Smash WTO - Geneva, November 28th, 2009

Indigenous peoples lash out at WTO inequities

Protests in the streets of Seattle outside the recent World Trade Organisation ministerial meeting were so severe and feelings ran so high that proceedings were almost aborted. The Indigenous Peoples' Seattle Declaration which follows makes it abundantly clear why so many concerned people were compelled to make a stand

on the occasion of the

Third Ministerial Meeting of the
World Trade Organisation
November 30 - December 3, 1999

We, the Indigenous peoples from various regions of the world, have come to Seattle to express our great concern over how the World Trade Organisation is destroying Mother Earth and the cultural and biological diversity of which we are a part.

Trade liberalisation and export-oriented development, which are the overriding principles and policies pushed by the WTO, are creating the most adverse impacts on the lives of Indigenous peoples. Our inherent right to self-determination, our sovereignty as nations, and treaties and other constructive agreements which Indigenous nations and peoples have negotiated with other nation-states, are undermined by most of the WTO agreements. The disproportionate impact of these agreements on our communities, whether through environmental degradation or the militarisation and violence that often accompanies development projects, is serious and therefore should be addressed immediately.

The WTO Agreement on Agriculture (AOA), which promotes export competition and import liberalisation, has allowed the entry of cheap agricultural products into our communities. It is causing the destruction of ecologically rational and sustainable agricultural practices of Indigenous peoples.

Food security and the production of traditional food crops have been seriously compromised. Incidents of diabetes, cancers, and hypertension have significantly increased among Indigenous peoples because of the scarcity of traditional foods and the dumping of junk food into our communities.

Small-scale farm production is giving way to commercial cash-crop plantations, further concentrating ancestral lands into the hands of a few agri-corporations and landlords. This has led to the dislocation of scores of people from our communities who then migrate to nearby cities and become the urban homeless and jobless.

The WTO Forests Products Agreement promotes free trade in forest products. By eliminating developed country tariffs on wood products by the year 2000, and developing country tariffs by 2003, the Agreement will result in the deforestation of many of the world's ecosystems in which Indigenous peoples live.

Mining laws in many countries are being changed to allow free entry of foreign mining corporations, to enable them to buy and own mineral lands, and to freely displace Indigenous peoples from their ancestral territories. These large-scale commercial mining and oil extraction activities continue to degrade our lands and fragile ecosystems, and pollute the soil, water, and air in our communities.

The appropriation of our lands and resources and the aggressive promotion of consumerist and individualistic Western culture continue to destroy traditional lifestyles and cultures. The result is not only environmental degradation but also ill health, alienation, and high levels of stress manifested in high rates of alcoholism and suicides.

The theft and patenting of our biogenetic resources is facilitated by the TRIPs (Trade-Related Aspects of Intellectual Property Rights) of the WTO. Some plants which Indigenous peoples have discovered, cultivated, and used for food, medicine, and for sacred rituals are already patented in the United States, Japan, and Europe. A few examples of these are ayahuasca, quinoa, and sangre de drago in forests of South America; kava in the Pacific; and turmeric and bitter melon in Asia. Our access and control over our biological diversity and control over our traditional knowledge and intellectual heritage are threatened by the TRIPs Agreement.

Article 27.3b of the TRIPs Agreement allows the patenting of life-forms and makes an artificial distinction between plants, animals, and micro-organisms. The distinction between "essentially biological" and "non-biological" and "microbiological" processes is also erroneous. As far as we are concerned, all these are life-forms and life-creating processes which are sacred and which should not become the subject of private property ownership.

Finally, the liberalisation of investments and the service sectors, which is pushed by the General Agreement of Services (GATS), reinforces the domination and monopoly control of foreign corporations over strategic parts of the economy. The World Bank and the International Monetary Fund impose conditionalities of liberalisation, deregulation and privatisation on countries caught in the debt trap. These conditionalities are reinforced further by the WTO.

In light of the adverse impacts and consequences of the WTO agreements identified above, we Indigenous peoples present the following demands:

We urgently call for a social and environmental justice analysis which will look into the agreements' cumulative effects on Indigenous peoples. Indigenous peoples should be equal participants in establishing the criteria and indicators for these analyses so that they take into consideration spiritual as well as cultural aspects.

A review of the agreements should be carried out to address all of the inequities and imbalances which adversely affect Indigenous peoples. The proposals to address some of these are as follows:

1. For the Agreement on Agriculture
   1. It should not include in its coverage small-scale farmers who are mainly engaged in production for domestic use and sale in the local markets.
   2. It should ensure the recognition and protection of rights of Indigenous peoples to their territories and their resources, as well as their rights to continue practising their Indigenous sustainable agriculture and resource management practices and traditional livelihoods.
   3. It should ensure the food security and the capacity of Indigenous peoples to produce, consume and trade their traditional foods.
      
      
2. With regard to the liberalisation of services and investments we recommend the following:
   1. It must stop unsustainable mining, commercial planting of monocrops, dam construction, oil exploration, land conversion to golf courses, logging, and other activities which destroy Indigenous peoples' lands and violate the rights of Indigenous peoples to their territories and resources.
   2. The right of Indigenous peoples to their traditional lifestyles, cultural norms and values should likewise be recognised and protected.
   3. The liberalisation of services, especially in the areas of health, should not be allowed if it will prevent Indigenous peoples from having access to free, culturally appropriate and quality health services.
   4. The liberalisation of finance services which makes the world a global casino should be regulated.
      
      
3. On the TRIPs Agreement, the proposals are as follows:
   1. Article 27.3b should be amended to categorically disallow the patenting of life-forms. It should clearly prohibit the patenting of micro-organisms, plants, animals, including all their parts, whether they are genes, gene sequences, cells, cell lines, proteins, or seeds.
   2. It should also prohibit the patenting of natural processes, whether these are biological or microbiological, involving the use of plants, animals and micro-organisms and their parts in producing variations of plants, animals and micro-organisms.
   3. It should ensure the exploration and development of alternative forms of protection outside of the dominant Western intellectual property rights regime. Such alternatives must protect the knowledge and innovations and practices in agriculture, health care, and conservation of biodiversity, and should build upon Indigenous methods and customary laws protecting knowledge, heritage and biological resources.
   4. It should ensure that the protection offered to Indigenous and traditional knowledge, innovation and practices is consistent with the Convention on Biological Diversity (ie Articles 8j, 10c, 17.2, and 18.4) and the International Undertaking on Plant Genetic Resources.
   5. It should allow for the right of Indigenous peoples and farmers to continue their traditional practices of saving, sharing and exchanging seeds, and cultivating, harvesting and using medicinal plants.
   6. It should prohibit scientific researchers and corporations from appropriating and patenting Indigenous seeds, medicinal plants, and related knowledge about these life-forms. The principles of prior informed consent and right of veto by Indigenous peoples should be respected.
      
      
4. If the earlier proposals cannot be ensured, we call for the removal of the Agreement on Agriculture, the Forest Products Agreements and the TRIPs Agreement from the WTO.
   
   
5. We call on the member-states of the WTO not to allow for another round whilst the review and rectification of the implementation of existing agreements has not been done. We reject the proposals for an investment treaty, competition, accelerated industrial tariffs, government procurement, and the creation of a working group on biotechnology.
   
   
6. We urge the WTO to reform itself to become democratic, transparent and accountable. If it fails to do this, we call for the abolishment of the WTO.
   
   
7. We urge the member nation-states of the WTO to endorse the adoption by the UN General Assembly of the current text of the UN Declaration on the Rights of Indigenous Peoples and the ratification of ILO Convention l69.
   
   
8. We call on the peoples' organisations and NGOs [non-government organisations] to support this "Indigenous Peoples' Seattle Declaration" and to promote it among their members.
   
   
9. We believe that the whole philosophy underpinning the WTO agreements and the principles and policies it promotes contradict our core values, spirituality and world views, as well as our concepts and practices of development, trade and environmental protection. Therefore, we challenge the WTO to redefine its principles and practices towards a "sustainable communities" paradigm, and to recognise and allow for the continuation of other world views and models of development.

Indigenous peoples, undoubtedly, are the ones most adversely affected by globalisation and by the WTO agreements. However, we believe that it is also us who can offer viable alternatives to the dominant economic growth, export-oriented development model. Our sustainable lifestyles and cultures, traditional knowledge, cosmologies, spirituality, values of collectivity, reciprocity, respect and reverence for Mother Earth, are crucial in the search for a transformed society where justice, equity, and sustainability will prevail.

Declaration by the
Indigenous Peoples' Caucus

convened and sponsored by
Indigenous Environmental Network
Seventh Generation Fund

in alliance with
TEBTEBBA (Indigenous Peoples' Network
for Policy Research and Education)
International Indian Treaty Council
Indigenous Peoples Council on Biocolonialism
Abya Yala Fund

Monkey-Wrenching the Globalisation Gang

APRN Trade Conference – Hong Kong, July 11-13, 2005

BWIs , IFIs , FTAs and MDGs : WMDs for the TNCs : Monkey-Wrenching the Globalization Gang

Aziz Choudry, GATT Watchdog

Click here for Aziz Choudry's full report: Neoliberal Globalization: Cancún and Beyond

I went to Bretton Woods, but all I got was this lousy t-shirt. Amazingly, it’s not a ‘one size fits all’ and it’s not full of holes.

Walking through the Mount Washington Hotel in Bretton Woods two years ago, in the New Hampshire mountain resort and official birthplace, in July 1944, of the International Monetary Fund (IMF), the World Bank, and of plans for an international trade organization – eventually embodied by the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO), I thought about the genocide of Indigenous Peoples in that part of the USA, now called “New England”, perpetrated by Puritans and other settlers who viewed them, as historian Douglas Leach put it, as a “graceless and savage people, dirty and slothful in their personal habits, treacherous in their relations with the superior race…fit only to be pushed aside and subordinated” .

Neoliberalism and Colonialism Fast forward a few centuries, and this colonizing mindset and racist contempt still underpins contemporary forms of subjugation, exploitation and dispossession against peoples of the Third World as well as Indigenous Peoples and racialized communities in the global North. It lives on at the G8, in the neoliberal policies of the Bretton Woods institutions, and powerful Northern governments like the US and the European Union, in aid arrangements and debt, in free trade and investment agreements, multilateral, regional and bilateral, and the activities of transnational corporations. 21st century imperialism is frequently masked in the language of development, ‘good governance’, ‘working for a world free of poverty’ , ‘fighting poverty in Asia and the Pacific’ ‘countering terror with trade’ and ‘building freedom through trade’ .

They might call it market capitalism, economic reforms and free trade instead of Manifest Destiny (though this may be news to the Bush Administration as it wages its wars and occupations), but the song remains the same.

''Colonialism is a big event that economists have not talked about, " MIT professor of economics and current winner of the John Bates Clark Medal, awarded by the American Economic Association to the US's top economist under 40, Daron Acemoglu told the Boston Globe last month. ''Historians talk about it. Political scientists talk about it. But economists just focus on the last 50 years."

When we discuss ‘policy coherence’ in the era of global neoliberal economics we should acknowledge the colonial roots of neoliberalism. In this supposedly ‘post-colonial’ world, colonial relations and geohistorical location continue to shape the reality of who eats, and who doesn’t, who has freedom, and who doesn’t, who has access to land and water, and who doesn’t, who can work in dignity and justice, and who doesn’t, who carries the burden of crippling debt, and who doesn’t, who has the right to determine their own futures, and who doesn’t.

When we hear ‘policy coherence’ talk, we should ask: coherent for whom and with what? The programmes of the IMF, World Bank and WTO fundamentally fail to cohere with development options which carve a different path than market capitalism. Indeed, they work to crush them, to shrink policy space and to prevent future governments from even thinking about alternatives. They are incoherent with peoples’ struggles for justice, dignity and self-determination. Behind sustainable development and pro-poor rhetoric, these institutions’ policies are utterly incoherent with socially and ecologically just development. ‘Policy coherence’ is a euphemism for imperialist globalization and expanded opportunities for domination by Northern governments and corporations.

There is definitely ‘policy coherence’ between colonization and neoliberalism. As activists, social movements and NGOs, we must name and confront the systems of capitalism and colonialism in our analyses and actions, if we are to put forward coherent agendas of resistance, and effectively struggle for justice, locally and globally.

Policy coherence: Singing from the same neoliberal songbook Almost every few weeks, another high-level statement calls for greater coherence between the Bretton Woods institutions, the WTO, the UN, the baby banks, bilateral donors and so on. This coherence agenda means support for the Doha work programme of the WTO – liberalization in goods, services, investment, trade-related capacity-building, improving global financial stability through capital account liberalization (didn’t that work well in Thailand and Korea in the 1990s! ) and channelling increased investment to developing countries and assisting borrower countries to improve coherence in their national policies.

In 2001, L. Alan Winters, (Director of the World Bank’s Development Research Group, Economic Professor at University of Sussex, and advisor to numerous international organizations on trade and development including the WTO, Organization for Economic Cooperation and Development (OECD), the InterAmerican Development Bank (IADB), the European Commission and UN Conference on Trade and Development (UNCTAD) wrote : “The WTO and the BWOs are already rather highly coherent. All subscribe to basically the same model of society and the economy, favouring markets over direction, advocating transparency and predictability, seeing international trade and investment as routes to prosperity and peace, accepting the importance of development and poverty alleviation, and recognizing the possibility that adjustment is painful. Hence much of what the three bodies do is mutually supportive, and incoherence is mostly just a matter of detail. This is not the impression one would get from some of the rhetoric behind calls for coherence.” This does not mean that there are not differences among these organizations in areas where they have jurisdictional overlap, especially in relation to financial liberalization.

Besides shared commitment to neoliberalism, the WTO, IMF and World Bank have formal relationships to achieve ‘policy coherence’. The Ministerial Declaration on the Contribution of the [World] Trade Organization to Achieving Greater Coherence in Global Economic Policymaking, in the Uruguay Round Act 1994, Part III.2 urged the IMF, the World Bank and the WTO to follow “consistent and mutually supportive policies…with a view to achieving greater coherence in global economic policymaking.” This is expressed in various agreements, ministerial declarations and decisions between the institutions. In May 2003, senior officials of the three institutions, including IMF Managing Director Horst Koehler, WTO Director General Supachai Panitchpakdi and World Bank President James Wolfensohn met in Geneva under the umbrella of the WTO General Council to develop a common approach to global economic policies – the “coherence agenda.”


The IMF and World Bank offer “technical assistance” and loans for adjusting debtor countries’ economies to full trade and investment liberalization. “Technical assistance” sounds benign enough. In reality it means coercing countries of the South to swallow more neoliberal medicine, sometimes in sectors over which they have been disputing further liberalization at the WTO. World Bank and IMF loan conditionalities generally insist that governments lower or eliminate tariffs, remove restrictions on foreign investment, modify customs procedures, fiscal and labour regulations and procurement policies, and promote private sector ownership. Privatization, deregulation and trade and investment liberalization have been core to Structural Adjustment Programmes (SAPs) and the so-called Poverty Reduction Strategy Papers (PRSPs) which the World Bank and IMF now insist countries adopt in order to receive continued loans. Former World Bank chief economist and US Treasury Secretary Larry Summers claimed in 1998: “IMF and…World Bank programs not just in East Asia but in India, Latin America, Central Europe and Africa, have led to more systematic trade liberalization than…bilateral or multilateral negotiations have ever achieved.”

Amid much official rhetoric about trade replacing aid to move people out of poverty comes more explicit aid-for-trade liberalization, (and, as we have seen with the recent G8 finance ministers’ debt reduction package, ‘debt relief’ for enforced liberalization and privatization) deals. The World Bank is increasingly concentrating its resources on trade-related operations, particularly towards least-developed countries (LDCs), transition economies and those in the process of WTO accession. The Bank is allocating more funds to trade-related activities in 2004-2006 than it did during the eight years from 1996-2003. Total trade lending over the next three years is nearly US $4 billion compared with just over $2 billion in the past 8 years . Lending for trade facilitation is increasing from $300 million over the past 8 years to a projected $1 billion over the next 3 years . Meanwhile the Bank leads the joint agency Integrated Framework for Trade-related Technical Assistance for Least Developed Countries (IF). The other agencies involved are the IMF, WTO, the UN Development Programme (UNDP), UNCTAD, and the ITC (International Trade Centre - the technical cooperation agency of UNCTAD and the WTO for operational, enterprise-oriented aspects of trade development). According to its website , the IF’s objectives are to ”"mainstream" (integrated) trade into the national development plans such as the Poverty Reduction Strategy Papers (PRSPs) of least-developed countries; and to assist in the co-ordinated delivery of trade-related technical assistance in response to needs identified by the LDC”.

The spread of World Bank-led diagnostic trade studies is forcing rapid unilateral trade liberalisation into national development plans through the back door.

The IMF, meanwhile, remains the global gatekeeper for aid, the most important single agency in signalling the quality of a country’s macro-economic environment and creditworthiness to other donors. The IMF’s Poverty Reduction and Growth Facility (PRGF) complements and interlocks with the World Bank’s PRSP and the work of the WTO. Its platform is trade liberalisation, privatisation and a reduced role for the state. In April 2004, the IMF launched its Trade Integrated Mechanism (TIM) to assist member countries meet balance of payment shortfalls resulting from multilateral trade liberalization (like reduction in export revenues, and increased import bills). Its first recipients were Bangladesh and the Dominican Republic. The IMF has also boosted technical assistance and research on trade.

A 10 December 1999 World Bank-IMF operational document on PRGF-PRSP argues: "The impediments to faster sustainable growth should be identified and policies agreed to promote more rapid growth: such as structural reforms to create free and more open markets, including trade liberalisation, privatisation and tax reform and policies that create a stable and predictable environment for private sector activity."

IFIs, the Basel Committee on Banking Supervision, comprised of the world’s thirteen most powerful Central Bankers , the WTO and the baby banks essentially form much of the framework for global economic policymaking. The IFIs set parameters for all donors of the accepted creed of policy discourse with developing countries and ‘effective’ aid delivery strategies. Calls for greater coherence of donor countries to harmonize their aid, investment, export credit insurance and trade policies are cold comfort when coherence means conformity to a neoliberal model of development. Trade-related conditionalities of the IMF-WB (and regional banks like the ADB) weaken negotiating positions and possibilities for formation of alliances of countries to stand against US-EU bullying in multilateral or regional trade negotiations or aggressive bilateral deal-making.

The ‘Baby Banks’ Trade–related technical assistance has also become an increased focus of ADB and IADB lending policy. The IADB has a close formal relationship with the WTO. In February 2002 it signed a memorandum of understanding to deepen cooperation on providing technical assistance like training courses and workshops on trade negotiations and capacity-building to Latin American and Caribbean countries “to participate fully in the multilateral trading system.” The IDB’s central policy goal is economic integration of Latin American countries with the global market. Since 1994 the IADB has contributed over US $10 million to support the Free Trade Area of the Americas (FTAA) process . In May 2002 WTO and ADB officials signed a memorandum of understanding under which their institutions agreed to cooperate on joint technical assistance programmes for participants from the ADB's developing member governments in Asia and the Pacific .

WTO As the WTO broadens its scope it opens up a greater interface with the IMF and World Bank, which have also broadened their roles beyond their original core activities in recent years. A key area for jurisdictional overlap between the institutions concerns capital liberalization, especially in relation to the General Agreement on Trade in Services (GATS), Trade-Related Investment Measures (TRIMs), and the plurilateral Financial Services Agreement. Continuing pressure from Northern governments and corporations in the GATS negotiations aims to achieve, by the backdoor, the liberalization and convertibility of capital accounts of developing countries. Meanwhile any future Multilateral Agreement on Investment (MAI)-style deal on investments at the WTO would inevitably create other areas of overlap with the IMF-World Bank.

Potential for inter-institutional tensions certainly exists, and there already are examples. As Korean academic Dukgeun Ahn has noted , measures adopted under South Korea’s December 1997 agreement with the IMF during the financial crisis became the focal point for WTO trade disputes with the USA and the EU. Here, IMF-prescribed and temporary increased roles of the government in the financial restructuring of the Korean corporate sector were challenged under the WTO Agreement on Subsidies and Countervailing Measures. Ahn observes: “There is no exception to WTO obligations for policy measures regardless of whether they are employed as parts of adjustment measures or IMF conditionality.” Perhaps the moral of this story is that when there is apparently full coherence and congruence between IMF, World Bank and WTO measures, you stand to get screwed for not being neoliberal enough, and if there is inconsistency, you also get screwed for not being neoliberal enough!
The UN, Neoliberal Globalization and the Millennium Development Goals The Monterrey Consensus declaration from the UN Conference on Financing for Development (FfD), attended by representatives of the IMF, World Bank, WTO and many corporations was aptly dubbed the “Washington Consensus wearing a sombrero” by John Foster of the Ottawa-based North-South Institute. With its advocacy of trade and investment liberalization, privatization and the marketization of land and resources, it highlights again the neoliberal capture of the United Nations. It comes on top of increasingly entrenched corporate involvement at UN agencies, its 1993 dissolution of the UN Centre on Transnational Corporations, and the UN Global Compact with 50 of the world’s largest corporations, an initiative which Kofi Annan promised would “safeguard open markets while at the same time creating a human face for the global economy" among other things . Arguments for more policy space must be seen in the context of an overall push to get UN members to ultimately move towards the same goal – free market economies.

On April 15 2005, a special high-level meeting of the UN ECOSOC with the Bretton Woods institutions, the WTO and UNCTAD (WTO Director-General Supachai Panitchpakdi’s new employer) discussed ‘Coherence, coordination and cooperation in the context of the implementation of the Monterrey Consensus: achieving the internationally agreed development goals, including those contained in the Millennium Declaration.” The President of ECOSOC’s summary noted that “the increasing interdependence of national economies in a globalizing world and the emergence of rule-based regimes for international economic relations meant that the space for national economic policy was now framed by international discipline, commitments and global market considerations”. Most sought “decisive progress” in the Hong Kong WTO Ministerial Conference towards “a successful conclusion of WTO negotiations in 2006 on the basis of a truly development-oriented Doha agenda”. Indeed, this is the UN Secretary-General’s request. A June 1 2005 Secretary-General’s report to the UN General Assembly reiterated support for “addressing systemic issues: enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.”

The MDGs ignore structural issues at the root of poverty such as debt, unfair trade and economic policies. Perhaps that is unsurprising. They were essentially drawn up by ministers from OECD countries, with no participation by governments from the South let alone those most directly affected. How exactly will governments finance primary health care and education while they are being forced to cut public expenditure and privatize services under neoliberal conditionalities of IFIs? How can the poor afford commercialized healthcare, water, education? How can even the rather modest goals of the MDGs be achieved by any country in the grip of neoliberalism, privatisation, and debt slavery? The social development goals are little more than a whitewash of the continuing policies of structural adjustment and liberalization – policies which worsen poverty and stunt genuine development.

In his “In Larger Freedom” report, Kofi Annan says that “development, security and human rights go hand in hand”. But what little the MDGs appear to give with one hand is taken away with the other. Goal 8 of the MDGs is: ‘Develop a global partnership for development …. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system (includes a commitment to good governance, development and poverty reduction – both nationally and internationally)”
IBON’s Joseph Yu points out: “The pessimism towards meeting the MDGs is not meant to spur rich donor countries to increase development assistance to underdeveloped countries, but to set the stage for the prescription of further neoliberal reforms as the means to achieve rapid economic growth and consequently, poverty reduction…Promoting an “open, rule-based trading and financial system”, cooperation with the private sector and competition in the global economy risks poverty alleviation goals being overwhelmed by corporate and donor interests.”

Finance Liberalization and FTAs The 1998 UNCTAD Trade and Development Report noted: “the ascendancy of finance over industry together with the globalization of finance have become underlying sources of instability and unpredictability in the world economy. (…) In particular, financial deregulation and capital account liberalization appear to be the best predictor of crises in developing countries.” Capital account liberalization, the removal of controls, taxes, subsidies and quantitative restrictions that affect capital account transactions - whether promoted through IMF loan conditionalities, the WTO Agreement on Financial Services, or now, in bilateral free trade and investment agreements – has already devastated domestic economies, particularly in South East Asia and Mexico in the 1990s.

The Chile and Singapore FTAs with the USA have “NAFTA -plus” broad definitions of investment, which throw the door wide open for disgruntled investors to take a case to a dispute tribunal. Both agreements impose alarming new limits on the use of capital controls. Indian policy analyst and researcher Kavaljit Singh argues that Chile’s controls on capital inflows have helped insulate it against financial crises. He writes that it “stands to reason that the probability of occurrence of a financial crisis in Chile and Singapore would increase manifold with the removal of capital controls as envisaged in the bilateral trade agreements with the U.S.”

Even free traders have slammed this aspect of these FTAs. In a March 2003 Financial Times article, Jagdish Bhagwati and Daniel Tarullo wrote, “The intention of the Bush administration to use these two agreements as ‘templates‘ for other trade agreements, possibly including the Doha round, means that acceptance of the capital control provisions could engender a trade policy that causes far-reaching damage. The prohibition on capital controls has the makings of a U.S. foreign policy debacle. Imagine that a government imposes short-term capital controls in order to manage financial problems.

Compensation will ensue, but only for American investors. The citizens of the developing country will then see a rich U.S. corporation or individual being indemnified while everyone else in the country suffers from the crisis. One would be hard-pressed to think of a better prescription for anti-American outrage.”

Fighting Back While some people say “make poverty history”, some of us say “make capitalism history”. Capitalism and colonialism are all too often the elephants in the room in NGO activities on debt, trade economic, social and political justice – and war.

If our analysis of neoliberalism takes an explicitly anti-colonial and anti-capitalist standpoint, we may question strategies which aim to move these predatory, carnivorous institutions and companies towards a vegetarian diet by polite petitioning and ‘civil society dialogue’, and instead work together to delegitimize them. We must go beyond a compartmentalized campaign approach to individual institutions and their policies and name and confront the values and ideology that lie behind and link them.

Both critics and supporters of policy coherence argue that coherence at an international level between institutions has to be based on coherence within national governments and their different ministries, agencies and departments. Strategically and practically, I think that it is primarily the domestic pressure points of intervention - conflicts, contradictions, tensions between officials, government ministries and departments - which are important to identify and campaign around, rather than the potential or apparent tensions between the IFIs and the WTO.

As labour researcher Gerard Greenfield warns, calls for transparency, openness and more democracy within institutions like the WTO ignore “the fact that we need to have the ability to do something about what we see, otherwise we’ll just be spectators in a transparent process… Aggressively cutting back our ability to impose democratic priorities on capital is not an afterthought - it lies at the very heart of the globalization project.

For those in power, an opposition that prioritizes dialogue and a contest of ideas with elites is far less dangerous and more controllable than one that understands power and builds counter-power through community organizing and movement-building.

“Many of the biggest and strongest civil society organizations orient upwards, justifying and elaborating the actions and ideologies of the dominant power. Others orient to the grassroots, and within this there are two different types: those that organize and mobilize to fit into programmes constructed by dominant power, and those that organize and mobilize to confront the dominant power” write South African activists and researchers Stephen Greenberg and Nhlanhla Ndlovu.

Perhaps we need to reclaim the roots of the word monkey-wrenching – it is a term from Ed Abbey’s book about a fictional band of militant environmental activists, The Monkey Wrench Gang referring to direct action against the powerful. The biggest and strongest kinds of monkey-wrench are strong and sustained communities of resistance and social movements. For those of us that do research and policy analysis, our challenge is to redouble our efforts to orient our work in ways that strengthen and support those popular struggles against neoliberalism, in our communities, and internationally.

*******

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UN General Assembly/Economic and Social Council. Summary by the President of the Economic and Social Council of the special high-level meeting of the Council with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (New York, 16 April 2005). 2 June 2005. http://www.un.org/docs/ecosoc/meetings/2005/bwi2005/President%27sSummary.pdf
UN General Assembly. The Monterrey Consensus: status of implementation and tasks ahead. Report of the Secretary-General. I June 2005. http://daccessdds.un.org/doc/UNDOC/GEN/N05/370/07/PDF/N0537007.pdf?OpenElement
UN General Assembly. In larger freedom: towards development, security and human rights for all. Report of the Secretary-General. p.5 http://www.un.org/largerfreedom
UN Millennium Development Goals website. http://www.un.org/millenniumgoals/
Joseph Yu. Kofi Annan’s ‘In Larger Freedom’: Still not free from the neoliberal strategy. IBON Features. Vol XI No 11. April 2005 http://www.ibon.org
UNCTAD Trade and Development Report 1998: Financial Instability, Growth in Africa. pp. V. and 55. http://www.unctad.org/en/docs/tdr1998_en.pdf
see Aziz Choudry. Bilateral Trade and Investment Deals: BITs a serious challenge for global justice movements. Z Magazine, December 2003 http://zmagsite.zmag.org/Dec2003/choudry1203.html
Kavaljit Singh. Trading Away Capital Controls. 12 April 2003. http://www.ased.org/artman/publish/printer_72.shtml
Jagdish Bhagwati and Daniel Tarullo. A ban on capital controls is a bad trade-off.
Financial Times, 17 March 2003
Gerard Greenfield. The Success of Being Dangerous: Resisting Free Trade & Investment Regimes. Studies in Political Economy, Spring 2001. http://www.global-labour.org/greenfield1.htm
Stephen Greenberg and Nhlanhla Ndlovu. Civil Society Relationships.  www.interfund.org.za/pdffiles/vol5_two/greenberg.pdf
Edward Abbey. 1976. The Monkey Wrench Gang. New York: Avon Books.

ENDS

Collapse of WTO talks: Historic victory over neo-liberalism

The Guardian 6 August, 2008

Anna Pha

After nine days of high pressure negotiations the Doha Round finally collapsed. At previous World Trade Organisation (WTO) conferences and those of its predecessor, GATT, the developing nations were subjected to heavy bullying, all manner of threats and standover tactics. In the end they would capitulate with little more than promises in their hands in return for huge sacrifices.

The tactics were no different in Geneva last week, but on this occasion the Third World countries came well prepared. Under the strong leadership of India and with the weight of China behind them, 100 united and determined developing countries refused to cave in to policies that would only result in greater poverty and add to the millions of undernourished in their countries.

The outcome is a historic victory for the people of the world, in particular the most poverty stricken, and a blow against the neo-liberal policies of US imperialism. Despite not getting everything they were seeking from the Doha round, it is still a huge victory for developing countries. It was a decisive rejection of neo-liberalism that speaks for hundreds of millions of people globally. It is also strikes a blow at the transnational corporations (TNC) whose bidding Western governments were doing.

The US’s chief negotiator, Susan Schwab, blamed China and India for their defeat. She told journalists the dispute with China and India "really wasn’t a political discussion" but one over trade policy. She said the two emerging powers were demanding a "free-for-all" that would regularly allow them to raise tariffs on goods such as soybeans, poultry and palm oil, hurting American exporters.

China and India did play an important leadership role, steadfastly refusing to accept a further opening up of their markets in return for more promises. They did so speaking on behalf of the 100 developing countries which had signed a joint statement which was distributed during negotiations. China was admitted to the WTO at the Ministerial Conference in Doha in November 2001 and up until now had taken a low-key approach.

India’s chief negotiator Kamal Nath received a heroes’ welcome on his return to India. "The vulnerability of poor farmers cannot be traded off against the commercial interests of developed countries", he said having refused to bend to pressure. "I can negotiate commerce but I cannot negotiate livelihood security", said Nath, who laid blame on the intransigence of the US.

In Australia, the President of the National Farmers’ Federation (NFF), David Crombie, lamented the breakdown of talks, saying that it would prevent Australian farmers from selling into new and expanded markets.

"The collapse, caused by hardline demands for unacceptable flexibilities in … market access by countries such as India, has cost Australian farmers the opportunity to export to new and expanded markets", Crombie claimed. Developing countries, he warned, would be the biggest long-term losers. This viewpoint represents the agro-industrial complexes. Smaller family farms would stand to lose a great deal from heavily subsidised imports into Australia. Australian farmers already face stiff competition from cheaper imports.

Bradley S Klapper, writing in the Washington Post (30-7-08) reflected the attitude of the US and other wealthier nations when he said: "… the talks hit a snag over an obscure ‘safeguard’ for protecting agricultural producers in the developing world from a sudden surge in imports or drop in commodity prices."

This so-called "obscure safeguard" is a matter of life and death for millions of people. Developing countries at the UN Food Crisis Summit earlier this year emphasised the importance of re-establishing their agriculture sector as a means of feeding their people.

The free market policies which the developing countries firmly rejected are the very same polices that led to the present global food crisis.

The conference should have been about negotiating developing countries’ access to developed countries’ agricultural markets in return for developing countries opening up to foreign investment and services. Instead it was a very one-sided affair with developed countries expecting everything for peanuts in exchange for more empty promises. The developing countries were also demanding previous promises be included in the agreement.

The developing countries were calling for:

"Policy space" for governments of poor nations to be able to take actions to assist with development, and food security, in particular to have the flexibility to raise tariffs where necessary to protect a fledgling industry.

Recognition of the Doha principle of?"Special and Differential Treatment" for poorer nations, whereby developing countries can take a slower pace in reducing tariffs according their needs.

The roll-back of patent laws that prevent?poorer nations from manufacturing cheaper generic medications.

The exemption of staples such as corn,?rice, and wheat from deregulation in line with the Doha principle of protecting "Special Products".

Technical and financial assistance from?rich nations with the IMF, World Bank, etc, required to develop industrial and agricultural sectors.

The US and EU to honour WTO rules, in?particular WTO rulings that found their subsidies for cotton and sugar to be in violation of exiting trade rules under the prior agreement.

Mutually advantageous trade relations.

Action on the part of developed countries?to reduce their subsidies and other trade barriers and practices.

An end to the double standards practiced by the developed countries. For example, the tariffs collected by the US on US$2 billion worth of imports from Bangladesh are higher than those imposed on US$30 billion of imports from France. The huge subsidies and other assistance given to the agricultural sector enable the US, France and other developed countries to dump products on Third World markets, at prices that put local farmers out of business.

Needless to say such demands fell on deaf ears even though they were consistent with WTO principles.

As at the Food Crisis Summit, developed countries lacked the political will to negotiate an agreement that would assist the development of poorer nations. They expected developing countries to slash tariffs and further open their markets to imports and foreign investment with no restrictions on the operations of TNCs, a recipe for disaster not development.

If the EU and the US redirected some of the billions of dollars they spend every year subsidising their agricultural sectors to the poor nations, those nations would have a chance of developing their agricultural and manufacturing sectors.

The budgets of many developing countries are heavily reliant on tariffs — as much as 40 percent of tax revenue in countries such as Madagascar, Sierra Leone, Uganda and Swasilan.

The demands of the developed countries were "business as usual", with the expectation that they would be able to force agreement on their agenda in the dying hours of the conference, as in the past. They were in for a shock.

A question of survival

Developing countries have in past rounds reluctantly agreed to tariff reductions on imports. In return they were promised, amongst other things, technical assistance, greater access to developed countries’ markets and flexibility. These promises, repeated yet again have never been honoured while the TNCs and developed nations were yet again demanding further concessions.

It was the same "North-South" divide in Geneva last week. On this occasion the North did not get its own way; even its usual divide and rule tactics failed

Several decades of structural adjustment programs, WTO policies, and IMF conditions and US puppet governments, are largely responsible for the destruction of agricultural sectors in many developing countries. As was reported to the UN Food Crisis Summit, former net exporters of agricultural products have become highly dependent on food imports. Millions of people have been driven off their land and added to the urban poverty of cities.

The Food Crisis Summit heard the same tragic stories repeated one after another from the poorer nations. Their pleas for financial assistance and technical knowledge largely fell on deaf ears. The hunger and malnutrition of more than 350 million people is a direct result of the operations of the TNCs under the umbrella of the WTO and Western governments.

Unity cemented

According to estimates by World Bank researchers, the Doha Development Round of negotiations would lift only 2.5 million people out of extreme poverty from an income of $1 to $1.10 per day by 2015 — not exactly eradicating poverty.

The development of various groupings of developing countries on a regional basis or round an issue at recent WTO ministerial meetings took an important step forward with the presentation by India of the joint statement from the 100 developing countries.

The statement pointed to the shortcomings of the draft text prepared by the Director General of the WTO Pascal Lamy. The statement put forward a very reasonable but firm position as to what was required.

Events in Geneva should act as a warning to the big imperialist powers and the corporate giants that it no longer "business as usual". The small and relatively powerless nations standing hand in hand with the likes of China and India, have gained a voice and power — no doubt their voices will be heard at other international conferences, including on another life and death matter — climate change.

The political change taking place in Asia, Central and South America, amongst African nations, and in the Pacific, together with the closer relations between developing countries are leaving the US behind. China, India, Russia, Venezuela, Cuba and other countries are forming closer economic and political ties.

Some of he most reactionary puppets of US imperialism have been thrown out of office and replaced by left and relatively progressive governments. This change for the better in the political landscape reflects the growth of mass movements behind the stand taken in Geneva by Third World governments. More and more people are becoming very conscious of the source of their hardship and expect real change from their governments.

Doha world trade talks collapse in blow to globalisation

Best news all week

By Edmund Conway Economics Editor

Last Updated: 8:02pm BST 29/07/2008

The Doha round of world trade talks has collapsed in what one former trade chief called the biggest blow to globalisation since the end of the Cold War.

An emergency World Trade Organisation summit aimed at resuscitating the seven-year long talks broke down in acrimony last night.

Negotiators warned that there was now little or no chance of salvaging the talks, which promised to bring down trade tariffs, pull millions out of poverty and keep food and goods prices under control.

Continues here

see also

RIP Doha Round - for shore!

New Zealand firms urge bilateral trade pacts after WTO failure

EPA will open economies of poor countries to European pirates

The Economic Partnership Agreement (EPA) due to be signed between the European Union (EU) and 110 developing countries this year would open up those countries to European pirates and ultimately increase poverty for less developed countries (LDCs), a new report on the EPA said on Wednesday.

“We are not against trade but we are against the type of rules that the EU imposes on us and that is why we say ‘no’ to European pirates,” the report quoted Ms Norma Maldonado from the Central American-based International Gender and Trade Network (IGTN) as saying.

The report put together by the World Trade Movement (WTM) under the title “Raw Deal”, and launched at the ongoing United Nations Conference on Trade and Development (UNCTAD XII) meeting in Accra, claims the benefits of signing a free trade deal with the EU sat firmly with European businesses, rather the developing countries.

Through the EPA, the EU is seeking to open up the markets of 110 African-Caribbean-Pacific (ACP), Latin American, Asian and Mediterranean countries for free trade in spite of the fact that all of those countries do not have strong enough economies to compete fairly with the EU.

Critics maintain that the fact that the EU provided heavy subsidies for its local farmers and multinationals, something that developing countries were being asked not to do, made the playing ground uneven.

The WTM through the report has therefore added its voice to the widespread call for the EPA to be rejected outright.

Meanwhile other organizations, including UK-based international charity, Oxfam, have said that a better deal would be to include some amount of development content in the EPA for less developed countries and for the EU to open up its markets for least developed countries (LDCs) now.

The report captured the development impacts of two existing EU bilateral trade agreements with South Africa and Mexico, saying that in both examples the deals were found to be one-sided in favour of the EU.

The impacts highlighted by the report included balance of payment problems, decreased tax revenue, decreased access to credit for farmers, decreased ability to effectively regulate foreign investors and increased unemployment in those two countries.

“An almost 50 per cent increase in South African food and drink imports from the EU, including diary products, cereals, and processed food and drink, coupled with the reduction of tariffs on European sweets in South Africa has resulted in 25 per cent fall in employment in the sweet making industry in that country.”

It said South Africa’s growing trade deficit with the EU had made that country more vulnerable to international debt, particularly destabilizing short-term capital flow.

In the case of Mexico, the report said that country could no longer regulate the proportion of foreign shareholders in banks.

“Mexico can no longer favour domestic companies for government procurement contracts, which amounts to six per cent of GDP, even though UNCTAD has said that favouring domestic companies is a vital tool of development,” it said.

It also projected government revenue loss to the tune of 7.5 per cent of GDP in Namibia.

Meanwhile Ghana and Cote d’Ivoire, who have already initialled an Interim EPA, are expected to lose at least 83 million dollars a year in import tariffs on goods from EU.

Ms Maldonado said the EU wanted to impose things on LDCs which they (EU) did not impose on themselves, such as demanding access to LDCs, even though they had huge subsidies on their own agricultural goods.

Ms. Vicky Cann, Trade Policy Officer of WTM, said EU trade deals were unfair and hurt the poor, adding that the evidence was that the EPA would benefit European multinationals and hinder rather than help the development of poor countries.

“In this time of rocketing world food prices, it is hard to believe that Europe seeks to open up developing countries’ markets to heavily subsidized European exports, putting LDCs farmers out of business and undermining food security,” she said.

Charles Santiago, MP for the Democratic Action Party in Malaysia, described the EPA as a re-write of trade rules in favour of EU corporations, following the thwarting of EU’s plans at the World Trade Organization (WTO) by LDCs.

“EU is now targeting LDCs individually to reap the rewards it couldn’t get at the WTO because countries stood up and said ‘no’ together. To developing countries I say keep away from EU free trade agreements, they do not work in your interest,” he said.

Mr. John Ochola from Econews in Kenya called on European citizens and companies to stand up to their governments and tell them not to make the poor poorer.

Meanwhile 25 individual LDCs, including Ghana, have already initialled an Interim EPA, under which a number of exports between them and EU were under a quota-free, duty free regime, pending the signing of the full EPA this year.

Critics have said if the EPA is signed, people in the 110 targeted countries, 1.47 billion of which lived on less than a dollar a day, stood the risk of even further sinking under the doldrums of poverty.

Source: GNA

Samoa Sacrifices its culture on the altar of Globalisation

Bilateral Negotiations for Samoa WTO Accession

Thursday, 31 January 2008, 6:28 pm
Press Release: New Zealand Settler Grubbyment

Hon Phil Goff
Minister of Trade

Settler Grubbyment

31 January 2008
Media statement

Minister of Trade Announces Conclusion of Substantive Bilateral Negotiations for Samoa WTO Accession

Trade Minister Phil Goff with Samoa Deputy Prime Minister Misa Telefoni
*****

New Zealand and Samoa have successfully concluded negotiations on the major outstanding issues in Samoa’s World Trade Organisation (WTO) bilateral accession negotiation, Trade Minister Phil Goff announced today.

To accede to the WTO a state is required to obtain endorsement from a WTO Working Party that its trade regime is consistent with WTO rules. It must also conclude individual bilateral negotiations on the terms of their entry to the WTO with other members.

“Samoa sees membership of the WTO as being important to achieving its economic goals, and we support their efforts to realise this ambition,” Mr Goff said.

“The conclusion of our substantive negotiations with Samoa on the key goods issues is a major milestone towards Samoa’s objective.

“A clear process has been agreed to complete remaining technical work necessary for the agreement to be concluded.

“The agreement will reflect Samoa’s level of development, the significant progress it has already made in restructuring its economy and substantially reducing its tariffs and the close friendship between our two countries,” Mr Goff said.

The agreement will be signed by Samoa’s Deputy Prime Minister Misa Telefoni and New Zealand’s Trade Minister Phil Goff in early March.

ENDS

Samoa ready for WTO

12:00PM Sunday November 11, 2007
By Cherelle Jackson

Rohan Ellis. Photo / Cherelle Jackson

New Pacific island countries ready to enter into the World Trade Organization.

This is according to Trade Representative of the Pacific Island Forum Trade Office in Beijing, Mr Rohan Ellis.

"Samoa has a strong government, is pro private sector and it has shown tremendous success in the reforms," Mr Ellis said.

Not all Pacific countries are ready for the move according to Mr Ellis, but Samoa is certainly poised to do so.

"In the long run, it is a great opportunity for Samoa as it is a stepping stone to better trade," he said.

All that Samoa is missing, according to Mr Ellis, is "innovation drive."

Convinced about Samoa's potential, Mr Ellis said Samoa needed to provide a product of difference to cater for a niche market.

"Samoa should make use of traditional and cultural products but create something that is different, that can be in demand," he said.

Currently Samoa is in accession status to the WTO, with negotiations currently underway at the national level.

A working party on the accession of Samoa was established on July 15 1998 and the Memorandum on Samoa's Foreign Trade Regime was circulated in February 2000.

A first revision of the draft Working Party Report was circulated in November 2006. Samoa submitted initial offers in goods and services in 2001.

The services offer was later revised in 2005 and 2006.

Mr Ellis said: "Not all countries are ready, but those who can afford to should enter."

He said although there was much to be gained through the WTO smaller islands also stood to lose if they were not careful.

"Samoa should make sure that the country is armed and ready to deal with the implications of the WTO," he said.

Mr Ellis, however, insists that the special privileges allowed by the WTO to smaller nations should give Samoa the chance to explore what the trade agreement has to offer.

He is one of the few who have expressed favourable support for Samoas accession to the WTO.

The last visit by the WTO to Samoa in June was met with scepticism by locals during a national level consultation.

Members from the Samoa Umbrella for Non Government Organization raised their concerns about the accession supporting notions by Oxfam New Zealand that Samoa may be taken advantage of by larger economies, once in the WTO.

Members of SUNGO expressed their concerns about the size, structure and strength of the Samoan economy to survive in the WTO.

Barry Coates, Executive Director of Oxfam New Zealand told Newline in an interview during the fifth Civil Society Forum in Samoa said that the decision to enter the WTO would have an impact on the independence of Samoa.

Mr Coates - who identified the islands need for "protection" - was adamant that there was more to lose than be gained from joining the organisation.

"Tough" was the word he used to describe the attitude towards new members of the WTO.

The demands include the observance of Intellectual Property (IP) rights and exercising Patent regulations whereby the entering nation will suffer strict policies by the WTO.

According to Mr Coates this would cause major problems Samoa.

"There have already been cases of new medicinal plants discovered in Samoa and once Samoa is in the WTO those plants can be patented by foreign companies."

But that's not it, when IP is observed many of the local bands, video stores and unsolicited content used on local TV stations will be taken out.

Samoans will face heavy penalties and repercussions for their actions.

"There's a lot that needs to be considered before Samoa moves into the WTO and everyone needs to be aware of the implications of it," Mr Coates said.

But WTO Counselor from Geneva and Coordinator for Asian and Pacific Economies Edwini Kwame Kessie, told Newline during the consultations that all trade negotiations are transparent in the WTO.

"Probably the most important of all principals is the accepted retaliation which consists in the cost of ignoring WTO commitments. It means that if a country chooses to ignore its WTO commitments, then those other members of the WTO whose trade has been negatively impacted can seek compensation."

The second central principle according to the WTO is non-discrimination which means that members of the WTO must treat all other members equally.

The most common example of this principle is the extension of most-favoured nation tariff rates to all members of the WTO.

A country that joins the WTO therefore agrees to extend the lowest tariff rate it charges any country on a particular customs category of goods to all other members.

But Mr Kessie said current Least Developed Countries (LDCs) members of the WTO have yet to benefit from the agreement.

"The share of LDC in world trade is 0.5 per cent, obviously the reason why they are not benefiting has got to do more with site supply constraints, most of them have not enacted the right economic and trade policies, they are unstable, the reality is, for most of these LDCs, it is not because of the WTO but due to current fundamental problems in those countries, that is why I stress that Samoa adopts the right economic and trade policies," Mr Kessie said.

The WTO was established in 1995, replacing the General Agreement on Tariffs and Trade (GATT) as the only international body with the global rules of trade between nations.

Mr Kessie reminded that it was a common misconception that WTO was a law-making and enforcement institution similar to a domestic legal system.

"It is not. It is an international organization that countries voluntarily agree to join. It has no coercive powers and all the countries that have chosen to become members have voluntarily accepted its rules."

According to him: "the WTO is therefore a political compromise."

Pacific Islands close to agreement on trade deal with European Union

Tonga and four other pacific countries are about to agree on an interim trade deal with the European Union (EU).

The Pacific Network on Globalisation (PANG) says that in a joint declaration after a ministerial-level meeting in Brussels, the EU and the Pacific countries said they have agreed to move on to some agreement.

“In view of the short time available until the deadline of 31 December 2007, it was necessary to conclude a World Trade Organisation (WTO)-compatible interim agreement as a stepping stone to a comprehensive EPA,” said PANG.

The Pacific countries involved in the talks include, Fiji, Samoa, Tonga, Tuvalu and Vanuatu.

Tonga was represented by the Hon. Minister for Labour, Commerce and Industries Lisiate ‘Akolo and Secretary for the Ministry Paulo Kautoke.

Interim agreement would include timetables for cutting tariffs on goods, rules of origin, and safeguard mechanisms for slowing sudden surges of imports plus possibly fisheries, competition and development issues.

The interim deal would enter into force on 01January and the two sides would seek a final EPA by the end of 2008.

PANG’s Director Roshni Sami said the Pacific had previously outlined their minimum negotiating position that no one facet of the deal is agreed on until the whole deal was agreed on.

“What we can see by this interim agreement is that actually that red line has been broken because they will be concluding negotiations on some sectors by December 31st 2007, according to this joint statement, and then the rest of the sectors will be negotiated and concluded by 2008. So you can see the Pacific’s arm has been twisted and the way they’ve done that is by including sugar in the EPAs.”

Tonga's delegation to the meeting returned yesterday.

Network hits out at dirty EU politics

THE Pacific Network on Globalistion (PANG) has supported the Pacific ministers and negotiators for sticking to their mandate on Economic Partnership Agreement (EPA).

Co-ordinator Roshni Sami said "people’s lives and livelihood are at stake here and PANG strongly supports Pacific ministers and negotiators for questioning such dirty politics by the European Union".

Ms Sami’s comments came after the Pacific African Carribean Pacific (ACP) trade ministers meeting in Vanuatu expressed "grave concern and deep disappointment" that the EU was tying the negotiation of the EPA to development funding from the 10th European Development Fund.

"Pacific people must continue to demand an EPA that actually benefits the development of Pacific Island countries," she said.

"We must keep in mind there are alternatives and we should not compromise the integrity of the Pacific negotiating position nor future economic opportunities for the Pacific just to sign an EPA within the negotiating framework set by the EU."

EDF funding is what Pacific governments use to build schools, hospitals and other vital public infrastructures, Ms Sami said.

She argued it was essential that Pacific Island nations receive separate assistance to cope with the effects of opening up the market as well as take advantage of opportunities that liberalisation might bring.

"This is why the Pacific proposal has always included an adjustment fund as a development component.

"It is imperative that Pacific negotiators continue to protect these kinds of pro-development initiatives in the Pacific ACP EPA proposal.

"We are seeing the explicit linking of aid with trade in an agreement between a weak and a very strong negotiating power. This power imbalance makes us vulnerable to bullying from the EU. PANG urges Pacific governments to stand strong and push for Pacific interests," said Ms Sami.

She said it was important for Pacific negotiators to hold their ground in the EPA negotiations to set a benchmark for negotiations with New Zealand and Australia.

Acceding Countries as Pawns in a Power Play: a case study of the Pacific Islands

Jane Kelsey

I would like to begin my comments with a plea made by the Deputy Prime Minister and Finance Minister of Samoa - one of three small islands in the South Pacific that are undergoing the torturous process of WTO accession: [1]

We, the small states of the pacific, and the world, feel as though we are the mice who catch pneumonia when the elephants sneeze. We would ask the big powers to tread softly, for you tread not only on our lives, but also on our livelihoods.[2]

Similar and persistent appeals for sensitivity in WTO accessions have fallen on deaf ears.[3] The problem, according to a senior Samoan negotiator, is that the supposedly ‘rules based organization’ has no rules. Others who have an intimate knowledge of Vanuatu’s stalled accession put it more sharply: ‘the accession process has no rules, except precedent and power, and is the very antithesis of what the members publicly state to be the intention and design of the WTO’.[4] The General Council Decision of 10 December 2002, which pledged sensitivity to development needs and self-restraint towards least developed countries (LDCs),[5] has not made the slightest difference. Nothing mocks the claim to a Doha ‘development’ agenda,[6] and delegitimates the WTO even further, than the power politics of accession.

While all eyes are fixed on the fate of the Doha Round, it is important to recognize that most of what the South is rejecting has already been forced, arrogantly and invisibly, onto some of the world’s smallest, poorest and most vulnerable countries.

Vanuatu is a group of 83 islands with 200,000 people. Samoa has a population of 177,000 and Tonga 100,000. Vanuatu and Samoa are LDCs. No one denies that these countries face enormous challenges. They are typical of small, geographically isolated and environmentally vulnerable island states.[7] The majority of their people are subsistence farmers.[8] Tariffs provide between one fifth and almost half of government revenue.[9] They run chronic and growing trade deficits.[10] They export a small number of commodities,[11] assisted by preferential access to Australia and New Zealand under SPARTECA and the EU under Cotonou that is now eroding. The main services ‘trade’ is tourism, and for Vanuatu offshore banking.[12] In recent years imports of cheap, low quality foods has undermined local self-sufficiency. Population growth rates are high. HIV/AIDs infection is growing, as are lifestyle diseases such as diabetes and heart disease. Inequality has become more noticeable, especially between rural and urban communities. Families depend heavily on remittances.[13] Their political situation is relatively stable in a quite unstable region, but each has had its controversies. Like other members of the Pacific Islands Forum they depend heavily on the patronage of Australia and New Zealand who aggressively protect their ‘patch’.[14] As the Australian newspaper put it: ‘Australia is often said to be the superpower of the South Pacific. If so, then New Zealand is certainly the second, with Wellington playing London to Canberra’s Washington.’[15]

Vanuatu completed its accession in 2001, after six tortuous years - only to put it on hold, citing ‘technical reasons’, days before the Doha ministerial. Stepping back from the pressure, the Treasury and politicians believed they had given away too much.[16] Recently, Vanuatu has begun to reactivate the process,[17] but wants to reopen the bilateral phase, especially on the far-reaching services offer on wholesale and retail trade, health, environmental, audiovisual, legal, professional and technical services it was bullied by the US into making.[18] They also want guaranteed rights to the TRIPS health waiver. There does not seem to be any legal basis for revisiting an accession package that has been signed off on, which leaves Vanuatu to the mercy of the General Council.[19]

Tonga began its process in 1996 and has bilaterals with the US and EU yet to do. Samoa applied for accession in 1998 and is, to quote, ‘taking its time’. Like all acceding countries,[20] they have faced outrageous demands for WTO-plus commitments from the self-nominated members of their Working Parties.[21] Samoa’s senior trade consultant objects that the right of veto means there are no negotiations: ‘They can ask for all sort of commitments which Samoa isn’t in a position to offer. If they insist, there are 2 options: we will never become a member or we have to give in to that request.’[22]



The Islands, like Cambodia and Nepal before them, are pawns in a global chess game that has nothing to do with their needs or the harm that would result if they gave in.[23] It is about creating precedents that provide leverage in multilateral negotiations or important accessions. Each favourable new precedent sets a progressively higher benchmark. The most pressing demandeurs have been Australia, New Zealand and the EU – plus the US, even though it barely trade with the Islands. The US has focused on tariff bindings, GATS, TRIPS, TRIMs and procurement,[24] while the Cairns Group members New Zealand and Australia target tariff bindings, export subsidies, domestic support and special safeguards measures for agriculture.[25] The Europeans have reportedly made fewer demands on the Pacific, but their turn will come when negotiations for a Pacific REPA under Cotonou begin later this year.[26]



Because the process is shrouded in secrecy, critics and analysts – let alone parliamentarians and citizens – have no idea of what is at stake. Fortunately, the Vanuatu case is now well-documented; [27] similar secrecy will be different next time around, especially as is may become an election issue later in the year.[28] Some information is slowly emerging on Tonga and Samoa; NGOs and the media are asking questions, especially in Samoa.[29] But there are no proper social impact studies and no open public debate about the kind of development they are being locked into. Let me give a couple of examples.



Both Tongan and Samoan officials concede that WTO accession offers no real commercial gains.[30] Samoa currently exports all that it can and has access to ‘Everything But Arms’, so long as that lasts. Tonga’s main export barriers are small scale, limited land, access to finance, natural calamities and climatic conditions, falling commodity prices, low priced international competition, remoteness, high transport costs, insufficient expertise and advise on diversification, and onerous standards and SPS requirements from richer countries.[31] None of these will be addressed through accession and may become worse.



New Zealand supplies around one third of Tonga’s imports. About one third of that is foodstuffs. Last month, New Zealand’s Trade Minister hailed the completion of Tonga’s bilateral negotiations as ‘saving’ New Zealand exporters $6 million in tariffs.[32] Put another way, Tonga, which currently draws over 40% of government revenue from border duties, will need to make up a $6 million fall in revenue. The options are user charges, broader sales tax or a consumption tax[33] - in a country where 80% of the people are subsistence farmers whose cash income is largely from remittances.[34]



Similar demands are being made of Samoa. Why? The Islands don’t produce competing products domestically; Tongans and Samoans would buy the products, with or without tariffs. Trade theory reassures us that price savings will compensate. But delicensing of Australian rice imports into Vanuatu made not different to the monopoly there, because that’s how the Australian exporter likes it. Prices haven’t dropped either.[35]



Indeed, there are sound development reasons for hoping that the prices won’t fall. Around one third of New Zealand’s meat exports into the Pacific are a fatty waste product known as ‘mutton flaps’. A 2001 World Health Organization report drew explicit links between dependence on imported foods, especially mutton flaps, diet-related disease and trade liberalization.[36] It found that, despite effective education and awareness programmes, people were making economically rational, but nutritionally detrimental, decisions to eat less healthy foods because they were cheap and available. That year Fiji, a WTO Member, announced a ban on mutton flaps, citing proven links to obesity; New Zealand threatened action at the WTO.[37] Tonga then urged the New Zealand government to end mutton flap exports and encourage a return to healthier traditional diets, such as fish, organic chicken[38] and taro that simply can’t compete in Tonga’s small domestic market. One New Zealand MP replied that Tongan businesses had the right to decide what to import.[39] At the same time, one of NZAID’s priorities is to fund health programmes in Tonga.



The direct socio-economic impacts are more obvious. US demands that Vanuatu immediately reduce its tariffs to 15-25 per cent would, to quote officials,

‘have thrown Vanuatu’s tiny private sector into competition with globally competitive neighbouring economies and probably would have made many businesses bankrupt’. .. [I]n Vanuatu the closure of even one major company would constitute a major blow to employment and aggregate economic growth. WTO entry could be expected to raise unemployment over the short term in manufacturing, construction, retail and wholesale, hotels and restaurants, and finance and insurance. Together these sectors comprise 47 per cent of employment.’ [40]

In agriculture: ‘It is likely that the swift abolition of price supports to the majority of farmers who live in outlying islands would have left them without any income.’



Other issues, such as the affordability of medicines for life threatening disease, ecological sustainability through local processing of timber or fish,[41] survival of small local shops faced with growing numbers of Asian wholesalers, and retention of land in customary ownership – which is a Constitutional guarantee in Vanuatu[42] – have the potential to make or break governments, as well as decide the future of their societies.[43]



The price of accession is intolerable in another way. Tonga says it gravely under-estimated what was involved. [44] There are simply not the people to do all the work, however far they stretch themselves. Vanuatu estimates the process cost it US$150,000. It cost US$20,000 a year cost for observer status – which is the entire budget of the Department of Trade. By the end, Vanuatu owed the WTO US$170,000 in unpaid fees. [45] The government’s total annual expenditure is just US$60 million. Once a member there are the costs of participation[46] and the burden of implementation (notably standards and quarantine) with threats of enforcement if they ‘fail’.[47]



That is just for the WTO. At the same time the Islands will have to manage negotiations with the EU for a Pacific REPA before the end of the year that are more extensive than the WTO, including the Singapore issues. Plus, Australia and New Zealand insist that once the REPA negotiations begin, the Islands must enter into parallel negotiations under PACER. Australian Prime Minister Howard has signaled the end game - a full ‘EU-style’ Pacific Economic Community, including a common currency and pooled governance and security arrangements, which of course Australia would lead.[48]



It is time to challenge those countries whose abusive practices are protected by the shroud of secrecy. New Zealand and Australia proclaim a special relationship with the South Pacific. But, as one New Zealand government representative frankly admitted to me: “When it comes to trade, there is no special relationship to the Pacific. They [the negotiators] do a group hug, then put their Geneva hats on.”[49] Australia and New Zealand reportedly threatened to cut off technical assistance to Vanuatu’s agricultural sector, which help fund its diversification programme unless it abandoned rights to use price supports, special safeguard measures and export subsidies, [50] and claimed that ‘Uruguay Round methodologies are not available to acceding countries. The lead came from the top. Former Director General Mike Moore proclaimed in a video-link to the first Trade Policy Course for Pacific Island countries run by the WTO and Forum Secretariat in March 2001,

‘It is my duty as Director-General to ensure you receive all the necessary and possible technical support to accelerate your applications. I will also work to ensure that undue pressure beyond the established rules is not placed on acceding countries’.[51]

Yet, one account says Moore’s Secretariat[52] warned Vanuatu that its accession would be denied unless it gave into US demands and took strong commitments on wholesale and retail trade, after which the negotiators changed course.[53]



There is no tolerance for contestable advice. In October 2003, The Guardian revealed a letter in which a senior British trade official and a London-based New Zealand diplomat discussed plans to monitor a Commonwealth Secretariat official at the Cancun ministerial and the need to ensure his contract was not renewed.[54] The official, Roman Grynberg, had given critical advice to Southern governments about the Doha Round and written numerous papers on the risks that such negotiations posed for the Pacific Islands.[55] He had been intimately involved in Vanuatu’s accession and was blamed for the Islands reluctance to include Australia and NZ in a regional trade agreement. A colleague working in Geneva was also reportedly targeted for giving ‘unhelpful’ advice to the LDCs.



The ‘Dracula principle’ of bringing daylight to bear on such behaviour can only achieve so much. In a recent report prepared a report for Pacific NGOs entitled Big Brothers Behaving Badly, [56] I exposed the tactics of Australia, often backed by New Zealand, which led to the PACER agreement. These included the familiar ploy of bypassing the more informed negotiators to pressure the politicians in the capitals. Small teams of officials were deluged with technical proposals they had no capacity to process. The Pacific response to the aggressive style of Australia and New Zealand was silence, which was interpreted as consensus. There was also full frontal bullying – shouting at, berating and intimidating officials, negotiators and consultants. One New Zealand consultant said:



The public behaviour of the Australian officials at some of the meetings was appalling. … Their private behaviour, at its worst, descended to levels that I regard as totally unacceptable The whole experience was stressful and demoralizing for me, let alone for the Pacific Islands negotiators. There were times that I felt ashamed to be a New Zealander; I was just pleased that I was not an Australian.[57]



Trade Minister Jim Sutton’s countered that Australia and New Zealand had behaved ‘impeccably’, then let forth a stream of personal abuse that proved the point.[58]



Similar attitudes flow through the accessions, although apparently New Zealand’s behaviour has improved since the PACER report was released. But that doesn’t alter the substance. To quote the Samoan’s adviser:



“The unfortunate thing about the United States is they are very arrogant and treat every country the same. … One would expect that Australia and NZ will understand about us more …. If New Zealand should insist that our binding rate should be zero … what happens then is Samoa or the Government will have to decide whether the price of joining WTO is too high – it is as simple as that. Eventually it will be up to the Government to make that decision. If we negotiate, we have a mandate but if what the country is asking of us is outside of the mandate and we cannot negotiate, then it’s time off. … We are going there with our eyes open. That is why we are not rushing into things.”[59]



In other words, the power politics may backfire. The Pacific Islands have nothing to gain and everything to lose from joining a club that has the potential to devastate their economies, cultures and societies, and create enormous instability and turmoil in an already unstable region. Once they enter the WTO, they will be trapped within an economic paradigm of global markets that is being pushed onto the Pacific by the World Bank,[60] Asian Development Bank (ADB)[61] and IMF,[62] and that is profoundly anti-development and anti-democratic. Those who advocate this model on behalf of the institutions see this as the real benefit of WTO accession. By “locking in” such reforms internationally, WTO accession provides governments with a defence mechanism against future policy backsliding or “de-liberalization” in response to domestic protectionist pressures’.[63] ‘Sensible’ governments would realize the need for reforms; ‘super-sensible’ governments would implement reforms that exceed WTO requirements.



Grynberg, by contrast, questions the inappropriateness of these policies for the Islands and doubts they are stable or strong enough to weather the severe political and economic consequences of the very long and difficult transitions that these policies would require. [64] Others of us are convinced that there is already enough evidence that this paradigm has failed the people of the Pacific.[65] It is not a question of whether these Islands can afford to say ‘no’ to the WTO. They cannot afford not to.

REFERENCES

Adhikari, R. and N. Dahal, (undated) ‘LDCs’ Accession to the WTO: Learning from the Cases of Nepal, Cambodia and Vanuatu’, South Asia Watch on Trade, Economics & Environment (SAWTEE), Kathmandu, Nepal



ADB (2004), ‘Discussion Paper. ADB Pacific Strategy 2005-9: Responding to the Priorities of the Poor’, Manila: ADB



AID/WATCH (2004) Press release: ‘Downer puts ‘Governance’ before sustenance in aid budget’, 11 May 2004



AUSAID (2003) AUSAID Seminar on Trade and Devvelopment, Sydney 17 November 2003



Bosworth, M and R. Duncan (undated) ‘Current Status of the WTO Accession Process and the Experience of ESCAP Acceding Countries’, ESCAP



Charveriat, C. and M. Kirkbride (2003) Cambodia’s Accession to the WTO. How the law of the jungle is applied to one of the world’s poorest countries’, OXFAM International http://www.cancun2003.org/en/web/216.html;



Choudry, A. (2002) ‘Killing me Softly’, ZNet Commentary 3 August 2002 http://www.zmag.org/sustainers/content/2002-08/03Choudry.cfm



CNN (2001) ‘Pulled out of WTO accession process’, 13 November 2001, CNN.com/2001/BUSINESS/asia/11/13/Vanuatu.sope.biz



DFAT (2000) Australian Government Department of Foreign Affairs and Trade, ‘The Government’s Key Market Access Wins for Agri-Food (Mid 1996 – 25 February 2000)’, www.dfat.gov.au/ma/pf/mawins4.html



DFAT (undated), Australian Government Department of Foreign Affairs and Trade , ‘WTO accessions and how Australia stands to benefit’, www.dfat.gov.au/trade/negotiations/accession/;



Evans, M et al. (2001) ‘Globalization, diet and health: an example from Tonga’, 79(9) Bulletin of the World Health Organization 856



FAO (undated) ‘Adjusting the changes in the global trading environment’, in FAO and SIDS: Challenges and emerging issues in agriculture, forestry and fisheries, www.fao.org/DOCREP/006/Y5203E/y5203e01.htm



Finger, M. and Schuler (2000) ‘Implementing the WTO Round Commitments: The Development Challenge’, The World Economy, 511



Gay, D. and R. M. Joy, (undated) ‘Vanuatu’, ESCAP



Government of Fiji (2001), ‘Health of Fijians more important than NZ threats’, Government Press Release, Suva, 15 March 2001 www.fiji.gov.fj/press/2001_03/2001_03_15-01.shtml



Government of Samoa (2003) ‘Country Programme outline for Samoa’ (2003-2007), Apia



Government of Tonga, (2001) ‘Report from Tonga’s First Working Party on its Accession to the World Trade Organization that was held in Geneva, Switzerland from 23 to 27 April 2001’, www.pmo.gov.to/aud1grp.html



Government of Vanuatu (2004) ‘WTO After Cancun’ – the perspective of Vanuatu’, powerpoint presentation



Grynberg, R. (undated) ‘The Pacific Island States and the WTO: Towards a post-Seattle Agenda for the Small Vulnerable States’, Forum Secretariat: Suva.



Grynberg, R. and R.M. Joy, (2000) ‘The Accession of Vanuatu to the WTO: Lessons for the Multilateral Trading System”, 34(6) Journal of World Trade p.159



Grynberg, R, V. Ognivtsev and M. Razzaque (2002) Paying the Price for Joining the WTO. A Comparative Assessment of Services Sector Commitments by WTO Members and Acceding Countries, Commonwealth Secretariat: London, p.41



Hayashi, M. (2003) ‘Arrested Development: Vanuatu’s Suspended Accession to the World Trade Organization’, Case Study prepared for the International Commercial Diplomacy Project: Geneva;



IMF, (2002) ‘The IMF report on the 2002 Article IV Consultation with Vanuatu did urge a ‘reinvigorated effort at WTO accession’, www.imf.org/external/np/sec/pn/2002/pn02134.htm



ITC, (2004) ‘Tonga: National Export Strategy: Scope, Focus and Process’, January 2004



Kelsey, J. (2004) Big Brothers Behaving Badly, Suva:PANG www.pang.org.fj



Lewis, P. (2002) ‘Negotiating with Unequal partners: Small States in the New Global Economy”, Foundation for Development Cooperation Symposium, University of Queensland, South Pacific Futures, July 2002 (draft paper)



Moore, M. (2001) ‘WTO/FORSEC Trade Policy Course for Pacific island Countries, Fiji 5-9 March 2001



O’Fa, S. (2004) ‘Tonga’s perspective – Post-Cancun’, Trade Policy Unit, Ministry of Labour, Commerce and Industries, Government of Tonga



Retzlaff, M.T. (2002) ‘Samoan Leader Discusses U.S. Role in Foreign Politics’, Georgetown University 2002 www.thehoya.com/news/100102/news4.htm



Sharma. S (2003) Media Statement, ‘IMF-World Bank-WTO Close Ranks Around Flawed Economic Policies’, Institute for Agriculture and Trade Policy, 12 May 2003



Slatter, C. (2003) ‘Will Trade Liberalization Lead to the Eradication or the Exacerbation of Poverty?’ CID Trade Forum Proceedings: February 2003, Wellington: Council for International Development



Slatter, C. (2004) The Politics of Economic Restructuring in the Pacific with a case study of Fiji, PhD thesis, Massey University, New Zealand



Stoler, A. L (2003), ‘The Current State of the WTO’, Workshop on the EU, the US and the WTO, Stanford, March 2003



UNCTAD, (2003) WTO Commitments by Cambodia, Nepal and Vanuatu – Comparative Table, 18 September 2003/VO/MH/DITC, UNCTAD, p.26



‘Vanuatu’s Suspended Accession’, (undated) www.commercialdiplomacy.org/case_study/vanuatu2.html, Annex Table 2



‘Vincent Chronicle No 14 – Our Social Security’, 31 July 2003, www.news.vu/en/opinion/Chronicles/269.shtml



World Bank (2002) Embarking on a Global Voyage: Trade Liberalization and Complementary Reforms in the Pacific, Pacific Islands Regional Economic Report, World Bank: Washington

* Professor Jane Kelsey (LLB Hons), BCL(Ox), MPhil(Camb), PhD, of ARENA and the University of Auckland, New Zealand, paper to WTO Public Symposium ‘Multilateralism at the Crossroads’ 27 May 2004

[1] Article XII of the Marrakesh Agreement Establishing the World Trade Organisation states: ‘Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations or for the other matters provided for in this Agreement and the Multilateral Trade Agreement may accede to this Agreement, on terms to be agreed between it and the WTO’.

[2] Retzlaff (2002)

[3] Dhaka Declaration of the Second LCD Trade Ministers’ Meeting 2003 (WT/L/521)

[4] Grynberg and Joy, (2000) p.172

[5] Decision of the General Council on Streamlining Accession of the LDCs, dated 10 December 2002 states: ‘WTO Members shall exercise restraint in seeking concessions and commitments on trade in goods an d services from acceding LDCs, taking into account the levels of concessions and commitments undertaken by existing WTO LDC Members’; and ‘Acceding LDCs shall offer access through reasonable concessions and commitments on trade in goods and services commensurate with their individual development, financial and trade needs, in line with Article XXXVI.8 of GATT 1994, Article 15 of the Agreement on Agriculture, and Articles IV and XIX of the General Agreement on Trade in Services’.

[6] Paragraph 42 of the Doha Declaration states that: Accession of LDCs remains a priority for the Membership. We agree to work to facilitate and accelerate negotiations with acceding LDCs. We instruct the Secretariat to reflect the priority we attach to LDCs’ accessions in the annual plans for technical assistance. The draft Ministerial Texts for Cancun said: ‘We continue to attach great importance to concluding accession proceedings as quickly as possible and, in particular, to accelerating the accession of least-developed countries. In this regard, we reaffirm the guidelines to facilitate the accession of LDCs adopted by the General Council on 10 December 2002’.

http://www.arena.org.nz/pacwto.htm

[7] see FAO (undated)

[8] The Samoan government reports that village studies show 78% of families in urban villages have one waged worker, compared with 37% in other locations: Samoa (2003). Gay and Joy (undated) estimate that 80% of Vanuatu’s population depend on subsistence farming, with the cash economy centred in two towns

[9] Samoa receives about 20% of revenue from tariffs, while approx 46% of the Tongan government revenue is from customs duties and the Port and Services Tax.

[10] Tonga 2002: merchandise exports US$9 million; merchandise imports US$70 million; Samoa 2002 exports ST$46,284; imports ST$454,227

[11] Vanuatu depends largely on copra, cocoa, cattle, forestry, with fishing, offshore financial services and tourism; Tonga on agriculture (squash, vanilla), tuna fishing, tourism; Samoa on fish, beer, taro and garments.

[12] All three islands have been accused of ‘harmful tax competition’ by the OECD and have taken some regulatory steps in response.

[13] It is believed that more Samoans and Tongans now live outside the countries than in them.

[14] Tonga, for example, received $US5.5 million from Australia and $NZ2.3 million from New Zealand in aid. The 2004 Australian budget has injected A$432 million into the AUSAID budget; A$208 million will be spent on police and military operations in Solomon Islands and Papua New guinea, most of which will boomerang back to Australian government agencies. AIDWATCH (2004)

[15] The Australian, 25 August 2003

[16] Vanuatu is one of three Pacific Island countries that has also chosen not to join the regional free trade agreement among the islands (PICTA) or PACER with Australia and New Zealand, even though the Parliament has passed the necessary legislation.

[17] Government of Vanuatu (2004). The IMF has been pressing for this; IMF (2002)

[18] Vanuatu’s extensive services commitments covered professional services; basic and value-added telecom, environmental, wholesale, retail, insurance, banking. hotels and restaurants. primary, secondary, higher, adult and other education, sewage, refuse disposal, sanitation and similar, general construction for buildings.

[19] Apparently, a letter was circulated by the General Council on the Vanuatu accession in early May 2004 but it’s content has not been made public.

[20] Charveriat and Kirkbride, (2003); Adhikari and Dahal, (undated)

[21] 15 WTO members and observers attended Tonga’s first Working Party meeting: Australia, New Zealand, Japan, India, Mexico, European Commission (on behalf of the 16 Members of the EU, US, Canada, Hong Kong China, and Observers: Chinese Taipei, WIPO, UNCTAD, World Bank and IMF. Government of Tonga (2001)

[22] Interview with Tuala Falani Chan Tung, Sunline, April 2004

[23] Recently, for example, the New Zealand Trade Minister has confirmed that export interests are the sole consideration in its requests for education services. Written parliamentary question 06455(2004) 25 May 2004

[24]Vanuatu’s Suspended Accession (undated) ; Charveriat and Mary (2003)

[25] DFAT (undated) is reasonably coy about the position, but makes no reference to the position of LDCs; actual achievements are described in DFAT (2000)

[26] For similar issues in relation to the Caribbean, see Lewis (2002)

[27] Hayashi (2003); Grynberg and Joy (2000); D. Gay and R. M. Joy (undated) ‘Vanuatu’, UNESCAP: Bangkok; UNCTAD (2003)

[28] This is a politicised issue. In June 2003 Opposition leader Willy Jimmy expressed doubts that resurrecting the accession was in the national interest.

[29].O’Fa(2004); Interview with Tuala Falani Chan Tung, Sunline, April 2004

[30] O’Fa (2004): he suggests that any potential benefits will depend on the policy reforms that accession puts in train.

[31] O’FA (2004); Interview with Tuala Falani Chan Tung, Sunline, April 2004

[32] Hon Jim Sutton, ‘NZ signs WTO accession agreement with Tonga’, 8 March 2004

[33] Tonga has introduced a tax reform bill but it will be difficult to implement.

[34] ITC (2004)

[35] Grynberg and Joy (2000) fn 9

[36] Evans (2001)

[37] Government of Fiji (2001)

[38] A ban on imported, often low quality, chicken to promote an infant industry of organic chicken became a politically charged issue and seems not to have been enforced. ‘Ban on imported chickens never respected’, 19 September 2003, www.news.vu/en/news/national/667.shtml

[39] Choudry (2002)

[40] Gay and Joy (undated), p. 299, 296

[41] Grynberg reports that the WTO objected to measures by PNG and Solomon Islands to move away from exports of unprocessed raw materials as an undesirable departure from comparative advantage, leaving them to export unprocessed forest and marine products while other countries processed them. He observes ‘It is difficult to imagine a policy prescription that is more odious to Pacific island policy makers’. R Grynberg (undated)

[42] Vanuatu’s post-Independence Constitution says “All land in the Republic belongs to the indigenous custom owners and their descendents’. Investors have 75 year leases and this seems to cause few real problems.

[43] Commentator Vincent Boulekone explains that customary land tenure is also seen as the main source of social security protection, including ‘pensions’. ‘Our people will be welcomed by their ancestral villages where custom and solidarity remain strong, at least outside the urban zones. But the question is: what is going to happen if, as recommended by the WTO and other international organizations, all the community lands have been registered for the profit of a few individuals in each clan and tribe? The ‘unproductive persons’ will have no option, after many years of work, but to remain in urban zones, and we all know what this would mean regarding social and ethnic conflicts. Just as in Africa, or in the Solomon Islands, the deterioration of life, even the possibility of wars, will inevitably cause civil unrest following the take-over of power by a dominant population from other islands.’

[44] According to Tonga’s Trade Policy Unit: ‘As is to be expected, Tonga has found the accession process to be cumbersome and tedious with human and institutional constraints prolonging the exercise. The true extent of the work involved was however not appreciated by Tonga at the beginning of the process. The extensive workload has been compounded by the fact that reform required for WTO accession has coincided with whole scale governmental reform.’ O’Fa(2004) Ahikari and Dahal report that Nepal was required to answer some 365 questions, 24 on economy, economic policies and foreign trade, 178 on the framework for making and enforcing policies affecting foreign trade in goods and services, 114 on trade-related intellectual property rights regime and 48 on trade-related services regime. Adhikari and Dahal, (undated) p.3

[45]World Bank economists have estimated that implementation of quarantine, standards and customs systems can cost the whole years’ development budget of a least developed country. M Finger and Schuler,(2000). They warn that poor implementation may result when governments do not feel a sense of ownership and ‘attempts to force implementation through the WTO settlement mechanism would likely reinforce the impression that the WTO rules are imperially imposed from the outside, for the benefit of the outside’, p.513

[46] One former US official observed ‘I think it is crazy to force a country like Vanuatu to spend years negotiating accession to the WTO when we already know that at the end of the day, Vanuatu won’t be represented in WTO meetings in Geneva.’ His solution was to formalize the imbalance of power by a two-tier WTO. Stoler (2003)

[47]One AUSAID paper puts the figure for implementing WTO related reforms at US$400 million, but that sounds excessive. (AUSAID, 2003) Australia and New Zealand are obliged under PACER to fund a Regional Trade Facilitation Programme but signing of the Memorandum of Understanding has been deferred twice now because of major disagreements over the amount they will provide. In July 2003, Australia announced A$500,000 ‘to assist small nations, including Pacific Island states to develop sufficient institutional capacity to further their trade interests at the WTO’. Australia had already provided initial funding of A$176 million in 2002 for the Agency for International Trade Information and Cooperation (AITIC), As Shefali Sharma observed in 2003 ‘No amount of technical assistance in implementing policies that, in effect, handicap and shackle developing countries in the WTO can improve gains towards development’.

[48] That goal has recently been endorsed by the ADB (2004.

[49] Kelsey,(2004), p.30

[50] The right to use Special Safeguard Measures under Art 5 of the Agreement on Agriculture (AoA) must be reserved at the time of accession. Art 15 of th e AoA exempts LDCs from commitments to reduce price support.

[51] Moore (2001)

[52] The Secretariat’s mandate to work for existing WTO Members leads Grynberg et al to suggest it has a conflict of interest in accessions, Grynberg et al (2002)

[53] Hayashi (2003) One informal source suggests the Secretariat played an even more direct role. Grynberg and Joy also note the conflict of interest for a Secretariat that is there to serve its existing members.

[54] The Guardian, 12 October 2003

[55] R. Grynberg (undated); Grynberg et al (2002)

[56] Kelsey (2004)

[57] Kelsey (2004), p.16

[58] ‘Sutton Attacks Kelsey Personally’, 5 April 2004, www.scoop.co.nz

[59]Interview with Tuala Falani Chan Tung, Sunline, April 2004

[60]World Bank (2002)

[61] Outlined most recently in ADB (2004)

[62] In Vanuatu, accession was strongly linked to the Comprehensive Reform Programme the ADB insisted on in 1998. Gay and Joy (undated) p.287

[63] Bosworth and Duncan (undated), p.10

[64]‘What is not accepted is that some island states may be so small, isolated and vulnerable that it is difficult to imagine what combination of internal adjustment policies would induce substantial domestic or foreign investment. Many SVEs suffer from very high operating costs stemming not from policy induced measures but from the inherent nature of small, isolated and physically dispersed economies’. Grynberg (undated

[65] These are comprehensively documented in Slatter (2004); see also Slatter (2003)