International Trade Minister Ed Fast (with microphone) participates at the OECD conference in Paris this week (Source: Government of Canada)
Rich country members of the G8, in a declaration from their meeting at Camp David last week, took a step away from consistent G20 commitments to slug away at the stalled Doha Round of trade negotiations at the WTO. Points #8 and #9 in the Camp David Declaration, which deal with trade negotiations, are clearly favourable to bilateral and regional agreements and the priorities in particular of the U.S. government in its Trans-Pacific Partnership project with eight other countries, which Canada, Mexico and Japan would like to join before year’s end.
The 2012 G8 declaration states:
8. Robust international trade, investment and market integration are key drivers of strong sustainable and balanced growth. We underscore the importance of open markets and a fair, strong, rules-based trading system. We will honor our commitment to refrain from protectionist measures, protect investments and pursue bilateral, plurilateral, and multilateral efforts, consistent with and supportive of the WTO framework, to reduce barriers to trade and investment and maintain open markets. We call on the broader international community to do likewise. Recognizing that unnecessary differences and overly burdensome regulatory standards serve as significant barriers to trade, we support efforts towards regulatory coherence and better alignment of standards to further promote trade and growth.
9. Given the importance of intellectual property rights (IPR) to stimulating job and economic growth, we affirm the significance of high standards for IPR protection and enforcement, including through international legal instruments and mutual assistance agreements, as well as through government procurement processes, private-sector voluntary codes of best practices, and enhanced customs cooperation, while promoting the free flow of information. To protect public health and consumer safety, we also commit to exchange information on rogue internet pharmacy sites in accordance with national law and share best practices on combating counterfeit medical products.
Contrast that with the G20 declaration from Cannes last November:
66. We stand by the Doha Development Agenda (DDA) mandate. However, it is clear that we will not complete the DDA if we continue to conduct negotiations as we have in the past. We recognize the progress achieved so far. To contribute to confidence, we need to pursue in 2012 fresh, credible approaches to furthering negotiations, including the issues of concern for Least Developed Countries and, where they can bear fruit, the remaining elements of the DDA mandate. We direct our Ministers to work on such approaches at the upcoming Ministerial meeting in Geneva and also to engage into discussions on challenges and opportunities to the multilateral trading system in a globalised economy and to report back by the Mexico Summit.
67. Furthermore, as a contribution to a more effective, rules-based trading system, we support a strengthening of the WTO, which should play a more active role in improving transparency on trade relations and policies and enhancing the functioning of the dispute settlement mechanism.
Finally, we have the OECD meeting this week, at which “Some Ministers highlighted the importance of the conclusion of the WTO Doha Round,” and it was generally agreed not to create new barriers to trade and investment flows (a standstill, as agreed to at Cannes). According to the Wall Street Journal, “Wednesday’s meeting also yielded ‘a high level of agreement’ on a trade-facilitation agreement that aims to simplify customs procedures at ports.” Australia’s trade minister, “along with counterparts from the U.S. and Canada, said there also was discussion of other issues, including advancing an information-technology trade agreement.”
Canada, the U.S. and the European Union are already far down this path, with the Harper gloating frequently about all the bilateral or preferential trade agreements he has signed or is signing. Countries like Argentina, on the other hand, expressed concern at the WTO this week “with the current course of global negotiations which face the serious risk of abandoning the development goals agreed when the launching of the current Doha Round of negotiations back in 2001.”
Backed by representatives from Chile, Venezuela, Brasil, China, Uruguay, Ecuador, Nicaragua, Bolivia, Dominican Republic and Zimbabwe, Argentine Foreign Minister Hector Timerman is reported to have told WTO Director General Pascal Lamy that, “The lack of advance could lead to the freezing of the current misbalance situation in international trade which clearly benefits the developed world,” and that the developed world’s intentions, spelled out in the G8 and OECD declarations, to move ahead with side-agreements on issues important to them, “can be described as dangerous for the organization and the objectives of Doha.”
(As I was writing this, news popped into the inbox that the EU has decided to take Argentina before a WTO panel for its “import licensing regime and an obligation on companies to balance imports with exports,” claiming, “Argentina’s trade policy has become rooted in unfair trade practices.”)
To break this impasse, the Peterson Institute for International Economics in Washington, has proposed that WTO members “should give interested countries, by a three-fourths vote, a green light to negotiate plurilateral agreements on an enumerated list of subjects.” The think tanks suggests “services liberalisation, WTO-International Monetary Fund coordination on currency undervaluation, greenhouse gas and energy measures, zero-for-zero tariffs, and rules of the road for state-owned enterprises all seem promising.”
These are G8 priorities but the possibility of developed countries moving ahead in these areas, as they have done in the WTO Government Procurement Agreement, is real.
The Peterson Institute elaborates that a new International Services Agreement at the WTO, “should shift from the General Agreement on Trade in Services architecture of a positive list of commitments to a negative list of exceptions, eliminating all non-listed barriers to GATS Mode 1, service consumption abroad, Mode 2, cross-border service supply, and Mode 3, foreign investment in service sectors.” Furthermore, “The broad government procurement exception in the GATS should be limited to essential functions of government that are tied to national sovereignty, for example military contractors. Parties should establish a procedure for declaring emergency safeguards when a domestic service sector is injured by foreign competition.”
Countries (and Canadian provinces at one point) have struggled with and opposed the “negative list” approach to committing services since it is much more difficult to make sure you’re protecting all the area you feel you should. This is precisely the point and the reason Canada and the EU are using this approach in their CETA negotiations. But the Peterson Institute proposals on procurement and services would drastically reduce the freedom of governments worldwide to direct investment toward local development and job creation strategies.
Can you feel an echo chamber developing here? The B20 — a group of 20 business leaders from G20 nations — is also adjusting its pitch to match the “yes to Doha but…” message coming out of the developed world but opposed by much of the rest of it. The group’s recent declaration, from a meeting alongside G20 trade ministers in Mexico, says “business” fully expects G20 states to take “corollary actions” to continue to move trade and investment liberalization goals forward, including “seeking alternative approaches to foster global trade liberalization; and engaging in preferential trade agreements (PTAs) as a complement – not a substitute – to the multilateral agenda.”
Interestingly enough, the B20 does not list services liberalization as a priority area for the WTO and does ask G20 leaders meeting in Los Cabos, Mexico next month to put more emphasis multilaterally on:
– Encouraging the implementation of trade-enhancing measures for least-developed countries, for example the phasing out of cotton subsidies
– Eliminating agricultural export subsidies
– Finalizing agreement on the transparency mechanism for [preferential trade agreements]
– Completing the Dispute Settlement Understanding review negotiations
And as Vijay Prashad writes in Frontline magazine this month, the hegemony of the Global North on trade and investment issues has been wobbly for some time, noticeably so since the most recent global financial crisis. Rich countries, including Canada, failed to undermine UNCTAD’s mandate as they had tried to do in the final declaration of this year’s conference. The next battleground, writes Prashad, will be the G20 summit in Mexico June 18-19.
“The agenda for that meeting, which was leaked, was drafted by Pascal Lamy, the Director-General of the WTO, and Angel Gurria, the Secretary-General of the North-dominated Organisation for Economic Cooperation and Development (OECD),” he writes in Frontline. “This agenda seeks to provide a ‘new trade narrative’. This new narrative will try to strengthen ‘global supply chains and value addition’ while ‘moving away from the ‘give and take’ setting in which trade discussions happen’. In other words, the G20 meeting is to create a paradigm that avoids negotiations (‘give and take’) and to establish a climate that benefits smooth global value chains – which would benefit the transnational firms.”
Mexican and international social justice movements and organizations are planning many events in or near Los Cabos for the G20 in mid-June. A common theme of these gatherings is the need to shift the global economy to one based on the whims of transnational capital to one based on the unique needs of unique peoples, cultures and climates. One focus of these groups, in particular members of the Our World is Not For Sale Network, will be to build bridges with the Rio+20 summit and gatherings in Brazil the week after the G20. More on the G20 in this space soon…
