clear reference to India and China -- had
scuttled it by rejecting a compromise reached on a key provision.

The provision in question dealt with how to protect farmers from a surge
in agricultural imports. The Indian negotiator retorted that a strong
safeguard against such surges was essential to the livelihoods of the
world's poorest farmers and "could not be traded off against the
commercial interests of the developed countries."

The E.U.'s trade chief, Peter Mandelson, slammed the conduct of the U.S.
negotiators and hinted that rather than working for success, the U.S. was
actually preparing for the failure of the talks.


The U.S. delegation shot back that "the E.U.'s anger is misdirected,
misguided and being misused," accusing Mandelson of trying to divert
attention from the fact that the European position on agriculture was
under attack by some of its own member states.

Farmers in the balance

What are the consequences of this year's ministerial collapse? If the only
news you got about the latest WTO failure came from the business press,
you would think that it was a major blow to the poor. An editorial in the
Wall Street Journal entitled "The End of Free Trade?" said the meeting had
historic significance because "for the first time since the multilateral
trading rounds began after World War II, a trade expansion effort has
ended in failure." The Journal said the Indian trade minister was the
"main villain" and he bore responsibility for blocking progress for
impoverished people in his country.

But generally organizations around the world that work on behalf of the
disadvantaged have been celebrating the collapse of the so-called Doha
Development Round. In exchange for largely illusory cuts to developed
country farm-subsidies, developing countries were being asked to open
their markets even further to the manufactured goods and services of
developed countries. Basically, they were expected to permanently block
their own path to development by eliminating the capacity to protect
infant industries with tariffs, the path that the U.S. and Europe had
followed to industrialize their own economies.

The U.S. was claiming it was willing to make big reductions to its
agricultural subsidies, but the recent passage of a $300 billion farm bill
by the U.S. Congress make it unlikely that the U.S. is serious about real
reductions. Such farm subsidies put developing-country farmers at a huge
competitive disadvantage. In addition, a number of studies have showed
that even if developed countries did actually cut their agricultural
subsidies, it would make little difference to world poverty. A report from
the United Nations Conference on Trade and Development concluded that a
Doha agreement could cost developing countries huge losses in tariff
revenue, four times as much as any benefits they might gain.

Ramping up a global banking disaster?

Not even registering on the radar of the mainstream media were the
consequences of a WTO package deal that would have included liberalization
of services. It is remarkable that in the midst of a major financial
crisis, with shockwaves continuing to be felt from the U.S. subprime
mortgage disaster, journalists did not cover the financial services
aspects of the WTO negotiations.

In what Director General Pascal Lamy reported as a bright spot in the
talks, countries met on July 26 to signal the major concessions they were
prepared to make on services. Apparently oblivious to the shaky state of
international banks, some countries proposed that they would eliminate
deposit requirements for foreign bank branches. They said they would open
up to increased trade in financial derivatives, even though these products
are a prime source of financial instability. The trade ministers' cheery
attitude towards further financial liberalization begs the question of how
bad the financial crisis would have to get before they thought twice about
permanently deregulating the sector through trade commitments.

Under the WTO services agreement, if countries commit to the complete
opening of a sector, they have to allow unlimited foreign ownership in
that sector. Some of the trade ministers at the services meeting announced
their countries were willing to allow total foreign control of key areas
like banking, telecommunications, health and postal services. While Lamy's
report of the services meeting names Canada as one of the 27 countries
represented, he does not identify who made which offer to liberalize. So
Lamy's report does not tell us what new offers Canada may have made.

David Robinson, in his capacity as trade and education consultant for
Education International, a global union federation claiming to represent
30 million teachers and other education workers, met with WTO negotiators
during the ministerial to discuss potential impacts on public education.
Robinson told The Tyee his organization's principle concern is that
"commitments taken could lead to locking in the forces of privatization."
Commitments to allow the establishment of foreign for-profit institutions,
for example, could undermine domestic efforts to build a strong public
education system.

Education International also objects to the development of new WTO
"disciplines" restricting how services are regulated, particularly in
relation to requirements for education qualifications. Robinson said if
governments tried to strengthen education qualifications for teachers, the
proposed WTO restrictions on regulation could mean these governments would
be challenged for creating a restriction on trade in education services.
These WTO restrictions on the right to regulate still may be imposed,
despite the collapse of the Doha round.

Cherry-picking the results

Although the ministerial meeting just ended in failure last week, it is
already clear how different delegations are manoeuvring for advantage in
the post-Doha era. Brazil, which jumped ship in Geneva on the
developing-country coalition opposing deep cuts to industrial tariffs, has
contacted President Bush directly to signal Brazil is still willing to
negotiate.

The U.S. is questioning the fundamental premise of a comprehensive trade
package, one that covers agriculture, market access for industrial goods,
and services. The U.S. trade negotiator said at her last news conference:
"Why should it have to come together at exactly the same time? We need to
reflect on how we move forward, but there are ways of moving forward
certainly with pieces of this, both near term and longer term." The U.S.
would probably like to harvest the services and industrial commitments
that were made without having to give anything in the area of agriculture.

But the Indian trade minister has already rejected this option, saying
that the WTO is not a buffet where countries can just take what they want
without making concessions. And while Pascal Lamy is claiming the WTO
could proceed in all the areas where there was agreement, this view is
categorically rejected by countries like Argentina that were excluded from
the inner circle of seven countries that did most of the negotiating.

The Bolivian way

In their debriefing on a services meeting held as part of the ministerial,
WTO staff described it as "dreadful." At this meeting, Bolivia, Venezuela,
Cuba and Nicaragua blasted the chair of the services negotiations for the
text of a report he had drafted on how the negotiations would proceed.

Among other things, this report would have had governments commit to
locking in existing liberalization so that they would not be able to undo
privatization and deregulation without risking a WTO challenge.
Surprisingly, the group of countries that had previously given their okay
to this language -- a group that included Canada, the U.S. and the E.U. --
mostly sat on their hands at the meeting and did not come to the chair's
defence.

While Bolivia is marginalized by the powers that be at the WTO, its views
probably are more mainstream than those of most trade negotiators. It is
Bolivia's position that services like health, education and water should
be excluded from commercial trade negotiations because they are basic
human rights. Local food production should be given priority over imports
because the environmental costs of transporting foreign food have to be
taken into account. The patenting of all life forms should be prohibited.

These positions were sent in a letter from Bolivian president Evo Morales
to Pascal Lamy. They provide a glimpse of what a real "development" round
of negotiations might look like.