By Roberto Azevêdo
NAIROBI, Dec 23 2015 (IPS)

World Trade Organization (WTO) members concluded the Tenth Ministerial Conference in Nairobi on 19 December by securing an historic agreement on a series of trade initiatives. The “Nairobi Package” pays fitting tribute to the Conference host, Kenya, by delivering commitments that will benefit in particular the organization’s poorest members.

Roberto Azevêdo

The elimination of agricultural export subsidies is particularly significant.

WTO members, ¬especially developing countries,¬ have consistently demanded action on this issue due to the enormous distorting potential of these subsidies for domestic production and trade. In fact, this task has been outstanding since export subsidies were banned for industrial goods more than 50 years ago.

WTO members’ decision tackles the issue once and for all. It removes the distortions that these subsidies cause in agriculture markets, thereby helping to level the playing field for the benefit of farmers and exporters in developing and least-developed countries.

This decision will also help to limit similar distorting effects associated with export credits and state trading enterprises.

And it will provide a better framework for international food aid ¬ maintaining this essential lifeline, while ensuring that it doesn’t displace domestic producers.

There are also important steps to improve food security, through decisions on public stockholding and towards a special safeguard mechanism, as well as a package of specific decisions for Least Developing Countries (LDCs).

This contains measures to enhance preferential rules of origin for LDCs and preferential treatment for LDC services providers.

And it contains a number of steps on cotton, such as eliminating export subsidies, and providing duty-free-quota-free market access for a range of LDC cotton products immediately.

In addition, we have approved the WTO membership of Liberia and Afghanistan, and we now have 164 member countries.
And I think we are all committed to supporting these two LDCs to boost their growth and development.

We also saw continued commitment to help build the trading capacity of LDCs through the excellent support shown at the Enhanced Integrated Framework (EIF) pledging conference.

And, finally, a large group of members agreed on the expansion of the Information Technology Agreement (ITA). Again, this is an historic breakthrough. It will eliminate tariffs on 10 per cent of global trade ¬ making it our first major tariff cutting deal since 1996.

While we celebrate these outcomes, we have to be clear-sighted about the situation we are in today.

Success was achieved here despite members’ persistent and fundamental divisions on our negotiating agenda – ¬ not because those divisions have been solved.

We have to face up to this problem.

The Ministerial Declaration acknowledges the differing opinions. And it instructs us to find ways to advance negotiations in Geneva.

Members must decide, the world must decide, about the future of this organization.

The world must decide what path this organization should take.

Inaction would itself be a decision. And I believe the price of inaction is too high.

It would harm the prospects of all those who rely on trade today ¬ and it would disadvantage all those who would benefit from a reformed, modernized global trading system in the future ¬ particularly in the poorest countries.

So we have a very serious task ahead of us in 2016.

We came to Nairobi determined to deliver for all those we represent ¬ and particularly for the one billion citizens of Africa.

At the outset, I warned that we were not looking at a perfect outcome. And what we have delivered is not perfect. There are still so many vital issues which we must tackle.

But we have delivered a huge amount. The decisions taken in Nairobi this week will help to improve the lives and prospects of many people ¬ around the world and in Africa.

When we left Geneva, the international media had already written their headlines:

-‘WTO talks break down’

-‘Another failure at the WTO’

That’s exactly how it was in the Ninth Ministerial Conference in Bali two years ago. And we saw it again this year.

Well, we’re getting used to proving those catastrophic headlines wrong.

In the past, all too often, WTO negotiations had a habit of ending in failure.

But, despite adversity ¬ despite real challenges ¬ we are creating a new habit at the WTO: success.

(End)

Excerpt:

ACP Secretary-General Patrick I. Gomes, who sees the group’s role as “a global player defending, protecting and promoting an inclusive struggle against poverty and for sustainable development in a world enmeshed in inequality”. Photo credit: ACP Press

By Patrick I. Gomes
BRUSSELS, Jun 28 2015 (IPS)

In his memoirs, Glimpses of a Global Life, Sir Shridath Ramphal, then-Foreign Minister of the Republic of Guyana, who played a leading role in the evolution of the Lomé negotiations that lead to the birth of the African, Caribbean and Pacific (ACP) Group of States, pointed to the significant lessons of that engagement of developed and developing countries some 40 years ago and had this to say:

“As regards the Lomé negotiations, the process of unification – for such it was – added a new dimension to the Third World’s quest for economic justice through international action. Its significance, however, derives not merely from the terms of the negotiated relationship between the 46 ACP states and the EEC, but from the methodology of unified bargaining which the negotiations pioneered.

“Never before had so large a segment of the developing world negotiated with so powerful a grouping of developed countries so comprehensive and so innovative a regime of economic relations. It was a new, and salutary, experience for Europe; it was a new, and reassuring, experience for the ACP States.

“Forty years later, that lesson remains retains its validity. Unity of purpose and action remains the touchstone of ACP’s meaning and success.”

With a conscious appreciation of that founding unity of purpose and action, the ACP Group convened a high-level symposium at its headquarters in Brussels on Jun. 6. The event marked the milestone of four decades of trade and economic cooperation, vigorous and contentious political engagements and a range of development finance programmes – all aimed at the eradication of poverty from the lives of the millions of people in its 79 member states.“The ACP will craft its future path to continue the struggle against power, inequality and injustice, the core purpose for which it was established in 1975”

In 1975, it was 46 developing countries that met in the capital city of Guyana, to sign the Georgetown Agreement and give birth to the ACP Group. They had recently embarked on their post-colonial path of independence following successful negotiations of non-reciprocal trade arrangements with the then nine-member European Economic Community (EEC) in February.

Known as the Lomé Agreement, after the capital of Togo where it was signed, this legally-binding, international agreement had a life-span of 25 years to 2000. Essentially, it comprised three pillars of trade and economic cooperation, development assistance – mainly through grants from the European Development Fund (EDF) – and political dialogue on issues such as human rights and democratic governance.

During that period, the preferential trade and aid pact undoubtedly gave an impetus to various aspects of economic and social development in the ACP Group. Substantial revenue was received from preferential access to the European market for exports of clothing, banana, sugar, cocoa, beef, fruit and vegetables, for example, and with the accompanying aid programmes.

The benefits were seen in the economies of Mauritius, Kenya, Cote d’Ivoire, Namibia, Guyana and Fiji, to name a few. Member states of the ACP Group, less-developed countries (LDCs), landlocked states and small island developing states (SIDS), had access to returns from trade for improved social services and in this sense, the first decades of Lomé were certainly gains for development in sub-Saharan Africa, the Caribbean and Pacific.

But these gains entrenched an aid-dependency of commodity export economies with minimal structural transformation through value-added manufacturing and related service sectors in ACP countries.

The fierce trade-liberalising world of the late 1990s, rising indebtedness due to enormous increase in the cost of energy and pressure from the challenge of the World Trade Organisation (WTO) to the European Union’s discriminatory practice of preferential trade and aid to this exclusive set of developing countries meant that post-Lomé ACP-EU trade relations had to be WTO-compatible.

Finding compatibility for “substantially all trade” between the economies of the ACP’s 79 members – grouped in six regions of Africa, the Caribbean and Pacific – and Europe, and ensuring that development criteria take precedence over tariff reductions and WTO rules have proven contentious in this long-standing partnership.

With this overhang of tensions in its troubled access to its principal market, the ACP faces the conclusion of the 20-year Agreement signed in Cotonou, the Republic of Benin, in 2020.

A soul-searching and vigorous process to be repositioned as a global player defending, protecting and promoting an inclusive struggle against poverty and for sustainable development in a world enmeshed in inequality is the singular task on which the ACP now concentrates.

Such a task has entailed a series of actions that are informed by the report of the Ambassadorial Working Group on Future Perspectives for the ACP Group of States that was approved by the Council of Ministers in December 2014.

The main thrust of the transformation and repositioning of the ACP is captured in the strategic policy domains identified in the report.

These are in five thematic areas that address:

a) Rule of Law & Good Governance;

b) Global Justice & Human Security;

c) Building Sustainable, Resilient & Creative Economies; and

d) Intra-ACP Trade, Industrialisation and Regional Integration;

e) Financing for Development.

In each of these, and in ways that are mutually reinforcing, very specific programmed activities of an annual action plan are being prepared and will be executed.

For example, the annual plan will address the thematic area of “sustainable, resilient and creative economies” through the mechanism of an ACP Forum on SIDS with financial resources, mainly from the intra-ACP allocation of the EDF and the UN’s Food & Agriculture Organisation (FAO), one of the partner agencies of the UN system with which the ACP Group works very closely.

Conceptualised so as to address systemic and structural factors affecting sustainable development, the ACP emphasises South-South and triangular cooperation as a major modality for implementation of its role as catalyst and advocate.

The current stage of rethinking and refocusing provides an opportunity for 40 years of development through trade by which the ACP Group and the European Union could recast the world’s most unique and enduring North-South treaty of developed and developing countries to effectively participate in a global partnership where no one is left behind.

The ACP has social and organisational capital accumulated from a rich experience on trade negotiations with the world’s largest bloc of Europe and its 500 million inhabitants.

Undoubtedly marked by contentious issues on trade provisions to satisfy the WTO’s non-discriminatory behaviour among its member States, ACP-EU relations reveal the persistent battle of poor versus rich with a view to finding common ground on issues of mutual interest.

The 40^th anniversary celebration by the ACP Group at a High-Level Inter-regional Symposium on Jun. 4 and 5 witnessed reflections on achievements and failures, as well as limitations in the performance of the ACP Group, in itself as a group and among its member states, as well as in its partnership with the European Union and the wider global arena.

The theme of the symposium covered the initial Georgetown Agreement and the ambitious objectives that were set in 1975. The high point was the keynote address by H.E. Sam Kutesa, President of the UN General Assembly.

Interestingly, discussions revealed how relevant and timely they remain and of special note was the “promotion of a fairer and more equitable new world order”.

This retrospective conversation has been recognised as fundamental for how, and in what direction, the ACP will craft its future path to continue the struggle against power, inequality and injustice, the core purpose for which it was established in 1975.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Bicycles are adding to Cambodia’s export basket, but at a price to workers. Credit: Michelle Tolson/IPS.

By Michelle Tolson
PHNOM PENH, Jan 28 2013 (IPS)

Cambodia’s export business is in the process of changing due to shifts in manufacturing in Asia. A business publication in the country has reported unexpected growth in the “machinery and transport equipment” sector and speculated it was as “probably bicycles.” But when Cambodia jumped into the top ten exporters of bicycles to the EU in 2012, it prompted the European Bicycle Manufacturers’ Association (EBMA) to investigate.

In 2011, 366,000 bikes were exported from Cambodia to the EU but “in the first half of 2012 the country managed to almost triple its bike export to the EU. Cambodia’s exports totaled close to 520,000 units in the first six months of 2012 compared to 140,000 in the same period of 2011,” according to Bikeeu.com.

The EBMA discovered that bicycle companies had moved their production to Cambodia from Thailand and China, citing increased expenses. The move is estimated to save 14 percent on taxes. A favourable scheme is in place for Least Developed Countries (LDCs) under the Generalized Scheme of Preferences (GSP) known as the Everything But Arms (EBA) agreement. The EBA allows countries ranked among the 48 LDCs to export products duty-free to the EU, except arms and ammunition.

Introduced at the beginning of 2011, it ushered in a surge of 53 percent in export growth to European countries that year, making the EU Cambodia’s second largest export partner after the U.S., according to local business reports.

Increasing expenses in China and Thailand have been attributed in part to rising wages. The minimum wage in Thailand was recently raised to 300 baht per day (10 dollars) and salaries in China in this business have risen to 400 dollars per month.  By contrast, minimum wages in Cambodia are set at just 61 dollars per month.

Strongman and A & J – listed as a subsidiary of Atlantic Cycle Co. – was reported to have originally opened their factory in Cambodia in 2005.  A government website listing investments into the country shows three bicycle factories in the “Tai Seng zone” in the Svay Reing province – A &J, Atlantic Cycle Co. and Smart Tech – and a fourth bike factory, Best Way Industry, in the ‘Manhattan zone’ in Svay Reing.

The Special Economic Zone (SEZ), according to a USAID report, offers pro-business perks to investors, a quick turnaround on red tape, low taxes, low wages, ease of doing business and a “young and educated” population. The report listed 1,500 workers in the bicycle industry. The minimum monthly salary then for factory work was 60 dollars a month, or 33 cents per hour, which would necessitate working six days per week to make 60 dollars monthly.  Dated 2008, this shows that wages have not risen in four years.

Local media recently revealed that a minimum wage increase for garment factories was in the works due to a labour shortage. Manufacturing overall has been shifting from China and Vietnam to Cambodia, and there are not enough workers in this country. The social affairs ministry has called for a wage increase but asked unions to agree on an amount – with suggested salaries ranging from 93 dollars to 150 dollars per month.

Bicycle factory workers face similar labour issues to garment workers.  Srun Srorn, activist and NGO consultant, explained how factory workers live on wages which amount to just two dollars per day.

Workers pool money and share a single meal. “Usually they do this: four friends x 500 riels (12 cents) = 2000 riels (50 cents). Then they eat some food which costs 500 riels or less. Usually the maximum is 5000 riels (1.25 dollars) for three or four people.”

Some factories include a meal stipend with the monthly salary.  Workers have short meal breaks and eat from vendors located just outside the factory gates.  Some employers include a transportation stipend.  There is no public transportation system in Cambodia, requiring workers to pay for motorbike taxi rides which cost 50 cents to a dollar.

In mid-December 2012, local media reported 1,000 workers at a Smart Tech bike factory in Svay Rieng went on strike to raise their salary. Two months prior, another strike had been reported at A& J.

Moeun Tola, a lawyer at the labour programme of the Community Legal Education Centre (CLEC) said he assisted the workers with legal advice. He said they were not part of a union but had organised the strike on their own. “They are not advised by anyone but we would give legal assistance and advice.”

Better Factories, an International Labour Organisation (ILO) programme, was created to help factory workers but at this time only assists garment factories, according to a spokesperson contacted by IPS.

IPS spoke with Nhanh Kosol, one of the workers, about the strike for an update. Kosol said that their wage is still just 61 dollars a month but the factory had agreed to a transportation subsidy of 13 dollars per month and overtime pay. They can work overtime between two hours and five hours a day, depending on the factory. Overtime of five hours earns an additional three dollars.

He thought the bike factory was “not too bad, because I have a job. The working conditions are some days good, and some days bad but the salary is not sufficient to support living and everything is always going up.” In his two years working there, the workers went on strike two or three times already and “it can help, but not too much.”

Bike EU listed the per unit price imported from Cambodia as about 200 euros. The U.S. has also recently had an upsurge in imports in bikes from Cambodia, according to foreign trade statistics. In 2009, 2.06 million dollars worth of goods were imported from Cambodia under the label “toys, shooting and sporting goods, and bicycles.” In 2010, the amount tripled to 6.8 million dollars and by 2011 it was 10.3 million dollars.

When asked how much he thought the bikes he helped make sold for, Kosol said workers thought between 1,400 dollars and 3,000 dollars, the low end of which is 25 times his monthly salary.