Reply-To: "WTO Impact List" From: "WTO Impact List" To: "ComputerB" Cc: "ICDA Secretariat [BACKUP]" Bcc: "Janice G Foerde" , "MANAB MAJUMDAR" , "Bruno Belmont" , "Consumers for World Trade" , , "Maha Kamel" , "Oliver Horsthemke Namibia Agricultural Union" , , "Rosalie Gardiner" , "Sabine Weyand" , "Solveig Crompton" , "Suchita" , "Cornelia Nauen EU Researcher" , "Nathalie Oliveira Senior Official at Ministry" , "MAIGA MOUSLIM--Livestock Scientist at UEMOA.Int" , "Graham Romanes" , "cecilia martinezclark Agrifood Argentina Govt" , , "Lucy Ford" , "Karin Wedig Individual" , , "John Madeley UK Writer Broadcaster" , "Silvia Fukuoka Researcher" , "Tang Yilin Student" , "Olivia Nelson Student -- prosp.ICDA Intern 2002" , "Robert Thetford Warehouse Worker" , "Rachel Ware USU Student" , "Kate Shea Student STAR" , "Drazen -- Sociologist" , "SERGIO CASTRILLON University Teacher" , "John Audley Senior Associate Think Tank" , "Jan Pennycook Journalist" , "Jamie McEvoy Student" , "Federico Nier-Fischer Journalist" , "Donald King Journalist" , "Alex Gusev Economist" , "Tom Chance Researcher" , "Richard Monck Activist" , "Patrick Gazaille Counsellor" , "Michael Tribe Lecturer" , "Juhani Artto Freelance Journalist" , "David Thual Consultant" , "Alejandro Saiz--Trade Lawyer" , "Andrea Schmidt" , "Bob Thomson" , "Daniele--Plummer" , "Davide Brocchi student" , "Debbie Levy student" , , "Eric Gutierrez" , "Fabio Bartolini" , , "Ferri Giulia" , "HARRIET Natali" , "Hartley Springman--former VeCo student" , "Helge Christie" , "Hilary Coulby Consultant" , "ICDA2 Backup" , "Isabella Torta ex intern" , "Iver Houmark Andersen Nairobi-klubben" , "Javier Blasco" , "Jim Rundle" , "Kirsten Meersschaert" , "LSR--Student" , "Lyazzat Zhunisbekova Researcher" , "Manolo Martinez" , "Marika Lerch researcher" , "Marit Hovdal Moan student" , "Mark Axelrod researcher" , "Michael Bressler researcher" , "natasha Johnson student" , "Nihal Sherif--Writer" , "Nora Galvin" , "Paul Fekete--Academic" , "piotr huisman" , "Ribes Sappa" , "Richard G. 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Kinuthia Consumer Information Network" , , "Justin Macmullan" , "Khalid Hussain Development VISIONS" , "Kitty Warnock" , "Klaus Piepel" , "Klaus Schilder WEED" , "Liam Flynn" , "Lotta Valtonen" , "Louise Hilditch" , =?Windows-1252?Q?Luis_de_Fran=E7a?= , "Malini Mehra" , "Marc Maes" , "Maria Riley" , "Martha Salazar" , "Martin Lidegaard" , "Martina Schaub" , "Maud Johansson" , "Mike Waghorne" , "Mikel Insausti" , "Morten Emil Hansen" , "Myriam Vander Stichele" , "Natasja van der Geest INZET" , "Olivier Hoedeman" , "Paddy Maguinness" , "Penny Fowler" , "Peter Sluiter \(INZET\)" , "Peter Unterweger" , "Peter With" , "Pierre Habbard" , "Pniggli" , "Rob Bleijerveld" , "Ronnie Hall" , =?Windows-1252?Q?R=FCdiger_Stegemann?= , "Rudy De Meyer" , "Sabina Voogd SOMO" , "San Diego WTO Alert" , "Sandra van den Brink" , "Sarah Dani" , "selena horrel Oxfam Student's assoc" , "SETEM" , "Sheena Hanley Education International" , "Solidar" , "Stephan Gueneau" , "Sunil Manandhar youth action for sustainable development" , "Suzette Frovin" , "Svante Sandberg" , "Swiss Coalition of Dev. Org." , "TAED" , "Tassos Hatzimikes" , "The South-Nord federation" , "Thierry Kesteloot" , "Tobias Reichert" , "Toby Kasper MSF" , "Tom Hansen ART" , "Tristan Le Cotty" , "Trocaire 3" , "Trocaire4" , "Ugo Biggeri" , "Vincent Espagne" , "Wendel Trio" , "WIDE" , "Chantal Marijnissen" , "Genevra Forwood" , "Anja" , "June Zeitlin" , "Nadia Johnson" , "Lars Anderskouv NGO Policy Adviser" , "Volunteer2 4 WDM" , "Intern @ WDM" , "Kees--Journalist" , "Grassroots Globalization Network" , =?Windows-1252?Q?B=E9atrice_Gorez--CFFA_Coordinator?= , "Margaret Harris Project Officer" , "Alice Carl" , "Barbara Evers" , "Meredyth B Ailloud \(SDI\)" , "Peter Wahl" , "Suvi Virkkunen" , "Andrew Simms--Writer" , "Karine Tavernier Solagral" , "EFTA efta advocay" , "Gichinga Ndirangu" , "Nicole Metz" , "Hans Steinmuller GERMANWATCH Researcher" , "Elie Jouen NGO GATS Researcher Brussels" , "Marion Lienert NGO--DevZone Librarian NZ" , "E.M Koshy aofgindia" , "Ian Sheare NZ--Sust Energy Forum Energy Engineer/Development Consultant" , "Francois Legault Programme Officer WSSD/Trade--ICDA Member-NGO" , "Marceline White Women's Edge NGO" , "Linda Hartke Ecumenical Advocacy Alliance Switzerland" , "Wilma Osei PA Coordinator Third World Network Int'l" , "Fredi Boni Consultant" , "Alicia Kolmans Misereor--NGO Policy Officer Trade-Agric" , "Hugo Cameron" , "Jim Addington Writer_Action For UN" , "Nathan Wyeth Sierra Student Coalition NGO-ntwk" , "Lyndsey Cockwell Journalist ONEWORLD.net--NGO" , "Doug Hunt ICTA--NGO Int'l Center for Technology Assessment" , "Alex Madden World Bank Boycott European Co-ordinator" , "Wiebke Herding Student but NGO linked to FOE-GY" , "Kevin Skerrett Researcher CUPE--\(NGO\)" , "Isabelle HOFERLIN WCL Trade Union-BXL" , "Eva Cheng Journalist Green Left Weekly\(NGO-related\)" , "Arline Prigoff Professor of Social Work Calif-State Uni" , "Rick Rowden RESULTS.org Researcher on Dev-Policies" , "Martin Koehler Campaign to Reform World Bank NGO" , "Isabel de la Torre INdustrial Shrimp Action Network NGO--Ramsar" , "Donnacha O Briain Journalist ATTAC-Ireland" , "Chris Individual--NGO-related Social Justice-IRELAND" , "MONTES DE OCA Julio - Ramsar" , "EKBensah" Subject: WTOIL#320 | Wed-4 Dec | [WTO-Qatar]:GATS Rage in UK; WTO Leaders Endorse Secret Meetings; Poisoned Wine and the WTO Date: Thu, 5 Dec 2002 15:52:25 +0100 Organization: International Coalition for Development Action (ICDA) MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_0087_01C29C76.53480CE0" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 6.00.2600.0000 X-MIMEOLE: Produced By Microsoft MimeOLE V6.00.2600.0000 This is a multi-part message in MIME format. ------=_NextPart_000_0087_01C29C76.53480CE0 Content-Type: text/plain; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable = =3D^=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D WTO Impact List #320 | Wed-4 Dec | [WTO-QATAR]: =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D *GATS Rage in UK *WTO Leaders Endorse Secret Meetings *Poisoned Wine and the WTO =3D=3D^=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D List of contents: 1)LOCAL COUNCILS ATTACK WTO 2)SUPACHAI AND HARBISON ENDORSE EXCLUSIVE WTO MEETINGS 3)US SLAPS A DUMPING DUTY OF 116% ON SOUTH AFRICAN FERROVANADIUM 4)POISONED WINE AND THE WTO =3D=3D^=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D Dear WTO Impact Lister, The first report today shows us how opposition to GATS is slowly = gathering pace, not just in the southern hemisphere, but also in...yes, = it is hard to believe - Britain! This report highlights the fact that = GATS will have a damaging effect on all our lives and that it also helps = to explain how the state, and especially local forms of government are = losing their ability to self determine their own policies.=20 Moving on, our second article follows-up on last weeks article regarding = the Mini-ministerial in Sydney. Today's piece again questions this kind = of decision making format and the truly democratic credentials, which = the WTO claims to hold to dear. Finally we can see how WTO membership has had a negative effect on = certain products in the developing world in our last two articles, which = feature South Africa and Taiwan. Regards Eamonn ___________________________________ If you have any constructive suggestions or comments about the ICDA WTO Impact List, or articles and news to contribute, do not hesitate to contact us! Best regards, Emmanuel.K.Bensah & Eamonn Moran ekbensah@icda.be eamonnmoran@icda.be ************************************************************ 1) LOCAL COUNCILS ATTACK WTO From: = http://society.guardian.co.uk/localgovt/story/0,7890,852012,00.html Date: December 2, 2002 By: Charlotte Denny (Economics Correspondant, The Guardian) =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D [Q U O T E OF THE A R T I C L E] =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D "Planning laws 'under threat from trade liberalisation'=20 __________________________________ The government was accused last night of giving up control of issues at = the core of local government in World Trade Organisation agreements = being thrashed out in Geneva.=20 The Local Government Association is concerned that councils could lose = their right to set tough planning laws in the little-known talks about = deregulation of services.=20 The implications are so far-reaching that anxieties were also raised = last night that the BBC could be affected by the negotiations, which are = aimed at providing new business opportunities for the City.=20 Alarmed at demands from Britain's trading partners, the LGA has written = to its members warning that their ability to set rules in areas such as = land use, licensing and environmental health could be threatened by = provisions in the WTO's general agreement on trade in services (Gats).=20 The UK is one of the strongest supporters of the Gats, which ministers = believe will open up markets abroad for the City's business and = financial services firms. But in return, Britain must offer concessions = to trading partners by opening up its own economy.=20 The LGA's international bureau warned the talks could pose a threat to = powers "at the very core of local government". Officials met with the = DTI to discuss Gats, but in the letter to its members says the meeting = failed to quell their concerns.=20 In a consultation document last month launched by trade minister = Baroness Symons, the DTI argues that towning planning rules will not be = affected by Gats rules as domestic regulatory measures which do not = discriminate against foreign firms are exempt from its scope. But the = LGA fears Gats provisions requiring that all regulation be shown to be = "necessary" and "least trade restrictive" could be used by Britain's = trading partners to challenge local councils. "There is considerable = anxiety that these tough criteria are very much open to interpretation, = and that the WTO dispute settlement process could be used to enforce a = strongly deregulatory interpretation in favour of business interests."=20 The LGA fears Britain will bow to demands from its trading partners that = local authorities abandon rules restricting the growth of out-of-town = shopping centres because they discriminate against foreign firms like = Wal-Mart, which is not in the small retail sector. While many European = countries have retained the right to apply an economics needs test = tosuch stores, Britain has made no such reservation.=20 Concerns about the BBC have been raised by a paper today from the World = Development Movement arguing government support for public service = broadcasting will be a major target for the US government. "We know that = the UK communications and broadcasting sector is the major target for = the USA in these negotiations," said Barry Coates, WDM's director.=20 The WDM says measures seen by many as crucial to high quality public = service broadcasting could be challenged under Gats rules - including = local content and regional production rules, limits on cross-media = ownership, restrictions on foreign media ownership and public service = obligations.=20 But seeking last night to allay concerns about the Gats talks, a DTI = spokesperson said: "We haven't taken any public commitments under Gats = to liberalise broadcast services, so the BBC will not be affected."=20 "We are in touch with the LGA and will work them over any implications = that Gats will have for local authorities. No WTO members want to give = up their rights to regulate."=20 Intangible benefits What is Gats?=20 The general agreement on trade in services is an international deal to = open up economies to competition from foreign firms. It was signed in = 1994 by the members of the General Agreement on Tariffs and Trade, the = predecessor to the World Trade Organisation.=20 Whose idea was it?=20 Decades of negotations under Gatt have reduced tariffs on goods to low = levels. Western governments now want to free up trade in services, which = account for a larger proportion of their economies than manufacturing. = The European Union and the US are seeking gains for their highly = competitive service sector firms in the next round of global trade talks = in return for concessions they may have to make on cutting agricultural = subsidies.=20 What does Gats do?=20 Because services are not physically traded - a company has to be near = its customers - Gats is a very different agreement from anything else = the WTO or Gatt has done. For foreign service firms to compete on equal = terms with domestic firms means that for the first time government = regulations could be subject to WTO scrutiny. Geneva rulings will apply = not only to how a country maintains its economic borders but to how it = controls its entire domestic economy.=20 Doesn't that give the WTO a lot of power over domestic economies?=20 The negotiators recognised extending the WTO's reach could be = politically difficult so Gats is an opt-in agreement. Countries have a = right to fence off any part of their domestic economy, subject to = general provisions about liberalisation.=20 (c) The Guardian ************************************************************* 2) SUPACHAI AND HARBISON ENDORSE EXCLUSIVE WTO MEETINGS From: Focus on the Global South Date: 2 December 2002 By: Aileen Kwa =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D [Q U O T E OF THE A R T I C L E] =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D "The mini-ministerial and green room meetings are about decision-making, whilst the majority, presented with the final package, = is only relegated to the position of being 'decision-takers'." _____________________________________________ 2 December 2002, Geneva. The WTO is widely known to have anti-democratic negotiating practices. Since Seattle, where a revolt took place on the inside, and developing country governments basically denounced the negotiating process which excluded them, the WTO has had to work a = little harder to justify its practices. Any changes, which are supposedly to = have taken place, have unfortunately been merely cosmetic. When the negotiations are stalemated, simply because the major powers = are loading up the agenda to their own advantage and being totally intransigent on issues of interests to developing countries, negotiations = automatically go back into a GATT-style exclusive group of about 20-25 Members. The marginalisation of the majority is ultimately the only way in which the powerful can bamboozle their agenda through and force it upon the weaker members. In a 'dialogue' between civil society groups based in Geneva and the = WTO's Director General Dr Supachai and his right hand man, Mr Harbinson, the issue of lack of anti-democratic negotiating practices / Green Room meetings was raised repeatedly. Unfortunately, these concerns were met with denials by Mr Harbinson that such meetings even exist, and elusiveness = by the Director General as to whether or not such Green Room meetings would continue. The DG also endorse the mini-ministerial meetings. Harbinson: 'There are no Green Room Meetings at the WTO' According to Supachai's chef de cabinet, Stuart Harbinson at this 'dialogue' attempted to defend his role in the lead up to the last Doha ministerial, and the negotiating process in general: 'There is a demonisation of the Green Room phenomena. In the preparation for Doha, I cannot remember having a green room process. We had endless meetings on specific subjects, and endless meetings on implementation. Sometimes the Chair would get a few people in the room and hammer up the technical aspects. I can't remember how many meetings we had, formal and informal. But there was no central green room process it did not happen and it is not happening now'. This is no less than a shocking statement. Clearly, 'Green Room' = meetings are being redefined by Harbinson (and perhaps the WTO Secretariat), so that meetings of 25 Members, such as the meeting on 5-6 November in Annecy of senior officials, and the Mini ministerial in Sydney (14-15 November) = are not considered Green Room meetings- presumably because they are convened by Members rather than the Director General. Informal meetings, wherein a select group is invited, and others are excluded, and are not even informed of which consultations are taking place between whom, are also not considered Green Room meetings. In reaction to such an outrageous statement, Steve Potter, from CIEL (Centre for International Environmental Law) retorted: 'There seems to be a deep misunderstanding on both sides. There is an understanding by many that the mini-ministerial is a legitimization of = the Green Room meetings. And it does not give legitimacy to the = institution'. Supachai Eludes Question on Stopping the Practice of Green Room Meetings Supachai on the other hand, did not deny the occurrence of Green Room meetings. However, he cleverly eluded the question of whether he would stop these meetings from taking place. Cecilia Oh of Third World Network pointedly asked the Director General: 'You mention that there was going to be lessons learnt from Seattle and Doha. If I remember rightly, I think Ruggiero (the first WTO Director General) said that one of his commitments was that there would be no = Green Rooms. We want to know if there is some sort of commitment, or at least = an attempt or effort to make sure Green Rooms do not happen? One of the biggest concern you have laid out is the need for efficiency and expediency, hence the need for small group meetings. However, we also = have the format that takes place in the UN. I guess it is whether or not the timing of WTO negotiations is of such importance that some sacrifices = (in terms of full participation) are made along the way. Perhaps deadlines = are not of such importance if the negotiations cannot be as transparent. How important is it to keep to the deadlines when there isn't a proper = balance of give and take?' Supachai sidestepped this question. He said: 'We are in the process of consulting with the Chairman. There is an = effort that there is full transparency. There are various proposals I have seen from EC, the Like Minded Group, India. They are all being taken up and consulted. I don't know how far they can go. They are consulting with = the Members.' He also asserted that 'In Cancun, we will take into consideration the = need to be fully inclusive. I am fully conscious of all countries, especially the ones that have been sidelined. We will look particularly in those areas. If we can house everyone, we will do that. The proposal that has been submitted by developing countries about Cancun will be taken on board'. He went on to say that the deadlines for the Round were very important = for developing countries. 'If the Round is going to stretch 6, 7, 8 years, I don't think it will serve anyone including the developing countries = since there may be some new means to block market access for developing countries. This is a round in which developing countries certainly will have their say. I keep urging them to be actively involved and to be united. If they are united, they will carry more weight. I don't think = the deadlines will be met if developing countries do not see it as serving their purpose.' Supachai : Mini-ministerials are Beneficial Despite his reassurances about making transparent the negotiating = process, Dr Supachai endorsed the Sydney mini-ministerial meeting. He took pains = to explain why these mini-ministerials were beneficial. Justifying the exclusive Sydney meeting of 25 Members, and mini-ministerials in = general, he said, 'I am there to listen to them and they can listen to me so that they can take stock of what is happening and give their analysis and input. This process is to eliminate surprises (at the Ministerial). They do not all have this opportunity to meet. If they can be briefed about what is = taking place, there is a good chance that we will have a good meeting (in Cancun). It is a chance for ministers to fully prepare themselves (for the Ministerial). As for Sydney, there were no concrete decisions taken. We highlighted = the health, Special and Differential Treatment, and market access issues, = with an emphasis on agriculture. We did go into agriculture substantially. We intended to have a full discussion on TRIPS and Health. In every session, I have tried to reflect the will of the members. It = might help to have this kind of stocktaking. These meetings give us momentum (for the talks in Geneva), but we do not intend for them to bypass the = Geneva process.' Aileen Kwa of Focus on the Global South challenged the Director General that these mini-Ministerials are illegitimate because they institute an 'executive council' of about 25 members through the back door, and that such exclusive practices contravened basic democratic principles. She = also said that there was a difference between decision-making and decision taking. The mini-ministerial and green room meetings are about decision-making, whilst the majority, presented with the final package, = is only relegated to the position of being 'decision-takers'. She reminded the DG that many countries that have been excluded would find it difficult = to reject a final package presented to them given the political costs they would have to pay (as the spoiler of the multilateral trade = negotiations). Supachai retorted: 'How do we then deal with the process of reaching consensus. Do you have another way to achieve it? Normally no one is excluded. It is just that the meeting can only accommodate so many.' He went on to say that the WTO cannot always have full meetings of 145 members. Ultimately, final decisions would have to be taken in the = plenary session. 'On implementation, I would call meetings the people never complain. I cannot invite 145 countries. Implementation is = controversial. But again, we need to have a process where we can achieve the outcome'. In his diplomatic persuasive fashion, Supachai attempted to reassure = NGOs: 'It is not like the Uruguay Round anymore. It is no like Blair House. I would agree with you the process is exclusive if we say that this is the agreement and you take it or leave it. This is not going to happen. From what we know we should not underestimate developing countries. They = fully know what their rights are. You are under-estimating the developing countries. Everyone will have to be fully involved, otherwise, you will not have a round. In all these meetings, and in Sydney, more than half of those invited were from developing countries.' 'It (Sydney) is not really decision-making. It is really about = stocktaking and trying to alert ministers. They got to know each other better. You cannot avoid them discussing these issues amongst themselves. It would = be worse if they discussed these matters on the phone, and only amongst the QUAD (US, EC, Japan and Canada). They do it all the time.' Giving an example of how Sydney was not a 'decision-making' meeting, he said: 'I don't think Sydney wrapped up the TRIPS and Health issue. If Sydney = was a decision-making process, how is it that until this weekend, I still = did not know if the Chair (of the TRIPS council) would produce a draft or = not? Nobody made Sydney a decisive moment.' One delegate, however, who was not in Sydney felt that while there was = no concrete decision taken in Sydney, Members were more receptive towards = the US position on the TRIPS and Health issue after the meeting. The TRIPS = and Health talks in Geneva subsequently collapsed, with the African Group rejecting outright the package offered by the developed countries. Yet, this decision by the African Group was only determined the morning of = the Trips Council meeting on 29 November, and only after considerable amount of lobbying by the NGOs actively involved in the TRIPS issue in the last = week. Secretariat Staff Can Chair Negotiating Bodies If the Membership so Wish Supachai was also asked at the meeting how it is that he has condoned to = a flagrant breach of rules, by allowing his chef de cabinet, Stuart Harbinson (ex-Hong Kong Ambassador) to continue as chair of the Committee on Agriculture. Harbinson had been elected to the post while he was still Hong Kong's Ambassador early this year. The Director General remarked: 'You seem to have a view that the staff is not neutral. You seem to have said that he (Harbinson) would be less of an impartial person than he = used to be if he joined the Secretariat and chairs agriculture. I don't think he would like to do this job (at which point Harbinson nods emphatically). = I think it is mainly in the interest of the whole membership. The rules do not forbid anyone from chairing a negotiating Committee if Members agree to it'. Clearly, Supachai does not think much of the Secretariat bulldozing its way into members' territory, and the need for a clear division of powers. He has also conveniently forgotten that there were several members that = spoke to him privately making it clear that they did not like Harbinson continuing as Chair of Agriculture once he joined the Secretariat. No public statements were made by developing countries, as many were conscious that they did not want to embarrass their newly appointed Director General, whom they had instituted only after a hard fight. Will Supachai Deliver? Supachai is at the moment delicately poised on a political tightrope, which he described to NGOs as follows: 'I have been around long enough to know how much developing countries = will have to give in order to get. I am trying to balance as much as I can without losing my credibility. I can't go out and say, 'Just stop negotiating'. On all fronts, I would like to see movement.' He gave the example of negotiations on industrial tariffs and that he = has been emphasizing also in these talks that the issue of tariff peaks and escalations (high tariffs on sensitive products used mostly by developed countries) must be tackled. For all Supachai's seemingly good intentions, he is clearly limited either by his own convictions about the benefits of more liberalisation for the South and the WTO in accomplishing this end, or the political games he = has to play in order to remain relevant in this power game. Whatever his personal views are, it is clear that he will also not be doing much to stop the undesirable practice of exclusive mini-ministerials which is now = being institutionalised and which turn into Green Room meetings between 25 Members during Ministerial Conferences. In this scenario, no matter how hard members work on substantive issues, it is unlikely that the = outcomes will really take on board the positions of the politically weaker majority. Already two more mini-ministerials are in the pipeline before Cancun. = The Japanese will be hosting one on 15 -16 February 2003. And Egypt has offered to host another, between February and the Cancun Ministerial in = September. A year on from Doha, the Doha Development Agenda is also not delivering = on 'development' and the promises made to developing countries are showing themselves up to be empty. The QUAD Members (US, EU, Japan, Canada) have blocked any decisions on 'implementation' issues which they promised developing countries would be tackled before the other negotiations. Already the Doha deadline of 31 July 2002 to find a way to provide developing countries with more market access in textiles (the growth on-growth provisions) was bypassed and postponed to 31 December. Some solution to implementation issues as well as promises to strengthen Special and Differential Treatment provisions were supposed to have been = provided by 31 December. This deadline is now again going to slip-by. According = to developing country delegates, there has not been real engagement or progress. The US, EC and Japan are also moving backwards on the TRIPS and Health Declaration, which in Doha gained them many brownie points. US is making attempts to narrow down access to medicines to only three diseases; = Japan to exclude vaccines; and the EU to put in place a whole host of = conditions that will make the export of generic drugs virtually impossible so that most countries without manufacturing capacity will still not be able to attain these drugs at an affordable price. If history is instructive, a likely outcome of Supachai's three-year tenure as DG is that there will be some token crumbs awarded to developing countries, but for which they would have to pay dearly. Developing countries may have to accept the launch of the new issues, investment, competition, government procurement, in order to attain (on the surface) some balance in agriculture. Whether in fact real balance in agriculture will be achieved is unlikely since US and EU will be shifting distorting supports into the 'Green Box' of supposedly non-trade distorting subsidies, even as another round of tariff liberalisation will have to = be undertaken by the South. An expanded new round, with new issues that will lead to = the dismantling of domestic legislation that favour national companies over foreign enterprises, will not be in developing countries' interests = since the South is in no position to compete. Further deindustrialisation is a likely scenario for the majority. This will be a regrettable legacy for a DG from a developing country. ************************************************************** 3.)US SLAPS A DUMPING DUTY OF 116% ON SOUTH FERROVANADIUM From: http://allafrica.com/stories/200211280285.html Date: November 28, 2002=20 By: John Fraser =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D [Q U O T E OF THE A R T I C L E] =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D "The duty now becomes effective for five years, and will last unless = there is a determination that no injury has been caused to US producers = something which I doubt will happen," said Deloitte & Touche trade = expert Riaan de Lange." __________________________________________________ US trade commission due to rule on whether US firms suffered injury THE US commerce department has imposed an antidumping duty of 116% on SA = exports of ferrovanadium, an alloying agent which is added to steel to = enhance its strength and resistance to wear. The move is expected to choke off an export business which was worth = just under $9m last year, and is expected to mainly hit Highveld Steel = and Xstrata. Highveld declined to comment on the US announcement yesterday. Antidumping duties are imposed if an investigation concludes that = exports into a market are being sold at unrealistically low prices, = usually at lower prices than those which apply in the home market of the = exporter. However, it also has to be proven that the competitors in the affected = market have suffered injury as a result of the dumped product before = antidumping duties can be triggered. The US's International Trade Commission is due to make its ruling on the = issue of injury early in January, and is expected to conclude that local = companies have suffered injury. The US is also taking similar action against Chinese ferrovanadium, with = antidumping duties of between 13,03% and 66,71%. The US administration mounted its antidumping investigation in December = last year, after it had received complaints from a number of US = companies Bear Metallurcical, Shieldalloy Metallurgical, Gulf Chemical = and Metallurgical, US Vanadium and CS Metals of Louisiana. The commerce department said that last year SA exported 1391830kg of = ferrovanadium into the US market, worth 8999883. "The duty now becomes effective for five years, and will last unless = there is a determination that no injury has been caused to US producers = something which I doubt will happen," said Deloitte & Touche trade = expert Riaan de Lange. "If you find an antidumping margin as large as 116%, it would be = difficult not to also find there has been injury to the market." He said that after a year, SA would be entitled to request a review of = the antidumping duty, if it believed there had been an injustice. "For the moment, however, any SA exports of ferrovanadium would attract = not only the normal customs duties but also this antidumping duty," he = said. "This is likely to severely hit the export trade." The US government has offered to launch negotiations with SA and its = partners in the Southern African Customs Union on a free trade agreement = (FTA). Trade and Industry Minister Alec Erwin said recently that he would = expect the negotiations to kick off in the new year. However, this latest antidumping action illustrates the sensitivity in = trade relations between the US and SA. It is likely that certain vulnerable industries in the US will lobby = hard for special treatment if an FTA is implemented, with the = agriculture sector expected to be leading the pack. John Fraser, Trade And Industry Editor Johannesburg=20 *************************************************************** 4.)TAIWAN: POISONED WINE AND THE WTO From: http://www.atimes.com/atimes/China/DL05Ad01.html Date: December 5 2002 By: Laurence Eyton=20 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D [Q U O T E OF THE A R T I C L E] =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D "The government has been considering asking the WTO to recategorize rice = wine in some way, perhaps as a cooking additive, or else to seek a = ruling allowing that tax should not be equivalent to more than half the = untaxed retail price - which would bring rice wine down to perhaps NT$30 = a bottle - making it too cheap to be worth bootlegging. Bodies such as = the American Chamber of Commerce have, however, impressed upon the = government that renegotiation of WTO entry terms is not really an option = so soon after entry. " _____________________________________________ TAIPEI - To Taiwanese, rice wine is not a wine, it is a cooking = ingredient - a condiment, if you like, as is Worcestershire or Tabasco = sauce. The World Trade Organization, however, thinks that wine means, = well, wine - as in claret, Riesling or Chianti. And therein lies the = basis of a cross-cultural misunderstanding that so far has led to the = deaths of 11 people, with two more deaths looking suspicious, and many = more people hospitalized.=20 A visit to a tepanyaki stall in a local nighttime food market gives an = indication of the Taiwanese appetite for rice wine - the chef pours it = over every kind of food as it cooks in astonishing quantities. Certain = traditional dishes, such as drunken chicken, have to be marinated in the = stuff, and its tonic powers are an essential part of the medicinal foods = given to women in the month after childbirth.=20 Some people, especially among Taiwan's severely impoverished Aborigines, = actually drink rice wine as a beverage, but it is not intended to be = used this way and is never sold as such in a bar. It is, however, = everybody's food additive of choice. It gives sauces a more robust taste = and is widely believed to make meat more "warming", according to the = esoteric Doctrine of Humors which underlies traditional Chinese medicine = - to which the Taiwanese are also addicted.=20 Overall demand is hard to estimate, for reasons that will become = obvious. The Taiwan Tobacco and Wine Corp (TTWC), which until this year = had a monopoly of rice wine manufacture, sold about 300 million 600 ml = bottles last year. But it is possible that imports, microbrewers and = bootleggers might contribute as much as another 100 million bottles to = the market volume, making a total consumption of more than 17 bottles a = year for every man, woman and child on the island.=20 The problem is that what is seen as a food additive by Taiwanese is = classed by the WTO as a distilled liquor. This follows the result of the = United States flexing its muscles during Taiwan's negotiations for entry = into the WTO, which it finally achieved at the beginning of this year. = The US had, of course, no interest in rice wine. What it did have was a = powerful desire to get Taiwan's formidably high duties levied on = imported alcohol lowered. Taiwan had for the last 50 years followed a = policy of selling locally made alcohol quite cheaply - a 600ml bottle of = TTWC beer cost about US$1, a bottle of the same company's rum (heaven = knows who drank the stuff) about US$3 - while foreign liquor cost an arm = and a leg. The US wanted Taiwan to adopt WTO standards whereby alcoholic = beverages are taxed according to their strength, not their place of = origin and not, by the way, their intended use.=20 Before an anti-globalist sees this as a textbook case of Western = corporatism bullying the defenseless Third World, it should be pointed = out that what the negotiators sought was a level playing field on which = imported products could compete with domestic ones. If Taiwan acted = sensibly - since nobody seriously thought it would raise the tax on TTWC = "Taiwan Rum" to that of a bottle of Bacardi - the result should have = been better liquor available to consumers at lower prices. = (Anti-globalists need not be disappointed however; US negotiations with = Taiwan on opening its tobacco market in 1986 would amply repay their = study.)=20 The result of classifying rice wine as a distilled liquor was dramatic. = The product was hit, upon entry into the WTO this January, with a tax of = NT$150 (US$4.30) a liter, which should rise to NT$185 per liter in 2004. = TTWC's most popular brand of rice wine suddenly leapt from NT$21 a = bottle, a price that had been steady for many years - to around NT$130, = an increase of 440 percent.=20 The government tried a number of measures to ease Taiwanese into the = idea that rice wine was going to become expensive, none of which worked = and all of which worked to the government's detriment. Its first plan as = far back as 1999 was to stop the sale of government-owned TTWC's popular = "red label" brand and replace it with a more expensive alternative, = priced at NT$64 a bottle and containing salt - therefore obviously wine = for cooking with only. There were only two problems with this plan: = people didn't like the salted wine, and immediately stated hoarding as = much red label as they could find. The plan lasted a few days only = before the government caved in and told TTWC to start making red label = again.=20 If people power was enough to make the government change its plans in = 1999, it could not defeat eventual WTO entry in January this year. The = price went up and stayed up. Not surprisingly, toward the end of last = year a rice wine crisis slowly developed as it became clear that people = were buying large quantities of the condiment and hoarding it to offset = the price increase. This ranged from families buying a few cases of the = wine - after all the savings per case were equivalent to a day's pay for = the average worker - to retailers hoarding hundreds of thousands of = bottles. So bad did the rice wine shortage become that the government = had to import 15 million bottles from Singapore in the run up to the = Lunar New Year in February.=20 The government threatened retailers who hoarded rice wine with swinging = fines of NT$2,000 per bottle sold above its original marked price. Since = nobody expected the police to have nothing better to do than go around = checking on the price of rice wine and housewives were happy to buy at = anything less than the new price, this was not the most effective of = policies.=20 Taiwanese are, however, nothing if not ingenious and it wasn't long = before an inventor had come up with a machine to desalinate salty rice = wine which at the time was classed as a condiment and carried a tax of = NT$22 per bottle instead of the NT$90 charged on the non-salty product. = Su Hsin-hsiang's contraption took half an hour to take the salt out of a = bottle of salty rice wine and was marketed in two versions, an economy = model at NT$68,000 and an industrial one for NT$188,000. Su claimed in = October last year to have 1,000 orders already, mostly from restaurants = in southern Taiwan.=20 For this observer of Taiwan affairs, the drama that has revolved around = rice wine pricing, provision, hoarding and consumption for the past = three years has been an amusing delight, a change from the endlessly = repetitive and sterile arguments about Taiwan's national status and = relationship with China - which is all that most of the world knows.=20 But things have now gotten ugly; the high price of rice wine and the = comparative ease of making it have attracted bootleggers into the = business. Since the end of the TTWC monopoly at the beginning of the = year, more than 200 companies in Taiwan have received licenses to make = rice wine. Even so, the CEO of one wine manufacturer thinks that 70 = percent of the rice wine now on the market is made by unlicensed firms. = TTWC has seen its own rice wine sales plummet due to competition. And a = former employee of the cabinet-level Department of Health (DoH) caused a = sensation last month when he said that as many as 100 million bottles of = bootleg rice wine might be sold this year.=20 Competition is supposed to be good for the consumer, but not when it = kills them. Some of the unlicensed companies turn out quality products - = though the companies' illegality makes any kind of public health-related = quality control difficult. Other companies have been plain murderous. = The most expensive part of brewing the wine is the distilling. One could = save money by distilling less and fortifying the wine instead. The = problem is that what has been used is methanol. And methanol consumption = can be deadly.=20 So far 11 deaths have been recorded as being from poisoned rice wine. = Authorities last week exhumed two recent burials to check if these = deaths, too, were related to the rice wine scam. More worryingly, when = on November 26 health departments across the country started conducting = free tests on rice wine for worried consumers, of the 726 bottles = tested, 31 - over 4 percent - were found to contain excessive levels of = methanol. It could be that the free tests tempted those who had special = reason to worry about their rice wine - price unusually low, taste not = what it should be, feelings of sickness after eating - and were not = representative of the island's rice wine supply as a whole. On the other = hand it might be that there is a huge reserve of potentially deadly rice = wine out there, necessitating a massive campaign to alert consumers to = the dangers of cheap rice wine and to smash the bootleggers who produce = such stuff.=20 The DoH has been swift to let people know how to identify those brands = of wine that have been found contaminated. But Taiwanese are deft at = faking labels so to buy a "reputable" brand might mean nothing. People = have also been warned that any rice wine sold under NT$90 - the tax on = each bottle - is suspicious and should be avoided. Also, the = contaminated wine involved in the deaths so far all appears to have been = sold in plastic rather than glass bottles. Consumers are virtually = boycotting rice wine in plastic bottles, a boon for TTWC, which still = uses glass, but a business disaster for licensed microbrewers.=20 The government isn't interested in the ills of small rice wine producers = as much as it is eager to stop the bootlegging. Police action can only = go so far; Taiwan hasn't the law enforcement resources to devote to = locating hundreds of illegal brewing operations, nor does it have the = budget to create them.=20 The government has been considering asking the WTO to recategorize rice = wine in some way, perhaps as a cooking additive, or else to seek a = ruling allowing that tax should not be equivalent to more than half the = untaxed retail price - which would bring rice wine down to perhaps NT$30 = a bottle - making it too cheap to be worth bootlegging. Bodies such as = the American Chamber of Commerce have, however, impressed upon the = government that renegotiation of WTO entry terms is not really an option = so soon after entry.=20 This might force Taiwan into what would be, for it, drastic action - = simply unilaterally lowering the tax on rice wine in violation of its = WTO agreements. This it is loath to do; compliance with trade agreements = is one of the ways Taiwan tries to show what a good international = citizen it is, so many other avenues having been denied it by China's = opposition. Nevertheless, people's lives might be at stake and the = government can't sit idly by.=20 It also has a precedent in this regard. According to Yang Chiung-ying, a = Kuomintang legislator, when Japan encountered the same problem in the = past with sake it simply cut its tax rate. This led to 10 years of = bickering within the trade body before Japan was granted another four = years to bring itself into compliance. It thereby earned 14 years to = deal with the problem.=20 There are reasons why this strategy might not be wise: Taiwan is not an = 800-pound=1F trade gorilla like its northern neighbor and the WTO has = powers to penalize far in excess of anything possessed by the GATT.=20 But opposition legislators like Yang are beginning to ask why Taiwanese = should live in danger simply because of an international trade = agreement. And many ordinary Taiwanese are beginning to listen.=20 (=A92002 Asia Times Online Co, Ltd. All rights reserved. ) **************************************************************** U S E F U L I C D A W E B S I T E L I N KS **************************************************************** [**] The ICDA WEBSITE IS BEST VIEWED WITH IE 5.5[**] **************************************************************** The WTOIL Page: http://www.icda.be/wtoimpactlist/ Latest News @ ICDA: http://www.icda.be/icdalatest/ ICDA LDC Page: http://www.icda.be/unldc3-index.htm ICDA FfD Page: http://www.icda.be/ffdevelopment/ ICDA ETN Page: http://www.icda.be/cennt/ ****************************************************************** The ICDA WTO Impact List is a regular list issued daily by the = International Coalition for Development Action (ICDA). Its purpose is to circulate = general information on Trade and trade-related issues, with a special but not exclusive focus on WTO ISSUES. Subscribers are welcome to and encouraged = to contribute information. 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WTO Impact=20 List #320 | Wed-4 Dec | [WTO-QATAR]:
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*GATS Rage in UK
*WTO Leaders Endorse Secret Meetings
*Poisoned Wine and the=20 WTO
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List of=20 contents:
1)LOCAL COUNCILS ATTACK WTO
2)SUPACHAI AND HARBISON = ENDORSE=20 EXCLUSIVE WTO MEETINGS
3)US SLAPS A DUMPING DUTY OF 116% ON SOUTH = AFRICAN=20 FERROVANADIUM
4)POISONED WINE AND THE WTO
=3D=3D^=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D

Dear WTO=20 Impact Lister,

The first report today shows us how opposition = to GATS is=20 slowly gathering pace, not just in the southern hemisphere, but also = in...yes,=20 it is hard to believe - Britain! This report highlights the fact that = GATS will=20 have a damaging effect on all our lives and that it also helps to = explain how=20 the state, and especially local forms of government are losing their = ability to=20 self determine their own policies.
 
Moving on, our second article follows-up on last weeks article = regarding the Mini-ministerial in Sydney. Today's piece again questions = this=20 kind of decision making format and the truly democratic = credentials,=20 which the WTO claims to hold to dear.
 
Finally we can see how WTO membership has had a negative effect on = certain=20 products in the developing world in our last two articles, which feature = South=20 Africa and Taiwan.
 
Regards
Eamonn

___________________________________

If you = have any=20 constructive suggestions or comments about the ICDA
WTO Impact List, = or=20 articles and news to contribute, do not hesitate to
contact=20 us!


Best regards,
Emmanuel.K.Bensah & Eamonn = Moran
ekbensah@icda.be   &n= bsp;   eamonnmoran@icda.be


************************************************************=
1)=20 LOCAL COUNCILS ATTACK WTO
    From: http://society.guardian.co.uk/localgovt/story/0,7890,852012,00.html
   =20 Date: December 2, 2002
    By: Charlotte Denny = (Economics=20 Correspondant, The=20 Guardian)
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D
[Q   =20 U    O    T   =20 E     OF    = THE    =20 A    R    T    = I   =20 C   L  =20 E]
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D
"Planning laws 'under threat from trade liberalisation'
__________________________________
 
 The government was accused last night of giving up control of = issues=20 at the core of local government in World Trade Organisation agreements = being=20 thrashed out in Geneva.=20

The Local Government Association is concerned that councils could = lose their=20 right to set tough planning laws in the little-known talks about = deregulation of=20 services.=20

The implications are so far-reaching that anxieties were also raised = last=20 night that the BBC could be affected by the negotiations, which are = aimed at=20 providing new business opportunities for the City.=20

Alarmed at demands from Britain's trading partners, the LGA has = written to=20 its members warning that their ability to set rules in areas such as = land use,=20 licensing and environmental health could be threatened by provisions in = the=20 WTO's general agreement on trade in services (Gats).=20

The UK is one of the strongest supporters of the Gats, which = ministers=20 believe will open up markets abroad for the City's business and = financial=20 services firms. But in return, Britain must offer concessions to trading = partners by opening up its own economy.=20

The LGA's international bureau warned the talks could pose a threat = to powers=20 "at the very core of local government". Officials met with the DTI to = discuss=20 Gats, but in the letter to its members says the meeting failed to quell = their=20 concerns.=20

In a consultation document last month launched by trade minister = Baroness=20 Symons, the DTI argues that towning planning rules will not be affected = by Gats=20 rules as domestic regulatory measures which do not discriminate against = foreign=20 firms are exempt from its scope. But the LGA fears Gats provisions = requiring=20 that all regulation be shown to be "necessary" and "least trade = restrictive"=20 could be used by Britain's trading partners to challenge local councils. = "There=20 is considerable anxiety that these tough criteria are very much open to=20 interpretation, and that the WTO dispute settlement process could be = used to=20 enforce a strongly deregulatory interpretation in favour of business = interests."=20

The LGA fears Britain will bow to demands from its trading partners = that=20 local authorities abandon rules restricting the growth of out-of-town = shopping=20 centres because they discriminate against foreign firms like Wal-Mart, = which is=20 not in the small retail sector. While many European countries have = retained the=20 right to apply an economics needs test tosuch stores, Britain has made = no such=20 reservation.=20

Concerns about the BBC have been raised by a paper today from the = World=20 Development Movement arguing government support for public service = broadcasting=20 will be a major target for the US government. "We know that the UK=20 communications and broadcasting sector is the major target for the USA = in these=20 negotiations," said Barry Coates, WDM's director.=20

The WDM says measures seen by many as crucial to high quality public = service=20 broadcasting could be challenged under Gats rules - including local = content and=20 regional production rules, limits on cross-media ownership, restrictions = on=20 foreign media ownership and public service obligations.=20

But seeking last night to allay concerns about the Gats talks, a DTI=20 spokesperson said: "We haven't taken any public commitments under Gats = to=20 liberalise broadcast services, so the BBC will not be affected."=20

"We are in touch with the LGA and will work them over any = implications that=20 Gats will have for local authorities. No WTO members want to give up = their=20 rights to regulate."

Intangible benefits

What = is=20 Gats?=20

The general agreement on trade in services is an international deal = to open=20 up economies to competition from foreign firms. It was signed in 1994 by = the=20 members of the General Agreement on Tariffs and Trade, the predecessor = to the=20 World Trade Organisation.=20

Whose idea was it?=20

Decades of negotations under Gatt have reduced tariffs on goods to = low=20 levels. Western governments now want to free up trade in services, which = account=20 for a larger proportion of their economies than manufacturing. The = European=20 Union and the US are seeking gains for their highly competitive service = sector=20 firms in the next round of global trade talks in return for concessions = they may=20 have to make on cutting agricultural subsidies.=20

What does Gats do?=20

Because services are not physically traded - a company has to be near = its=20 customers - Gats is a very different agreement from anything else the = WTO or=20 Gatt has done. For foreign service firms to compete on equal terms with = domestic=20 firms means that for the first time government regulations could be = subject to=20 WTO scrutiny. Geneva rulings will apply not only to how a country = maintains its=20 economic borders but to how it controls its entire domestic economy.=20

Doesn't that give the WTO a lot of power over domestic = economies?=20

The negotiators recognised extending the WTO's reach could be = politically=20 difficult so Gats is an opt-in agreement. Countries have a right to = fence off=20 any part of their domestic economy, subject to general provisions about=20 liberalisation.


(c)=20 The=20 Guardian
*************************************************************=
2)=20 SUPACHAI AND HARBISON ENDORSE EXCLUSIVE WTO = MEETINGS
    From:=20 Focus on the Global South
    Date: 2 December=20 2002
    By: Aileen=20 Kwa
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D
[Q   =20 U    O    T   =20 E     OF    = THE    =20 A    R    T    = I   =20 C   L  =20 E]
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D
"The=20 mini-ministerial and green room meetings are about
decision-making, = whilst=20 the majority, presented with the final package, is
only relegated to = the=20 position of being 'decision-takers'."

_____________________________________________


2 December 2002, Geneva. The WTO is widely known to have=20 anti-democratic
negotiating practices. Since Seattle, where a revolt = took=20 place on the
inside, and developing country governments basically = denounced=20 the
negotiating process which excluded them, the WTO has had to work = a=20 little
harder to justify its practices. Any changes, which are = supposedly to=20 have
taken place, have unfortunately been merely = cosmetic.

When the=20 negotiations are stalemated, simply because the major powers = are
loading up=20 the agenda to their own advantage and being = totally
intransigent
on issues=20 of interests to developing countries, negotiations automatically
go = back into=20 a GATT-style exclusive group of about 20-25 Members. = The
marginalisation of=20 the majority is ultimately the only way in which the
powerful can = bamboozle=20 their agenda through and force it upon the weaker
members.

In = a=20 'dialogue' between civil society groups based in Geneva and the=20 WTO's
Director General Dr Supachai and his right hand man, Mr = Harbinson,=20 the
issue of lack of anti-democratic negotiating practices / Green=20 Room
meetings was raised repeatedly. Unfortunately, these concerns = were=20 met
with
denials by Mr Harbinson that such meetings even exist, = and=20 elusiveness by
the Director General as to whether or not such Green = Room=20 meetings would
continue. The DG also endorse the mini-ministerial=20 meetings.

Harbinson: 'There are no Green Room Meetings at the=20 WTO'

According to Supachai's chef de cabinet, Stuart Harbinson at = this
'dialogue' attempted to defend his role in the lead up to the = last=20 Doha
ministerial, and the negotiating process in = general:

'There is a=20 demonisation of the Green Room phenomena. In the preparation
for = Doha, I=20 cannot remember having a green room process. We had endless
meetings = on=20 specific subjects, and endless meetings on implementation.
Sometimes = the=20 Chair would get a few people in the room and hammer up the
technical = aspects.=20 I can't remember how many meetings we had, formal and
informal. But = there was=20 no central green room process  it did not happen
and it is not = happening=20 now'.

This is no less than a shocking statement. Clearly, 'Green = Room'=20 meetings
are being redefined by Harbinson (and perhaps the WTO = Secretariat),=20 so
that
meetings of 25 Members, such as the meeting on 5-6 = November in=20 Annecy of
senior officials, and the Mini ministerial in Sydney (14-15 = November) are
not considered Green Room meetings- presumably because = they are=20 convened
by
Members rather than the Director General. Informal = meetings,=20 wherein a
select group is invited, and others are excluded, and are = not=20 even
informed
of which consultations are taking place between = whom, are=20 also not
considered Green Room meetings.

In reaction to such an outrageous statement, Steve Potter, from=20 CIEL
(Centre for International Environmental Law) = retorted:

'There=20 seems to be a deep misunderstanding on both sides. There is = an
understanding=20 by many that the mini-ministerial is a legitimization of the
Green = Room=20 meetings. And it does not give legitimacy to the = institution'.

Supachai=20 Eludes Question on Stopping the Practice of Green Room = Meetings
Supachai on=20 the other hand, did not deny the occurrence of Green Room
meetings. = However,=20 he cleverly eluded the question of whether he would
stop these = meetings from=20 taking place.

Cecilia Oh of Third World Network pointedly asked = the=20 Director General:
'You mention that there was going to be lessons = learnt from=20 Seattle and
Doha. If  I remember rightly, I think Ruggiero (the = first=20 WTO Director
General) said that one of his commitments was that there = would=20 be no Green
Rooms. We want to know if there is some sort of = commitment, or at=20 least an
attempt or effort to make sure Green Rooms do not = happen?

One=20 of the biggest concern you have laid out is the need for=20 efficiency
and
expediency, hence the need for small group = meetings.=20 However, we also have
the format that takes place in the UN. I guess = it is=20 whether or not the
timing of WTO negotiations is of such importance = that some=20 sacrifices (in
terms of full participation) are made along the way. = Perhaps=20 deadlines are
not of such importance if the negotiations cannot be as = transparent. How
important is it to keep to the deadlines when there = isn't a=20 proper balance
of give and take?'

Supachai sidestepped this = question.=20 He said:

'We are in the process of consulting with the Chairman. = There is=20 an effort
that there is full transparency. There are various = proposals I have=20 seen
from EC, the Like Minded Group, India. They are all being taken = up=20 and
consulted. I don't know how far they can go. They are consulting = with=20 the
Members.'

He also asserted that 'In Cancun, we will take = into=20 consideration the need
to be fully inclusive. I am fully conscious of = all=20 countries, especially
the ones that have been sidelined. We will look = particularly in those
areas. If we can house everyone, we will do = that. The=20 proposal that has
been submitted by developing countries about Cancun = will be=20 taken on
board'.

He went on to say that the deadlines for the = Round=20 were very important for
developing countries. 'If the Round is going = to=20 stretch 6, 7, 8 years, I
don't think it will serve anyone including = the=20 developing countries since
there may be some new means to block = market access=20 for developing
countries. This is a round in which developing = countries=20 certainly will
have their say. I keep urging them to be actively = involved and=20 to be
united. If they are united, they will carry more weight. I = don't think=20 the
deadlines will be met if developing countries do not see it as=20 serving
their purpose.'

Supachai : Mini-ministerials are=20 Beneficial
Despite his reassurances about making transparent the = negotiating=20 process,
Dr Supachai endorsed the Sydney mini-ministerial meeting. He = took=20 pains to
explain why these mini-ministerials were beneficial. = Justifying=20 the
exclusive Sydney meeting of 25 Members, and mini-ministerials in=20 general,
he said,

'I am there to listen to them and they can listen to me so that they=20 can
take stock of what is happening and give their analysis and = input.=20 This
process is to eliminate surprises (at the Ministerial). They do = not=20 all
have this opportunity to meet. If they can be briefed about what = is=20 taking
place, there is a good chance that we will have a good meeting = (in
Cancun).
It is a chance for ministers to fully prepare = themselves (for=20 the
Ministerial).

As for Sydney, there were no concrete = decisions=20 taken. We highlighted the
health, Special and Differential Treatment, = and=20 market access issues, with
an emphasis on agriculture. We did go into = agriculture substantially. We
intended to have a full discussion on = TRIPS and=20 Health.

In every session, I have tried to reflect the will of the = members. It might
help to have this kind of stocktaking. These = meetings give=20 us momentum
(for the talks in Geneva), but we do not intend for them = to=20 bypass the Geneva
process.'

Aileen Kwa of Focus on the Global = South=20 challenged the Director General
that these mini-Ministerials are = illegitimate=20 because they institute an
'executive council' of about 25 members = through the=20 back door, and that
such exclusive practices contravened basic = democratic=20 principles. She also
said that there was a difference between = decision-making=20 and decision
taking. The mini-ministerial and green room meetings are = about
decision-making, whilst the majority, presented with the final = package,=20 is
only relegated to the position of being 'decision-takers'. She=20 reminded
the
DG that many countries that have been excluded would = find it=20 difficult to
reject a final package presented to them given the = political=20 costs they
would have to pay (as the spoiler of the multilateral = trade=20 negotiations).

Supachai retorted:

'How do we then deal = with the=20 process of reaching consensus. Do you have
another way to achieve it? = Normally no one is excluded. It is just that
the meeting can only = accommodate=20 so many.'

He went on to say that the WTO cannot always have full = meetings=20 of 145
members. Ultimately, final decisions would have to be taken in = the=20 plenary
session. 'On implementation, I would call meetings  the = people=20 never
complain. I cannot invite 145 countries. Implementation is=20 controversial.
But again, we need to have a process where we can = achieve the=20 outcome'.

In his diplomatic persuasive fashion, Supachai = attempted to=20 reassure NGOs:

'It is not like the Uruguay Round anymore. It is = no like=20 Blair House. I
would agree with you the process is exclusive if we = say that=20 this is the
agreement and you take it or leave it. This is not going = to=20 happen. From
what we know we should not underestimate developing = countries.=20 They fully
know what their rights are. You are under-estimating the=20 developing
countries.
Everyone will have to be fully involved, = otherwise,=20 you will not have a
round. In all these meetings, and in Sydney, more = than=20 half of those
invited were from developing countries.'

'It = (Sydney) is=20 not really decision-making. It is really about stocktaking
and trying = to=20 alert ministers. They got to know each other better. You
cannot avoid = them=20 discussing these issues amongst themselves. It would be
worse if they = discussed these matters on the phone, and only amongst the
QUAD (US, = EC,=20 Japan and Canada). They do it all the time.'

Giving an example of = how=20 Sydney was not a 'decision-making' meeting, he
said:

'I don't = think=20 Sydney wrapped up the TRIPS and Health issue. If Sydney was
a = decision-making=20 process, how is it that until this weekend, I still did
not know if = the Chair=20 (of the TRIPS council) would produce a draft or not?
Nobody made = Sydney a=20 decisive moment.'

One delegate, however, who was not in Sydney = felt that=20 while there was no
concrete decision taken in Sydney, Members were = more=20 receptive towards the
US position on the TRIPS and Health issue after = the=20 meeting. The TRIPS and
Health talks in Geneva subsequently collapsed, = with=20 the African Group
rejecting outright the package offered by the = developed=20 countries. Yet,
this decision by the African Group was only = determined the=20 morning of the
Trips Council meeting on 29 November, and only after=20 considerable amount
of lobbying by the NGOs actively involved in the = TRIPS=20 issue in the last week.

Secretariat Staff Can Chair Negotiating = Bodies If=20 the Membership so Wish

Supachai was also asked at the meeting how = it is=20 that he has condoned to a
flagrant breach of rules, by allowing his = chef de=20 cabinet, Stuart
Harbinson
(ex-Hong Kong Ambassador) to continue as = chair=20 of the Committee on
Agriculture. Harbinson had been elected to the = post while=20 he was still
Hong
Kong's Ambassador early this year. The Director = General=20 remarked:

'You seem to have a view that the staff is not neutral. = You=20 seem to have
said that he (Harbinson) would be less of an impartial = person=20 than he used
to be if he joined the Secretariat and chairs = agriculture. I=20 don't think
he
would like to do this job (at which point Harbinson = nods=20 emphatically). I
think it is mainly in the interest of the whole = membership.=20 The rules do
not forbid anyone from chairing a negotiating Committee = if=20 Members agree
to it'.

Clearly, Supachai does not think much of = the=20 Secretariat bulldozing its
way
into members' territory, and the = need for a=20 clear division of powers. He
has also conveniently forgotten that = there were=20 several members that spoke
to him privately making it clear that they = did not=20 like Harbinson
continuing as Chair of Agriculture once he joined the=20 Secretariat. No
public statements were made by developing countries, = as many=20 were
conscious
that they did not want to embarrass their newly = appointed=20 Director
General,
whom they had instituted only after a hard=20 fight.

Will Supachai Deliver?

Supachai is at the moment = delicately=20 poised on a political tightrope,
which
he described to NGOs as=20 follows:

'I have been around long enough to know how much = developing=20 countries will
have to give in order to get. I am trying to balance = as much=20 as I can
without losing my credibility. I can't go out and say, 'Just = stop
negotiating'. On all fronts, I would like to see = movement.'

He=20 gave the example of negotiations on industrial tariffs and that he = has
been=20 emphasizing also in these talks that the issue of tariff peaks=20 and
escalations (high tariffs on sensitive products used mostly by=20 developed
countries) must be tackled.

For all Supachai's = seemingly=20 good intentions, he is clearly limited
either
by his own = convictions about=20 the benefits of more liberalisation for the
South and the WTO in=20 accomplishing this end, or the political games he has
to play in = order to=20 remain relevant in this power game. Whatever his
personal views are, = it is=20 clear that he will also not be doing much to
stop
the undesirable = practice=20 of exclusive mini-ministerials which is now = being
institutionalised  and=20 which turn into Green Room meetings between 25
Members during = Ministerial=20 Conferences. In this scenario, no matter how
hard members work on = substantive=20 issues, it is unlikely that the outcomes
will really take on board = the=20 positions of the politically weaker
majority.

Already two more mini-ministerials are in the pipeline before Cancun. = The
Japanese will be hosting one on 15 -16 February 2003. And Egypt=20 has
offered
to host another, between February and the Cancun = Ministerial=20 in September.

A year on from Doha, the Doha Development Agenda is = also=20 not delivering on
'development' and the promises made to developing = countries=20 are showing
themselves up to be empty. The QUAD Members (US, EU, = Japan,=20 Canada) have
blocked any decisions on 'implementation' issues which = they=20 promised
developing countries would be tackled before the other=20 negotiations.
Already the Doha deadline of 31 July 2002 to find a way = to=20 provide
developing countries with more market access in textiles (the = growth
on-growth provisions) was bypassed and postponed to 31 = December.=20 Some
solution to implementation issues as well as promises to=20 strengthen
Special
and Differential Treatment provisions were = supposed to=20 have been provided
by 31 December. This deadline is now again going = to=20 slip-by. According to
developing country delegates, there has not = been real=20 engagement or
progress.

The US, EC and Japan are also moving backwards on the TRIPS and=20 Health
Declaration, which in Doha gained them many brownie points. US = is=20 making
attempts to narrow down access to medicines to only three = diseases;=20 Japan
to exclude vaccines; and the EU to put in place a whole host of = conditions
that will make the export of generic drugs virtually = impossible so=20 that
most countries without manufacturing capacity will still not be = able=20 to
attain these drugs at an affordable price.

If history is instructive, a likely outcome of Supachai's=20 three-year
tenure
as DG is that there will be some token crumbs = awarded to=20 developing
countries, but for which they would have to pay dearly.=20 Developing
countries may have to accept the launch of the new issues, = investment,
competition, government procurement, in order to attain = (on the=20 surface)
some balance in agriculture. Whether in fact real balance in = agriculture
will be achieved is unlikely since US and EU will be = shifting=20 distorting
supports into the 'Green Box' of supposedly non-trade=20 distorting
subsidies, even as another round of tariff liberalisation = will=20 have to be undertaken
by the South. An expanded new round, with new = issues=20 that will lead to the
dismantling of domestic legislation that favour = national companies over
foreign enterprises, will not be in = developing=20 countries' interests since
the South is in no position to compete. = Further=20 deindustrialisation is a
likely scenario for the majority.

This will be a regrettable legacy for a DG from a developing=20 country.


*****************************************************= *********
3.)US=20 SLAPS A DUMPING DUTY OF 116% ON SOUTH = FERROVANADIUM
    From:=20 http://allafrica.= com/stories/200211280285.html
   =20 Date: November 28, 2002 
    By: John=20 Fraser
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D
[Q   =20 U    O    T   =20 E     OF    = THE    =20 A    R    T    = I   =20 C   L  =20 E]
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D

"The duty now becomes effective for five years, and will last unless = there is=20 a determination that no injury has been caused to US producers something = which I=20 doubt will happen," said Deloitte & Touche trade expert Riaan de = Lange."

__________________________________________________

US trade commission due to rule on whether US = firms=20 suffered injury

THE US commerce department has imposed an = antidumping duty=20 of 116% on SA exports of ferrovanadium, an alloying agent which is added = to=20 steel to enhance its strength and resistance to wear.

The move is expected to choke off an export = business which=20 was worth just under $9m last year, and is expected to mainly hit = Highveld Steel=20 and Xstrata.

Highveld declined to comment on the US = announcement=20 yesterday.

Antidumping duties are imposed if an investigation = concludes=20 that exports into a market are being sold at unrealistically low prices, = usually=20 at lower prices than those which apply in the home market of the = exporter.

However, it also has to be proven that the = competitors in=20 the affected market have suffered injury as a result of the dumped = product=20 before antidumping duties can be triggered.

The US's International Trade Commission is due to = make its=20 ruling on the issue of injury early in January, and is expected to = conclude that=20 local companies have suffered injury.

The US is also taking similar action against = Chinese=20 ferrovanadium, with antidumping duties of between 13,03% and 66,71%.

The US administration mounted its antidumping = investigation=20 in December last year, after it had received complaints from a number of = US=20 companies Bear Metallurcical, Shieldalloy Metallurgical, Gulf Chemical = and=20 Metallurgical, US Vanadium and CS Metals of Louisiana.

The commerce department said that last year SA = exported=20 1391830kg of ferrovanadium into the US market, worth 8999883.

"The duty now becomes effective for five years, = and will=20 last unless there is a determination that no injury has been caused to = US=20 producers something which I doubt will happen," said Deloitte & = Touche trade=20 expert Riaan de Lange.

"If you find an antidumping margin as large as = 116%, it=20 would be difficult not to also find there has been injury to the = market."

He said that after a year, SA would be entitled to = request a=20 review of the antidumping duty, if it believed there had been an = injustice.

"For the moment, however, any SA exports of = ferrovanadium=20 would attract not only the normal customs duties but also this = antidumping=20 duty," he said.

"This is likely to severely hit the export = trade."

The US government has offered to launch = negotiations with SA=20 and its partners in the Southern African Customs Union on a free trade = agreement=20 (FTA).

Trade and Industry Minister Alec Erwin said = recently that he=20 would expect the negotiations to kick off in the new year.

However, this latest antidumping action = illustrates the=20 sensitivity in trade relations between the US and SA.

It is likely that certain vulnerable industries in = the US=20 will lobby hard for special treatment if an FTA is implemented, with the = agriculture sector expected to be leading the pack.

John Fraser, Trade And Industry=20 Editor
Johannesburg
*********************************************************= ******
4.)TAIWAN:=20 POISONED WINE AND THE WTO
    From: http://www.atim= es.com/atimes/China/DL05Ad01.html
   =20 Date: December 5 2002
    By: Laurence Eyton=20
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D
[Q   =20 U    O    T   =20 E     OF    = THE    =20 A    R    T    = I   =20 C   L  =20 E]
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D
"The government=20 has been considering asking the WTO to recategorize rice wine in some = way,=20 perhaps as a cooking additive, or else to seek a ruling allowing that = tax should=20 not be equivalent to more than half the untaxed retail price - which = would bring=20 rice wine down to perhaps NT$30 a bottle - making it too cheap to be = worth=20 bootlegging. Bodies such as the American Chamber of Commerce have, = however,=20 impressed upon the government that renegotiation of WTO entry terms is = not=20 really an option so soon after entry.=20 "
_____________________________________________


TAIPEI - To Taiwanese, rice wine is not a wine, it is a cooking=20 ingredient - a condiment, if you like, as is Worcestershire or Tabasco = sauce.=20 The World Trade Organization, however, thinks that wine means, well, = wine - as=20 in claret, Riesling or Chianti. And therein lies the basis of a = cross-cultural=20 misunderstanding that so far has led to the deaths of 11 people, with = two more=20 deaths looking suspicious, and many more people hospitalized.

A = visit to=20 a tepanyaki stall in a local nighttime food market gives an indication = of the=20 Taiwanese appetite for rice wine - the chef pours it over every kind of = food as=20 it cooks in astonishing quantities. Certain traditional dishes, such as = drunken=20 chicken, have to be marinated in the stuff, and its tonic powers are an=20 essential part of the medicinal foods given to women in the month after=20 childbirth.

Some people, especially among Taiwan's severely = impoverished=20 Aborigines, actually drink rice wine as a beverage, but it is not = intended to be=20 used this way and is never sold as such in a bar. It is, however, = everybody's=20 food additive of choice. It gives sauces a more robust taste and is = widely=20 believed to make meat more "warming", according to the esoteric Doctrine = of=20 Humors which underlies traditional Chinese medicine - to which the = Taiwanese are=20 also addicted.

Overall demand is hard to estimate, for reasons = that will=20 become obvious. The Taiwan Tobacco and Wine Corp (TTWC), which until = this year=20 had a monopoly of rice wine manufacture, sold about 300 million 600 ml = bottles=20 last year. But it is possible that imports, microbrewers and bootleggers = might=20 contribute as much as another 100 million bottles to the market volume, = making a=20 total consumption of more than 17 bottles a year for every man, woman = and child=20 on the island.

The problem is that what is seen as a food = additive by=20 Taiwanese is classed by the WTO as a distilled liquor. This follows the = result=20 of the United States flexing its muscles during Taiwan's negotiations = for entry=20 into the WTO, which it finally achieved at the beginning of this year. = The US=20 had, of course, no interest in rice wine. What it did have was a = powerful desire=20 to get Taiwan's formidably high duties levied on imported alcohol = lowered.=20 Taiwan had for the last 50 years followed a policy of selling locally = made=20 alcohol quite cheaply - a 600ml bottle of TTWC beer cost about US$1, a = bottle of=20 the same company's rum (heaven knows who drank the stuff) about US$3 - = while=20 foreign liquor cost an arm and a leg. The US wanted Taiwan to adopt WTO=20 standards whereby alcoholic beverages are taxed according to their = strength, not=20 their place of origin and not, by the way, their intended use. =

Before an=20 anti-globalist sees this as a textbook case of Western corporatism = bullying the=20 defenseless Third World, it should be pointed out that what the = negotiators=20 sought was a level playing field on which imported products could = compete with=20 domestic ones. If Taiwan acted sensibly - since nobody seriously thought = it=20 would raise the tax on TTWC "Taiwan Rum" to that of a bottle of Bacardi = - the=20 result should have been better liquor available to consumers at lower = prices.=20 (Anti-globalists need not be disappointed however; US negotiations with = Taiwan=20 on opening its tobacco market in 1986 would amply repay their study.)=20

The result of classifying rice wine as a distilled liquor was = dramatic.=20 The product was hit, upon entry into the WTO this January, with a tax of = NT$150=20 (US$4.30) a liter, which should rise to NT$185 per liter in 2004. TTWC's = most=20 popular brand of rice wine suddenly leapt from NT$21 a bottle, a price = that had=20 been steady for many years - to around NT$130, an increase of 440 = percent.=20

The government tried a number of measures to ease Taiwanese into = the=20 idea that rice wine was going to become expensive, none of which worked = and all=20 of which worked to the government's detriment. Its first plan as far = back as=20 1999 was to stop the sale of government-owned TTWC's popular "red label" = brand=20 and replace it with a more expensive alternative, priced at NT$64 a = bottle and=20 containing salt - therefore obviously wine for cooking with only. There = were=20 only two problems with this plan: people didn't like the salted wine, = and=20 immediately stated hoarding as much red label as they could find. The = plan=20 lasted a few days only before the government caved in and told TTWC to = start=20 making red label again.

If people power was enough to make the=20 government change its plans in 1999, it could not defeat eventual WTO = entry in=20 January this year. The price went up and stayed up. Not surprisingly, = toward the=20 end of last year a rice wine crisis slowly developed as it became clear = that=20 people were buying large quantities of the condiment and hoarding it to = offset=20 the price increase. This ranged from families buying a few cases of the = wine -=20 after all the savings per case were equivalent to a day's pay for the = average=20 worker - to retailers hoarding hundreds of thousands of bottles. So bad = did the=20 rice wine shortage become that the government had to import 15 million = bottles=20 from Singapore in the run up to the Lunar New Year in February. =

The=20 government threatened retailers who hoarded rice wine with swinging = fines of=20 NT$2,000 per bottle sold above its original marked price. Since nobody = expected=20 the police to have nothing better to do than go around checking on the = price of=20 rice wine and housewives were happy to buy at anything less than the new = price,=20 this was not the most effective of policies.

Taiwanese are, = however,=20 nothing if not ingenious and it wasn't long before an inventor had come = up with=20 a machine to desalinate salty rice wine which at the time was classed as = a=20 condiment and carried a tax of NT$22 per bottle instead of the NT$90 = charged on=20 the non-salty product. Su Hsin-hsiang's contraption took half an hour to = take=20 the salt out of a bottle of salty rice wine and was marketed in two = versions, an=20 economy model at NT$68,000 and an industrial one for NT$188,000. Su = claimed in=20 October last year to have 1,000 orders already, mostly from restaurants = in=20 southern Taiwan.

For this observer of Taiwan affairs, the drama = that has=20 revolved around rice wine pricing, provision, hoarding and consumption = for the=20 past three years has been an amusing delight, a change from the = endlessly=20 repetitive and sterile arguments about Taiwan's national status and = relationship=20 with China - which is all that most of the world knows.

But = things have=20 now gotten ugly; the high price of rice wine and the comparative ease of = making=20 it have attracted bootleggers into the business. Since the end of the = TTWC=20 monopoly at the beginning of the year, more than 200 companies in Taiwan = have=20 received licenses to make rice wine. Even so, the CEO of one wine = manufacturer=20 thinks that 70 percent of the rice wine now on the market is made by = unlicensed=20 firms. TTWC has seen its own rice wine sales plummet due to competition. = And a=20 former employee of the cabinet-level Department of Health (DoH) caused a = sensation last month when he said that as many as 100 million bottles of = bootleg=20 rice wine might be sold this year.

Competition is supposed to be = good=20 for the consumer, but not when it kills them. Some of the unlicensed = companies=20 turn out quality products - though the companies' illegality makes any = kind of=20 public health-related quality control difficult. Other companies have = been plain=20 murderous. The most expensive part of brewing the wine is the = distilling. One=20 could save money by distilling less and fortifying the wine instead. The = problem=20 is that what has been used is methanol. And methanol consumption can be = deadly.=20

So far 11 deaths have been recorded as being from poisoned rice = wine.=20 Authorities last week exhumed two recent burials to check if these = deaths, too,=20 were related to the rice wine scam. More worryingly, when on November 26 = health=20 departments across the country started conducting free tests on rice = wine for=20 worried consumers, of the 726 bottles tested, 31 - over 4 percent - were = found=20 to contain excessive levels of methanol. It could be that the free tests = tempted=20 those who had special reason to worry about their rice wine - price = unusually=20 low, taste not what it should be, feelings of sickness after eating - = and were=20 not representative of the island's rice wine supply as a whole. On the = other=20 hand it might be that there is a huge reserve of potentially deadly rice = wine=20 out there, necessitating a massive campaign to alert consumers to the = dangers of=20 cheap rice wine and to smash the bootleggers who produce such stuff. =

The=20 DoH has been swift to let people know how to identify those brands of = wine that=20 have been found contaminated. But Taiwanese are deft at faking labels so = to buy=20 a "reputable" brand might mean nothing. People have also been warned = that any=20 rice wine sold under NT$90 - the tax on each bottle - is suspicious and = should=20 be avoided. Also, the contaminated wine involved in the deaths so far = all=20 appears to have been sold in plastic rather than glass bottles. = Consumers are=20 virtually boycotting rice wine in plastic bottles, a boon for TTWC, = which still=20 uses glass, but a business disaster for licensed microbrewers. =

The=20 government isn't interested in the ills of small rice wine producers as = much as=20 it is eager to stop the bootlegging. Police action can only go so far; = Taiwan=20 hasn't the law enforcement resources to devote to locating hundreds of = illegal=20 brewing operations, nor does it have the budget to create them. =

The=20 government has been considering asking the WTO to recategorize rice wine = in some=20 way, perhaps as a cooking additive, or else to seek a ruling allowing = that tax=20 should not be equivalent to more than half the untaxed retail price - = which=20 would bring rice wine down to perhaps NT$30 a bottle - making it too = cheap to be=20 worth bootlegging. Bodies such as the American Chamber of Commerce have, = however, impressed upon the government that renegotiation of WTO entry = terms is=20 not really an option so soon after entry.

This might force = Taiwan into=20 what would be, for it, drastic action - simply unilaterally lowering the = tax on=20 rice wine in violation of its WTO agreements. This it is loath to do; = compliance=20 with trade agreements is one of the ways Taiwan tries to show what a = good=20 international citizen it is, so many other avenues having been denied it = by=20 China's opposition. Nevertheless, people's lives might be at stake and = the=20 government can't sit idly by.

It also has a precedent in this = regard.=20 According to Yang Chiung-ying, a Kuomintang legislator, when Japan = encountered=20 the same problem in the past with sake it simply cut its tax rate. This = led to=20 10 years of bickering within the trade body before Japan was granted = another=20 four years to bring itself into compliance. It thereby earned 14 years = to deal=20 with the problem.

There are reasons why this strategy might not = be wise:=20 Taiwan is not an 800-pound=1F trade gorilla like its northern neighbor = and the WTO=20 has powers to penalize far in excess of anything possessed by the GATT.=20

But opposition legislators like Yang are beginning to ask why = Taiwanese=20 should live in danger simply because of an international trade = agreement. And=20 many ordinary Taiwanese are beginning to listen.

(=A92002 Asia = Times=20 Online Co, Ltd. All rights reserved.=20 )
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