The Meeting
After initial introductions and photo
opportunity we summarised the breadth of support for trade justice in the North
West of England as demonstrated by the 1800 signatures, the 50 tons of
Mancunians who had ‘Weighed In’ for trade justice at the rally in Manchester
and the widespread support by the public in supporting the campaign (noting how
few people didn’t want to sign the petition).
We each then asked a question around the
moral justification for trade policies that were so detrimental to the poor.
Q1/ Trade/Debt & Corruption are key barriers to poverty reduction.
EU has promised reforms but not delivered.
How does he as the most senior negotiator responsible for the EU trade
negotiations, personally live with responsibility for agreements which lead to
19,000 collateral deaths/day?
PL – was emphatic that
every agreement that he was responsible for had made some progress towards
poverty reduction. (It would be
fair to say he was somewhat upset by the implication of the question).
He then made the point that there were many issues
contributing to countries failing to develop….but he accepted that it was the
EU responsibility to remove trade barriers.
He criticised NGOs for focussing exclusively on North
South trade rather than recognising the greater opportunities in South South
trading.
He claimed EU were moving in the right direction and
then moved to the key agricultural issues.
Whilst welcoming and claiming that CAP was moving to subsidies being in
less ‘trade distorting’ categories (ie they are not volume dependent and are
more indirect) he put forward a quite passionate defence of both protecting
European Agriculture and countryside as such and more specifically in supporting
regulations to improve food quality and animal husbandry which have
consequential cost implications. He
addressed the problems of moving an industry from self-sufficiency to one in
which trade was protected but in a way that did not harm the poor.
He asserted that subsidies had been reduced by some 20% in 1992 trade
round, 10% in 1999 trade round and potentially 40% in CAP reform.
He rejected the idea that tariffs and quotas are a
key trade barrier in agriculture and reported on a poll of developing country
governments on barriers to increased trade in agricultural and 80% of the
responses had not been trade related issues.
Q2/ Moral justification for export
subsidies? How can dumping
agricultural products and destroying livelihoods be justified?
PL was almost incensed at
the use of the term dumping and went to lengths to claim that the EU
‘merely’ refunded the difference between the EU market price and the world
market price and that as such this did not affect the world market price. (afterwards
I found in an Oxfam report that the UN had estimated that ‘dumping’ had
reduced the world market price by 17%).
But really he accepted the need to eliminate export
subsidies and insisted that progress was being made as demonstrated by the fact
that EU export subsidies had fallen consistently from $10bn 10 years ago to
around $3bn today. Export subsidies
are a direct consequence of protecting high prices within Europe and over
production and that the objective was to eliminate the over production and in
the case of dairy products that depended on control of production quotas.
Each time the issue of sugar arose PL implied that it
would be addressed in the autumn and that he was confident that progress would
be made, not least because of the EBA exceptions on sugar expiring. PL
then made a specific request for NGO pressure on the sugar regime issue to
counteract the lobbying from industry and governments.
(later clarification, they want International Development Ministers
to be demanding these changes to help Fischler deal with the Agricultural
Ministers)
He then returned to the dumping issue with a pretty
strong condemnation of US practices of export credit and even worse food aid in
kind in which surpluses were ‘dumped’ into defenceless markets.
Q3/ GATS
- Lack of clean water is a primary cause of infant mortality.
How does he feel when the EU pushes for water privatisation, knowing the
history of increased prices and no access to water because the regulatory
environment cannot stand up to big companies.
The EU /WTO/GATS is not
about privatisation! He rejected
responsibility for the GATS agreement as such being responsible for decisions
to privatise.
No country has contracted for water services to be
within GATS.
Then he took the line that the only way to finance
the massive gap in the provision of water would be to use private finance/FDI
(Foreign Direct Investment); much public supply was poor quality and incapable
of filling the need for clean water. The
EU/WTO would not get involved in the sovereign decisions to privatise.
However, if countries did need to attract FDI to provide water, then they
would have to find a balance between regulation and the need to attract finance.
He asserted that the EU was not doing any arm-twisting on GATS and the water
service sector. He did however note
how strong European companies were in the water market and by implication the
EU’s interest in developing these private businesses.
Q4/ TRIPS;
Andrew Dawson said that Manchester Anglican Diocese is linked to Namibia Diocese
where the rate of HIV-AIDS infection is very high so that a cross section of
society is being more than decimated with extra results for the whole society.
The Namibian Government can only afford a policy of educational reventention and
palliative care. Likewise in Uganda
which has succeeded more than any other African country but only in stemming the
rate of infection increase, He
stated the urgent need to resolve the TRIPS constraints on access to generic
drugs not only for HIV-AIDS but also for all preventible infectious diseases..
(This is an issue in which PL has tried hard to find a compromise but the
US has refused to accept the proposals).
PL started with the
accepted point that TRIPS/drug prices is only a small part of the total AIDs
problem, maybe just 10% of the problem.
There is a need for tiered
prices with drugs available at production costs (which are very low) for the
poorest countries.
The position for countries
with established generic suppliers was not the issue. But there needed to be a solution for all the other
countries.
Responsibility for the
failure to reach agreement was placed firmly with the US/Pfizer (Note this seems to be accepted that other companies have
accepted the proposals, Pfizer is the problem). PL is of the view that in the end US will concede to protect
the whole acceptance of TRIPS in the future.
He also said that in
practice the unilateral declarations of the EU/Japan/USA on compulsory
licensing could be a solution, but that it was a second rate solution and not
politically attractive.
Q5/
Commodity Prices.
Many of the poorest countries depend on primary commodities and prices,
especially for products like coffee and chocolate, had fallen drastically and
wrecked the livelihoods of the farmers and indeed the countries.
If the commodity prices fall in this manner, how can
poor countries pay for machineries from the West in order to industrialise their
countries without taking on huge loans from the West with crippling interest
rates? What can the EU or WTO do to stop this situation happening?
‘Not very much’
came the clear reply! Then
he went on to talk about the need for diversification of commodities for
export from the poor countries and development assistance from the rich West.
Interestingly, PL then
stated that these commodities were good examples of where trade liberalisation
didn’t work! However falling
commodity prices was a long-term issue, over 50 years and not really a
consequence of WTO agreements. Primary
responsibility was in over supply and new countries entering markets that
didn’t have the capacity to absorb the increased supply.
In effect to influence the
free market would require a cartel and with the limited exception of oil,
which had very powerful political commitments, cartels had not proven very
successful in the face of long-term trends and over supply.
Even in oil, prices had fallen in real terms over 50 years.
The WTO responsibility was
to address the issues of tariff escalations so that poor countries can have
the opportunity to add value. (The
understanding was that reducing these tariff escalations was part of the EU
commitment at Cancun).
In addition EU help would
be through development assistance to fund diversification.
Q6/
What is the moral justification for forcing new
issues (investment, competition, government purchase, trade restrictions)
onto poor countries before all the commitments made by the rich countries have
been met. Given the opposition of so many countries in the south, what
right has the EU to tell these countries what is best for them?
PL – actually countries
in the south have a divided view, some are on board, some are not.
Some of the opposition is only tactical, others substantive, so let’s
concentrate on the substantive issues.
The leading claim is
‘capacity’. The EU can
resolve this by providing trade related assistance money.
The other issue is
‘policy scope’ and the need to control the investment.
PL claimed that the EU
ambition was for a very simple set of rules (not like the impossible old
MAI). Basic rules for FDI
and a legal framework for the agreements.
To address the policy scope, the sectors would be elective as for GATS,
so countries could decide which sectors they wanted to be open to these rules.
(The issue
of Policy Scope arose late in our meeting and there was no time to seek
clarification, but the impression given was that it relates to allowing
defined scope for national/governments to determine where and how far the
rules applied. No doubt a little
research would find a better explanation of the issues)
PL also demonstrated his
concern that unless there was a multilateral agreement, there was a much more
insidious risk of bilateral agreements which would be far more prejudicial to
poor countries.
EU is ready to write into
the agreement that it would not reduce the policy scope.
The
meeting, scheduled for half an hour extended to at least three quarters of an
hour.
The
consensus of the 6 delegates was that this had been a very open and constructive
meeting. Obviously PL had exhibited
a total command of the issues and not hidden the conflicts of interests that had
to be reconciled. He clearly accepted the need for progress, the need to reduce
barriers for market entry and indeed the advantage of a multilateral approach
rather than the potentially damaging unilateral agreements if WTO failed.
This is reflected in the proposed quote from PL which was given to us:-
“It is great to see groups like TJM getting
involved with the Doha Development Agenda, the new Round of trade negotiations.
Next stop Cancun, where we hope to advance the case for both market
opening and clearer, better rules governing the trade system.
If we fail, globalisation will just take its course, unharnessed and
uncontrolled: a sure way for richer countries to get richer, and the poorer to
get poorer. Much better to make
sure that the Round lives up to its billing, and make sure that developing
countries get a fair deal out of the WTO”
Sabine
Weyand who was in the meeting is a ‘Member of Cabinet’, which means advisor,
with special responsibility for relations with civil society, NGOs, Trade
unions, PE Parliament etc. She provided the copy of the PL letter being sent to anyone
who lobbies directly and the above quote. I
contacted her the day after, good feedback, endorsed the need to pressurise on
sugar etc.
Tel
- +32 2 298 1307, FAX 1399
19 Juni 2006
