cancun

TRADE UNION STATEMENT ON THE AGENDA FOR THE 5TH MINISTERIAL CONFERENCE OF THE WORLD TRADE ORGANISATION (WTO) (Cancún, 10-14 September 2003)

ICFTU (International Confederation of Trade Unions)

Introduction

Advancing Development Priorities

Safeguarding Services

Investment at the WTO

Trade and Competition Policy

Government Procurement

Trade Facilitation

Sustainable Development at the WTO

Agriculture

Conclusions

Introduction

1. Hopes that the 4th WTO Ministerial Conference in Doha had set the agenda for a genuine Development Round are being disappointed as one deadline after another is missed, against a context of slowing economic growth world-wide. All the while, the impact of China's WTO accession on other developing countries, in terms of continual pressure to reduce core labour standards and, all too often, to increase misery and exploitation (particularly of women workers) often in export processing zones, is continuing to worsen. The rights to food security and to adequate health care in developing countries are increasingly far from being realised, particularly for the world's poorest and again with the worst impact on women.

2. If the current WTO negotiations are to produce an outcome that could benefit working people, particularly in developing countries, the broken promises from Doha must be resolved and developing countries' concerns dealt with first, before discussion gets underway on the rest of the Doha agenda. WTO members must recognize that trade is only one of the elements in the three pillars of sustainable development endorsed at the World Summit on Sustainable Development in 2002. Debt relief, democracy, environmental protection, poverty eradication and decent employment (including the respect of fundamental workers' rights) must simultaneously be achieved as part of a wider, far-reaching agenda to achieve development and higher living standards for all people, in accordance with the objectives outlined in the preamble of the WTO Agreement. In addition, WTO agreements must not undermine the rights of democratic governments to conduct their own education, social welfare and public investment policies. Democracy, Transparency, Consultation and Reform of the WTO

3. The WTO needs urgently to be reformed and made more transparent and democratic, in order to redress the power imbalances evident in recent WTO Ministerial Conferences and to achieve coherence and consistency with the goals agreed through the UN system, as enshrined in the Universal Declaration of Human Rights and other multilaterally agreed instruments such as the ILO Declaration on Fundamental Principles and Rights at Work. The weight of the UN and its specialized agencies, including the ILO, needs to be increased relative to that of the WTO. A closer link and co-ordination between the WTO and other international institutions, including the ILO, with reciprocal observer status, must be agreed before or at the 5th WTO Ministerial Conference.

4. WTO negotiations must progress with due regard to the capacities of smaller and poorer countries, and developing country WTO members must enhance their co-operation and co-ordination. Increased transparency and financial assistance are needed to ensure that all WTO members (particularly the least developed) are able to take part fully in the current negotiations as well as all WTO activities and procedures. Formal commitments to provide such assistance must be made at latest at the 5th WTO Ministerial Conference. The internal negotiation processes of the WTO must be fair, transparent and predictable so as to ensure the effective participation of all its members.

5. The WTO must also be opened up to outside participation and to relevant social issues. A WTO Parliamentary Assembly is needed, to provide direct contact with elected representatives. A formal consultative process should be established to ensure that trade unions, non-governmental organisations and other representative elements of civil society can present their views to WTO committees and discuss issues of mutual concern with trade ministers, and with the WTO General Council, as well as at national level. Environmental and social concerns must be incorporated fully throughout WTO mechanisms and structures, and the scope of the Trade Policy Review Mechanism (TPRM) expanded to include relevant environmental, gender and social concerns, including the right of all to food security and respect for core labour standards, with the full involvement of the ILO. WTO members should already begin to include such concerns in the reports they submit to the TPRM meetings of the WTO.

6. In view of its unprecedented powers, the dispute settlement procedure must be opened up for public information and involvement. In relevant cases, such as those with health, labour and environmental implications, the WTO must involve the UN agencies competent in the areas concerned. Trade unions and other civil society groups concerned by any dispute settlement process should be able to participate directly in the procedures with a right to submit amicus curiae briefs. The experts judging any disputes case must not merely be trade specialists but must include people with varied backgrounds representing labour, environment and development organisations. There should be a swift public release of the findings and conclusions of disputes settlement procedures.

Advancing Development Priorities

7. The missed deadlines from Doha are compromising the credibility of the multilateral trading system. A major effort to boost the sustainable development of developing countries is needed in every area of the multilateral system, including greatly enhanced debt relief, a substantial increase in development assistance (including technical assistance and capacity building on trade issues), and fundamental reform of IMF/World Bank economic adjustment policies.

8. In the WTO negotiations, urgent agreement is needed on a range of issues where developing countries require action, as follows:

· A decision in the TRIPS discussions to define health problems broadly enough for all developing countries to be able to achieve access to low-cost medicines in case of health need;

· Decisions on special and differential treatment to enable developing countries to have increased flexibility in their implementation and interpretation of the various WTO agreements when favourable to their economic and social development, and so that the Uruguay Round implementation deadlines are extended for all developing countries on a multilateral basis;

· Evaluation of non-tariff barriers to developing country exports to ensure they are reasonable requirements for consumer and environmental protection, with the involvement of the specialized UN agencies as well as trade unions and other civil society groups concerned, and provision of technical assistance so developing countries can attain such standards;

· Provision of international funding to support employment adjustment assistance, especially if jobs are lost as a result of trade liberalisation;

· Progress in the industrial tariffs negotiations to provide improved market access for developing countries (addressing tariff peaks and tariff escalation in their areas of interest), particularly for least developed countries, and continued commitment by the industrialised countries to their own implementation requirements under the Uruguay Round, parallel with progress on respect for core labour standards so that workers in developing countries benefit from improved market access. Making Progress on Workers' Rights at the WTO

9. It is a priority to protect the fundamental rights of workers against unscrupulous governments or companies which seek to gain an unfair advantage in international trade through the violation of core labour standards. Furthermore, respect of core labour standards is crucial to achieving sustainable, equitable, democratic economic development.

10. Before or at the 5th Cancún, therefore, the following measures need to be taken: · All WTO members must renew and demonstrate their commitment to uphold core labour standards;

· A first-ever meeting of Trade and Labour Ministers must be organised, with the participation of trade unions and employers' organizations;

· WTO members must agree that UN treaties have primacy over trade rules, and must therefore update the WTO agreements (including GATT Article XX and GATS Article XIV) to incorporate human rights standards including the core labour standards;

· To enable a full examination of the relationship between trade, employment and core labour standards, the WTO together with the full and equal participation of the ILO, must establish a formal structure to address trade and core labour standards. Such a body should also address wider trade-related social issues, such as the impact of trade policies on women, and the provision of adjustment assistance for workers displaced by trade. Clearly, such discussions must not result in any arbitrary or unjustified discrimination;

· As noted in para. 5 above, core labour standards should be included in WTO trade policy reviews;

· Agreement that the WTO General Council will give serious consideration to the recommendations, once they are published, of the ILO World Commission on the Social Dimensions of Globalisation;

· A clarifying statement is needed to the effect that the weakening of internationally-recognised core labour standards in order to increase exports, as in export processing zones (EPZs), is an illegitimate trade-distorting export incentive that is not permissible under WTO rules.

Safeguarding Services

11. Public services and other services of general interest reflect democratically-determined public policy objectives, and it is essential that these not be undermined by private sector competition under WTO disciplines. Governments need to preserve full responsibility and accountability in the area of such services.

12. The Cancún Ministerial should adopt the following measures: · Building on recent statements by WTO members like the European Union, the 5th WTO Conference should amend the terms of the GATS agreement to exclude formally public services (above all, education, health and essential public utilities) including at sub-national levels of government, and socially beneficial service sector activities from all further GATS negotiations; · A timetable and deadline should be established for completion, in conformity with Article XIX of the GATS, of a full assessment of trade in services in overall terms and on a sectoral basis, which should be conducted before the completion of the current negotiating round;

· To protect effectively the ability of governments to regulate and to enact domestic regulatory measures (in accordance with the preamble of the GATS) without possibility of legal challenge, GATS Article VI.4 should be deleted or revised and a clarifying statement adopted that social and environmental concerns have primacy over the principle of 'free trade' and that such regulations will not be subject to any 'necessity test' through the WTO dispute settlement mechanism;

· Attempts to limit regulations (even when completely non-discriminatory) involving qualifications, standards, and licensing requirements, as is discussed in the GATS Working Party on Domestic Regulation, pose a serious threat to government regulation and it is essential that the Cancún Ministerial eliminate the principle of "no more burdensome than necessary", such that government regulations cannot be subject to any potential challenge by the GATS negotiations;

· Article XXI of the GATS agreement should be amended to include an explicit clause to enable governments to withdraw or diminish their GATS commitments so that they can improve their public services without any risk of challenge under WTO rules (so preventing foreign service suppliers from using the WTO as a tool to maintain market access);

· Article I.3 (b) of GATS should be clarified to make it absolutely clear that 'the exercise of governmental authority' allows, without threat of legal challenge, WTO members to exclude competition from public services and services of general interest; · Regarding "Mode 3" of the GATS on 'commercial presence' (i.e. investment), GATS negotiations and GATS commitments should incorporate the factors indicated in the section on investment below;

· With regard to "Mode 4" (i.e. temporary cross-border movement of natural persons), GATS negotiations and commitments must ensure: observance of core labour standards, national labour law (incorporating those standards) and existing collective agreements by all parties, with regard to all workers concerned; protection of migrant workers against all forms of discrimination, and of the remittance of their contributions to social security and insurance schemes; and the full involvement of the ILO;

· In media, the GATS negotiations and GATS commitments must not jeopardise domestic measures to protect the cultural diversity and cultural identity of WTO member countries;

· Desirable regulations that are necessary to ensure the continued availability of quality retail trade services and support smaller companies that would be unable to compete with large enterprises in a deregulated environment, must not be dismantled through the GATS negotiations;

· Negotiations in sectors such as post and telecommunications must not jeopardise the provision of universal services at uniform and affordable prices;

· the Cancún Ministerial should take a decision to end the conditions of secrecy under which the GATS negotiations have been taking place, with publication of the details of the access "requests" and "offers" under negotiation.

Investment at the WTO

13. Discussions are on the agenda for Cancún that some governments hope will lead to the opening of WTO negotiations to create a multilateral framework on investment. The status quo concerning foreign direct investment (FDI) is a barrier to sustainable development. An international regime is emerging based on bilateral and regional investment agreements that disproportionately favour investors, entrenching their rights with no countervailing binding mechanism governing their responsibilities. Meanwhile, domestic economic deregulation and liberalisation has led to the explosive growth of export processing zones that exempt foreign investors from compliance with labour and environmental protection, and often offer tax breaks or regulatory loopholes. Multilateral investment rules could in principle help governments avoid engaging in such destructive competition for scarce FDI.

14. The international union movement therefore agrees on the need for multilateral investment rules, that would govern only foreign direct investment, and which would promote, not hinder, sustainable development, in conjunction with the implementation of revisions to the IMF Articles of Agreement to bring order and stability to international capital markets and short-term capital flows. Such investment rules must be built around the promotion and protection of social policies, through binding and enforceable investor obligations covering core labour standards and observance of the provisions of the ILO Tripartite Declaration on Multinational Enterprises and Social Policies, and the OECD Guidelines for Multinational Enterprises, and environmental norms, as well as commitments not to lower domestic labour standards or violate core labour standards in order to attract investment.

Any multilateral investment regime must be compatible with the right of governments to regulate in all areas of public interest including investment, and must respect the value of public services and state ownership. Governments must have the leeway to implement legitimate domestically-based economic development strategies, especially to promote decent employment and strong communities, so that they can support domestic industries and investment, and encourage the emergence of new and infant industries.

Investment agreements should exclude provisions on expropriation, or National Treatment provisions (whether pre - or post-establishment) that limit the scope to pursue local, regional and national economic and social development strategies, in particular social priorities. Disputes must be solved only through transparent government-to-government procedures that promote the full and active participation of the social partners, and wider civil society groups.

15. Set against these criteria, the current proposals tabled at the WTO fall far short. The international union movement will review its position should new proposals emerge in favour of our vision of a multilateral investment regime. However, as things stand, we cannot support Trade Ministers at Cancún giving a green light to the commencement of negotiations on investment at the WTO.

Trade and Competition Policy

16. The global union movement is extremely concerned by the vast increase in mergers and acquisitions taking place worldwide, frequently under a definition of foreign investment flows, which stand to further increase the concentration of capital at global level. A multilateral negotiation to monitor international mergers (with particular regard to employment, working conditions and respect for core labour standards) and to increase control over them would be welcome, as would increased regulation of hard-core cartels and restrictive business practices of multinational companies (particularly with regard to the trade in primary commodities that is frequently concentrated among a handful of companies).

17. However, any WTO negotiation on trade and competition policy must allow developing countries to continue to apply different treatment to domestic companies (both state monopolies and private companies) as far as market share is concerned, and must allow developing country WTO members to preserve the ability to decide whether or not to legislate a competition policy. Any negotiation must not affect the right of governments to regulate or restrict economic competition, nor include any provision for investor-to-state disputes mechanisms.

18. In view of the above considerations, and in the light of current proposals, we do not believe that the current discussions of competition policy at the WTO are on the right track. While there is a case for international co-operation on competition policy and a need to prevent market abuses by multinational companies, the case has not been made for negotiating a competition policy agreement at the WTO, with its focus on trade liberalisation.

Government Procurement

19. Negotiations on transparency in government procurement have a positive role to play in eliminating corruption. Such negotiations must cover the protection of workers employed on government contracts, including migrant workers, on the basis of the relevant international standards standards such as the core labour standards as well as ILO Convention No. 94 on Labour Clauses (Public Contracts), the aim of which is to ensure that acceptable labour standards are observed in public contracts.

20. Negotiations should also commence on remedying the flaws in the existing Government Procurement Agreement (GPA). Specifically, the ban in the GPA on the use of "non-economic" criteria should be removed. in order to authorize public authorities to include development, ethical, social, regional and local objectives in their purchasing policies. In addition the GPA must include reference to the application of labour standards when workers are employed on government contracts. There must be no consideration of expansion of the GPA on a multilateral basis until such problems have been addressed fully.

Trade Facilitation

21. The objectives of the trade facilitation debate on minimising unnecessary customs procedures and speeding up movement of goods are worthy of support. At the same time, investing in modern customs equipment and information technology stands to be extremely costly for developing countries. The use of WTO procedures which would leave a choice between paying those costs or facing penalties for non-compliance would be wholly inappropriate in this area. Furthermore, WTO principles such as "least trade restrictive measures" are inappropriate in the context of trade facilitation, which is an issue linked intrinsically to safety and security in the cross-border transit of goods. Attention is needed to ensure that the existing competences of UN specialised agencies such as the IMO and the ICAO, which deal with trade facilitation under the same roof as the regulation of safety and security, are not undermined by WTO negotiations.

22. Given the above, it would be more appropriate for WTO measures to promote trade facilitation to remain of a non-enforceable nature. Large-scale technical assistance should be provided to help developing countries upgrade their trade facilities, rather than negotiations which would introduce WTO disciplines into this complex and costly area. Discussions should instead continue in the WTO working group on trade facilitation.

Sustainable Development at the WTO

23. Sustainable development needs to be incorporated effectively into every aspect of WTO work. This could be facilitated by the following specific measures:

· Agreement on large-scale assistance for developing countries to improve their environmental standards;

· Achieving a clarification in the negotiations on Multilateral Environmental Agreements (MEAs) that MEAs, such as the Biodiversity Protocol, take precedence over WTO rules;

· The implementation of sustainability impact assessments (SIAs) at a multilateral as well as national level, covering both environmental and developmental sustainability and social concerns including core labour standards and the effect of trade on women;

· Strengthening of the precautionary principle to ensure that consumers' or workers' health and safety can under no circumstances be threatened by WTO rulings;

· The reorientation of harmful fisheries subsidies to those areas which would promote sustainable and responsible fisheries practices, address the social aspects of restructuring and improve the life and working conditions of fishers;

· Clarification that eco-labelling schemes such as forestry certification should not be subject to challenge at the WTO.

Agriculture

24. The present levels of agricultural subsidies in many industrialised countries impose heavy costs, often failing to target subsidies on the poorest farmers and boosting the incomes of large wealthy agro-businesses instead. Furthermore, the subsidisation of agricultural exports has artificially depressed prices in many developing countries, leading to the destruction of farms, plantations and rural employment.

25. Therefore, the trade union movement proposes: · the elimination of all forms of agricultural export subsidies;

· the reduction and reorientation of other agricultural subsidies towards sound rural development through the eradication of rural poverty, the improvement of employment conditions and the promotion of animal welfare and ecological sustainability;

· increased stable and predictable market access for developing countries to industrialised country agricultural markets;

· strong rights for special and differential treatment concerning developing countries so that they have the requisite flexibility to enhance domestic agricultural production, in particular for domestic consumption, poverty eradication, land reform and food security, and to take other measures as necessary to improve the livelihood of farmers, particularly low-income and resource-poor farmers;

· provision of technical assistance to weaker developing countries to ensure their agricultural production for domestic consumption as well as exports can benefit.

Conclusions

26. The Cancún Ministerial finds the WTO at a watershed. The failure so far to meet many commitments in the Doha Round is creating a crisis of trust between the WTO's industrialised and developing country members. At the same time, the WTO's credibility and legitimacy among the general public, including the trade union movement, continue to be widely questioned.

The global union movement calls on WTO members to take decisive actions at the Cancún Ministerial and in its preparatory period, in order to reform the WTO to fulfil its commitments to developing countries, to address fundamental social and labour priorities and to achieve a fair world trading system that can provide a balance between the strong and the weak in the globalisation process, help lead to an expansion in world trade, and promote better living standards in both the developing and the industrialised countries.

15.04.2003