WTO Meeting in Hong Kong, 2005
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13–18 December, 2005 saw hundreds of delegates and ministers descend upon Hong Kong for the 4th World Trade Organization (WTO) Ministerial meeting, one of the most important meetings in the world. Continuing from the earlier
Doha round (which was supposed to start off a round of talks on issues to help developing countries in world trade as it was recognized that the global trading system was unequal and unfair for most of the world), this meeting was billed as a
However, the concerns from previous years remained, including the lack of transparency and democracy in the decision-making processes, and the power that the rich nations have over the poor to distort trade in their favor. The previous Ministerial meeting in 2003 collapsed1 when developing countries managed to stand up against unfair demands from rich nations. Yet, since then, the same issues have resurfaced as rich nations appear to have hardly moved on their countless promises, pledges and obligations.
Build up to meeting has the same problems as previous years
This section looks at the sadly predictable issues that came up during the build up to the Hong Kong meeting, and the obstacles the poorest countries would face.
Blame The Poor Again?
It seems that year after year, we see the same process whereby the negotiations lead to rich countries blaming the poor for not accepting their generous offers.
As a recap from the July 2004 WTO meeting where talks collapsed19, I wrote how the rich countries continually blame the poor, even though the majority of the world’s countries and NGOs see it the other way. As was written on that previous page, the NGO Oxfam, for example, summarizes such a global view, that
the refusal of the EU and US to cede any ground to developing countries on agriculture—and Europe’s attempt to force a global investment and competition treaty on to the table—had forced poor countries to walk out.
Many years ago, the rich countries had agreed to sort out the unfairness in their agricultural policies (vast subsidies and denying market access for the poor countries, for example), and the impact that had on the rest of the world. But what happens at these meetings is predictable:
- Year after year, rich countries have stalled on their obligations and want the poor to agree to discuss other issues (such as opening up poor countries for
foreign investmentand domination by transnational corporations originating from the rich countries);
- Rich nation negotiators say that if they will offer a great deal: concede to reduce subsidies and market barriers, thus improving access for the poor countries, but only if the poor countries to provide some concessions in return (as if the many destroyed livelihoods in the developing world due to rich nations failing in their promises have not been enough);
- The mainstream media typically reports the current happenings, e.g. the EU or US agreeing to do something but only in return for some concessions from developing nations;
- When the historical context is missing from the headlines, it makes it look like a fair offer;
- When the poor likely reject the agreement in some way, which they are in their full right to do, it is presented as though the poor were unreasonable;
- For good measure, some politicians from rich countries will exclaim their astonishment as to why the poor might refuse their offer;
- And unfortunately the majority of the people in the rich countries will continue to believe their leaders have been accountable and been good global citizens...
- On the other hand, if developing countries agree (typically under a lot of pressure) to the unequal trade concessions, the rich will claim success and say that this is a good deal for the poor countries.
I wrote practically the same thing after the July 2004 Framework meetings20 where I suggested this was a recipie for continued poverty.
Unfortunately much of this turned out to be the case for the Hong Kong meeting build up.
Undemocratic Processes at WTO Once Again
It seems that the preliminary meetings leading up to the December meeting also followed this same pattern21 discussed above, as Martin Khor from the Third World Network reports.
Furthermore, as various non-government organizations (NGOs) have criticized, the draft texts once again revealed the undemocratic nature of the WTO process22 whereby some items were included into the draft text without consensus and could only be removed by consensus of all 148 nations. Hence, special interests from rich nations were easily added in, while time and energy would be required to to attempt (typically unsuccessfully) to get it back out. This gave the big players an unfair advantage. They set the barriers or the level of discourse so high that any concessions that they would have had to make would still result in a reasonably good outcome for them.
green room meeting process, whereby the rich nations only invite a few developing countries to set the basic agenda of the meeting did not really change. As reported by the Third World Network,
And as Martin Khor reported separately on one of those mini Green Room Ministerial Meetings, there was a lot of concern during the meeting build-up that the EU and US would attempt to introduce discussions of new issues without resolving the existing ones first, which they are supposed to do:
Rich countries complained of
lack of symmetry ignoring their own hypocrisy
The BBC’s Newsnight program reported in early November 2005 (15th or the 9th), that Peter Mandelson (the European Union’s Commissioner for Trade) was frustrated that the developing countries were not reciprocating on the concessions the rich were appearing to give.
There is a lack of symmetry on the offers on the table, he felt. US President George Bush has also said indicated that the US is willing to cut subsidies to its agricultural industry, but only if poorer countries do the same cutting, to the same extent.
On the surface, such suggestions of reciprocation sound fair. Yet, without the historical context and the unequal playing field that all the countries start on, these suggestions are grossly outrageous. Furthermore, rich countries have long agreed to do these things, without the need for any nation to reciprocate, because it has been recognized that these practices are unfair.
Furthermore, while rich countries argue that cutting their subsidies may harm some poor countries that have preferential access to their markets, it has long been agreed at the WTO that poorer countries on the whole will need special treatment so they can benefit from a global rules-based trading system. Oxfam once again provides a useful summary:
And as Oxfam goes on to note, not much has happened in this area, apart from meaningful words and gestures from rich countries.
There is genuine concern that some poor countries that currently do benefit from preferential trade access with the rich, Europe in particular, do risk losing out to competition from other poor countries if rich country subsidies and barriers are removed/reduced. However, as stated above, these types of concerns are supposed to be at the core of WTO rules to ensure trade leads to positive, sustainable development. These are the things that need priority in discussions. Rich countries instead, year after year, are pushing to discuss other areas such as opening up the services sectors in poorer countries. The developing countries are rightly attempting to delay that.
The kind of statement Mandelson makes is interesting. In the 2003 WTO meeting in Cancun, Mexico26, UK’s then trade representative, Patricia Hewitt, exclaimed similar concerns: that there was a deal on the table which was fair and the poor countries did not take it (which Hewitt said surprised her; she couldn’t understand it.) That previous link has more details, but Mandelson and other rich country representatives appear to continue to have the same types of attitudes. Are they simply playing spin to the media, or are they really that ignorant of concerns from the developing countries?
World Trade: Important for the Poor
Consider Africa. It is the poorest continent. Yet, it has constantly faced an uphill struggle at the WTO and other international forums. Repeatedly, Africa has provided information on the types of concerns it has, the changes it suggests that rich countries need to make to make global trading fairer, etc. Repeatedly the richer countries have said they will listen, but actually have done very little.
Earlier, in July 2005 at the G8 Summit, the issue of Africa and poverty came to the fore, as Live 8 and the Make Poverty History campaign came into full view. G8 leaders were pressured to deliver meaningful improvements in their policies. They promised what sounded like enormous debt relief ($40 billion written off) which the mainstream applauded. What was less reported however, was that such a promised debt write-off for Africa by G8 leaders was spin27:
- Being spread over some 40 years, the debt relief actually only amounted to $1 billion per year for just 18 of the poorest countries (some 60 or more are said to need similar debt relief);
- The net present value of the deal is actually about $17 billion.
- As if that was not enough, even more conditions were associated with the aid. But those conditions, as well as the important things like sticking to democratic principles and dealing with corruption, included the less reported but more damaging economic ones that have helped maintain so much poverty for Africa in the first place.
(See the previous link for more details.)
If aid, and debt relief are subject to so much spin, trade, therefore, becomes an even more important aspect for Africa to help alleviate poverty. In fact, while a lot is often made of aid, small changes to trade can dwarf the aid amounts, as Oxfam, the prominent development organization, has noted:
Oxfam also provides a useful summary of the problems that have resulted. Rich countries, under unfair WTO rules (which they have helped formulate) have created numerous problems for Africa and other poor countries, such as the following:
- Industrialized countries continue to export crops at subsidized prices far below the cost of production, depressing markets and putting at risk the livelihoods of millions of small farmers and their families.
- At the same time, they exclude agricultural goods and value-added products made by African countries, through the imposition of peak tariffs and the use of non-tariff barriers (NTBs) that include excessive regulations on allowable levels of pesticide residues.
- Tariff and non-tariff barriers undermine diversification and industrialization that would help poor countries out of poverty.
- Many provisions in WTO rules restrict African governments’
policy spaceor room for maneuver in domestic policy making (i.e. WTO rules sometimes conflict with sovereign decision-making rights, potentially undermining democratic accountability.) For example,
- Under the Agreement on Agriculture (AOA), TRIPS, Trade-Related Investment Measures (TRIMs), and other WTO agreements, officials are constrained in terms of the types of pro-development policies that they can enact in the areas of agriculture, tariffs, investment, and intellectual-property rights.
- Worse, in order to implement these agreements and fund compliance with hostile trade rules, poor countries are required to shift large sums of money away from investments in health care, education, or essential infrastructure.
- Moreover, WTO agreements, once agreed, are nearly impossible to revise, even when negative implications for development become evident, as happened with the TRIPS Agreement.
Needless to say, poor countries are disadvantaged by the WTO rules which the more powerful, richer countries are of course able to influence for their own interests. Free market principles, which the rich countries promote, are thus distorted at the very core, creating
inequality structured into law as J.W. Smith of the Institute for Economic Democracy30 describes this.
Compound this with the distorting effects of vast subsidies that rich countries give for their own agriculture and other industries, the free market principles they they so forcefully demands from the poor are only used by themselves when it suits.
For years, rich country governments have been accused by poor countries of using such tactics to pry open markets of the developing world for their corporations and interests, creating unequal trade and an uneven playing field. This, as J.W. Smith also notes, is mercantilist, which is what characterized the old days of colonialism and imperialism. It is therefore not without serious concern that some from the developing world regularly cry foul of the rich countries for practicing
Development Rounds Appear To Have Little To Do With Development
In 2001, at the Doha round of trade negotiations31, rich countries promised to listen to the repeated concerns of poor countries that they all needed to finish off discussion about issues critical to poor countries, which were still unresolved from previous negotiations (and which rich countries had actually agreed to finish discussion of before starting talks on new issues). The rich countries therefore promised Doha would be a
Rich countries promised to remain committed to trade rules reform to make them fairer and heed various concerns poor countries raised. Rich countries, for example, agreed to
- Prioritize amendments to the controversial TRIPS agreement so that medicines would be more affordable for poor countries;
- Reform regulations to end the dumping of subsidized agricultural exports;
- Curb their use of non-trade barriers that made it harder for poor countries to gain market access to rich countries.
Yet, as Oxfam notes,
But Oxfam does not stop there. They criticize the tactics of the rich nations further:
(For more about the devastating onslaught of structural adjustment, see this site’s section on Structural Adjustment Policies35.)
And then there are the procedural problems that for years the poorer countries have complained about. For example, the infamous
green room whereby major rich countries and blocs will meet typically with just a couple of poor countries, such as Brazil and India, and present the main thrusts of the negotiating agenda. The poor countries which form the majority of the world will only be represented by two nations and start on the defensive.
As has happened in past years, the poor, or least developed countries (LDC) often find they lack resources and staff to attend all the meetings, thus putting them in a disadvantaged position. The rich appear to care little, as Oxfam is worth quoting once again:
This site’s pages on the previous meetings detail these aspects as well (links to those pages are at the bottom of this page).<