Background Briefing

Canadian Council for International Co-operation
[email protected]
www.incommon.web.net
(613) 241-7007

October 2001

Trade Ministers of the World Trade Organization (WTO) are scheduled to meet in Doha Qatar from November 9-13, to negotiate and announce priorities for the global trade agenda.

As illustrated by the complete breakdown of talks at the WTO’s last Ministerial meeting in Seattle in November 1999, international trade discussions are marked by conflict and a lack of consensus on key issues. Many industrialized countries, including Canada, see Doha as the place to help re-invigorate confidence in the WTO and the global economy through the launch of a new comprehensive round of global trade talks, including potentially new issues such as investment or government procurement.

Many, though not all, developing countries have been vociferously opposed to adding new issues, and demand priority attention to outstanding issues from the implementation of the 1994 Uruguay Round Agreements. Civil society movements worldwide, whose mobilization was the more visible part of the crisis in Seattle, have also continued their critique of liberalized trade from Seattle to Prague to Quebec City. In diverse ways, in national and international fora, citizens’ organizations have been building momentum for fundamental changes to the global trading system.

The Canadian Council for International Co-operation is of the view that the WTO is an institution in crisis--both because of major conflicts over the content of current trade agreements and because of core issues of legitimacy linked to the governance of the institution itself. There are many reasons for the crisis, but one of the most important is that poverty is increasing globally in spite of booming international trade in the past two decades. In short, the world’s trading system has not delivered its promised outcomes to the developing world.

According to the General Agreement on Tariffs and Trade (GATT), trade is meant to be a means of "raising standards of living, ensuring full employment, and a large and steadily growing volume of real income" for citizens of liberalizing countries.

The WTO, which replaced the GATT in 1995, extended that mandate adding that trade "should be expanded in accordance with the objectives of sustainable development" and ensuring that countries "especially the least developed, secure a share in the growth in international trade ..."

Research and experience reveal profound gaps between the rhetoric of trade liberalization and its impact on sustainable development and poverty.

Poverty is growing globally, and it is wealthy countries that have disproportionately captured the gains from expanding world trade. The least developed and poorest countries have actually seen their share of world trade decrease by half over the past 20 years. Sub-Saharan Africa, home to almost a quarter of the developing world’s hungry, saw 28 of its countries become poorer between 1980-1996, precisely during the widest, most rapid trade liberalization.¹ The experience of the last round of global trade negotiations has been particularly instructive.

The Uruguay Round made clear that, notwithstanding theories that the benefits of free trade accrue to all parties, trade agreements are the outcomes of political processes, in which powerful countries and negotiating interests can extract demands from less powerful countries while minimizing their own commitments and adjustment.

The UNDP estimated that developing countries, with three quarters of the world’s population, would get only a quarter to a third of the income gains generated from the Uruguay Trade round, and most of that to a few powerful exporting countries in Asia and Latin America. Sub-Saharan Africa was estimated to lose up to $1.2 billion a year (from lost tariff revenue, loss of preferential access etc.).

Core trade issues of concern to developing countries were not on the Uruguay agenda, such as debt or the management of commodity markets. And commitments for improved market access in key export sectors of interest to the South such as textiles and agriculture never materialized.²

Many civil society organizations and some governments are also questioning this approach to development, as they witness how export-led development strategies and the quest for market access cause competition amongst economies (and societies) on the basis of cheap labour and ‘flexible’ regulatory environments for investment and production.

The result for many of the poorest countries has been a globalization trap, based on reliance on export of unprocessed commodities or labour-intensive low-tech exports, and increased food imports. But with declining terms of trade, continued high trade barriers in the North, declining aid levels and high debt payments, development prospects for the poorest countries are dim, while the human and environmental costs are high and visible, raising political problems at home.

This experience of the impact of the last Round, coupled with undemocratic and untransparent processes through which WTO negotiations are pursued, has sharply influenced both the analysis and strategies of civil society groups and developing countries in their approach to the global trade agenda, including the frustrations that blocked the launch of a new Round in Seattle.

Since Seattle and in the lead up to Doha, the discourse of trade has become steeped in ‘development’ talk. Both North and South and many civil society organizations are arguing that development in the poorest countries figure prominently on the global trade agenda.

The international context following the attacks on New York and Washington gives new salience to poverty concerns. The World Bank has released research showing how the economic downturn that has ensued since Sept 11^th will hit the world's poor the hardest. Some 10 million more men, women and children are likely to see their incomes drop below $1 day, to say nothing of added insecurity, and feelings of powerlessness. Preliminary analysis shows the effects may hit doubly hard in Africa because economic slow-down may bring a greater decline in prices for key export commodities.³

But while the prominence of development concerns is positive, the question of how to ensure trade addresses poverty and development is answered very differently by different actors. Quad countries like the US and Canada have argued that the launch of a new Round of trade negotiations is critical to development and poverty reduction targets. While they do not argue that trade liberalization is sufficient, it is presented as a necessary condition for development and poverty reduction.⁴

US Trade Representative Robert Zoellick and Canadian Trade Minister Pierre Pettigrew are also explicitly linking the need for a new round of trade negotiations to the international war against terrorism, raising new political pressures on countries to choose allegiances. The WTO Secretariat itself has also been lobbying the developing world hard to secure commitment to new liberalization commitments. As Director General Mike Moore puts it "the surest way to help the poor is to continue to open markets."⁵

While some developing countries, particularly in Latin America, agree to a new Round, most did not ask for it. And many, particularly the least developed countries have been clearly opposed. Instead most of the developing countries have been arguing that a developmental approach to trade would stress first the need to address the outcomes of the previous Uruguay Round as well as the unique needs of developing countries.

They are asking that developed countries address the major existing imbalances in the global trading system - a system that keeps Northern markets closed to Southern exports and that operates by rules whose content clearly favours the needs of major corporations in the North, whether through demanding tough intellectual property regimes, barring flexibility in investment policy, or disallowing protections for small farmers and infant industry.

In this view, the approach of countries like Canada to renew promises of market access and increased assistance for trade capacity building, as part of a package to ensure a new round is developmentally friendly, is a very narrow approach to development. Canada’s analysis neglects both the need to remedy the injustices in the content of current agreements. This approach demands that developing countries negotiate trade-offs in new areas in order to qualify for benefits they fairly deserve from the last round. It also does not adequately recognize the power differentials that shape trade rule making and enforcement.

Members of the Canadian Council for International Co-operation (CCIC) have been working for decades to reduce poverty around the world. Groups like CUSO, Médecins Sans Frontières, Oxfam and World Vision have a long history as development workers, working alongside partners in the South. From their own experience and those of their partners, NGOs have witnessed increasing poverty alongside growing international trade. Moreover, in many cases we have seen poverty increased because of liberalized international trade. Many Canadians agree that this is ethically and politically unacceptable.

For CCIC, the global trading system must be judged ultimately by its contribution to the elimination of poverty and the promotion of sustainable human development world-wide.⁶ Building a fair and just global trading system can make a contribution but is not a comprehensive strategy for addressing global poverty.

Many of the barriers to poverty eradication and development are rooted in national social and political structures, institutional arrangements and national policy choices. In many country situations, international trade may be remote as a priority to address the pressing human development needs of the poor. But global institutions and policies have a strong influence on prospects for local change for development. A comprehensive reworking of international trade rules and practices is necessary to address global poverty.

To address how trade can contribute to poverty elimination, we need to start with an analysis of poverty and its causes. Canadian NGOs’ analysis of poverty stresses the importance of building sustainable livelihoods, improving the poor’s access and control over resources and assets, and ensuring that men and women living in poverty can claim rights that are essential for empowerment--rights of organization and self expression, rights to food, health, decent work, and to participation in decision making.

Our approach to trade starts from the experience of those living in poverty and the work of our partners and related research, to understand how the trade system shapes the prospects for these key issues (rights, livelihood, resources, decision making). How will trade affect the scope for states to design national development strategies that address poverty and take account of local realities and constraints?

The international trade system can and should play a positive synergistic role by linking national economies to foreign investment and external markets in ways that promote growth with equity. But the terms of that linkage and integration with the global economy and with global economic actors make all the difference. And trade agreements shape those terms profoundly. Trade rules at the WTO and in other agreements, have come to cover a broad range of policy areas beyond trade and tariff issues--from investment to service regulation to intellectual property--with major implications for domestic economies and domestic policy choice, regulation and enforcement.

The essential direction of the trade system has been towards harmonization of global standards in these areas. For CCIC, this ‘one-size fits all’ orientation of trade rules, fundamentally does not fit the needs of development and poverty eradication, given both the highly unequal power relations and capacities among countries, and the need for national development strategies to be locally relevant. Current WTO provisions that allow for ‘special and differential treatment’ of developing country contexts are weak. They are linked largely to slightly longer timeframes to implement the same rules or to measures that are hard for developing countries to access or enforce.

Trade rules and institutions like the WTO need to be transformed from being a means to ensure uniformity of access to all countries’ markets, to being a means to manage the interface of trade for countries with different domestic policy environments, pursuing diverse locally-relevant development strategies for sustainable human development.⁷ The UN system of human rights law and multilateral norms and agreements provides citizens and governments a framework for the evaluation and criticism of different trade and development strategy choices.

Fundamentally, trade must be recognized as a means to an end rather than an end in itself. Resetting the purpose of trade and the objectives of the WTO to focus on poverty eradication and sustainable human development would be a good start. In this framework, it is essential that trade rules not constrain a government’s ability to implement diverse national development strategies for poverty eradication. If the WTO is to pay more than lip service to the rhetoric of ‘country ownership’ and allow Southern governments and their citizens to define national policies, then the priority of deeper integration, more trade openness or trade policy reform cannot be imposed, or assumed as a given--as it so often is in today’s development discourse.⁸

Policy makers must work with some humility, accepting real limits in our knowledge about which trade policy choices produce the best outcomes for poverty reduction goals. The complexity and contingency of poverty reduction strategies requires that policy makers reject the patronizing certainty about what is or isn’t good for the poor. This also means supporting the analysis and augmenting the voice of poor people and poor countries in trade policy decision making. Already there have been considerable proposals from the South and from civil society groups to change the terms of trade agreements.

Much of the debate about Doha has been framed as a "Round or nor Round debate." CCIC supports the call from civil society groups around the world and the majority of developing countries that now is exactly the wrong time to demand commitments of developing countries in new trade issue areas.

If the WTO is truly a permanent forum for discussion of trade issues, it does not need a new round, least of all a comprehensive new round that forces developing countries into an ‘all or nothing’ trade package.

But no one supports the status quo. Global leaders have a special opportunity at Doha to take concrete steps to build a global economy that promotes inclusion and human security.

The draft Ministerial declaration released on September 26^th, speaks often of development but is missing concrete expressions of that sentiment in many of the major areas that developing countries seek change. There is a myriad of important issues that must be addressed. From a development perspective some of the most pressing issues for governments to tackle at Doha include:

• Ensuring Access to Essential Medicine (TRIPS)
• Banning Patenting of Life Forms and Protecting the Rights and Knowledge of Indigenous Peoples (TRIPS)
• Supporting Food Security (The Agreement on Agriculture)
• Increasing Market Access
• Democratizing the WTO.

In developing countries, millions of men women and children die unnecessarily every year because they lack access to affordable medicine. The World Health Organization and UNAIDs estimate that in the year 2000 alone, roughly 3 million people died of AIDS, 2 million dies of tuberculosis and 1-2 million died from malaria.

There are many factors that influence the accessibility of medicines, but price is a vital determinant. This is particularly true in developing countries where health spending come more directly from household budgets, given restrictions and limitations of public health expenditures in poor countries. One of the most important factors affecting the price of medicine is the existence of patents, and the presence or absence of competition from generic drugs.⁹

The WTO’s Trade Related Aspects of Intellectual Property (TRIPS) Agreement requires all WTO members to have legislation that protects patents for 20 years--imposing developed country standards on all members irrespective of local context and developmental needs. Patents create monopolies for the manufacture, distribution and sale of protected products and processes. Since the TRIPS agreement does not differentiate among products, treating medicine the same as widgets, pharmaceutical companies are able to set prices for patented medicines at levels that maximize profits rather than health, free from the competition of low-price generic drug manufacturers.

By its own terms, the TRIPS agreement allows countries to undertake measures such as ‘compulsory licensing’ for the production of generic drugs or ‘parallel importing’ of branded drugs from countries that have better prices. But bilateral pressure from countries such as the U.S and bullying tactics of pharmaceutical giants have been used to threaten and prevent developing countries from implementing TRIPS flexibility measures. The TRIPS Agreement has been invoked by the pharmaceuticals as grounds for declaring these measures illegal, though by all reasonable standards the measures taken were TRIPS consistent.

Given the gravity of health pandemics in developing countries, the issue of what TRIPS does or doesn’t allow has become a flash point for North-South conflict at the WTO. NGOs and developing countries have mobilized to call for a clear declaration from the Doha Ministerial that the TRIPS Agreement shall not be interpreted or used in a manner that prevents countries from taking measures to protect public health. A strong declaration from the Ministerial is seen as crucial since it has the authority to adopt interpretations of WTO Agreements, influencing both WTO dispute settlement panels and how national legislation is assessed by the TRIPS Council in the future.

Canadian NGOs and their international partners feel strongly that while innovation deserves to be protected and encouraged, patents--like trade policy--are not ends in themselves but means to ensure public benefit. The purpose of intellectual property protection is defeated if the system prevents benefits from reaching the vast majority of the world’s people who need them. Governments have a duty to limit patent monopolies where this is necessary to protect public health.

For its part, Canada, rather than actively support the proposal of 60 developing countries, has joined a handful of wealthy countries in putting forward a vague counter-proposal that does little more than re-state what is already in TRIPS, and fails to include the language sought by developing countries.

The TRIPS agreement is also extremely controversial for its requirements, stipulated under Article 27.3(b), that countries must offer patent protection for some kinds of life forms and provide intellectual property rights (IPR) protection for plant varieties, either through patents or some alternative specially designed system (sui generis). Applying intellectual property rights to life forms and plant and genetic resources is challenged by many indigenous peoples, farmers groups, NGOs and increasingly Southern governments as unethical and inappropriate for the cultural and developmental contexts of poor countries.

In particular, the TRIPS agreement fails to acknowledge indigenous knowledge or protect Farmers Rights-rights which governments are explicitly required to support through other legally-binding international instruments such as the Convention on Biological Diversity. The poverty implications of TRIPS requirements for life form patenting are also numerous:

First, the TRIPS agreement does not provide any guarantee or safeguard to ensure that the billions of dollars that are made from the application of traditional knowledge is shared with the poor. Many pharmaceutical and agro-industry companies are shortening their research time by factors of hundreds, using indigenous knowledge to find commercially useful plants, and then patenting the results and claiming a monopoly over them.¹⁰ Examples of such "bio-piracy" abound. Famous cases include W.R. Grace’s attempted patent of the fungicidal properties of the Neem tree, (later overturned) and the controversial US patent secured by RiceTec Group on a rice plant crossed with India’s famous aromatic Basmati rice.

Second, the TRIPS agreement threatens farmers’ control over production and access to appropriate agricultural resources including seeds. Specifically, by requiring IPR protection for plant varieties current trade rules increase the registered (largely corporate) plant breeders’ control over plants, seeds and genetic resources and decrease the farmers’- including inhibiting practices critical to food security such as harvesting seed from a crop for replanting the next year or for sale and exchange in local markets.

Some governments have attempted to develop flexible ‘sui generis’ systems of plant variety protection that recognize Farmers Rights and community control issues, but these initiatives are being superceded by bilateral and WTO pressure to adopt more restrictive policies.

Third, the TRIPS agreement contributes to trends that threaten biodiversity, on which the poor depend so vitally for food and medicine. TRIPS requirements strengthen incentives for high-tech agriculture, which focuses land and resources on uniform plants and mono cropping as opposed to maintaining diverse fields and locally-adapted plant varieties.

Backed by the major mobilization of indigenous and farmers organizations, many Southern governments, led by a strong African bloc are calling for a substantive review of TRIPS to lead to its reworking. Knowing much more now than they did at the time of signing, Southern governments now contend that patents on life should not be permissible.¹¹

To date, Canada seems silent on key debates, supporting the existing TRIPS agreement. Canadian NGOs call for Canada to play a much more active role to better balance the legitimate needs of industry with the higher obligation of government to protect people’s rights, safeguard biodiversity, and pursue sustainable development objectives.

Rural development and the viability of small-holder agriculture are enormously important for poverty reduction and food security in developing countries. For developing countries (the majority of WTO members) between 50 and 80% of the population relies on agriculture for a living, as compared to less than 5% in developed countries. Small-scale, subsistence farmers, often women, account for the bulk of domestic food production in many developing countries and are the majority of the world’s poor. And hunger and food insecurity remain chronic development issues in the south predominantly, though not exclusively in rural areas.¹²

Although only about 10% of global agriculture is traded, the current WTO’s Agreement on Agriculture (AoA) has a major constraining impact on how all agriculture is managed and on the possibilities for developing countries to pursue rural development strategies that protect and enhance the livelihoods of poor farmers. In general, the Agreement aims to restrict governments’ abilities to protect domestic agriculture (though unequally) and to require developing countries to open their economies to international agricultural trade.

The AoA is a good illustration of how WTO rules, by blindly pursuing increasing amounts of internationally traded agricultural commodities, do not promote free or fair trade, but trade that is carefully managed to protect the interests of Northern governments, and, significantly, the large agribusiness exporters based there.

The AoA institutionalizes instead of redressing inequalities between countries:

• It preserves, in large measure, the right of wealthy countries to provide or only slowly phase out their enormously higher domestic financial support to agriculture, while preventing developing countries from ever increasing or introducing it.
• It demands that countries provide minimum market access for international imports in all products, effectively eliminating the option of self-sufficiency, which many developing countries have in important crops.¹³
• It ignores the special role of agriculture and poor farmers in developing economies, and imperils their production methods and local crop preferences. Special and differential treatment measures offered to the South are weak (longer timelines) or inaccessible (expensive options) or unenforceable (reliant on ’best efforts’ by Northern governments).

At heart, the current AoA is based on promoting the export requirements of an industrial agriculture model that is foreign to the practices of the majority of the world’s farmers. It assumes food security is possible or desirable to achieve through a policy of low cost food imports. In fact the AoA, by offering neither fair open trade for Southern agricultural exports nor allowing developmental protections for the poor, jeopardizes both food security and sustainable rural development in the South.

The food security impacts of trade liberalization policies, including of the Agreement on Agriculture, have been clear and well documented by NGOs and UN Agencies.¹⁴ Poor farmers have been devastated by a flood of cheap (often ‘dumped’ or unfairly subsidized) imports. Three thousand Jamaican small dairy farmers have been overwhelmed by subsidized EU milk powder; 300,000 Sri Lankan potato and onion farmers are being undercut by foreign imports (notably from India), and 700-800,000 Mexican campesinos have been displaced by the arrival of cheap U.S. corn.

‘Cheap’ imports become very expensive when weighed against the costs of thousands of lost rural livelihoods, increased migration to overcrowded cities, and the concentration of lands and assets in the hands of men and wealthy farmers, which exacerbates inequalities and throws many deeper into poverty. Also, cheaper imports often do not translate into cheaper retail food, meaning powerful intermediaries capture the windfalls.

Small farmers, community groups and NGOs have challenged the AoA as promoting an unsustainable model.¹⁵ They note there is little logic in assuming that industrial sectors in developing economies can ever absorb the labour force now sustained by agriculture. The ecological costs of large-scale industrial agriculture, with its attendant dependencies on high-cost petrochemical-based inputs and long distance transport, are also high. This underscores the need to support the viability of small-scale local agriculture in ways that meet human needs, promote democratic communities, and protect the environment.

Many Canadian NGOs (such as those in the Canadian NGO Food Security Policy Group¹⁶), and developing countries, are seeking minimally an urgent re-balancing of the AoA to better address development and food security needs of the poor. A proposal for a ‘development box’ in the AoA, is being advanced by many Southern countries in Doha. Such a box would re-equip governments (who choose to act) with policy tools that can

1. protect the livelihoods of small farmers (through border measures and exemptions from market access commitments for key food security crops); and
2. promote their productivity (through increasing the flexibility of allowable supports, targeted at poor farmers).

Developing countries are also calling for increased access to Northern markets and for wealthy countries to make good on their Marrakech commitment to provide financial and technical assistance to help offset the rising food import costs of net-food importing developing and least developed countries.

CCIC and most civil society organizations reject the exclusive focus on ‘market access’ as the most important trade approach to development. This forces countries of vastly different capacities to negotiate with each other for reciprocal market access concessions that largely benefit corporate actors positioned to take advantage of such openings. External markets are viewed in this approach as the route for national development, outside of considerations of local human needs and the ecological limits to growth. All countries should have some means to develop and support important and emerging economic sectors.

While market access is therefore no panacea, increased and meaningful access to Northern (and some Southern) markets for textiles and agriculture remains an important target for developing country governments for Doha. There is considerable bitterness; for example, that industrialized country have dragged their feet on implementing their commitments to reduce import barriers in the Agreement on Textiles and Clothing, by lifting all the least important restrictions first.

Recent market access initiatives like the European Community’s "Everything but Arms Initiative" and Canada’s own August 2000 commitment to lift tariffs on certain imports from least developed countries, have been criticized for leaving important barriers largely untouched or for making offers with very small consequences for developing country trade. For example nearly all textiles, clothing and footwear items have been excluded from the Canadian initiative, even if these are the items in which least developed countries have strong export interest.

Increasing market access for developing country exports to the North has become important both politically and symbolically. It can also be an important factor in shaping developing countries’ local industrial growth and access to foreign exchange.

Market access initiatives should favour least developed countries. Such initiatives will have very limited development impact if they do not address tariff escalation in which higher processed goods face greater barriers than raw commodities, inhibiting industrial development in the South. Compensation and supportive programs must also be developed for those negatively affected in Northern societies and for countries, particularly least developed countries, who are negatively impacted by competition from other developing economies.

However market access initiatives offered outside of a willingness to re-work the terms and scope of other WTO agreements that undermine the potential for developing countries to boost local productive capacity will have limited developmental value. In agriculture, for example, allowing support to small farmers or reducing Northern subsidies may be more important.

For trade rules and regimes to address poverty eradication, the interests of the poor must be effectively represented in decision-making. The determination of who sits at the policy making table is critical to the outcome of whose interests policy serves. There are major blocks to democratic participation at the WTO both internally, in terms of the ability of its members to participate equally and effectively, and externally in terms of the transparency and openness of its operations to parliamentarians and civil society organizations.

The formal structure of the WTO is more democratic than that of the World Bank or the IMF since every country has one vote, as opposed to voting rights linked to financial contributions. In theory, decisions are also made by consensus.

The reality is quite different, however, with decision-making authority closely tied to economic and political clout. The "Quad", (comprised of the US, the EU, Japan and Canada), hold enormous influence. While some major developing countries such as India and Brazil have played an active role regarding certain trade issues, the large majority of WTO members do not have this capacity or this power.

Much of actual WTO negotiation is done informally, and non-transparently. In many cases only a few countries are invited to informal or "Green Room" meetings, where the US and the EU, or perhaps the Quad, work out positions ahead, and then bring them to larger groupings, to gain/impose consensus. There is neither a record of who participated in informal meetings, nor any access to their proceedings for those not invited. Major developing country protest of Green room meetings at the WTO Seattle Ministerial has prompted some efforts and attention at addressing the way informal meetings are carried out.

The technical and legal nature of many of the negotiations means many developing country negotiators lack training and capacity to effectively secure their national interests. Even the costs of maintaining representation are too much for many countries. Over half of the 49 least developed countries do not maintain permanent delegations in Geneva, and others are staffed by one or very few--who play multiple representative roles with other international organizations.

The WTO has not continued the GATT rule that prohibited holding more than one meeting at a time. Since many WTO meetings can take place simultaneously, the challenges to small delegations are clear. This is compounded by the WTO’s procedural principle of "negative consensus," by which if no disagreement is explicitly voiced at a meeting, agreement is assumed.

Another issue is the problem of a round of trade negotiations being presented as an all-or-nothing option. The concept of a ‘single undertaking’ means members have to agree to the whole package even if they were hardly participants in many elements of it.

The Dispute Settlement Mechanism (DSM) was hailed as a major power equalizer among nations, since no country could block a complaint from being brought forward to a WTO panel. While the DSM offers some important protection for developing countries, making use of it also requires resources and legal expertise unavailable to least developed and many developing countries.

Three quarters of disputes brought to the WTO to date have been by developed countries, and an African country has yet to make claim. The DSM, based on sanctions as the deterrent for WTO non-compliant behaviour is also flawed because it assumes poor countries can effectively impose sanctions against rich countries.

There has also been significant criticism of the role of the WTO Secretariat. Many feel that the Secretariat and the Director General must maintain neutrality, and facilitate dialogue and the expression of all sides of a debate amongst members. However in many instances, the office of the Director General has acted more as an agent of the Quad rather than the whole. For example the Director General has been involved in an active campaign, in public and private, to promote the view of the major powers on the need for a new Round, including support for the new issues.

Another key governance concern is the slow pace of reform on external transparency. All informal and internal meetings, but also most external and formal Ministerial meetings of the WTO are closed, even to observers, including dispute settlement hearings.

For citizens of WTO member countries, having access to information about trade negotiations and the agenda of multilateral trade talks is central to their ability to make their views and voices heard, and have an influence on the outcome. Other multilateral policy fora such as under UN auspices have made much greater headway than the WTO in ensuring transparency of operations for the public.

Parliamentarians also have too limited a role in trade policy making either in their own legislatures or through the WTO. Canada has played a positive role in advancing the external transparency agenda, but much more needs to be done. Improving national level consultation and openness is also important.

Civil Society organizations are pressing for greater access to WTO documents and for observer status in WTO meetings. In recent years, the WTO has initiated a number of dialogue sessions with NGOs and civil society groups. But the political context for civil society mobilization is worrying. Increasingly demonstrations--in Quebec City and Genoa for example--have been marked by egregious police and state violence.

The WTO response to citizen mobilization has been an unhelpful characterization of civil society organizations as breaking down into two sides, "destructive" organizations who do not engage in polite policy dialogue - and whom the WTO inaccurately links with violence - and "constructive" NGOs who do engage in trade policy dialogue.

This approach is divisive. It ignores both the more nuanced and diverse reality of civil society strategies, (which are all overwhelmingly non-violent), the political legitimacy of democratic mobilization of opposition, and the priority need to address the regulation of other more powerful actors in trade policy making, notably large corporations.

A recurrent theme in discussion of WTO governance issues is the influence of large corporations on the process, agenda and implementation of WTO agreements. While dozens of less powerful countries and billions of the world’s population are not effectively represented at the WTO, the leaders of the world’s largest corporations have excessive influence over decision-making.

For example a group of companies including Pfizer, General Motors and Monsanto played a central role in putting intellectual property rights on the Uruguay Round negotiations. In the talks that followed, 96 out of the 111 members of the US delegation negotiating in that area were from the private sector.

Institutional reform and democratization at the WTO is thus a major priority area for progress on making trade more poverty sensitive. This requires that WTO members priorize, as a matter of urgent global governance, issues of ‘ownership’ and decision-making over the speed and scale of trade reform.

A major review of the WTO is in order to examine how to restructure and ensure its programs and staff can address issues of global poverty and sustainable human development. Progress will not be possible on all fronts at once. Confidence must be built with developing country partners.

Key areas for change include changing the procedures for decision-making and consensus building, increased external transparency for the public and civil society, addressing the terms of corporate lobbies, improving coherence with UN law and commitments, and enhancing the quality of capacity-building assistance for developing countries to be able to exercise their rights in negotiations and dispute settlement.

1. Canada and other developed countries must not pressure developing countries into negotiations on new issues, or to undertake commitments towards a new round. Canada should focus instead on first addressing outstanding ‘implementation’ issues of concern to developing countries and redressing major developmental imbalances in existing agreements.

2. Canada should provide political support for recognition that a central purpose of trade is to eradicate poverty and promote sustainable human development. The WTO’s objectives should explicitly reflect this.
3. An independent and overall review of the WTO should be commissioned under the auspices of the UN Secretary General to assess the capacity of the WTO’s current governance arrangements and staffing to promote sustainable human development and identify major structural reform needed.

4. In the interim, Canada should advocate for democratization of rules and procedures for equal and effective participation of developing country governments in WTO decision making. Canada should support a call at Doha for the General Council of the WTO to undertake a comprehensive work program on Institutional Reform that would develop recommendations for the next WTO Ministerial.
5. Promote external transparency and openness in WTO trade negotiations and dispute settlement processes to facilitate monitoring and contributions by i) civil society ii) parliamentary actors, and iii) to illuminate and regulate the influence of corporate interests.
6. Support democratization of domestic trade policy processes to allow greater involvement for parliamentarians and civil society actors in the shaping of Canadian trade priorities and assessment of trade policy success.

7. Canada should support a moratorium on TRIPS enforcement for medicine and biological resources pending review and reform of the Agreement.
8. Canada should support a clear and unambiguous Ministerial Declaration at Doha that nothing in the TRIPS Agreement prevents members from taking measures to protect public health.
9. Canada should call for the completion of a substantive review of TRIPS Article 27.3b by 2002, which would clarify that patenting of life forms would be prohibited and affirming the rights of each member to determine appropriate sui generis systems for protection of plant varieties that protect Farmers Rights.
10. Canada should advocate that TRIPS articles be consistent with the provisions in the Convention on Biological Diversity that help protect against biopiracy by requiring prior informed consent, benefit sharing and disclosure of the source of genetic resources as part of patent approval.

11. Canada should support creation of a ‘development box’ in the Agreement on Agriculture that preserves policy options for developing countries to protect the livelihoods of small farmers, encourage local food production and promote food security of the poor. Development Box measures would include the ability to exempt key food security crops from tariff reduction or market access commitments.
12. Canada should continue to seek the elimination of all export subsidies and all forms of export supports, which contribute to agricultural dumping on world markets.
13. Canada should call for the immediate implementation of the Marrakech Decision regarding provision of compensation for the increased food bills of net food importing developing countries. An international fund managed through the FAO or other international body should be established with clear and legally binding implementation guidelines.

14. Canada should support effective Special and Differential Treatment provisions throughout trade agreements that recognize the long-term development needs that come from unequal economic capacities. Such measures should be responsive to the diverse needs of developing countries, and be linked to appropriate development milestones as opposed to unrealistic timeframes.

15. Ensure duty free treatment for all imports from Least Developed Countries. Address needs for compensation and adjustment where least developed countries are damaged by other developing country competition.

1 | United Nations Food and Agriculture Organization, State of Food Insecurity in the World 1999.

2 | UNDP Human Development Report 1997.

3 | World Bank News Release No: 2002/093/S, October 1, 2001.

4 | Minister of Trade Pierre Pettigrew and Minister for International Cooperation Maria Minna are calling for a ‘growth and development round’ noting that new trade liberalization commitments must be accompanied by supportive national policies including ‘strong macro-economic disciplines’ good infrastructure, tax reform and social safety nets. DFAIT Information Paper on Trade and Development, October 2001

5 | Financial Times June 19, 2000:17

6 | At the September 2000 Millennial Summit of the UN, head of state around the world, including Prime Minister Chretien, re-committed themselves and their governments to the eradication of global poverty.

7 | Rodrik, Dani. The Global Governance of Trade as if Development Really Mattered. Background paper prepared for the UNDP. Cambridge: Harvard University, 2001.

8 | Some developing, particularly least developed countries, may feel their economies’ industrial regulatory or capacities are not ready for (more) open world trade and investment or that their developmental needs and fiscal priorities are elsewhere, (or would be elsewhere if other international cooperation was at hand--for example focussed on debt cancellation.)

9 | Médecins Sans Frontières (Canada) documents that people with AIDS-related meningitis in a Nairobi hospital were being sent home to die because they could not afford the only effective available treatment. Patent protection in Kenya means that one day’s treatment for this strain of meningitis costs $US 20/day. The same treatment in Thailand, where the patent is not protected costs only $0.70 per day.

10 | It is estimated that if just a 2% royalty were charged on genetic resources that had been developed by local innovators in the South, the North would owe more than $5 billion in paid royalties for medicinal plants. UNDP Human Development Report 1999:71.

11 | The Africa Group proposal, submitted by Kenya in 1999 prior to, asks for changes to 27.3 b so that "plants and animals as well as micro-organisms and all other living organisms and their parts cannot be patented, and that natural processes that produce plants, animals, and other living organisms should also not be patentable."

12 | The latest FAO statistics show that almost 800 million people in developing countries are undernourished. FAO State of Food and Agriculture Report 2000.

13 | While many poor countries have been forced to liberalize their markets anyway under structural adjustment programs, Northern markets still remain closed to developing country exports in certain key crops like sugar.

14 | See for example Agriculture, Trade and Food Security: Issues and Options in the WTO Negotiations from the Perspective of Developing Countries. Vol. II Country Case Studies Rome: FAO 2000; and John Madeley, Hungry for Trade London: Zed Books, 2000.

15 | Some farmers organizations like those represented by the global network Via Campesina are calling for Agriculture to be taken out of the WTO all together.

16 | The Canadian NGO Food Security Policy Group is a coalition of non-governmental organizations that supports the World Food Summit objective to halve the global number of food insecure people by 2015. They include: The Canadian Foodgrains Bank, Oxfam Canada, World Vision Canada, Inter Pares, Mennonite Central Committee Canada, ETC Group and CCIC.