Archived press release

Pascal Lamy Must Tackle Unfair Trade System

31 August 2005

The new Director General of the World Trade Organisation (WTO), Pascal Lamy, is being urged to push for radical change in the international trading system because of its damaging impacts on the poor and the environment. The former EU Trade Commissioner, who previously called the WTO "medieval", takes over as Director General today (Thursday, 1 September) as tension builds ahead of the WTO Ministerial which takes place in Hong Kong this December.

Trade negotiations are still stalled as developing and developed countries each demand that the other side moves first over attempts to increase free trade in agricultural and non-agricultural manufacturing. Little, if any, progress has been made since Cancun, and Lamy says the conclusion of the negotiations under the so-called Doha Development Round will be his "objective number one, number two and number three" [1].

Meanwhile a number of high profile trade disputes have highlighted the problems with the current system. In Europe, huge quantities of Chinese-manufactured clothing is being held following the introduction of European quotas on Chinese imports, in an attempt to protect the more expensive European garment industry - a direct contradiction to both the UK and EU's vocal insistence in the negotiations that other countries must not protect their industries.

And a dispute is also raging between the United States and developing countries after the US imposed a tariff on sugar imports to protect their own sugar growers. The WTO has ruled that the system violates WTO rules, but the US is refusing to comply until they get what they want from negotiations in other areas.

Europe and the US are also in dispute over GM food - with the US challenging Europe's precautionary approach to importing genetically modified crops and food. The WTO is expected to rule on the dispute this October [2].

Friends of the Earth Trade Campaigner Eve Mitchell said:

"Pascal Lamy is clearly going to have his work cut out to make a success of these trade negotiations. The current free trade agenda simply does not work - and that is why we are seeing this blatant hypocrisy with the US and Europe demanding free trade from others on the one hand while doing everything they can to protect their own industries on the other.

"What we need to see is a fairer international trading system that recognises the rights of individual countries to protect their developing economies, to protect their workers and to protect the environment. If Pascal Lamy cannot achieve this, then no deal at all in Hong Kong would be better than a bad deal which perpetuates the current system of unfair trade".

M. Lamy's track record has already attracted criticism from non-governmental organisations. As EU Trade Commissioner he aggressively promoted the interests of European big business, often to the detriment of people and the environment and in the face of outright opposition from many developing countries[3].

Notes

[1] Pascal Lamy at a media conference, see Reuters, 17 May 2005.

[2] The WTO will rule on whether or not countries have the right to restrict imports of genetically modified food and crops (GMOs) after a complaint by the US, Argentina and Canada about the EU's approach (based on the Precautionary Principle as outlined in the internationally-agreed Biosafety Protocol). A ruling in favour of the US would force countries, to accept GM food imports, and rumours of a future US complaint on labeling would threaten consumers' ability to choose what they eat. This would have serious implications in developing countries who either do not want GM foods or want to wait until they can set up regulatory systems. WTO rejection of precaution would allow biotechnology companies like Monsanto to move in and effectively take control of the world's food supply, threatening food sovereignty, wildlife and the environment as well as people's health and right to choose.(3)

More than 130,000 citizens from 100 countries and more than 745 organizations representing 60 million people have signed a Citizens' Objection to the WTO saying the WTO cannot legitimately undermine the sovereign right of any country to protect its citizens and the environment from GM foods and crops.

Lamy's track record on biotech is worrying, to say the least. At the Seattle WTO Ministerial Conference in 1999, Lamy tried to make a deal with the United States to set up a WTO working group for developing GM product rules. EU environment ministers furiously rejected Lamy's deal, which ran counter to the previously agreed EU negotiating position. In the last few years, Lamy and other members of the European Commission have lifted the moratorium on GMOs under pressure from the US, the WTO and biotech companies.

[3]Lamy's insistence as Trade Commissioner on expanding the WTO's agenda to include investment, competition and government procurement against the will of many developing countries and civil society, was a key factor in the break down of the WTO talks in Cancun and makes his selection as new WTO head a surprising one. Trade Commissioner Lamy also aggressively pursued opening up developing country markets in essential public services, such as water, to the benefit of EU multinationals

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