Eye on Hong Kong

Eye on Hong Kong

Eye on Hong Kong is a way for you to connect with and stay updated on the negotiations, events and resistance at the upcoming WTO Ministerial which will be held in Hong Kong, China from 13 to 18 December 2005.

Oakland Institute's Director, Anuradha Mittal will be reporting daily from inside the Ministerial where she will be participating as an accredited NGO, and Oakland Institute Fellow Becky Tarbotton will be providing regular updates from events in the parallel NGO forums and mobilizations in the streets.

Daily reports will summarize key happenings in the WTO negotiations as well as provide analysis and opportunities for you to take action.

What is the WTO?

The World Trade Organization (WTO) was set up in 1995 to replace the General Agreement on Tariffs and Trade (GATT). Vested with extensive and unprecedented legislative and judicial powers to develop and enforce international trade rules, the WTO represents the globalized economic system that has been advancing for several centuries, beginning with conquest and colonialism, and then continuing under the guise of ‘development’ and now as the era of corporate-led globalization.

Beginning more than five hundred years ago, colonial powers began to force colonies to abandon their local food economies and produce monocrops for export markets. Colonialism provided vast riches for the privileged classes in Europe, but systematically destroyed the relatively self-sufficient, local economies of the South.

By the twentieth century, the colonies became independent politically but not economically. After World War II, the US and Britain sought to establish a ‘so-called’ stable, multilateral economic system, ostensibly to prevent the outbreak of another World War. At a meeting in Bretton Woods, they created a set of international institutions, the International Monetary Fund (IMF), World Bank and the General Agreement on Tariffs and Trade (GATT), to govern the global economy ‘for the benefit of all.’ In practice, these three institutions continued to act in concert to push developing countries along the road to production for export markets through trade liberalization ‘to the benefit of a very few.’ Increased trade liberalization (commonly called ‘free trade’) was blindly promoted out of a belief that economic growth (usually measured as a rise in Gross Domestic Product (GDP)) and increased trade are the only way to increase standards of living and reduce poverty. In reality, most of developing countries export earnings did and continue to go to paying off huge debts incurred from loans obtained to build the industrial infrastructures required to participate in global trade in the first place. The GATT was a treaty designed specifically to govern and regulate world trade. Until 1995 it was concerned solely with tariff reductions on trade in manufactured goods. Agriculture was excluded as being too politically and culturally sensitive. However, the GATT gradually expanded to include other issues. By the Uruguay Round of the GATT in 1995, trade in agricultural goods, services and intellectual property rights were all included. At the same time, the World Trade Organization (WTO) was set up to administer the Uruguay Round agreements as well as to provide a forum for further negotiations, to review member countries’ performance on trade liberalization, and to administer dispute settlement. Agreements signed onto within the WTO are legally binding, in effect making a non-democratically elected institution more powerful than elected governments.

What Does the WTO do?

Despite purporting to promote ‘free trade’, the WTO has actually put in place regulations that tilt the playing field in favor of corporations. The so-called ‘removal of all barriers to trade’ includes the removal of labor, environmental and health standards, which means that corporations can move to wherever production is absolutely cheapest, often bidding out local producers.

The WTO and GATT Uruguay Round Agreements have functioned principally to pry open markets for the benefit of transnational corporations at the expense of national and local economies; workers, farmers, indigenous peoples, women and other social groups; health and safety; the environment; and animal welfare.

Under this free trade regime, the social and environmental costs of free trade agreements have been borne by the public while democratically elected officials have been rendered incapable of protecting public interest. For example, in the ten years of its existence, WTO panels comprising of corporate attorneys have ruled that US laws protecting sea turtles, US clean air standards, and dolphins are a barrier to "free trade. That the European Union law banning hormone-treated beef is illegal. While the EU ban on GMO crops is being contested in the WTO.

What Power Does the WTO Have?

Unlike United Nations treaties, International Labor Organization conventions, or multilateral environmental agreements, WTO rules can be enforced through legal sanctions, giving the WTO more power than any other international body and in effect making a non-democratically elected institution more powerful than elected governments.

In addition, the WTO system, rules and procedures are undemocratic, un-transparent and non-accountable and have operated to marginalize the majority of the world's people. On paper the WTO merely deals with governments. In practice however, Transnational Corporations (TNCs) have a large, though often invisible presence. In talks that led to the agreements on TRIPS (extending corporate control of the knowledge economy), 96 out of the 111 members of the US delegation of negotiators were from the private sector.

Growing Resistance to the WTO

The WTO is fundamentally a vulnerable institution because it is based upon the false logic of a global trade regime that is based upon the creation of poverty and inequality in every country around the world. Producers in both ‘rich’ and ‘poor’ countries are told that their livelihoods are threatened by foreign production and that they must increase exports to gain a competitive edge. Absent from this argument is any recognition of the fact that a handful of major corporations now dominate 80% of all global trade and so any benefits of increased trade will invariably flow to them. As a small farmer from Wisconsin pointed out at a demonstration against the WTO in Cancun in 2003: “They hope to divide us, pit farmer against farmer, farmer against consumer, North against South.”

People around the world are realizing that the WTO is promoting a flawed and dangerous agenda, and are mobilizing to challenge its power. November 1999 marked a coming of age for this global resistance when more than 80,000 people went to Seattle to challenge this corporate agenda at the WTO’s Ministerial, and to demand a democratic, socially just and environmentally sustainable global economy. The protests succeeded in shutting down the trade talks and derailing another round of corporate-managed trade agreements.

In Seattle the WTO had planned to launch a "Millennium Round" of trade talks that would have expanded the WTO's reach and privatization agenda into sensitive areas such as education and healthcare. The demonstrations were a historic moment. As the Los Angeles Times wrote: "On the tear gas shrouded streets of Seattle, the unruly forces of democracy collided with the elite world of trade policy. And when the meeting ended in failure ... the elitists had lost and the debate had changed forever." Farmers, workers, environmentalists, and womens’ rights, immigrants rights, and human rights groups again mobilized tens of thousands in Cancún in 2003 to protest the WTO – and again the trade talks collapsed. The words of an Indian farmer group, in their letter to the Prime Minister of India demanding that he withdraw India from the WTO exemplify the passion and vision expressed by many people and groups around the world in their rejection of the WTO: “We don’t like money and markets from abroad to rule our villages; we want our nature and hard work to be utilized by us only to fulfill the need of every citizen. Let the right to water, forest and land be with our village communities. Our hard work is for self-reliant, equitable distribution.”

What is a Ministerial? The Ministerial Conference is the organization's highest-level decision-making body. It meets "at least once every two years", as required by the Marrakesh Agreement Establishing the World Trade Organization - the WTO's founding charter.