Presented to the Special Committee on Globalization
House of Representatives (Philippines)
18 November 2009

On behalf of the Stop the New Round Coalition (SNR) a network of around 40 national and regional level groups and movements, I would like to thank the Special Committee for the opportunity to present our views on the Doha multilateral trade talks and the upcoming WTO Ministerial Meeting in Geneva.

SNR would like to highlight for the attention of the Committee the following issues and concerns:

Doha Negotiations

1. The Doha Round negotiations in the WTO which were launched in 2001 were premised on the goal of putting the development interest of poorer Member countries at the center of the negotiations.

Among the issues that are crucial to the development interest of poorer countries in the context of the trade negotiations are (i) increased market access to developed country markets, (ii) greater flexibilities in terms of tariff reduction commitments based on the principles of special and differential treatment and less than full reciprocity, (iii)greater safeguards to ward off the disastrous effects of import surges, (iv) enhanced policy space or the ability to use tariff policy as a tool for development, (v) increased assistance in the form of development cooperation and aid, and (vi) equal participation in the process of negotiations.

Eight years on what we have witnessed in the Doha negotiations is the continued dilution and marginalization of the interest of developing countries.

In agriculture, the limited demand for flexibilities to defend livelihoods of small food producers under the Special Products and Special Safeguard Mechanisms for developing countries has been further watered-down to the point of making these provisions ineffective and useless.

In the NAMA negotiations, we have seen so clearly how ambition has trumped flexibilities. We have seen how the industrialized countries have successfully pushed a highly ambitious formula for reduction of industrial and fisheries tariffs whilst undermining the demand for flexibilities. An agreement on NAMA would mean de-industrialization, erosion of policy space, huge revenue losses and job losses and insecurity for countries like the Philippines.

The imbalance in Doha is further manifested in the services negotiations. The US and the EU, whose corporations dominate global trade in services, have consistently been trying to muscle in their agenda for a more liberalized services regime which threatens developing countries right to regulate these investments. A deal on services would put even essential services, like health and education, at the mercy of market predators and at the expense of the welfare and wellbeing of the poor in developing countries.

A recent South Centre report on GATS identified potential conflicts between the disciplines on domestic regulation that will be imposed under a new GATS agreement and the existing regulations in developing countries. South Centre has raised the concern over (the) “potential for straight-jacketing developing countries into using certain “acceptable” regulatory tools and frameworks.” According to the South Centre “Setting regulatory parameters based on foreign values or “best practices” ignores the unique historic, cultural, political and other important characteristics that shape the type of governance that is successful for a country.”

For the Philippines, the report identified conflicts in regulatory policies with regards to education, utilities particularly water, and land development.

Aside from the substantive elements of the deal, the process of the negotiations also reflects a grave imbalance. The Doha round negotiations have been characterized by a lack of transparency, by bullying tactics and intimidation, and exclusionary processes.

We see Doha therefore not as a development round but yet another ambitious agenda to liberalize trade in goods and services and ease restrictions on investments that ran counter to the development needs of countries like the Philippines.

Ministerial Meeting in Geneva

2. A new approach has been proposed for the upcoming Ministerial Meeting in Geneva. A two track process whereby developing countries are already being asked to begin the process of scheduling commitments ahead of the negotiations on the modalities which remains highly contentious.

We see this as an attempt by the WTO led by the Director General Pascal Lamy to fast track the negotiations and push developing countries to move the agenda of the negotiations forward.

We raise the concern also that while the provisional agenda of the Ministerial seems “low key” and intended more for “housekeeping” purposes, the hard negotiations over issues are continuing elsewhere- in smaller and more exclusive meetings. We are also concerned over the seeming lack of preparation by the Philippine government to tackle issues that may arise from this Ministerial.

Trade in a time of Crisis

3. The global economic crisis has re-opened the debate on free trade and development.

We argue that it is precisely the pursuit of free trade policies that have reduced protection and relaxed regulations that has made economies of poor countries more vulnerable to financial and economic contagions. Free trade therefore is part of the problem and not the solution. What we need are more effective regulation of markets, renewed emphasis on domestic production, and support for the most vulnerable sectors by way of increased subsidies and protection.

The WTO negotiations are also happening in the context of a serious climate crisis. The long term solution to which is a shift away from the current unsustainable and inequitable development model towards a low carbon/low emission model. The push for greater global trade would inevitably lead to increased carbon emissions particularly from air and freight transport and transhipment of goods and therefore contribute to worsening the climate crisis rather than addressing it.

Conclusion

4. The Doha negotiations have gone from bad to worse. To conclude a bad deal like Doha under any other time would be a grave mistake for developing countries like the Philippines. To conclude a bad deal like Doha now, at a time when the world is facing multiple crises that further burden the poor, would clearly be detrimental to Philippine interest.

Presented by:

Joseph Purugganan
Focus on the Global South
On behalf of the Stop the New Round Coalition