Big business lobbyists have undue influence on trade talks

Corporate lobbyists have an undue influence on the current global trade talks, says a new report by ActionAid. The report launches on the first day of the World Economic Forum at Davos, where 25 trade ministers will meet for a 'mini-ministerial'.

ActionAid’s report, Under the influence, reveals a worldwide explosion of corporate lobbying, contributing to unfair trade rules that undermine the fight against poverty. The report calls on governments to curb corporate influence and stop the profits of multinationals being put above the interests of poor people in the current trade talks.

"Multinational corporations are using their economic might to push for trade rules that will hinder, not help poor countries. The EU and US promised that the current round of trade talks would combat poverty. Instead they are colluding with big business to ensure that only the fat cats will reap the benefits," said Dominic Eagleton, ActionAid policy officer and author of the report.

The report cites examples of privileged corporate access to, and excessive influence over the WTO policymaking process. Corporate lobby group, the European Services Forum (ESF), which includes BT, Vodafone and Lloyds, has confirmed it has regular meetings with high-level EU trade officials to share strategies for WTO negotiations. The group pushes for liberalisation and the opening up of services markets, including telecoms, tourism and IT, in developing countries. The EU took up ESF’s position in its negotiations at last month’s Hong Kong ministerial.

ESF also enjoys easy access to the powerful but secretive EU trade policy setting committee – the 133 Committee – that formulates EU trade policies in WTO negotiations. In contrast to ESF’s easy access, details of 133 Committee meetings are kept secret from MEPs and the public.

Drug companies are using WTO rules to safeguard their profits and hinder the fight against HIV and AIDS. In 2003, senior officials from Pfizer, the world’s biggest drug company, negotiated directly with the WTO’s director-general and its member states to block a proposal that would allow poor countries to import cheaper copies of patented drugs during health emergencies. Drug industry lobbying at the WTO brought about a rule change last year, that ensured that countries such as Brazil, India and Thailand will find it much harder to make cheaper copies of patented medicines.

Meanwhile in 2005 PhRMA, the US drug industry pressure group whose members include Pfizer and Merck, lobbied the Indian government to bring in a new law that threatens to deny AIDS treatment for up to 350,000 people who depend on low-cost Indian drugs worldwide.

Key statistics from the report:

In the EU:

• There are around 15,000 lobbyists based in Brussels - around one for every official in the European Commission
• more than 70% of Brussels lobbyists represent business interests, while only 10% work for public interest groups
• annual corporate lobbying expenditure in Brussels is estimated at €750 million to €1 billion

In the US:

• around 17,000 lobbyists work in Washington DC – outnumbering US Congress lawmakers by 30 to one
• corporations and lobby groups spent nearly $13 billion influencing the US Congress and federal officials from 1998 to 2004
• the pharmaceutical industry spent over $1 billion lobbying in the US in 2004
• 93% of the official external advisors to the US trade department are from corporate lobby groups and multinational companies such as Burger King, Coca-Cola, McDonalds, and Pfizer

"Governments meeting at Davos must not be influenced by the business heavyweights in their midst. Unless there is a radical change in the direction of the trade talks, putting poor people’s interests above those of multinationals, it is time to halt the negotiations," said Ruchi Tripathi, head of ActionAid’s Stop Corporate Abuse campaign.

ActionAid recommends:

Governments must take urgent action to curb corporate influence at the WTO. ActionAid calls on WTO members to put the needs of poor people above those of multinational corporations, and for the EU and US to stop pushing developing countries to open their markets to foreign multinationals.