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By: WTO volunteers

Session 22: Trade punishments not wanted for social issues, but ?

SESSION TITLE: Social standards and human rights clauses in trade agreements: Window-dressing, hidden protectionism or furthering the cause?

Speakers agreed that trade should not be used as a punishment to enforce social standards but some, even from developing countries, saw more of a role for the WTO.

Colombia’s Ambassador to the WTO, Eduardo Muñoz, urged WTO members to abandon their reluctance to discuss social issues (including labour and the environment) in the organization. He said that he hopes that when the Doha Round has finished, this will be part of the institution’s new agenda.

Speakers accepted general consensus on not using trade as a punishment to enforce social standards. But the EU’s acting head of delegation to the WTO, John Clarke, said the EU is obliged under its internal treaties to promote democracy, the rule of law and human rights in its international agreements.

Claudia Hofmann of the University of Kassel in Germany said that the labour issue has been at a standstill in the WTO since the 1996 Singapore Ministerial Conference but 31% of regional trade agreements already have a labour clause.

The issue of “a job is better than no job”, raised by Pradeep Merhta of CUTS sparked some debate. He said that a child in a developing country prevented from having a job might turn to prostitution or despair. A jobless child should be provided with free schooling and a free meal, he said.

But other speakers said that this debate has moved since years ago and the issue now is to provide “a decent job” to everybody. For Ambassador Muñoz this means social security and a minimum wage.

Ambassador Muñoz said that the phrase “social clauses” includes environmental as well as labour issues, and their inclusion in trade agreements is now accepted more by developing countries. He stressed that trade cannot by itself solve the problems of development. Trade has to be accompanied by strong public policies particularly in the social field, he said.

> More on this session

Session 23: Speakers look beyond the Doha Round

SESSION TITLE: A pathway to recovery — a case for the further development of the multilateral trading system?

The session aimed at building consensus around how to further develop the multilateral trading system, particularly in the current fragile economic climate, post-crisis.

Discussions proceeded mostly on the basis of the sub-theme, ie, looking to the future: what post-crisis agenda for the WTO in a shifting power scenario? The following key issues were discussed:

• A strong multilateral trading system is key, and the WTO has proved its resilience particularly in its rules being an important restraint for countries considering protectionist reactions to economic crisis.

• Trade remains an important engine for growth.

• There is need to conclude the Doha Round to underpin any creadible efforts in further strengthening the multilateral trading system.

• More flexibility in future, including on the single undertaking (where countries accept all the agreements resulting from a negotiation as a single package).

• Owing to linkages in global value chains, most liberalization is taking place autonomously. This need not be perceived as negative — although there is undoubted value in the multilateral trading system capturing all of this by turning the liberalization into binding commitments in the WTO.

• Countries need to think outside the box and focus on other areas such as the WTO’s regular work, better notifications systems, data availability, changes in committee procedures to make them more inclusive, enabling minor disputes to be handled outside the WTO’s formal dispute system such as through arbitration or mediation, etc

• A new work programme might be needed on regional trade agreements, better analysing trends, with the overall aim to bring these gains into the multilateral system.

• Economic times are hard, but it is important to recall that even the Uruguay Round was adopted in similar economic conditions.

• Some issues proposed for a post-Doha agenda include:
  1. Non tariff barriers such as sanitary-phytosanitary measures and technical barriers to trade
  2. Deeper liberalization in what will be the Doha Round’s unfinished business such as agriculture (subsidies), non-agricultural market access and services
  3. Addressing value creation in weak countries particularly in Africa
  4. More resources to maintain the system, such as for notifications and transparency
  5. Improvements in countries’ negotiations to join the WTO, especially for small and poor countries.

• The WTO needs to enhance its cooperative arrangements with other international institutions such as the OECD and UNCTAD.

> More on this session

Session 24: Crisis-resistant telecoms boosted by regulation and WTO rules, experts say

SESSION TITLE: The post crisis agenda for growth in developing and emerging economies: unlocking the potential of telecommunications

Information and communications technologies (ICTs) have proved resilient during the financial downturn, and research shows that telecoms — particularly mobile telephony and broadband — may spur recovery and economic development.

Those were the assessments of the panellists who also broadly agreed that effective regulation — the “rule of law” — underpins the policies needed to ensure that telecommunications fulfilled its role in enabling growth. They acknowledged that trade disciplines, in turn, are an important tool in supporting effective regulation.

They cited research estimating for example that a 10% increase in household penetration of ICT can lead to a 0.6?.7% growth in gross domestic product (GDP) per year on average. Similar figures exist, which state that broadband growth can boost GDP by as much as 1.3%.

BT Vice President for Trade and International Affairs Tilmann Kupfer stressed that telecommunications and “network readiness” were recognized as part of efforts to reach the Millennium Development Goals and that ICTs had an important role in integrating developing and developed countries in the world economy.

He said ICTs have lead to another wave of unbundling of production processeses and enabled companies to supplement trade in finished products by trade in tasks, allowing for example back office services and call centres to emerge, in which developing economies have excelled.

Looking at the way BT has changed to adapt to these developments, Mr Kupfer said WTO and its General Agreement on Trade in Services’ (GATS) telecom rules take on even greater importance: BT is a new entrant in every market but the UK, and it now services local outsourcing industries as well as multinational corporations.

AT&T Executive Director for Government Affairs Mike Corcery followed up saying that GATS catalyzed telecom liberalisation, which transformed AT&T into a global wholesaler of connectivity for small carriers and multinational corporations.

He said that increasing the players in telecom markets had led to a virtuous circle of investment in ICT and related industries, and that WTO commitments were among the critical conditions for new market entry. Other conditions included transparent licensing, competition safeguards, foreign ownership or control, and broad-based liberalization to permit innovation.

He urged that updating rules and commitments would further enable ICT development and that tools to achieve this included trade agreements, regional economic groupings and broadband initiatives around the world.

South African delegate Wamkele Keabetswe stressed that the telecom sector is very dynamic, and that the sector has been one of the most resilient during the financial crisis. In Africa, he said mobile telephony, in particular, had led to economic growth, but that the appropriate support policies and regulation, for telecoms and broader economic activity, needed also to be in place.

Mr Keabetswe argued that the link between telecoms, development and economic growth is clear and hard to dispute but that the challenge is the regulatory framework, citing South Africa’s new Electronic Communications Act, which he said puts parts of the WTO Reference Paper into law.

He added that it was also important that the law provided for legal recourse if political or commercial interference in the independent regulator were suspected.

He said South Africa’s GATS telecom commitments were made taking into account their political difficulties, but also the country’s desire to integrate into the global economy. Despite the challenges, he said, the results had overall been positive, most definitely for consumers. South Africa has become an exporter of telecoms in other developing country markets via foreign direct investment.

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Session 25: Research on preferential agreements suggests the unexpected

SESSION TITLE: Much ado about what? Do preferential agreements create trade?

Credit risk was more devastating in the financial crisis than weak demand. Regional trade agreements could be encouraging “vertical specialization” — specializing in parts of the production chain. And liberalization of trade in goods and services are linked.

Those were some of the less obvious conclusions suggested by panellists when they described three work-in-progress empirical research projects on the dynamics underlying the relation between regional integration, preferential trade agreements and the shaping of global trade.

World Trade Institute Deputy Managing Director Pierre Sauvé moderated the session. He explained the growing importance of preferentialism in international trade relations and how it now represents a driving force of trade diplomacy and trade cooperation. He noted that, after all, globalization is nothing but an aggregation of regional trends, even in trade relations. He then introduced the topics of the three research papers under discussion.

Research Affiliate Javier Lopez-Gonzales of the University of Sussex’s Centre for the Analysis of Regional Integration at Sussex (CARIS) outlined the evolution of vertical specialization in trade and investment. In view of the global scope of vertical specialization (off-shoring), the paper seeks to determine the underlying causes.

His research indicates that there might be a link between the emergence of vertical specialization and regional trade agreements. This link can be found in the effects generated by the removal of tariffs and behind-the-border tariffs, standard harmonization and lower transaction costs that generate higher opportunities of economies of scale.

CARIS Unit Director Michael Gasiorek looked at the impact of the crisis on trade, what factors influenced it and what impact regional agreements had in the transmission of its effects. He described the factors that are traditionally understood as having led to the decline in trade during the latest economic crisis: decline in demand, difficulties in access to credit, rise of protectionism and the amplifying effects of vertical specialization.

The research conducted so far has found that while decline in demand had an important impact on trade reduction, increased credit risk had a more devastating effect on high income members of regional agreements. He noted that regional agreements did not shield their members from the trade fall and explained the phenomenon as both depending on the increased importance of vertical specialization, and on the level of reliance of firms on credit availability.

World Trade Institute Senior Research Fellow Anirudh Shingal dealt more specifically with preferential agreements in services and their net trade-creative properties. The results showed that there is a positive correlation between trade in goods liberalization and trade in services. In the framework of regional trade agreements, he noted that North-South services deals have the highest impact on services trade. However, he said, research on services is hampered by poor data availability.

The analysis was enriched by the expertise of World Bank Trade Department Director Bernard Hoekman who pointed to the importance of this kind of research and to some of the factors determining trade patterns that had not been explored, such as changes in technology, geography and foreign direct investment.

The open discussion was lively. The audience gave important insights into other elements that might feed into the research, such as the role of trade within regions, disaggregation of data and the potential role of international financing institutions.

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Session 26: South Centre, Third World Network panellists take aim at latest developments

SESSION TITLE: Key issues in trade, development and climate change

The panel of this session described the linkages between development, climate change and trade. They focused on pharmaceutical patents, global and regional integration, the need for developed countries to take responsibility for tackling climate change, and services agreements.

Sanya Reid Smith from Third World Network said free trade agreement (FTAs) and economic partnership agreements (EPAs) can undermine developing countries’ access to life-saving sectors such as medicine. She argued that patents mainly serve developed countries.

She argued the “TRIPS plus” provisions (those going beyond the standards of the WTO’s intellectual property or TRIPS Agreement) on enforcement should deal only with substandard medicines that would induce health problems, but not generic medicines which have very little overlap with the former.

Aileen Kwa from South Centre offered data to show that the number of poor is increasing in least developed countries, and that per capita income in Africa is basically at the same level as in 1980, since structural adjustment programmes, and now poverty reduction strategy programmes, were effective.

In the last 25 years, most countries have been advised to become more integrated with the global economy through exports, she said. Agriculture imports surge frequently and an increasing number of African countries are becoming dependent on food imports.

Tariff cuts in the 1980s have de-industrialized Africa, she went on. Now the situation is changing. Regional trade is thriving. To Africa, the African market is more important than EU market, and the growth of African exports to Africa's increasing fast while that to the EU stagnates. Africa is its own market for industrial exports, which is a story of hope.

Vicente Paolo Yu from South Centre said climate change is a serious economic issue. He argued that to deal with the problem environmental, developmental and equity imperatives should be addressed. He looked at the relationship between carbon dioxide emission and the Human Development Index (HDI) and proposed to break the link between the two.

He quoted numbers to conclude that the resources used to tackle climate change are still inadequate and inefficient.

Responding to a question from the floor he said developed countries should take responsibility to reduce their own emissions and help developing countries by providing financial and technical support.

Sanya Reid Smith from Third World Network said some issues, such as visas, qualifications and citizenship, are not included in the services liberalization side of free trade agreements.

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Session 27: G20 ?from a financial focus to a role for trade

SESSION TITLE: The role of the G20 in WTO governance

G20 pledges and WTO reporting have helped prevent large-scale protectionism during the financial crisis and this has also led to a bigger role for the WTO in the G20, whose original focus was finance, this session heard

Questions about the G20 included its limited membership, accountability and transparency. G20’s main role is in formulating policies, and its leadership in trade would be welcome in helping conclude the Doha Round.

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Session 28: Trade rules and environment agreements: which should move first?

SESSION TITLE: Climate change, trade and competitiveness: Issues for the WTO

This session evolved into a debate about whether the WTO or environmental forums should make the first move in defining the relationship between international climate change policies and international trade rules.

Some panellists felt that the WTO should adapt its rules only after the international community has agreed upon a global climate change policy. Other panellists argued that the WTO should now spell out its rules on environmental production process methods and environmental services — since there is no international agreement on these topics, they are already handled as national climate change policies.

Additionally, theoretical and empirical research on the use of Border Carbon Tax Adjustments (BCAs) was presented that showed that unilateral BCAs have been successful in protecting selected sectors at the expense of the rest of both the national and global economies, and thus were inefficient from an economic point of view.

Furthermore, in general unilateral carbon-capping schemes have led to a reduction in domestic demand for fossil fuels which has lowered the world price of fossil fuels. This has resulted in carbon leakage as consumption abroad increased in response to the lower price. Empirical observations found that firms have not relocated much, although they appeared to shift investments abroad from the home country.

Finally, all panellists agreed that the WTO currently employed better established and superior procedures in negotiating and dispute resolution than the environmental forums dealing with climate change policies.

However, due to the lack of agreement in the WTO and the respective environmental forums, in the immediate future the WTO’s dispute settlement system is expected to effectively determine the relationship between environmental policies and trade rules, which concerned some panelists who believed that the WTO does not possess the necessary environmental expertise.

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Session 29: Panellists see climate change as an opportunity to coordinate policies better

SESSION TITLE: Trade, the environment and 9 billion hungry people: Coordinating the efforts of the WTO and other international organizations to ensure food security and to mitigate the impact of climate change

The challenges of climate change and hunger require better coordinated policies nationally and internationally, and they are also an opportunity to do so, this session heard.

The panel of three speakers addressed issues related to the challenges of how to bring about policy coherence and coordination between the WTO and other international organizations on their respective rules, negotiations, and other efforts to ensure food security and to mitigate the impact of climate change. The session was moderated by Mr Thaddeus Burns, Senior Counsel, Intellectual Property & Trade, General Electric.

Professor Ruth Oniang’o, a former parliamentarian working closely with women at the grass roots, touched upon the following issues:

• the value of sharing experiences directly

• the need for scientists to educate policy makers

• the idea of farmer “entrepreneurs” in developing countries (not just recipients of aid)

• focus on good governance at all levels (national and international) and impact on grass roots

• what is required for progress is commitment and political will

• respect for human dignity

Senior Counsellor Gretchen Stanton of the WTO’s Agriculture and Commodities Division pointed out that:

• it is our political and moral obligation that people have enough to eat and can access healthy food, practical solutions need to be found

• so long as millions of people are starving, and driven to slash-and-burn and similar practices, environmental protection will be a losing battle

• trade is one of the tools to reach objectives such as hunger reduction

• this challenge requires close collaboration among various disciplines

• a well co-ordinated approach is needed at the national level before bringing the issues to the international level

• the challenge is to develop the least trade distorting policies.

Director Anatole Krattiger of the World Intellectual Property Organization’s Global Challenges Division started his presentation with a main question: Climate Change: what to achieve? He listed three goals: accelerate transfer of technology, encourage new technologies to be invented and adapt new solutions to developing countries. He also expressed other ideas such as:

• the integrity of the global policy-making process

• public and private goods are not opposite, the two sectors should work together

• climate change as a catalyzing force, the way to turn a problem into an opportunity

Some questions from the floor:

• a representative of the Namibian Government: What did Africans do wrong? Nothing. The problem is the lack of education in Africa.

• Canada: Who will bring coherence?

• German Farmers Organization: aid does not reach those who can mitigate hunger. Farmers should be empowered.

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Session 30: Experts eye the good, the bad and the urgent in fish subsidies

SESSION TITLE: The future of trade and the environment: Creating the WTO's solution for trade, development and sustainable oceans

This session’s objective was to assess the negative impact of subsidies and overcapacity of industrial fishery on the sustainability of fish stock and their effects on ocean depletion. As fish cross borders, overcapacity issues are a problem for both developed and developing countries.

Speakers said subsidies can be “good” (for small-scale fisheries) and “bad” (mostly for industrial fisheries). The WTO is in a position to tackle these urgent issues through market access, subsidies and Aid for Trade negotiations and a conclusion of the Doha Round is crucial in this matter.

Former US Ambassador Peter Allgeier began his introduction by reminding us that the Doha Round is the first trade negotiation to include environmental sustainability and conservation issues. The aim of negotiating fishery subsidies is to tackle overcapacity while retaining flexibility for developing countries, he said

Negotiations thus aim to protect commercial interest while achieving the common good of sustainable oceans, he said. Because fish don’t respect borders, fishery issues cut across North-South lines. There needs to be a balance between development and trade on one side and environment and sustainability on the other. Key issues need to be addressed: the scope of prohibitions; special and differential treatment for developing countries; and the enforceability of dispute settlement.

Leibniz-Institute’s Dr Rainer Froese presented some figures on the industrial fleets’ responsibility for the sharp decline in Canadian cod fishery stocks in the 1970s and how they have not recovered up to this day. He reminded the session of FAO’s alarming prediction of a global fish stock collapse by 2048.

Additions to fish stocks can be expected to decline to zero by 2020, he said. Global fish stocks have been reduced by 90% since the 1950s. Subsidized industrial fleets are responsible for the depletion of the oceans. The reasons for overfishing are greed, mismanagement and subsidies. Subsidies are an incentive for overfishing and must be reduced, he concluded.

Prof. Anthony Charles of St Mary’s University in Canada concentrated on artisanal and small-scale fisheries and the challenges they face. He shared the concern about subsidies and said that all fisheries have the potential to be over-fished.

Subsistence, artisanal and small-scale fisheries are not synonymous with developing counties fisheries, as they can be practised in developed countries as well, he went on. Small-scale fisheries are best placed to help meet Millennium Development Goals as they can contribute to the wellbeing of local communities, food security and human rights while meeting conservation objectives.

Subsidies are “good” if they meet the needs of small-scale fisheries: secure access to fish; food security and household or community well-being; good governance and the capacity to organize well; legal space and empowerment; livelihood diversification.

“Bad” subsidies given to industrial fishing include: investment in modernization of vessels, tax credits, tax exemptions for fishermen or vessel owners, decommissioning of vessels, fuel subsidies and market access subsidies.

ICTSD Chief Executive Ricardo Meléndez-Ortiz called for a focus on subsidies, market access and Aid for Trade when looking at trade in fish.

Around 70—80% of subsidies are responsible for overcapacity rather than directed towards sustainability, he said. Reducing subsidies is a complex issue due to the labour market adjustments it entails. Better market access and Aid for Trade would help small—scale fisheries to move up the value chain.

There have been dramatic changes in the world environment since we realized that we have moved from a world of plenty to a world of scarcity, he said. Without the sustainability of resources there cannot be trade and thus no gain. Fish don’t respect boundaries but policies can respect developing countries specificities. There has been a learning curve of countries on the importance of environmental issues and fishery subsidies. The WTO’s dispute settlement system has usually dealt with the observance of obligations; today there is a new body of jurisdiction which deals with sustainable development. It has been recognized that trade does not happen in a vacuum.

Discussion: Issues raised included: the impact of reducing high-seas fishing by industrial fleets or easy-to-use proxies to achieve the Maximum Sustainable Yield (MSY) in fishing; whether it is feasible to preserve livelihoods in some communities without subsidies; how to incorporate non-trade partners in the negotiations; price rises resulting from the removal of subsidies and their domestic unpopularity; the impossibility of the WTO producing a silver bullet in fisheries negotiations due to the complexity of the issue; the fact that the problem of the ocean’s depletion is shared but not all are responsible. Speakers also discussed the prospects of the Doha Round failing and the urgent need to conclude it.

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Session 31: The challenges women face when trading informally across borders

SESSION TITLE: Campaign for participation and representation of women’s issues in trade: Strengthening responses to create wealth and reduce poverty for women in informal cross border trade in Southern Africa

The session highlighted the need to include gender budgeting in trade at national and regional levels. It described the importance of informal cross border trade from women in southern Africa and highlighted the numerous challenges that face women who trade across borders.

Challenges facing cross-border trading include illnesses; fatigue, malaria, flu, air borne and water borne diseases. Some use sexual relation as coping mechanism to reduce accommodation problems.

Harassment is not uncommon; sexual, verbal and physical abuse is rampant. Cross-border traders also face abuse at the hands of corrupt officials, who demand brides and have to deal with frequent delay at borders, tedious paper work, searching at borders. They sometimes even have their goods seized by immigration officials.

Proposals to address the challenges: For national governments to recognize informal cross boarder trade and put in place support policies, facilitate provision of financial assistance, provide reliable and affordable transport, empower women through business skills etc,

Currently, there is a huge information gap between those making polices and those implementing the policies.

> More on this session