May 14 Public Lobby of the Dail Briefing paper

national | miscellaneous | news report Monday May 12, 2003 20:31 by Ian McDonald - Comhlamh ian at theplateau dot com 086 605 9122

The following is a detailed briefing on the May 14 Public Lobby of the Dail organised by the newly formed Trade Justice Ireland coalition. It gives a popular, but detailed, account of the context and background of the trade injustices we need to oppose. It gives background information on the four points Trade Justice Ireland is asking people to make to their supporters when they meet their TDs on May 14.

Note: This document has not been officially endorsed by Trade Justice Ireland at time of posting, hopefully it will by tomorrow. Comments and criticism welcome - ian@theplateau.com.

Contents:

I. Why Trade Matters

II. The WTO
A description of the organisation

III. The Story So Far at the WTO
What it has done and how people have resisted its agenda

IV. The Fifth Ministerial: Doha
The little told story of how

V. Trade Justice Ireland
Who we are, why we have formed

VI. Our Four Main Points
A description of the four points we wish to make to our TDs on the May 14th lobby

IVV. Postscript: In defence of the WTO.
A warning that the we do not merely need to oppose the WTO - things could actually be worse.

Mass Dail Lobby for Trade Justice
May 14, 2003
Background Briefing

“To convince governments, you don’t do it only in the streets – that’s social pressure, that’s important, this might be the most essential thing – but to really convince then you must lobby them… oblige them to listen to you. That is their obligation. In Mexico we do that a lot, because they have to be educated.”
- Manuel Pérez Rocha
(Mexican National Network on Free Trade)

I. Why Trade Matters.

What a country trades or doesn’t trade has a huge influence on the character of its economy, the livelihoods of its people, and therefore just about every other aspect of life in that country. Trade determines where a country is self sufficient, where it is dependent, and who it is dependent upon.

And yet we live in a world where unfairness in the rules of international trade costs poor countries, according to the UN, $1.6 billions dollars every day. This is greater that the combined income of the 1.2 billion people who, in the same day, struggle to survive on less that $1. And among them, 19 000 children will loose that struggle, succumbing to hunger and the diseases of poverty.

For countries determined to lift millions of their people out of poverty, trade could be an important tool. But in order for trade policy to contribute towards solutions, and to stop ranking among the problems, serious issues in the rules of international trade need to be addressed, and in the global power imbalances that these rules reflect.

And across the world, from peasant farmers in Africa and Latin America and Asia to regular citizens in Ireland, people are beginning to call for trade justice.

To do this we need to understand something of the role of the World Trade Organisation.

II. The WTO

The World Trade Organisation, or WTO, is the international body through which the rules of international trade are negotiated and enforced. All the countries of the world, barring very few, participate as, in principle at least, equal members.

The mandate of the WTO is to negotiate agreements that will increasingly liberalise the world economy. In other worlds the goal of the WTO is to transform the world into one gigantic free trade zone. (Although the word “free” in free trade can be a bit misleading, because it involves reams of rules that place severe restrictions on governments in order that goods and services be traded as “freely” as possible.)

When we talk about trade, we’re not just talking about goods, we can also talk about trade in services, for instance a Canadian company might set up a branch in Europe to provide home nursing care to people in Europe, and this is considered trade. Or a French water company might undertake to run the water supply of a Latin American country. Or a British company might set up in Ireland to provide a mobile phone service.

Traditionally, governments have had a large role in regulating trade in many sectors.
For instance, Canada has not allowed private health care companies from the US to operate in Canada in the interests of public health care. Japan has placed large import taxes on rice to protect Japanese rice farmers from cheaper American rice. India has allowed a generic drug industry to produce affordable drugs for its people, even though this violates parts of American and European patent laws.

What motivates the trade agreements of the WTO is the hope that free trade and liberalization will encourage trade and economic growth. But the reality of the effects of WTO agreements is attracting a great deal of criticism.

III. The story so far at the WTO

In November 1999, the fourth ministerial of the WTO met in Seattle. This was a high level meeting involving trade ministers from all WTO member countries. Few expected that it would be an affair any less dreary that any of its other meetings since they began in 1995.

The idea behind the Seattle Ministerial was for countries to meet and agree to launch a new round of negotiations to create new trade agreements that would make it freer and easier for countries to trade across the world. Arriving in Seattle, little did delegates suspect that what awaited them were events that would change the reputation of WTO meetings forever.

They were met by somewhere between 50 and 60 thousand demonstrators on the streets. There were farmers from across the world, demonstrating against agricultural trade policy favoring big business over small farmers. With them were trade unionists demonstrated against trade policy that ignores labour standards, church groups and third world advocacy groups, such as Oxfam, protesting the unfairness of trade rules for developing countries. The Seattle ministerial was probably also the first trade policy meeting to attract large numbers of kids dressed as turtles - they were protesting the way trade rules have been used to overrule laws meant to protect endangered sea turtles. In fact, The Seattle ministerial met one of the broadest mobilisations of civil society in history. Some were protesting against free trade and liberalisation. Others were simply concerned that the agenda of free trade and liberalisation needed to take into account all of the other things that trade affects, like labour rights, human rights, the needs of developing countries, the environment, the increasingly unequal distribution of wealth in the world, and so on.

But for all the drama of the street protest, an equally important and perhaps even more historic confrontation was taking place within the summit. Inside the negotiation, delegates of developing countries were becoming increasingly frustrated. They were frustrated by the $1.6 billion dollars that existing unfair trade rules were costing them, and frustrated that rich countries were not delivering on their promises to address the situation. And they were frustrated that they were not being treated as equals in the negotiations. Many developing countries felt that their experience with existing trade agreements boded ill for the new agreements being pushed at Seattle.

By some accounts, the last straw was the "Green Rooms". Frustrated that poor countries weren't towing the line quickly enough, rich countries began retreating into "Green rooms" where negotiations continued behind closed doors. Attending a "Green Room" negotiation was by invitation only.

One Irish NGO delegate tells the story of the final moments of the Seattle Ministerial. Delegates from developing countries were waiting in the hallway, wondering where the next session was to take place. And then, suddenly, the board displaying the location of the next session went blank. They recognised that this meant the negotiations had retreated into yet another "Green Room" without them. And perhaps it was a moment emblematic of their exclusion. Angry now, they went into their regional caucuses, and each region - Africa, Asia and Latin America - issued a statement rejecting the agenda of the Seattle negotiations, bringing the fourth Ministerial of the WTO to an end. The agenda of the rich countries had been defeated.

The media circus ignited by all of the groups protesting in Seattle, combined with the dismay over the failure of the negotiations, launched the many interconnected issues of trade justice into the public imagination as never before.

And yet, there is a sense in which the Salt Satyagraha (marches) launched by Gandhi were a response to a trade policy – he was protesting unfair rules meant to ensure that local producers (of salt) did not interfere with the trade interests of a more powerful country (Britain). The Irish potato famine can be also described as a result of a trade policy designed to ensure that the Irish economy served the needs of a foreign power, and not the Irish people.

IV.The Fifth Ministerial: Doha

Following the spectacular failure in Seattle, the fifth ministerial of the WTO met in Qatar in 2001. This time, fewer than 150 representatives of civil society were able to attend. And unsurprisingly, given the authoritarian Qatari government, the meetings were not welcomed by protests.

Developing countries went in to the Doha ministerial insisting, some quite vehemently, that the existing unresolved issues should be addressed before the agenda defeated in Seattle be reconsidered. So it was a surprise to many of us watching from afar when much of the agenda of free trade and liberalisation on the table in Doha went through, with only vague, often noncommittal, assurances that existing issues would be addressed.

So what happened? On the surface at least, things appeared to have improved between Seattle and Doha. Delegates from developing countries reported that at least they were allowed to attend negotiations.

But in the end, rich countries got almost everything they wanted, and developing countries accepted the Doha agenda. Following the meeting, accounts from delegates of developing countries, often speaking anonymously out of fear for the consequences of their words, spoke of strong-arm negotiations that took advantage of the dependency of developing countries arising from debt, aid, and existing trade deals.

In the words of one South African activist, “In the end, we were broken. And we were broken because we are dependant”.

Or to quote a former high level Indian trade official, “The immediate political costs of withholding consensus [by vetoing the Doha agreement] appears to them [developing countries] to be much heavier than the burden of these obligations in the future [that these new trade rules will bring]”, and most of the agenda went through. (B. L. Das, former Indian delegate to GATT).

V. Trade Justice Ireland
This September, the sixth ministerial of the WTO will meet in Cancun, Mexico. On the agenda are many issues with potentially damaging effects for developing countries.

In response, Trade Justice Ireland has been formed to campaign for fairness and justice in the way we trade with developing countries. We are a coalition of groups concerned with the injustice of trade thorough the world. Members range from the usual suspects (Oxfam, Trocaire etc) to groups like the National Youth Council of Ireland.

Speaking at the European Social Forum last November (a meeting of over 60 000 activists from across the world), a common theme of trade activists from southern countries was this: "We, in the developing countries of the South, need you in Europe to hold you governments accountable for their policies, and to create dissent amongst the public that will allow a space for developing countries to resist the agenda being forced on them in Cancun".

To create this space, and to strive for a more just and equitable world, we invite citizens of all ages, and all levels of experience to join us on May 14th in a mass lobby of the Dail.

The day will look something like this: at 1:15 there will be a mass gathering outside the Dail. At 1:30 we will raise our voices in unison to call for trade justice. For the rest of the afternoon and early evening people will meet with their TDs to express the concern about the current system. You can call your TD and ask for an appointment ahead of time (we have written them, so they should be expecting calls), or you can show up on the day and we can try to arrange for you to join in a meeting that someone else has arranged.

A room has been booked in Buswell’s Hotel (across from the Dail) were groups of people will be meeting their TDs. Trade Justice Ireland has prepared briefing materials which summarise the basic points we want to make, and which provide suggestion for what your TD can do press for change. If your TD has any tricky or technical questions, Trade Justice Ireland campaigners will be there to help out – although the day really isn’t about debating trade with your TD, it’s about expressing your concern. The basic moral point about the need for change is very simple.

Similar lobbies elsewhere have been very successful in getting governments to start paying attention to the issues of trade justice, so on May 14th, we invite everyone, citizens of all ages, all levels of experience and all political persuasions to join us in a mass lobby of the Dail, where we will engage our elected representative on the following issues of social and economic justice….

VI. Our Four Main Points:

The following are the four main points we want to really impress upon our TDs in the run up to the Cancun meeting of the WTO. More detailed descriptions are given below

1. An end to dumping. The practice of selling something at less that it cost to produces is called dumping. This can destroy the livelihoods of local producers, and undermine vital industries in the country on the receiving end of the dumping. And this is exactly what is happening to many developing countries. It must stop.
2. What is Ireland’s trade policy? Almost no one knows. Even if we did know, trade negotiations are conducted at the European level with a “tradition of confidentiality” (read: absolute secrecy) – and with virtually no input from elected representatives. Trade issues are far too important to be conducted in such secrecy. For democracy to be meaningful, trade policy decisions must be debated openly and publicly.
3. No new powers for the WTO – we feel that the new rules on the table for negotiation at the meeting in Cancun will not be good for developing countries. Ireland must stand against them.
4. “Freeness” in trade is not the same as fairness. Too often, free trade gives a disproportionate advantage to the already wealthy. We call for fairness – fairness to all people, not just the wealthy - to be the guiding principle of all trade rules.

Point 1: Dumping and Unfair Barriers

The whole idea behind the agenda of free trade is this: if each country concentrates on the areas in which it is most competitive, and then can trade those goods and services freely, then the overall increase in competitiveness - and therefore productivity - will be good for everyone.

However, in practice these trade rules have been used to substantially open up the markets of developing countries to imports, which has often meant that local companies have gone under because they could not compete with larger companies from more developed countries.

The theory of free trade acknowledges that while developing countries may suffer in sectors where they cannot compete with large foreign companies, those losses should be more than compensated for by the advantage gained from being able to export in the sectors where they have a competitive advantage.

But this has not happened.

In sectors where developing countries should have the greatest advantage, particularly agriculture and textiles, the rich world has not lived up to promises to remove trade barriers, and so developing countries cannot export their produce.

In the case of agriculture, the rich world spends $1 billion per day subsidising its own farming industries. This leads to massive production, which is then sold (or “dumped”) on the world market – often at less than the cost of producing it.

This is devastating for farmers in the developing world. In Haiti local rice farmers go under because they cannot compete with subsidised American rice. In Jamaica dairy farmers are similarly devastated by subsidised EU imports.

To add insult to injury, developing countries are often forbidden by trade rules from intervening to protect their farmers because they are forbidden from using the time-honoured policy tool of import tariffs.

Not only are the effects of this devastating to the livelihoods of millions of small farmers across the developing world, it also undermines their food security, increasing the risk of hunger and famine, and deprives them of the resources with which to pursue development beyond agriculture.

This is a “heads I win, tails you loose” form of trade policy that in no way resembles the concept of free trade so lauded by economics textbooks. It is through policies like this that developing countries lose $1.6 billion per day to unfair trade rules
The effects are devastating for millions of people across the world, and it has to stop.

In answer to the argument that agricultural subsidies are necessary to protect EU and Irish farmers, it’s very important to note that in Europe half of agricultural subsidy payments go to the top 7% of producers. So it’s simply not true to say that these subsidies are targeted at protecting small farmers in Ireland. In fact, many small farmers in developing countries would prefer to stand with their Irish counterparts, and focus criticism instead on the subsidies paid to industrial scale agribusiness.)

Point 2: Fair and Transparent Trade Policy Making.
An immense range of trade agreements have been negotiated since the foundation of the WTO in 1995. They are transforming the world economy for everyone on the planet.

And yet, even as these agreements transform the world economy for us all, there is scarcely a peep of debate in the Dail about what Ireland’s position on them should be.

Meanwhile, the interests of Ireland at WTO negotiations are represented through the European Commission. The unelected and unaccountable Commission negotiates trade agreements within a "tradition of confidentiality". Which means that the public, and in many cases even elected representatives, are not permitted to know what the Commission is negotiating on our behalf. On most issues the commission has only to deliver the secretly negotiated deals to the Council of Ministers for ratification, with no involvement of any other elected representatives, and well away from any public scrutiny. Following the ratification of the Treaty of Nice, Ireland will no longer have a permanent representative on the European Commission, and the introduction of qualified majority voting at the Council of Ministers will limit Ireland’s ability to stand against any trade rules it may object to.

For democracy to develop meaningfully, there are things that Ireland must do within our own political system, for instance:
· The Irish government should publish regularly a report detailing its stance on issues of trade policy so that the people of Ireland can decide for themselves what should be supported and what should be opposed.
· Irish positions on trade policy negotiations should be regularly debated in the Dail. Trade is too important an issue – for us in Ireland as well as for developing countries - for the government to keep its views so well hidden.
· We should push hard - particularly now that we have the opportunity with the Convention of Europe - to require openness and accountability from the European Commission on trade issues by, for instance, giving a role to the European Parliament in trade negotiations.

But the issue of fairness and democracy extends to the WTO itself. With many developing countries so dependency on rich countries – because of debt, aid, existing trade agreements etc – it is all too easy for rich countries to bully them into accepting trade agreements that are not working for them. The evidence from the Doha negotiations is that rich countries do a great deal of bullying in trade negotiations.

We call therefore for our leaders to urgently address the issues of these dependencies - crippling debt, strings attached to development aid and so on - but also to urgently stand publicly and strongly against any negotiating tactics that would seek to exploit these dependencies.

They could start by taking a stand against the many well documented "formal process issues" that disadvantage developing countries in negotiations. For instance, the "mini-ministerials", like the one recently held in Australia, where negotiations proceed with only a select group of developing countries invited to participate.

More difficult to confront are the informal power politics of the WTO. Which is to say, all the bullying that goes on. Although these “informal process issues” of the WTO merely reflect much larger issues of inequality and power, they still must stop.

Point 3: No new powers for the World Trade Organisation

There are three major trade agreements, left over from the Seattle and Doha meetings, which are being pushed in Cancun. Each agreement is full of rules restricting a country’s rights to intervene in its own economy. We believe that these agreements are very unlikely to be in the interest of developing countries, and should not go ahead.

1. Agreement on investment

This is an agreement to protect the rights of investors. Such an agreement may stimulate development by attracting more investments, but there are flaws in the agreement as proposed.

For one thing, it gives protection to investment, but without any corresponding responsibilities. Not all investment has positive impacts on development. A company that sets up in a developing country may wish to take advantage of, say, lax environmental laws and labour standards, and may not employ local people in positions of skilled labour at all. Developing countries need to have the ability to place conditions and restrictions on investment to ensure that it will benefit people.

One strategy Ireland has taken very often in the course of its development is to require that foreign companies, if they wish to get the full advantages of operating in Ireland, hire people locally for skilled positions. This is true of, for instance, the software industry and the film industry.

While Ireland has been very successful with this type of development strategy, new rules coming from the Cancun meeting would deprive developing countries of opportunity to use similar tools in their own strategies for development.

Trade Justice Ireland does not feel that given that such an agreement is likely to benefit developing countries.

2. Agreement on Competition

This agreement is about ensuring that all businesses, from small local enterprises to gigantic Transnational Corporations, must compete equally. The problem with this is that it is difficult to see how fledgling local businesses in developing countries are going to compete with huge corporations.

It comes down to how one defines an even playing field. For all countries, rich and poor, to be subject to exactly the same rules is like putting Manchester United out against an inexperienced team just starting to learn how to play football. However flat the pitch, it is not really a level playing field. We all know that one side is going to be destroyed.

Development of local industries has always required a period of nurturing, which is often facilitated through government policies that protect local industries against more developed foreign competition until the local industries are ready to compete alone.

This agreement on competition would eliminate yet another policy tool which developing countries need to fight poverty.

3. Government purchasing
In many developing countries, government contracts are one of the largest sectors of the economy. Awarding government contracts to local companies is a time-honoured method of nurturing local industries.

Another agreement on the table in Cancun relates to government purchasing. it requires transparency – never a bad thing - in government purchasing. But it has been made clear that the context of this agreement is to set the stage for a future agreement that would allow foreign companies equal access to government contracts.

Such a future agreement would further erode development tools available to developing countries.

Point 4: Fair Trade, Not Free Trade

History tells us that no country has ever developed without government policies designed to intervene in the local economy in ways that nurture and encourage local development. For example, the success of the automotive industry in Malaysia would never have been possible without government intervention, and the same can be said of the software industry in California. In Ireland, the Irish Development Agency has been very successful in promoting development by putting conditions on the terms of foreign companies investing in Ireland.

While there are examples of countries achieving economic growth through free trade agreements, it is simply not the case that free trade is a de facto recipe for development. No developed country, not Britain, not the US, nor Japan nor South Korea nor Malaysia nor Ireland, has ever developed exclusively through free trade policies. In fact, it is very hard to imagine how any of these countries could possibly have developed successfully under the existing and proposed one-size-fits-all free trade policies of the WTO.

The lesson of history is that free trade (and the policies of the WTO) would not provide a level playing field for developing countries, even if they were level. Which, as we have seen, they certainly are not.

***

For more details, more injustices, and more ideas about what to do about them, our website (www.tradejusticeireland.ie). Or call 661 0949.

VII. Postscript: In defense of the WTO
It is also important to say that, for all of its flaws, the WTO does represent an attempt at a multilateral rules based trade system. The rules may be unfair, and the bullying power politics of rich countries may make it a less than shining example of democracy, but in fact, things could be worse.

A bad job is better than no job, and however bad the deal reached in Doha, a bad multilateral agreement was apparently seen by developing countries as preferable to having to face the kinds of concessions that rich countries are capable of extracting from poor countries in a environment of competition for bilateral deals, where rich countries may pick a few favorites and play poor countries off against each other.

The failure of the EU and the US to deliver on promises given to developing countries in Doha has led some to speculate that this may be a prelude to abandoning the multilateralism of the WTO altogether. Writing in the Guardian, George Monbiot notes,

"If the US does not back down [on its refusal to fulfill promises made in Doha], the world trade talks will collapse at the next ministerial meeting in Mexico in September, just as they did in Seattle. If so, then the WTO, as its former director-general has warned, will fall apart. Nations will instead resolve their trade disputes individually or through regional agreements. Already, by means of the free trade agreement of the Americas and the harsh concessions it is extracting from other nations as a condition of receiving aid, the US appears to be preparing for this possibility."

Perhaps this possibility is evident in the large number of country to country (bilateral) trade agreements being pursued by both the US and the EU. Even more ominously, a recent article in The Economist warns:

"In Washington, support is growing for rewarding countries supportive of America's military policies with bilateral trade deals instead of pursuing multilateral agreements".

Even as we criticize WTO, we need to stand up in support of the multilateralism that it, in principle at least, represents.