AUGUST 2006

WORLD TRADE ORGANISATION (WTO) Talks Heading Down in Flames - But What Will Replace Them?

According to the WTO's Director General Pascal Lamy, the "Doha Development Round" of global free trade negotiations are now in "crisis". But rather than seeing this as a bad thing, civil society groups, small farmers and workers around the world are actually celebrating the talks' failure. Why?

Well, after the WTO's Seattle ministerial collapsed amid complaints from developing countries that previous rounds of trade negotiations had benefited only the rich countries of the world, the WTO met in Doha in 2001, and developing countries were promised that the new round of negotiations would be a "round for free". This would be a round where the rich countries would finally let their poor neighbours have some crumbs from the feast which the rich world had been having at the poor's expense.

But it did not take long for the US and EU ? the WTO's two most powerful players ? to go back on their promises, and to again demand huge sacrifices from the world's poor in return for reductions in the massive subsidies which the US and EU use to undercut poor farmers.

The latest offer from the US in the WTO negotiations would actually allow an overall increase in the almost US$40 billion in subsidies it pays its farmers every year, and in return, the US is demanding tariff reductions by poor countries so US farmers and manufacturers can force their way into new markets at the expense of struggling industries in the developing world.

Summarising the US position, the President of the American Soybean Association said that "reductions in, and limitations on, domestic support for U.S. agriculture are only acceptable if the negotiations yield an important net gain for American farmers and ranchers through commitments on market access and other trade-distorting policies by our trading partners".

To add insult to injury, the US is also using the latest WTO negotiations to demand the return of the "Peace Clause", a controversial element of the WTO's Agreement on Agriculture which protected countries which subsidised their farmers (ie: the US, EU & Japan) from challenge within the WTO (even if their subsidies broke WTO rules). The Peace Clause expired in 2003, and since then, a number of African and Sth American countries have challenged US subsidies within the WTO system. The return of the Peace Clause would be another big blow to the poorest farmers trying to eke out a living in the face of subsidised US produce which floods their markets.

Finally, the US and EU are using the carrot of slight reductions in their massive agricultural subsidies and increased "aid for trade" to push developing countries to open up their service sectors - water provision, healthcare, education etc. - to ownership by US and EU multinational corporations. The victory which the US and EU won on the GATS (services) agreement in Hong Kong last year
(see http://www.tradewatchoz.org/enews/36.html )
means it will be much more diffucult for any country - Australia included - to limit their commitments under the GATS, if the negotiations are eventually successful.

But while ordinary people across the world celebrate the break-down of the WTO talks, the US continues to forge ahead with an alternative strategy of negotiating smaller trade agreements with dozens of individual countries and country groupings. These agreements probably constitute an even greater threat to the developing world than the WTO, since in bilateral negotiations, smaller countries can't band together to defend themselves against the US's army of experienced negotiators. Just as Australia was convinced by US negotiators in 2004 to accept an economically, socially and environmentally damaging trade agreement which was obviously not in our interests, so many smaller and weaker countries are getting the same treatment.

Of particular concern is a new US focus on a trade agreement with Africa. In 2000, the US Congress passed the African Growth and Opportunity Act (AGOA), which the government is now aiming to turn into a fully fledged US-African Trade Agreement.

Like in the WTO negotiations, the AGOA uses the carrot of offering to reduce US import barriers to African exports of goods and services. But like the WTO negotiations, the AGOA makes onerous demands of African countries. In order to qualify, African countries must first liberalise their economies, privatise their public assets, deregulate rules on private business practices (like environmental and labour laws) and created a U.S.-style legal and intellectual-property system.

An of course, reductions in US tariffs will have almost no impact for African countries while the US continues to subsidise its farmers by tens of billions of dollars every year, inflating prices and undercutting African producers.

We can only hope that as with the WTO negotiations, African leaders manage to see past the carrots and recognise the long-term consequences of accepting such a policy future.

* ActionAid: WTO must reform to stop rich countries' underhand tactics

Threats, deception and manipulation are among the negotiating tactics used by rich countries in the current round of trade talks reveals a new ActionAid report, The Doha Deception Round: How the US and EU cheated developing countries at the WTO Hong Kong Ministerial.

The report warns that power politics, exclusive gatherings, diplomatic arm-twisting and 'take-it-or-leave-it' ultimatums will only intensify as talks move towards a conclusion to the Doha round of trade negotiations, leading towards an unjust trade deal that could have a devastating impact on millions of poor people.

ActionAid says poor countries should not be forced to accept a deal that would allow dumping to continue and ruin poor farmers, workers and fisher folk. Developing countries should stand firm against the manipulative tactics and reject this bad deal. If the trade talks fail, the blame will lie with the US and EU which have not honoured their promises to agree trade rules that will help fight poverty.

Read the full report here:
http://www.actionaid.org.uk/doc_lib/doha-
deception-round.pdf


The Beginning Of The End
     Author: Jim Sinclair

  Dear CIGAs,

Pandora's Box was opened on the night CNN carried the invasion of Iraq in surround sound and full color. Since then it has been a slide down a slippery slope which has unleashed such hatred that a ceasefire, if it was achievable between Israel and Hezbollah, would only be an intermission between conflicts.
 
Hate is like molten lava. When it flows it cannot be stopped and it
destroys everything in it path. The East, West and Middle East are
enraged.

I truly feel that what has now happened opens up a new chapter in world
affairs. This new chapter will be more dangerous than any other, ever.

The key question now is whether or not this period today will be
considered the "Beginning of the End." I would not even try to define
what the end is, but it may very well be the subject matter of the book
"One Point Safe."

The West was going wild over Iran's nuclear policy before more urgent
matters grabbed the attention of prestigious world leaders. Some say the
present situation was quite involved with Syria and Iran, but may have
backfired when it was discovered Hezbollah is not a group of rag-tag
insurgents. Hezbollah has shown the ability to withstand extraordinary
opposition and keep on fighting.

This is the first time in history Islam has not performed the strategy of
all fall down, get up, dig up their weapons and slowly bleed the
opposition to death. This time they have stood longer and harder than
anyone would have imagined. This is a point missed by all observers so
far. This marks a major change and invites the conclusion that a new,
more dangerous chapter of world history has TODAY just started.

It is the end of the beginning and now the beginning of the end.

Gold and Oil are going to unimaginable prices for simply awful reasons.
Ebb and flow will occur in prices as there will be times of terrible
conflict and quiet. All that means is higher highs and higher lows as
gold takes out every Angel in the illustration.

I recently wrote an article for you titled "This is it." I am sorry for
being right, but there is no question in my mind that "This is it."

I see three investments that will sustain you. Honest Money, which is
Gold, the least dishonest currency, which is the Cando and the grease
that makes the wheels spin, oil. Under these are the consumables of war
as well as peace, nickel and copper. Do you sometimes get the feeling markets know more about the future than all the experts, seers and sages? I do. I will be in the office Monday morning, not bushy tailed but certainly bug eyed.

Regards,
Jim