President Rafael Correa Delgado of Ecuador does not mince words when it comes to development. ”Neoliberal policies based on so-called competitiveness, efficiency and the labour flexibility framework have helped the empire of capital to prosper at the cost of human labour,” he told a crowded auditorium at the 15th Raul Prebitsch Lecture.

The Raul Prebitsch Lectures, which are named after the first Secretary-General of the U.N. Conference on Trade and Development (UNCTAD) when it was set up in 1964, allow prominent personalities to speak to a wide audience on burning trade and development topics.

This year, President Correa took the floor on Oct. 24 with a lecture on ‘Ecuador: Development as a Political Process’, which covered efforts by his country to build a model of equitable and sustainable development, “Neoliberal policies based on so-called competitiveness, efficiency and the labour flexibility framework have helped the empire of capital to prosper at the cost of human labour” – President Rafael Correa Delgado of Ecuador

Development, he told his audience, “is a political process and not a technical equation that can be solved with capital” and he offered a developmental paradigm that seeks to build on “people-oriented” socio-economic and cultural policies to improve the welfare of millions of poor people instead of catering to the “elites of the empire of capital”.

Proposing a “new regional financial architecture”, he said that “the time has come to pool our resources for establishing a bank and a reserve fund for South American countries to pursue people-oriented developmental policies in our region” and reverse the “elite-based”, “capital-dominated”, “neoliberal” economic order that has wrought havoc over the past three decades.

“We need to reverse the dollarisation of our economies and stop the transfer of our wealth to finance Treasury bills in the United States,” Correa said. “South American economies have transferred over 800 billion dollars to the United States for sustaining U.S. Treasury bills and this is unacceptable.”

According to Correa, people-centric policies in the fields of education, health and employment in Ecuador have improved the country’s Human Development Index (HDI) since 2007. The HDI is published annually by the U.N. Development Programme (UNDP) is a composite statistic of life expectancy, education and income indices used to rank countries into tiers of human development.

Ecuador’s HDI value for 2012 is 0.724 – in the high human development tier – positioning the country at 89 out of 187 countries and territories, according to UNDP’s Human Development Report (HDR) for 2013.

Explaining his country’s achievement, Correa said that public investments involving the creation of roads, bridges, power grids, telecommunications, water works, educational institutions, hospitals and judiciary have all helped the private sector to reap benefits from overall development.

“At a time when Hooverian depression policies based on austerity measures are continuing to impoverish people while the banks which created the world’s worst economic crisis in 2008 are reaping benefits because of the rule of capital,  Ecuador has successfully overcome many hurdles because of its people-oriented policies,”  he said.

Correa argued that by investing public funds in education, which is the “cornerstone of democracy”, particularly in higher education or the “Socrates of education”, including special education projects for indigenous and Afro-Ecuadorian people, it has been shown that society can put an end to capital-dominated policies.

“We need to change international power relations to overcome neocolonial dependency,” Correa told the diplomats present at the lecture.  “Globalisation is the quest for global consumers and it does not serve global citizens.”

The Ecuadorian president argued that developing countries have secured a raw deal from the current international trading system which has helped the industrialised nations to pursue imbalanced policies while selectively maintaining barriers.

He urged developing countries to implement autonomous industrialisation strategies, just as the United States had done over two centuries ago.

Developing countries, he said, must pursue ”protectionist policies as the United States had implemented under the leadership of Alexander Hamilton [U.S Secretary of the Treasury under first president George Washington] when it closed its economy to imports from the United Kingdom.”

Citing the research findings of Cambridge-based economist Ha-Joon Chang in his book ‘Bad Samaritans:  The Myth of Free Trade and the Secret History of Capitalism’, Correa said that protectionist policies are essential for the development of developing countries.

He stressed that developing countries, which are at a comparable of stage of economic development as the United States was in Hamilton’s time, must devise policies that would push their economies into the global economic order.

The strategy of “import-substitution-industrialisation [ISI]” and nascent industry development is needed for developing countries, he said. “However, the developing countries must ensure proper implementation of ISI strategies because governments had committed mistakes in the past while implementing these policies.”

“Free trade and unfettered trade,” continued Correa, is a “fallacy” based on the Washington Consensus and neoliberal economic policies. In fact, while the United States and other countries preach free trade, they have continued to impose barriers on exports from developing countries.

Turning to the global intellectual property rights regime, which he said is not helpful for the development of all countries, Correa said that these rights must serve the greater public good, suggesting that the current rules do not allow equitable development in the sharing of genetic resources, for example.

In this context, he said that governments must not allow faceless international arbitrators to issue rulings that would severely undermine their “sovereignty” in disputes launched by transnational corporations.

President Correa also called for the free movement of labour on a par with capital. “While capital can move without any controls and cause huge volatility and damage to the international economy, movement of labour is criminalised. This is unacceptable and it is absurd that the movement of labour is met with punitive measures while governments have to welcome capital without any barriers.”

He was also severe in his criticism of the financialisation of the global economy which cannot be subjected to the Tobin tax. “Nobel Laureate James Tobin had proposed a tax on financial transactions in 1981 to curb the volatile movement of currencies but it was never implemented because of the power of the financial industry,” he argued.

Concluding with a hint that his government’s social and economic policies are paving the way for the creation of a healthy society, Correa quipped: “The Pope is an Argentinian, God may be a Brazilian, but ‘Paradise’ is in Ecuador.”

(Edited by Phil Harris)

As Juan Evo Morales Ayma, popularly known as ‘Evo’, celebrates his victory for a third term as Bolivia’s president on a platform of “anti-imperialism” and radical socio-economic policies, he can also claim credit for ushering in far-reaching social reforms such as the Bolivian “Law against Political Harassment and Violence against Women” enacted in 2012.

“In many countries women in the political arena, whether candidates to an election or elected to office, are confronted with acts of violence ranging from sexist portrayal in the media to threats and murder,” says the World Future Council (WFC), which monitors the gap between policy research and policy-making.

Speaking to IPS after the 2014 Future Policy Award for Ending Violence against Women and Girls ceremony, organised by WFC, the Inter-Parliamentary Union (IPU) and UN Women on Oct. 14, WFC founder Jacob von Uexkull told IPS that the Bolivian law “is a visionary law, particularly for protecting women against political harassment and violence.”“Achieving gender equality and ending violence against women and girls is a matter for both men and women ... violence against women is a human rights violation but also a social and public health problem, and an obstacle to development with high economic and financial costs for victims, families, communities and society as a whole” – Martin Chungong, IPU Secretary-General

“For the first time we introduced the category of what are called visionary laws which aim to curb violence against women in politics and other professions,” he said, adding that the passing of such a law in Bolivia is “very significant”, suggesting that other should emulate the Bolivian example.

The law against political harassment and violence against women was enacted in Bolivia by the Morales government following the assassination of Councillor Juana Quispe after she had complained about the abuse she suffered from other councillors and the mayor of her town. The law defines political harassment and political violence as criminal offences which carry imprisonment ranging from two to eight years depending on the magnitude of the offence.

The WFC, which promotes the world’s best laws and solutions for implementation by policy-makers in countries all over the world, chose to offer the “honourable mention” for the Bolivian law in the visionary category.

Based in Hamburg, Germany, the WFC was set up in 2007 to pioneer the campaign for the spread of best laws in different areas. Beginning in 2009, the WFC has been offering the Future Policy Award (FPA) for the strongest laws in the field of sustainable development.

The WFC identified the Belo Horizonte Food Security Programme in 2009 as the best law for the FPA to address the right to food. In 2010, the FPA went to Costa Rica for the best law to strengthen biodiversity. In 2011, it was awarded to Rwanda for its laws to protect forests, and in 2012 it was awarded to the Republic of Palau in the Pacific Ocean for the best laws to protect coasts.

Last year, the FPA went to the treaty for the prohibition of nuclear weapons in Latin America and the Caribbean.

With 2014 having been designated by WFC as the year for ending violence against women and girls, UN Women Executive Director Phumzile Mlambo-Ngcuka says that governments must adopt a “comprehensive legal framework” that addresses violence against women, by “recognising unequal power relations between men and women” and advocating a “gender-sensitive perspective in tackling it.”

According to Martin Chungong, Secretary-General of IPU, the key message is that “achieving gender equality and ending violence against women and girls is a matter for both men and women.” Moreover, “violence against women is a human rights violation but also a social and public health problem, and an obstacle to development with high economic and financial costs for victims, families, communities and society as a whole.”

Michael Paymar (centre), member of the Minnesota House of Representatives, along with others behind the ‘Coordinated Community Response to Domestic Violence’ programme of Duluth, Minnesota, winner of this year’s gold Future Policy Award (FPA). Credit: Courtesy of World Future Council

This year’s WFC gold award went to the “Coordinated Community Response to Domestic Violence” programme of the City of Duluth in the U.S. state of Minnesota. Among others, said von Uexkull, the “Duluth model” has a shared philosophy about domestic violence and a system that shifts responsibility for victim safety from the victim to the system.

The “Duluth model” has helped countries formulate laws and policies based on the principles of coordinated community response and paved the way for the intervention of criminal justice in cases of intimate partner violence.

Each year, an estimated 1.3 million women are victims of physical assault by an intimate partner.

According to von Uexkull, such violence entails huge human, social, and economic costs which are estimated to be around 5.18 percent of world GDP.

HBO (Home Box Office), a U.S. pay television network, has recently produced a documentary entitled Private Violence, which looks at domestic violence against women. In an interview with The Guardian, Cynthia Hill, the documentary’s director, said: “The thing that I did not know that was so revealing to me was that anywhere between 50 percent and 75 percent of domestic violence homicides happen at the point of separation or after [the victim] has already left [her abuser].”.

One of the biggest issues facing women and girls today in the world, says Nyaradzayi Gumbonzvanda, General Secretary of the Young Women Christian Association (YWCA), is violence. “I see the violence against women as a manifestation of inequalities, disempowerment and exclusion,” Gumbonzvanda told IPS. “It is the accumulation of many realities that women find in their own lives, particularly that of social disempowerment.”

To highlight the importance of enforcing and implementing existing laws to eradicate violence against women, the WFC gave awards this year to Austria and Burkina Faso for their stringent implementation of laws to protect women against violence. “When the justice system and specialised service providers work hand in hand, real progress can be made,” said von Uexkull.

However, as countries are preparing to celebrate the 20^th anniversary of the Fourth World Conference on Women in Beijing, there is not a single country in the world where we have succeeded in eliminating violence against women, warns Gertrude Mongella, Secretary-General of the Beijing conference, former President of the Pan-African Parliament and WFC Honorary Councillor from Tanzania.

“Many countries now have laws that protect women from violence,” Mongella told participants at the FPA ceremony. “However, women who report violence often face a range of challenges, including resistance or disbelief from law enforcement officers, judges and lawyers.”

(Edited by Phil Harris)

Amid escalating conflicts and rampant violations of human rights all over the world, spreading “human rights education” is not an easy task. But a non-governmental organisation from Japan is beginning to make an impact through its “global citizenship education” approach.

At the current annual meeting of the United Nations Human Rights Council, which began on Sep. 8, two side events marked the beginning of what promises to be a sustained campaign to spread human rights education (HRE).

Alongside the first, the launch of the web resource “The Right to Human Rights Education” by the Office of the High Commissioner for Human Rights, a special workshop was also convened on HRE for media professionals and journalists.

The workshop was an initiative of the NGO Working Group on HRE chaired by Soka Gakkai International (SGI), a prominent NGO from Japan fighting for the abolition of nuclear weapons, sustainable development and human rights education.“It is important to raise awareness of human rights education among media professionals and journalists who are invariably caught in the crossfire of conflicts” – Kazunari Fujii, Soka Gakkai International

“This is the first time that the NGO Working Group on Human Rights Education and Learning and a group of seven countries representing the Platform for Human Rights Education and Training have organised a workshop on human rights education for media professionals and journalists,” said Kazunari Fujii, SGI’s Geneva representative.

Fujii has been working among human rights pressure groups in Geneva to mobilise support for intensifying HRE campaigning. “Through the promotion of human rights education, SGI wants to foster a culture of human rights that prevents violations from occurring in the first place,“ Fujii told IPS after the workshop on Tuesday (Sep. 16).

“While protection of human rights is the core objective of the U.N. Charter, it is equally important to prevent the occurrence of human rights abuses,” he argued.

Citing SGI President Daisaku Ikeda’s central message to foster a “culture of human rights”, Fujii said his mission in Geneva is to bring about solidarity among NGOs for achieving SGI’s major goals on human rights, nuclear disarmament and sustainable development.

The current session of the Human Rights Council, which will end on Sep. 26, is grappling with a range of festering conflicts in different parts of the world. “From a human rights perspective, it is clear that the immediate and urgent priority of the international community should be to halt the increasingly conjoined conflicts in Iraq and Syria,” said Zeid Ra’ad Al Hussein, the new U.N. High Commissioner for Human Rights.

“In particular, dedicated efforts are urgently needed to protect religious and ethnic groups, children – who are at risk of forcible recruitment and sexual violence – and women, who have been the targets of severe restrictions,” Al Hussein said in his maiden speech to the Council.

“The second step, as my predecessor [Navanetham Pillay] consistently stressed, must be to ensure accountability for gross violations of human rights and international crimes,” he continued, arguing that “impunity can only lead to further conflicts and abuses, as revenge festers and the wrong lessons are learned.”

Al Hussein, who comes from the Jordanian royal family, wants the Council to address the underlying factors of crises, particularly the “corrupt and discriminatory political systems that disenfranchised large parts of the population and leaders who oppressed or violently attacked independent actors of civil society”.

Among others, he stressed the need to end “persistent discrimination and impunity” underlying the Israel-Palestine conflict – in which 2131 Palestinians were killed during the latest crisis in Gaza, including 1,473 civilians, 501 of them children, and 71 Israelis.

The current session of the Human Rights Council is also scheduled to discuss issues such as basic economic and livelihood rights, which are going to be addressed through the UN’s Sustainable Development Goals, the worsening plight of migrants around the world, and the detention of asylum seekers and migrants, including children in the United States.

“Clearly, a number of human rights violations and the worsening plight of indigenous people are major issues that need to be tackled on a sustained basis,” said Fujii. “But it is important to raise the awareness of human rights education among media professionals and journalists who are invariably caught in the crossfire of conflicts.”

During open discussion at the media professionals and journalists workshop, several reporters not only shared their personal experiences but also sought clarity on how reporters can safeguard human rights in conflicts where they are embedded with occupying forces in Iraq or other countries.

“This is a major issue that needs to be addressed because it is difficult for journalists to respect human rights when they are embedded with forces,” Oliver Rizzi Carlson, a representative of the United Network of Young Peacebuilders, told IPS.

Commenting on the work that remains to be done in spreading global citizenship education, Fujii noted that tangible progress has been made by bringing several human rights pressure groups together in intensifying the campaign for human rights education.

“Solidarity within civil society and increasing recognition for our work from member states is bringing about tangible results,” said Fujii. “The formation of an NGO coalition – HR 2020 – comprising 14 NGOs such as Amnesty International and SGI last year is a significant development in the intensification of our campaign.”

(Edited by Phil Harris)

India’s decisive stand last week not to adopt the protocol of amendment of the trade facilitation agreement (TFA) unless credible rules were in place for the development issues of the South was met with  “astonishment” and “dismay” by trade diplomats from the North, who described New Delhi’s as “hostage-taking” and “suicidal”. 

It obviously came as something of a shock for representatives of Northern interests that any party should have the brass neck to place the interests of its constituents on the negotiating table.

After all, why should such banal issues as food security and poverty get in the way of a trade agenda heavily weighted in favour of the industrialised countries?New Delhi was demanding nothing more than credible global trade rules to ensure that “development,” including the challenges of poverty, in the countries of the South take precedence over the cut-throat mercantile business interests of the transnational corporations in the North

In fact, it was India’s firm stand for permanent guarantees for public stockholding programmes for food security that turned this trade agenda upside down at the World Trade Organization (WTO) last week, putting paid to the adoption of the protocol of amendment for implementation of the contested TFA for the time being.

India and the United States failed Thursday at the WTO to reach agreement on construction of a legally binding decision on a “permanent peace clause” that would further strengthen what was decided for public distribution programmes for food security in developing countries at the ninth ministerial meeting in Bali, Indonesia, last year.

The Bali decision on food security was one of the nine non-binding best endeavour outcomes agreed by trade ministers on agriculture and development.

For industrialised and leading economic tigers in the developing world, the TFA – which would harmonise customs procedures in the developing world on a par with the industrialised countries – is a major mechanism for market access into the developing and poorest countries.

The failure to reach agreement came during a closed-door meeting between India and the United States organised by WTO Director-General Roberto Azevedo in an attempt to break the impasse between the world’s two largest democracies.

New Delhi was demanding nothing more than credible global trade rules to ensure that “development,” including the challenges of poverty, in the countries of the South take precedence over the cut-throat mercantile business interests of the transnational corporations in the North.

Trade diplomats from several developing and poorest countries in Africa, South America, and Asia say India’s “uncompromising” stance will force countries of the North to return to the negotiating table to address the neglected issues in the Bali package concerning agriculture and development.

These issues are at the heart of unfinished business in the Doha Development Agenda (DDA) negotiations, the current round of trade negotiations aimed at further liberalising trade.

“It is important to keep the battle alive and India has ensured that the big boys cannot simply walk away with the trade facilitation agreement (TFA) without addressing the concerns on food security and other major issues,” one African official said.

The industrialised countries and some rising economic tigers in the developing world are unhappy that they cannot now take home the TFA without addressing the problem raised by India and other developmental issues in the Doha Development Agenda negotiations.

Many developing and poor countries in Africa and elsewhere were opposed to the TFA but they were “arm-twisted” and “muzzled” by the leading super powers over the last three months. African countries, for example, were forced to change their stand after pressure from the United States, the European Union and other countries.

The TFA was sold on false promises that it would add anywhere up 1 trillion dollars to the world economy. During the Bali meeting last year, the Economist of London, for example, gave two different estimates – 64 billion dollars and 400 billion dollars – as gains from the TFA, while the International Chamber of Commerce gave an astronomical figure of 1 trillion dollars without any rational basis.

“Those predicted gains [from TFA] evaporate when one looks at the assumptions behind them, such as the assumption that all countries in the world would gain the same amount of income from a given increase in exports,” said Timothy A. Wise and Jeronim Capaldo, two academics from the Global Environment and Development Institute at the U.S. Tufts University.

At one go, the TFA will provide market access for companies such as Apple, General Electric, Caterpillar, UPS, Pfizer, Samsung, Sony, Ericsson, e-Bay, Hyundai, Huawei and Lenova to multiply their exports to the poorest countries.

It would drive away scarce resources for addressing bread-and-butter issues in the poor countries and direct them towards creating costly trade-related infrastructure for the sake of exporters in the industrialised world.

Here are ten reasons why trade diplomats from the developing and poorest countries say India’s stand will bolster their development agenda:

1.  India’s stand on food security brings agriculture, particularly unfinished business in the DDA negotiations, back to centre-stage.

2.  The Doha trade negotiations were to have been concluded by 2005 but remain stalled because a major industrialised country put too many spanners in the negotiating wheel.

3.  Major industrialised countries have been cherry-picking issues from the DDA which are of interest to them while giving short shrift to core “developmental” issues.

4.  Issues agreed in the Doha negotiations, such as the ”July package” agreed on August 1, 2004, the Hong Kong  Ministerial Declaration of December 2005 and the un-bracketed understandings of the December 2008 Fourth Revised Draft Modalities for Agriculture, have all been pushed to the back burner because one major country does not want to live up to them.

5.  The Fourth Revised Draft Modalities for Agriculture provided an explicit footnote to enable the developing countries to continue with their public stockholding programmes for food security. That footnote was the result of sustained negotiations and a compromise solution among key WTO members such as the United States, the European Union, India, Brazil, Australia and China, but the United States refused to accept the footnote because of opposition from its powerful farm lobbies.

6.  Trade-distorting practices in cotton which are harming producers in Benin, Burkina Faso, Mali and Chad are supposed to be addressed “ambitiously”, “expeditiously” and “specifically” by the distorting countries in the North. But cotton is now being swept under carpet because a major industrialised country does not want to address the issue because of its farm programme.

7.  Trade facilitation was one of the Doha issues but not the main item of the agenda at all.  It was actually dropped from the Doha agenda in Cancun, Mexico, in 2003 and was brought back in 2004 due to pressure from the United States and the European Union. The core issues of the Doha agenda were agriculture, services and developmental flexibilities.

8.  A major industrialised country which pocketed several gains during the negotiations refuses to engage in “give-and-take” negotiations based on the above mandates and has turned the Doha Round upside down.

9.  Industrialised countries along with some developing countries have formed a coalition of countries willing to pursue what are called “plurilateral” negotiations, only to undermine the DDA negotiations which are multilateral and based on what is called a “single undertaking” (that is, nothing is agreed until everything is agreed). Currently, these countries are negotiating among themselves on services, expansion of information technology products and environmental goods even though these issues are being negotiated in the Doha Round.

10.  Delay in the adoption of protocol will pave way for a healthy debate to reinvigorate the multilateral trading system which is being undermined by those who created it in 1948. The developing and poor countries want credible and balanced multilateral trading rules to replace what was agreed over 25 years ago in order to continue their “developmental” programmes with a human face.

Herein lies the crux of the issue – are the major powers of the North prepared to go along with a global trading system that puts the interests of the majority of the world’s people before their own interests?

(Edited by Phil Harris)

The failure of the two major players in global trade negotiations to bridge their differences has put paid to the adoption of the protocol of amendment for implementation of the contested Trade Facilitation Agreement (TFA) for the time being. 

India and the United States failed Thursday at the World Trade Organization (WTO) to reach agreement on construction of a legally binding decision on a “permanent peace clause” that would further strengthen what was decided for public distribution programmes for food security in developing countries at the ninth ministerial meeting in Bali, Indonesia, last year.New Delhi made its choice clear to Azevedo: either members [of the WTO] agree to a permanent solution for food security or postpone adoption of the TFA protocol until there are credible outcomes on all issues, by the end of the year.

The Bali decision on food security was one of the nine non-binding best endeavour outcomes agreed by trade ministers on agriculture and development.

For industrialised and leading economic tigers in the developing world, the TFA – which would harmonise customs procedures in the developing world on a par with the industrialised countries – is a major mechanism for market access into the developing and poorest countries.

WTO Director-General Roberto Azevedo, who had put all his energies over the last seven months into ensuring the timely adoption of the TFA protocol by July 31 as set out in the Bali ministerial declaration, was clearly upset with the failure to adopt the protocol.

“The fact we do not have a conclusion means that we are entering a new phase in our work – a phase which strikes me as being full of uncertainties,” Azevedo told the delegates at the concluding session of the General Council, which is the highest WTO decision-taking body between ministerial meetings.

The Bail ministerial declaration was adopted at the WTO’s ninth ministerial meeting in December last year. It resulted in a binding multilateral agreement on trade facilitation along with non-binding outcomes on nine other decisions raised by developing and poorest countries, including an interim solution on public distribution programmes for food security.

The developing and poorest countries remained unhappy with the Bali package even though their trade ministers endorsed the deal. The countries of the South resented what they saw as the “foster parent treatment” accorded to their concerns in agriculture and development.

While work on clearing the way for the speedy implementation of the TFA has preceded at brisk pace at the WTO over the last seven months, other issues were somewhat neglected. Several African and South American countries, as well as India, remained unhappy with the lack of progress in issues concerning agriculture and development, particularly in public distribution programmes for food security.

Last week, India fired the first salvo at the WTO by declaring that unless there are “credible” outcomes in the development dossier of the Bali package, including a permanent solution for food security, it would not join the consensus to adopt the TFA. Bolivia, Venezuela and Cuba shared India’s concerns.

Despite concerted political lobbying by leading U.S. administration officials and envoys from Western countries in New Delhi to change its stand, the Indian government informed the WTO director-general Wednesday that it wanted a substantive outcome on food security, without which it would oppose the TFA protocol.

Without bringing India and the United States into a face-to-face dialogue at the WTO, Azevedo held talks with the representatives from the world’s two largest democracies in a one-on-one format.

According to sources familiar with the WTO’s closed-door consultations, Azevedo informed India that its demand for a substantive outcome on food security would not be acceptable to members because they would not approve “re-writing” the Bali ministerial declaration.

New Delhi made its choice clear to Azevedo: either members agree to a permanent solution for food security or postpone adoption of the TFA protocol until there are credible outcomes on all issues, by the end of the year.

“India’s position remains the same,” New Delhi trade minister Nirmala Sitharaman told reporters after a meeting with the U.S. Commerce Secretary Penny Pritzker Thursday.

Given the importance of TFA for U.S. business interests, Washington yielded some ground by agreeing to a compromise, but the two sides were stuck on legal aspects, particularly on how this should be adopted at the General Council.

The result Thursday was that the differences between the two led to an adjournment of the General Council without the TFA protocol.

“We have not been able to find a solution that would allow us to bridge that gap,” the WTO director-general told members.  “We tried everything we could … but it has not proved possible,” Azevedo said.

“We are absolutely sad and disappointed that a very small handful of countries were unwilling to keep their commitments from the December conference in Bali and we agree with the director-general that the failure has put this institution on very uncertain ground,” U.S. deputy trade representative Ambassador Michael Punke told reporters.

Brazil’s trade envoy Marcos Galvao suggested that it would be possible to reinvigorate the talks despite the failure Thursday. “When we come back in September, we can come forward with the Bali package and the whole work programme,” Galvao told IPS.

In New Delhi, U.S. Secretary of State John Kerry said “our feeling is obviously that the agreement that was reached in Bali is an agreement that importantly can provide for food security for India.”

“We do not dismiss the concerns India has about large numbers of poor people who require some sort of food assurance and subsistence level, but we believe there’s a way to provide for that that keeps faith with the WTO Bali agreement,” Kerry maintained.

Credible and permanent rules for food security are vital for developing countries to continue with their public distribution programmes to address livelihood security.

“The programme enables governments in the developing countries to put more money in the hands of the poor farmers by buying their crops at stable and higher price, and use those government purchases to feed the hungry – many of those same farm families – with free or subsidised food distributions,” said Timothy A. Wise, an academic with the Global Development and Environment Institute at the U.S. Tufts University.

Several developing and poorest countries – Zambia, Ghana, Malawi, Senegal, Kenya, Nigeria, Egypt, Morocco, Tunisia, Botswana, Sri Lanka, Bangladesh, Nepal, Jordan, India, and Saudi Arabia – are currently implementing food security programmes for different food articles.

The Bali package involves nine issues in addition to the TFA and they need to be addressed “on an equal footing,” Nelson Ndirangu, Kenya’s senior trade official told IPS. “I’m sympathetic to India’s stand and I agree that all issues, including a permanent solution for food security, must be addressed along with the TFA,” said Ndirangu.

(Edited by Phil Harris)

A group of developing countries brought a tectonic shift at the World Trade Organization on Friday by turning the tables against the industrialised countries, when they offered a positive trade agenda to expeditiously arrive at a permanent solution for food security and other development issues, before adopting the protocol of amendment of the contested Trade Facilitation Agreement.

Bolivia, Venezuela, Cuba and India inflicted a huge blow on the dominant actors in global trade by refusing to join consensus on the protocol required for full implementation of the TFA that is being pushed through the WTO with carrots and sticks.

“This is unimaginable, that New Delhi would decide the fate of decisions at the WTO, which has been a preserve of the United States and the European Union for the last 50 years,” said a trade envoy from a Western country.The mismatch, in terms of progress, between the TFA on one side, and lack of credible movement in agriculture and development on the other, especially in arriving at a permanent solution for public stockholding programmes, has come into the open at various meeting in Africa and elsewhere

Only seven months ago, the industrialised countries were triumphant at the WTO’s ninth ministerial meeting in Bali, Indonesia, after having succeeded in clinching the TFA. At one go, that agreement would harmonise customs procedures in the developing world on a par with the industrialised countries. It would offer enhanced market access for companies in the rich and leading developing countries such as China, Korea, Hong Kong and Singapore.

According to former WTO Director-General Pascal Lamy, the TFA would cut tariffs in developing countries by 10 percent

The developing and poor countries, in return, were offered half-baked outcomes in the Bali package on agriculture and development, including an interim mechanism for public stockholding for food security with a promise of a permanent solution in four years, an agreement on general services in agriculture, transparency-related improvements in what are called tariff rate quota administration provisions, and most trade-distorting farm export subsidies and export credits.

The poorest countries, as part of the “development” dossier, secured a set of best endeavour promises concerning preferential rules of origin for exporting to industrialised countries, preferential treatment to services and services suppliers of least developed countries, duty-free and quota-free market access for least-developed countries, and a final monitoring mechanism for special and differential treatment flexibilities.

The TFA has witnessed perceptible progress since the Bali meeting, while other issues raised by developing and poor countries have taken a back seat at the WTO.  The mismatch, in terms of progress, between the TFA on one side, and lack of credible movement in agriculture and development on the other, especially in arriving at a permanent solution for public stockholding programmes, has come into the open at various meeting in Africa and elsewhere.

“Even seven months after Bali, we do not have the required confidence and trust that there will be constructive engagement on issues that impact the livelihood of a very significant part of the global population,” Indian Ambassador Anjali Prasadtold WTO’s General Council, which is the organisation’s highest decision-making body, during the ministerial meetings, on Friday.

Prasad said “the Trade Facilitation Agreement must be implemented on as part of a single undertaking including the permanent solution on food security.” Bolivia, Cuba and Venezuela took the same stand as India that all issues in the Bali package have to be implemented on the same and equal footing.

“Nothing is agreed until everything is agreed in the Bali package,” India’s trade minister Nirmala Sitaraman told the Financial Times last Friday.

Against this backdrop, India finally pulled the plug at the General Council meeting by saying that “the adoption of the trade facilitation protocol be postponed until a permanent solution on public stockholding for food security is found.”

Without the protocol, it is difficult to undertake rapid liberalisation of customs procedures as set out in the TFA.  Effectively, the Indian stand has put paid to an early adoption of the trade facilitation protocol.

“Today, we are extremely discouraged that a small handful of Members in this organization [WTO] are ready to walk away from their commitments at Bali, to kill the Bali agreement, to kill the power of that good faith and goodwill we all shared, to flip the lights in this building back to dark,” Deputy U.S. Trade Representative Ambassador Michael Punke lamented at the General Council meeting.

Trade envoys from Japan, the European Union and a group of 25 industrialised and developing countries slammed India for its move to oppose the TFA until all other issues, particularly, the permanent solution on food security, are resolved.

“But the TFA cannot be divorced from the other issues, including food security, which need to be converted into a binding agreements on a priority basis,” India’s former trade envoy Ambassador Jayant Dasgupta told IPS Saturday.

Dasgupta, who played a major role in providing the rationale for exempting public distribution programmes for food security from WTO disciplines, offered several reasons why food security must trump over the hard core mercantile trade agenda embodying the TFA.

First, he said, ” the debate on food security exposed the insensitivity of trade negotiators of some major industrialised countries (pushed by seven or eight transnational corporations that dominate global food trade) to address food security issues, arising out of static interpretations of trade rules framed many decades ago, when such problems were not conceived.”

Second, the objections raised by the United States, Canada and Australia in addressing food security  are unacceptable because they do not want to concede that there has been more than 650 percent inflation in India since 1986-88.

The WTO agreement on agriculture uses the references prices of 1986-88 for determining domestic support commitments. “Any economist worth his salt would be aghast at the idea that the calculation of subsidies should take place without reference to the current market prices but to market prices which existed twenty six to twenty eight years,” the former Indian trade official argued.

Third, the problem of public procurement and stockholding for food security purposes is resorted to by not only India, but China, Indonesia, Philippines, Pakistan, Egypt, Jordan, Nigeria, Kenya and many other developing countries.

“Because of the way the agreement on agriculture provisions is worded, most of these developing countries could be held to be in violation of the WTO rules,” said Dasgupta, pointing out that “India is articulating not only its own problems but also those of other developing countries.”

And fourth, “by seeking to push India into a corner on this extremely sensitive issue for many developing countries, the United States and its handful of supporters are seriously jeopardising the credibility of the WTO in terms of latter’s ability to correct its mistakes and to be sensitive to the needs of a majority of its developing members.”

The “fragility” of the World Trade Organization’s ‘Bali package’ was brought into the open at the weekend meeting in Sydney, Australia, of trade ministers from the world’s 20 major economies (G20).

The Bali package is a trade agreement resulting from the 9th Ministerial Conference of the WTO in Bali, Indonesia, in December last year, and forms part of the Doha Development Round, which started in 2001.

The G20 group of countries includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, the United States, and the European Union.“… the Bali package is not just about trade facilitation and it also includes other issues ... That was the premise on which the developing countries agreed to trade facilitation and it has to be self-balancing” – South African trade minister Rob Davies

During the Sydney meeting, India and South Africa challenged the industrialised countries present to come clean on implementation of the issues concerning the poor countries in agriculture and development, according to participants present at the two-day meeting.

Ahead of the G20 leaders meeting in Brisbane, Australia, in mid-November, Sydney hosted the trade ministerial meeting to discuss implementation of the Bali package, particularly the trade facilitation agreement (TFA). The TFA has been at the heart of the industrialised countries’ trade agenda since 1996.

More importantly, Australia, as host of the November meeting, has decided to prepare the ground for pursuing the new trade agenda based on global value chains in which trade facilitation and services related to finance, information, telecommunications, and logistics play a main role.

“I said the Bali package is not just about trade facilitation and it also includes other issues,” South Africa’s trade minister Rob Davies told IPS Monday. “That was the premise on which the developing countries agreed to trade facilitation and it has to be self-balancing.”

Davies said that “the issue is that while South Africa doesn’t need any assistance, many developing and poor countries have to make investments and implement new procedures [because of the TFA]. What was there in the [TF] agreement is a series of best endeavour provisions in terms of technical and financial support together with best endeavour undertakings in terms of issues pertaining to least developed countries in agriculture and so on.”

Over the last few months, several industrialised countries, including the United States, have said that they can address issues in the Bali package concerning the poor countries as part of the Doha Single Undertaking, which implies that nothing is agreed until everything is agreed.

The specific issues that concern the interests of the least-developed countries include elimination of cotton subsidies and unimpeded market access for cotton exported by the African countries, preferential rules of origin for the poorest countries to export industrial products to the rich countries, and preferential treatment to services and services suppliers of least developed countries, among others.

“Even if there is an early harvest there has to be an outcome on other issues in the Bali package,” the South African minister argued.

There is lot of concern at the G20 meeting that if the trade facilitation protocol is not implemented by the end of this month, the WTO would be undermined.

“What we said from South Africa is to commit on the delivery of the outcomes in the Bali package,” Davies told IPS. “And a number of developing countries present at the meeting agreed with our formulation that there has to be substantial delivery of the outcomes in the Bali package.”

At the Sydney meeting, the industrialised countries pushed hard for a common stand on the protocol for implementing the Trade Facilitation Agreement by July 31. The TF protocol is a prerequisite for implementing the trade facilitation agreement by the end of July 2015.

The United States also cautioned that if there is no outcome by the end of this month, the post-Bali package would face problems. “Talking about post-Bali agenda while failing to implement the TFA isn’t just putting the cart before the horse, it’s slaughtering the horse,” U.S. Trade Representative Ambassador Michael Froman tweeted from Sydney.

The industrialised countries offered assurances that they would address the other issues in the Bali package, including public distribution programmes for food security, raised by developing countries. But they were not prepared to wait for any delay in the implementation of the TF agreement.

Over the last four months, the developing and poorest countries have realised that their issues in the Bali package are being given short shrift while all the energies are singularly focused on implementing the trade facilitation agreement.

The African countries are the first to point out the glaring mismatch between implementation of the TFA on the one hand and lack of any concerted effort to address other issues in the Bali package on the other. The African Union has suggested implementing the TFA on a provisional basis until all other issues in the Doha Development Agenda are implemented.

The industrialised countries mounted unprecedented pressure and issued dire threats to the African countries to back off from their stand on the provisional agreement. At the AU leaders meeting in Malibu, Equatorial Guinea, last month, African countries were forces to retract from their position on the provisional agreement.

However, South Africa, Tanzania, Zimbabwe and Uganda insisted on a clear linkage between the TFA and the Doha agenda.

India is fighting hard, along with other developing countries in the G33 coalition of developing countries on trade and economic issues, for a permanent solution to exempt public distribution programmes for food security from WTO rules in agriculture.

New Delhi has found out over the last six months that the industrialised countries are not only creating hurdles for finding a simple and effective solution for public distribution programmes but continue to raise extraneous issues that are well outside the purview of the mandate to arrive at an agreement on food security.

India announced on July 2 that it will not join consensus unless all issues concerning agriculture and development are addressed along with the TF protocol.

India’s new trade minister Nirmala Sitaraman, along with South Africa, made it clear in Sydney that they could only join consensus on the protocol once they have complete confidence that the remaining issues in the Bali package are fully addressed.

Against this backdrop, the G20 trade ministers on Saturday failed to bridge their differences arising from their colliding trade agendas.

The developing countries, particularly India, want firm commitment that there is a permanent solution on public distribution programmes for food security along with all other issues concerning development, an Indian official told IPS.

Framing rules at the World Trade Organization for maintaining public stockholding programmes for food security in developing countries is not an easy task, and for Ambassador Jayant Dasgupta, former Indian trade envoy to the WTO, “this is even more so when countries refuse to acknowledge the real problem and hide behind legal texts and interpretations in a slanted way to suit their interests.”

“The major problem is that the WTO’s Agreement on Agriculture (AOA) was negotiated in early 1990s and there are many issues which were not taken into account then,” says Ambassador Dasgupta, who played a prominent role in articulating the developing countries’ position on food security in the run-up to the WTO’s ninth ministerial meeting in Bali, Indonesia, last year.

“If the WTO has to carry on as an institution catering for international trade and its member states, especially the developing and least-developed countries, the rules have to be modified to ensure food security and livelihood security for hundreds of millions of poor farmers,” Ambassador Dasgupta told IPS Thursday.

Ironically, the rich countries – which continue to provide tens of billions of dollars for subsidies to their farmers – are insisting on inflexible disciplines for public stockholding programmes in the developing world.“Credible disciplines for food security are vital for the survival of poor farmers in the developing countries who cannot be left to the vagaries of market forces and extortion by middlemen” – Ambassador Jayant Dasgupta, former Indian trade envoy to the WTO

The United States, a major subsidiser of farm programmes in the world and charged for distorting global cotton trade by the WTO’s Appellate Body, has called for a thorough review of farm policies of  developing countries seeking a permanent solution for public stockholding programmes to address food security.

“Food security is an enormously complex topic affected by a number of policies, including trade distorting domestic support, export subsidies, export restrictions, and high tariffs,” says a United States proposal circulated at the WTO on July 14.

“These policies [in the developing countries],” continues the proposal, “can impede the food security of food insecure peoples throughout the world.” The United States insists that food security policies must be consistent with the rules framed in the Uruguay Round of trade negotiations that came into effect in 1995.

“Public stockholding is only one tool used to address food security, and disciplines regarding its application are already addressed in the Agreement on Agriculture,” the United States maintains.

The agriculture agreement of the trade body was largely based on the understandings reached between the two largest subsidisers – the European Union and the United States – which culminated in what is called the Blair House Agreement in 1992. The major subsidisers were provided a “peace clause” for ten years (1995-2005) from facing any challenges to their farm subsidy programmes at the WTO.

The AOA also includes complex rules regarding how its members, especially industrialised countries, must reduce their most-distorting farm subsidies.

In the face of increased legal challenges at the WTO and also demands raised for steep cuts in subsidies during the current Doha trade negotiations, several industrialised countries shifted their subsidies from what are called most trade-distorting “amber box” measures to “green box” payments which are exempted from disputes. Jacques Berthelot, a French civil society activist, says that the United States has placed some of its illegal subsidies into the green box.

When it comes to disciplines on food security, however, the United States says it is important to ensure that “[food security] programmes do not distort trade or adversely affect the food security of other members.”  The United States has suggested several “elements” for a Work Programme on food security, including the issue of public stockholding programmes, for arriving at a permanent solution. Washington wants a thorough review of how countries have implemented food security in developing countries.

The U.S. proposal, says a South American farm trade official, is aimed at “frustrating” the developing countries from arriving at a simple and effective solution that would enable them to continue their public stockholding programmes without many hurdles. “The United States is interested in preserving the Uruguay Round rules but not address the issues raised by the developing countries in the Doha Round of trade negotiations that seek to address concerns raised by developing countries,” the official adds.

The G-33 group – with over 45 developing and least-developed countries – has brought the food security issue to the centre-stage at the WTO. Over the last two years, the G-33, led by Indonesia with China, India, Pakistan, the Philippines, Kenya, Nigeria, Zimbabwe, Bolivia, Cuba and Peru among others, has called for updating the external reference price based on 1986-88 prices to ensure that they can continue with their public stockholding programmes under what is called de minimis support for developing countries.

Following the G-33’s insistence on a solution for public stockholding programmes for food security, which became a make-or-break issue at the WTO’s Bali ministerial meeting, trade ministers had agreed on a decision “with the aim of making recommendations for a permanent solution.” The ministers directed their negotiators to arrive at a solution in four years.

Over the last six months, there has been little progress in addressing the core issues in the Bali package raised by developing countries, including food security. “We are deeply concerned that the Ministerial Decision on Public Stockholding for Food Security Purposes is getting side-lined,“ India told members at the WTO on July 2.

“In this and other areas, instead of engaging in meaningful discussion, certain members have been attempting to divert attention to the policies and programmes of selected developing country members,” says New Delhi, emphasising that “the issues raised are in no way relevant to the core mandate that we have been provided in the Bali Decisions.”

At a time when the industrialised countries want rapid implementation of the complex agreement on trade facilitation, their continued stonewalling tactics on the issues raised by developing countries has created serious doubts whether food security issue will be addressed in a meaningful manner at all.

“Credible disciplines for food security are vital for the survival of poor farmers in the developing countries who cannot be left to the vagaries of market forces and extortion by middlemen,” says Ambassador Dasgupta. “The delay in addressing food security will pose problems for millions of people below poverty who are dependent on public distribution programmes.”

African countries are coming under strong pressure from the United States and the European Union to reverse the decision adopted by their trade ministers to implement the World Trade Organization’s trade facilitation agreement on a “provisional” basis.

At last week’s summit of African Union leaders in Malabo, Equatorial Guinea, “there was unprecedented [U.S. and European Union] pressure and bulldozing to change the decision reached by the African trade ministers on April 27 in Addis Ababa, Ethiopia, to implement the trade facilitation (TF) agreement on a provisional basis under paragraph 47 of the Doha Declaration,” Ambassador Nelson Ndirangu, director for economics and external trade in the Kenyan Foreign Ministry, told IPS.

“This pressure comes only when the issues and interests of rich countries are involved but not when the concerns of the poorest countries are to be addressed,” Ambassador Ndirangu said.“This pressure [on African countries] comes only when the issues and interests of rich countries are involved but not when the concerns of the poorest countries are to be addressed … Clearly, there are double-standards” – Ambassador Nelson Ndirangu, director for economics and external trade in the Kenyan Foreign Ministry

“Clearly, there are double-standards,” the senior Kenyan trade official added, lamenting the pressure and arm-twisting that was applied on African countries for definitive implementation of the agreement.

The TF agreement was concluded at the WTO’s ninth ministerial conference in Bali, Indonesia, last year.  It was taken out of the Doha Development Agenda as a low-hanging fruit ready for consummation.  More importantly, the agreement was a payment to the United States and the European Union to return to the Doha negotiating table.

The ambitious TF agreement is aimed at harmonising customs rules and regulations as followed in the industrialised countries. It ensures unimpeded market access for companies such as Apple, General Electric, Caterpillar, Pfizer, Samsung, Sony, Ericsson, Nokia, Hyundai, Toyota and Lenovo in developing and poor countries.

Former WTO Director-General Pascal Lamy has suggested that the TF agreement would reduce tariffs by 10 percent in the poorest countries.

In return for the agreement, developing and least-developed countries were promised several best endeavour outcomes in the Bali package on agriculture and development. They include general services (such as land rehabilitation, soil conservation and resource management, drought management and flood control), public stockholding for food security, an understanding on tariff rate quota administration, export subsidies, and phasing out of trade-distorting cotton subsidies (provided largely by the United States) in agriculture.

The non-binding developmental outcomes include preferential rules of origin for the export of industrial goods by the poorest countries, a special waiver to help services suppliers in the poorest countries, duty-free and quota-free market access for least developed countries (LDCs), and a monitoring mechanism for special and differential treatment flexibilities.

African countries were unhappy with the Bali package because they said it lacked balance and was tilted heavily in favour of the TF agreement forced by the industrialised countries on the poor nations.

The Bali outcomes, said African Union Trade Commissioner Fatima Acyl, “were not the most optimal decisions in terms of African interests … We have to reflect and learn from the lessons of Bali on how we can ensure that our interests and priorities are adequately addressed in the post-Bali negotiations.”

The African ministers in Malabo directed their negotiators to propose language on the Protocol of Amendment – the legal instrument that will bring the TF agreement into force at the WTO – that the TF agreement will be provisionally implemented and in completion of the entire Doha Round of negotiation.

African countries justify their proposal on the basis of paragraph 47 of the Doha Declaration which enables WTO members to implement agreement either on a provisional or definitive basis.

The African position on the TF agreement was not acceptable to the rich countries. In a furious response, the industrialised countries adopted a belligerent approach involving threats to terminate preferential access. The United States, for example, threatened African countries that it would terminate the preferential access provided under the Africa Growth Opportunities Act (AGOA) programme if they did not reverse their decision on the TF, said a senior African trade official from Southern Africa.

The WTO has also joined the wave of protests launched by the industrialised countries against the African decision for deciding to implement the TF on a provisional basis. “I am aware that there are concerns about actions on the part of some delegations [African countries] which could compromise what was negotiated in Bali last December,” WTO Director-General Roberto Azevedo said, at a meeting of the informal trade negotiations committee on June 25.

The African decision, according to Azevedo, “would not only compromise the Trade Facilitation Agreement – including the technical assistance element. All of the Bali decisions – every single one of them – would be compromised,” he said.

The United States agreed with Azevedo’s assessment of the potential danger of unravelling the TF agreement, and the European Union’s trade envoy to the WTO, Ambassador Angelos Pangratis, said that “the credibility of the negotiating function of this organisation is once again at stake” because of the African decision.

The United States and the European Union stepped up their pressure by sending security officials to Malabo to oversee the debate, said another African official.  He called it an “unprecedented power game rarely witnessed at an African heads of nations meeting.”

In the face of the strong-arm tactics, several African countries such as Nigeria and Mauritius refused to join the ministerial consensus to implement the TF agreement on a provisional basis.  Several other African countries subsequently retracted their support for the declaration agreed to in April.

In a nutshell, African Union leaders were forced to change their course by adopting a new decision which “reaffirms commitment to the Doha Development Agenda and to its rapid completion in accordance with its development objectives.”

The African Union “also reaffirms its commitment to all the decisions the Ministers took in Bali which are an important stepping stone towards the conclusion of the Doha Round …  To this end, leaders acknowledge that the Trade Facilitation Agreement is an integral part of the process.”

Regarding capacity-building assistance to developing countries to help them implement the binding TF commitments, African Union countries still want to see up-front delivery of assistance.  The new decision states that African Union leaders “reiterate in this regard that assistance and support for capacity-building should be provided as envisaged in the Trade Facilitation Agreement in a predictable manner so as to enable African economies to acquire the necessary capacity for the implementation of the agreement.”

The decision taken by the African leaders is clearly aimed at implementing the TF decision, but there is no clarity yet on how to implement the decision, said Ndirangu. “We never said we will not implement the TF agreement but we don’t know how to implement this agreement,” he added.

In an attempt to ensure that the rich countries do not walk away with their prized jewel in the Doha crown by not addressing the remaining developmental issues,  several countries – South Africa, India, Uganda, Tanzania, Solomon Islands and Zimbabwe – demanded Wednesday that there has to be a clear linkage between the implementation of the TF agreement and the rest of the Doha Development Agenda on the basis of the Single Undertaking, which stipulates that nothing is agreed until everything is agreed!

More than 180 days after the Bali meeting, there is no measurable progress on the issues raised by the poor countries. But the TF agreement is on course for final implementation by the end of 2015.

As industrialised countries celebrate the World Trade Organisation’s Bali accord, the developing and the least-developed countries are forced to carry their battle to another day after securing only half-baked results and grandiose promises, said several trade ministers.

“While the agreements reached at Bali are important, it is important to ensure balance in the agreements,” said Rob Davies, South Africa’s trade minister. “We are of the view that there is structural imbalance in which the least-developed countries secured only best endeavor solutions while there is a binding agreement on trade facilitation,” Davies told IPS.

“The developing and least-developing countries secured only promises and best endeavor outcomes while agreeing to a comprehensive trade facilitation agreement,” said Kenya’s foreign minister Amina Mohamed.
In sharp contrast, the United States, the European Union, and other industrialised countries praised the Dec. 3-7 Bali Ministerial Conference for delivering the trade facilitation agreement.

“For the first time in its almost 20-year history, the WTO reached a fully multilateral agreement,” said U.S. Trade Representative Ambassador Michael Froman. “WTO Members have demonstrated that we can come together as one to set new rules that create economic opportunity and prosperity for our nations and our peoples.”

EU Trade Commissioner Karel De Gucht said the breakthrough at Bali in wrapping up the agreement on trade facilitation, and some deliverables in agriculture, were truly significant for the trade body.

“They take the WTO from the darkness of the multilateral era to [shine] light on multilateral action,” commissioner Gucht told reporters. The EU commissioner, however, admitted that there was a lack of balance in the overall Bali agreement.

For over 15 years, the industrialised countries and some advanced developing countries such as Hong Kong, Singapore, South Korea, Chile and Mexico have pushed hard for rapid liberalisation of customs procedures as part of the trade facilitation agreement so as to enable their exports to rapidly penetrate the developing and least developed countries without many hassles.

Proponents say the TF accord is a “good governance agreement” for customs procedures that industrialised countries want the developing and the poorest countries to implement in the coming days and years on a binding basis – failing which the latter can be hauled up at the WTO’s dispute settlement body.

In return, the developing countries managed to secure only best endeavor agreements on some issues of their concern in agriculture, such as an interim mechanism for public stockholding for food security, transparency-related improvements in what are called tariff rate quota administration provisions, and most trade-distorting farm export subsidies and export credits.

The poorest countries as part of the “development” dossier secured another set of best endeavor improvement concerning preferential rules of origin for exporting to industrialised countries, preferential treatment to services and services suppliers of least developed countries, duty-free and quota-free market access for least-developed countries, and final monitoring mechanism for special and differential treatment flexibilities.

Ironically, the Bali accord has weakened the language on issues raised by the developing and the poorest countries as compared to what was agreed in the WTO Hong Kong Ministerial Declaration in 2005.

The Kenyan foreign minister – who was the chair of the WTO General Council at the Hong Kong meeting – spoke about this puzzling change.

“What is the guarantee that the industrialised countries will implement the promises now made in the Bali agreement, particularly the provision of financial and technical assistance to implement the trade facilitation commitments, when they did not implement the commitments that were made eight years ago?” she remarked to IPS.

The Bali package included ten agreements. They comprise a binding agreement on trade facilitation and four descriptive items in agriculture such as general services, public stockholding for food security purposes, understanding the tariff rate quota administration provisions of agriculture products, and export competition.

In the development dossier, the Bali package offered non-binding best endeavor outcomes on preferential rules of origin for least developed countries, organisation for the waiver concerning preferential treatment to services, duty-free and quota-free market access, and a monitoring mechanism on special and differential treatment.

“We have only partly accommodated the concerns of the poorest countries,” said Davies. “The priority out to be on development and implementation issues in the coming days,” the South African minister emphasised.

India steadfastly pushed hard for strong language to ensure that the public stockholding programmes for food security continued without interruption until a permanent solution was arrived at.

Despite opposition from some major industrialised countries, including the United States, and also opposition from some developing countries, India managed to secure an interim mechanism that would last for four years during which there is a commitment to find a permanent solution. If there is no outcome within four years, the interim solution will be extended till members agree to a permanent outcome.

However, there are many notification and safeguard conditions that India and other developing countries will have to implement in order to avail themselves of the interim mechanism for food security. The U.S. said these conditions are essential to ensure that public stockholding programmes for food security in one country do not cause food insecurity in other countries.

The post-Bali work programme has admitted that there are glaring asymmetrical outcomes in the “Bali Package.” “Issues in the Bali Package where legally binding outcomes could not be achieved will be prioritised… Work on issues in the package that have not been fully addressed at this Conference will resume in the relevant Committees or Negotiating Groups of the WTO,” according to the Bali Ministerial Declaration.

In short, the developing and least-developed countries will have to carry their fight as there are no “legally binding outcomes” on any of their issues. That is the message from the Bali Ministerial meeting.

Also, the Bali meeting shall be remembered for the manner in which the developing and the poorest countries remained divided thanks to a grand strategy adopted by the Northern countries.

“Unless the developing world remains united it is highly unlikely that they will make progress on their issues in the next year, and this is even more true in a period when the North is going to push hard its new trade agenda,” said a trade minister who preferred not to be identified.

Second day of the WTO's ministerial conference in Bali, Indonesia. Credit: © WTO/ANTARA

By Ravi Kanth Devarakonda
BALI, Dec 4 2013 (IPS)

The World Trade Organisation’s ninth ministerial meeting at Bali, Indonesia has morphed into a fierce battle between the countries seeking social safety nets for hundreds of millions of poor people and those insisting on having advanced import-facilitation programmes in the developing countries on par with the industrialised nations.

These two narratives openly clashed at the plenary meeting Tuesday. “Millions of people depend on food security and millions of people are going to see what will be done on this vital issue,” Kenya’s foreign minister Amina Mohamed told IPS.

“In Africa there are millions of people who need food security and they are all waiting to see if the ministers in Bali are going to be sensitive as an international community to the livelihood and survival concerns of the most vulnerable people,” she said.

She urged the trade ministers “to come up with a solution to send a message that we heard what you are saying and that we want to support your issue and we acknowledge food security is a vital issue.”

India’s trade minister Anand Sharma said at the plenary meeting that “Food security is essential for four billion people and is an important goal of the millennium development goals.

“Food security is non-negotiable,” said Sharma, maintaining that India cannot accept the current interim mechanism because it fails to provide legal certainty. Public stockholding of food grains to ensure food security must be respected, he said.

In the run-up to the Dec. 3-6 Bali meeting, India along with a group of countries including Bolivia, Cuba, Kenya, South Africa, Venezuela and Zimbabwe pressed hard for improved rules to ensure that their public stockholding programmes for food security are not undermined by flawed trade rules.

The rules in the WTO agreement on agriculture were largely crafted by the European Union and the United States during the 1986-1994 Uruguay Round of negotiations. While the rules insulate mega subsidisers from clear discipline, they are somewhat indifferent to the concerns of countries with large populations. “Dated WTO rules need to be corrected,” Sharma said

More importantly, “any trade agreement must be in harmony with our shared commitment to eliminate hunger and ensure the right to food, which we accepted as part of the MDG agenda,” the Indian minister said.

At issue is whether developing countries like India and Kenya, which have massive public stockholding programmes, particularly procuring food grains from small and poor farmers at minimum support prices, should face legal challenges due to rules that are inconsistent with current global economic realities.

Over the last 15 years, prices of essential food items have gone up by over 250 percent.

India, along with the members of the G33 coalition of 46 developing countries led by Indonesia, made a strong case for changing some parameters in the current WTO agreement on agriculture.

The G33 called for updating the external reference price in the WTO agreement to reflect current global prices. The coalition also demanded that excessive inflation be taken into consideration when assessing the commitments.

The industrialised countries, led by the U.S. and EU, vehemently opposed the G33 demand last year, saying they would never allow any change in the rules. But after sustained sabre rattling and intimidating threats, the developed countries backed down from their initial position, promising a more flexible response.

They offered what is called a “Peace Clause” as part of the Bali package, which would provide temporary respite – for no more than four years – from any trade disputes. But although they agreed to continue the discussion, they did not commit to finding a permanent solution.

In sharp contrast to their opposition to food security proposals from the developing countries led by India and Kenya, the industrialised countries pressed for a brand-new agreement on trade facilitation, which involves comprehensive changes in the customs and import procedures. The new TF agreement calls for a number of changes in the previous WTO rules.

If concluded at Bali, the trade facilitation agreement would save around 441 billion dollars for developing countries, said the EU trade commissioner Karel de Gucht. In fact, the International Chamber of Commerce claimed that a WTO trade facilitation agreement would provide gains to the tune of one trillion dollars for the developing and least developed countries.

WTO director general Roberto Azevêdo has also made similar claims over the last three days to drum up support for the Bali package.

The trade facilitation agreement, said de Gucht, is “essentially a way to help many countries cut red tape at their borders, to become more efficient and effective traders.”

Although the industrialised countries have constantly repeated the mantra that trade facilitation would deliver enormous gains, they have so far offered no conclusive evidence to that end.

“Unfortunately, these figures depend on too many unjustifiable assumptions to be relied on,” wrote Jeronim Capaldo, an academic at the Global Development and Environment Institute at Tufts University near Boston in the U.S.

Inaccurate estimates and unclear gains have become the order of the day. “It is hard to see how uncertain gains and unequal distribution of costs [underlying trade facilitation estimates] can justify diverting resources to trade facilitation from badly needed policies such as the strengthening of social safety nets,” Capaldo argued.

The Bali meeting has brought the simmering conflict into the open. Participants described it as a clash of these two narratives – a food security-plus approach as proposed by India and other developing countries versus a TF-plus approach pushed by industrialised nations and some developing countries.

South Africa’s trade minister Rob Davies cautioned against the imbalances in the Bali package, particularly the tilt towards trade facilitation.

Kenya’s foreign minister Mohamed, meanwhile, said “I agree with India, and we all want a clear solution…I’m hopeful that language will be found to move forward on this issue… I don’t think it is in anybody’s interest to allow this ministerial to send the wrong signal that we cannot come together and that we cannot find language to satisfy millions of poor people. It is important we achieve a concrete result on this at the Bali meeting.”

The fate of the Bali package now hangs in the balance. In the next 72 hours, the world will know whether a solution could be found for addressing the food security issue – or whether the Bali package will be torpedoed due to unbridgeable differences.

Sixteen-year-old Parul, hailing from Dhaka's Batara slum, is paid about 15 dollars a month for her work in a garment factory. Also in the picture are her younger brothers and a cousin. Credit: Naimul Haq/IPS

By Ravi Kanth Devarakonda
GENEVA, Jul 13 2013 (IPS)

The decisions of the United States and the European Union to demand implementation of controversial labour standards in Bangladesh following the Sawa industrial tragedy pose a serious threat to the rule-based global trading system, says Dr Supachai Panitchpakdi, Secretary-General for United Nations Conference on Trade and Development.

“Labour rights and standards are something very sensitive to all developing and least developed countries at the World Trade Organization and when countries try to impose labour standards they are just distracting from the WTO’s authority,” Panitchpakdi told IPS.

A fortnight ago, the new United States trade representative Ambassador Michael Froman announced in Washington that the U.S. administration is discontinuing benefits offered to Bangladesh under the Generalised System of Preferences (GSP) scheme because of Dhaka’s poor labour rights."When countries try to impose labour standards they are just distracting from the WTO’s authority."

The GSP provides a soft window for exports from Bangladesh to enter the American market with low customs duties. Except textiles and garments on which Bangladesh pays high import duties in the U.S. market, other products from Bangladesh attract the GSP benefits.

Close on the heels of the U.S. decision, the EU resorted to trade-linked conditionality to impose labour rights in Bangladesh. The EU has forced Bangladesh to sign a “compact” that lays out the labor reforms that Bangladesh will have to carry out in a time-bound framework to avail duty-free and quota-free market access in the EU market.

Since the violent Seattle ministerial conference in 1999 which broke down due to irreconcilable differences between the rich and the poor nations over attempts to bring labour standards into the WTO rule book, the industrialised countries have stayed away from linking labour rights with trade at any multilateral forum.

The latest actions by the U.S. and the EU signal a change. If anything, they seem to stoke the fires of the Seattle meeting all over again. “If countries get away with doing all this, then, it results in a shift away from WTO in rule-making which is quite threatening,” Panitchpakdi said.

Brussels not only threatened Bangladesh but warned other least developed countries that it will deny market access under the “Everything but Arms (EBA)” scheme if they fail to implement labour standards in their textiles and garments industry on a war footing.

“I want to make it clear that Bangladesh – or for that matter any other least developed country – cannot take for granted the trade preferences it currently enjoys (in the EU market),” said Karel De Gucht, the EU trade commissioner.

While signing the multi-stake holder compact to improve labour rights, working conditions, and factory safety in Bangladesh, Gucht warned that “under the ‘Everything but Arms’ scheme, the EU may consider appropriate action should there be no, or insufficient progress for Bangladeshi workers.”

The compact signed in Geneva early this week, says the EU trade policy chief “commits us – the Government of Bangladesh, the EU, and the ILO (International Labour Organization), to a number of time-bound actions.”

As part of the commitments set out in the compact, Dhaka will have to reform its labour law by the end of this month to provide “freedom of association and the right to collective bargaining,” and to improve “occupational health and safety rules” and “building and fire safety.”

Bangladesh foreign minister Dipu Moni has suggested that the compact is only a “political” initiative and not a “legal document,” but the EU trade commissioner has refused to accept Moni’s assessment.

“The compact is a rulebook for Brussels to judge whether Bangladesh has implemented its commitments,” Gucht said bluntly.

Bangladesh, which exports textiles and garments estimated at around nine billion dollars to the EU market every year, came under intense criticism for the recent accidents in Seva which killed hundreds of workers. The government in Dhaka has since embarked on a series of measures to improve health and safety conditions in its textile industry.

“If trade majors want to impose labour rights,” said Panitchpakdi, “they should bring the issue to the WTO.” It is unfair to punish countries outside of WTO by threatening denial of market access, he said.

“They have been doing this with Cambodia and now Bangladesh,” Panitchpakdi said. Instead of labour rights, the industrialised countries “must look at the business practices of their retail and wholesale industry because the problem with global value chains is the way they are exploiting the sweat shops in poor countries which are providing cheap labour.”

Nyaradzayi Gumbonzvanda, the general secretary of the global rights network World YWCA, said that further economic and social empowerment was needed to change the lives of women in Africa. Credit: Ravi Kanth Devarakonda/IPS

By Ravi Kanth Devarakonda
GENEVA, May 7 2013 (IPS)

Nyaradzayi Gumbonzvanda, a human rights lawyer and the general secretary of the global rights network World YWCA, knows what it is like to struggle against poverty and violence: she herself comes from a poor family in Magaya village in Murewa district, which lies northeast of Zimbabwe’s capital Harare.

But Gumbonzvanda has travelled a long way from her home. And she has spent much of her life trying to change the lives of women who were not as fortunate as she was.

And now she is a candidate for the executive director position at United Nations Women – a post formerly held by Chile’s ex-president Michelle Bachelet, who resigned in March.

In an interview with IPS at her offices in Geneva, Switzerland, Gumbonzvanda said that economic growth and development have to address “opportunities for creating wealth at household level, but also structural issues such as the violence and inequality that women continue to experience almost on a daily basis.”

She applauded development on the African continent, while stressing that further economic and social empowerment was needed to change the lives of women.

“I see women going forward in various areas and sectors in all African countries, who are able to shape a new narrative. We need economic and social empowerment – it is not enough to have political empowerment,” she said.

Excerpts of the interview follow:

Q: Let us start with the growing rates of rape and domestic violence against women. How grave is this problem and is it universal?

A:  I think this is one of the biggest issues facing women and girls in the world today. I see the violence against women as a manifestation of inequalities, disempowerment and exclusion…

Social disempowerment, the fact that women are seen as second-class citizens who do not often have a voice or rights about their own bodies; the painful realities of poverty and violence against women; and child trafficking for sexual exploitative work are all burning issues that need to be addressed.

What is important is that we work on preventing violence against women, including domestic violence, violence in conflict (situations) and sexual abuse. The prevention part is critical, (and it should be) followed by robust policies in different social sectors within countries and at the international level.

Q: Over the last 30 years there have been tremendous changes in the global economy and culture – largely due to the internet and globalisation. What impact has this had on women?

A:  I think there are a couple of things that happened in the last 30 years. I was in Beijing (in 1995) for the (World) Conference on Women and I would argue that there has been real international work on the international norms to do with women and human rights that is progressively good.

We now have conventions and treaties at an international level, and even at regional level, like the Maputo Plan of Action for Women (on reproductive and sexual health rights).

Even at the normative level, we see quite a lot of work and some good progress. However, whether an economic model can address the structural issues that contribute to violence against women still needs to be resolved.

Q: Are governments doing enough to address these challenges?

A:  They are not sufficient. I think governments need to get (their) priorities right and do more when they formulate their budgets. The greatest security of any nation is when its mothers and children are secure, when there is food on the table and water nearby, when there is a functioning school and, ultimately, the possibility of getting a job. That is the most secure nation.

I would urge our governments to rethink the relationship between military expenditure and expenditure on social and basic services. Just by buying one military helicopter less, governments can build 10 schools. That is the paramount challenge for governments all over the world.

Q: While there has been renewed conflict on the African continent, there are also great successes and progress with regards to development and empowering women. What do you think still needs to be done for women on this continent?

A: This year, the African Union is celebrating its 50th anniversary and African women were quite involved in the decolonisation process. They were in the trenches looking for a new Africa – and it has happened.

We are celebrating Nkosazana Dlamini-Zuma, who is the first African woman to lead the African Union, and that’s good for Africa.

We see countries like Rwanda and others having (significant) number of women in decision-making (positions). And yet we have to address the issue of conflict. As long as countries remain in conflict situations, and as long as there is violence, it continues to hold us back.

The continent, from the Cape to Cairo, is a rich one and we need to look within Africa (and see) where women can be more involved in the big sectors like mining, transport, and agriculture.

Q: We see technology playing a role in developing the continent with SMSs being used to inform mothers of vaccinations for children etc. What role does it have to play in bettering the lives of Africans?

A: We see a lot of potential in Africa in mobile telephony and we see it being used in Tanzania around services for family planning or for the immunisation of kids. We have also seen the introduction of mobile (phone) banking services in Kenya and Zimbabwe, and these are powerful ways to enable and empower communities.

There is a lot of potential that can be harnessed from technology and what is critical is the infrastructure and regulatory framework, which needs to be enabled.

Q: What, in your opinion, are some of the greatest successes of African women? And what can we learn from them?

A: I think I always reached out to the women leaders from my continent.  You have to remain grounded in your identity … You (have to) embrace the totality of what is good about your own context. And that is your contribution as a global citizen … My identity is informed by the collective identity.

As parties to the treaty on the Non-Proliferation of Nuclear Weapons (NPT) begin their second preparatory conference in Geneva on Monday, representatives of civil society and several countries have decided to bring the festering nuclear issue and its potential humanitarian consequences to the centre stage.

“The NPT has its own process and business as usual,” said Rebecca Johnson, co-chair for the International Campaign to Abolish Nuclear Weapons (ICAN), a Geneva-based global coalition of pressure groups working on disarmament and a ban on nuclear weapons.

The Geneva preparatory committee meeting will focus on a range of issues for the next two weeks to prepare the agenda for the 2015 Review Conference which will take place in Geneva.

More importantly, it is taking place against the backdrop of rising nuclear tensions in the Korean peninsula and Iran’s nuclear enrichment programme.  Also, several countries held an international conference on the Humanitarian Impact of Nuclear weapons in Oslo last month.

“My hope is that a large number of countries talk (at the Geneva meeting) about the importance of bringing the nuclear issue back to human level and understanding the humanitarian consequences because of nuclear weapons,” Johnson told IPS.

She expects that a large number of parties to the NPT will sign up to the South African statement on the human dimension of nuclear weapons which will be delivered at the meeting.

“We want a sustained dialogue on the humanitarian impact so that it changes the balance of power in the NPT,” Johnson argued.

The NPT came into force in 1970 with the avowed goal of stopping countries from building a nuclear bomb. So far, 189 countries have ratified the treaty while India, Israel, and Pakistan refused to become parties to it. All three countries possess a nuclear arsenal, with total estimates varying from 50 to 200 nuclear weapons.

The official nuclear weapon states – the United States, Russia, Britain, France, and China who are known as P5 – are required to implement measures under the treaty to “cessation” of the nuclear arms race, and complete nuclear “disarmament”.

The five nuclear weapon states held a meeting last week during which they discussed promoting dialogue and mutual confidence on nuclear issues. The P5 members exchanged views on various issues concerning “non-proliferation”, “the peaceful uses of nuclear energy”, and “disarmament” – known as the three pillars of the NPT.  The five nations, who are the permanent members of the United Nations Security Council, reaffirmed their commitment to the goal of nuclear disarmament.

However, progress on nuclear disarmament is almost limited or negligible over the last 45 years.  “There is not much progress on nuclear disarmament and we need a new dynamic to break the paralysis, otherwise there will be new cold war,” said Martin Hinrichs, an ICAN activist. Representatives of ICAN from some 16 countries held a brainstorming session on how to go about their advocacy campaign during the NPT meeting this week.

“They (the P5) have got a vested interest and they constructed their industry, defence industries, and military to deploy, to possess, and to modernise nuclear weapons,” said Johnson.

The P5 members, says Johnson, “have a vested interest in keeping the status quo and stopping new countries entering the nuclear club.” Besides, they enjoy numerous privileges because of their status and it would be a mistake to think that they would implement substantive measures towards complete nuclear disarmament, she said.

So, the “game” for the elimination of nuclear weapons will not start from the P5 side who wield powerful nuclear weapons, Johnson said.

“What has to change is that the non-nuclear states have to start things to bring about nuclear disarmament,” the ICAN co-chair argued. “They (the non-nuclear weapon states) have the power and tools to change by becoming aware that nuclear weapons are a humanitarian problem even if they are set in the international legal and political rules.”

Therefore, it is important not to give exalted status to the nuclear arms states every time on the hope that they would carry out disarmament. “The non-nuclear weapon states are not supplicants, and they have to engage in politics and change international relations by joining forces with civil society,” Johnson asserted.

The international ban movement intends to delegitimise nuclear weapons for everybody so that countries are dissuaded from spending billions of dollars on nuclear weapons.

Industrialised countries have mounted an unprecedented campaign to stop the United Nations Conference on Trade and Development from providing policy advice to the poorest countries in Africa and across the globe.

Industrialised countries have voiced their unhappiness with theUNCTAD's policy advice to developing nations. Credit: Einberger/argum/EED/IPS

As UNCTAD attempts to secure a new mandate at its ministerial meeting in Doha, Qatar, from Apr. 21 to 26, industrialised countries have voiced their unhappiness with the agency’s policy advice to developing nations.

According to trade officials from developing countries, industrialised countries believe that the agency’s advice on finance, environment, food security, intellectual property rights and development clashes with their market-driven liberal agenda.

“Developed countries do not want UNCTAD to enter into finance on the grounds that it is an area that only the International Monetary Fund and the World Bank must handle,” said Lesotho’s ambassador to the U.N. and World Trade Organization (WTO), Dr. Anthony Mothae Maruping. He is also chair of the UNCTAD negotiating committee in charge of the draft text for the upcoming meeting. Maruping said that he was working to bridge the differences between the industrialised countries, led by the European Union (EU) and the United States (U.S.), and the G77 and China – the coalition of developing countries.

The draft text on the agency’s mandate for the next four years outlines its research and policy advice on subjects including the current economic recession, exchange rate misalignments, the volatility and financialisation of commodity markets, special and differential treatment for developing countries, regional financial and monetary cooperation, and the need for the reform of the international financial and economic architecture. In his report for the Doha meeting, UNCTAD Secretary-General Dr. Supachai Panitchpakdi calls for a paradigmatic shift to development-oriented growth that would bring about sustainable and inclusive economic and social change in the world’s least-developed countries (LDCs).

“The combination of macroeconomic austerity, rapid liberalisation, privatisation, and deregulation not only failed to produce a supply-side revolution but, instead, set the region (Africa) back economically; productivity growth stalled in most sectors, and the informal economy had grown rapidly since the onset of the international debt crisis in the early 1980s,” Panitchpakdi said in the report.

He argued that the time has come for moving away from finance-driven globalisation, which has characterised the dominant pattern of international economic relations based on a one-size-fits-all policy agenda. He said this has had a destructive impact on all countries, particularly on least- developed ones.

However, the aftershocks of the global economic crisis of 2008 continue to reverberate across the world in countries like the United States, the United Kingdom, France, Germany, Greece, and Portugal.

It is little wonder that, despite this, industrialised countries led by the U.S. and the EU are stubbornly pressing ahead with their failed boom-and-bust policies, say analysts.

Against this backdrop, UNCTAD’s meeting in Doha has assumed considerable importance in setting out a new agenda.

“It comes at a time when global economic governance is under close scrutiny, with growing concerns about the health of the multilateral agenda,” said Richard Kozul-Wright, the head of UNCTAD’s Unit on Economic Cooperation and Integration among Developing Countries.

He was referring to the controversial plurilateral negotiating effort among select industralised countries for a free trade agreement on services at the Doha multilateral trade negotiations.

A plurilateral agreement allows member countries to voluntarily agree to new rules. In contrast, in a multilateral agreement all members have to be in agreement.

“The stalled Doha Round, the slow pace of climate discussions and the failure of the international community to pre-empt recurrent food crises have added to the growing concerns about multilateralism,” he told IPS.

UNCTAD was the first multilateral body, since its inception in 1964, to point out the dangers of an unsustainable housing bubble and the unsustainable public and private debt of industrialised countries. Its 1997 report cautioned against the downside risks of finance-driven globalisation.

The U.N. agency also cautioned against the demands made on developing countries during the Doha negotiations to reduce the tariffs on their industrial goods to almost zero.

“UNCTAD’s work in all areas is commendable,” said Dr. Matern Yakobo Christian Lumbanga, Tanzania’s ambassador to the U.N. and WTO. “UNCTAD’s assistance in different policy areas is vital for LDCs and it has rightly advised us not to depend on one or two areas of exports or raw materials.” He said that LDCs in Africa have come to realise the benefits of diversification, as advocated by UNCTAD.

The upcoming UNCTAD meeting is going to address the specific concerns of the LDCs, and will focus on durable economic changes such as “broadening the variety and sophistication of goods and services produced so that LDCs are less vulnerable to external shocks,” said Kozul-Wright. “This is the most pressing of the rebalancing challenges, which must include an emphasis on job creation, social protection and environmental sustainability if the opportunities provided by a more open global economy are to improve the lives of many rather than the favoured few,” he said.

Trade ministers of the BRICS countries – Brazil, Russia, China, India and South Africa – say that at the G20 trade ministerial summit later this month in Mexico they will try to ensure that attempts by industrialised countries to frame a new trade agenda do not drown development-led trade liberalisation and the World Trade Organization talks.

The G20 is not representative of the WTO because the poorest countries have no say in setting the trade agenda. Credit: Kim Cloete/IPS

The Doha Development Agenda (DDA) was launched by the WTO almost 11 years ago to correct the historical imbalances and asymmetries in the global trading system. It was designed to enable poorer countries to integrate into the system.

“This is a most dangerous move by the industrialised countries which are determined to undermine the independence and multilateral character of the WTO, where a large majority of countries are asking for developmental flexibilities for implementing liberal trade commitments,” said a trade envoy, referring to the agenda for the meeting.

“The G20 is not representative of the WTO because the poorest countries and countries in Africa, except for South Africa, have no say in setting the trade agenda,” the envoy said.

The G20 bloc of major and emerging economies is made up of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, and the European Union.

Clearly, the rich countries have overwhelming influence in setting the agenda at the G20 meetings, the envoy said.

“The draft agenda for the meeting is basically asking trade ministers to agree on creating a super-body headed by the chiefs of the WTO and OECD (Organization for Economic Cooperation and Development) to oversee all the review and monitoring functions,” the envoy argued.

Therefore, the presence of the BRICS ministers is so essential and important, lest the trade agenda be radically altered for the next 10 years, said sources familiar with the BRICS ministers meeting.

During their meeting in New Delhi last week, the BRICS ministers discussed the draft G20 agenda issued by Mexico, and not yet made publicly available, the South African trade minister said.

Significantly, the draft agenda is silent on the Doha trade talks.

It aims to take decisions on core trade issues without first discussing them at the WTO, which is now grappling with new approaches to accelerate the DDA talks.

“We strongly believe that the process has to be multilateral and the central focus has to be on the Doha single undertaking,” said Davies, emphasising the importance of transparency and inclusiveness.

“Attempts to reshape the architecture without concluding the Doha talks are not correct,” Davies said, suggesting that the BRICS countries are ready to take small steps to reinvigorate the Doha trade negotiations. The minister insisted that agriculture is at the heart of the DDA and that precious little is done to address the continued trade-distorting subsidies of the industrialised countries.

It is important to accord primacy to the Doha multilateral trade negotiations by discussing issues first at the WTO, Davies argued.

The draft agenda for what is going to be the first G20 trade ministerial meeting of its kind – beginning on Apr. 19 – sets the stage for preparing a “New Trade Narrative.”

The five-page agenda obtained by IPS, which remains confidential, squarely addresses the trade interests of the rich countries, under subheadings such as “better understanding global value chains to better regulate trade” and “services, trade finance and trade facilitation are essential to oil global value chains.”

Angel Gurria, secretary-general of the OECD, known as the rich-country think tank, and Pascal Lamy, the WTO director general, will provide the justification for pursuing this new agenda to the G20 trade ministers.

The heads of the OECD and the WTO have been working in tandem for some time now to change the manner in which global trade is measured and assessed in a neoliberal framework away from a development perspective, say analysts.

But developing countries and the least-developed countries have opposed the framework advanced by the OECD and WTO Secretariats on market-led trade reforms.

In addition, the G20 ministers will discuss “trade, growth, and jobs.” The themes for discussion include “trade as a source of growth,” “trade as a source of jobs,” and “the imperative to keep markets open and to keep opening markets.”

Up until now, trade negotiations, including the very setting of the trade agenda for any negotiations, have been based on a give-and-take framework. But for the first time, Mexico is asking ministers to move away “from this setting in which many trade discussions happen” to identify “the links between trade and job creation and (to improve) trade statistics that consider global chains and value addition.”

Mexico also wants ministers to focus on “the major forces and challenges facing their economies, including protectionist pressures, and what alternative policies are there to deal with them, other than trade instruments.”

“Reading the draft agenda, one gets the feeling that there is a hidden language, which shows basically the interest of developed countries and not of developing countries,” said Isabel Mazzei, a former Oxfam International trade policy advisor.

Speaking in her private capacity to IPS, she asked: “What does it really mean ‘to change the trade narrative’- does it mean to ‘move the goal posts’?”

“The Doha Round is about development, agriculture, elimination of subsidies, policy space….and now it looks like this narrative is obsolete as there is no mention of agriculture or subsidy elimination,” she said. “Many developing countries still have a big portion of their labour force coming from the agricultural and manufacturing sectors.

“Clearly the G20 draft agenda is a concerted attempt to bring the issues and concerns of rich countries from the back door,” she concluded.

Brazil and South Africa have experienced a widespread contraction of their manufacturing industries, with the latter suffering massive unemployment as well, thanks to the rampant volatility and misalignment of dominant global currencies like the dollar, trade experts from the two countries say.

South Africa's unstable exchange rate made exports uncompetitive. Credit: Servaas van den Bosch/IPS

“Brazilian industry is at the receiving end of exchange rate appreciation and 2011 saw a negative growth in the manufacturing sector with textiles, leather, chemicals, rubber, and electrical industries, among others, having been adversely affected,” said Josue Gomes da Silva, the chief executive of the Brazilian company, Coteminas. He was speaking at a closed-door seminar at the World Trade Organization (WTO) on Mar. 27.

“Four hundred thousand small businesses closed down in South Africa over the last three years, resulting in unemployment of about 23 to 34 percent due to the unstable exchange rate that made South African exports uncompetitive,” said Stewart Robert Jennings, chief executive of South Africa’s PG Group.

“The South African Rand has strengthened during the last three to four years and is now the most volatile currency,” he said, suggesting that the Brazilian Real and Rand are at their highest appreciation values against the greenback.

Da Silva and Jennings offered a detailed account of the creeping “deindustrialisation” in their respective countries at a closed-door seminar convened by the WTO’s Working Group on Trade, Debt, and Finance.

The two-day seminar, which concluded on Mar. 28, is an outcome of a sustained campaign by Brazil over the last year to persuade members of the WTO to discuss the role played by volatile exchange rates in international trade.

However, several industrialised countries, as well as China, were reluctant to address the issue of exchange rates at the WTO, saying it is part of the International Monetary Fund’s (IMF) agenda. “The seminar is an attempt to give shape to a reality, away from abstract concepts,” Brazil’s trade envoy Ambassador Roberto Azevedo told IPS.

While representatives from the private and public sectors and academia were invited to discuss the role exchange rates played in trade, journalists were barred from the seminar at the insistence of Canada and the United States.

Though there was no consensus on the factors influencing the misalignment of currencies, which imply that there is a gap between a country’s real exchange rate and its equilibrium level, there was general recognition that a problem exists and is playing an adverse role in different countries.

While currencies in big developing countries appreciated significantly over the last few years, in other countries, currencies depreciated or were maintained at a steady peg to the dollar despite favourable macro-economic fundamentals.

The Real is overvalued by 42 percent, while South Africa’s Rand has appreciated in double-digit percentage terms against the dollar. The Indian Rupee also initially appreciated by five percent against the dollar from 2008 to 2009. However, it has recently depreciated sharply due to the country’s burgeoning current account deficit.

Consequently, Brazil and South Africa witnessed a sharp drop in their exports of manufactured goods, while imports from other countries shot up alarmingly. “Brazil has dropped to 14th place in machinery and equipment exports, while imports doubled because of exchange rate overvaluation,” said da Silva.

Meanwhile, the policy flexibility of South Africa, Brazil and India, as reflected by the Wiggle Room Index constructed by The Economist, is not high. The three countries are ranked 65th, 79th and 82nd, respectively.

Against this backdrop, WTO director general Pascal Lamy issued a nuanced statement on Mar. 27 on the exchange rate volatility and its various effects on traders. He said international trade needs exchange rate stability.

“Trade measures cannot correct policy imbalances elsewhere, and be an answer to non-trade policy concerns…. Tit-for-tat measures would be a recipe for protectionist crossfire,” Lamy cautioned.

All these issues, Lamy said, “require a mix of cooperation in the macro-financial field and proper domestic policies which lie outside the remit of the WTO.”

The director general exhorted participants to make sure that the “WTO system does not crumble under the weight of excessive expectations.”

In contrast, a senior official of the U.S. administration, which is providing credit at close to zero percent to its banks and industry since the onset of the financial crisis in 2008, complained that China had kept the Yuan nearly unchanged despite a growing current account surplus and bulging foreign exchange reserves.

“A strong consensus now exists on the importance of promoting market-determined exchange rate systems, enhancing flexibility to reflect underlying economic fundamentals, avoiding persistent exchange rate misalignments and refraining from competitive currency devaluation,” said Mark Sobel, the U.S. Treasury Department’s deputy assistant secretary for international monetary and financial policy.

China responded saying that those countries adopting unconventional monetary policy have contributed to the currency volatility and misalignment by adding liquidity to financial markets.

“Exchange rate volatility was intensified by the monetary policy of major currency issuers – the U.S.,” Ruogu Li, president of China’s Exim Bank, told the participants.

“Both developed and developing members have fallen victim to major currency issuers,” the Chinese banker said, according to sources present at the meeting. “For every iPhone sold in the U.S., Chinese workers and companies get less than two percent, while the rest of the profits go to the American companies.”

The seminar has underscored the need to acknowledge the problem.

“If countries agree that misalignments are a given in the current international economic and trade processes, it is important to discuss the trade-related aspects of the problem at the WTO,” said Azevedo.

By Ravi Kanth Devarakonda and - -
GENEVA, Mar 24 2012 (IPS)

Trade envoys of India, Brazil, and South Africa have warned industrialised countries not to hijack the Doha multilateral trade negotiations by adopting the controversial plurilateral approach to liberalise trade in services.

A plurilateral agreement allows member countries to voluntarily agree to new rules. In contrast, in a multilateral agreement all members have to be in agreement.

This, they say, could ultimately undermine “the possibility of resuscitating the Doha Round.” The Doha Development Agenda was launched almost 11 years ago to correct the historical imbalances and asymmetries in the global trading system and was designed to enable poorer countries to integrate into the system.

A closed-door Enchilada meeting was convened on Mar. 21 by the chair for Doha services trade negotiations, Ambassador Fernando de Mateo of Mexico. According to sources present at the meeting, the trading bloc known as IBSA (India, Brazil, South Africa) stated that while they are willing to explore new approaches to advance the Doha trade negotiations towards an early outcome, they would oppose any attempt to weaken the multilateral negotiations.

Over the last three years, the industrialised countries have changed the terms of the Doha negotiations without addressing the central issues. They seem determined to extract a high price involving steep cuts on industrial goods and sweeping market access for services from the four developing countries – China, India, Brazil, and South Africa – for meagre concessions to reduce their subsidies and market access for agriculture products.

The Enchilada provided the first encounter between industrialised countries and the IBSA countries in the face of sustained attempts by 16 industrialised and some developing countries to part with the Doha trade negotiations.

Thirty-three countries were invited to the Enchilada including: the United States, Argentina, Australia, Brazil, Canada, Chile, China, the European Union, India, and Singapore among others.

De Mateo said that it is important to fully explore different negotiating approaches based on the guidance provided by trade ministers at the eighth ministerial meeting of the World Trade Organization (WTO), while respecting the principles of transparency and inclusiveness. He said it is important to advance negotiations where progress can be made and asked the participants to suggest whether a plurilateral approach can be adopted to do this.

The three IBSA members warned that the existing methodology of negotiations, which involved inclusiveness and transparency, must not be replaced by an exclusive format of plurilateral negotiations involving select members.

“We are willing to explore new approaches to reinvigorate the Doha Round as directed by ministers at the WTO’s eighth ministerial meeting, but this has to take place within the framework of multilateralism, inclusiveness and full transparency based on the Doha mandate which has stipulated that negotiations to be conducted on the basis of Single Undertaking,” South Africa’s trade envoy Ambassador Faizel Ismail told IPS.

The Doha Round was launched on the basis of single undertaking in 2001 to enable the WTO members to address all the issues across- agriculture, industrial goods, services, rules, environment, and intellectual property rights – on a fair and balanced framework.

But the negotiations are facing a grave impasse due to untenable demands raised by some industrialised countries in market access for industrial goods. Trade ministers have repeatedly called for concluding the round based on a “fair and balanced” outcome that members could live without much pain.

However, powerful domestic lobbies in some major industrialised countries have raised the bar exceedingly high in areas like industrial goods and services beyond what is prescribed in the Doha mandate while turning their back on agriculture and movement of short-term services providers as demanded by developing countries.

At the WTO’s eighth ministerial meeting, ministers asked their envoys to explore new approaches to overcome the prolonged impasse in the Doha negotiations. But, the industrialised countries, along with some developing countries like Singapore, Colombia, South Korea, Hong Kong, Mexico, and Chile, are insisting on plurilateral negotiations that would exclude the participation of majority of countries.

The South African envoy argued that “the so-called plurilateral approached that has been proposed by some of the major developed countries is designed to raise the level of ambition beyond the capacity of the majority of developing countries and to change the existing methodology of negotiations of trade in serves as a stand-alone issue.”

“Any attempt to create new approaches would have the effect of undermining the Doha Round and further marginalising the smaller and poorer countries at the WTO,” he said.

Brazil’s trade envoy Ambassador Roberto Azevedo said, according to sources at the Enchilada meeting, that his country is ready to work on any multilateral approach in the context of the Doha Round that could make progress and help conclude the Round.

“Market access is an integral part of agriculture, industrial goods and services,” Azevedo told his counterparts. According to sources he was suggesting that some members are aiming at market access in services in total disregard to agriculture and industrial goods, which would be tantamount to a “business as usual approach” and which would not succeed.

According to sources, the Indian trade envoy Ambassador Jayant Dasgupta said his government is willing to discuss any issue in services under the Doha mandate at the special committee on trade in services.

Supporting the South African proposal for concluding the negotiations on a waiver for least-developed countries from undertaking any services commitments as well as duty-free and quota-free market access for the poorest countries, the Indian trade envoy cautioned against a plurilateral approach for services.

Even among the industrialised countries, there is no unanimity on a service plurilateral agreement outside the Doha. The European Union said at the Enchilada meeting that Brussels wants members to pursue an information and communications technology services agreement in parallel with the ongoing ITA- II (Information Technology Agreement) goods review.

But, the United States and Canada, two major drivers for the services plurilateral agreement among the 16 countries, kept mum at the Enchilada meeting. Significantly, the 16 countries – who call themselves the Real Good Friends of services liberalisation – hosted their own meeting on Wednesday and Friday to discuss how they must cobble their plurilateral agreement.

In a nutshell, the WTO is torn asunder by the two conflicting approaches. “The plurilateral approach will have the effect of excluding developing countries while undermining the possibility of resuscitating the Doha Round,” Ismail cautioned.

Excerpt:

By Ravi Kanth Devarakonda and - -
GENEVA, Mar 17 2012 (IPS)

India, Brazil, and South Africa, the international grouping for promoting international cooperation among the three countries known as IBSA, along with China and several other developing countries, have denounced the ongoing attempts to craft an exclusive, plurilateral agreement to liberalise trade in services without concluding the multilateral trade negotiations of the World Trade Organization.

IBSA has denounced the ongoing attempts to craft an exclusive, plurilateral agreement to liberalise trade in services. Credit: Servaas van den Bosch/IPS

In sharp contrast, the proposed plurilateral agreement for services, which aims to seek WTO commitments for the 16 countries part of the initiative, will turn the clock back for providing the much-promised developmental gains from the poorest and developing countries.

Ahead of the current turmoil in global trade negotiations, the IBSA trade ministers warned that that “plurilateral initiatives go against the fundamental principles of transparency, inclusiveness, and multilateralism.”

The 16 countries, the United States, countries from the European Union, Japan, Canada, Norway, Switzerland, Australia, New Zealand, Singapore, South Korea, Taipei, Pakistan, Mexico, Colombia, and Chile, call themselves the real good friends (RGF) of liberalisation of trade in services.

The RGF coalition will hold their third brainstorming session on Mar. 21 to prepare the ground for a plurilateral services agreement outside the WTO. Though the contours of the form and substance of the proposed agreement are not clear yet, the coalition appears determined to achieve an outcome based on the highest common denominator, say trade envoys from the coalition.

The IBSA countries have not adopted any formal position on the ongoing plurilateral initiative of the RGF coalition. But trade envoys from the respective countries spoke against the dangers it would pose to the multilateral negotiations in general, and the Doha trade negotiations in particular.

“We don’t think that plurilateral initiatives will comply with the requirement of transparency and inclusiveness, which is the basis for any multilateral process,” Brazil’s trade envoy to the WTO, Ambassador Roberto Azevedo, told IPS. “Brazil doesn’t believe it is a building block for the resumption of multilateral negotiations and on the contrary it would make that even more difficult.”

Brazil, said Azevedo, “is perfectly willing to negotiate multilateral market access in services as long as others are willing to negotiate market access in agriculture which is at the heart of the WTO’s Doha trade negotiations.”

The plurilateral route for an agreement on services will undermine the “balance” in the Doha trade negotiations, said Ambassador Jayant Dasgupta, India’s trade envoy. South Africa’s trade envoy Ambassador Faizel Ismail expressed concern that a plurilateral agreement will undermine the much- promised “developmental” outcome in the Doha trade negotiations.

Even the EU, which is taking an active part in the current RGF plurilateral initiative remains uncomfortable. “Our line is that we should not take initiatives that undermine the WTO because the WTO is very important for trade,” the EU’s trade commissioner Karel de Gucht said on Mar. 12.

Under the WTO’s General Agreement on Trade in Services (GATS), which governs global trade in services, any group of countries can strive for economic integration by seeking higher and deeper services commitments among themselves.

Until now, there was no attempt by any group of countries to craft an exclusive plurilateral services free trade agreement among a select group of countries within the WTO since its establishment in 1995.

In the past there were open-ended plurilateral agreements such as the WTO’s Information Technology Agreement involving liberalisation of trade in various electronic goods, and the telecom services agreement.

The ongoing exploratory talks among the 16 countries are taking place at a time when the WTO members have not been able to conclude the much-promised Doha negotiations, which were started in 2001.

A continued stalemate in negotiations between a large majority of countries seeking a palatable outcome and one major industrialised country making “maximalist” demands has put paid to an early conclusion, said trade diplomats.

As opposed to multilateral negotiations in which all members have an equal say, at least on the paper, the plurilateral process involves closed-door negotiations among select-members. The U.S. and other major industrialised countries, however, reckon that it is difficult to negotiate with 153 countries as it would involve a grand bargain of compromises.

“We live in a consensus based-organisation and what that means is that 153 members have to approve on everything and what that means in practice is the least common denominator,” the U.S. trade envoy to the WTO, Ambassador Michael Punke, told a seminar organised by the European Centre for Political Economy in Brussels.

He said “we should look at the services plurilateral as a different, fundamentally different way, of approaching the agreement.” Punke argued that the RGF group would provide the ideal ground for accomplishing an outcome based on “highest common denominator” since most of them are engaged in significant liberalisation of trade in services.

However, developing countries remain opposed to the assault on the multilateral framework. “The greater the number of participants, it would be difficult to reach a common agreement but it would provide greater benefits,” said Azevedo. “In short, a modest outcome with a larger number of participants should lead to more attractive and meaningful outcome.”

Excerpt:

By Ravi Kanth Devarakonda and - -
GENEVA, Nov 17 2011 (IPS)

The convergence of leading countries from the global South – China, India, Brazil and South Africa, among others – to assist the poorest countries in sub-Saharan Africa and elsewhere constitutes a new “dynamic” in the emerging global economic partnerships, says the United Nations Conference on Trade and Development.

In a report released on Thursday on the poorest countries – often referred to as the least-developed countries (LDCs) – UNCTAD calls for “a new path of development” to break from the “structural maladjustment” policies that led to “boom and bust cycles and growth collapses.”

There are currently 48 poorest countries with low per capita income of less than a dollar a day. About two-thirds of LDCs are located in Africa, and all indicators suggest that they are the worst affected by the International Monetary Fund (IMF) and World Bank’s market-oriented policies.

“The neo-liberal policies (fostered by the IMF and World Bank) devastated these countries,” says Dr. Supachai Panitchpakdi, UNCTAD’s secretary general. “These policies turned most sub-Saharan African countries from net food producing countries into net food importing countries.”

Team leader for the report, Zeljka Kozul-Wright, said that the LDCs are the victims of “structural maladjustment” policies followed over the last 40 years, which resulted in “boom-bust cycles and growth collapses.”

“LDCs suffered unstoppable marginalisation, and what we are saying is that if the current trends persist, the LDCs would become major loci for extreme poverty in the global economy sooner rather than later,” cautions Charles Gore, UNCTAD’s chief for the African division, LDCs and special programmes.

“The only way to reverse this trend is to create a new type of catalytic developmental state in the poorest countries with an adequate policy framework that would strive for structural transformation,” Gore told IPS.

“South-South cooperation opens up more opportunities and policy space needed to build such a catalytic developmental state,” he argued, suggesting that the economic and technical assistance offered by China, Brazil, and India comes without any conditionalities.

He dismissed suggestions that LDCs are merely exporting oil and other vital raw materials to China. Though the report cautions about “commodity-dependence”, it also says that there are positive examples where manufactured exports from LDCs to other developing countries increased by 18 percent per annum during the last decade.

Faced with worsening international trading conditions and haemorrhaging economic crisis in the centres of leading industrialised countries, LDCs face major challenges. The only plausible path to stay afloat in these difficult times and sustain their economic growth in the short and medium term is by enhancing their partnership with the Southern champions of economic development, the report says.

The report says that overall, the LDCs’ real GDP increased by 5.7 percent last year, “which is a slight improvement – one percentage point – in comparison with the result in 2009, but is far below the 7.1 percent average annual growth rate attained during the boom period between 2001 and 2008.”

Latest estimates suggest that LDCs are expected to grow by about 4.9 percent this year. The breakdown of the growth projection suggests that while Asian and island LDCs are expected to grow by 5.2 percent and 5.4 percent, the African LDCs and Haiti are likely to grow by 4.9 percent.

In terms of real GDP per capita income growth, African LDCs are expected to grow by 2.1 percent, which is barely sufficient given the high population growth. The Asian LDCs performed better than their African counterparts, the report says.

The report forecasts an average growth of around 5.8 percent for the LDCs during the medium term. “Clearly, it is an Asian LDC story,” says Gore, suggesting that the poorest countries in Africa are not there yet to realise their potential.

“The reason for the better performance of Asian LDCs has much to do with the flying geese model involving the catching-up process of industrialisation of latecomer economies from the international division of labour in East Asia based on dynamic comparative advantage,” he told IPS.

The performance of Asian LDCs – Bangladesh, Cambodia, and even Nepal – is impressive because of textile and other exports of manufactured goods. The African LDCs exports of manufacturing products comprise processing raw material, which have some initial value-addition.

Against this backdrop, the African LDCs must adopt the model followed in East Asia where the state played a dominant role in creating new, productive capacities and structural transformation. The state must be able to provide industrial subsidies, and credit for the development of industry and pursue robust policies in the social sector – health and education, Panitchpakdi told IPS.

South-South cooperation can become a “game changer” in the emerging economic partnerships of countries outside the industrialised North.

“The benefits of South-South cooperation support the building of developmental state capacities and the objectives of developmental states in LDCs, while the developmental state in LDCs in turn generates and augments the development impact of South-South cooperation,” Panitchpakdi says.

At a time when there is a complete drought in the much-promised official development assistance by rich countries, a mere one percent contribution by the leading developing countries from their 3.5 trillion dollars in foreign exchange reserves held by developing country sovereign funds can result in a significant development finance for the poorest countries.

This is where “developmental regionalism” can play an important role “that accepts globalisation as a historical trend, but rejects the market-led approach to it,” Panitchpakdi says.

Excerpt:

When the G20 leaders meet for their fifth summit in Cannes, France, on Thursday, they will be confronted with several worsening global economic and trade issues. Among them is how to strengthen the international trading system and how to overcome the developmental deficit that continues to create an uneven playing field for poor countries.

A police car burns at last year's G20 summit in Toronto, Canada. Credit: Marty Olauson/IPS

So far there is no consensus among the members of the WTO on what the blueprint to addressing the endemic ills plaguing the organisation is, particularly on how to deliver on the developmental promises made in the Doha Development Agenda (DDA), say trade diplomats.

The DDA was launched over 10 years ago to correct the historical imbalances and asymmetries in the global trading system and was designed to enable poorer countries to integrate into the system.

The EU and its allies, including Switzerland, want the G20 leaders to instruct their trade ministers to agree to an “ambitious” agenda that would make the WTO an active and lively body.

“The EU’s stand is also subtly supported by the WTO’s Director General Pascal Lamy, who wants an expanded agenda,” says a trade diplomat familiar with the discussions.

“A number of delegations want new approaches to be consistent with the Doha mandate, suggesting that the WTO could play its role in responding to global challenges, including its role in keeping protectionism at bay,” Lamy told members at the WTO’s General Council meeting last week.

Though Lamy did not mention the exact number of delegations or their composition, he was primarily alluding to a small group of countries led by the EU, says a trade diplomat from the IBSA countries.

Lamy, who will attend the G20 meeting, is expected to lobby leaders for his expanded agenda to revitalise the WTO.

But China and IBSA members do not share the need for an expanded agenda. At a time when the WTO is yet to deliver on the promised developmental goals set out in the Doha agenda, they are asking why members should abandon the single undertaking of the DDA negotiations and embark on a new programme. The single undertaking principle stipulates that nothing is agreed upon until everything is agreed upon in the entire Doha package.

Clearly, there are differing perspectives at play, particularly between the EU, IBSA and China. “We are not telling the public the truth about where we are and how members must make a collective effort to recover the credibility of the organisation,” says Ambassador Roberto Azevedo, Brazil’s trade envoy to the WTO.

He disagreed with the EU’s specific demands, which include an early realisation of select issues, including trade facilitation and improvements in the Dispute Settlement Understanding (the WTO’s procedure for resolving trade quarrels).

“Characterising extremely difficult issues as areas of potential outcome for early harvest would not reflect the truth and would set us up for additional failures to deliver on a realistic promise,” Azevedo told IPS.

IBSA and China have adopted common positions on the DDA and other issues at the WTO. China supports the recent IBSA declaration that reiterated the trading bloc’s commitment to the DDA in addressing the core inequities and uneven playing field that poses problems for the poorest countries trying to integrate into the global trading system. China wants to ensure that there is a strong outcome on the development package.

The emergence of BRICS (Brazil, Russia, India, China, and South Africa) countries on the global stage brought tectonic shifts, even at the WTO. While Russia is yet to join the WTO, China and IBSA present common strategies on developmental issues in the Doha mandate.

In their statement issued on Oct. 19, the IBSA leaders said “the demands of the current negotiations in the Doha Development Round reflect an imbalance in the sense that there is too much accommodation of the sensitivities of developed countries in agriculture, alongside unjust demands on developing countries to open their markets in the services and industrial sectors.”

Over the last three years, the industrialised countries have changed the terms of the Doha negotiations without addressing the central issues. They seem determined to extract a high price involving steep cuts on industrial goods and sweeping market access for services from the four developing countries – China, India, Brazil, and South Africa – for meagre concessions to reduce their subsidies and market access for agriculture products.

In sharp contrast, the EU issued a “non-paper” for the G20 Summit in Cannes, on the same day when the IBSA declaration was made public. Brussels’ “non-paper”, obtained by IPS, is totally silent on the issue of addressing “the high levels of protection and subsidies in agriculture in the developed countries” as demanded by the IBSA leaders.

Incidentally, high levels of protection and tens of billions of dollars in farm subsidies are still prevalent in the EU and several farm defensive countries – Japan, Switzerland, and Norway among others – have more to do.

The EU, however, defended its proposal saying it is “our initiative” and others can discuss their proposals. “We are open to the proposals from other members,” said the EU’s trade envoy Ambassador Angelos Pangratis. “We certainly look forward to other initiatives,” he told IPS, suggesting that Brussels would like members to discuss the elements it had proposed.

South Africa has expressed sharp concern over concerted attempts by leading industrialised countries, particularly the U.S. and the European Union (EU), to extract onerous commitments from developing countries as a condition to concluding the stalled Doha Round trade negotiations.

“We are deeply concerned over attempts to raise the level of ambition by leading industrialised countries in industrial goods and services that would call for a substantial payment from developing countries,” South Africa’s trade and industry minister Dr Rob Davies told IPS.

At a time when many African countries are struggling to recover from the raging global economic crisis that has resulted in mass unemployment, it would be “unfair” to expect either South Africa or poorer countries to agree to onerous commitments to provide market access in industrial goods and services, he said.

Over the last two weeks, members of the World Trade Organisation (WTO) stepped up efforts to accelerate the Doha Round trade negotiations, which entered its 10th year. The Doha Round was supposed to have been concluded by Jan 1, 2005.

But stark disagreement between industrialised countries and some developing countries, on one side, and a large majority of developing and least developed countries, on the other, over the level of commitment to reductions in egregious subsidies, high tariffs on farm products and tariffs on industrial products; and to market-opening for services put paid to an early agreement.

Recently, former WTO director general Peter Sutherland, who was responsible for concluding the previous Uruguay Round of trade negotiations, issued a report calling on members to conclude the Doha Round this year, failing which the credibility of the global trading system will be irreparably damaged.

“The emerging countries must provide substantial market access in industrial goods and services to conclude the Doha Round,” he told IPS.

Trade chiefs of the U.S. and the EU made similar comments at the World Economic Forum in Davos a fortnight ago.

The U.S. and the EU made a strong pitch for “real” and “new” market access in industrial goods and services in emerging countries — China, India, Brazil, South Africa, and Argentina, among others — to finalise the Doha Round of trade negotiations this year.

During the Davos meeting, trade ministers reiterated their commitment to avail themselves of the “window of opportunity” to conclude the Doha negotiations this year.

But there remained pointed differences on what ought to be the level of ambition and whether it is proper to demand a huge payment from developing countries to conclude the negotiations.

Trade ministers of Brazil, India, China, and South Africa issued a common declaration in Davos maintaining that the final outcome in Doha trade negotiations must hinge on the principle of “reciprocity” that would require proportional commitments between developing countries and developed countries.

More importantly, the four ministers insisted that final commitments in the market access areas of agriculture, industrial goods, and services must be based on the mandate that was agreed in the Jul 2004 framework agreement and the Hong Kong Ministerial Declaration of 2005.

The declaration and the agreement reaffirmed the centrality of development and the interests of poor countries in the Doha Round.

The trade ministers said there should be no “reopening” of the texts that were tabled in Dec 2008 in industrial goods and services, which reflected the final compromises that members ought to make.

The trade majors, however, are in no mood to adhere to the commitments as suggested by China, India, Brazil, and South Africa.

The EU, for example, said there is “asymmetry” in what they are going to provide in agriculture and what they are going to receive in industrial goods and services as part of the Doha commitments.

EU trade commissioner Karel De Gucht told his counterparts in Davos that Brussels will need more market access from the emerging countries, regardless of what the mandate stipulated.

In similar vein, U.S. trade representative Ron Kirk maintained that the emerging countries bear the responsibility to conclude the Doha trade negotiations. He said the U.S. faces high unemployment, which requires real market access to big emerging developing countries.

Commenting on these conflicting positions, the South African trade minister said, “despite a moderately ambitious agriculture package (that is on the table), we had already paid much more in industrial goods and services.

“We want an agreement because we are committed to addressing the systemic issues in the global trading system, such as cotton and duty-free/quota-free access,” said Davies, emphasising that the “credibility” of the global trading system rests on how it treats poor countries in Africa and elsewhere.

Despite a clear mandate on cotton, which needs to be addressed “ambitiously,” “expeditiously,” and “specifically” according to July 2004 framework agreement and the Hong Kong Ministerial Declaration of 2005, there is no progress because the U.S. wants to address this issue only after there is an agreement in all other areas.

The U.S. is also not ready to address duty-free and quota-free market access for the poorest countries until all other issues are resolved.

In a series of meetings of the Doha negotiating groups on agriculture and industrial goods at the WTO this past week, the differences on the level of ambition between industrialised countries and developing countries like India, South Africa, and Argentina came into the open.

While the U.S. and the EU insisted on increasing the level of ambition by bridging the “gap” between members’ positions, the developing countries reminded members that the level of ambition will have to reflect paragraph 24 of the 2005 Hong Kong Ministerial Declaration which called for a proportional outcome between agriculture and industrial goods.

“It is difficult to believe that countries which managed to get a range of exceptions in agricultural market access want the developing countries to offer more on industrial goods and services,” Davies said, arguing that those who are asking for more should also pay more in areas of interest to South Africa and other African countries.

An Indian textile engineer and entrepreneur called Raj Rajendran visited Rwanda in 1999. He was tasked to close down an unviable textile factory following the civil war. But he discovered propitious agro-climatic conditions, particularly volcanic soil — ideal for the rearing of silk worms to produce raw silk.

Charles Gore holding a sample of Raj Rajendran's work. Credit: El Hadj Gorgui Ndoye/IPS

“Rajendran converted an old refrigerator into an incubator to hatch silk worm eggs, imported second-hand machinery from India, and started reeling Rwanda’s first silk yarn,” Charles Gore, a senior official of the Africa division in the United Nations Conference on Trade and Development (UNCTAD), told IPS.

Sustained efforts by Rajendran over the last 10 years resulted in him creating a new brand called “Silk Hills” which bears the label “Made in Rwanda”. Rajendran’s company now exports silk and cotton products to the U.S., Canada and elsewhere and is the largest private employer in the tiny east African country.

“In short, the Indian entrepreneur demonstrated that it is possible to bring about ‘transformational’ changes in an African country through economic interactions and knowledge-sharing skills with big developing countries like China, India and Brazil,” Gore argued.

He is the lead author of UNCTAD’s annual report on Africa, titled “South-South Cooperation: Africa and the New Forms of Development Partnership”, published on Jun 18.

The report confirms China and India’s status as the main drivers of trade and investment with African countries.

It is true that “increasing trade and investment between developing countries by reducing trade barriers could bring real benefits in terms of employment and incomes,” said Isabel M. Mazzei, senior policy advisor for Oxfam in Geneva, in an interview with IPS.

“It could also promote improved political relationships between countries and enable countries to reduce their dependence on markets in the industrialised countries.”

But Mazzei warned that, “due to large differences in the size and level of development of Third World economies, full liberalisation of South-South trade is not desirable.”

“Getting the balance right between further liberalisation and the appropriate protection of vulnerable farm sectors and infant industries will be a major challenge for economic policy makers,” she added.

At the launch of the report Dr Supachai Panitchpakdi, UNCTAD’s secretary general, pointed out that there exists a growing recognition that South-South cooperation — which is accelerating investment and trade between large developing countries, such as China, India and Brazil, and African countries — could pave the way for transfer of technology and knowledge skills.

Panitchpakdi urged the rising economic giants of the South to go well beyond trade and investment to create a new economic and social climate to reverse the historical trend which has seen Africa supplying agricultural goods and raw materials while importing manufactured goods.

“I am confident that with the rising trend of developmental aid flowing from the leading countries of the South to Africa, estimated at around 2.8 billion dollars in 2006, there will be a paradigmatic shift in the coming years,” he told IPS, adding that China also increased its assistance to Africa last year.

The 116-page report on Africa captures undercurrents that are gradually changing the landscape of South-South trade. For example, the total merchandise trade between African countries and non-African developing countries such as China, India, and Brazil, among others, jumped to 283 billion dollars in 2008 — from 34 billion dollars in 1995.

In contrast, Africa’s trade with developed countries increased from 138 billion dollars to 588 billion dollars over the same period. “The growing share of developing countries in Africa’s trade has led to a reduction in the proportion of the region’s trade going to its traditional partners in Europe and North America,” according to the report.

But the reports’ authors noted that, “although there has been an increase in Africa’s trade with developing countries, the composition is skewed more towards imports rather than exports”.

Non-African developing countries are now the major “greenfield” investors on the African continent. This kind of investment refers to creating new economic assets that could include manufacturing facilities, along with other infrastructural facilities.

Foreign direct investment in greenfield projects has shot to 184 in 2008, up from 52 in 2004. Chinese infrastructure and financial commitments increased to 4.5 billion dollars in 2007, compared to 470 million dollars in 2001.

But the report’s authors cautioned that China’s growing economic interaction with Africa should not be seen as a “China-Africa story” but part of a broader trend towards intensifying Africa-South economic relationships, particularly with large and dynamic emerging countries.

The report urged African countries to adopt a “pro-active” approach by planning long-term economic projects and asserting their domestic concerns when negotiating cooperation with other developing countries.

In effect, African nations should strive towards building their “productive capacities” to produce a greater variety of goods that are more sophisticated products, the report emphasised.