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TRADE: Davos “Mini-Ministerial” Called Undemocratic

Emad Mekay

WASHINGTON, Jan 26 2006 (IPS) - International advocacy groups are rallying against an elite trade meeting at a Swiss ski resort that they say will ignore the interests of most member countries of the World Trade Organisation (WTO).

About 30 trade ministers will come together in Davos at a “mini-ministerial” for the first time since global trade talks in Hong Kong last December ended in modest agreements on relatively minor issues and avoided sticking points like agricultural subsidies and services.

The Friday meeting will be on the sidelines of the World Economic Forum’s annual meeting in Switzerland and aims to set a timeline for concluding the Doha Round of negotiations by the end of the year.

Officials from 25 countries, including influential economies like the United States, the European Union, Brazil, India, Japan and Australia, hope the gathering will achieve concrete goals such as creating tariff cut formulas in the farm and industrial sectors by the end of April when a full ministerial meeting will take place.

There is likely to be another meeting in July to finish off the negotiations by 2007.

But advocacy groups say such “mini-ministerials” – often called for by rich nations – are undemocratic and should be scrapped altogether. They argue that the meeting is without the full participation of all the 149 WTO members, and lacks any participation at all from civil society groups.

“Major trade negotiations should only happen during official WTO meetings,” ActionAid International, a group that monitors global trade talks, said in a statement.

The groups have also called on rich nations ahead of the meetings to reform agricultural trade rules, end their own farm subsidies and stop pressuring developing nations to open up their markets for industry and services to multinational corporations.

The European Union and the United States have both offered to cut their hefty agricultural subsidies, but made this step conditional on developing nations opening their markets further.

Developing nations and independent trade analysts have generally agreed that those offers do not go far enough and skirt the problematic issue of dumping of agricultural goods from rich nations in the global market.

“The U.S. and EU offers on agriculture won’t stop dumping,” said Jeremy Hobbs, Director of Oxfam International. “They have turned this trade round on its head: from one that was meant to reform trade rules for the benefit of poor countries, to one which is about aggressive corporate gain in industrial products and services and indefensible northern protectionism in agriculture.”

The EU had said last week that it still has no plans to put forth a new offer to reduce its farm tariffs beyond an average of 38 percent. Officials from the economic bloc say that their October 2005 offer is still on the table but remained provisional on other WTO member countries opening their industrial goods and services markets.

Trade advocacy groups say that the EU’s offer is only cosmetic and urged the grouping not to wait for other nations to act first.

“The only people who think Europe has done enough are the Europeans. The EU needs to go further with its agricultural reform offer, and immediately stop making such unreasonable demands on developing countries in other areas,” Hobbs said.

Oxfam says the United States will be compelled to act if the Europeans make the first move.

“Then the spotlight will shift back to the U.S., which must cut its cotton subsides, implement full duty- and quota-free market access for poor countries, and keep its promises on agriculture, whatever Europe does,” Hobbs said.

The groups have blamed multinational corporations as the driving force behind the positions of rich nations and for sidelining demands by developing nations.

On Tuesday, ActionAid International called on rich nations to curb corporate lobbyists’ influence on the current global trade talks.

The group issued a report finding that the European Services Forum (ESF), a lobbying group which includes heavyweight firms like BT, Vodafone and Lloyds, meets regularly with high-level EU trade officials to push for liberalisation in services markets, including telecommunications, tourism and information technology, in developing countries.

The EU took up this position during the Hong Kong meeting in December.

In the United States, the group’s research found that 93 percent of the external advisors to the U.S. trade department are from corporate lobby groups and multinational companies such as Burger King, Coca-Cola, McDonald’s and Pfizer.

“Governments meeting at Davos must not be influenced by the business heavyweights in their midst. Unless there is a radical change in the direction of the trade talks and we put poor people’s interests above those of multinationals, then no deal is better than a bad deal,” said Aftab Alam Khan of ActionAid’s Trade Justice campaign.

Advocacy groups say a fair deal would have to include U.S. approval to eliminate all trade distorting cotton subsidies. Cotton is a major export from developing nations that must compete with U.S.-subsidised exports.

Developing countries also want a formula that would allow them to make smaller tariff cuts than rich countries and reduce pressure to negotiate further liberalisation. They have previously expressed a desire to have more space and time to draft their own policies.

“The demands of expansionist businesses on the one hand and protectionist northern agriculturalists on the other must not be allowed to skew the outcome in the final months,” Hobbs said. “No deal should be signed unless it is one that helps poor countries, not hurts them.”