25 July 2005

On the eve of its General Council meeting in Geneva, ActionAid is calling on the World Trade Organisation to halt negotiations as the current proposals being discussed could have a devastating impact on millions of the world’s poorest people.

ActionAid is calling for an immediate assessment of the impact on poor countries of all the draft agreements. Talks should only be resumed if they follow a pro-poor agenda.

"The current negotiations are spiralling out of control. Pushed on by self-interest, rich countries are pressuring poor countries to sign up to a deal that could increase rather than combat poverty. The talks must be suspended. It is time for the WTO to put the lives and livelihoods of millions of poor people who depend on this deal at the centre of negotiations," says Aftab Alam head of ActionAid’s trade justice campaign.

It is now four years since WTO members adopted the Doha Ministerial Declaration, that declared the current trade talks would be a “development round” that would work in the interest of poor people. It now appears that rich countries have reneged on their promises, with the talks unlikely to deliver real benefits to the world’s poorest countries. In order for global trade to work for all countries, not just the rich, the WTO must follow an agenda that will benefit poor people.

So what are the problems with the negotiations?

• Agriculture
  Subsidies: the current text will do little to end the damaging export subsidies that are having a devastating impact on millions of the world’s poorest people who depend on farming to survive. In West and Central Africa cotton makes up the main source of income for more than 10 million people. The $4bn in subsidies that the US is gives its cotton farmers is depressing world prices and pushing African cotton farmers out of business. Despite African ministers’ requests for this issue to be fast-tracked in order to save lives, there appears to be no movement.
  
  What’s more, the US is bullying poor countries to accept the WTO deal, saying that only after it is signed will they consider reducing their subsidies. This suggests the current negotiations will do nothing to reduce subsidies.
  
  Special products: the current negotiations do not give poor countries the freedom to protect crucial agricultural sectors from the negative impacts of liberalisation. In Western Kenya, 250,000 families make a living from sugar cane farming, a further six million people depend on the industry for their livelihoods. If the sugar industry collapsed, the region’s economy would be thrown into crisis and many people would be pushed to the brink of starvation. Therefore the country would like sugar to be classified as a Special Product in order to protect the industry from very cheap and often highly subsidised produce from abroad.
  
  With rich countries protecting their own markets while pressuring poor countries to limit the number and benefits of Special Products, it seems increasingly unlikely that these will provide effective protection for poor farmers.
  
  
• NAMA (non agricultural market access)
  
  Rich countries are pushing for an agreement that would make it difficult for poor countries to develop their industries, outlawing the very policies they used in the past to become prosperous. Developing countries are being pressured to open their markets to manufactured and industrial products, such as textiles, leather and automobiles. This goes against strong evidence that such policies have a devastating impact on poor countries’ economies.
  
  Assessments of the impact of trade liberalisation on local manufacturing capacity in Zimbabwe, Bangladesh, Ecuador, Hungary, the Philippines and Ghana show that manufacturing has either fallen or stagnated since liberalisation. In Ghana increased competition from foreign consumer imports in the 1980s and 1990s forced at least 120 factories to close, with the loss of 50,000 jobs.
  
  
• GATS and services
  If agreed the deal would make it more difficult for poor people to have access to the basic necessities, such as water, health and education. The current text promotes privatisation of these services, putting the profits of multinational corporations above the rights of poor people.
  
  Recent research by ActionAid in South Africa revealed that during the last three months of 2001 around 500,000 people were cut off for non-payment of bills after their water was privatised. With supplies cut, many people were forced to drink contaminated water from ponds and ditches.
  
  
• Democracy at the WTO
  Increasingly, crucial negotiations are held outside the WTO structure through informal meetings and mini ministerials, with the participation of only an elite group of delegates. Poor countries are often left on the sidelines unable to have a say in important negotiations.

ActionAid’s recommendations:

• the WTO must halt the talks and carry out an immediate assessment of the impact of all negotiations on poor people
• talks should only resume if rich countries support a pro-poor agenda at the WTO that will deliver a true development round
• rich countries must stop forcing poor countries to liberalise and open their markets
• poor countries must be allowed the right to choose trade policies to protect the livelihoods of their poorest farmers
• there must be an immediate end to all damaging export subsidies
• the profits of multinationals must not be put above people’s rights
• poor countries should not be forced to liberalise basic services such as water, health and education

Angela Wauye from ActionAid Kenya says:
"This year poverty in Africa has been in the spotlight. However, I see little hope for the continent unless we get trade justice. We cannot trade our way out of poverty while the US and Europe continue to dump highly subsidised produce on our markets, whilst demanding that we accept more competition from their multinationals. It is time that the WTO stopped being part of the problem and supported us in finding solutions."