From Aefjin
Africa and the New Round of the World Trade Organization (WTO)
(25 February)

---

(From AEFJN)

    Document Plan
    1. Summary
    2. Overview

    What is happening to people we know
    Trade and Africa
    The World Trade Organisation
    Africa and the WTO
    The Millennium Round
    The issues of the New Round of and Africa
        The review of the existing issues
           The GATT
           Services
           Agriculture
              Position of different countries on the review of the Agri. Agreement
           The TRIPS
        The new issues
           Investments
           Competition Policy
           Government Procurement
           The WTO and labour rights
           Environmental issues
        How these new issues affect Africa

    3. Position of AEFJN
    4. ACTION: thins you can do
    5. Further Information

---

1.  Summary

The World Trade Organization (WTO)
As a result of the Uruguay Round of Trade Negotiations the World Trade Organization (WTO) was created in 1995. The WTO was set up with the aim of promoting consumption and raising living standards throughout the world, by encouraging and regulating free trade in the global market. However, the WTO has disregarded some of its commitments and has often favoured the interests of multinational companies, at the expense of African and other poor countries. The WTO transformed the GATT (General Agreement on Tariffs and Trade) into an enforceable global commercial code for the 135 member countries. The principle of economic efficiency and free trade that directs the action of the WTO dominates any other values, such as sustainable development, social standards, health safeguards, democracy and care of the environment. The aim is short-run corporate profits, which means providing Transnational Corporations (TNC) with a cheap supply of labour and natural resources. The WTO guarantees TNC access to foreign markets without requiring that TNCs respect countries’ domestic priorities. The main deciders in the WTO are USA, the EU, Japan and Canada.

The New Round of Negotiations
The EU has taken the opportunity of the Ministerial Meeting of the WTO in Seattle (USA) in December 1999 to ask for a New Round of Trade Negotiations that it has called “The Millennium Round”. Many other industrial countries have backed the EU, have proposed new issues they would like to introduce in the WTO and have agree on 3 years negotiating period. The “new issues” include what was never before considered as “trade” but that if taken up in the WTO will be converted in “merchandise” without caring for the common good. This includes: services (health, culture, education, water, energy…); investments (free access to markets and full protection of investments, similar to the MAI that civil society managed to stop in October 98) Governments will be unable to direct an investment policy that will benefit the country. This will favour short-term profits and the accumulation of wealth over sustainable development. Competition Policy - opening free competition among companies- and forbidding any protection of local firms. To gain competitivity companies move where salaries and working conditions standards are low and where there are no environmental laws. This means no rights for the workers. Developed countries defend labour and environmental standards, as an excuse to let it go and obtain what they really aim at in agriculture and services.

Africa position in the New Round of Trade Negotiations
Most African countries opposed the new Round of Negotiations arguing that while the developing countries have liberalized their markets, the rich countries are not keeping their commitments to the Uruguay Agreements and continue their “protectionist” policies, concerning products on which the developing countries could have an “advantage” (textile, clothes and agriculture). These countries fearing the “competition of cheaper products” keep high custom duties making it difficult for the developing world to enter into these markets.
They industrialised nations to reduce substantially customs duties, notably on textiles, clothing and agricultural products, abolish anti-dumping measures and abandon export subsidies for their agricultural products.  “The export earnings of developing countries could rise by USD 700 billion a year and their GDP by 12% - which represents 14 times the amount of aid they receive- if the rich countries opened their markets”  (Michael Bailey - Oxfam). “ We (European Union) preach humanitarian values and we practise protectionism” (John Bowis, European Parliamentarian).
African countries know they will have to agree to a New Round of Negotiations and ask the rich countries to comply to the commitment they made at the Uruguay Round before starting new negotiations. The African countries have presented a series of proposals for the coming negotiations, so that the WTO takes into account the situation of the most vulnerable countries. They ask for measures to protect Food Security; for a period of 10 years to comply with the obligations of the Investment and Intellectual Property Agreements. They ask for market access for all products, and the reduction of custom duties for manufactured products, especially textiles and agriculture where they could be competitive but where the industrialized countries fear competition.

Agriculture
Agriculture is vital for Africa. It provides food and means of living, to the 70% African population living in rural areas. It is also a source of foreign currency. But agriculture liberalization threatens all this. African markets are often flooded with European and USA subsidized agricultural products (meat and cereals) that make fall prizes, deteriorating the livelihood of farmers and menacing local food security. The best arable land is dedicated to “export crops” rather than meeting local needs.
African countries want to renegotiate the present Agreement of Agriculture of the WTO, because they see in it a thread to local economies. They ask for the recognition of food and water security (not to be considered as trade goods); protection against the dumping of subsidized agricultural products from the rich countries; total reduction of import tariffs, to be able to export “processed food”.

Protection of Plants varieties
The Intellectual Property Rights (TRIPs) Agreement allows, “life patenting” (genetically modified plants and organisms) but does not recognize the rights of local communities to their traditional knowledge. This could lead to the patenting of their agricultural biodiversity by TNCs, decreasing the farmers’ access to seed, threatening food security and leading to a lost of genetic resources and biodiversity.  African governments want to eliminate “patenting of life” from the agreement.

The consequences of WTO for Africa
African countries are the “losers” of the globalisation. The richness of the continent (raw materials, petrol, minerals, agriculture, wood, fishing…) are being exploited by multinationals and is taken out of the country with the minimum of benefits for the Africans. The opening of the markets to food imports is destroying local agriculture and jeopardizing food security. The few new factories offer very low standards of work conditions and destroy the environment. The industrialised countries want the free circulation of goods, companies and capitals throughout the world, but do not allow the free circulation of persons from the South towards the North (economic migration). The social standards have diminished (health, education, social commitments) and the conditions of workers have deteriorated.

Position of AEFJN. What we ask for:
 

---

2.  OVERVIEW

What is happening to people we know

---

Trade and Africa
The liberalisation of Trade

Free Trade has been made possible by the bringing down of all barriers so that goods and services can travel freely around the world setting up the global market. This move has reached Africa and is having direct consequences on its people and their living standards.
Many changes have taken place in Africa these last years. Shops are full, products of all kinds are exhibited though only available to a few with money. Importers make great business. There is a new class of “rich people”,… But at the same time workers lose their job, cheap import products cause the ruin of small farmers, salaries lose buying power; governments have less possibilities of defending policies to protect their young industry; as well as social standards and the health of its citizens. Natural resources are used without measure: deforestation grows, mines are exploited without caring for the waste, causing pollution to the environment; big ships fish in the African coasts emptying one of the richest world marine reserves; The Namibia platform is exhausted and the West African coast follows the same path… Over-fishing prevents the recuperation of the oceans; soil erosion produces the loss of arable land and contaminated waste is buried on the edge of the African coasts or even within the continent, being a real danger for the population. Modern and cheap technologies replace the “home-made”, leading to greater unemployment. Cheaper goods or services flood the market and the local prices have to be aligned to those of the international markets… Free market is having adverse consequences for the majority of Africans; increasing poverty, diminishing free social services and widening the gap between the rich and the poor.

Free Trade does not profit the majority of the world. While there has been a rapid growth in global trade and investments, the majority of the population suffers from the deterioration of their living conditions. The richest 20% of the world population consumes 86% of the world’s resources, while the poorest 80% of people consume just 14% of resources. The World Trade Organisation (WTO) rules pushing for globalisation have hastened these trends by breaking the barriers and allowing production to go where the labour is cheaper, workers are most easily exploited and environmental costs are low.

The globalisation as developed by economic powers presents a major democratic risk for Africa. It has institutionalised injustice. It reverses priorities by putting trade and economic standards above political, social and environmental standards and by setting privileges for short-term profits and immediate profits against a sustainable development, a just social order and an ecological environment. In most African countries Trade liberalisation has reduced access to essential goods and services : food, healthcare… ; and has increased the concentration of wealth in the hands of a few ; leaving the market at the power of Trans-National Corporations (TNC).

The way companies and countries trade across borders has profound implication in the quality of life and in the social and political sphere. Today international commerce has become an important force shaping the lives of the people of Africa and the African governments are worried about the consequences of Free Trade on their economy, social services and their small industrial and services companies.

Trade and other non-political multilateral decisions (by many countries) can affect greatly the life of people. As an example, the decision of allowing the use of vegetable fats other than cocoa butter in the manufacture of chocolate, will make a large sector of the economy collapse in all the cocoa producer countries (Ivory Coast, Senegal, …). The immediate consequence of this decision was a reduction in demand for cocoa beans ; accompanied by sharp drop in cocoa prices ; loss of jobs in cocoa-processing industry ; loss in export earnings which might have strong consequences in the public expenditure and even interrupt the industrialisation and modernisation of other sectors.

The pillars of the globalising economy are: « free trade » focus of the WTO, the Structural Adjustment Programs (SAP) of the International Monetary fund (IMF) and the Multilateral Development Banks which required African countries to open their markets.
 

---

The World Trade Organisation

Since 1948 the General Agreement on Tariffs and Trade (GATT), formed by 23 western block countries aimed at liberalising and regulating the international trade on goods by reducing the customs duties, thus facilitating the circulation of goods. By the 1980’s it became clear that given the many changes taking place in the world a revision of GATT was necessary. Then in 1986 in Uruguay a New Round of Trade Negotiations started called the Uruguay Round. Despite the difficulties met with on the negotiations in agriculture, the negotiations came to an end in 1993 and the Trade Agreements were signed in Marrakech (Morocco) by 131 countries. They became effective in January 1995.

One of the most important agreements that came out of these negotiations was the establishment in January 1995 of the World Trade Organisation (WTO) in Geneva. Its mission was to administer the Agreements and rules on International Trade and to liberalise the market bringing down all that interferes with on the way to the free market.

The creation of the WTO was proclaimed as a means of « enhancing the creation of global wealth and prosperity and promoting the well-being of all people in all member states » by promoting sustainable consumption and regulating the trade in the global market. Today 5 years later we see that not only has the WTO not accomplished this objective, but the liberalisation of the market has increased the difficulties of the most vulnerable countries while it has mainly profited the Trans-National Companies (TNC). « What is so painful is that these objectives have not been realised in my country – nor in our continent, or indeed for most of humanity » (Nelson Mandela, at the WTO 1997).

While the GATT dealt only with the trade on goods, WTO covers a larger field, dealing also with services and Intellectual Property.
The rules governing the international trade came out of the Uruguay Round and are gathered in three main agreements.

These agreements are the legal rules of International Trade and they are binding for all the member states which at the end of negotiations countries either accept or reject the « package » of Agreements as a whole as they cannot decide to sign one part of the deal and not sign another part.

The three main objectives of the WTO are:

« Most favoured nation », and « National treatment » are the two underlying principles of the WTO.
 

Members of the WTO

The 134 countries members of the WTO have had to adapt their national legislation to the rules of the WTO. The most powerful members of the WTO are USA, the European Union (EU), Japan and Canada. Developing countries are the majority in number (2/3), but not in power.Russia and China are observers and candidates to the WTO like other 35 countries among which are: Algeria, Sudan and Seychelles. Ethiopia is an observer but has not applied to join. 39 African countries are members  of WTO: Angola (23 November 1996), Benin (22 February 1996), Botswana (31 May 1995), Burkina Faso (3 June 1995), Burundi (23 July 1995), Cameroon (13 December 1995), the Central African Republic (31 May 1995), Chad (19 October 1995), Ivory Coast (1 January 1995), Egypt (30 June 1995), Gabon (1 January 1995), the Gambia (23 October 1996), Ghana (1 January 1995), Guinea (25 October 1995), Guinea-Bissau (31 May 1995), Kenya (1 January 1995), Lesotho (1 January 1995), Madagascar (17 November 1995), Malawi (31 May 1995), Mali (31 May 1995), Mauritania (31 May 1995), Mauritius (1 January 1995), Morocco (1 January 1995), Mozambique (26 August 1995), Namibia (1 January 1995), the Niger (13 December 1996), Nigeria (1 January 1995), Rwanda (22 May 1996), Senegal (1 January 1995), Sierra Leone (23 July 1995), South Africa (1 January 1995), Swaziland (1 January 1995), Togo (31 May 1995), Tunisia (29 March 1995), Uganda (1 January 1995), the United Republic of Tanzania (1 January 1995), Zaire (1 January 1997), Zambia (1 January 1995), Zimbabwe (3 March 1995)

The Dispute Settlement Mechanism (DSM)

The real force of the WTO lies in its Dispute Body, which acts only under the complaint of a country member against the practice or trade legislation of another country. The dispute panels decide whether national laws are « barriers to trade » in which case a sanction is decided which becomes active that same day and applies to all the countries in the same situation .e.g.; in the bananas dispute between the EU and USA, the decision obliges the EU to offer to any OMC country the same advantages it offers to the ACP (African, Caribbean and Pacific) countries under the Lomé Treaty. The beneficiaries are the US companies; the main banana exporters from South America, while the ACP banana exporter countries, many of which depend strongly on the banana exports will suffer the consequences.
The dispute settlement system has been used to challenge national social, public health, and environmental laws. Its decisions influence the life of millions of persons. e.g. As a consequence of the EU losing the case on the banana settlement, the exports of pineapples and bananas of Ivory Coast will decrease about 150 thousand millions of Francs CFA, thereby impoverishing small-scale planters. This decision of the dispute panel of the WTO means the bankruptcy for millions of small farmers.
To introduce a case in the Dispute Body of the WTO is terribly expensive for the countries involved; needs a lot of technical expertise that most African countries cannot have; and the sanctions can destabilise the economy of a vulnerable country. This explains the fear most African countries have of breaking the WTO rules and being brought to the dispute panel.
 

The WTO and democracy
The main decision body of the WTO is the Ministerial Conference that gathers together every two years the governments of the member states. Though apparently decisions are taken by “ consensus”, the reality is that most decisions are taken by a reduced group of members. The « Quaint » formed by USA, EU, Japan, Canada and Australia are the main « deciders ». The big corporations influence the most powerful governments and as a result the WTO serves mainly their interests. This is the “return” the big companies receive from their sponsoring presidential and political election campaigns, and the reason why the companies sponsor politicians.
Most of the key decisions at the WTO are made in ” informal groups” where only a few countries are invited (usually the main industrial countries having interests on the issue discussed) and where the main discussions and negotiations take place. The result worked out in these groups are brought before the formal meeting (with all the members) and made into decisions. “This « practice » is chosen because of its « efficiency » and the need of small groups to make the negotiations go forward”, say the “decider” countries. Even when some developing countries are invited to these “informal groups”, it is only at the last moment and the ratio of North-to-South countries favours the North. The majority of members are non-invited. Because the decisions are taken behind “closed-doors” the Northern countries are able to put pressure on the developing countries present, to give in.
Most African countries are not invited in the restricted meetings and the big countries have strong means to dissuade them of a veto in the formal meeting. As a result the decisions are biased against the developing countries’ interests.  At the Singapore Conference many Ministers and officials from the developing countries were kept in the dark of what was going on at the negotiating table.
EU facilitates ACP work in Geneva
The European Union has agreed to provide the finances (10 million euros) for a better coordination of ACP (African, Caribbean and Pacific) countries within the WTO and a better insertion of the ACP in the world economy. This project aims at preparing the next round of multilateral trade negotiations, so that the interests of the ACP may be taken into consideration.
This project includes financing the permanent presence in Geneva of experts from the ACP General Secretariat. This will enable the ACP: to be better informed on all WTO activities; to define their own trade objectives and to co-ordinate their strategies and actions; to further their interests within the WTO
 

---

Africa and the WTO

The Uruguay Round contained some liberalisation measures e.g. commitments to cut their customs duty rates on imports of goods. Although in some cases, tariffs (taxes on imports) are being cut to zero like in the 1997 agreement on information technology products, which could benefit some African countries, the overall package is having a negative impact on Africa. The developed countries have kept the “tariffs peaks” making it difficult for exports of critical interest to developing countries in products where these could be competitive.
 

An unbalanced implementation of the Uruguay Round Agreements has reaped results only for a handful of multinational companies and has not improved the life of many Africans. Most developed countries have not accomplished their promises regarding liberalisation, they have kept tariffs and subsidies while at the same time asking the developing countries to eliminate theirs.
During the past decade most African countries have embarked on a macroeconomics stabilisation, structural adjustment, economic policy reforms and public sector restructuring. These efforts have provided a sound economy for attracting trade and investment. In the last five years there has been a steady growth in Africa though in 1998, economic growth was less strong (3.6%, compared to 4.6% in 1997 and 4.9% in 1996). Out of a total of 48, only 13 countries had a growth rate of 5% or more, and 29 countries had positive growth (1999 World Band Report). These results were obtained at terrible social cost and caused a lot of suffering among the « ordinary people » whose living standards have greatly deteriorated during the last decade and who have not yet seen the benefits of the “free trade”. Poverty is higher in most African countries than elsewhere in the developing world. Forty per cent of the population of Sub-Saharan Africa lives on less than $1/ day.

African countries believed that free trade can offer them the opportunities they need to enter into the world market. They are committed to the liberal and open trade policies of the WTO but they would like that these policies integrate the “development dimension”.

 Trade rules negotiated at the WTO are increasingly affecting national regulations and the ability of governments to regulate and ensure public protection, health care,…, as these laws are perceived by multinational companies as a barrier to developing their business. For example in 1997, the South African government intended to pass a law to facilitate access to cheap medicines for all. This meant encouraging use of generic drugs, (drugs whose formula has been made public and equivalent to more expensive trade-mark medicines), banning the practice of manufacturers offering economic incentives to doctors who prescribe their products and allowing the import of drugs from the cheapest market. The big pharmaceutical companies opposed this law and challenged the SA government with bringing the case before the Dispute Panel of the WTO. (related by Public Citizen)
African firms and farmers are small and lack the technology and marketing skills to compete in the world market. The opening of markets has mainly benefited the transnational corporations at the expense of national African economies and the small farmers, workers, and jobless persons. It is predicted that while the Uruguay Round Agreements would increase the world’s wealth by 200 billion dollars, sub-Saharan African countries could end up being worse off by losing their preferential tariff agreements with the richer countries.

While at the UN, the principle is “one nation one vote”, this is not the case at the WTO, where the big countries are the real “decision-makers”. Africa has very little saying and on top of it, it has not the means to participate fully in all the discussions in the working groups in Geneva, because it lacks economic and technical means. Only 26 out of the 39 African countries have a permanent ambassador in Geneva, and only Uganda has an ambassador specially attached to the WTO. Even the countries having ambassadors in Geneva they can hardly follow all that is going on at the Geneva WTO Centre. One ambassador explained it with a comparison. “To go to the WTO is like going to a “multi-film”, you know there are plenty of films going on but you can watch only one” There are so many things going on at the same time at the WTO that only the big delegations having plenty of people and of specialists can follow what is going on and participate fully in the discussions.
 

---

The Millennium Round

The first WTO Ministerial Conference in Singapore

During the first Ministerial Conference of the WTO in Singapore (1995) the industrial countries wanted to add to the three existing issues: goods, services and intellectual property, other issues such us: investment rules, competition policy and government procurement.
Most African and developing countries opposed - already 4 years ago -, having agreements on these new issues, but under the pressure of the powerful countries they  agreed to forming « working groups » to discuss these issues. The main opposition of the developing countries centred on proposals to include issues of labour and environment standards to which they were opposed fearing that this would be a way of « putting them out of the commercial scene » by reducing their advantages of cheaper production cost.

The Ministerial Conference in Seattle (USA)

From November 30 to December 3, 1999, the 135 member governments of the WTO are meeting in Seattle (USA) for the Third Ministerial Conference of the WTO. At this summit decisions will be taken for the working program and agenda of the WTO for the coming years.

The Millennium Round or Seattle Round

The European Union (EU) has proposed to start at Seattle a new Round of Trade Negotiations that it called The Millennium Round, in view to a greater liberalisation of the market. Other industrial countries have agreed to start a New Round of Trade Negotiations to last not more than three years. The final decision about the Negotiations will be taken at the summit of Seattle.
Industrial countries push for further liberalisation by introducing new issues in the WTO to which developing countries are very « sensitive »: investments, competition policy, government procurement, as well as to enlarge the scope of the existing agreements to forest, education, and non-trade issues such as labour and environmental standards….
Most developing countries oppose this new Round of Negotiations arguing that they are still coping with the difficulties of the liberalisation coming out of the Uruguay Round and learning how to manage to play both, internal and external economies. They argue they do not have the capacity to enter into another Round of Negotiations and they know they will have very little to gain from new areas of negotiation. « A new comprehensive round would entail an unsustainable burden and should not include new issues » (Southern and East African “Seatin” workshop – Kampala, March 1999

Position of African countries

Many African countries have spoken against a new Round of Negotiations.  Their position is that the WTO should allow developing countries - which are the majority – the time to tackle the problems that the implementation of the existing Agreements has originated. They are certain that if other issues enter into the WTO, it will be disastrous for them. « We would like to see the successes achieved in the existing Agreement consolidated before exploring new areas » (Prime Minister of Ivory Coast at the WTO, 1997)

Many developing countries are being pressurised to agree to a Millennium Round of negotiations, but as they do not want to accept it, they are being promised a re-look at the problem areas, as part of a bargain package. Though  African countries oppose a new Round, they know they will have to accept it, and they are preparing what they would like this new Round to take in. Zambia, co-sponsored by Kenya, Uganda, Tanzania and other African countries has suggested possible actions to be taken at the New Negotiating Round in order to make the system of the WTO more responsive to the needs of developing countries. They ask for a reform of the WTO, and say that the new talks at the WTO cannot be undertaken, at least the interests of the developing countries  will be taken into account. They stand up for the right that the distribution of benefits of the free trade will work to the advantage of everybody .

African Trade ministers met in Algiers (Sept 99) “to guarantee the effective participation of African countries in the negotiations”. They endorsed the message of the G-77 group of developing countries and they ask for the Seattle Ministerial Declaration to include commitments to:

Revise the TRIPs Agreement to identify means to realise its objectives with regard to technology transfer to African countries. Ensure that TRIPs Agreement does not prevent developing countries from granting licenses for the local manufacture of drugs considered essential by the WHO (World Health Org.)
 

---

The Issues of the new Round of Negotiations and Africa

The review of the existing issues
The WTO has a built-in agenda to review many existing agreements. Only agriculture and services appear firmly on the agenda, all other items are bracketed.

The General Agreement on Tariffs and Trade
The “cumulated” tariff structure of the industrial countries, (favours imports of raw materials (low taxes) but penalises products made from them (high taxes on processed products). This policy is a hindrance for the development of the food processing industry in Africa. If as agreed in the Marrakech Treaty the barriers to trade really would disappear, the African countries could develop industries derived from their agricultural products with « added value » (the money from the processing would remain in the country and the income from exports would also increase ).

US and other industrial countries have exorbitant textile tariffs (custom duties) which constitute big barriers to the export of textile and clothes from Africa (Zimbabwe, Zambia, Uganda, Tanzania, Mozambique, …), one of the sectors where  these countries could be competitive.

The African group asks for: an improvement of the market access for all products, as well as a reduction of the custom duties even for manufactured products, particularly for textiles and agriculture products coming from developing countries. Zero tariffs for products originating in least-developed countries (LDC), 33 of which are located in Africa.

If US would abolish the exorbitant textile duties this would remove the big barriers to the exports of African countries (Zimbabwe, Mozambique, Uganda,…)

The industrialised countries abuse of anti-dumpling policies (unilateral measures applied by a WTO member state after an investigation and determination by that member, in accordance with the provisions of the Anti-Dumping Agreement, that an imported product is "dumped" (sold cheaper than its production cost) and that the dumped imports are causing material injury to a domestic industry producing the like product.

Services
The General Agreement on Trade in Services (GATS) as it stands, only applies to the 40 countries that have agreed to its provisions. However, with a mandate to relaunch the discussion of services by 2000, it is almost certain that many other issues such as transport, energy, tele-communications and education will be on the menu at the WTO Ministerial Conference in Seattle, and that there will be a concerted effort toward further deregulation for all members.

Services are not objects, so barriers to trading services are referred to as non-tariff barriers. The goal of 'free trade' is to remove these barriers to further liberalise the world economy. World Trade in commercial services, accounted for 20% of world exports and 60% of investments.  Services are a major source of innovation, especially in electronic commerce, and telecommunications.

Africa has already started the liberalisation of its transport .  A private company now operates the Abidjan-Ouagadougou rail line. The SADC countries (Southern Africa Development Community) are working together to create new growth poles for Southern Africa (roads, rails, ports), like the Beira and the Maputo Corridors between Zimbabwe, South Africa and Mozambique, including port and rail concessions. In West Africa: Mali, Mauritania, and Senegal are working together on a Regional Hydropower Development Project.

This agreement will cover the educational services not provided by the public sector, or with commercial purposes. Most of the world's educational systems fall under the WTO umbrella e.g. distance education, foreign universities, teachers and training centres should have the same rights as the national ones.

African countries believe that some of these issues (health, education,…) are not to be dealt  with as “merchandise”. The African countries have not expressed yet their “ official position” to the expansion of  Services under WTO.

Among the industrial countries there is general agreement to increased liberalisation of services, but there are differences related to the sector or issues to focus on. USA would like the liberalisation of EU’s and Canada’s audio-visual restrictions, while the EU targets the liberalisation of the US protection of its maritime sector.
 

Agriculture
 The Agreement on Agriculture (AoA) sets the framework for agricultural trade and development and has significant implications for achieving sustainable agriculture in Africa. This Agreement is due for review at the end of 1999, so negotiations in agriculture will take place with or without a new round.

The agriculture WTO rules are stacked against developing countries. The policies of developed countries are not “fair” towards developing countries. The developed countries advocate open markets, but they go on maintaining high protection and subsidies for their own agricultural and food sectors, while denying developing countries the use of these very support measures (import controls and producer subsidies) which allowed the EU and US to develop their farming sectors. The developing countries are forced by the WTO rules to allow the entering of subsidised imports of food, which compete unfairly with agricultural goods produced by their own farmers who receive no subsidy. Despite a commitment to allow more market access, the developed countries have maintained high tariffs on “sensitive products” preventing the export of these products by developing countries.  WTO members have broken their promise to provide compensation to Net-Food-Importing developing countries in case of fluctuation of prices. All this has broken the trust of the developing countries in the WTO.

Agriculture in Africa

Agriculture accounts for 35% of Africa’s wealth and production, 40% of exports and 70% of employment. More than 70% of the African population lives in rural areas, in large households which are often headed by women. The rural population is the most vulnerable group in Africa and they will continue to outnumber the urban population for nearly three decades to come.

Agriculture is vital in Africa as it provides basic food, it is the source of livelihood and provides the foreign exchange needed to import essential products. Agriculture liberalisation and the Agriculture Agreements of the WTO could threaten this having great implications in the lives of people.

The African market is often flooded with European or USA food dumped products (sold at a price lower than its real value because subsidised by their governments). This lowers prices and threatens local production of food as local producers cannot compete in these conditions. A country’s staple crop production can be easily devastated by an influx of cheap imports. Trade liberalisation can cause deterioration of farmers’ life standards and influence negatively food security. The number of undernourished people in Africa has nearly doubled, from 100 million in the late 1960s to nearly 200 million in 1995.

African countries see that a change in the EU farm policies - e.g. by eliminating subsidies - would benefit them far more than all the EU aid programs to help poor countries. Africa could also benefit from processing its agricultural products, but the barriers to imports in industrial countries makes it difficult to export them. The EU and the USA fear competition, and thus keep their trade barriers for processed food.

The African countries see that the liberalisation of the sector profits mainly the great agri-business companies that invade the cereal and seed market and threaten local economies, especially subsistence production. They are also at the root cause of the lowering of prices of raw materials the consequence of which is to diminish the export income of most African countries.

Agriculture and Food Security

The current trade rules and the economic system undercuts food security by promoting the use of arable land for « export crops » rather than for meeting local needs ; permitting the dumping of heavily subsidised crops on world markets posing a threat to food safety laws and policies designed to promote local, sustainable agriculture. E.g. the dispute over the bananas will bring the bankruptcy of thousands of African farmers exporters of bananas.

Position of different countries on the review of the Agriculture Agreement

African  countries want to renegotiate the Agricultural Agreement to adapt it to their needs. They insist that before further liberalisation in agriculture takes place, it is important to review the actual Agreement on Agriculture with a view
to removing its imbalances and unfair provisions. So they say « No new negotiations before Review of the Agreement on Agriculture »,
because they see in it a threat for local economies, especially subsistence production, and food security. They know that further liberalisation of the agricultural sector is in the interest of an expanding agribusiness.

Many African and developing countries demand:
· The recognition of food and water security as a fundamental right and ask for technical assistance for countries depending on import of food as well as for countries affected by a fall in raw material prices.
· Special measures to be allowed to assure food security :
» either a « box for Food Security» (support for Food Security)
» or to allow « food produced for domestic consumption and the products of small farmers » to be exempted from the Agriculture Agreements
» or the recognition of Food Security as a central « non-trade concern ». This would give the right to regulate imports and exports for food security reasons.
· Safeguards and anti-dumping protection: reduction of customs rights and of domestic and export subsidies by the developed countries, and flexibility for the Southern countries wanting to develop a certain agricultural sector e.g. fruits and flowers for export.
· Total reduction of import tariffs in the developed countries, to be able to export fully their products.
The EU which protects its agriculture a lot will defend the possibility of subsidising its agriculture and expects from the reform better market access to third countries for its surpluses..
EU and Japan want recognition of “multi-functionability of agriculture” which means that agriculture has other functions besides production – its contribution to the rural economy, the environment, the landscape, the quality of water, food security and so on,…, which would justify continuing subsidies.
The USA priority is to remove obstacles to the Genetic Modified Organisms (GMO) to be able to import its genetic crops and foods in Europe.
The Cairns group (grain producers with no-subsidised agriculture, among them South Africa) insists that big cuts in agriculture support should be the “centrepiece” of the New Negotiating Round.
 

---

Forests
Africa lost 39 million hectares of tropical forest in the 1980s, and 10 million hectares by 1995. Tropical forest destruction has gone too far to prevent irreversible damage. It would take many generations to replace the lost forests, and the many species lost with them can never be replaced. African forests are believed to contain 45% of all global biodiversity. The sustainable management of this rich resource is important for Africa.

Forest-related activities account for at least 10% of the GDP of 17 African nations. In Cameroon, Central African Republic, Congo, Ivory Coast, Equatorial Guinea, Gabon, Liberia and Mozambique, forest products account for more than 10% of trade. Deforestation and its irreversible effect on soil degradation and desertification has severe consequences in these countries for the local populations

US and other countries have proposed to create a Free Trade Agreement for Forests Products (wood, paper). If this is implemented it would increase logging and the destruction of valuable forests and ecosystems in Africa.

---

Fishing
Some governments with a very developed fishing industry and big industrial boats push for the elimination on tariffs in 3 to 5 years. This would not benefit the African fish industry unable to compete with the big fishing boats and processing companies.
Although the new Negotiations of Seattle will not have the same acuteness for fishing as it does for agriculture, it is expected that aid-related aspects will be discussed.
 

---

The TRIPS (Intellectual Property Rights)

The Agreement on Trade-Related Aspects of intellectual Property Rights (TRIPs Agreement) is due for review in 1999, but it is feared that if the New Round is fixed the review will become a new agreement. Article 27.3 (b) of TRIPS allows “life patenting”  (genetically modified plants and organisms can be patented) and requires members to extend intellectual property rights protection to all varieties of plants (all genetic resources including food and agriculture). This Article does not recognise the rights of local communities to their traditional and indigenous knowledge which could lead to patenting of their agricultural biodiversity by corporations. All this has provoked a great controversy  and opposition.

Patents and other intellectual property rights’ protection on genetic resources for food, agriculture, and genetically modified organisms (GMO) can decrease farmers’ access to seed, threaten food security, reduce efforts in public plant breeding, increase loss of genetic resources, prevent seed and plant sharing and can put poor farmers out of business. Patenting is closely linked with genetic engineering and the trend for large transnational agrochemical industries to control the industrialisation and intensification of agriculture.

The WTO's fierce defence of intellectual property rights-patents, copyrights and trademarks comes at the expense of health and human lives. The organisation’s support for agri-business and pharmaceutical companies against governments seeking to protect their people's livelihood and health may have serious implications for  sub-Saharan Africa, where 80 percent of the world's new AIDS cases are found. One example is the effort of the US government, on behalf of US drug companies,  trying to block developing countries' access to less expensive, generic, life-saving drugs.

The TRIPs may affect also the “culture” as cultural products are eligible for patenting.

Countries position

The African group (Kenya co-sponsored by other African countries) of WTO members tabled a series of proposals regarding the WTO Agreement on Trade-related Aspects of Intellectual Property rights (TRIPs Agreement). African countries are opposed to any agreement on patenting of life “that would allow the privatisation of biological resources”. Their main demands are:

Many countries ask for banning culture from the WTO agreements.
EU wants to increase the protection of intellectual property rights and does not want “to go back on to standards which have already been achieved”, but it is ready to consider the relationship of TRIPs to the Convention on Biological Diversity (CBD).
 

---

The New issues

The industrialised countries have already made it clear that at this new round that the EU called “The Millennium Round” they want to pursue “new issues” such as: investment rules, competition policy, government procurement, trade facilitation, tariffs, environment, and labour standards , technical barriers to trade, consumer health, trade defence instruments so that they become subjects for new Agreements. They are also very keen in having new agreements on the issues of the Uruguay Round: services, agriculture and Intellectual Property Rights, so as to have more market openings and greater advantages.

Issues that did not enjoy consensus and were opposed by many developing countries  at the Singapore meeting, will find their way into the Seattle Ministerial Meeting.

Investments (TRIMS)
The existing Trade Related Investment Measures Agreement (TRIMS) is scheduled for review in 2000. Some Northern nations are seeking to negotiate an investment liberalisation agreement in the WTO. They want a global regime for Foreign Direct Investment (FDI) (major investments done with the purpose of taking managerial control) guaranteeing free access to markets and full protection of investments. They are trying to put in  the WTO, the famous Multilateral Agreement on Investment (MAI) that NGOs managed to stop last year. This agreement could interfere with the development of regional economies and reduce the responsibilities of investors at the local level. These new multilateral rules will favour short term profits, the accumulation of wealth over sustainable development and would allow transnational corporations, through the Dispute Settlement Mechanism, to challenge any national regulation which they consider a barrier to free investment. The consequences would not favour Africa and would bloc the liberalisation process through which many African countries have gone (the SAP imposed by the IMF). The United Nation development Program (UNDP) Report concludes that “the new rules of globalisation focus on integrating global markets, neglecting the needs of people that markets cannot meet. The process is concentrating power and marginalising the poor”.

All WTO countries will have to give foreign investors the right to enter and establish themselves, with 100% ownership. Foreigners and foreign firms will have to be treated as well as locals and restrictions on the free flow of capital and firms’ operations into and out of the country would be prohibited. This will mean that African  countries would no longer be able to give preferences or protection to local investors, firms or farmers and that capital  will flow out of the country; the working conditions may become more difficult and the transfer of technology, skills and standards will hardly take place, as it will be « old material and technologies» that would be sent to Africa.
The EU wants to commit countries to a process of gradual further deregulation of national investment rules, that would become in five years the equivalent of the MAI. The EU and Japan are the most fervent supporters for developing WTO disciplines on investment.

The developing countries ask that in the review of the Trade Related Investment Measures Agreement (TRIMS), developing countries are allowed the right to have “local ” policy so as to help the building of a domestic industrial sector (i.e. that local firms can be supported).

Most African countries have not taken an « official position » in front of the negotiations on investments. Only Uganda has expressed its opposition to starting investment negotiations in the WTO.

The civil society in most African countries, as in rest of the world, opposes the introduction of investments in the WTO. «We all hope for economic growth and we all work toward development. However, we want development that will guarantee the directors of corporations such as Ford-Kenya and Novartis as well as their employees a basic salary, housing, education, social security and health care. We do not want an agreement that will rob workers of their basic human rights and transform Kenya into a major export processing zone, and a major import consumption centre. Kenyans must decide whether they want to grow food or import food for example, and Kenyans are perfectly capable of doing so » (Jagjit Plahe -  MAI : National Sovereignty for Sale? Nairobi)

Competition Policy

Developed countries are advocating the introduction of a new agreement on Trade and Competition Policy on the WTO. This would allow companies to compete with each other in foreign markets, taking full advantage of the expansion of international trade.

This would eliminate all domestic laws or practices in developing countries that favour local firms. e.g. a government would not be allowed to give local firms importing or distribution rights, not even better marketing channels. The international firms will have equal rights and the local African enterprises  which are mainly small and medium size will be overwhelm by the big ones. As a result the big international corporations will take over a larger share of the market.

Ironically, competition policy was originally understood as a means to help small companies not to be overwhelmed by the big firms. But now it is used by the rich countries to help their giant corporations to compete in the developing countries with the local firms.

Some African countries have voiced opposition to the proposal for the negotiation of multilateral rules on Competition Policy in the WTO. They argue the issue is too complex for them at this moment, as they have many other commitments to comply with in the WTO.

Government Procurement

The aim of this issue entering the WTO is to bring government spending policies, decisions and procedures of all member countries under the umbrella of the WTO, where the principle of “national treatment” will apply. Under this principle, government in their procurement and contracts for projects and privatisation deals would no longer be able to give preferences or advantages to citizens or local firms. The big companies will have the possibility of providing supplies and winning the contracts and projects of the public sector in the African countries as foreigners  should be given the same chances as locals. Foreign firms that are unhappy with the governments’ decisions can bring the matter to court in the WTO.

At present government expenditure is outside the scope of the WTO, unless a member country voluntarily joins the “pluri-lateral” agreement on government procurement.

 As this is “shocking” for many developing countries, the rich countries have divided this issue in a two-stage plan: “transparency” in government procurement, and a broader agreement covering the national treatment principle.

The WTO and labour rights

To gain competitively companies in developing countries pay very low salaries and workers put up with very hard conditions. Labour standards are very low. Under the pressures of Trade Unions and social NGOs, some industrial countries have accepted to put labour standards on the agenda of the WTO, though the WTO has refused to address the impacts of free trade on labour rights.

Already the issue was brought up at the Singapore meeting but many developing countries, such as Mexico, contend that labour standards constitute a "barrier to free trade" for countries whose competitive advantage in the global economy is cheap labour. Potential solutions to labour and human rights abuses are blocked by the WTO, which has ruled that it is: 1) illegal for a government to ban a product based on the way it is produced (i.e. with child labour); and 2) governments cannot take into account the behaviour of companies that do business with vicious dictatorships such as Burma .

Like Mexico, many African and developing countries, see that these issues should be discussed and agreed upon at the ILO (International Labour Organisation), but Trade Unions and many other organisations defending the rights of the workers see this as a means to forget about workers conditions, because the ILO has no power to oblige countries to apply its recommendation, while the dispute settlement of the WTO is the only body able to assure that the rules for labour standards are applied .

On the other side, governments and Trans-National Companies which are more worried about « cheap production and export incomes » see the introduction in WTO of labour standards like a barrier that will increase prices and reduce the market access to the developing countries.

Environmental issues

The consequences of free trade have been disastrous for the environment. To increase profits companies have misused nature, polluted and destroyed the environment, thus putting in danger the survival of future generations.

Environmentalists around the world are doing pressure on their governments and international organizations so that the environment issues are dealt with at the WTO.

Many developing countries remain fearful that environmental provision in trade agreements could be used to shut out their products from rich country markets, but at the same time civil groups in the developing countries are becoming more aware of the negative consequences of the « globalisation » and free trade in their environment.

To overcome this difficulty, environmentalists are pressing for “win-win” negotiations (a liberalisation that helps environment. e.g. lowering tariffs on environmental beneficial technologies, or eliminating subsidies that hurt the environment) to tackle fishing and farming subsidies of the developed countries that distort trade and damage the environment.

What the companies want out of the Millennium Round

 Their principal goals for the Seattle Round of the WTO are:

 

How these “new” issues will affect Africa
Many of these proposals reflect the “economic agenda” of the WTO, which prioritises trade liberalisation as an end in itself, rather than as a means to attain sustainable development and improving the quality of life of the people and communities affected.
The widening of the mandate of the WTO and its dispute settlement mechanism will influence even more in a negative way the social and environmental dimensions of African national economies and deteriorate the social standards, while the issues of investment, competition, information technology and electronic commerce will improve the Northern countries’ own market access.
 

---

3.  Position of AEFJNOpposed to the New Round of negotiations

A number of African countries are still struggling to implement the results of the last Uruguay Round of negotiations; and some of them have publicly stated that “A new comprehensive Round would entail an unsustainable burden and should not include new issues”
More than a thousand organisations representing millions of people (among them AEFJN) have opposed the launch of negotiations within the WTO and signed the Manifesto « NO TO A NEW ROUND OF NEGOTATIONS IN THE WTO ». Many of them were present at Seattle to manifest their opposition and to present their proposals. Knowing that the negotiations will take place, AEFJN asks to call them the « Seattle Round » as this seems more respectful for the countries of non-christian tradition.

Assessment on the impact of the WTO Agreements
The African countries ask for an assessment on the impacts of the Multilateral Trade Agreements of the WTO on sustainable development, agriculture, local and national trade, food security, health, human rights, democracy, environmental sustainability, labour rights and the costs of implementing the agreements in developing countries.
This assessment process must begin immediately. It must be open and transparent, global in scope, and conducted through a balanced, impartial process. A moratorium (not to use trade rules to challenge national laws) should be in place until the results of the assessment are known.
This assessment should allow the WTO to see if the existing laws, policies and institutions to liberalise trade lead to social and environmental beneficial outcomes. If not, the assessment must formulate needed institutional, legal and policy changes before moving forward with further talks on liberalisation.
AEFJN calls for : WTO members to undertake a comprehensive ASSESMENT of the
                            development and social impacts of the current trade system, and of any
                            proposal for further liberalisation.

Reform of the WTO System

The time has come to review and revise trade rules, in order to develop a system of commerce that benefits people, their livelihoods and the resources upon which they ultimately rely. This asks for a fundamental revision of the regulations governing world trade in order to promote sustainability.
Seattle should decide to make the WTO system more open and democratic, more transparent and participatory to developing countries, parliaments and civil society.

AEFJN calls for :
a. A process to REVIEW, REPAIR and REFORM  the existing WTO Agreements and the system of decision making and participation within the WTO, so that all countries may be part of the decision process.

b. The WTO to replenish a fund to support developing countries capacity
building, and sharing the expenses incurred by entering into the dispute
panel mechanism.

Rules and Procedures

The WTO as it exists today needs urgent reform to ensure that the WTO affirms, rather than hinders, a sustainable development. Existing and future WTO rules and procedures must be
written and interpreted so that they give proper deference to national and international standards that serve legitimate development objectives. « Where there are manifest inequalities when the rules are introduced then special and thoughtful measures have to be applied » (N. Mandela at the WTO, 1997) These changes must be reflected in any negotiations that might be launched in Seattle.
AEFJN calls for: The WTO members to ensure that trade liberalisation is accompanied by
                         rules facilitating the SUSTAINABLE DEVELOPMENT for the least
                        developed countries.

Democratisation of the WTO

All WTO members must be allowed to participate in discussions and negotiations (including informal groups and meetings where many key decisions are made). The practice of small informal groups making decisions for all Members should be discontinued. It is necessary that all negotiations are accurately minuted and that these minutes, and all working papers including governmental position papers and draft negotiating texts, are distributed to all members on time and promptly de-restricted and released to the public, so that National Parliaments may have the opportunity of studying them. The system of participation is to be searched keeping in mind not the advantages of the developed countries but the full participation of all.

Equally important, the WTO's decision-making must be transparent and must involve public scrutiny and input not only from companies but also from civil society.

AEFJN calls for : The WTO to change its procedures for more transparency and
                            participation in decision-making so that the developing countries may
                            participate in the process of discussions and negotiations where key
                            decisions are taken .

Stop WTO expansion, which means « No New Issues »

The WTO’s limits of jurisdiction need to be defined more clearly, so that the WTO stays within its recognised realm of trade policy, and does not include any other issues not related to trade, neither does it stray into the field of other non-trade issues.

This is not the time to embark on further expansion of the WTO's power or the scope of its rules on  investment liberalisation, government procurement or "early harvest" of tariff reductions.

Therefore no new issues should be launched at Seattle as topics for negotiating new agreements, specially not investment, competition policy, government procurement.

AEFJN calls for : The WTO to stop the expansion of its rules into investment and other
                             major new areas of commerce.

Agriculture and Food Security

AEFJN calls for: The WTO to renegotiate the Agricultural Agreement in order to remove
                           its imbalances  and unfair provisions towards the developing countries
                           and to allow for a « Food Security » box and to allow policies to support
                          local production for domestic consumption.

TRIPS
AEFJN calls for: The WTO to change rules so that life forms cannot be patented ; to
                           incorporate community and indigenous rights into rules on plant
                           protection; to allow compulsory licensing of vital drugs.
 

---

4. ACTION

Things you can do to help reform the WTO
 

---

5. Further Information

How to know more about WTO, Trade and Africa

Magazines
* ECHOES, justice, peace and creation news –the World Council of Churches – P.O.
    Box 2100   /  1211 Geneva 2 – Switzerland – skh@wcc-coe.org  -  http://www.wcc-coe.org –
  Fax: 22.791 61 11
* DEFIS SUD, le magazine d’action pour le Développement – SOS Faim – rue aux Laines, 4
    1000 Bruxelles – Belgique – sosfaim@glo.be  - (20 US$ - 4 numéros par an).
* BRIDGES, Between Trade and Sustainable Development – ICTSD – 13, chemin des
    Anémones  - 1219 Geneva, Switwzerland - ictsd@ictsd.ch  - http://www.ictsd.org –
    Fax: 41 –22. 917 8093
* PASSERELLES entre le commerce et le développement durable (Edition française de
    BRIDGES)  B.P. 3370 – Dakar – Senegal – syspro2@enda.sn – http://www.enda.sn
* PUENTES Entre el Comercio y el Desarrollo sostenible (edicion de Bridges en español)
   Casilla 17-17-558 – Quito – Ecuador fflal@fulano.org.ec

Leaflets
* “Sustainable Trade for a living Planet” (Sept 1999) by WWF International –
    Av. Du Mont-Blanc – CH-1196 Gland – Switzerland.
* “The Emperor has no clothes” (June 1999) by Friends of the Earth – Tel. (44) 171 490 2665 -

Websites
* Third World Network:   http://www.twnside.org.sg/souths/twn/trade.htm
* Focus on the global South: http://www.focusweb.org
* ATTAC. -  http://Attac.org/
* Oneworld http://www.oneworld.org/
* International Centre for Trade and Sustainable Development (IATP): http://www.iatp.org
* Friends of the Earth: http://www.foe.org/international/trade/wto/wto.html
* Consumers International: http://www.consumersinternational.org
* People for Fair Trade: http://www.peopleforfairtrade.org
* Public Citizen’s Global Trade Watch: http://www.tradewatch.org
* Institut pour l'agriculture et les politiques commerciales (IATP)  http://www.iatp.org/
* Mobilisation contre la globalisation des grandes entreprises  http://www.seattlewto.org/
* Public Citizen.  http://www.tradewatch.org/
* Trade Watch.  http://www.tradewatch.org/
*  WTO watch.  http://www.wtowatch.org/
*  Corporate Watch.  http://www.corpwatch.org/
* Déclaration des membres de la Société Civile internationale
   http://www.americanlands.org/forestweb/newwto7.htm
* A l'OMC, trois ans pour achever la mondialisation, par Susan George (juillet 1999)
   http://www.monde-diplomatique.fr/1999/07/GEORGE/12221.html
* L'AMI nouveau va arriver, par Christian de Brie (mai 1999).
   http://www.monde-diplomatique.fr/1999/05/DE_BRIE/12006.html
 * L'OMC, fer de lance des transnationales, par Martin Khor (mai 1997).
   http://www.monde-diplomatique.fr/1997/05/KHOR/8161.html
 * World Trade Organisation (WTO) http://www.wto.org/
* Commission Européenne DG1:  http://europa.eu.int/comm/dg01/dg1newround.htm

NGOs working on this issue:

· Third World Network (Ghana;
· Focus on the global South
· ATTAC. (France, Belgium,…)
· Friends of the Earth:
· Christian Aid
· CIDSE ( Misereor (Germany);
· IRENE (Nederland)
· Consumers International (Consumer National groups)
· Fair Trade organisations: (Max Havelaar ( Nederland); Fair Trade (England);
· The Green Party (different names in different countries)
· Public Citizen
· Agir Ici (France)
· Groups against the MAI
· NCOs (Belgium)
· Trade Unions
· ICDA
· WWF (World Wild Fund) (sections in most African and European countries)
· KOO (Austria)
· OXFAM (U.K.; Ireland; Belgium; France; Zambia; Kenya;
· SOLIDAR (Belgium)
· Amici de la Terra (Italia)
· ECO News Africa (Kenya)
· World Development Movement (U.K.)
 

---

 AFRICA-EUROPE FAITH AND JUSTICE NETWORK
RESEAU FOI ET JUSTICE AFRIQUE-EUROPE
174,  rue Joseph II/ B-1000  BruxellesBelgique
Tel. 32-2 234 6810,    Fax 32-2 231 1413
e-mail. aefjn@village.uunet.be
http://www.oneworld.org/aefjn