Trading away the SDGs?


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GPW Logo_quadrat

By Roberto Bissio


Less than two years after having committed themselves to implement the 2030 Agenda, the same governments that unanimously adopted an ambitious set of sustainable development goals (SDGs) at the UN have failed to translate those promises into action at the ministerial conference of the World Trade Organization (WTO) held mid-December in Buenos Aires.

The meeting at the Argentinian capital collapsed without approving a declaration, not even to thank the host country. “We failed to achieve all our objectives,” said the EU Trade Commissioner Cecilia Malmstrom in her remarks at a closed meeting of delegation heads in Buenos Aires, according to the audio recording, leaked by the US media outlet and website POLITICO. “The sad reality is that we did not even agree to stop subsidizing illegal fishing” she went on. “I hope all delegations here reflect carefully about the message this sends to our citizens, to our stakeholders and to our children.”

Goal 14 of the SDGs commits governments to “conserve and sustainably use the oceans, seas and marine resources” and its sixth target promises to prohibit, by 2020 “certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation”.

In Buenos Aires, the governments could only “agree to continue to engage constructively in the fisheries subsidies negotiations” with a view to adopting an agreement by the next WTO Ministerial Conference in 2019. But this promise cannot be blindly trusted. The previous WTO Ministerial, held in Nairobi in 2015, had similarly agreed to conclude in Buenos Aires the negotiations on agricultural stockholding for food security by developing countries. In spite of that commitment, no agreement was reached last December on this key issue, not even to continue negotiating at the next Ministerial.

This failure to agree on agriculture also contravenes the commitments of the 2030 Agenda. The second SDG, promises to “end hunger, achieve food security and improved nutrition and promote sustainable agriculture” and to that effect it spells out as specific targets the commitments to “correct and prevent trade restrictions and distortions in world agricultural markets” and also to “ensure the proper functioning of food commodity markets” […] in order to help limit extreme food price volatility.”

Without an agreement on agriculture, not even to continue negotiating these issues, indispensable to achieve the hunger targets, there is no hope for SDG2 to be met.

In the case of “Trade-Related Aspects of Intellectual Property Rights,” known by the acronym TRIPS, the results of the Buenos Aires ministerial were a bit more positive, with a single paragraph resolution that promises to keep discussing the substance of the conflict between patents of medicines, protected by the TRIPS agreement, and making those same drugs affordable. Countries using generics or resorting to compulsory licensing of medicines in the interest of public health risk being sued at the WTO compliance mechanisms. The continuation of the present “peace clause,” committing WTO members not to initiate such complaints while a substantial agreement is being negotiated, was agreed to in Buenos Aires, diluting immediate threats to public health.

The language on health of SDG 3 is carefully formulated, promising to “provide access to affordable essential medicines and vaccines” but adding “in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on TRIPS regarding flexibilities to protect public health, and, in particular, provide access to medicines for all.”

The TRIPS Agreement is international law, but the “scopes and modalities” of the “flexibilities” that it allows are still being negotiated at the WTO. Meanwhile, the right of developing countries to use those provisions for public health without being threatened by the countries that host the Big Pharma companies is imbedded in the Doha Declaration… a document that the Buenos Aires ministerial failed to reaffirm.

The Doha Declaration was adopted in Qatar in 2001, as a result of the Fourth WTO Ministerial, that launched the still unfinished “Development Round” of trade negotiations, under the US presidency of George W. Bush, a few weeks after the 9/11 attacks in New York. This new round of trade negotiations was supposed to address the issues of concern to developing countries, in particular textiles and agriculture.

Paragraph 68 of the 2030 Agenda resolution called “upon all members of the World Trade Organization to redouble their efforts to promptly conclude the negotiations on the Doha Development Agenda”. The need for WTO new rules or speedy implementation of existing commitments (for example on ‘special and differential treatment’ for LDCs) is mentioned in ten different targets of the SDGs.

The WTO membership is composed of 164 countries, all of which are also members of the UN. But a few weeks after agreeing to the 2030 Agenda in New York, the same countries could not agree at the 10th WTO Ministerial in Nairobi to reaffirm their commitment to conclude the Doha Round. Thus, paragraph 30 of the Nairobi Declaration simply informs that “many Members reaffirm the Doha Development Agenda” while “other Members do not reaffirm the Doha mandates” but the text acknowledges “the strong legal structure of this Organization” and the following paragraph declares “a strong commitment of all Members to advance negotiations on the remaining Doha issues”, including the “three pillars of agriculture” (domestic support, market access and export competition), as well as non-agriculture market access, services, development, TRIPS and rules.

In Buenos Aires, the Conference Chair Susana Malcorra ciculated a draft ministerial statement that did not mention the word “Doha” but wanted the WTO members to “reiterate paragraphs 30 and 31 of the Nairobi Ministerial Declaration” and “commit to work towards more effective implementation and enforcement of WTO rules as negotiated and agreed by all and underscore the importance of implementing decisions by members.”

The US vetoed that language. Nothing seems less strict than referencing a statement that says that some are in favour and others against… so observers are led to believe that it was the mention to “the strong legal structure” of the WTO what the US intended to block, even at the cost of letting the whole conference collapse.

The “legal structure” of the WTO is not its role as negotiating forum, but its dispute settlement system that applies trade rules to claims raised by members against other members, allowing for the use of proportionate trade sanctions when a country is found guilty of violating trade rules. At the top of that system the Marrakesh Treaty places an Appellate Body, the supreme court of global trade, composed of seven Members with fixed terms. The Trump Administration has been blockading the appointment of new members to replace those whose mandate expires, which might soon paralyze that body and thus make the WTO useless and leave the door open to trade wars and unilateral impositions.

The positions of the US government were known in advance and they follow a pattern that is not dissimilar from, for example, the US withdrawal from the Paris Agreement. What was really surprising during the Buenos Aires ministerial conference is the inability of the other 163 members of the WTO to reaffirm their common faith in “a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization.” This is what their Heads of State agreed to in the 2030 Agenda (target 10 of SDG17, on implementation). Without trade, or rather with international trade governed by the law of the jungle, sustainable development will not be possible.

Instead of trying to come out with some “consensus minus one” common statement, the developed countries, with enthusiastic support from the International Chamber of Commerce, the World Economic Forum and an active lobby of the GAFA-A group (Google, Amazon, Facebook and Apple, with common interests in some issues with the Chinese Alibaba) pushed for partial (non consesnual) agreements with some middle income countries and a few least developed countries on “new issues,” instead of solving the issues of interest to developing countries and mandated by previous conferences.

Thus, the US did sign, together with the European Union, Japan, China, Russia and some middle income countries a “joint statement” promising “to initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce”.

This “coalition of the willing” with 70 signatories is not being called plurilateral “because one member is sensitive to the use of terms like plurilateral and multilateral,” said one of the co-sponsors, quoted by SUNS correspondent Ravi Khant.

This coalition wants to advance “electronic commerce work in the WTO in order to better harness (…) opportunities” for micro, small and medium-sized enterprises (MSMEs). Yet the Anglo-Ecuadorean analyst Sally Burch, one of the NGO experts banned from attending the conference by the Argentinean authorities, commented that “MSMEs are just the bait to attract support” to the Agenda that the GAFA-A was lobbying for.

This agenda includes “free flow of data”, which actually means the possibility of commodification and appropriation of personal and local data by global corporations, freedom for those corporations to operate in a country without having commercial presence in it (and thus exempted from fiscal and even criminal liabilities), and freedom to offer their services to the public and to the States without having to disclose their algorithms or include local software or expertise.

Two other “joint initiatives” were made public in Buenos Aires (endorsed by many countries, but without consensus to approve them) around what Malcorra called “21st century issues”: investment facillitation (supported by 70 members), MSMEs (87 members) and a “declaration on women and trade”, signed by over one hundred countries.

Some two hundred women groups from around the world immediately condemned the notion that the WTO could contribute to empower women, arguing that “increasing access to credit and cross border trade for a few women will not benefit women’s human rights overall. The declaration is a ‘pink herring’, an attempt to obscure the harm WTO provisions have on women while ensuring the WTO can bring in ‘new issues’, likely to deepen inequality.”

Similarly, many associations of small and medium-enterprises, mainly from developing countries, condemned the idea of an informal working group on them in the WTO, as well as using supposed benefits for them, but without any consultation, to introduce in the WTO the issue of e-commerce, seen more as a subsidized non tax-paying threat than an advantage.

The introduction of these new issues was opposed by the African Group as a whole, as well as by Bangladesh, India and other countries. South Africa’s trade minister Rob Davies castigated the attempts at Buenos Aires to terminate the special and differential treatment (S&DT) flexibilities for developing countries and “walk away from all mandated issues while embracing new issues, which doesn’t portend well for the organization”. Without reaching first a permanent solution for public stockholding (PSH) programs for food security, as mandated by previous WTO ministerials and by the 2030 Agenda, no new issues of interest mainly for big corporations and their countries of origin should be placed in the agenda for negotiations or “studies”, which in the WTO experience is usually a foot on the door to initiate negotiations.

Without naming the United States, India said, “unfortunately, the strong position of one member against agricultural reform based on current WTO mandates and rules, led to a deadlock without any outcome on agriculture or even a work programme for the next two years.”

The WTO is a young organization, created in 1994 to replace the GATT (General Agreement on Trade and Tariffs) that structured world trade after the Second World War. In its short history, it has seen several ministerial conferences collapse (as in Seattle, 1999, and Cancún, 2003). The Obama Administration tried to move the agenda of trade liberalization forward with plurilateral agreements on regional or functional basis, such as the proposed Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), or the Trade in Services Agreement (TiSA), while the European Union actively pursued its own network of agreements like the CETA (EU-Canada Comprehensive Economic and Trade Agreement) , the Economic Partnership Agreements (EPAs) with countries in Africa, the Caribbean and the Pacific and the EU-Mercosur free trade agreement that could not be finished in time to be announced in Buenos Aires. All those agreements, plus a “spaghetti bowl” of three thousand bilateral investment agreements have shaped economic globalization as we know it, with free flow of capital but not of labour and increased rights and privileges for investors (including the right of foreign investors to sue host States before private arbitration panels) without countervailing rights for workers, citizens or even governments.

Much of the extreme inequalities in the world that Goal 10 of the SDGs promises to address derive from that system, which badly needs reformulation. Yet, with all its unbalances detrimental to developing countries and to workers and consumers everywhere, the WTO dispute settlement mechanism is the only legal mechanism with enough “teeth” to make powerful countries comply to demands from smaller states. Last December, at his arrival to the Buenos Aires conference, US Trade Representative Robert Lighthizer said that the WTO is “losing its focus on trade negotiations in favor of litigation”.

Lighthizer, who once mounted an unsuccessful campaign to be named a WTO appellate judge, left Buenos Aires the day before the conference ended, which precipitated its collapse, as one of the three trade giants (EU, China, US) lacked a valid interlocutor at the Ministerial.

Deprived both of its role of enabling negotiations (by a major player abandoning the field) and of the arbitration function (for lack of referees), the WTO itself risks being submerged into irrelevancy. International trade is defined by the 2030 Agenda as “an engine for development”. (Paragraph 62). Is it safe to leave it running without map or driver?