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KAIROS Trade E-Bulletin Fall 2004
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To join this list, please email Rusa Jeremic, Program Coordinator for Economic Justice at rjeremic@kairoscanada.org
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- WTO inches forward
- FTAA Remains at a Standstill
- Bilateral Trade Deals Hang in the Balance
- Brazil Travels its own Road
- Canadian Expectations
- Peoples’ Week of Action on Trade
Previous Edition:
WTO inches forward
Since the September 2003 WTO Ministerial in Cancun collapsed, WTO
talks had officially slowed to a crawl. However, the back rooms
never closed down for business. Months of intense and secretive
negotiations amongst members of the Non-Group of Five (US, EU, Brazil,
India and Australia), to the exclusion of the other 100+ WTO members,
resulted in a Framework for moving forward with not only agricultural
negotiations but also all negotiations. On July 31st, minutes before
the midnight deadline, this new Framework was presented to other
members, giving them only 17 hours to review and respond. On most
counts the process lacked transparency and was undemocratic. The
key difference was that the emerging middle powers of Brazil and
India agreed to participate in this process.
The long sought for demand of some countries like Brazil for the elimination of Northern country export subsidies and domestic support, appears to have been met. However, beneath the surface, the agreement is vague and full of loopholes even on this contentious issue. It is actually not clear how the reduction will impact the US and EU because of the various allowances that have been made and the creation of new categories. Even though the agreement calls for an overall reduction of trade distorting domestic support (domestic subsidies) to 80% of the current total, the cut to the actual amount being used is likely to be zero. This is because for countries like the US, the dollar figure for subsidies is an inflated number. The 20% will in effect do very little to prevent agri-business dumping in the South. Other setbacks include the West African countries who had demanded that cotton be negotiated outside of the Agriculture Agreement. This demand lost out to a loosely detailed decision that cotton would be negotiated as a sub-agreement within the overall Framework. Canada also lost out as provisions in the agreement call for the elimination of some State Trading Enterprises (STEs) like the Canada Wheat Board.
The next Global Economic Justice Report will feature an in-depth analysis of the July Framework and look at the role of agriculture in global trade talks. Look for GEJR Volume 3, Number 4 due out at the end of the year. Subscriptions are $20 annually. To subscribe contact orders@kairoscanada.org
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FTAA Remains at a Standstill
On the other hand, the FTAA (Free Trade Area of the Americas) has
been stalled since February when talks collapsed without assigning
mandates to negotiating committees. After several attempts to re-start
the talks and come to some agreement, US officials have finally
publicly acknowledged that the FTAA will not be implemented by the
highly touted and hotly contested date of January 1, 2005.
Indeed, the entire project remains frozen as the two continental
heavyweights, the US and Brazil, continue to pursue separate regional
bilateral strategies and also global strategies at the WTO.
KAIROS, Common Frontiers and the HSA (Hemispheric Social Alliance)
see this as a collective victory of peoples across the Americas
who rose up, said No to the FTAA, and together demanded that their
voices be heard from the streets of Quebec City to the streets of
Quito to the streets of Brazil and the streets of El Salvador. The
HSA is calling on people across the hemisphere to take the time
to recognize our joint victory with a celebratory fiesta on January
1st, 2005.
Bilateral Trade Deals Hang in the Balance
Since May 2003, the US has been negotiating the Andean Free Trade
Agreement (AFTA) with Colombia, Ecuador and Peru. Bolivia is participating
as an observer and Venezuela has been excluded. The US is hoping
to conclude negotiations by the end of January 2005 despite quite
vocal opposition to many of the positions it is putting forward.
Colombian negotiators have grave concerns on several fronts. First,
the US proposes to extend patent protection beyond WTO obligations,
which will make access to affordable medicines even more unlikely.
Secondly, in stark contradiction with its own foreign policy vis-à-vis
Colombia, the US is pushing for the elimination of tariff protection
for corn and rice. These tariffs fluctuate depending upon the international
prices. Pushing for their elimination will undoubtedly lead poor
farmers, in their desperation, to consider more profitable crops
like coca. The US is also non-committal on maintaining the ATPDEA
(Andean Trade Preference and Drug Eradication Act) that gives 6,500
Colombian products tariff-free access to the US Market.
Moreover, the US has refused to allow Bolivia to become a full member of the AFTA negotiations unless it passes the Hydrocarbon Law, which would provide judicial guarantees for foreign investors.
CAFTA continues to hang in the balance. It has not yet come before the US Congress for ratification. Meanwhile, strong civil society opposition to CAFTA has been gaining support in the Costa Rican legislature and was one of the contributing factors leading to the resignation of the President’s economic team, including the Finance Minister.
The US successfully signed a Bilateral Investment Treaty (BIT) right before the Uruguay elections safeguarding US corporate rights in Uruguay. As hoped, for the first time in history, Uruguay has elected a progressive left President, Tabare Vazquez. Moreover, 60% of Uruguayan people supported the Constitutional Reform in the Defence of Water that added water as a recognized human right in the constitution, laying the groundwork for exclusive public, participatory sustainable management of water resources.
Canada has taken a quiet back seat on the bilateral front since the Canada-Central America 4 (CA-4: Nicaragua, El Salvador, Honduras, and Guatemala) talks were suspended. We continue to be concerned about the lack of transparency surrounding the negotiations and Canada’s negotiating position.
Brazil Travels its own Road
Brazil, meanwhile, has been charting and developing its own trading
relations. In early July, Mexico and Venezuela joined Bolivia, Chile,
and Peru as Associate Members of Mercosur: the regional trade pact
that includes Brazil, Argentina, Uruguay, and Paraguay. This fall,
the South American nations decided to form a South American Community
of Nations which will merge Mercosur with the Andean Community
(Bolivia, Venezuela, Colombia, Ecuador, and Peru). Many see this
new formation as providing a counterweight to the US in the region,
as their combined GDP is greater than Canada’s, especially
if the FTAA talks are refuelled.
On the other hand, negotiations between Mercosur and the European Union (EU) followed a disturbing pattern that included a secretive, non-transparent process and several offers of giving up services like financial and banking services and key agricultural sectors like the dairy sector. This could negatively impact countless small-scale producers and family farms. Currently, divisions between the two parties persist and Mercosur-EU FTA talks have been postponed until 2005.
Canadian Expectations
As the tenth year anniversary of NAFTA draws to a close, there is
growing scepticism of the benefits that NAFTA has brought to Canada.
In addition to the negative impacts on women, social policies, the
nature of work and other such impacts, the broad objective of guaranteeing
US market access for Canadian goods has proven to be a failure.
Although Canada is much more dependent upon US markets for its goods, the US administration continues to impose protectionist measures against Canadian goods. When the US chooses to, it closes the border to Canadian beef, softwood lumber, and other products. It has also doggedly pursued the Canada Wheat Board (CWB). The US has placed over ten challenges against the CWB through NAFTA’s Chapter 11 and the WTO. Not one has been successful. The recent WTO Framework agreement contains clauses that will likely mean the dismantling of some State Trading Enterprises like the Canada Wheat Board. With the Bush administration re-elected Canada can only expect more of the same protectionist, contradictory measures under NAFTA. It is time to recognize that overall NAFTA has not worked for Canadians.
Peoples’ Week of Action on Trade
Mark your calendars! April 10 –16 2005 marks the Global Week
of Action on Trade. KAIROS is developing an advocacy strategy aimed
at MPs on Parliament Hill and also in their local communities. Web-based
materials will be available early in the New Year.
Stay tuned for more updates !
Also available in French. Any questions or suggestions? Want more information? Please contact Rusa Jeremic, Global Economic Justice Program Coordinator, KAIROS, rjeremic@kairoscanada.org
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