Big Brother Knows Best: The World Trade Organization
Seeks to Govern the World on Behalf of Transnational Corporations
SUNDAY INDEPENDENT (London) July 17

THE HIDDEN TENTACLES OF THE WORLD'S MOST SECRET BODY

Behind the imposing entrance of a grand 1920s building on the shores of
Lake Geneva lies what is probably the most powerful organisation on Earth.
Far more potent than any government, its decisions are already affecting
our lives and unleashing international conflicts.

It can stop us choosing what we eat. It can strike down laws passed by
even the strongest, democratic governments. It can start or sanction trade
wars. And it can set at naught the provisions of international treaties
which have been solemnly ratified by the world's nations.

It's not Nato, despite its victory in Kosovo. It's certainly not the weak
and underfunded United Nations. It's not even the IMF, although it directs
the economies of scores of countries. No, the building on the lakeside -
set in fine gardens with a magnificent view of Mont Blanc - belongs to a
much less well-known but much more powerful body, the World Trade
Organisation (WTO).

This organisation, which sets the rules that govern how nations trade with
each other, is about to become the centre of a gigantic battle for public
opinion. This autumn it will begin a push, backed by many of the richest
nations, to extend its powers even more. And some 700 organisations from
73 countries have sworn to stop it.

Ranging from big outfits such as Oxfam, Friends of the Earth and the
Japanese Consumers' Union to small grassroots networks in the Third World,
they have signed a joint declaration to "oppose any effort to expand the
powers of the World Trade Organisation", saying that it has worked "to
prise open markets for the benefit of transnational corporations at the
expense of national economies, workers, farmers and other people".

Already the temperature is rising. Last week, the WTO ruled that the EU
must drop an 11-year ban - imposed to safeguard health - on US beef
treated with hormones. It authorised the Clinton Administration to
penalise European goods until it does.

The row will come to a head on 29 November, when world trade ministers
meet in Seattle. The EU, despite its experience last week, will be
pressing for a new round of negotiations - called the Millennium Round -
to give the WTO power over even more areas of world trade. It will be
backed by Japan, Canada and, to a lesser extent, the US. The grassroots
campaigners and some Third World governments, including India, Egypt,
Malaysia and a coalition of African countries, will resist.

It was never supposed to be like this. The WTO is the inheritor of a
50-year push to promote free trade - a cause once as uncontroversial as
freedom itself - to prevent a repeat of the unhappy era of
beggar-your-neighbour protectionism between the wars. In eight rounds of
talks since 1947, its predecessor - the General Agreement on Tariffs and
Trade (Gatt) - gradually opened world markets. The Uruguay Round,
completed in 1994, set up the WTO. It was charged with monitoring and
enforcing the new rules and given unprecedented powers to make legally
binding rulings on trade disputes between countries, and authorise
retaliatory, punitive trade sanctions.

The way it has used these powers is leading to a growing suspicion that
its initials should really stand for World Take Over. In a series of
rulings it has struck down measures to help the world's poor, protect the
environment, and safeguard health in the interests of private - usually
American - companies.

"The WTO seems to be on a crusade to increase private profit at the
expense of all other considerations, including the well-being and quality
of life of the mass of the world's people," says Ronnie Hall, trade
campaigner at Friends of the Earth International. "It seems to have a
relentless drive to extend its power."

Environmentalists and health campaigners fear that after slapping down
such diverse "impediments to free trade" as small Caribbean banana
farmers, clean petrol, endangered turtles, and health precautions, it will
now help the US government, Monsanto and other biotech companies make it
impossible for people to refuse to eat genetically modified food.

The US and Canada have already officially complained to the WTO about the
increasing measures in Britain and other European countries to label GM
products. Even though these are only being brought in after much public
disquiet and enshrine the principle of consumer choice, they may fall foul
of the trade rules.

If they do, European governments will have to scrap the labels or face
massive retaliatory action on wholly unconnected industries (targets for
sanctions so far include jam and tea-makers, bed linen and handbags,
cheese and motorcycles).

Enter a little-known, but immensely powerful body, the Codex Alimentarius
Commission, a living embodiment of the effectiveness of the bureaucratic
dodge of disguising the importance of an institution by giving it an
obscure name.

Run by two UN bodies, the Food and Agriculture Organisation and the World
Health Organisation, it is supposed to be used by governments to set food
standards. In practice its assemblies and decision-making committees are
packed with representatives of the food industry, who meet in secret to
set rules to govern their own conduct. They are, unsurprisingly therefore,
not very demanding.

The WTO makes the world observe these standards and no other. A
democratically elected government cannot choose to set tougher ones to
protect its people. If it tries, the WTO can rule the measures illegal and
hit the country with punitive sanctions.

Environmentalists fear that the WTO will outlaw voluntary labelling, like
the successful schemes to identify wood produced by ecologically friendly
forestry. A Dutch timber labelling scheme has already been scrapped after
a threat to take it to the WTO. Another target may be the increasingly
popular "fair trade" initiatives, which identify tea, coffee and other
products produced in ways that benefit the world's poor.

All this, protests the WTO, is in the interests of "deregulation". But it
is also forcing developing countries to introduce rules which could enable
multinationals to patent foods and natural medicines that their people
have used for centuries: one US company has "patented" basmati rice. Poor
people may thus be forced to pay for products they have traditionally
used.

The WTO and its supporters - trade ministers of the wealthiest countries -
insist this liberalisation will benefit the poor. It is not working out
like that. Under the trade rules, for example, the Philippines is
importing American corn that is far cheaper than its local equivalent. As
a result, says Oxfam, half a million poor Filipino farmers risk losing
their livelihoods. And, it adds, the subsidy to each American farmer, at
$29,000 (#17,000) a year, is 100 times higher than the Filipino growers'
entire average income.

Aren't such subsidies an impediment to free trade? The WTO seems to have a
selective view. While Third World countries are forbidden to subsidise
their crops, Western nations quintupled their agricultural subsidies from
$47bn to $247bn in the first four years of the WTO's existence.

The biggest winners of the Uruguay Round, studies show, are the EU, US,
Canada and China, while African countries lose out. Kevin Watkins of Oxfam
points out that the poorest countries' share of world trade has shrunk.

In Seattle objectors will be demanding that the WTO puts its house in
order. They can draw on the success of two of the most successful recent
grassroots campaigns - against GM foods and for the cancellation of poor
country debt. But the little-known lakeshore institution remains their
toughest target yet.

THE ATTACK ON THE POOR

FOR MORE than 20 years the EU has helped small West Indian banana growers
scratch a living by favouring imports of their fruit. As farmers of poor
soils on steep hillsides, they cannot compete with cheaper fruit grown on
giant estates in Latin America by big US companies such as Chiquita. The
EU scheme gives them a chance, while not doing much to affect world trade.
Although the fruit makes up 60 per cent of the islands' exports, it only
accounts for three per cent of world trade. Despite its pro-Caribbean
stance, Europe still buys nine out of 10 of its bananas from the big US
firms.

Three years ago the Clinton Administration complained to the WTO that the
EU scheme was unfair - even though the US has never exported a single
banana. The complaint closely followed a $500,000 donation from Chiquita
to the Democratic Party. The WTO upheld the complaint, ordered the EU to
stop its help, and authorised the US to start a trade war by penalising
imports of a host of European goods - from Italian handbags to British
bath salts - with $191.4m (#112m) in trade sanctions. The EU backed down.
Experts expect the unemployed farmers to switch to growing cocoa and
marijuana for smuggling into the US.

THE ATTACK ON HEALTH

THE US meat industry feeds cattle with hormones to make them grow and
fatten faster. The EU stops its farmers from using the hormones and has
long banned the import of meat from cattle given them, fearing that they
could cause breast and colon cancer.

In 1995 the Codex Alimentarius Commission narrowly voted to adopt food
standards that allowed the presence of the hormones in meat. The next year
the US, after lobbying from its agrochemical industry, complained to the
WTO. It said that the EU was merely trying to protect its own meat
industry; the EU cited its health concerns and pointed out that Europeans
have made it clear they do not want to eat beef with hormones anyway.

The WTO ruled for the US. Last Monday - after the EU had still refused to
lift the ban - it authorised the Clinton Administration to impose $116.4m
(#65m) of trade sanctions on European goods including Roquefort cheese,
chewing gum, raspberry jam and motorcycles.

Critics fear the US will enlist the WTO in the same way to force Europe to
import genetically modified milk and foods, despite widespread public
abhorrence.

THE ATTACK ON THE ENVIRONMENT

LAWS TO safeguard the environment have fallen prey to free-trade rules. In
its first ever case the WTO stopped the US cutting air pollution by
cleaning up petrol, on the grounds that this would discriminate against
producers of dirtier oil, such as Venezuela. This overruled a vote in the
US Congress and forced the Administration to change its Clean Air Act.

The WTO stopped the US requiring nations from which it brought shrimps to
bring in regulations to ensure that their boats did not catch critically
endangered sea turtles. The US is trying to get it to stop the EU
recycling components of electrical goods. And under similar free trade
rules, the EU has taken Denmark to the European Court for bringing in laws
to make bottles returnable.

Environmentalists fear that the WTO could strike down provisions in
long-agreed treaties to protect the ozone layer, control the dumping of
toxic wastes overseas, and to ban trade in endangered species. The WTO has
not yet ruled on such a treaty, but this is only because it has not
received a complaint about one. Ominously it has so far failed officially
to recognise any of the treaties, and experts believe that it is only a
matter of time before they are challenged.


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THE SUPERPOWER ELITE THAT SIDELINES THE POOREST NATIONS

By Hilary Clarke

I found myself right at the heart of the world's most powerful
organisation during the final phase of the Uruguay Round trade
negotiations in Geneva in 1993. Along with other reporters I was privy to
the deliberations of the world's superpowers. But the majority of Third
World trade ministers had no such access: they were forced to wait for
hours on end in the coffee bar, begging the emerging journalists to tell
them the latest developments in the negotiations.

Little has changed at the WTO. Some 30 of its 134 members still can't
afford to base anyone in Geneva, one of the most expensive cities in the
world. Others, such as Bangladesh, have just one official for WTO issues.
Geneva was allowed to keep the WTO after the Uruguay Round because
Switzerland promised to finance a low-rent centre for developing country
governments. Nearly six years later this has still to materialise.

The WTO is aware of the problems poor nations have in coping with the
trade bureaucracy, and is setting up computer links to the WTO from the
least developed countries. However, according to Claudia Orozco, a
Colombian trade official, "the problem is not a lack of information but
too much of it". Apart from the reams of documents produced by the WTO
only comprehensible to experts, there are some 40 committee meetings held
at its HQ every week. "It's like a multiplex cinema. You turn up and
decide which film you are going to watch," said another official from a
developing country. Rich countries boost their Geneva presence by flying
in experts whenever meetings become technical, a luxury none of the
developing nations can afford.

The inequalities of the system become even more apparent when a developing
country runs into a trade dispute with a rich nation. One of the reasons
Latin American countries let the US fight their case with the EU over the
banana trade was because they couldn't afford the legal costs involved.
Colombia is spearheading a campaign to set up a "legal aid" centre for
trade matters for developing countries. The UK is one of a handful of
countries to have contributed to a fund to finance the project, but other
OECD countries have not yet offered their support.

Sometimes being poor can have its advantages. The Bangladesh ambassador to
Geneva, Dr Iftekhar Chowdhury, last week successfully brokered a deal in
which the new WTO leadership is likely to be shared between Supachai
Panitchpakdi of Thailand and Mike Moore of New Zealand.