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Summary, Overview & Development (SOD) Reports

RIO+10 ] Qatar/WTO ] Regional Trade ] FfDevelopment ]

Regional Trade

Summary, Overview & Development Report 2.1
The Case for United Nations LDC3: August 2001
By Emmanuel.K.Bensah, ICDA Secretariat

The paradox of the African continent is one that touches us all. Here is a rich continent, with many resources, unexploited as they are; yet here also is a continent that comprises 34 Least Developed Countries. Surely there is something seriously wrong with this picture?

A Thousand Words
They say a picture paints a thousand words, and after the mini-debacle at Genoa, this was perhaps even truer. Who can forget the clashes between the Italian police and anti-globalisation protesters? Worse, still, who can actually remember what positive and constructive outcomes came out of the summit?

According to Boaventura de Sousa Santos, whose article featured in 27 August’s WTOIL (Learning from Genoa), there was a report following Genoa, entitled “Debt Relief & Beyond”, which he argues “clearly reveals the insurmountable contradiction between the neo-liberal economy and the welfare of the majority of the world population”. Words that would not have shocked us had we not heard it all before. Sousa Santos goes on to argue that the report “proclaims the success of the initiative in the case of 23 countries”, insisting that in the short run, “debt sustainability will depend on the greater integration of these countries in the world trade.” He adds that considering there are no radical changes proposed to ameliorate this situation, it falls short of nothing but hypocrisy.

This hypocrisy is exacerbated by the fact that, as Mohamed Sid-Ahmed, writing in Ahram Weekly argues, “the organisers of these increasingly unpopular meetings have every interest in discrediting their critics by focussing attention on the anarchist minority to falsify the overall picture and drown the voices of the disciplined demonstrators”. (WTOIL 20 August, How Useful Is The G8?).

Sid-Ahmed maintains that despite the moniker of “anti-globalisation” attached to the protesters, those at Genoa are not against the process of globalisation, per se, “but to the way it is being implemented by the proponents of neo-liberalism.” Out of these proponents, the most ardent are multinationals, which de Sousa Santos takes a hack at in his essay. He writes: “there would be less famine in the world if the least developed countries were allowed to protect their economic activities from the voracity displayed by the 200 larger multinationals, which hold 28% of global trade, but only one percent of global employment.”

In short, these two articles provided the basis, in August’s WTOIL, with special focus on the Third United Nations Conference on Least Developed Countries’, for people to engage themselves in a refreshing analysis of the developing world, especially the so-called “poorest of the poor”, in the wake of Genoa.

That said, if there is anything both articles agreed on, it is that dialogue and/or debate is paramount at this sensitive politico-diplomatic juncture before the WTO confabulation in November. Sid-Ahmed’s exhortation for debate - a “wide-ranging public debate, not a restricted discussion conducted behind high walls by a handful of leaders whose decisions will impact on the whole of humankind” - pales in comparison to that of de Sousa Santos, who argues that “dialogue is…urgent”. He contends that “cynical rhetoric of empty concessions must give way to a global social contract guaranteed by a new and equally global democratic political framework.” Very nice words, but will the leaders, this time, get the picture?

The framework, as mentioned by de Sousa Santos, would necessarily include one of the very crucial cornerstones of the economies of the Least Developed Countries - food security, which also occupied pride of place in August’s WTOIL. Food security is actually defined in an article - Agriculture and Food Security - by the NGO US-Africa Trade Policy Working Group as the “means assured access for every person, primarily by production or purchase, to enough safe, nutritious, and culturally acceptable food to sustain an active and healthy life with dignity”. (WTOIL 20 August).

In this same article, the issues underpinning food security, as well as its ramifications are discussed at length. Though it dates from 1997, and is produced by the NGO US-Africa Trade Policy Working Group, it provided one with some very sobering statistics.

On average, the article maintains, “food insecure Africans consume 1,470 calories/day, far below the minimum requirement of 2,350 calories; women grow up to 80% of Africa’s domestic food supply, but agriculture and rural development programs tend to focus on male farmers and export crops.” Finally, between 1969-1971 and 1990-1992, “the proportion of the region’s population with inadequate access to food rose from 38% to 43%, while the absolute number of hungry people doubled, from 103 million to 215 million.” These statistics truly do fly in the face of what pro-globalisation and proponents of across-the-board trade liberalisation like to tell us.

Barring the statistics, food security remained a crosscutting issue in August’s WTOIL, as exemplified by the two articles on the ramifications of the UNDP’s Human Development Report, Making Technologies Work For the Poor.

In a follow up to SOD Report 1.1 (Pandora Revisited: The Plight of LDCs and Food Security), in which Dr. Devinder Sharma’s article advanced an incisive criticism of how the UNDP was toeing the transnational companies’ line, the first, “Open Letter from Lead Author of the UNDP HDR 2001 Report”, responds indirectly to Sharma’s arguments.

The above article by the lead author of the HDR 2001 report, Sakiko Fukada-Parr, attempts to mollify the angst expressed by NGOs that the report is nothing but what Sharma calls “deft manipulation” as indicated in SOD Report 1.1. Fukada-Parr argues that 800 million people do not have “adequate food, and 1.2 billion people in the world live on only $1 a day” - or 600 million people as the conservative UN estimate has been. He concedes that GM crops “are not a silver bullet that can feed them”, especially since at the root of poverty remain very “complex social, political and economic reasons why there is more food than the world’s six billion people need”.

However, his argument that more money poured into R&D (research & development) of GM crops is a “promising avenue for accelerating progress in tackling global poverty and hunger challenges” is not so much a sinister as a specious argument, for implicit in this argument is the idea that multinationals, whose very nature is to put profit ahead of any kind of humanitarian objective, have the upper hand.

In the second article, Devinder Sharma Responds to Open Letter from UNDP, the author in question offers a damning indictment of the Human Development Report, arguing that even in his own country of India, there is “a dubious distinction of an unmanageable food surplus exceeding 60 million tonnes on the one hand and a staggering population of 320 million hungry people on the other”. He maintains that if one were to eradicate hunger from India -- one of the most populous countries in the world - “a third of the world’s hungry would be out of the hunger trap”. Why this is not happening, or has not happened, speaks volumes of the hypocrisy inherent in the global system - one that “perpetuates hunger, which in reality has become part of the criminal act of exploiting the poor and hungry”.

Finally, the August editions of the WTOIL briefly covered two articles that broached the issue of globalisation. The two articles that covered these were both featured in the WTOIL of 20 August.

The first, UNDP Chief Lists Ills of Globalisation, featured the speaker and chief, Economic Unit of the UNDP, Dr.K.K.Kamaludeen, in an interview with Lagos paper, The Guardian. In the interview, the UNDP chief argues how “globalisation has not really benefited Nigeria because the country is yet to get what it takes to profitably participate in the phenomenon”. He maintains that globalisation, far from enabling opportunities for a country like Nigeria to benefit from goods coming in and domestic goods going out, which would favour Nigeria’s economy, the reverse has been true as Nigeria’s “level of production is still largely crude and unable to compete with international standards.” Kamaludeen argues that Nigeria’s participation in globalisation “has triggered unemployment”. However, EU Trade Commissioner Pascal Lamy who was in Egypt in April would be very quick to disagree about this adverse aspect of globalisation. In fact, on his visit to Egypt, he outlined four major areas of concern that the EU is looking at in the run-up to the WTO Ministerial Conference in Doha in November. (WTOIL 20 August, Globalisation Done Gently) The first area of concern - put forward to the Egyptian Council for Foreign Affairs - resides in the statement that “changes should be introduced to the WTO system to integrate developing countries into the world trading system and that the poverty gap must be reduced”. Lamy pointed to the approval of the Everything But Arms (EBA) initiative as a step to this effect. The second area, according to Ahram Weekly, lies with investment and competition rules, “which he sees as indispensable for more secure and transparent market access and a predictable climate for foreign direct investment.” Thirdly, one of the most important aspects that has been a bone of contention for many a developing country - let alone an LDC - are “the protectionist measures taken by advanced countries against the formers’ products for social and environmental reasons”. Finally, Lamy stressed the importance of “a better dialogue between the International Labour Organisation and the WTO” with respect to labour issues. Developments ° The United Nations’ Food and Agriculture Organisation (FAO) and the World Health Organisation (WHO) have called upon countries “to apply clear-cut, science-based international food safety and quality standards to protect health and trade in food”. The FAO will be setting up an Internet-based information system on food safety, plant and animal health with other UN agencies and partners. This could include a rapid reaction system on food safety issues. (WTOIL 13 August) ° The New African Initiative (NAI) was mooted in Lusaka in July. The initiative is by and for Africans. The initiative will also recognise peace, security and good governance as preconditions for development, and receiving ODA and FDI. The German government has pledged DM 800 million in funding for sub-Saharan Africa this year German Minister of State at Federal Foreign Office Ludger Volmer said. Swiss government will soon remove all trade barriers for the LDCs. (WTOIL 13 August) ° A North American event, GROUNDWORK 2001, to take place in October will be first of its kind to support FAO’s TeleFood campaign to reduce world hunger. It will do this through a week-long series of concerts and community activities in SEATTLE and WASHINGTON from October 14 to October 22. Honorary Chair of the Advisory Committee, Louise Ciccone, better known as Madonna, has pledged support for the event, saying that « the first casualty of hunger is hope. It"s shameful », she continues, « how little it really takes to help, and how easily we are all discouraged from doing so. » (WTOIL 13 August) ° The two regional Africa groupings of SADC and COMESA are to team up in order to prepare for the 4th WTO Ministerial Conference. Meeting in August brought together EGYPT, COMESA’s largest economy and SOUTH AFRICA, SADC’s economic powerhouse. They are to formulate a strategy for adavancing Africa’s interests at the WTO meeting « and ensuring solid trade gains for the continent ». The meeting, about cooperation, was paramount considering earlier problems regarding membership poaching between the two regional groupings. (WTOIL 20 August).

© E.K.Bensah, 2001



Summary, Overview & Development Report 1.3
The Case for Qatar/WTO: July 2001
By Hannes Huhtaniemi, ICDA Secretariat

July was the month in which the WTO Impact List began its daily focus on five diverse, but highly crosscutting, issue areas. Today we bring you the synopsis of what appeared in July's Qatar Impact Lists.

Large emphasis lay on the prospects of launching a new round of trade liberalization talks at Doha. The quotes below highlight some of the most recurring concerns brought up.

"The new round of WTO talks, then, should not be regarded as a fight over more rights and privileges but, if it is to be successful, should endeavour to formulate a uniform criteria for all, as well as awarding much needed relative advantages to developing countries. Only then will the historic imbalance debilitating the position of the developing countries begin to be redressed." (From WTOIL 18 July - WTO PROSPECTS
Date: 5 - 11 July 2001
By: Aziza Sami // Al-Ahram Weekly Online )

« EU negotiators favour some level of concessions to Third World governments to get them on side. They are also far keener to get the round off the ground, as the EU needs gains on new issues, such as investment and competition, to offset what it will likely have to give away in the ongoing negotiations on agriculture, which the EU massively protected under its Common Agricultural Policy. (…) Southern governments have been able to force discussions on implementation issues within the WTO, but Quad negotiators have brushed their concerns aside and have conceded nothing substantial to date. (…) The negotiating position of the "like-minded nations" group, which includes major Third World trading nations such as Brazil, Egypt and India, is to threaten to oppose a new comprehensive round outright unless they receive tangible concessions on implementation issues before the Qatar conference and unless issues of interest to them, such as anti-dumping policies and export subsidies, are part of the round. Many Southern governments are also dead-set against adding new issues like investment to the agenda.

The US for its part has said that it will not, under any circumstances, submit its export subsidy or anti-dumping policies, by means of which it massively aids both its exporting and import competing companies, to negotiation. »

From: http://www.greenleft.org.au/back/2001/445/445p19.htm
Date: April 25, 2001 issue --
By: Sean Healy)

The logic of the "trade game" - the secretive wheeling and dealing that goes on in the Green Room and which makes a mockery of the principle of decision making by consensus - was put bluntly by WTO Director General Mike Moore in WTOIL July 4.

"It is through a round that developing countries can obtain the leverage that is necessary to engage effectively with the more powerful nations. Only a broad round offers the sort of trade-offs that are necessary to bring about an outcome where all member nations win," (MOORE LENDS WEIGHT TO DEVELOPING COUNTRIES
From: http://allafrica.com/stories/200106150468.html
Date: June 15, 2001
By: Zimbabwe Independent (Harare); Dumisani Ndlela in Geneva)

Now, questioning such lofty statements as "where all member nations win" is what we like to do best. "Engaging effectively" with developed nations in this horse-trading is a tall order for poor states, which have had a dangerous deficit of trade negotiating cunning and expertise ever since they were formally included in the process in the Uruguay Round. So-called "consensus" decisions in effect mask an ugly tradition of pressure build-up and arm-twisting of developing countries.

All the same, we had run something on the previous day's WTOIL from the "pro-round, pro-WTO" camp, which highlighted features of the global economic context in which the Qatar-round is being hastened off the ground, as well as some improvements the WTO can claim on other Bretton Woods offspring institutions. The author clearly understood the necessity of approaching the prospect of a new round with modest proposals (and hence with fewer opportunities for manoeuvring away the developing countries' trading futures), and the need for a conciliatory tone in trade talks to bring the multilateral system to the service of those who need it most.

"Does (the fact that agreement on the substance of Doha is lacking) matter? After all, world trade seems to be bowling along nicely without the negotiators. Last year's phenomenal growth in merchandise trade ­ over 12 per cent, in dollar terms ­ matches anything we have seen in the past 50 years. It was, admittedly, boosted by the rising price of oil, driving Middle Eastern exports up in value by over 50 per cent. But even in volume terms, trade grew spectacularly: the rising price of oil went hand in hand with a fall in the price of manufactured goods ­ for the fifth year in succession. Other regions enjoyed a trade bonanza. Only in Western Europe were both growth and trade sluggish. So who needs another trade round?

Well: one group of countries clearly does. Of all the complaints at Seattle, the most rational came from the developing world, which believes the trade playing-field is still stacked against it. Turning against the WTO was, however, an irrational response, since this fragile institution is the only weapon small economies have.

The difficulty is that the "trade game" involves cross-industry bargaining, with each country discarding some restrictions in return for market access elsewhere. This has been vividly illustrated in the trade regime's greatest success story over the past year, the negotiations with China. While the rich world's protesters berate the WTO as a lackey of the "new colonialism", the Chinese government remains keen to join. Last week's negotiations with the United States had truly remarkable results, not least an agreement to reduce China's agricultural tariffs to single figures. In the previous phase of these negotiations, the European Union did even better than the United States; they now also have to close the deal, but if they can, the path to China's entry looks clear.

For the future of international trade, this would be far more important than anything else that is likely to be agreed at Geneva or Doha. In the struggle to set a new agenda, the WTO will be wise not to be too ambitious. Yet some sense of momentum is important, lest commitment simply drains away.

For all the criticism, the WTO has some claim to be the most functional (or least dysfunctional) of all international economic organisations. It is the youngest. It is the leanest. It can only change by consensus. It cannot invent theories of development, embark on large-scale lending or tell governments what to do with their currencies and interest rates. It can only arbitrate between members on the basis of rules that they themselves have written. It is the least dominated by the United States: neither the International Monetary Fund nor the World Bank has any sway over their host country, but WTO panels have found against the US more than once. Mr Moore may be pushing it a bit to describe the WTO the "final nail in the coffin of imperial and domestic privilege", but he is right to remind us of its essential neutrality.

The WTO has been set up for a bruising year of exhortation and negotiation with a grumpy membership, without strong leadership from the major economies and against a background of popular discontent. At the end of the day, let's hope the world remembers to keep tight hold of Nurse. There is something worse."

From: http://www.independent.co.uk/story.jsp?story=78670
Date: 18 June 2001
By: Sarah Hogg, Chairman of Frontier Economics)




Summary, Overview & Development Report 1.5
The Case for Financing for Development: July 2001
By Hannes Huhtaniemi, ICDA Secretariat

July's Financing for Development (FfD) WTOILs tried to shed light on the various dimensions the subject features in. How to finance development is a highly crosscutting question, to which adequate proposals must incorporate the wisdom of sustainability and trade in development, as well as the more direct financial instances of debt management, investment mobilisation and foreign aid. In other words, the upcoming FfD conference in March 2002 in Mexico can little afford to neglect any domain of development. Ranging from safeguarding communities to learning the intricacies of macroeconomics, from protecting property rights to embracing the wider opportunities presented by globalisation, viable and sustainable patterns of financing social, economic and human development depend on solid understanding of the various aspects of capital formation, market psychology and economic innovation. It is a long-overdue conference, one which can nonetheless benefit from the years of accumulated knowledge of how to link all these together.

The preparations for the conference itself have roughly divided the subject matter into six areas. First, there is the matter of how best to mobilise domestic resources, including how to create an overall favourable environment for the raising of capital through existing assets backed by strong public finances, legal and tax systems. Second, the conference intends to focus on mobilising international resources for the benefit of developing countries, including private flows and official development assistance (ODA). Third comes the question of how to improve market access for developing country products, if necessary through special and differential (S&D) arrangements. Fourth, the conference will explore new innovative ways of FfD. Fifth, if will seek to propose solutions for the crippling debt conditions of many countries. And finally, in terms of creating enabling global regimes for FfD, attention will be placed on so-called "systemic" issues relating to the international trading and financial architectures, with the possibility of reinvigorating the role of the UN in the process. Emphasis rests with the necessity of considering these topics together and in a mutually supportive way.

In WTOIL 6 July, there appeared an article on a UN FfD panel report which briefly touched on some of these very questions.

"The panel report says that primary responsibility for securing economic growth and equity lies with national governments, and urges developing countries to undertake balanced fiscal policies, macroeconomic discipline, fair and effective governance, secure tax bases, support for human capital and the installation or strengthening of pension plans. While welcoming current mechanisms to reduce the debt burden of the poorest countries, the panel warns that debt relief by itself is not sufficient to move countries forward. The report urges a renewed push toward the target of devoting 0.7 per cent of donor country gross national product (GNP) to official development assistance, and advocates various mechanisms to target resources more effectively towards the poorest sectors of the population."
Date: June 28, 2001
By: United Nations (New York)

Indicating the World Bank policy line on debt management, we then pasted this the following week. It lays out the economic arguments advanced by developed countries in their reluctance to grant comprehensive debt relief.

"Commenting on the Heavily Indebted Poor Countries (HIPC) initiative, Wolfensohn expressed satisfaction with the progress thus far. (…) HIPC has also reduced debt service requirements from around 7% of GDP to 2%, freeing about $1.7 billion per year that can be utilized for social programs in these countries. (…) While the World Bank calculates it has reserves on paper which could go toward more debt forgiveness, the dilemma is that donor countries rely on these repayments to replenish IDA so that the Bank can continue to lend to poor countries in the future. (…) "The other important point is that debt forgiveness alone is not the key to sustainability, in terms of poverty alleviation programs or economic stability," said Wolfensohn. "As you move forward, what you must have is the host of programs that go with it.""

From: http://www.brettonwoods.org/Wolfensohn01.html
Date: April 27, 2001
By: Bretton Woods Committee Annual Meeting 2001

Concerning other changes initiated in the international financial institutions with respect to their lending programs and the conditions they attach to these - especially the poverty reduction strategy papers - much criticism centred on the deplorable similarity between the new programs, and the old, discredited lending facilities. This, from WTOIL 13 July:

"A statement from thirty-nine organisations and regional networks from fifteen African countries agreed at a meeting in Kampala, Uganda, in May that PRSPs were simply window-dressing to improve the IMF and World Bank's declining legitimacy. The content of PRSPs continues to put corporate rights before social, human and environmental rights. Rather than enable local people to decide their content, PRSPs meant more IMF and World Bank control "not only over financial and economic policies but over every aspect and detail of all our national policies and programmes", said the statement. In particular, the participants noted that the macroeconomic programme was still not open for discussion, and that "anti-poverty programmes are expected to be consistent with the neo-liberal paradigm including privatisation, deregulation, budgetary constraints and trade and financial liberalisation. Yet these ignore the role of international/global factors and forces in creating economic crises and poverty.""
From: http://www.brettonwoodsproject.org/topic/adjustment/a23prspstats.html
Date: N/A - Topics section
By: Please see above

Regarding the G8 Genoa summit's conclusions on recognising and resolving problems relating to FfD, we posted up the World Development Movement's reactions in WTOIL 27 July.

"It is good news that the G8 recognised their responsibility and the need for decisive action, but shameful that they did not deliver any. Despite the world economic slowdown, the recent financial crises and the gap between rich and poor, the G8's approach remains the same. The G8 continue to believe that extending neo-liberalism and tweaking the current system, offer the best way forward.

The G8 suggested that the debt relief initiative is progressing well - all that needs to happen is to continue along this path. The G8 leaders referred to progress, but WDM believes that this has been too slow. Of the $100billion of debt stock cancellation offered at the Cologne G8 Summit in 1999, only $2.6 billion has been cancelled in the last two years. Analysis by the World Bank shows that the HIPC Initiative does not deliver a lasting exit from unsustainable debt. Even after receiving debt relief sixteen countries still have to spend larger amounts on debt service than on health and education. WDM is also concerned that the liberalisation and privatisation policies demanded in exchange for debt relief are a continuation of the structural adjustment policies that hurt, rather than helped, the poor in the past.

The G8's collective aid to the developing world is declining. The G8 said nothing about extra funding to reverse the decline in their aid, nor about time scales for rich countries to reach the UN target of 0.7% GNP devoted to aid. WDM welcomes the untying of aid, but again regrets that the G8 set no timetable for implementation."

From: World Development Movement-http://www.wdm.org.uk
Date: 27 July 2001
By: Alison Marshall

We also ran a few articles on capital flows, always a seasonable topic.

"It is clear developing countries should not view international capital markets as ever-increasing, predictable, or reliable sources of long-term financing for development. Moreover, capital-account liberalization can have an adverse impact on financing for development by facilitating capital outflows and capital flight, and undermining domestic financial stability." (From WTOIL 20 July) FINANCING INTERNATIONAL DEVELOPMENT
From: http://www.nsi-ins.ca/ensi/publications/review/v3n3/03.html
Date: Oct. 28, 1999
By: The North-South Institute; Roy Culpeper

"In the face of some 1.2 billion people living in abject poverty on less than $1 a day, international organizations (mainly IMF, World Bank and WTO) and government leaders continue to focus on economic growth as the most effective way to reduce poverty. With official development assistance (ODA) in 2000 still below 1995 levels (last year, the average donor country provided only 0.24 percent of its gross national product in foreign aid), trade and financial liberalization - both domestic financial and capital account liberalization (CAL) - are touted as the "inevitable"(IMF economic counselor Michael Mussa) prerequisite for developing countries to partake in the open world economic system and to achieve poverty alleviation through economic growth."

"…the discussion centered on the question whether CAL supports or restrains other policies aimed specifically at reducing poverty (f. ex. by prohibiting developing country governments from using pro-poor spending)…"

"the shortfall of government revenues created by CAL needs to be accounted for, especially since financial liberalization, according to several UNDP studies, has failed to deliver on the promise of contributing to higher economic growth rates, which could have contributed to increased government revenues. On the contrary, because CAL demands strict market discipline with an inherent deflationary bias, governments in effect have to slow down growth, so that potential growth benefits of CAL can only be realised in the short-term."

"…CAL in the short-run constitutes a source of wage inequality (with the wages of skilled labor, which compliments capital, rising faster than those of unskilled labor, thus widening the income gap). Therefore, attention has to be given to the question of how to broaden access to capital in order to reach a "complementarity between human and physical capital."

"(Is it the case that) capital account liberalisation is to some extent unavoidable if countries have liberalised trade accounts, since with liberalised trade accounts money can be easily transferred abroad? Therefore, maybe the appropriate discussion about the connection between CAL and poverty has to centre more on the question of how far and how fast capital accounts should be liberalised as well as the question of how to ensure that countries benefit equally and evenly."

"Krishna Srinivasan from the IMF suggested that the possible loss of government revenue after implementing CAL would be offset by efficiency gains… He commented that tax holidays had little impact on foreign direct investments (FDI) and that the IMF did not support them… ODA as well as private capital flows are pro-cyclical, confounding the dilemma for developing countries in need of foreign capital. ... While the private capital flows to developing countries have increased, most of the money goes to only a few countries and within those countries mostly to financial institutions with a "frightening maturity structure" of less than one year of most bank flows."

"Tim Kessler from the Initiative for Policy Dialogue pointed out that capital flows will only benefit the poor if they go to the disadvantaged in the form of direct loans. This is particularly important since pro-poor sectors of a national economy, for example agriculture usually don't attract foreign investment. However, schemes to direct credit are often hampered by the International Financial Institutions (IFIs) and private foreign capital"
From: http://www.brettonwoodsproject.org/topic/financial/f23calwashington.htm
Date: April 24th,, 2001
By: Liane Schalatek, Heinrich Böll Foundation Washington
(From WTOILs July 13 and 20)

And thus, returning to our original contention, that FfD is a formidable and multifaceted issue, we take up the challenge in rendering it a little more in months to come.




Summary, Overview & Development Report 1.2
The Case for RIO+10: July 2001
By Julio Montes de Oca, ICDA Secretariat

During the month of July, the Rio+10 WTOILs touched on subjects related directly or indirectly with the 2002 WSSD, including current UN initiatives, as well as with topics of interaction between trade, the environment and sustainable development.


The most prominent topic in the news for the month of July was the climate change talks at the Bonn Conference of Parties-6. The global initiatives on climate change will proceed under the basic framework set by in the 1997 Kyoto Protocol after an 11-th hour deal prevented the initiative from being shelved. In the aftermath, there are widely varying perspectives on what Kyoto being "kept alive" really means. We provided a wide sample of all the views expressed post-Bonn in order to identify the different dimensions of the debate. The complete list of articles in the July WTOIL included: July 24 -

July 31 -

The first dimension on the meaning of the Bonn Conference outcome is political. The political debate was sparked a few months back when the United States announced it would not ratify the Protocol, with President Bush calling it "fatally flawed". However, the deal reached in Bonn to keep the process going was considered as extremely positive for various concerned parties and actors, including the WWF ["Historic Victory..."-WTOIL, July 31], UNEP and the Conference Chairman/Dutch Environment Minister Jan Pronk ["UNEP on Bonn Conference"-WTOIL, July 31]

The "victory" consists firstly on having built a wider consensus by bringing part of the "umbrella group" countries on board, including Japan, Canada, and New Zealand. Secondly, the US rejectionist position is isolated further.

A more skeptical view provided in The Economist ["Kyoto Rescued?"-WTOIL, July 31] points out that this wider consensus was achieved via compromises that water down the treaty and essentially nullifies its actual effectiveness. Additionally, implementation raises another important issue: how to strike a balance between the need for reversing the effects of climate change and the economic cost that the initiative implies? Is economic feasibility the most important criteria to determine the success of the protocol? This certainly seems to be the position of the US.

Related to this last point, what next for the US? Having rejected Kyoto, the United States has not come out with any constructive proposals [JAPAN CALLS FOR USA…]. But will US proposals be made within the UNFCCC framework or will they insist on a separate track for action? Dutch Minister Jan Pronk argues that after the "victory" of Bonn, the US might even be compelled to return to the Kyoto family [July 31- "PRONK FORECASTS US RETURN…]. The question remains if this would require further compromises and watering down of the treaty. .


Developing countries have some general concerns about the possible launch of a new trade round in the next WTO Trade Ministerial in Qatar. African countries in particular have been engaged in preparations [July 3- "AFRICAN TRADE NEGOTIATORS PREPARE"] for the meeting. Among other chief concerns of the continent are WTO rule implementation, consideration of labor and environmental standards in any new trade round, and the role of international financial institutions in Africa's future development.

From the Addis Tribune we presented an interesting view on the intricate problems of governance that Ethiopia currently faces [July 3- "THE PUZZLING NOTION OF GOVERNANCE"]. Their problems are extremely complex - catalyzed by years of political instability - and are enhanced by lack of infrastructure, and lack of integration of the different ethnic groups that make up its population. While the author does not suggest the concrete steps to be taken, he gives an important starting point for future discussions.

The final Africa-related note refers to an environmentally-friendly production initiative coming from the South [July 24 - "UGANDA CERTIFIED ORGANIC COFFEE"]. A simple example of the possibility for sustainable agricultural practices even where conditions are most difficult and resources more scarce. Productive initiatives from developing countries could satisfy the rapidly increasing market for organic products in Europe. However, the article does not bring up another related issue of international trade: the "fairness" in the North-South exchange.


July 3's "WHO WANTS TO LEAD THE WORLD'S NEXT TRADE ROUND?" highlights the lingering differences between Europe and America, in particular with respect to agricultural trade. With the Trade Ministerial looming, the article also makes a strong argument for developing countries not to discount what the WTO can do for them. In essence, a portrayal of the WTO as the lesser of two evils, the other one being an anarchical state with no rules, where the strongest corporations can really run rampant.

Coming back to current United States trade and other multilateral policies, the conservative environmental NGO Environmental Defense Fund criticized the Bush administration recent actions [July 3- "CRITICISM OF BUSH TRADE POLICIES"]. The criticism centers mostly on the lack of coordination between trade and environment policies. Chief amongst them is the rejection of the Kyoto Protocol, as detailed previously. Bush's disregard for multilateral environmental initiatives has caused EDF to question how well the President can conduct US trade policy in light of the possible conflicts that arise with respect to the environment.

In the run up to the Qatar WTO Ministerial, the WWF expressed their position to WTO member states at the Symposium on Issues Confronting the World Trading System, in Geneva at the beginning of July [July 24- "WWF ON WTO"]. WWF highlights that consideration of developing country positions as well as those of concerned citizens all over the world are key for the WTO to seriously address global problems of poverty, economic inequity, and the environment. The World Wildlife Fund recognized five key areas that should be prioritized:

1-Respect and prevalence of multilateral environmental agreements over trade rules.

2-Insistence on achieving "triple-win" scenarios between trade, environment and development.

3-Increased participation and transparency in WTO processes, including coordination at national level.

4-Increased capacity-building for developing countries to achieve efficient participation in WTO discussions and negotiations.

5-No new negotiation of rules on foreign direct investment within the WTO framework.


African countries were called upon to provide accurate and timely reporting on ozone depleting substance use in the continent by UNEP [July 3- "UNEP WARNS AFRICANS ON OZONE"]. While receiving funding for phasing out ODSs, it is critical that the correct information is relayed to UNEP as part of an effective strategy to achieve the goals of the Montreal Protocol.

A recent EU-UN meeting pointed out some of the most pressing global issues for the next 15 years [July 3 - "STATES SAID TO LAG ON FOOD SECURITY"]. The most recognized area for action seems to be poverty reduction, although not enough is being done in one of its main manifestations - food insecurity. The coming Food Summit+5 (in Rome) needs to assess the progress achieved up to now, as well as support the implementation of constructive initiatives.

Green Left presented a stinging criticism on the German Greens [July 10- "GERMAN GREENS--BETTER THAN NOTHING/WORSE THAN USELESS?"] based on their position with respect to the movement of nuclear wastes from France to Germany for reprocessing. The article points out the policy inconsistency of the German Coalition government (of which the Greens are part of). Germany was already committed to admitting back the reprocessing wastes, thus avoiding "NIMBY" criticism at least. However, that was the pre-condition for being allowed to send more fuel for reprocessing to France and the U.K. Finally, the article points out that "the waste is not a 'French' problem or a 'German' problem", but rather that it points to the global need for the nuclear industry to provide feasible options for reprocessing and disposal.

From Earth Times we presented an interview with Anita Bay Bundegaard, Minister for Development Cooperation [July 17- "INTERVIEW WITH..."]. Ms. Bundegaard came across as very enthusiastic on the effect of her position, which is supported by the traditionally cooperative Danish government. She mentioned the importance of working with NGOs both in Denmark and in the South. With respect to next year's World Summit on SD, she highlighted the need for not only setting appropriate goals but also assessing their chance for success. The issue of financial assistance is key, as implementation of goals and initiatives will be highly dependent on the contribution from donor countries.

Water resources use and management is an area that is getting increasing attention on the global agenda. Is commodification of water and privatization of its management the most beneficial practice? We presented a report from the "Blue Planet Conference" [July 17-

"BLUE PLANET TARGETS COMMODIFICATION OF WATER"], that explores the question. The arguments are kept on an ideological plain, without taking the discussion to its practical implication and solutions. Room for further exploration here in the future!.


There are a growing number of worldwide efforts to find new biological material for pharmaceutical and agricultural research. [July 3- THE NEW SHOPFRONTS FOR BIO-PROSPECTORS]. The Australian government is launching investigations on the bio-prospecting industry, as well as on the establishment of appropriate laws. Still it remains to be seen if a proper balance between a private company's use of "public assets" and protection of marine/land flora and fauna.

An interview with the head of the Least Developed Countries Unit of the World Intellectual Property Organization (WIPO) [July 10-THE WEST HAS BEEN STEALING AFRICAS IP] brings to the table the significant problems that many African countries face in this respect. It is argued that implementation of property rights does not necessarily imply preferential protection of foreign interest, and does bring much needed foreign direct investment. However, it also points out the infrastructural and administrative inadequacies in least-developed countries that are unable to protect their knowledge and resources from foreign plunder. The arguments were also discussed during the OAU/UPOV/WIPO May meeting [July 10-"IPR AGENTS TRY TO DERAIL OAU PROCESS"]. The meeting discussed the OAU Model Law that seeks to protect the rights to biodiversity of local communities, farmers and breeders. However, it became apparent that OAU and WIPO do not see eye to eye, especially with respect to patents on life. Further conflict was

generated by the Union for the Protection of New Plant Varieties (UPOV), which essentially tried to discredit the OAU initiative. Some of the most relevant unresolved issued in the debate include how property rights could affect (positively or negatively) food security, and if existing IPR laws subordinates farmers' rights to breeders' rights.


Business involvement with sustainable development initiatives is another extremely controversial subject. The business sector considers it a "win-win situation", while hardcore environmentalists and development advocates call it "corporate greenwashing". An article on the "win-win" side of the debate [July 10- NEW SD AWARD FOR COMPANIES] advocates the creation of a Sustainable Development Award for "companies that have proven that sustainable development can be profitable". While their heart seems to be in the right place, there are intrinsic difficulties in placing a sustainable development banner over a company. The definition of sustainable development can take varying shapes and forms, for one. Also, would complete consideration be given to a company's way of conducting business, or simply to specific green initiatives they perform? This more skeptical view is also shared by the Corporate Europe Observer [July 17- "RIO+10 FREE MARKET ENVIRONMENTALISM"]. The article chronicles the development of the

business sector's involvement with sustainable development, from the creation of the Business Council on SD to current efforts in the lead-up to the Rio+10 meeting. But in the end, it is up to the business community to "put up or shut up" with effective wide-ranging strategies, not only strategical initiatives that merely serve PR-purposes. Additionally, it is up to NGOs to ensure that the business sector does deliver concrete promises, and to educate the public in order to balance the sometimes one-sided information coming from the media.

One final article from Green Left Weekly [July 17- "COULD CAPITALISM EVER BE ENVIRONMENTALLY STABLE?"] brings into question our dominant economic doctrine. Before diving into a more ideological discussion, the authors point out that the core of the problems resides in the Northern definition of "well-being", consumerism, and the unfeasibility of "green consumption" on a global scale.


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