New Issues
WTO Members continue to debate over whether or not to expand the WTO built-in agenda, which includes negotiations on agriculture and services, to address so-called new issues (e.g. investment, environment). Below is a brief overview of these issues and a general outline of key differences between Members.
Biotechnology
Regarding biotechnology, the U.S. has proposed the establishment of a WTO working group on biotechnology. Canada and Japan have also called for similar working groups. Argentina, Chile, and Uruguay support the notion of a working group; Asian countries led by Malaysia and joined by Bolivia, Egypt, Nigeria, Norway, Peru, and Switzerland prefer to discuss the issue of biotechnology in forums outside the WTO.
The EU has yet to take a formal position on the issue of a working group but is expected to call for clearer general recognition of the precautionary principle within the WTO. The principle, often used in environmental policy, holds that where there are threats of serious or irreversible damage, lack of scientific certainty should not be used as a reason for postponing action. In a trade sense, the principle could be employed to allow preventive measures — such as an import ban — to be used when scientific evidence is lacking. Application of the principle is at the heart of trade disputes between the EU and U.S. over hormone-treated beef and genetically modified organisms.
In an 18 November letter to the U.S. Trade Representative Charlene Barshefsky, a grouping of non-governmental organisations expressed deep concern over the U.S. proposal for a biotechnology working group. The NGOs said the proposals could undermine “the development of new national and international safeguards for trade in agricultural biotechnology products” and further “could place excessive constraints on the rights of governments to regulate, hampering their ability to respond to scientifically uncertain threats on the basis of the precautionary principle”, according to the letter. The NGO letter also warned that bringing biotechnology to the WTO could undermine the Biosafety Protocol (addressing the international movement of genetically modified organisms), and “could lead to new restrictions on right of governments to require labelling of GMO products to promote consumers’ right-to-know”, the letter said.
The NGO grouping is comprised of the Centre for International Environmental Law, Community Nutrition Institute, Consumer’s Choice Council, Corporate Agribusiness Research Project, Defenders of Wildlife, Falls Brook Centre, Friends of the Earth, Sierra Club, Transnational Resource & Action Center, and the Union of Concerned Scientists.
“NGO letter on WTO biotech proposals,” 18 November 1999; “EU nervous of specific GMO talks at Seattle,” REUTERS, 14 November 1999.
Labour
As part of the Seattle Ministerial preparations, the U.S. has put forward a proposal to establish WTO working group on labour issues (see BRIDGES Weekly Trade News Digest, Vol. 3 No. 43, 1 November 1999, http://www.ictsd.org/html/weekly/story1.01-11-99.htm ).The proposal calls for a group to examine trade issues related to: labour, specifically trade and employment; trade and social protections; trade and core labour standards; positive trade policy incentives and core labour standards; trade and forced or exploitative child labour; and trade and derogation from national labour standards. The U.S. position is the result of a Congressional mandate that the U.S. should seek such a working group. Moreover, the request is politically expedient to assuage a very vocal labour movement in the U.S. whose support is necessary to maintain U.S. momentum toward further trade liberalisation.
The EU also submitted a proposal for a forum to address labour issues. However, its proposed Joint ILO/WTO Standing Working Forum would not have official standing within the WTO. Both the EU and U.S. proposals have met with strong opposition from developing country Members during the Ministerial preparatory process.
Developing countries’ main concern is that the trade and labour linkage is a veiled protectionist mechanism sought by developed countries as a way to squash developing countries’ comparative advantage in labour. At the First WTO Ministerial in Singapore in December 1996, WTO Members agreed that the International Labour Organisation was the appropriate agency to address trade and labour linkages.
Developing countries made their position clear in statements put forward by various groupings in advance of the Ministerial. The Group of 15 (G-15) developing countries said they “resolutely oppose any renewed attempt to raise [the issue of trade and labour linkage] in the WTO.” The Group of 77 (G-77) developing countries echoed these sentiments in their joint declaration on the Ministerial, stating that it would “firmly oppose any linkage between trade and labour standards.” Other smaller, regional groupings (which include an overlap of Members from the G-15 and G-77 groupings), also said they would reject any attempt at trade and labour linkages. These include the South Asian Association for Regional Co-operation (SAARC) comprised of India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka, and Maldives.
These Members are supported by a grouping of prominent Third World intellectuals and non-governmental organisations who called for the issue of linking trade with labour (and the environment) to be laid to rest at the WTO (see BRIDGES Weekly Trade News Digest Vol. 3, No. 36, 13 September 1999, http://www.ictsd.org/html/story3.13-09-99.htm). The list of signatories included Jagdish Bhagwati (Columbia University, USA), Muchkund Dubey, (Government of India), Arvind Panagariya (University of Maryland, USA), Pradeep S. (Mehta Consumer Unity and Trust Society, India), Jasper Okelo (University of Nairobi, Kenya). The group of experts emphasised that “the WTO’s design must reflect the principle of mutual gain; it cannot be allowed to become the institution that becomes a prisoner of every developed country lobby or group that seeks to advance its agenda at the expense of the developing countries.”
Australia on 14 November said that it does not support inclusion of labour issues at the WTO. Australian Trade Minister Mark Vaile stated that Australia prefers labour issues be discussed at the ILO.
“Trade and labour at WTO,” THE PROGRESSIVE RESPONSE, 5 November 1999; “Australia says WTO should not be distracted by labour,” REUTERS, 14 November 1999; “Attempt to get labour on WTO agenda reejected,” FINANCIAL TIMES, 9 November 1999; “U.S. proposal on labour splits WTO,” THE STAR (Malaysia), 8 November 1999.
Culture
When WTO Members meet in Seattle next week, Canada is expected to call for a WTO agreement on trade in cultural goods and services. The agreement could be used to protect cultural industries, including the audio-visual sector, books, magazines, and broadcasting, by setting them apart from other goods.
In its negotiating position, the EU agreed to leave open the possibility for implementing safeguards related to cultural protections within the context of the WTO agreement on trade in services. The EU negotiating guidelines call for the EU to ensure “that the Community and its Member States maintain the possibility to preserve and develop their capacity to define and implement their cultural and audio-visual policies for the purpose of preserving their cultural diversity.” (See BRIDGES Weekly Trade News Digest Vol. 3, No. 43, 1 November 1999, http://www.ictsd.org/html/weekly/story3.01-11-99.htm ).
France has been the most outspoken proponent of protecting the so- called cultural exception, arguing that culture is not a commodity. Culture has figured in a trade dispute between the U.S. and Canada over magazine advertising content rules (see BRIDGES Weekly Trade News Digest Vol. 3, No. 6, 15 February 1999 http://www.ictsd.org/html/story6.15-02-99.htm ). The cultural exception issue has also figured indirectly in the accession bids of Albania, Moldova and Croatia, as the three countries remain caught in the midst of an EU-U.S. dispute over market access regimes for the audio-visual sector.
In related news, the Information Society Forum, a group of 140 independent experts from across the European Union and Eastern European countries, have called on WTO Members to recognise the importance of cultural sustainability and acknowledge that cultural goods and services are significantly different from other products. In their Seattle Declaration, the Forum called on WTO Members to, inter alia, “refrain from applying the General Agreement on Trade in Services to services related to the communication of audio-visual content to the public, which are directly linked to the cultural, political and social interaction and sustainable development of societies”.
“Cultural implications of the Millennium Round,” Contribution of The Information Society Forum to the WTO Ministerial Conference in Seattle, September 1999; “Canada develops alliances to protect culture, fight farm subsidies,” AGENCE FRANCE-PRESSE, 18 November 1999; “Canada lists its priorities for Seattle,” FINANCIAL TIMES, 17 November 1999;”Sheila Copps croisee de l’exception culturelle,” LIBERATION, 2 November 1999; “EU seeks to protect cultural diversity of its states in WTO talks,” AGENCE FRANCE-PRESSE, 14 November 1999.
Investment
The EU and Japan are pushing for inclusion of investment in a new round of global trade talks, intended to harmonise international investment rules and to dismantle barriers to foreign investment.
Talks for a Multilateral Agreement on Investment (MAI), conducted under the auspices of the 29-member Organisation of Economic Co-operation and Development (OECD), failed in late 1998 amid vigorous disagreement among governments and action by civil society groups who opposed it for not incorporating labour and environment standards, for its lack of transparency, and for the rights and power it would have given corporations vis-a-vis governments. The OECD was also strongly criticised for its failure to include developing countries in MAI negotiations. France ultimately withdrew from OECD talks over differences with respect to the so-called cultural exceptions, precipitating the end of the MAI at the OECD. France subsequently called for the transfer of talks to the WTO, in hopes that a broader group of countries could participate in the talks, rather than just the elite group of 29 OECD members.
During debate leading up to the WTO Ministerial, Bolivia, speaking on behalf of the Group of Latin American and Caribbean countries, said that negotiations on investment should not be undertaken, arguing that issues of agriculture and implementation are of greater urgency (see related stories in this issue). Other developing countries, including Indonesia, Haiti, Malaysia, Kenya, Pakistan, Argentina, Cuba, Australia, Uganda, Singapore, Thailand, and El Salvador, argued against negotiations on the ground that there was no consensus for an investment agreement at the WTO.
A number of developing countries supported continued study of investment under The Working Group on the Relationship between Trade and Investment, although some, notably India, said they would only support such work if it carried no commitments toward future investment negotiations. Developing countries are supporting provisions within the draft Ministerial that call on the Working Group to “focus on issues of interest to developing countries, in particular, the effects of foreign direct investment, positive and negative, on the development objectives of host countries, the obligations of foreign investors to host countries, and the obligations of home countries in respect of disciplines on their investors.” The U.S. subsequently proposed removing the language regarding developing countries in the Working Group mandate.
For its part, the U.S. is opposed to investment talks at the WTO, arguing that the sector is not yet ripe for a multilateral agreement. Further, the U.S. has criticised the EU’s support for investment talks, calling it the “anything but agriculture” approach to trade talks in reference to the EU’s perceived reluctance to further liberalise its farm sector.
“Latest developments on investment in the WTO,” SEATINI BULLETIN, 15 & 30 October 1999; “EU faces uphill battle in bid for wide trade round,” REUTERS 15 November 1999; “US, India to oppose investment pact,” ECONOMIC TIMES, 29 October 1999.
Environment
The debate over the trade and environment linkage at the WTO is as divisive as the debate over trade and labour, and again the division falls along North-South lines. Most notably, the EU and U.S. have pressed for various mechanisms to link trade and environmental protection. In addition to calling for a continuation of the Committee on Trade and Environment as a discussion forum for contentious issues and the promotion of trade and environment win-win situations, a U.S. proposal on Trade and Sustainable Development (WT/GC/W/304)* has pointed to the importance of institutional reform and a pursuance of liberalisation “in a way that is supportive of high public health and environmental standards.”
In keeping with the objectives outlined in its proposal, the Clinton Administration on 17 November called on the U.S. Trade Representative to carry out an assessment of the potential environmental impact of major trade agreements “to ensure that our efforts to expand trade reflect our strong commitment to promoting environmental protection worldwide.” The Clinton Administration said the review would be used to help shape the U.S. negotiating position in the next round of WTO trade talks and would include input from outside experts and the public. The review is intended to complement the U.S. objectives for the next round with respect to the environment, e.g. including ending subsidies that promote over-fishing and eliminating trade barriers to so-called clean technologies.
Developing countries argue that a trade and environment linkage could be used as a protectionist mechanism by developed countries (e.g. by establishing non-tariff barriers to trade). India’s commerce and industry minister Murasoli Maran summed up developing country sentiments earlier this month, noting that India is a “signatory to a host of ecological treaties. We believe that…environment issues should be dealt with in those fora. The WTO should discuss trade issues only.”
A number of other developing countries have also submitted proposals suggesting approaches to trade and environment. These include Kenya (WT/GC/W/233), Bangladesh (WT/GC/W/251), Pakistan (WT/GC/W/126), Dominican Republic-Honduras-Pakistan (WT/GC/W/255), Cuba-Dominican Republic-Honduras-Pakistan (WT/GC/W/163), and Cuba (WT/GC/W/387). For the most part, these have cautioned against the establishment of stronger links between trade and new issues such as environment and labour. They also reinforce the developing countries’ demands for greater emphasis on special and differential treatment, particularly with respect to sustainable development. Many are also fearful that more stringent environmental language may allow process and production methods to be used as a basis for trade discrimination.
References to the environment are to be found throughout the 19 October draft Ministerial Declaration (available online at /ministerial/seattle/eattleministerial.htm ). It is included in various guises under the sections marked “Objectives and Priorities”, “Implementation of Existing Agreements”, “New Negotiating [Round]“, “Structure, Organization and Participation”, “Subjects for Negotiation”, and “Other Elements of Work Programme”. Virtually all references are in square brackets, indicating areas where Members remain divided in their positions.
*Document available online at http://www.wto.org/wto/ddf/ep/public.html
“U.S. to review eco-impacts of trade agreements,” ENS, 17 November 1999; “Turning over a green leaf?” ECONOMIC TIMES, 12 November 1999; “U.S. president orders environmental reviews of proposals to help develop positions,” INTERNATIONAL ENVIRONMENT REPORTER, 24 November 1999. ICTSD Internal Files