Biggest development challenge in WTO trade talks – Correcting, not exacerbating, global imbalances*

Wigberto Tañada, Lead Convenor

We welcome this initiative of the WTO and the Friedrich Ebert Stiftung (FES) to hold here in Manila this two-day multi-stakeholder dialogue-consultation workshop for the Asia-Pacific region on the WTO trade talks.

As all of us gathered here are aware of, the trade talks under the Doha Development Round (DDR) are on their 7th year. Director General of WTO, Mr. Pascal Lamy, a former Socialist leader of France, has virtually tried everything in the books to break the impasse in the DDR talks – dramatically suspending the talks last year, quietly reviving them early this year, holding official individual meetings with the stubborn members, shepherding a critical few in Davos, and in his own words, swinging back and forth from blustering to bantering. And yes, hopping from one capital to another, in search of the elusive global consensus.

And so last February, Mr. Lamy was here. He met with the business community and a few representatives of the civil society movement. As one of the privileged civil society speakers, I told Mr. Lamy that a large number of people in the Philippines have been wary of the DDR talks. For after 12 years of existence, the WTO has not delivered the promises of more and better jobs for the workers, more and better incomes for the farmers and more and better businesses for our entrepreneurial class. After 12 years of WTO, the Philippines’ poor have become poorer and more numerous, with hunger now affecting one out of every seven Filipinos.

The poor performance of the Philippines under the WTO is apparently replicated in the uneven pattern of development in other developing countries of Asia and elsewhere. This is especially true in agriculture where global imbalances have remained huge and global trade has increasingly tilted against the small farmers of Asia. Thus, the growing number of farmers committing suicides, from Korea to India and Pakistan.

But what must have surprised Mr. Lamy in the Manila forum last February were the blunt statements made by the members of the Philippine business community. They told him frankly and unequivocally – that the global trading system under the WTO is tilted against the poor developing countries, that the giant agricultural subsidies of the North are fueling hunger in the South, that the lower tariffs of the rich developed countries can not make up for the higher protection extended by patent monopolies on technologies, and that the one-size-fits-all liberalization formula is no development formula at all. The WTO and the trade liberalization ideology it has come to represent have no social constituency in the Philippines and many parts of the world.

This is why the DDR talks, focused as they are on more market access opening in agriculture, industry and service sectors, are deadlocked. Advocates of fair and just trade want a correction, not an exacerbation, of global trade imbalances. They demand the universal observance of the principle of special and differential treatment (S&DT), for not all countries are created equal. And not all have the capacities to follow a uniform formula of liberalization. Equal rules for unequal partners often lead to more inequalities and sufferings among the weak and vulnerable.

This is why if this WTO-FES dialogue-consultation workshop is meant to help break the impasse in global trade talks, the focus of the discussion should be on how the existing global trade imbalances can be reduced, if not eliminated. We are familiar with the major sources of imbalances – unfair agricultural subsidies, unfair monopoly protection for drug patents, unfair commercialization of basic services needed by the poor, unfair use of sanitary and phyto-sanitary measures by the rich, unfair non-recognition of the right of the poor countries to Special Products and Special Safeguard Mechanisms in agriculture, and so on and so forth. Strangely, the DDR talks are not giving enough attention to these issues; instead, the overwhelming focus is on how to further open up liberalized markets through the so-called Swiss formula for industry and the different market access formulas for agriculture and services.

At this point, let me clarify – briefly – the stand of our Fair Trade Alliance on the DDR and the WTO. Our Alliance is not against multilateralism. In fact, we prefer it over the bilateral free trade recipes being pushed down our throats by the big economic powers. Our disappointment with the WTO is that it has not lived up to its vision of development eloquently captured in the Preamble establishing the WTO in 1995, which states that member countries recognize that

“relations in the field of trade and economic endeavor should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development”. (Preamble of the Agreement establishing the World Trade Organization)

The WTO has not lived up to this lofty vision because it has allowed powerful global interests to concentrate in the promotion of a one-sided, narrow and uncritical liberalization formula, the same formula that is now being foisted in the DDR talks. No, we are not against liberalization per se. But it should be calibrated to our needs and to our level of development. There should also be space and flexibility for member countries to calibrate protection for the weak and vulnerable in society.

So if we want this DDR round to move on and succeed, let us be guided by the Preamble of the WTO itself. Let us not allow ourselves to get boxed in in the narrow liberalization box. Let us make the trade talks truly developmental in character and orientation. For the challenge, to repeat, is how to correct, not exacerbate, global imbalances.

—————————

Speech delivered at the multistakeholder workshop on “What future for the Multilateral Trading System-Development Perspectives from Asia” organized by the World Trade Organization and Friedrich Ebert Stiftung, held at Discovery Suites 25 ADB Avenue, Ortigas, Metro Manila, June 4-5, 2007.

World Trade Organization
Doha Development Agenda
Friedrich Ebert Stiftung

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