2006 Conference Workshop ED3
From Hooked - Students for Trade Justice
Contents |
[edit] The Global Trading System
Mike Cebon, Global Trade Work, 6\5\6
Mike wrote the “The World Trade Organisation: An Australian Guide” booklet, with contributions from others.
[edit] Start: 1944
- New Hampshire and the US: got together to set up how the world would run.
- The WB: te redevelop Europe after the war
- the IMF: to regulate cash flows between countries
- And the ITO (International Trade Organisation)
- US didn't like the ITO because it had labour and environmental standards.
- So instead they took one part of it, called it the GAT, and used that for the next 40 years.
- It was 22 countries, that met at Brettonwood (OECD)
- rich countries; reducing tariffs and stuff between those countries
- in 80s started adding countries, by 1984 maybe 40.
- In 1984 in the Euro round: a massive expansion of the GAT. Negotiate not just tariffs, but about 30 agreements. Took this and called it the WTO. Took negotiations from 1984 to 1994 to establish the WTO.
- In 1944, most trading done by states between each other. But in war years corporations grew in wealth and power and id most of the trading.
- they basically expanded the GAT (to make profit). Essential mission of GAT: to make profit.
- In 1970s many colonies became independent, and wanted to get on board with this world trading system. 1994: 120 countries. Now: 150.
- Until then, the World Trading System was pretty Innocuous. In early 80s what the WTO was actually doing became apparent, and ppl began questioning it.
[edit] The four agreements of the WTO
- AoA (Agreement on Agriculture) Previously, Agriculture was never part of the trading rules.
- GATS (General Agreement on Trade in Services)
- TRIPS (Trade-Related Aspects of Intellectual Property)
- this shows probably more clearly than anywhere, the real power corporations had in these agreements.
- It goes against the whole thing the WTO was trying to do (trade liberalisation) TRIPS actually does the opposite: it creates barriers to trade in a particular way that benefits large owners of intellectual property, in US and Europe. And it does this in very particular ways.
- The actual text of the agreement was written by the big pharmaceutical companies in the agreement. They submitted it to the countries in the WTO and they endorsed it.
- ASPM (Agreement on Sanitary & Photosanitary Measures)
[edit] The AoA
- they pushed things onto the poor countries which really hurt the poor countries and benefited the rich countries
- “Subsidies are good; tariffs are bad.”
- really interesting: some trade barriers OK, some not.
- a tariff is a tax. Provides a struggling government with assistance
- subsidy is the opposite; government paying out to producers. Rich countries have money to do this, poor countries don’t!!
- winds back income of poor countries
- rich countries are thus able to have trade barriers, and poor countries are not
- “Greed, Rules, and Double-Standards”—Oxfam
[edit] Question: Current pressure to reduce subsidies; is that coming through WTO?
- Doha Round is the current round of WTO. A push to rewrite agreement on agriculture; to reduce the subsidy-giving ability of rich countries, and to give poor countries some room to move
- Have agreed: by 2013, will eliminate export subsidies: i.e. money given to farmers specifically to export their products (e.g. US cotton, rice) That’s (Europe) $1 b and (US) $4 or 5 b. That’s taken 4 or 5 years of negotiations with a hundred developing countries. And what they’ve given up in order to get that has been very damaging.
- damage: they’ve had to reduce tariffs on industrial products; leading to de-industrialisation of their own economy
- 2 million people every week move to slums in the city; because they can’t survive by growing their own crops.
- The subsidies: 90% of them in the US go to Agribusiness, huge corporations who don’t need the help; only 10% go to families who farm.
[edit] GATS
- Services make up about 80% of Oz’s economic. Edu, Health Care, water provision, etc. Not making a product; servicing a market. Developed countries’ economies tend to major on these
- opens up areas of economies around the world, lie water, health care…postal.
- forbids countries making laws about these areas to suit their own needs. Rather, have to accord with this international agreement.
- The people who control these are the big companies that provide services. The rich countries have these, not poor countries
- the poor countries must privatise these services, instead of the countries providing its own healthcare; has to allow international companies to come in and do it.
- not allowed to subsidise your health care, schooling, etc.
- Currently countries only put into the GATS, the industries they’re comfortable with. Edu and Health Care are not yet in there, so things aren’t so bad there.
- e.g. NZ put AV sector in. Can’t restrict TV, radio content. In 1997 sign agreement. Next government made initiatives to increase local content, but found it was now illegal.
- the idea was NZ entertainment industry would be more competitive internationally, so they hoped to gain, but lost out big time.
- poor countries aren’t stupid; they can see the service-providing corporations are based in rich countries; they don’t want to privatise their service sector.
- GATS a “Bill of Rights” for international corporations. Gives them so much power!
[edit] TRIPS
- forces gov’s to adopt US ideas on Intellectual Property.
- countries previously could use whatever ideas they wanted. Now, gotta pay the owner of the idea
- Pharmaceuticals: poor countries used to cheaply produce medicines developed in rich countries
- Now they've got to pay the hugely exorbitant price of the
- India has been produced cheap AIDS drugs, selling locally and in Africa. Is being forced close down the entire production of them. Came into force end of 2005, so the effects are beginning to be felt now.
- BIO-PIRACY
- patenting plants in developing countries. Neem in India, a leaf good for cleaning teeth. Patented it, now if a company want to use it, have to pay this US corporation.
- Chinese traditional medicine. As these get patented by US corporations (who literally make billions of dollars from these products) and they can no longer legally be sold in China.
[edit] ASPM
- regulates quarantine!
- Contentious in Australia; as an island. Allows countries to challenge each other’s quarantine.
[edit] Since 1994: growing movement saying “this is outrageous”
- mostly in developing world, of course
- WTO system seen as intrinsically unfair, for having these systems benefiting rich countries
- debate over whether WTO is OK, but agreements need to be changed or (it’s totally undemocratic, poor countries
- formal meeting at start and close, in-between it’s all backdoor deals
- no minutes, not open to press
- bully “we will cut aid, this, that, unless you do such and such”
- they’re forced to cave in to the rich countries’ demands
- 30 agreements. Some are 1000 pages long. 150 delegates from US, etc. They understand what’s going on, and the effects. The poor countries just don’t understand. Even a group of poor countries working together, they don’t have a chance.
- often don’t understand what they’re agreeing to, and what the impacts would be
- Can the WTO be reformed, to benefit the poor? Or if the organisation as a whole needs to be scrapped. Base it on fairer organisations. Currently: goal is to liberalise trade, regardless of the cost.
- liberalise at all costs: this is dogma; Free Trade will be better for everybody.
- all very mathematical, theoretical. but in practice, as people are seeing more and more, especially in last 5 years, that it’s just destroying poor countries
- Potential of Social Movements, especially in developing countries, is great. Developing countries realising the whole system is totally stacked against them. In 1999, Ministerial system collapsed because the developing countries refused to cooperate.
- Change is happening here and there, this group imploding, that group imploding, and developing countries refuse cooperation. No agreements in the WTO working out because the developing countries are standing up and saying “there needs to be reform”. WTO at a standstill. Doha round “development round”: we’ll help you and ask for nothing in return. a lie: they’ve still demanded heaps from the developing countries.
Global Trade Watch is an Australian initiative. Quite small at the moment, its size goes in cycles. If you’re interested in getting involved education people about what’s happening, come and chat!
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