*{ http://www.foei.org/publications/trade/seattlewto.html 19 juillet 2002 December 13th 1999 -------------------------------------------------------------------------------- Seattle and the WTO: A Briefing -------------------------------------------------------------------------------- |Summary | What happened in Seattle & Why | The EC and the Member States| The Environmental Audit Committee's Report | Where Should We Go From Here? | -------------------------------------------------------------------------------- SUMMARY This short briefing explains why trade liberalisation talks collapsed in Seattle last week. It sets out why this is not a result of misunderstanding and false fears, but of informed and worldwide concern that further comprehensive trade liberalisation would be socially, environmentally and economically damaging. Further, it shows why the failure of the talks is not a disaster, but a positive opportunity for the UK - and other progressive countries - to carry forward an agenda of 'review, repair and reform' of the trade system and its rules, with a view to promoting fair and sustainable trade in the interests of the people of both developing and developed countries. The key issue now is to initiate a thorough and independent review that looks at the trade system itself, not just WTO procedures. Fundamental reform should begin with governmental support for the following: · A full, thorough and measured review of the social and environmental impacts of trade liberalisation. · The introduction of binding regulations to control the activities of transnational corporations. · A balanced investment agreement under the auspices of the UN, that addresses the legitimate fears of poorer countries and civil society. · The removal of agriculture from the WTO in order to protect and promote the many roles of agriculture. · Unilateral initiatives by the EU to reduce export subsidies, pay compensation to net-food-importing developing countries (as promised at the end of the Uruguay Round) and grant zero-tariffs on all imports from Least Developed Countries. · Reform of the WTO's Trade Related Intellectual Property Rights (TRIPs) agreement to remove the requirement to patent plant varieties and microbiological processes; and removal of biodiversity from the TRIPs agreement. · A new agreement in the United Nations, to be signed by heads of state, to clarify the status of multilateral environmental agreements. · New and substantial commitments to capacity-building for developing countries. · A review of the status of the Lome Convention, currently being reviewed because it conflicts with WTO rules. · A moratorium on WTO disputes relating to environment and development in the WTO and a transfer of such debates to an alternative, binding international court which does not prioritise trade over the environment. · Increased parliamentary scrutiny of all international negotiations. · A review of European Commission's negotiating competence in the WTO. For detailed information about the operation of the World Trade Organisation (WTO) and specific information concerning the details of pre-Seattle negotiations on food, forests and finance, visit "The Seattle Series" } *partie=titre WHAT HAPPENED IN SEATTLE AND WHY? *partie=nil WTO talks intended by some governments to set up a new round of trade liberalisation negotiations collapsed dramatically at the beginning of December 1999. Governments present could not agree an agenda for the proposed 'Millennium Round', nor even when negotiations might recommence. There were four reasons for this comprehensive failure: opposition from civil society; conflict between developed and developing countries; disagreements amongst developed countries; and shockingly poor procedures. *partie=titre Opposition from civil society *partie=nil The civil disturbance in Seattle, with about 50,000 demonstrators, indicated the strength of opposition from US groups and all those groups around the world, from Northern and Southern countries, who were able to find the resources to be present. Civil society opposition was undoubtedly widespread - the 'Stop the Round' statement attracted sign-ons from nearly 1500 organisations - of all types - from nearly 90 countries spanning all continents. Forty FOEI representatives, from 20 countries, across the world, were also present in Seattle with a clear and agreed position opposing a new round for both environmental and developmental reasons. Such statistics illustrate the breadth of opposition to the proposed Round and reveal unprecedented cooperation between different public-interest groups in different countries. Those who argue that civil society opposition was motivated purely by self-interest are wrong. Indeed, Mike Moore's statement that "Anti-globalisation becomes the latest chapter in the age-old call to separatism, tribalism and racism." (USA Today, 29 November 1999). This criticism is clearly untrue, and offended many third world people present. Such comments are in fact likely to fuel belief that the WTO is closed and unresponsive to legitimate protest. The vast majority of Seattle protestors were peaceful throughout. Disturbance seems to have been due to the response of a city authority unaccustomed to dealing with large-scale non-violent direct action and the activities of a small (unknown) group of individuals who were less restrained. The city authority initially held back but then changed tack completely, going in indiscriminately with tear gas and rubber bullets and imposing a curfew. These actions outraged demonstrators, prolonged the protests and led to world-wide coverage of events. All in all, it was quite evident within the Washington State Convention Centre that the demonstrations and subsequent delays to proceedings had a significant impact on negotiators. Whilst there are a number of reasons for the collapse of the Seattle talks, it is clear that civil society opposition encouraged different countries to register their dissatisfaction with and oppose various elements of proposed negotiations. In other words, it became easier for governments to resist the usual pressures to conform. This was the precise goal of the coalition opposing the Millennium Round. The collapse of negotiations is therefore a resounding success from the perspective of these groups, whichever group of countries is accused of halting the talks. *partie=titre Conflict between developed and developing countries *partie=nil Right from the start, some developing countries, particularly in Africa and Asia, were opposed to the inclusion of any new issues, because of (a) lack of capacity; (b) concern that uncontrolled foreign investment will not benefit them; and (c) the track record of the WTO, whose previous agreements (on issues like agriculture and intellectual property rights) have been biassed towards rich countries and worked against the poorer countries. It is also significant that most developing country complaints about procedure related to the working group dealing with new issues such as competition and investment (known as the Singapore Issues Working Group). The chair of this working group was extremely dismissive of developing country interventions. Some countries appeared not to know the working group was already meeting and some were refused access to key'green room' meetings (access to these is restricted to industrialised nations and carefully selected, larger developing countries). More generally, the US consistently refused to deal with the implementation issues that developing countries had prioritised. Another significant fracture in the negotiations occurred when President Clinton voiced his unequivocal support for bringing labour concerns into the WTO. There have since been many suggestions that Clinton's primary concern was retaining support for the Democrats in the forthcoming presidential elections. However, it seems likely that this was a failed attempt to please all factions - demonstrators, business and trading partners - rather than a deliberate ploy to scupper the Round half way through the talks. One of the key goals of civil society groups was to demonstrate worldwide support for those industrialised and developing country governments who objected to proposed negotiations. This was particularly the case with developing countries , since previous ministerials have seen weaker governments forced to concede on issues they were extremely unhappy about or unable to deal with effectively, because of lack of capacity (eg investment, intellectual property rights). The same concerns emerged in Seattle, and much of the final two days was taken up with civil society groups (such as Third World Network) and unhappy delegations giving joint press briefings. It is therefore misguided to believe that civil society groups and developing countries had entirely different agendas. *partie=titre Conflicts between developed countries *partie=nil There were disagreements between developed countries that also remained unresolved. In particular, France, Norway and Japan maintained varying degrees of resistance to proposals to reduce agricultural support. In addition, the row between the European Commission and member states over biotechnology was very significant. The majority of EU member states themselves - including the UK - were opposed to a working group on biotechnology, a key (and predicted) demand of the US (see below for more detail). *partie=titre WTO procedures *partie=nil The procedures employed during the meeting were the final straw for many countries. It was highly inappropriate that the chair was also the main trade negotiator for the US, Charlene Barshefsky. Ms Barshefsky appeared to be manipulating the agenda to suit US concerns and refused to acknowledge that she knew about objections to procedures from developing countries. When questioned, Ms Barshefsky responded by threatening to use even more restrictive procedures if working groups failed to reach agreement. Basically, some countries found themselves overruled in working groups, unable to attend smaller 'green room' meetings (either because they were refused access or didn't know about them) and sometimes found themselves in meetings without the right negotiating papers. At least one group (the African group) found itself trying to negotiate internally without interpretation, when their interpreter was asked to leave to assist a US-backed meeting on trade and labour instead. Many papers were issued to the press without identification of authors and without the traditional square brackets indicating dissent. Thus, for example, a 'Ministerial Declaration' was issued at 05.45 on Friday morning, without identification (we can only assume it came from the Secretariat) and without being contained in square brackets. Nevertheless, the EC later told various people that it did not agree with this text. Such procedures - described by Pascal Lamy as 'medieval' - are entirely unacceptable in a meeting of this importance, and while not the only concern of developing countries, they were the last straw. *{ Summary Many of the demonstrators and developing countries shared a common position. The demonstrators were not simply supporting Northern protectionism. In fact, the emerging common position is neither protectionist nor anti-protectionist, it is instead a growing recognition around the world that the trading system is working in favour of huge transnationals, not people. This was demonstrated clearly by the 'Stop the Round' statement and joint NGO-delegate press conferences held in Seattle. } *partie=titre THE EUROPEAN COMMISSION AND THE MEMBER STATES *partie=nil At the start of the closing EU press conference, Pascal Lamy, EC trade commissioner, stated that the Ministerial failed because the issues were too complex. This is right, but a rather surprising remark coming from the European Commission, who initiated the idea of the Millennium Round and promoted the 'all-concerns-on-the-table' approach. Still, it was Leon Brittan and not Pascal Lamy that came up with the idea. The EU consistently promoted the Millennium Round as an approach that would benefit developing countries, in spite of those countries' opposition to new issues. One of the defining features of this conference was turmoil amongst the European components. Specifically, EC determination to reach a deal initiating a round that included investment appeared to spur them on to agree to a biotechnology working group even though this had not been previously agreed to by the member states. Even when challenged by the five European environment ministers present and opposed by twelve of the fifteen member states trade ministers, they still refused to back down. Mr Meacher's opposition was straightforward and much appreciated by the NGOs present. This concern should not be dropped. It is unacceptable for an unelected body to have negotiating competence and then to resist the desires of its elected government representatives. This issue should be taken further by the UK. Various working group texts that appeared also implied that the EC was prepared to sell out on forests and possibly the use of precautionary principle (this latter in the draft agriculture text). In general, it appears clear that the EC was prepared to sacrifice a lot of the detail of its proposed negotiating stance on the environment - just as FOE had predicted. The European proposal to have zero-tariffs on all Least Developed Country imports was sound, but they only seemed prepared to go ahead with this if other countries agreed to it. If a clear signal of genuine intent is desired, the EC should go ahead with this unilaterally and FOE warmly welcomes Stephen Byer's announcement to the House of Commons on December 9th 1999 that the EC is planning such a move. *partie=titre THE ENVIRONMENTAL AUDIT COMMITTEE'S (EAC) REPORT *partie=nil This parliamentary select committee report on the Millennium Round proposal - the first examination of the issue by UK Parliamentarians - is a critical document, offering a real basis for future progress. It advocates more transparent and accountable decision making procedures in the UK and EU, and largely disagrees with the EU position taken into Seattle. Published the week before the Ministerial, the report questions the need for a comprehensive round - raising the very real concern that developing countries might face another 'stitch-up'. It also makes a clear case for a thorough review of the impacts of previous agreements, emphasises the need for better capacity building, and questions the case for including investment in the remit of the WTO. Additionally, it puts a strong case for prioritising work to improve the relationship between Multilateral Environmental Agreements (MEAs) and trade rules to make MEAs more effective. The EAC report is an excellent starting point for Parliamentary involvement in the forthcoming debate on reform of the trade system. Improved and effective Parliamentary involvement in trade negotiations needs to be given serious attention. *partie=titre WHERE SHOULD WE GO FROM HERE? *partie=nil It is not true that opposition to the WTO will result in world going 'back to the system where the big guys dominated everything, quietly and in private' as stated by Clare Short in her reaction to events in Seattle. Why should it not be possible to develop a fair and sustainable rules-based system - which all the protestors are calling for? The key issue now is to initiate a thorough and independent review that looks at the trade system itself, not just WTO procedures. *partie=titre Fundamental reform required *partie=nil The level of opposition to the proposed Millennium Round of new issues demonstrates the need for fundamental reform of the international trade system. The system is inequitable, unsustainable and working to benefit large transnational corporations through deregulation and increased market access. This is the view of many different people, in many different circumstances, right across the world. It is not a view based on lack of understanding of the processes. Rather, it is a common realisation that this complex and obscure set of regulations is behind many of the everyday problems that people experience. Our general experience is that opposition increases in line with knowledge of the processes. *partie=titre A critical opportunity *partie=nil FOEI and many other groups worked to oppose the Round, for two reasons. Firstly, because our analysis of the situation clearly shows that the emphasis on international trade at the expense of other societal concerns is detrimental to many and that rapid liberalisation is likely to cause further damage. Secondly, it was felt that there was a need for a political hiatus in which governments and society could review the workings of the economy and in particular the trade system. Now the round has collapsed, we are indeed at that critical point where we need to decide how and by whom such a review should be conducted. We must ensure that the lessons of Seattle are learned and applied. *partie=titre The UK and reform of the trade system *partie=nil Stephen Byers has committed the UK to taking a lead on reforming WTO procedures. This is a step in the right direction, but it is not enough. If worldwide opposition is to be quelled a more thorough overhaul is necessary. How can we revise our approach to international trade so that it is in line with the need for local and regional trade, control of transnationals, sustainable use of resources, equity, development and regulation to protect the environment and promote health and welfare? How can we rebalance the institutional landscape so that any trade institution is in balance with other equally important international institutions? A rules-based, yet people-centred approach is needed. We believe that the UK Government should support: 1. A full review A full, thorough and measured review of the impacts of trade liberalisation on people and their environment, with input from civil society (through a number of different institutions perhaps, including CSD and UNCTAD). This review needs to include an assessment of the impacts of export-led development in general, and the impact of international debt obligations on trade policy in developing countries. 2. Corporate control Binding regulations are needed to control the activities of transnational corporations, possibly building on the OECD's Multinational Enterprise Guidelines process, if the political will can be found within the OECD. Transnational influence on international processes must be curbed. Mistrust of transnationals is at an all-time high and there is no evidence that voluntary measures are effective at controlling transnationals - binding measures must be developed. 3 Keep investment out of the WTO A balanced investment agreement should be sought under the auspices of the UN. Investment rules are needed - but investment liberalisation has become an albatross - sinking any international process it is attached to, because of the legitimate fears of poorer countries and civil society. 4. Reform agriculture rules and subsidies Removal of agriculture from the WTO, since agriculture is too important in terms of multi-functionality to give trade issues top consideration. The current Agreement on Agriculture is highly inappropriate since it benefits transnationals at the expense of small farms the world over. The EU should, at the same time, make unilateral efforts to reduce export subsidies; pay compensation to net-food-importing developing countries (as promised at the end of the Uruguay Round); and grant zero-tariffs on all LDC imports, to signal its genuine intentions towards the developing world. 5. Intellectual property rights & and biotechnology Use of the ongoing review of the Trade-Related Intellectual Property Rights (TRIPs) Agreement to put a stop to the TRIPs requirement to patent plant varieties and microbiological processes, and to ensure that the TRIPs agreement does not cover biodiversity, which should be dealt with instead in the Convention on Biodiversity (patents) and the Biosafety Protocol (trade restrictions). The EU and developing countries must stand firm to support restrictions on GM trade, in the face of ongoing pressure from the Miami group of GM-food exporting nations at the next Biosafety Protocol negotiation in January 2000. The defeat of the biotechnology working group proposal means that this negotiation now has a better chance of success. 6. Multilateral environmental agreements Governments should seek an agreement in the United Nations, to be signed by heads of state, to clarify the status of multilateral environmental agreements. 7. Capacity-building New and substantial commitments to capacity-building for developing countries, with a view to allowing them to participate meaningfully and on their own terms in international negotiations. In this context, within the EU, the review of the Lome Agreement should be reconsidered, since this long-standing arrangement with African, Pacific and Caribbean countries is only being dismantled because it conflicts with WTO rules. FOE welcomes Stephen Byers support for an increase in WTO budgets for developing countries, but notes that attendance and participation at the WTO is only one of the needs of such countries. 8. Moratorium on WTO disputes A moratorium on disputes relating to environment and development in the WTO. To enable developing countries in particular to still bring cases against legislation they deem to be unfair or not genuine, cases should be referred to an alternative, binding international court which does not prioritise trade over the environment 9. Increased parliamentary scrutiny Vastly improved parliamentary scrutiny of all international negotiations, including those relating to the trade and particularly at the domestic level. 10. Review of European Commission's negotiating competence Given the EC's demonstrated willingness to negotiate deals without due deference to the will of its member states, its negotiating competence in the WTO should be reviewed. In the United Nations and the OECD, for example, European nations negotiate on their own behalf.