Fairness among nations

10 December 1999

Fairness among nations

– a difficult aim to achieve

Rules agreed and policed by the World Trade

Organisation increasingly affect farmers world-wide.

Geoff Tansey visited the WTOs headquarters in

Geneva before the recent talks in Seattle faltered and

reports on some of the issues behind the headlines

THE World Trade Organisation has a new boss – New Zealands ex prime minister Mike Moore. Actually its a job share – he gets it for half the six-year term then a Thai, Dr Supachai Panitchpakdi, takes over. This compromise took months to arrive at and highlights the wide differences within the membership of this relatively new and powerful international organisation.

WTO is powerful because its rules are law. In fact they override the laws that national governments or regional blocks like the EU may enact.

WTOs 550 staff work in the old GATT building on the edge of the lake in Geneva, Switzerland. They service the WTO members, 134 countries at the moment with another 30 or so queuing up to join, most notably China. Various WTO committees and councils police the operation of some 28 Agreements that emerged from the Uruguay Round of Trade Negotiations.

For farming, three agreements are particularly important. The Agreement on Agriculture (AoA) tends to get most of the headlines as it covers subsidies and market access issues. These were on the agenda in Seattle, with the EU wanting agriculture included in a new trade round. In that way it stands a greater chance of trading off concessions in other areas for an agriculture agreement that suits it best.

Despite the stalemate in Seattle, increased trade liberalisation in agriculture is likely as the AoA itself contains a commitment to further negotiations within the normal running of WTO. One way or another, officials expect decreases in tariffs, greater market access and reduced export subsidies to be agreed eventually.

The Sanitary and Phytosanitary Agreement (SPS) agreement was used by the US to challenge the EUs ban on US hormone-treated beef. Unlike the earlier GATT rules, WTO rules are enforceable through a legally binding disputes settlement procedure.

No appeal

First, a three-person dispute panel of trade specialists passes judgement. Then, if necessary, a three person appeals body gives a final ruling on a dispute. There is no further appeal.

Unless countries comply by changing their rules, they may face international trade sanctions – as many European producers know to their cost. They have been affected by the sanctions imposed by the US following their victory in the beef hormones dispute. But this is as nothing compared to the looming dispute over genetically engineered foods, say insiders.

Privately, however, some officials fear attempts to use the organisation to try to force market access for GM crops in Europe may backfire on the WTO. It is already the bête noire of a growing band of non-governmental environmental and developmental organisations for failing to recognise their concerns and putting trade on a pedestal above all else.

Narrow focus

But if the US takes the EU to the WTOs binding dispute settlement procedure then three trade lawyers, taking a very narrow focus on the trade rules, will have to judge an issue that goes far, far beyond trade concerns. And whatever they decide will almost certainly not end the matter but put the WTO at the centre of the GM controversy.

It is not clear, anyway, that Europes restrictions on GM foods contravene the SPS Agreement as it only covers "risks arising from additives, contaminants, toxins or disease causing organisms in food, beverages or feedstuffs". This might be arguable for some GM crops but not others. Alternatively, the US might argue that Europes restrictions contravene the Technical Barriers to Trade Agreement but this allows a more flexible interpretation of the reasons for preventing entry than the narrowly scientific – so it is by no means a forgone conclusion this will work for the US as it has with beef hormones.

As European officials recognise, it is a different world from when the Uruguay Round of Trade talks began. The developed countries cannot simply kick off a new trade round without the agreement of developing counties. And some of them are angry at how both the US and EU have been tackling the third important agreement for farming worldwide – the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement. These IPRs, especially patents, underpin the controversial development of genetic engineering in agriculture.

This particular agreement illustrates one problem with the trade rules enshrined in the WTO agreements – they are negotiated documents. Often negotiators achieved agreement by introducing what one insider calls "constructive ambiguity" in various articles where agreement was hard to reach. This happened in TRIPS.

Future of seeds

"TRIPS is of great importance to the developing countries, especially to farming, as it involves the future of seeds, who controls the food industry and supplies in the world, and if and what well have to eat in 20-30 years", argues Martin Khor, director of the Third World Network.

Many fear the introduction of IPRs for plant varieties. In fact, patents for innovations concerning micro-organisms will be of most benefit to major agribusiness corporations promoting genetically-engineered farming. Moreover they could undermine farming in their countries.

The US would like the exemption from patenting removed while some developing countries want to completely exclude plants, animals and micro-organisms from patentability. Kenya, on behalf of the Africa group, put this proposal on the table for consideration in the preparations for Seattle and also called for a moratorium on implementing the article. This has received wide support from NGOs.

Developed countries, however, are very unwilling to open up any part of the TRIPS Agreement to rewriting, as they fear it may unravel. They will strongly oppose any attempt to exclude plants, animals and micro-organisms from patenting as they see the biotech industries in both pharmaceuticals and agriculture as crucial growth areas in which they have a competitive advantage.

EU officials, however, have hinted that if the developing countries want more flexibility, a moratorium or changes in the provisions of TRIPS, they should concede something else in the broader WTO negotiations.

Trade-off deals

Many developing countries and NGOs, however, argue that changes should be agreed without any trade-off deals elsewhere. They fear that in the horse-trading that is a part of these trade negotiations, last minute decisions and compromises could have a devastating effect on the future of farmers and food security for the poor.

A key problem for officials is that new internationally-agreed rules affecting farmers cover environment, trade and agriculture but often these different departments do not work together in developing policies. So trade officials may decide on things in negotiations that impact badly on their farmers through ignorance.

This is producing a sense of injustice in the way the trade rules are agreed and operate – as the new DG Mike Moore has recognised. The critics argue that the current trade environment favours the big, against the small, promotes the mega-merger against the development of locally based enterprises, and seeks to rig the rules to suit the big.

The challenge in Seattle was to go beyond negotiations dominated by European/US perspectives to a much more inclusive approach embracing both developing countries interests in food security and the broader environmental and development concerns. Next year negotiations will continue in Geneva.

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