Global Policy Forum

By Patricia Ranald

The WTO is an organisation of 144 governments, including the Australian government, which sets global rules for trade between countries. Its major Ministerial meetings are held every two years: the next one will be in Mexico in September 2003. In between these meetings there is an agreed process of negotiations through committees. Why then is there an "informal mini-Ministerial" meeting in Sydney on November 14-15 to which only 25 selected governments will be invited? The answers to this question tell us a lot about the WTO and democracy.

Although the WTO claims to make decisions by consensus of all members, it is in fact dominated by the most powerful trading economies, the US, Canada, Europe and Japan, (called the "quad"). WTO rules are heavily influenced by global corporations which have enormous resources to lobby governments. Governments have transferred powers to the WTO without proper democratic accountability.

Before the WTO was formed in 1995, trade agreements only dealt with trade in manufactured goods. The WTO now has many agreements including Agriculture, Services, and Trade in Intellectual Property Rights (TRIPS). It is planning new agreements on investment, competition policy and government purchasing. Together with changes proposed to the General Agreement on Trade in Services agreement (GATS) these new agreements could remove many regulatory powers from national and local governments, resurrecting the Multilateral Agreement on Investment which was defeated in 1998 by community campaigns.

The WTO has teeth: governments can complain about other governments' regulation to a disputes panel of trade law experts which can enforce its decisions through trade sanctions. This means that the winner can ban or tax the products of the loser.

What's wrong with the WTO as an international organisation becomes obvious when you compare it with the UN. The UN is far from perfect, but it has public debates, majority voting, and non-government observers can attend meetings. Agreements are implemented through domestic legislation which is debated by parliament. Thus there is public debate and accountability at the international and national levels.

WTO meetings are held behind closed doors. Its provision for majority voting has never been used. The USA, Canada, Europe and Japan, often draft the agreements, and consult with another 20-30 governments through the so-called "green room" process. Up to 100 developing countries face trade and aid pressures from the economically powerful to sign up. Often they lack the resources to negotiate effectively. The Sydney meeting is part of this process, a lobbying exercise to influence key governments to speed up current negotiations which are behind schedule.

WTO agreements can bind governments without domestic legislation. In Australia, agreements are briefly tabled in Parliament and examined by a committee, but the decision to ratify them is made by Cabinet. This means that there is often little public national or international public debate before agreements are signed.

WTO agreements can prevent national governments from regulating in the public interest. WTO rules have defined health and safety and environmental regulation as barriers to trade. WTO rules on intellectual property rights enforce the payment of royalties on patents for 20 years. Last year pharmaceutical companies persuaded the US government to make a WTO complaint against Brazil to try to prevent the local production of low priced medicines for the AIDS epidemic. The complaint was only withdrawn after campaigns by community organisations.

The WTO faced a crisis of credibility after its 1999 Seattle Ministerial Meeting, which was delayed by demonstrations and collapsed when developing country governments refused to agree to an agenda for new agreements. The WTO had more meetings with developing country governments and some consultation with non-government organisations. But its decision making remained the same, with meetings behind closed doors and domination by the most powerful governments. The 2001 WTO Ministerial meeting was held in Doha, Qatar, a small middle Eastern country where public protest is illegal.

Despite consultation with developing countries before the meeting, their views were not included in the draft documents. A compromise outcome was achieved only by an all night extended session, with great pressure on developing countries. The WTO recognised the right of governments to manufacture affordable medicines for public health, and made commitments to reduce agricultural subsidies which disadvantage developing countries. Developing country governments agreed to further negotiations on agriculture, services and goods, and to preliminary discussions on the proposed new agreements. The decision about whether to proceed with new agreements is to be made at the next meeting in 2003.

Negotiations are behind schedule partly because the United States has continued its policy of free trade abroad but protectionism at home by passing laws to raise its agricultural subsidies. Developing countries are also resisting changes to the GATS agreement which would reduce the right of governments to regulate services.

Developing country governments are still unhappy with the WTO process. In May 2002 they put forward proposals for more democratic procedures. These included that the WTO secretariat and Chairs of Committees should be impartial, that draft documents should be distributed in advance of meetings, and differences should be expressed clearly through use of text in brackets, and that texts and draft decisions should be introduced only in meetings open to all. These proposals were rejected, hence the exclusive Sydney meeting.

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