Last minute trade talks, announced late last night, and aimed at rescuing the failing World Trade Organisation (WTO), could spell disaster for developing countries and the environment, warned Friends of the Earth.

The environmental campaign group urged world leaders to step back and consider the fundamental problems faced by the multilateral trade organisation.

Friends of the Earth Trade Campaigner Joe Zacune said:

"This last ditch attempt to resuscitate the world trade talks could spell disaster for communities around the world. The latest collapse of the trade talks was down to the EU and USA's stubborn refusal to stop dumping their produce on developing countries' markets. The failure to get a deal reflects the inherent flaws in the World Trade Organisation and reveals the desperate need for an alternative approach."

Campaigners from Friends of the Earth are calling for a review of the multilateral trading system and an open debate on alternative approaches to global trade.

The new trade talks are scheduled to take place in Cairns, Australia on 20-22 September with around 50 countries set to attend. These talks are part of a final push to revive the Doha Round in order to allow the US to extend its special trade authority by six months and pass a Doha trade liberalisation agreement next year.

Friends of the Earth said this posed a threat to the millions who have already been blighted by unfair trading rules and would certainly face further impoverishment and irreparable damage to the environment. Developing countries, including India, also fear the devastating impact the WTO would cause to millions of farmers and fisherfolk.

The organisation added that world leaders have failed dramatically to put development at the heart of the Doha Round. According to EU's own impact assessment [1] published in May this year [2] poorer countries stand to lose more than gain from the Doha round, including the loss of vital tariff revenue.

A recent World Bank study [3] - and government negotiators [3] themselves - provide testimony that the current trade liberalizing agenda is not working for the majority of people in the developing countries. The interests of the largest and most powerful countries and their transnational companies continue to dominate the WTO's agenda [4].

Furthermore, consideration of the disastrous potential global environmental impact of current negotiating proposals is virtually non-existent within the WTO [5]. Yet there is increasing evidence elsewhere, including from studies commissioned by the European Commission, that escalating international trade in natural resources is likely to damage global biodiversity and local economies. [6]

Indeed, if more natural resources are traded internationally instead of being available for use locally - as certain countries and transnational corporations wish - this could increase poverty for millions in the world's poorest communities [7].

For example, forests and fish and fish products are both sectors slated for complete or exceptionally high levels of liberalization in the WTO's current negotiations. Yet worldwide, some 60 million indigenous people are almost completely reliant on forest resources for their livelihoods - for food and fuel, medicines and materials - and some 36 million people directly employed in small-scale artisanal fishing [8].

Similarly, current negotiations to expand international trade in agricultural products could threaten the livelihoods of millions of small and peasant farmers worldwide. In short, poverty and environmental degradation could be increased significantly by the WTO's negotiations.

Notes

[1] www.sia-trade.org/wto/FinalPhase/GLOBALOVERVIEW_FINALMay2006.pdf (PDF)

[2] A study by the World Bank's Independent Evaluation Group (IEG) released in March 2006 concluded that the World Bank's strategies on trade have not delivered on employment and poverty reduction. World Bank's Independent Evaluation Group Issues report Assessing Two Decades of Global Trade Programs, IEG, World Bank, Washington DC, 22 March 2006, www.worldbank.org/ieg/trade/docs/press_release_trade_evaluation.pdf (PDF). In addition, a 2006 study by the Carnegie Endowment for International Peace also suggests that the gains that have been predicted from world trade are likely to be much more modest than has been portrayed, with those countries particularly reliant on subsistence farming likely to be harmed. Winners and Losers: Impact of the Doha Round on Developing Countries, Sandra Polaski, Carnegie Endowment for International Peace, Washington DC, 2006, www.carnegieendowment.org/files/BWfinal.pdf (PDF).

[3] For example, the Hon. Charles Savarin, Minister of Foreign Affairs, Trade and Labour, Commonwealth of Dominica, has said: "In recent times, the rules, norms and procedures of the multilateral trading system have pushed the Caribbean to the precipice of disaster…Called the Doha Development Round, these on-going trade talks are failing the Region." Caribbean Regional Negotiating Machinery press release, No. 27/2005, December 6, 2005. The G33 group of countries has also recently sent a letter to Pascal Lamy stating that its members will not accept proposed modalities for agriculture if these do not include modalities on special products (SPs) and a special safeguard mechanism (SSM) that are key aspects of special and differential treatment for developing countries(Geneva, 20 April). These were agreed in Hong Kong but have now been sidelined for attention at some later date.

[4] Some WTO papers are surprisingly explicit about engagement with industry. For example: "This forest products proposal is driven by industry interest. The Santa Catalina Group, which has industry representatives from both developed and developing countries, has met with NAMA negotiators on several occasions to discuss its members' priorities" Market Access for Non-Agricultural Products, Tariff Liberalization in the Forests Product Sector, Communication from Canada, Hong Kong China, New Zealand, Thailand and the United States, TN/MA/W/64, 18 October 2005 (05-4784), World Trade Organization, Geneva.

[5] The WTO's Committee on Trade and Environment is mandated to oversee the environmental impacts of all the WTO's current negotiations but has not done so. Indeed, there is an unwritten rule in the WTO that multilateral environmental or sustainability impact assessments are not permitted, because they are too controversial, as Pascal Lamy himself confirmed in a meeting with civil society, 17 October 2005.

[6] The European Commission-financed sustainability impact assessment on the forest sector, for example, demonstrates that there are likely to be significant and irreversible impacts on forests and biodiversity in 'biodiversity hotspot' countries such as Brazil, Indonesia, countries in the Congo Basin and Papua New Guinea. In addition, countries that currently protect their forest industries using trade measures can expect those industries to shrink and possibly collapse. Sustainability Impact Assessment of Proposed WTO Negotiations: Final Report for the Forest Sector Study, Marko Katila and Markku Simula, Savcor Indufor Oy, Finland, in association with the Institute for Development Policy and Management, University of Manchester, UK, with financial assistance from the Commission of the European Communities, 19 June 2005
www.sia-trade.org/wto/final%20report%20page.shtml

[7] Worldwide, some 60 million indigenous people are almost completely reliant on forest resources for their livelihoods - for food and fuel, medicines and materials. Almost 40 million people are involved in fisheries globally and 90 percent of these are employed in small-scale artisanal fishing. For further details see FOEI's The Tyranny of Free Trade: wasted natural wealth and lost livelihoods, December 2005, www.foei.org/publications/index.html

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