An information kit
on the WTO

 Prepared by
Alan Griffiths

INDEX

SECTION ONE

World Trade Organization Agreements

SECTION TWO

WTO Rules for Market Access

 

SECTION THREE

 

WORLD TRADE ORGANIZATION
Australia’s Joint Standing Committee on Treaties public inquiry into
Australia’s Relationship with the WTO

Dear friends,

This information pack is to assist you in making an informed submission to the federal Joint Standing Committee on Treaties public inquiry into Australia’s relationship with the WTO. In Section One I’ve compiled information on the main agreements that are most likely to seriously threaten Australia’s environment, workers, indigenous, cultural, democratic and/or civic rights, etc.

In Section Two I’ve detailed how the WTO’s legally enforceable trade rules could affect Australia. It is important to bear in mind two things;

  1. That all the rules in Section Two apply to the application of all the agreements described in Section One.
  2. That the rules described in Section Two brought about the demise of the MAI (Multilateral Agreement on Investment). In other words the WTO is on very shaky ground.

Given the time constraints, in Section Three I’ve only touched on some viable alternatives to the WTO. If you require a more detailed analysis, please don’t hesitate to contact me.

Now that the inquiry has formally set its’ parameters you can visit their official web site www.aph.gov.au/house/committee/jsct For those of you who wish to write a submission but don’t feel confident enough in presenting a written or verbal statement, then please don’t hesitate to contact me & I’ll be only too happy to assist you. I hope to have a standard submission ready soon for anyone who is interested.

Yours sincerely,

Alan Griffiths
Vic WTO Watch
142 Gold St
Brunswick 3056

Tel (03) 9380 6414

composer@alphalink.com.au
http://home.vicnet.au/~gcforum/VicWTOWatch.htm

 

 

SECTION ONE  

BACK to Contents

 

World Trade Organization agreements:

GATS (General Agreement on Trade & Services)

[In November 1998] the MAI (Multilateral Agreement on Investment) was defeated in the OECD (Organization for Economic Cooperation and Development). OECD Secretary General Donald Johnston said there were lessons to be learnt for the World Trade Organization (WTO) from the failed MAI negotiations at the OECD. He believes that the pressure brought to bear on governments by civil society was the single most important reason for the ceasing of the MAI negotiations.

The MAI is being negotiated at the WTO under a different agreement known as GATS (General Agreement on Trade and Services). The WTO web site says:

  • ‘The GATS is the first multilateral agreement to provide legally enforceable rights to trade in all services... And it is the world's first multilateral agreement on investment, since it covers not just cross-border trade but every possible means of supplying a service, including the right to set up a commercial presence in the export market.’
    •

    How could this affect Australia?

    Governments will no longer be ‘democratically accountable’ to their constituents nor responsible with the allocation of ratepayers funds to serve the needs of their community, ahead of new rights for foreign corporations.

     

    GATS is designed to cover:

     

    What is defined as a service?

    *Distribution including wholesale, retail and franchising. *Construction, buildings, architecture, decoration, maintenance. *Civil, mechanical and other types of engineering. *Financial services, banking and insurance. *Research and development.

    *Real estate. *Rental, credit and hire purchase. *Postal services, telecommunications or audio-visual. *Tourism, travel, hotels, restaurants. *Environmental services, including road construction, maintenance, rubbish collection and sewerage disposal, delivery, protection of the landscape and urban planning. *Recreational, cultural and sports services including entertainment, library, archives and museums. *Publishing, printing and advertising. *Transportation by every imaginable conveyance.

    * Education – primary, secondary, tertiary and adult. *Human and animal health

    What activities will GATS challenge, eg:

    State and local governments are not ‘parties’ to the GATS, yet are subject to the full extent of the obligations. The current GATS proposal will make national and local governments and their equivalents elsewhere automatically bound by the GATS once their national governments have signed.

     

    GPA (Government Procurement Agreement)

    The GPA would remove any influence future governments may wish to employ over GATS and the following agreements described below. See on p.9, Section Two for details. Luckily however, after 25 years of negotiations, the GPA has not been agreed to.

    SPS Agreement (Sanitary & Phytosanitary Agreement)

    The SPS Agreement covers countries import customs regulatory laws that protect its flora, fauna and human health from introduced diseases, unwanted pests & other dangers such as the spread of GMOs, Genetically Modified Organisms. It was this agreement that Canada used through the WTO to force our Federal Government into agreeing to import live salmon from Canada. Tasmania however, has introduced a permanent ban on the live importation of salmon to protect its own $150 million industry and banned GM crops to protect its’ clean and green image.

    Canada is currently challenging France through the WTO over its ban on asbestos.

     

    ‘While the SPS Agreement currently forbids countries from enacting some of the most effective safeguards that could minimise bio-invasion risks, the U.S. and other countries are advancing proposals that could make even existing safeguards challengeable (illegal) and a barrier to trade’ (Victor Menotti, Director of the International Forum on Globalization Environment Program).

    Listen to what India’s author, academic and activist Vandana Shiva has to say about the SPS Agreement from her recent BBC Reith Lecture. ‘… new health and ecological hazards are being forced on Third World people through dumping of genetically engineered foods and other hazardous products.


    Recently, because of a W.T.O., ruling, India has been forced to remove restrictions on all imports. Among the unrestricted imports are carcasses and animal waste parts that create a threat to our culture and introduce public health hazards such as the Mad Cow Disease.

    The US Centre for Disease Prevention in Atlanta has calculated that nearly 81 million cases of food borne illnesses occur in the US every year. Deaths from food poisoning have gone up more than four times due to deregulation. Most of these infections are caused by factory farmed meat. The US slaughters 93 million pigs, thirty seven million cattle, two million calves, six million horses, goats and sheep and eight billion chickens and turkeys each year.


    Now the giant meat industry of US wants to dump contaminated meat produced through violent and cruel methods on Indian consumers. The waste of the rich is being dumped on the poor. The wealth of the poor is being violently appropriated through new and clever means…’

     

    TRIPs (Trade Related Intellectual Property agreement)

    This now leads to TRIPs, the Trade Related Intellectual Property agreement. Just as mineral companies go prospecting around the world for mineral deposits. Bio-tech companies go bio-prospecting around the world for DNA patents. 75% of all pharmaceuticals derive in some form from indigenous knowledge from somewhere in the world. This represents an enormous threat to the very viability of indigenous cultures surviving & remaining intact in the 21st century.

    The TRIPs guarantees bio-tech companies the right to patent any form of DNA, whether it derives from plant, animal, human or a combination thereof. Through TRIPs, bio-tech companies will be able to take an idea from any indigenous culture, whether it be a formulae for illnesses, or a recipe for cooking or any type of mixture or concoction that has taken indigenous peoples hundreds of years to craft. In other words the indigenous people are the inventors. The western bio-tech companies steal it and patent the idea. These patents cost around $US 100 000 per patent. Corporations own over 5 million patents already. TRIPs guarantees the patent owner exclusive rights to grow &/or reproduce, manufacture, distribute & sell this patented idea worldwide. Meanwhile the indigenous people who crafted this idea no longer retain the right to use it. If however they continue to use their original idea the new patent owner can sue them for expropriation through the WTO.

    Bio-tech companies are especially interested in indigenous people who display unique genetic characteristics. This has caused grave concern amongst indigenous activists. Take for instance Aroha Te Pareake Mead’s article ‘Resisting the gene raiders’, published in the New Internationalist of August 1997. In this article Aroha states that

    ‘Scottish-based PPL Therapeutics is conducting research into Maori and Aboriginal peoples, in some cases to ascertain genetic pre-dispositions to what are essentially socio-economic conditions – alcoholism, lung cancer and domestic violence.’

    Take what happened to the Hagahai people who first came in contact with the ‘outside’ world in 1984. Due to this first contact many of them died from external diseases and viruses. At risk of extinction they made contact with a foreign researcher who provided inoculations which saved their lives. Unbeknown to them, he also took samples of their DNA, which was sent back to the US. The Hagahai seemed to be immune to leukemia and degenerative neurological diseases, which persuaded the US researchers to take out a patent on the genetic qualities of a Hagahai individual. Thankfully the resulting public outcry stopped this from happening. However, through the WTO this would be guaranteed to continue.

    One would have to question that if someone else owns your DNA, what rights do you have if you wish to pass on your own genetic material which would then evolve into its’ own unique DNA? In other words, if you wish to have children, does this mean you have to seek permission first and would you be better of patenting the DNA of you child to protect its’ rights?

    As absurd as this may sound, some governments have actually brought this a step closer to reality. Take for instance Iceland, who has negotiated with Roche Holding Limited, a bio-tech company, to sell the rights to its entire population’s DNA for a $US 200 million five-year-deal to develop new drugs from the data (Traders Tales, number 68, Autumn 1999).

    And what of the threat to Australia’s own indigenous people & culture? You only have to watch ‘Bush tucker Man’, or go bush in the Grampians after it has rained, to witness the abundance of bio-diversity. Sooner or later our indigenous nations will have to face this reality if we are to stay in the WTO.

    And what of our own rights now? A vast majority of Australians polled have demanded that their food be labelled. However, Australia is willing to trade away the wishes of the majority of its population to having their food labelled for possible GM (genetically modified) additives. ‘ACF understands that the Australian Government is seriously considering support for a GMO trade deal as part of its efforts to see agriculture liberalised.’

    --Press Release, November 30, 1999, Anna Reynolds, ACF

    Australia has been desperate to gain American support to help prise open access to the heavily subsidised European agricultural markets.

     

    Who is behind the SPS & TRIPs agreements?

    The Codex Alimentarius Commission is an immensely powerful and secret lobby group embedded deep within the WTO administration and it is the driving force behind these 2 agreements. Its make up consists of some of the worlds top trade lawyers who represent the worlds largest bio-tech industries. The Codex Alimentarius Commission incidentally is not only opposed to mandatory labelling of GM foods but voluntary labelling schemes as well. Take for instance a Dutch initiative for an eco-friendly wood-labelling scheme on wood imports. The WTO deemed this as a ‘non-tariff-barrier’ to trade and therefore illegal. It was stopped before it even got of the ground.

     

    ATLI (Accelerated Tariff Liberalization Initiative)

    Although halted last year thanks to the protests in Seattle, the ‘Quad’ consisting of Canada, US, Japan and the EU are pushing for its incorporation into the WTO process. The ATLI aims to privatise everything on this planet. It would ensure the right to acquire any business or property or resource in any sector, anywhere globally, including natural resources & strategic industries, ie communications & defence.

    The ATLI also includes the Global Logging Agreement that came out of APEC.

    This threatens the worlds remaining native old growth forests & most of the world’s bio-diversity by increasing the world’s total output of timber production by 9%. ‘WTO investment rules would institutionalize "cut-and run" logging around the world and prevent governments from favouring local entities which may tend to be more accountable to the land and its inhabitants’ (Victor Menotti).

    Initiatives such as eco-friendly certification of forest products have also been ruled as ‘non-tariff-barriers’ to trade and deemed illegal.

    BACK to Contents

     

    SECTION TWO

    THE AIM of WTO IS MARKET ACCESS

    The World Trade Organizations Rules for Market Access to Another Country's Resources & Labor.

    Most Favoured Nation (MFN) treats all WTO member countries as equal trading partners. Countries cannot discriminate between their own and foreign products, services, persons &/or corporations. This forbids consumer boycotts against companies or countries that abuse human, environment &/or indigenous rights, etc.

    National Treatment ensures that foreign products, services, persons &/or corporations are treated the same as domestic ones. Foreign transnational corporations (TNCs) have the same rights of access to funding on par to locally run community organisations. Countries can not, for example, place special restrictions on what foreign corporations can own, produce, transport or sell; maintain economic assistance programs for the pure benefit of ecologically sustainable development or require that a corporation hire a certain percentage of local personnel.

    Market Access denies countries the right to distinguish between national and foreign products, services, persons &/or corporations. By their sheer size and power this could give foreign corporations more leverage in gaining access to both our export and home markets.

    Expropriation

    The GATS (General Agreement on Trade & Services) is modelled on the discredited MAI (Multilateral Agreement on Investment), which inturn was modelled on an already existing treaty between Canada, the US and Mexico, called NAFTA, the North American Free Trade Agreement.

    In early April 1997, the Canadian Parliament acted to ban the import & inter-provincial transport of an American company Ethyl Corporation’s product, MMT, a gasoline additive designed to replace lead. Canada wishing to deem MMT as a dangerous toxin both to their constituents’ health and environment, was mainly following the lead of some US states that had applied their own ban on MMT.

    On April 14, 1997, Ethyl responded by filing a $251 US million lawsuit against the Canadian MMT ban, claiming that this violated the provisions of NAFTA and sought restitution of $251 US million to cover losses resulting from the "expropriation" of both its MMT production plant and its "good reputation".

    Under the WTO’s new definition of ‘expropriation’, any new government measures to protect forests (or anything in the public interest) could be challenged as an illegal ‘expropriation’ that requires full cash compensation to the foreign corporation. Known by critics as the ‘Pay the Polluter’ principle, this would send a chill over new environmental protections across the globe (Victor Menotti).

    In response to the publicity generated in Canada around its lawsuit, Ethyl also claimed that the legislative debate itself constituted an expropriation of its assets because public criticism of MMT damaged the company’s reputation. In response to the Ethyl legal challenge, the Canadian Parliament backed down and 2 legislatures had to perform the ignominious duty of retracting their MMT ban in parliament and award Ethyl with $13 US million in compensation for its potential loss in earnings. Not its actual loss, but potential loss.

    ‘Expropriation’ under the WTO could eventually lead to legally enforceable speculation. Any corporation could file suit against any government against any law that stood in the way of them making potential money. The inevitable outcome envisioned by the ‘free trade’ believers would be a ‘level playing field’, where corporations and financial institutions could come and go anywhere they please on their own terms, and therefore play one country against another for the most favourable ‘climate’ for investment, leading to a downward spiral of labour & environmental standards.

    Expropriation is legally enforceable through the WTO’s own tribunal and it has the ability to override national institutions. This court appoints three anonymous judges who are not obliged to know anything about the country of origin that the transnational corporation is challenging. They are not required to posses any prior knowledge or training on the likely affects the WTO may have on local communities that are most susceptible to harm imposed by the open market economy. The country in question appoints a representative for defence, but their respective aggrieved community in question is unable to represent let alone defend themselves. The problem here obviously is that the member country has already agreed to the principles and enforcement rules of the WTO, while its’ internal communities the country represents have not. The ruling is absolute & there is no room for appeal.

     

    List of Reservations

    To help with the transition from a democracy to an oligarchy, each country is allowed to submit a list of reservations that it wants protected from the WTO. These agreements are what is known as ‘bottom-up’, meaning, that any country can place areas of its’ economy, environment and/or civic processes etc, in a list of reservations. These reservations are then protected from the WTO. However, once submitted the country is then barred from adding additional areas to this list. The problem here is that if any indigenous nations in Australia, for instance, win a land claim that is not covered by Australia’s list of reservations, they then face the threat of losing this land claim through the WTO. Ie, if a mining interest or any corporation wishes to gain access to their land for its resources, then it can use the threat of ‘expropriation’ to do so.

    The main flaw with this List of Reservations however, is that any area that Australia deems unnecessary to protect from the WTO, will then be unprotected forever. What if Australia refuses to place its’ air traffic control services in this list of reservations? If we loose power over our air control this will inevitably lead to a break down in the quality of service it was otherwise able to offer through public accountability. There will inevitably be a massive public outcry with any loss of life. But under the WTO all future governments will be powerless to enforce consumer protection ahead of the rights of transnational corporations. The only fear these corporations have is the loss of value in their share market price.

    Unfortunately however, Australia is already pushing ‘ahead with a controversial plan to privatise air traffic control services as part of an overhaul of aviation regulation.’ (The Age, Friday 5, November 1999).

    Australia’s list of reservations are yet to be made public, in fact details of a similar information submitted under the now discredited MAI negotiations have been deemed too sensitive to be released, even after the Australia Conservation Foundation applied for them through a FoI (Freedom of Information) request.

    France is adamant in protecting its culture. America wishes to protect all levels of its government from beneath the federal line, down to local city councils. And Australia, in regards to the TRIPs (Trade Related Intellectual Property agreement), wants to protect its indigenous population (David Spencer, Deputy Secretary of Australia’s Department of Foreign Affairs and Trade, DFAT). As far as I know DFAT has not consulted any representatives from the indigenous nations of Australia.

     

    Performance Requirements on Investment

    The WTO aims to ban all performance requirements on trade and investment. Performance requirements form a basis for the protection of our rights enshrined in our democracy. These are especially important to protect the rights of all communities in each country ahead of TNCs. These include:

    1. Content requirements on all investment and business practices including the;

    1. hiring of local staff,
    2. hiring of local management who in turn may be accountable to community needs,
    3. buying from or contracting out to locally run business services,
    4. implementation of training schemes, apprenticeships or scholarships,
    5. technology transfer,
    6. implementing sustainable practices into the workplace,
    7. cleaning up dirty practices &/or re-investing in cleaner technology, etc

    2. Content requirements on all levels of Local, State &/or Federal Government procurement programs, especially regarding our publicly run, utilities, health and education institutions, etc. Requirements may include;

    1. transparent processes of contractual agreements,
    2. Australian curriculum facilitated, run and owned by Australians,
    3. commissioning research,
    4. supporting Australian Culture, ie, film, music, public broadcasting, etc,
    5. the protection, respect, education and promotion of indigenous values,
    6. the ability to promote local artistic endeavour,
    7. promoting Australian business including community based firms,
    8. accountability to community input and consultation,
    9. the ability to implement consumer boycotts, ie, Melbourne’s Moreland City Council ban on the use of GM food, to list but a few.

     

    Rollback & Standstill

    Australia’s ‘reservations’ are also subject to the ‘rollback’ clause, meaning they can expire, they have a use by date. This is proposed to be done over a three to five-year period. After repealing all legislation found to be offensive to TNCs, all future local, state &/or federal governments will be powerless to renew or enact new legislation to protect the interests of their communities ahead of the unelected rights of TNCs. This is what was known as the Standstill clause. Known as ‘deep integration’ there is no withdrawal process from the WTO. Once you’re in you’re in.

    The WTO also refuses to include legally binding language that can protect labor & environmental rights. This is actually a standard practice according to the Washington based Preamble Center for Public Policy. Negotiators site that there are other organisations better equipped to enforce these rights, such as the ILO, International Labour Organization. The problem here is that the ILO has no teeth. It possesses no mechanisms to enforce its agreements. Therefore these rights can only act as guidelines, so there is no obligation on part of the corporations or countries to respect these rights.

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    SECTION 3 Australia must withdraw from the WTO

    There are 40 parallel negotiations going on at any one time, 24 hours a day, either on line by computer, or in Geneva, the WTO headquarters. Geneva is an exceedingly expensive city to stay in. Purely by its price restraint, most 3rd world countries don’t share the same rights of access to negotiations as with their western counterparts. There is a lot of double-dirty-dealing going on. So what are the alternatives?

    On the 17th of December, a couple of weeks after Seattle, the WTO met in relative secrecy in Geneva. There was no Bill Clinton, mass protests or media. And the 3rd world blocked the same agenda that failed to get through at Seattle. Three months ago at their alternative summit to the IMF in Havana, the G77, representing 80% of the world’s population, declared their solidarity with the IMF & World Bank protestors. They also called for a kind of new Nurenberg Court such as the International Crime Court to prosecute the persons in the IMF responsible for crimes against humanity. On Tuesday, May 30, 2000, a call went out for an alliance to be formed between the Global Resistance Movement & the G77 group of countries.

    In June 2000 the ACTU rejected free trade for fair trade. Sooner or later, the International Council of free Trade Unions consisting of over 120 million members will take up the same stance. A fair trade deal negotiated between all the representatives of the world’s people is looking increasingly likely. Before we do this we need an international agreement to regulate the power of transnational corporations. The most likely institution equipped to do this is the UNCTAD (the United Nations Council of Trade & Development).

    Any future trade negotiations must be done outside the WTO. The WTO has demonstrated why it must be dismantled. Its whole architecture is fundamentally flawed & is only useful for TNCs in getting their way. It is too late to reform. The WTO must go!

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