 Trade Justice mass lobby
Introduction
International trade rules are complex and reach into many areas, which is all the more reason why they should be held up to public scrutiny. They affect us all.
Trade can play an important part in reducing poverty and improving our quality of life. It can generate jobs and wealth. But currently these benefits are being captured by those who already have the most. Poorer countries and people, and the environment, are at best missing out, and in some cases being harmfully exploited.
The Trade Justice Movement is a fast-growing coalition of civil society organisations in the UK. We are not against trade, or rules to govern trade. In fact, we want international trade rules - but rules that are fair.
These briefings outline some of the reasons why we believe current international trade rules must be fundamentally changed if they are to benefit us all.
They illustrate ways in which the existing rules favour the interests of the most powerful trading nations and the largest corporations at the expense of the wider public interest.
An opportunity for fundamental change
A new set of international trade negotiations was launched in Doha in November 2001. This provides an opportunity to change the rules. But it also poses the threat of more of the existing type of rules being extended to cover new areas of economic activity.
This summer, trade rules will be high on the agenda of three international summits:
EU Heads of State Summit: 21-22 June, Spain
G8 Summit: 26-27 June, Canada
World Summit on Sustainable Development: 26 August - 4 September, South Africa
The Trade Justice Movement urges the UK government to take a lead at these summits in fundamentally changing trade rules so that they place as their highest priorities the fight against poverty and sustaining the environment.
In particular, the Government should:
- support a new approach to food and farming to protect poor farmers' livelihoods and the environment
- call for reconsideration of plans to liberalise vital services, such as water
- support new global laws to regulate the activities of international corporations
How MPs can support the growing movement for justice in international trade:
- Sign the Trade Justice Early Day Motion to be tabled on June 18, 2002
- Write to the Secretary of State for Trade and Industry on one or more of the issues outlined in these briefings
- Contact the Trade Justice Movement secretariat for points to raise in parliamentary questions or debates.
Case study: Food
Philippe works in a rice mill in Haiti. The mill was built so that poor farmers could process their rice and sell it at local markets. However, while rich countries continue to subsidise their rice exports, Haiti has been forced to reduce significantly protection for its farmers. This means Haiti has been flooded with cheap rice imports, and it is becoming harder and harder for Philippe to find a market for his crops. With little alternative work, Haitian farmers like Philippe and their families face a desperate situation.
The problems
Over half the world's extremely poor people depend on farming or farm labour for their livelihoods. And yet developing countries are being prevented from protecting their poor producers against unfairly subsidised food from rich countries with whom they cannot hope to compete.
In this and other ways, international trade rules are threatening poor communities' access to safe and nutritious food; they are destroying bio-diversity, damaging the environment and preventing small farmers from earning a decent living through local food markets and exports.
Import Duties
International trade rules are limiting the ability of poor countries to protect their farmers from unfairly subsidised cheap imports. During the 1980s and 1990s, World Bank and International Monetary Fund (IMF) reforms required many developing countries to drastically cut duties on imported food, so poor farmers lost their markets at home. However, if poor farmers try to export their crops they face prohibitive trade barriers imposed by rich countries.
Subsidies
Developing countries are also denied the flexibility to support their farmers. Subsidies were cut by reform programmes imposed by the World Bank and IMF and are now capped by the World Trade Organisation (WTO). In contrast, the reductions in subsidies that rich countries should have made to their own farmers under WTO rules have not materialised.
Millions of smallholder farmers in the developing world are struggling to survive on less than £260 a year in total income. They are competing against American and European farmers who receive an average of £15,000 and £11,500 a year respectively in subsidies.
Schemes like the European Union's Common Agricultural Policy tend to support the richest farmers and the most environmentally damaging farming practices. In particular, current subsidies encourage over production in Europe and the US and the unfair dumping of cheap food imports in poor countries like Haiti.
Patents
The WTO Trade Related Intellectual Property Rights Agreement (TRIPs) is allowing international companies to secure patents on staple crops that have been used by farmers in developing countries for generations. This poses a threat to poor farmers who may be forced to buy their seeds from companies and pay them royalties. Monopolies over seeds are reducing bio-diversity and enabling companies to introduce genetically modified crops.
A lethal mix
The current prescription for global food trade is lethal. Rich countries support their wealthiest farmers and most environmentally destructive farming. Cheap subsidised imports destroy the livelihoods of farmers in developing countries, and there is little their governments are allowed to do about it. Large international companies are taking out patents on seeds and monopolising poor farmers markets.
Make world trade work for the whole world
The Trade Justice Movement is campaigning for international trade rules based on the needs of poor people and sustaining the environment. Trade rules must allow for sustainable trading and for protection and intervention, where necessary, in order to promote important national development objectives such as food security, poverty reduction and environmental standards.
Case study: Water
When the Argentinian government handed over the public water system in the poor province of Tucumán to the French company Vivendi, the water turned 'inexplicably' brown. At the same time water rates doubled and people couldn't afford to pay their bills. Residents mounted a non-payment campaign and water operations were eventually returned to public ownership.
The problems
Drinking water is a basic human need and should be available to all people, regardless of their ability to pay. But if the European Union (EU) gets its way at the World Trade Organisation (WTO), the world's water supply will soon be controlled to big business.
Trading away basic rights
Many countries in the developing world have already come under intense pressure from the World Bank and International Monetary Fund (IMF) to privatise their water supplies. This has often raised prices above the level that poor families are able to afford, forcing them to collect water from untreated sources such as rivers and threatening their basic right to health.
Now these basic rights to water and health are being traded away through an international agreement called the General Agreement on Trade in Services (GATS). GATS rules apply to 'services', which includes anything from education provision to rubbish collection, tourism services to transport policy, health delivery to the setting up of retail stores.
The aim of GATS is to remove from such services government regulations that are considered 'barriers to trade'. Many of the regulations this will eliminate are government policies designed to regulate corporate power or to ensure universal access to basic services irrespective of people's ability to pay. And once governments have opened up particular service sectors to GATS rules, there is effectively no going back.
In whose service?
So far, there has been no proper assessment of the social, economic and environmental impact of GATS. The UK Government's current support for the agreement reflects the demands of business lobbies. A senior UK trade negotiator recently admitted that "the pro-GATS case was vulnerable when non-governmental organisations asked for proof of where the economic benefits of liberalisation lay." Meanwhile, the European Commission has openly acknowledged that "GATS is first and foremost an instrument for the benefit of business".
Our right to know
At the Ministerial Meeting of the WTO in November 2001, new deadlines were set for negotiations to expand the coverage of GATS. By 30 June 2002, countries must submit requests for service sectors they would like other countries to include under the agreement - and the EU is pushing hard for water to be included. By 31 March 2003, countries will have to state which of their own services they will allow to be covered by GATS rules. Parliamentarians and the public have a right to know what services the UK/EU is preparing to negotiate on, but the Government has given no indication of when (or if) this information will be made available.
Make trade work for the whole world
The Trade Justice Movement is campaigning for trade rules such as GATS to put the interests of poor people and the environment ahead of new rights for companies.
Case study: Jobs and corporate regulation
In 2001, Gildardo and Marta, together with 230 other banana workers at the San Pedro plantation in Colombia were made redundant overnight when Dole, the world's largest fruit company, decided to cut costs and shift more of its banana production and trading activities to Ecuador.
Although unions face severe repression in Colombia, costs are cheaper in Ecuador, partly because there are no unions arguing for decent wages and benefits. As a result, child labour and lower wages for women workers are common, the environment is polluted and local communities suffer severe health problems from aerial spraying of chemicals.
The problems
Increased trade and investment internationally has meant that crucial decisions on local production, jobs and employment conditions are made in far-off places by multinational companies that have little allegiance to the communities most affected. The rules that govern the behaviour of the international companies are therefore crucial in determining whether these decisions are likely to promote sustainable development or to undermine it.
Declining role of governments
The World Trade Organisation (WTO) has placed more and more restrictions on the role that governments can play in promoting domestic businesses and creating decent jobs. Existing WTO agreements on services, investment and intellectual property rights give rights to multinational companies, while restricting the role of governments. This is despite the fact that all of the rich countries and the Asian 'tiger' economies used a wide range of government interventions in the past to boost their economies and promote development.
On top of this the European Union (EU) is pushing hard for negotiations to start next year on a new agreement on investment that would remove further powers from government to regulate investment, while giving new rights to companies. This must be opposed.
A change of direction is required - to regulate companies, not governments; to give priority to removing barriers to development, not barriers to trade; and to add enforceable responsibilities on companies, not enforceable rights.
Voluntary codes
In some cases, it will be in the interests of companies voluntarily to adopt sound practices. Many of the UK's leading companies are members of the Ethical Trading Initiative - a joint scheme formed by non-governmental organisations, trade unions and companies - that helps to ensure International Labour Organisation core standards, such as the right to form trade unions, are enforced throughout companies' supply chains. The rapid growth of the fair trade movement is also increasing the power of many poor and marginalised producers.
The need for enforced regulation
However, voluntary initiatives are no substitute for the role of government in regulating companies. Governments must set the standards to ensure that companies do not compete in a "race to the bottom" on issues such as labour rights or the environment. Instead they must create incentives for companies to adopt socially beneficial practices. Currently, there are no enforceable international rules to establish acceptable operating standards and make companies accountable to workers, local communities and the host societies wherever they operate.
Make trade work for the whole world
The Trade Justice Movement is campaigning for new global rules to regulate and re-direct the activities of international business towards pro-poor and sustainable development.
Mass lobby of Parliament, 19 June 2002
Policy Proposals
Trade rules will be high on the agenda of the G8 and the European Heads of Government meetings in June, which precede the crucial World Summit on Sustainable Development in South Africa in August.
The Trade Justice Movement calls on the support of all Members of Parliament in urging the UK Government to use the opportunity of these important summits to take a lead in fundamentally changing international trade rules.
It is calling for international trade agreements that have as their highest priorities the fight against poverty and sustaining the environment. As a first step, the UK Government should:
a) support a new approach to food and farming to protect poor farmers' livelihoods and the environment:
- Support the right of developing countries to protect their food security and the livelihoods of their poorest farmers - including using import duties against floods of unfairly subsidised food imports. To guarantee this right for developing countries, the UK government should as a first step call for the inclusion of a Development Box within the WTO Agreement on Agriculture.
- Within the European Union, call for reform of the Common Agricultural Policy to remove all subsidies that cause the unfair dumping of food in developing countries. European subsidies should only be used to achieve sustainability, environmental and rural development objectives, focusing in particular on small-scale poor farmers.
- Support a ban on patents on plant genetic resources for food and agriculture. This would protect farmers' rights to own, grow, exchange and sell seeds and to avoid corporate control of the resources for agriculture. These rights should not be undermined by the Trade Related Intellectual Property Rights Agreement (TRIPs) agreement of the WTO.
b) call for reconsideration of plans to liberalise vital services, such as water:
- Call publicly for a thorough and independent impact assessment of the General Agreement on Trade in Services (GATS) to take place before the current phase of negotiations can continue.
- Place all European Union negotiating positions on GATS in the public domain.
- Publicly state that developing countries should not be pressured to liberalise services other than in accordance with their own development objectives.
c) support new global laws to regulate the activities of international corporations:
- Change trade rules so that governments retain the right to regulate foreign investors in the interests of poverty reduction and sustainable development. There are opportunities to start such reforms in the trade negotiations launched at Doha in November 2001.
- Create a new global mechanism for legally binding regulation of international companies, outside the World Trade Organisation (WTO), ensuring that they compete fairly and comply with internationally agreed standards on corporate responsibility, including human rights, environment, technology transfer, disclosure and reporting. The World Summit on Sustainable Development, to be held in Johannesburg, South Africa in August, represents an important opportunity to start this process.
How MPs can support the growing movement for justice in international trade:
- Sign the Trade Justice Early Day Motion to be tabled on June 18, 2002
- Write to the Secretary of State for Trade and Industry on one or more of the issues outlined in these briefings
- Contact the Trade Justice Movement to discuss other ways to help, for example by tabling a question to the Prime Minister or requesting an adjournment debate.
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