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negotiations on a range of subjects, and other work including issues concerning the implementation of the present
agreements.
The negotiations take place in the Trade Negotiations Committee and its subsidiaries. Other work under the work
programme takes place in other WTO councils and committees.
TRIPS and public health. In the declaration, ministers Report to the General
stress that it is important to implement and interpret the Council — solution on
TRIPS Agreement in a way that supports public health — compulsory licensing and
by promoting both access to existing medicines and the lack of pharmaceutical
creation of new medicines. They refer to their separate production capacity:
declaration on this subject. originally by end of 2002,
decision agreed 30 April
This separate declaration on TRIPS and public health is 2003.
designed to respond to concerns about the possible
implications of the TRIPS Agreement for access to Report to TNC — action
medicines. on outstanding
implementation issues
It emphasizes that the TRIPS Agreement does not and under par 12: by end of
should not prevent member governments from acting to 2002 (missed)
protect public health. It affirms governments’ right to use
the agreement’s flexibilities in order to avoid any reticence Deadline — negotiations
the governments may feel. on geographical
indications registration
The separate declaration clarifies some of the forms of system (wines and
flexibility available, in particular compulsory licensing and spirits): by 5th
parallel importing. (For an explanation of these issues, go to Ministerial Conference,
the main TRIPS pages on the WTO website) 2003 (in Mexico)
(missed)
For the Doha agenda, this separate declaration sets two
specific task. The TRIPS Council has to find a solution to Deadline — negotiations
the problems countries may face in making use of specifically mandated in
compulsory licensing if they have too little or no Doha Declaration:
pharmaceutical manufacturing capacity, reporting to the originally by 1 January
General Council on this by the end of 2002.(this was 2005, now unofficially by
achieved in August, 2003, see intellectual property section end 2006
of the “Agreements” chapter.) The declaration also extends
the deadline for least-developed countries to apply Least-developed
provisions on pharmaceutical patents until 1 January 2016. countries to apply
pharmaceutical patent
Geographical indications — the registration system. provisions: 2016
Geographical indications are place names (in some
countries also words associated with a place) used to
identify products with particular characteristics because
they come from specific places. The WTO TRIPS Council
has already started work on a multilateral registration
system for geographical indications for wines and spirits.
The Doha Declaration sets a deadline for completing the
negotiations: the Fifth Ministerial Conference in 2003.
Since the 1 August 2004 decision, this subject has been dropped from
the Doha agenda.
Interaction between trade and competition policy Key dates: trade and
(pars 23–25) > back to top competition policy
This is another “Singapore issue”, with a working group set Continuing work in
up in 1996 to study the subject. working group with
defined agenda: to 5th
In the period up to the 2003 Ministerial Conference, the Ministerial Conference,
declaration instructs the working group to focus on 2003 (in Mexico)
clarifying:
Negotiations: after 5th
• core principles including transparency, non- Ministerial Conference,
discrimination and procedural fairness, and 2003 (in Mexico) subject
provisions on “hardcore” cartels (i.e. cartels that are to “explicit consensus” on
formally set up) modalities with deadline:
• ways of handling voluntary cooperation on by 1 January 2005, part
competition policy among WTO member of single undertaking. But
governments no consensus; dropped
• support for progressive reinforcement of from Doha agenda in 1
competition institutions in developing countries August 2004 decision
through capacity building
Since the 1 August 2004 decision, this subject has been dropped from
the Doha agenda.
The Doha Declaration endorses the work already done on Report on further
electronic commerce and instructs the General Council to progress: 5th Ministerial
consider the most appropriate institutional arrangements for Conference, 2003 (in
handling the work programme, and to report on further Mexico)
progress to the Fifth Ministerial Conference.
Many developing countries face serious external debt General Council report:
problems and have been through financial crises. WTO 5th and 6th Ministerial
ministers decided in Doha to establish a Working Group Conferences, 2003 and
on Trade, Debt and Finance to look at how trade-related 2005 (in Mexico and
measures can contribute to find a durable solution to these Hong Kong, China)
problems. This working group will report to the General
Council which will in turn report to the next Ministerial
Conference.
The November 2001 declaration of the Fourth Ministerial Conference in Doha, Qatar, provides the mandate for
negotiations on a range of subjects and other work. The negotiations include those on agriculture and services,
which began in early 2000.
In Doha, Ministers also approved a linked decision on implementation — problems developing countries face in
implementing the current WTO agreements.
Ministerial discussions have taken place in Cancún in 2003, Geneva in 2004, Hong Kong in 2005 and Geneva in
2006 and 2008.
Since Doha back to top
The Doha Round began with a ministerial-level meeting in Doha, Qatar in 2001. Subsequent ministerial meetings
took place in Cancún, Mexico (2003), and Hong Kong (2005). Related negotiations took place in Geneva,
Switzerland (2004, 2006, 2008); Paris, France (2005); and Potsdam, Germany (2007).
The most recent round of negotiations, July 23-29 2008, broke down after failing to reach a compromise on
agricultural import rules.[3] After the breakdown, major negotiations were not expected to resume until 2009.[4]
Nevertheless, intense negotiations, mostly between the USA, China and India, were held in the end of 2008 in
order to agree on negotiation modalities. However, these negotiations did not result in any progress.
Contents
[hide]
• 1 Negotiations
o 1.1 Before Doha
o 1.2 Doha, 2001
1.2.1 Importance of US presidential 'fast-track' authority
o 1.3 Cancún, 2003
1.3.1 Collapse of negotiations
o 1.4 Geneva, 2004
o 1.5 Paris, 2005
o 1.6 Hong Kong, 2005
o 1.7 Geneva, 2006
o 1.8 Potsdam, 2007
o 1.9 Geneva, 2008
1.9.1 Collapse of negotiations
• 2 Current progress
• 3 Issues
o 3.1 Agriculture
o 3.2 Access to patented medicines
o 3.3 Special and differential treatment
o 3.4 Implementation issues
• 4 Benefits
• 5 See also
• 6 References
• 7 Literature
• 8 External links
[edit] Negotiations
Doha Round talks are overseen by the Trade Negotiations Committee (TNC), whose chair is the WTO’s director-
general, currently Pascal Lamy. The negotiations are being held in five working groups and in other existing
bodies of the WTO. Selected topics under negotiation are discussed below in five groups: market access,
development issues, WTO rules, trade facilitation and other issues.[1].
Before the Doha ministerial, negotiations had already been under way on trade in agriculture and trade in
services. These ongoing negotiations had been required under the last round of multilateral trade negotiations (the
Uruguay Round, 1986-1994). However, some countries, including the United States, wanted to expand the
agriculture and services talks to allow trade-offs and thus achieve greater trade liberalization.[1]
The first WTO ministerial conference, which was held in Singapore in 1996, established permanent working
groups on four issues: transparency in government procurement, trade facilitation (customs issues), trade and
investment, and trade and competition. These became known as the Singapore issues. These issues were pushed
at successive ministerials by the European Union, Japan and Korea, and opposed by most developing countries.[1]
Since no agreement was reached, the developed nations pushed that any new trade negotiations must include
these issues.[5]
The negotiations were intended to start at the ministerial conference of 1999 in Seattle, USA, and be called the
Millennium Round but, due to several different events including protest activity outside the conference, the
negotiations were never started.[6] Due to the failure of the Millennium Round, it was decided that negotiations
would not start again until the next ministerial conference in 2001 in Doha, Qatar.
According to the so-called "inbuilt agenda", negotiations on agriculture and trade in services started in 2000.
These negotiations were later merged into the overall Doha negotiations.
Just months before the Doha ministerial, the United States had been attacked by terrorists on September 11, 2001.
Some government officials called for greater political cohesion and saw the trade negotiations as a means toward
that end. Some officials thought that a new round of multilateral trade negotiations could help a world economy
weakened by recession and terrorism-related uncertainty. According to the WTO, the year 2001 showed "...the
lowest growth in output in more than two decades,"[7] and world trade contracted that year.[1]
The 'Doha Development Agenda' began in November 2001, committing all countries to negotiations opening
agricultural and manufacturing markets, as well as trade-in-services (GATS) negotiations and expanded
intellectual property regulation (TRIPS). The intent of the round, according to its proponents, was to make trade
rules fairer for developing countries.[8] However, by 2008, critics were charging that the round would expand a
system of trade rules that were bad for development and interfered excessively with countries' domestic "policy
space".[9]
The round had been planned for conclusion in December 2005 — after two more ministerial conferences had
produced a final draft declaration. The WTO pushed back its self-imposed deadline to slightly precede the
expiration of the U.S. President's Congressional Fast Track Trade Promotion Authority. Any declaration of the
WTO must be ratified by the U.S. Congress to take effect in the United States. Trade Promotion Authority
prevents Congress from amending the draft. It expired on June 30, 2007,[10] and congressional leaders decided not
to renew this authority for President George W Bush.[11]
[edit] Cancún, 2003
The 2003 Cancún talks—intended to forge concrete agreement on the Doha round objectives—collapsed after
four days during which the members could not agree on a framework to continue negotiations. Low key talks
continued since the ministerial meeting in Doha but progress was almost non-existent.[12] This meeting was
intended to create a framework for further negotiations.
The Cancún ministerial collapsed for several reasons. First, differences over the Singapore issues seemed
incapable of resolution. The EU had retreated on some of its demands, but several developing countries refused
any consideration of these issues at all. Second, it was questioned whether some countries had come to Cancún
with a serious intention to negotiate. In the view of some observers, a few countries showed no flexibility in their
positions and only repeated their demands rather than talk about trade-offs. Third, the wide difference between
developing and developed countries across virtually all topics was a major obstacle. The U.S.-EU agricultural
proposal and that of the Group of 20, for example, show strikingly different approaches to special and differential
treatment. Fourth, there was some criticism of procedure. Some claimed the agenda was too complicated. Also,
Cancún ministerial chairman, Mexico’s Foreign Minister Luis Ernesto Derbez, was faulted for ending the meeting
when he did, instead of trying to move the talks into areas where some progress could have been made. [1]
The collapse seemed like a victory for the developing countries.[13] The failure to advance the round resulted in a
serious loss of momentum and brought into question whether the January 1, 2005 deadline would be met.[1] The
North-South divide was most prominent on issues of agriculture. Developed countries’ farm subsidies (both the
EU’s Common Agricultural Policy and the U.S. government agro-subsidies) became a major sticking point. The
developing countries were seen as finally having the confidence to reject a deal that they viewed as unfavorable.
This is reflected by the new trade bloc of developing and industrialized nations: the G20. Since its creation, the
G20 has had fluctuating membership, but is spearheaded by the G4 (the People's Republic of China, India, Brazil,
and South Africa). While the G20 presumes to negotiate on behalf of all of the developing world, many of the
poorest nations continue to have little influence over the emerging WTO proposals.
The aftermath of Cancún was one of standstill and stocktaking. Negotiations were suspended for the remainder of
2003. Starting in early 2004, U.S. Trade Representative Robert Zoellick pushed for the resumption of
negotiations by offering a proposal that would focus on market access, including an elimination of agricultural
export subsidies.[1] He also said that the Singapore issues could progress by negotiating on trade facilitation,
considering further action on government procurement, and possibly dropping investment and competition.[14]
This intervention was credited at the time with reviving interest in the negotiations, and negotiations resumed in
March 2004.[1]
In the months leading up to the talks in Geneva, the EU accepted the elimination of agricultural export subsidies
“by date certain.” The Singapore issues were moved off the Doha agenda. Compromise was also achieved over
the negotiation of the Singapore issues as the EU and others decided. Developing countries too played an active
part in negotiations this year, first by India and Brazil negotiating directly with the developed countries (as the so-
called “non-party of five”) on agriculture, and second by working toward acceptance of trade facilitation as a
subject for negotiation. [15]
With these issues pushed aside, the negotiators in Geneva were able to concentrate on moving forward with the
Doha Round. After intense negotiations in late July 2004, WTO members reached what has become known as the
Framework Agreement(sometimes called the July Package) , which provides broad guidelines for completing the
Doha round negotiations. The agreement contains a 4-page declaration, with four annexes (A-D) covering
agriculture, non-agricultural market access, services, and trade facilitation, respectively. In addition, the
agreement acknowledges the activities of other negotiating groups (such as those on rules, dispute settlement, and
intellectual property) and exhorts them to fulfill their Doha round negotiating objectives. The agreement also
abandoned the January 1, 2005 deadline for the negotiations and set December 2005 as the date for the 6th
ministerial to be held in Hong Kong. [15]
Trade negotiators wanted to make tangible progress before the December 2005 WTO meeting in Hong Kong, and
held a session of negotiations in Paris in May 2005.[16]
Paris talks were hanging over a few issues: France protested moves to cut subsidies to farmers, while the U.S.,
Australia, the EU, Brazil and India failed to agree on issues relating to chicken, beef and rice.[16] Most of the
sticking points were small technical issues, making trade negotiators fear that agreement on large politically risky
issues will be substantially harder.[16]
The Hong Kong Convention Center, which was the site of the Sixth WTO Ministerial Conference
Main article: WTO Ministerial Conference of 2005
The Sixth WTO Ministerial Conference took place in Hong Kong, December 13 to 18, 2005. Although a flurry of
negotiations took place in the fall of 2005, WTO director-general Pascal Lamy announced in November 2005 that
a comprehensive agreement on modalities would not be forthcoming in Hong Kong, and that the talks would
“take stock” of the negotiations and would try to reach agreements in negotiating sectors where convergence was
reported.[1]
Trade ministers representing most of the world's governments reached a deal that sets a deadline for eliminating
subsidies of agricultural exports by 2013. The final declaration from the talks, which resolved several issues that
have stood in the way of a global trade agreement, also requires industrialized countries to open their markets to
goods from the world's poorest nations, a goal of the United Nations for many years. The declaration gave fresh
impetus for negotiators to try to finish a comprehensive set of global free trade rules by the end of 2006. Director-
general Pascal Lamy said, "I now believe it is possible, which I did not a month ago."[17]
The conference pushed back the expected completion of the round until the end of 2006. [1]
The July 2006 talks in Geneva failed to reach an agreement about reducing farming subsidies and lowering
import taxes, and negotiations took months to resume. A successful outcome of the Doha round became
increasingly unlikely, because the broad trade authority granted under the Trade Act of 2002 to U.S. president
George W. Bush was due to expire in 2007. Any trade pact would then have to be approved by the U.S. Congress
with the possibility of amendments, which would hinder the U.S. negotiators and decrease the willingness of
other countries to participate.[2] Hong Kong offered to mediate the collapsed trade liberalisation talks. Director-
general of Trade and Industry, Raymond Young, says the territory, which hosted the last round of Doha
negotiations, has a "moral high-ground" on free trade that allows it to play the role of "honest broker".[citation needed]
In June 2007, negotiations within the Doha round broke down at a conference in Potsdam, as a major impasse
occurred between the USA, the EU, India and Brazil. The main disagreement was over opening up agricultural
and industrial markets in various countries and also how to cut rich nation farm subsidies.[18]
On July 21, 2008, negotiations started again at the WTO's HQ in Geneva on the Doha round but stalled after nine
days of negotiations over the refusal to compromise over the special safeguard mechanism. "Developing country
Members receive special and differential treatment with respect to other Members' safeguard measures, in the
form of a de minimis import volume exemption. As users of safeguards, developing country Members receive
special and differential treatment with respect to applying their own such measures, with regard to permitted
duration of extensions, and with respect to re-application of measures.— Technical Information on Safeguard
Measures WTO official site
Negotiations had continued since the last conference in June 2007.[19] Director-general Pascal Lamy said before
the start of the conference that the odds of success were over 50%.[20] Around 40 ministers attended the
negotiations, which were only expected to last five days but instead lasted nine days. Kamal Nath, India's
Commerce Minister, was absent from the first few days of the conference due to a vote of confidence being
conducted in India's Parliament.[21] On the second day of the conference, U.S. Trade Representative Susan
Schwab announced that the U.S. would cap its farm subsidies at $15 billion a year[22], from $18.2 billion in 2006.
[23]
The proposal was on the condition that countries such as Brazil and India drop their objections to various
aspects of the round.[22] The U.S. and the EU also offered an increase in the number of temporary work visas for
professional workers.[24] After one week of negotiations, many considered agreement to be 'within reach'.
However, there were disagreements on issues including special protection for Chinese and Indian farmers and
African and Caribbean banana imports to the EU.[25] India and China's hard stance regarding tariffs and subsidies
was severely criticized by the United States.[26] In response, India's Commerce Minister said "I'm not risking the
livelihood of millions of farmers."[27]
The negotiations collapsed on July 29 over issues of agricultural trade between the United States, India, and
China.[28] In particular, there was insoluble disagreement between India and the United States over the special
safeguard mechanism (SSM), a measure designed to protect poor farmers by allowing countries to impose a
special tariff on certain agricultural goods in the event of an import surge or price fall.[29]
Pascal Lamy said, "Members have simply not been able to bridge their differences."[3] He also said that out of a
to-do list of 20 topics, 18 had seen positions converge but the gaps could not narrow on the 19th — the special
safeguard mechanism for developing countries. The mechanism allows countries to protect poor farmers by
imposing a tariff on imports of specified goods, if the price of those goods drop or there is a surge in imports.
However, the United States, China and India could not agree on the threshold that would allow the mechanism to
be used, with the United States arguing that the threshold had been set too low. The European Union Trade
Commissioner Peter Mandelson characterized the collapse as a "collective failure".[30] On a more optimistic note,
India's Commerce Minister, Kamal Nath, said "I would only urge the director-general to treat this [failure of
talks] as a pause, not a breakdown, to keep on the table what is there."[29]
Several countries blamed each other for the breakdown of the negotiations.[31] The United States and some
European Union members blamed India for the failure of the talks.[32]India claimed that its position was supported
by over 100 countries.[33] Brazil, one of the founding members of the G-20, broke away from the position held by
India.[34] Then-European Commissioner for Trade Peter Mandelson said that India and China should not be
blamed for the failure of the Doha round.[35] In his view, the agriculture talks had been harmed by the five-year
program of agricultural subsidies recently passed by the U.S. Congress, which he said was "one of the most
reactionary farm bills in the history of the U.S.".[28]
[edit] Issues
Agriculture has become the lynchpin of the agenda for both developing and developed countries. Three other
issues have been important. The first, now resolved, pertained to compulsory licensing of medicines and patent
protection. A second deals with a review of provisions giving special and differential treatment to developing
countries; a third addresses problems that developing countries are having in implementing current trade
obligations.[1]
[edit] Agriculture
Agriculture has become the most important and controversial issue. The first proposal in Qatar, in 2001, called for
the end agreement to commit to substantial improvements in market access; reductions (and ultimate elimination)
of all forms of export subsidies; and substantial reductions in trade-distorting support.”[1][40]
The United States is being asked by the European Union (EU) and the developing countries, led by Brazil and
India, to make a more generous offer for reducing trade-distorting domestic support for agriculture. The United
States is insisting that the EU and the developing countries agree to make more substantial reductions in tariffs
and to limit the number of import-sensitive and special products that would be exempt from cuts. Import-sensitive
products are of most concern to developed countries like the European Union, while developing countries are
concerned with special products — those exempt from both tariff cuts and subsidy reductions because of
development, food security, or livelihood considerations. Brazil has emphasized reductions in trade-distorting
domestic subsidies, especially by the United States (some of which it successfully challenged in the WTO U.S.-
Brazil cotton dispute), while India has insisted on a large number of special products that would not be exposed to
wider market opening.[2]
A major topic at the Doha ministerial regarded the WTO Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS). The issue involves the balance of interests between the pharmaceutical companies in
developed countries that held patents on medicines and the public health needs in developing countries. Before
the Doha meeting, the United States claimed that the current language in TRIPS was flexible enough to address
health emergencies, but other countries insisted on new language.[1]
On August 30, 2003, WTO members reached agreement on the TRIPS and medicines issue. Voting in the General
Council, member governments approved a decision that offered an interim waiver under the TRIPS Agreement
allowing a member country to export pharmaceutical products made under compulsory licenses to least-
developed and certain other members.[1]
[edit] Special and differential treatment
In the Doha Ministerial Declaration, the trade ministers reaffirmed special and differential (S&D) treatment for
developing countries and agreed that all S&D treatment provisions “...be reviewed with a view to strengthening
them and making them more precise, effective and operational.”[1][40]
The negotiations have been split along a developing-country/developed-country divide. Developing countries
wanted to negotiate on changes to S&D provisions, keep proposals together in the Committee on Trade and
Development, and set shorter deadlines. Developed countries wanted to study S&D provisions, send some
proposals to negotiating groups, and leave deadlines open. Developing countries claimed that the developed
countries were not negotiating in good faith, while developed countries argued that the developing countries were
unreasonable in their proposals. At the December 2005 Hong Kong ministerial, members agreed to five S&D
provisions for LDCs, including the tariff-free and quota-free access.[1]
Developing countries claim that they have had problems with the implementation of the agreements reached in
the earlier Uruguay Round because of limited capacity or lack of technical assistance. They also claim that they
have not realized certain benefits that they expected from the Round, such as increased access for their textiles
and apparel in developed-country markets. They seek a clarification of language relating to their interests in
existing agreements.[1]
Before the Doha ministerial, WTO Members resolved a small number of these implementation issues. At the
Doha meeting, the Ministerial Declaration directed a two-path approach for the large number of remaining issues:
(a) where a specific negotiating mandate is provided, the relevant implementation issues will be addressed under
that mandate; and (b) the other outstanding implementation issues will be addressed as a matter of priority by the
relevant WTO bodies. Outstanding implementation issues are found in the area of market access, investment
measures, safeguards, rules of origin, and subsidies and countervailing measures, among others.[1]
[edit] Benefits
All countries participating in the negotiations believe that there is some economic benefit in adopting the
agreement; however, there is considerable disagreement of how much benefit the agreement would actually
produce. A study by the University of Michigan found that if all trade barriers in agriculture, services, and
manufactures were reduced by 33% as a result of the Doha Development Agenda, there would be an increase in
global welfare of $574.0 billion.[41] A 2008 study by World Bank Lead Economist Kym Anderson[42] found that
global income could increase by more than $3000 billion per year, $2500 billion of which would go to the
developing world.[43] Others had been predicting more modest outcomes, eg, world net welfare gains ranging from
$84 billion to $287 billion by the year 2015.[1][44] Pascal Lamy has conservatively estimated that the deal with
bring an increase of $130 billion. [45]
The Copenhagen Consensus, which evalutes solutions for global problems regarding the cost-benefit ratio, in
2008 ranked the DDA as the second-best investment for global welfare, after the provision of vitamin
supplements to the world's 140 million malnourished children.[46][47]
Why the WTO Doha Round Talks Have Collapsed – and a Path
Forward
by Lori Wallach and Deborah James
The collapse of the World Trade Organization (WTO) Doha Round talks on July 24, 2006, should come as no surprise. A
decade into the WTO experiment, it is clear that the WTO model of corporate globalization has not delivered the promised
benefits of increased economic prosperity, while economic, social, and environmental conditions have worsened in many
rich and poor countries alike. Because of this failed record, opposition has grown worldwide to the WTO model of
globalization which as been driven by a narrow slice of corporate elites to suit their interests. The collapse of the Doha
Round WTO expansion talks offers an extraordinary opportunity for a fundamental re-think of the direction of the global
economy.
To date, most press coverage of the Doha Round collapse has focused on the blame game -- which countries’ failure to
make specific agricultural concessions is to blame. But the under-recognized, but extremely important story is that the
underlying cause of the breakdown is the growing rejection of the WTO, and more broadly of the corporate-led globalization
model, by many people worldwide based on this model’s effects on their lives.
Since the Doha Round’s 2001 launch, every deadline on issues from service sector liberalization to industrial tariffs has
passed. In 2004 half of the original Doha agenda – adding new foreign investor rights and limits on countries’ competition
and procurement policies – was simply jettisoned after the Cancun WTO summit imploded. At issue throughout has been
major differences regarding the WTO’s proper objectives and direction. Effectively, popular opposition is now a significant
counterforce pressuring many WTO member nations to reject the agenda pushed by the world’s largest multinational
corporations, which traditionally have used the WTO Secretariat and negotiators of the world’s most powerful countries to
write the rules of the global economy in favor of expanding their profit margins.
The Doha Round was dubbed a “Development Round.” However, the actual texts reveal an agenda aimed at expanding the
scope of the existing WTO regime. Yet, after a decade of damaging results, many people in the 149 WTO signatory nations
have made clear their opposition to more of the same. This was before the World Bank dramatically revised downward its
projections of Doha Round gains and revealed that a long list of poor countries would be net losers under the likely
outcome. While U.S. and European editorials declared the Doha Round collapse as disaster for the poor, social movements
and NGOs representing the populations of poor countries cheered.
Instead of promised gains, during the WTO decade, economic conditions for the majority have deteriorated. The number
and percentage of people living on less than $1 a day in Sub-Saharan Africa and the Middle East have increased while the
percentage living on less than $2 a day has increased in these regions, as well as in Latin America and the Caribbean.
Growth and the rate of poverty reduction have slowed in most parts of the world since implementation of the WTO’s policy
package – a model imposed a decade earlier on many developing countries by the International Monetary Fund and World
Bank.
In Africa, per capita income – which is an economy’s total output divided by its population– grew around 40 percent from
1960 to 1980 – but actually shrank more than 10 percent from 1980 to 1998.
In Latin America, from 1960 to 1980, average per capita income grew by 82 percent – that’s over 4 percent per year per
person. However, during the era in which governments in the region began implementing policies of corporate globalization,
from 1980 to 2000, income per person grew only 9 percent – less than one half of one percent per person per year. Now its
down to 5%.
There is growing consensus that the clear failure of the model – often called “neoliberalism” – to deliver economic growth or
better standards of living for most is translating into electoral victories for leaders who have made rejection of this agenda a
staple of their platforms. Nowhere is this more evident than in Bolivia, Argentina and Venezuela whose economies all have
been decimated under previous neoliberal governments. After adopting alternative domestic economic policies, Argentina
and Venezuela now boast the highest economic growth and fastest poverty reduction in the region. Likewise, Bolivia’s new
president Evo Morales was elected on a platform of opposition to flawed trade deals after previous neoliberal governments’
policies resulted in a lower per capita GDP today in Bolivia than 27 years ago. Even Costa Rica, Peru, and Mexico,
traditionally neoliberal strongholds, have experienced presidential elections almost entirely dominated by debate over trade
liberalization.
The number of people living in poverty has also increased in South Asia, while growth rates and the rate of reduction in
poverty have slowed in most parts of the world – especially when one excludes China, where huge reductions in poverty
have been accomplished, but not by following WTO-approved policies (China became a WTO member only in 2001).
Indeed, the economic policies that China employed to obtain its dramatic growth and poverty reduction are a veritable
smorgasbord of WTO violations: high tariffs to keep out imports and significant subsidies and government intervention to
promote exports; an absence of intellectual property protection; government-owned, operated and subsidized energy,
transportation and manufacturing sectors; tightly regulated foreign investment with numerous performance requirements
regarding domestic content and technology transfer; government-controlled finance and banking systems subsidizing
billions in non-performing debt; and government-controlled, subsidized and protected agriculture. Many of these same
policies are those employed by the now-wealthy countries during their period of development.
It’s not as if the status quo is working for most people in the rich countries either. During the WTO era, the U.S. trade deficit
has risen to historic levels – from $130 billion (in today’s dollars) in 1994 (the year before the WTO went into effect) to more
than $717 billion in 2005. The U.S. trade deficit is approaching 6 percent of national income – a figure widely agreed to be
unsustainable, putting the United States and global economy at risk. Soaring U.S. imports during the WTO decade have
contributed to the loss of nearly one in six U.S. manufacturing jobs. U.S. real median wages have scarcely risen above their
1970 level, while productivity has soared 82 percent over the same period, resulting in declining or stagnant standards of
living for the nearly 70 percent of the U.S. population that does not have a college degree.
Although trade and the failure of corporate globalization will be important issues in many 2006 U.S. congressional races, the
bottom-up public pressure that has altered trade politics in many nations has not risen to a level in the United States that
translates into significantly altered negotiating positions. Thus, while a majority of the U.S. public is losing under the Bush
administration’s trade agenda, the U.S. WTO position continues to be that of the narrow commercial interests that have
bankrolled the administration’s campaigns and those of the Republican majority in Congress. That’s why efforts of the newly
launched Citizens’ Trade Campaign Political Action Committee (CTC PAC - www.citizenstrade.org/political-action.php) to
hold elected officials accountable for their trade votes on recent bilateral and regional agreements with Oman and Central
America are crucial to changing the future of U.S. trade policy, and hence the future prosperity and well-being of workers
and farmers in the United States and globally.
Meager Projected Doha Round Gains for a Few and Net Losses for Many
The Doha Round was dubbed a “Development Round.” However, the actual texts reveal an agenda aimed at expanding the
scope of the existing WTO regime. Given the record of the WTO decade, proponents of the Doha Round agenda sought to
change the debate away from the WTO’s performance and onto prospective future gains. While initial projections by the
World Bank were $832 billion, more recent World Bank studies based on revised analysis found extremely limited possible
gains from a “Doha Round” overall. The most likely Doha scenario the World Bank reviewed would yield benefits of only $54
billion to the world by 2015, with developing countries receiving a meager 16 percent of those gains. These projections
amount to a miniscule 0.14 percent of projected developing country GDP by that year, or about 0.23 percent of world GDP.
Put another way, it is a little less than one cent per person per day to the developing world, or about four cents per person
per day to the world as a whole.
Worse, the new research revealed that under the “likely” Doha scenario, the Middle East, Bangladesh, much of Africa and
(notably) Mexico would actually face net losses. These studies also showed that the alleged gains that are projected to
accrue to Brazil and India would be largely concentrated in those countries’ agribusiness and manufacturing industries
respectively, while subsistence farmers – a much, much larger percentage of those populations – would see tiny gains or
net losses.
There are several key problems with the studies, however, in that they project gains from agriculture and goods
liberalization without taking into account many costs of Doha implementation. First of all, the economic models used in the
studies “assume full employment.” That means they capture alleged savings on consumer food prices as gains, but fail to
show a loss if millions of subsistence farmers, who represent nearly half of the developing world, lose their livelihoods. In
addition, they fail to include the increased costs that consumers worldwide pay for medicines due to pharmaceutical
monopolies, which some economists estimate outweigh the projected gains, even for the few developing country “winners.”
And finally, the models fail to adequately take into account the loss in tariff revenue for developing countries, which the
United Nations Conference on Trade and Development estimated would be 2 to 4 times the projected gains for developing
countries from the Doha WTO expansion. These flaws have rarely been mentioned in media reports touting alleged “gains”
for the poor.
The World Bank findings are key to understanding the current political dynamic because many countries only reluctantly
entered into WTO expansion talks at Doha in 2001 after being promised a “development” round aimed at rectifying
imbalances left over from the original ‘Uruguay Round” multilateral negotiations that hatched the WTO. Indeed, at the 2001
Doha WTO Ministerial, where the talks that have just collapsed were started, a group of 100 developing nations had tabled
an alternative agenda for negotiations, called the Implementation Agenda, which consisted of specific fixes needed to
existing WTO terms. The Implementation Agenda was the developing countries’ counter-initiative after they had rejected the
“Millennium Round” WTO expansion agenda at the 1999 Seattle WTO summit. So while the media still refers, without
attribution, to the negotiations as a mechanism to help the poor, in fact those pushing WTO expansion merely used the false
promise of poverty reduction to get the talks launched, while pursuing policies geared to fatten corporate profit margins.
Underlying the continuing faltering of the WTO negotiations and those of other agreements based on the same model of
corporate globalization is not a battle between “protectionism” and “free trade.” Rather, the current globalization model
implemented by the WTO is being challenged increasingly by large numbers of elected officials, economists and civil society
analysts, joining workers, farmers, and environmentalists worldwide, because the set of policies embodied in the model
have proved to be harmful across the globe to all but a corporate elite representing the management of the largest of grain
trading, pharmaceutical, banking and other multinationals. As we live in a world where 24,000 people die every day of
hunger and poverty-related diseases, wages are stagnant yet corporate profits soar, we need to identify the causes of all of
this damage – and how to fix the situation.
Historically, trade agreements have dealt with lowering tariffs on goods. The United States and European nations relied
heavily on tariffs to protect infant industries from foreign competition. But trade agreements no longer just deal with trade in
goods. A cornerstone of the expansion of the corporate globalization agenda also encompasses services. The liberalization
of services involves allowing foreign investors the right to own and operate services within other WTO signatory countries’
territories – including essential services like education, health care, electricity provision and water distribution – for profit. It
also involves de-regulating service industries such as telecommunications, insurance, transportation – even banking, such
as Argentina did before its IMF-induced economic collapse in 2001.
Little-known negotiations in the current Doha Round would also strictly limit national, state and local authority to set service
sector professional licensing, technical standards and qualification requirements. The United States has even offered to
commit higher education to WTO disciplines. But privatization and de-regulation of essential services worldwide have
decreased access for the poor and have eroded hard-won democratic consumer protections.
Meanwhile, the WTO’s agriculture trade rules have been a disaster all around. According to the UN Food and Agriculture
Organization, “progress [toward reducing hunger] has slowed significantly in Asia and stalled completely worldwide” in the
last 15 years. It was the goal of the world’s handful of multinational grain trading giants, including a former Cargill executive
who as a U.S. trade official drafted the WTO farm rules which forced the world to treat food like any other commodity. This
system has failed with horrific results and must be replaced.
The livelihoods of billions of subsistence farmers have been pitted against the profits of corporate agribusiness and grain
trading companies with success measured as greater volume of food moving around in trade, not in decreasing hunger. The
Indian government has confirmed that at least 100,000 farmers who have lost their livelihoods to this scandalous system
have committed suicide in the WTO decade. Meanwhile, for the first time in generations the United States is headed for net
food-importer status (imports outpaced exports in April 2006) even as we are the world’s largest agriculture exporter (often
of the same foods we import) U.S. farmers’ incomes have tanked, while profits of corporate agribusiness giants have
soared.
Another pillar of the WTO model is the massive expansion of corporate patent monopolies. The WTO’s Trade Related
Aspects of Intellectual Property Rights agreement (TRIPS), which sets 20-year worldwide monopoly marketing rights on
drugs and seed varieties, is the single greatest protectionism agreement in the world. Forcing governments worldwide to
provide monopoly protection for every seed variety or medicine that Big Pharma and Agribusiness patent has meant vastly
increasing prices for consumers in rich and poor countries alike – and many cut off of these life sustaining goods.
Instead of having to adhere to new restrictions on trade that protect corporate profits, countries must be free to prioritize
other values and goals, particularly regarding the saving of millions of lives by getting access to low-cost life-saving drugs.
For example, African nations facing the HIV-AIDS epidemic must be free to decide that access to essential medicines takes
priority over U.S. pharmaceutical profits, even if those corporations are one of the largest lobbies on trade in the United
States.
Instead of pinning blame on specific countries, the focus of energy should be on how the world’s governments can develop
a multilateral trade system that preserves the benefits of trade for growth and development, while pruning away the many
anti-democratic constraints on domestic policy making contained in the existing WTO rules. These rules are designed to
create a world that operates as one single homogenized global market rather than setting terms of trade between separate
nations with distinct priorities.
The critics of corporate globalization are for international trade between different, unique countries or regions when it is
mutually beneficial. To strike this balance between promoting trade while respecting the laws and values of different
countries, some existing international rules and institutions need to be cut back, while others need to be bolstered.
Currently, the WTO trumps all other international agreements. The WTO must be scaled back so that the human rights,
environmental, labor and other multilaterally agreed public interest standards already enshrined in various international
treaties can serve as a floor of conduct for corporations seeking the benefits of global trade rules. For instance, the
International Labor Organization provides core labor standards; there are more than 200 multilateral environmental treaties
covering toxics, air pollution, biodiversity and waste dumping; and the World Health Organization and the U.N. Charter on
Human Rights provide many standards on access to medicine and food security.
Two hundred and six civil society organizations, including social movements representing millions of people in poor and rich
countries alike, support a WTO transformation program dubbed “Stop Corporate Globalization: Another World is Possible,”
available at www.ourworldisnotforsale.org. The International Forum on Globalization has published the book Alternatives to
Economic Globalization: A Better World is Possible, which reports on proposals for alternatives gathered through years of
conversations with civil society leaders, scholars and government officials in poor and rich countries.
These are but a few of the rich alternatives being discussed everywhere but at the WTO. The WTO experiment has failed.
Replacing the overreaching WTO agenda with fair rules aimed at facilitating trade between willing countries is the only way
forward.
Such change globally requires work form us living here in the United States. We can start by building a majority in our
elected leadership who understand that the corporate globalization system implemented by the WTO has failed American
workers and farmers, failed the most basic tenants of democratic governance and failed the world. Time is long overdue to
change the way this policy is developed and thus whose needs it serves. This will only happen through citizen activism. For
ideas about how to get involved, please visit our website at www.tradewatch.org.
Lori Wallach, Director of Public Citizen’s Global Trade Watch, is the author of Whose Trade Organization? A
Comprehensive Guide to the WTO. Both she and Deborah James, Director of the WTO Program at the same organization,
are leaders in the worldwide struggle against corporate globalization.