Put Sustainable Development on the Agenda!

April 2001

WTO after Seattle:

- Positions and Proposals by Danish Non-Governmental Environmental and Development Organizations The ’92 Group and the Danish North/South Coalition The following organizations support the presented views and proposals, although not each organization necessarily agrees with every detail. The member organizations of the two networks are very diverse. Not all of them have an opinion about everything that is mentioned in this position paper; while some of the organizations will have additional and further proposals that they might seek to promote themselves.

Bird Life Denmark Care Denmark DanChurch Aid Danish Association for International Co-operation Danish Outdoor Council Danish United Nations Association FairNet Greenpeace Denmark IBIS K.U.L.U. - Women and Development Nature and Youth Network for Ecological Education and Practice / Econet The Danish Rainforest Group Nepenthes The Danish Society for the Conservation of Nature The Ecological Council The Labour Movement’s International Forum WWF Denmark

This publication was published in April 2001. The publication is the result of a co-operation between organizations which are members of the '92-Group or the Danish North/South Coalition. The '92-Group is comprised of Danish environmental and development organizations and works on the follow-up to UN’s Conference on Environment and Development, Rio de Janeiro, 1992. The Danish North/South Coalition includes development and environmental NGOs and individual members cooperating on trade, debt, financial, and development issues from a South/North perspective.

The ’92 Group C/o Mellemfolkeligt Samvirke Borgergade 14 1300 København K Telephone: +45 77 31 00 06 www.92grp.dk The ’92 Group

The Danish North/South Coalition c/o IBIS Nørrebrogade 68B 2200 København N Telephone: +45 35 35 87 88 www.nord-syd.dk WTO after Seattle: Put Sustainable Development on the Agenda!

- Positions and Proposals by Danish Non-Governmental Environmental and Development Organizations

In November 2001 the World Trade contribute to sustainable development in a mea- Organization’s Fourth Ministerial Conference ningful way, coming negotiations must not fo- (WTO-MC4) will be convened in Doha, Qatar. cus on trade liberalization as the prime and It is the first time that WTO members will be overall objective. Instead the point of departure meeting at top level to discuss and plan the must be in the need for a regulation of inter- organization’s future work, since the collapse of national trade in which environmental and de- negotiations at the Third Ministerial Conference velopment concerns are integrated. in Seattle, 1999. The ’92-Group and Danish North/South Coali- The Ministerial Conference in Qatar could lead tion urge the Danish government and the EU to to the initiation of a new and comprehensive work for the negotiations in the WTO substan- round of trade negotiations. It is the position of tial progress from the WTO negotiations in the the 92-Group and the Danish North/South following areas: Coalition that any kind of trade round or any other negotiations in the framework of the  Environmental considerations should be WTO should be used to advance sustainable de- genuinely integrated into WTO rules and velopment. agreements.  Development concerns and poverty eradi- Sustainable development, environmental pro- cation in developing countries should be a tection, and the need for special considerations main priority in the regulation of world for developing countries were included as ob- trade, just as a gender perspective and anal- jectives for the WTO, during the last, big round ysis should be mainstreamed into trade reg- of trade negotiations, the so-called Uruguay ulation and policy. Round. But this has not resulted in any concrete  Respect for fundamental workers’ rights measures of real consequence. It continues to be should be integrated into WTO agreements. difficult to integrate environmental considera-  Regulation of international investments and tions into the WTO’s regulation of world trade; conditions of competition should promote a and the development of the world’s poorest sustainable environment and development. countries continues to be a very low priority.  The WTO organization should be democra- tized. As the volume of international trade continually increases, the need for global regulation of Below a number of concrete proposals are put social and environmental concerns becomes forward, all of which promote sustainable increasingly more urgent. Trade liberalization development and which the Danish government creates both losers and winners and causes a and the EU should work for in any future WTO need for re-distributive policies at the interna- negotiations. The realization of the individual tional level, for instance in the form of special recommendations should however not considerations and increased development necessarily await the conclusion of a possible assistance for those countries and segments of new, comprehensive round of trade populations that lose out and become liberalization negotiations which might go on marginalized. Without a global environmental for years. The possibilities for obtaining policy, unfettered trade can lead to further progress at an earlier time should be detected pressure on the earth's fragile and limited and utilized. resources. However, the WTO is experiencing a crisis. If the WTO is to live up to its own objective to Mistrust is wide spread, especially between the rich and the poor countries. For this reason all forms for negotiations have been extremely  The least developed countries should have sluggish. The collapse of negotiations at the free access to the rich countries’ markets. Seattle ministerial conference revealed how far Customs, quotas, seasonal restrictions, etc. apart the different countries’ positions were should be eliminated at the latest 1 year af- from one another. ter the conference.  All forms for export credits to agricultural Developing countries perceive the rich coun- products should be reduced by at least 50 % tries as doing anything to avoid their obliga- in relation to the year 2000 level. tions. At the close of the Uruguay Round, de-  That would give developing countries the veloping countries achieved both agreements possibility to protect vulnerable agricultural and promises concerning better opportunities to product markets. export agricultural products and textiles to the  Concrete decisions that lead to the realiza- rich countries. The poor, net-food-importing tion of the promise to compensate the poor- countries were promised compensation for ris- est and the net-food-importing developing ing prices on food products. Unfortunately it countries for rising food and agricultural can only be confirmed that the rich WTO mem- product prices that are caused by the WTO’s ber countries have not yet lived up to their obli- present Agreement on Agriculture should gations. Neither were the rich countries willing be taken. too take concrete initiatives that would give  It should be agreed that the TRIPS agree- concessions to the developing countries at the ment on patents, etc., should not block de- ministerial conference in Seattle. veloping countries’ access to import and copy the production of vital medicines, in- The relationship between the rich countries and cluding medicine against AIDs. the developing countries became further  The time periods for implementing the strained by the manner in which negotiations TRIPS agreement should also be extended were conducted in Seattle. The real negotia- to a minimum 5 years for developing coun- tions took place in exclusive circles, in the so- tries. The least developed countries should called “Green Rooms”, where the only coun- be completely excepted from the agreement. tries that could participate were the ones invited  Developing countries should have the right by the chair of the conference – who at the to advance local production in connection same time was the US Trade Representative, with foreign investments. As such, a mora- the head negotiator for USA. That meant that a torium on cases of violations of the TRIMs large number of poor countries were not able to agreement’s ban on the share of locally pro- defend their interests. duced inputs to a foreign-owned company. (The TRIMs Agreement is an agreement A prerequisite for bringing the WTO out of this within the WTO’s investment regime.) crisis is for the EU and other rich countries to give concessions to developing countries. This Finally, it should be a matter of course that all should happen by a number of decisions taken official negotiations of the Ministerial Confer- at the ministerial conference in Qatar going into ence in Qatar are prepared in a manner that en- effect as quickly as possible after the ministerial ables all WTO members to participate to the ex- conference. tent they wish to do so.

1.Environment

There has only been very limited progress in the aside some trade restrictions which are used in environmental field since the establishment of multilateral environmental conventions such as WTO in 1995. It is for example still not clari- the Montreal Protocol on the phasing out fied whether the WTO can be misused to set substances that destroy the ozon layer, the Basle Convention on the export of dangerous waste, to environmental problems connected to the and the CITES Convention on trade with production process methods in the country of endangered species. origin. Restrictions should be applied to developing countries, only when other solutions It is also still unclear to what extent WTO (assistance, transfer of technology, international agreements limit possibilities to introduce regi- agreements, etc.) are not sufficiently effective. onal or national environment regulations that When applying trade restrictions to goods from have consequences for imported products. In developing countries, mainly positive incen- the WTO a number of disputes concerning nat- tives, such as environmental labeling and in- ional environmental rules have been settled; and creased market access for products with less they have most often resulted in the setting environmental impact, should be used instead of aside of national regulations. negative sanctions such as duties and embargo. An important problem is that it is uncertain whether the WTO dispute settlement In the WTO Denmark and the EU should work institutions will in connection with concrete for: cases accept that free trade can be limited by environmental regulations based on the use of 1.1 Clear rules in WTO agreements allowing the precautionary principle: i.e., the principle trade restrictions to be used in international that an environmental risk can provide the basis environmental conventions and trade for preventative measures, even if the scope of sanctions to be implemented towards the environmental effects are not completely countries that do not respect international clear. environmental conventions.

It is also uncertain whether the WTO dispute 1.2 Specifications in WTO-agreements that institutions will accept that member states limit nation states and regional governmental free trade by making demands that relate to the organizations can implement any well- environmental impact of production which founded environmental regulations - also takes place abroad. It should as such be possible regulations based on the precautionary to make environmental demands which relate to principle and on life cycle considerations - the whole life cycle of a product, and not just to if at least the same demands are placed on the impacts on environment and health from the domestic goods and services as on use and disposal of the products. imported goods.

Environmental arguments should not be used to 1.3 Provision of environmental expertise and introduce disguised trade restrictions, so- called knowledge to the WTO dispute settlement “green protectionism”; but on the other hand, it institutions, when environmental regulation should be prevented that considerations for free is involved in the disputes. trade be given precedence over environmental considerations. The elimination of trade restrictions can have both positive and negative consequences for the Denmark and the EU should therefore continue environment. The environmental aspect should to work for the adoption of binding therefore be integrated in all negotiations in the international rules in the environmental field coming round, and analyses of the impact of and the use of trade restrictions as part of such trade liberalization on sustainable development rules. The rules should, as the point of should be undertaken before the agreements go departure, be minimum rules and contain an into effect (see proposal 2.1 below). Denmark environmental guarantee which allows the and the EU should work for the implementation individual country to give more extensive of trade liberalization in areas where it would considerations towards the environment. benefit the environment. Denmark and the EU should therefore work for: Denmark and the EU should furthermore work for the limitation of the use of restrictions on 1.4 New agreements on the reduction of envi- imported goods from developing countries due ronmentally damaging subsidies in, for example, energy, fishing, and agricultural 1.5 Attainment of rapid results in regards to sectors. (See also section 4. on agriculture.) liberalization of trade in environmental products, such as organic goods and tropical wood produced in a sustainable manner, and in environmental techno-logy.

2. Development, Poverty Eradication and the Gender Aspect

The WTO is well on the way to becoming a 2.1 Implementation of impact analyses of the global trade organization with more than 140 consequences of trade liberalization for member states; and a number of countries, sustainable development, including the including China and Russia, are about to consequences for women and children. The become members. This should lead to the analyses should be carried out before new regulation of the world trade in a manner which trade agreements are initiated and as a part is beneficial for the entire world's population of the WTO's regular trade policy reviews and not just for inhabitants of the rich countries. of the member countries.

Observers rightly noted that the Uruguay Round 2.2 Introduction of mechanisms with the pur- was the “rich countries' round”. That must not pose of giving full compensation to the be repeated. Denmark and the EU should work poor countries for negative effects of future for setting the problems of the poor in central trade liberalization. The compensation must focus in the coming WTO negotiations. not be deducted from development assistance to developing countries. In many areas developing countries cannot compete on equal terms with rich countries; and 2.3 Free access (i.e. no duties, quotas, or simi- therefore mechanisms that rectify these lar restrictions) to the markets of rich imbalances must be introduced. Some WTO countries for least developed countries. agreements contain provisions for special and differentiated treatment of the developing 2.4 Reduction of tariff rates by rich countries countries, especially the least developed for goods from the developing countries, countries. These provisions are however most including agricultural goods (see also often non-committal declarations of intent. section 4. Agriculture), fish and fish products as well as leather goods, textiles Moreover it is a problem for developing and clothing. In addition, it must be countries that there is no coherence between ensured that no deterioration in the terms of WTO agreements and the conditions that the the WTO Agreement on Clothes and IMF and World Bank impose in connection Textiles is allowed. This means, among with loans for economic reform programs. other things, that all types of quotas on the These conditions often force developing import of these goods from the developing countries to open their domestic markets more countries must be phased out latest and liberalize more than they are obligated to 1.1.2005. do according to WTO-agreements. 2.5 Liquidation of tax escalation by rich coun- Women and girls compose 70% of the world’s tries, i.e. the practice by which tariff rates poor. This is just one of the reasons for the are higher for manufactured and processed necessity to integrate a gender dimension into goods than for raw materials. world trade rules and analysis. 2.6 Limitation of the possibilities for rich Denmark and the EU should work for: countries to misuse anti-dumping rules. Anti-dumping duties should be limited to situations involving market dominance by foreign companies, and anti-dumping 2.8 Making the provisions for special and instruments should be subjected to the differential treatment of developing WTO's normal dispute settlement system. countries in WTO agreements operational and binding.

2.7 WTO acceptance of the Cotonou Agreement 2.9 Obligating the WTO to build up com- and other regional agreements, in which petence to undertake gender analysis as a rich countries give a group of developing part of trade policy analysis, which countries improved market access without includes impact analyses of how changes in requiring reciprocal free access to the trade policy effect women’s and men’s markets of the developing countries in occupational access, employment, income, question. control of and access to resources, etc.

3. Workers' Rights

There is a risk of increased free trade leading to Fundamental Principles and Rights at the Work environmental and social dumping: that produc- Place and Its Follow-up” is the cornerstone in tion will be placed in countries with the lowest the efforts to achieve workers’ rights. level of protection for workers and their rights. The risk for social dumping arises when This ILO declaration gives the key conventions companies and countries are willing to use on of the ILO a universal character; and the worst conditions for workers as a compliance with these conventions is related competitive edge, assuming that this will eligibility for ILO membership. At the same increase their competitiveness and possibilities. time, the declaration obligates the secretary This assumption however is outdated. Countries general to report annually to the ILO annual that do not comply with basic workers’ rights conference on compliance to the principles. are in fact not performing as well economically as countries that comply with good conditions ILO’s key conventions include no.s 29 and 105 for workers. (rights to freedom from slavery and forced labor), 87 and 98 (the right to membership of a However, a comprehensive documentation labor union and the right to collective exists on the violation of workers' rights in a bargaining), 100 and 111 (rights to freedom large number of countries; and it is especially from discrimination on the basis of sex, race, worrying that competition for jobs among color, religion, political viewpoints, nationality developing countries is leading to the creation or ethnic origin), as well as no.s 138 and 182 of an increasing number of export processing (minimum age and the right to childhood and zone (EPZ’s), where compliance with even the the elimination of the worst forms of child most basic workers' rights is disregarded. The labor). majority of employees in EPZ’s are women. The demand for compliance with basic Sustainable development cannot be achieved workers’ rights or core labor standards is not a through poverty and oppression of workers. On blind for protectionism. On the contrary, it is a the contrary, sustainable development requires means to ensure that free trade does not lead to the creation of development for the world's social dumping and further impoverishment of poorest. ordinary people.

UN’s workers' organization, ILO, has Denmark and the EU should therefore work for: formulated conventions and other declarations on workers’ rights. A broad international 3.1 The obligation of WTO member countries agreement supports the ILO’s “Declaration on to comply with the basic workers’ rights. The WTO should also encourage more of 3.2 The obligation of the WTO to include its member states to develop specific compliance with basic workers’ rights in the custom duties discounts – similar to the regular WTO trade policy reviews of EU’s General System of Preferences (GSP) member countries. The inclusion should be - for goods from countries that respect core based on reports conducted by the ILO. labor standards. The developing countries must at the same time be given better 3.3 The extension of the current WTO regu- opportunities to draw on technical lation which allows countries the possibility assistance from the ILO, so that efforts to to forbid import of goods produced by comply with basic workers’ rights are not prisoners to also include goods produced hindered by the lacking technical capacity. under slavery, forced labor, child labor, violation of the freedom to organize, or under discriminating conditions.

4. Agriculture and Food Security

The agricultural support systems of the EU and agricultural products. On the other side, many other industrialized countries lead to intensive developing countries have already opened their agricultural production systems, resulting in markets to agricultural products much more great damages to the environment. In addition, than rich countries. This is not a primary result subsidy systems lead to massive distortions on of WTO commitments but has occurred as part international markets for food and agricultural of the economic reform programs, structural products. Sales of the rich countries’ surplus adjustment programs, which are part of the production with export subsidies results in an conditions for receiving World Bank and even more unfair competition for many International Monetary Fund loans. This has developing countries. made it difficult for developing countries to strengthen their own agricultural sector and The developing countries’ expectations that the create food security. present WTO Agreement on Agriculture with its ceilings on domestic support to the agri- Instead of the EU’s and other rich countries’ cultural sector and on export subsidies would support systems which promote intensive result in fairer competition have not been met at production with a high consumption of all. On the contrary, the support to this sector in fertilizers and pesticides, there is a need for the rich countries is the same today as it was 10 support that promotes environmental protection years ago; only the forms of support have been and nature conservation. changed. That means that competition in the agricultural sector is often based on support In the negotiations for a new agricultural systems and not on price and quality. agreement in the WTO, Denmark and the EU should work for: The artificially low prices on world markets may tempt developing country governments to 4.1 A phasing out and abolition of export rely on importing cheap food products from subsidies and credits in the course of a few abroad instead of developing their own years. As long as export subsidies exist, the potential for food production. It is a dangerous support should not be targeted at export to development that in the long run can be specific developing countries, such that the harmful for these countries’ food security. local farmers’ competition conditions are extremely undermined. The developing countries that have an export potential in agricultural products are blocked by 4.2 A vigorous reduction in general agricultu- the rich countries’ support to their own ral support, as well as limiting the number production and by the high tariff walls for of exceptions in the allowed forms of support. expected to increase. In the short run, this can harm developing countries dependent on food 4.3 The continued possibility to support envi- import (net-food-importing countries). Many ronmental and nature conservation, organic of these countries are among the poorest in the farming, and other means of advancing world. It is therefore vital to maintain and extensive agricultural production. These renew the promise from the Marrakech support forms should however be Agreement in 1994 to compensate these monitored closely in order to avoid that countries for possible negative effects of the they develop into unfair competition in Agreement of Agriculture. Until now this relation to developing country producers. promise has not been fulfilled.

4.4 Ensuring developing countries better pos- Denmark and the EU should ensure: sibilities to strengthen the development of their own agriculture and food security. 4.7 That the poorest countries and net-food- This could for example be done by giving importing countries are compensated for developing countries the possibility to the increasing price levels which have exempt crops from the agricultural resulted from the present Agreement on agreement and by exempting developing Agriculture. This compensation must not countries from the obligation to open their be deducted from development assistance. own markets to agricultural products. 4.8 That a new Agreement on Agriculture 4.5 Increased access to the rich countries’ should include obligations to provide markets for developing countries in support for agricultural development in general, by reducing tariff barriers as well poor and net-food-importing countries in as making access independent of seasonal order to prevent possible negative effects. and quotas. The least developed countries In addition, compensation should be should be given free market access. provided for price increases that the new agreement might cause. When export subsidies and the level of domestic support are reduced, the price level for certain agricultural products can be

5. Intellectual Property Rights

Intellectual property rights are regulated by the of developing countries had not produced any so-called TRIPS Agreement, Trade Related legislation before the TRIPS Agreement. Aspects of Intellectual Property Rights, under Therefore is has been necessary fore these the auspices of WTO. According to the agre- countries to develop an extensive set of laws ement, member countries must implement pa- and an administration for these laws. Very few tent protection on areas which are not yet in- developing countries have the capacity and cluded in their national jurisdiction. The economic resources to carry out such changes in industrialized countries had a deadline to the short time period allotted. The result is that implement this protection before 1996, while some developing countries didn’t meet the the developing countries had a deadline in deadline – and some have adopted other 2000, while the least developed countries have countries’ systems without any real national deadline in 2006. adjustment in order to meet the deadline.

The TRIPS Agreement regulates, among other The TRIPS Agreement involves a kind of items, copyrights, industrial designs, inverse development aid. More than 95% of all trademarks, patents, and protection of plant patents and copyrights are owned by companies varieties. This is an area in which the majority and people from rich countries; and the TRIPS Agreement makes it possible for these people protection of patents on plants and animals. But and companies to charge the developing they are obligated to grant protection to plant countries for royalties. The amount which in varieties. This can be done either by the this way is transferred from the poor to the rich introduction of a patent system along the lines countries will probably exceed the amount of of the Western model, or by the introduction of gramted development aid, as the TRIPS other so-called “sui generis systems” (systems Agreement is implemented in more and more of their own kind). However, the USA and developing countries. other countries are working to remove this exemption from the article. If this is the case, Many development countries have not had this will enable the biotechnological industry to patented protection of medicine before. This has take out patents on all kinds of genetic material helped to keep the prices down. The TRIPS without consideration of developing countries’ Agreement requires that patents be introduced or indigenous peoples’ rights. on all medicine. The affect will be higher prices and less access for poor people to medicine. In the WTO Denmark and the EU should work for: However, Article 31 in the TRIPS Agreement makes it possible to issue mandatory licenses 5.1 An exemption of the least developed coun- which means that a country’s government can tries from the TRIPS Agreement. issue a license for the production of a certain product without it being necessary to receive an 5.2 An extension of the deadline for the other acceptance from the patent owner first. developing countries in order to implement Mandatory licensing can only be issued under the agreement, including longer deadlines certain conditions and only in special situations. for the introduction of sui-generis systems Unfortunately this exemption clause is to protect plant varieties. formulated in a vague manner; and therefore there is doubt about the possibilities of using 5.3 The possibility for developing countries to the clause. This has led to the situation that only refrain from implementing patent a few developing countries - in spite of the protection of medicine. health catastrophe that AIDS had caused in many developing countries – producing and 5.4 Maintaining the TRIPS Agreement article selling inexpensive AIDS medicine. 27.3(b) in its present form, so member countries can still refrain from patenting The TRIPS Agreement is not coherent with the living organisms such as plants and Biodiversity Convention. According to the animals. Biodiversity Convention, genetic resources can only be utilized if prior consent is obtained and 5.5 Securing the rights of indigenous peoples to an agreement on sharing the benefits is made their own resources by giving the with the country or the indigenous people from Convention on Biodiversity precedence which the genetic material originated. The over the TRIPS Agreement. Patent TRIPS Agreement, however, enables countries applicants must be obligated to account for to provide patent protection on plants and the origin of genetic material and be able to animals without any requirement to document document consent and the profit-sharing the consent and sharing of benefits as a agreement with the country/peoples from condition for receiving patent protection. The which the material comes. TRIPS Agreement thereby makes “bio-piracy” possible, where genetic resources are extracted See also in the introduction of this paper the and utilized commercially without consent from proposals concerning decisions about the the country of origin. TRIPS Agreement at the coming conference in Qatar. According to the TRIPS Agreement’s article 27.3(b), countries are not obligated to grant 6. Investments

Investments across borders have since the and more democratic composition would be mid1980’s received a marked increasing the ideal framework for the negotiation of a importance in the world economy. Whereas multilateral agreement on investments. trade between countries previously played the However, the most realistic is that biggest role in supplying foreign markets with negotiations will take place within the WTO goods and services, this dominant role is now which is the most important organization for furnished through foreign direct investments. international economic co-operation. The advantage of this could be that the WTO Today the rights of the investor are typically already operates with binding rules, a dispute secured by a bilateral investment agreement settlement system, and possibilities for between the investor’s country of origin and sanctions. the receiving country. International co- operation in the field of investment can be im- A minor agreement on investments already proved and eased by a multilateral agreement exists in the WTO. The TRIMS Agreement, on investments which could replace the nu- Trade Related Investment Measures, contains merous bilateral agreements. At the same prohibitions against different forms of time, such an agreement would legally regulations which have been typically been provide nations with weak and strong used by the developing countries to increase economies with equal rights. the development effects of foreign investments. It is among other things not Along with the rapid increase in foreign allowed to demand that a certain share of investments, an increased internationalization inputs to the foreign-owned companies’ of private companies has taken place. production process should be locally Therefore, it has become more urgent to produced. Presently, a number of countries implement a regulation of transnational have requested to be exempted from measures companies and their international of the TRIMS Agreement. investments. A multilateral agreement on investments must therefore not only involve Denmark and the EU should work for the the rights of the investors, but also their initiation of negotiations on a multilateral responsibilities and obligations. agreement on investments. However, just any multilateral investment agreement at all is not A multilateral agreement on investments preferred to no agreement. The content of the should give special considerations to deve- agreement is vital. What is needed is a mul- loping countries. Developing countries should tilateral agreement on investments based on be able to make demands concerning the con- the objective to ensure democratic regulation crete design of the investments, in order to of international investments that promote sus- develop their national economies and ensure tainable development globally. The demands special considerations for poor segments of to such an agreement should be: their population of which women and girls comprise a large part. This might be demands 6.1 Investors are obligated to comply with to employ the local workforce, use local ILO conventions on fundamental products, reinvest profits, and partial national workers' rights and the OECD guidelines ownership of the investment. Furthermore, for multinational enterprises. developing countries should be able to regulate capital transfers to foreign countries 6.2 Investors are obligated to observe and pro- and thereby have an opportunity to intervene mote the UN Human Rights Declaration in cases of speculation and balance of and the corresponding conventions, as payments deficit. well as contribute to observance of multilateral environmental agreements. In principle, the UN-system with its broader 6.3 The agreement should prohibit the prefe- 6.7 The possibility for developing countries to rential treatment of foreign investors regulate the transfer of capital abroad. which today often results in the disregard of rules concerning environmental and 6.8 The agreement does not hinder the imple- employee protection, for example in mentation of agreements in other fora export processing zones (EPZs). which impede currency speculation, for example by hindering, limiting. or taxing 6.4 Environmental and social impact assess- short-term capital flows. ments should be executed, as well as hearings of the local populations before 6.9 Dispute settlement should continue to take the placement of new, big production place between states, with openness and sites, etc., are decided. transparency ensured in the process.

6.5 The agreement should not make it more 6.10The agreement exclusively pertains to difficult to carry out usual national areas and sectors explicitly mentioned in regulation, such as regulation concerning the agreement. physical planning, the environment, the work place environment, consumer 6.11The individual developing countries protection, tax, and cultural policies. should be able to decide which areas and sectors their agreement covers. 6.6 The possibility for developing countries to make special demands to investments, for See also the introduction of this paper for a example requirements to hire a local proposal concerning decisions on the TRIMs work force, use local products, to reinvest Agreement at the upcoming conference in profits, and partial national ownership of Qatar. the investment.

7. Competition companies; and as such the rules are, in fact, At present there are no binding and effective an obstacle to competition. rules at the international level that prevent the establishment of monopolies and business Under the auspices of the WTO there is also practices that distort competition, such as an agreement on public procurement. The price dumping, exclusion of competitors, and agreement provides better possibilities for the export of profits through foreign concerns' competition because it stipulates that foreign internal accounting systems. and domestic suppliers should have equal treatment. However, so far only 25 countries There are WTO rules on anti-dumping, but have signed on to the agreement, and many they are insufficient. Dumping occurs when goods and services are exempted. goods are sold at prices below their costs of production. A motive for dumping might be Binding international regulation of competition practices would give developing the companies’ desires to gain market shares. countries considerable advantages. Partly Current WTO regulations make it possible to such rules could lead to the opening of indus- levy a tariff penalty on goods claimed to be trialized countries' markets to imported goods dumped. However, the rules make it possible from developing countries; and partly the to compute the existence of dumping, even rules would limit the at times ruthless though it is not really the case. This means behavior of multinational companies.

International competition rules should that the rules can be used to protect national however give special consideration to food security as well to agricultural and industrial 7.1 Prohibition of practices that distort com- development in developing countries by al- petition. lowing protection of especially vulnerable sectors in these countries against foreign 7.2 Protection of particularly vulnerable competition. Neither should international sectors in developing countries competition rules force developing countries against foreign competition, as well as to promote private companies’ engagement in prevention of international competition areas which today are primarily taken care of rules from forcing developing countries by the public sector, consumer owned to promote private companies’ companies, or similar entities, as for example, engagement in areas which today are education, power supply, or water supply. managed by the public sector, consumer- owned companies or the like. In other words, Denmark and the EU should work for the adoption of an international See also proposal 1.4 concerning subsidies, agreement on the regulation of competition 2.8 concerning anti-dumping, and 4.1 to 4.3. policy which gives specific consideration to concerning agricultural subsidies. the developing countries' situation. Denmark should therefore work for:

8. Services is therefore that there are no thorough In many countries the service sector is grow- economic or social analyses of the ing in relation to the industrial sector. At the consequences of trade liberalization under the same time the service sector is being interna- GATS Agreement. The problem is greatest tionalized. Trade in services is as such in- for the developing countries that do not have creasing faster than trade in goods. Today the administrative capacity to examine and realize the consequences. trade in services comprises 25-40 % of the to- tal world trade. The developing countries’ In connection with the GATS agreement, share of world trade in services is about 25%. there are lists for each country with specifications of its obligations in regards to In the WTO trade regimes, international trade market access within each sector and under- in services is regulated by the GATS sector and within each of the four delivery Agreement, the General Agreement on Trade forms. On the one hand, trade liberalization in Services. The GATS agreement covers 12 under the GATS Agreement is therefore a service sectors, including banking services, very complicated affair with long, very telecommunication, electronic trade, trans- detailed lists. On the other hand, this “bottom- port, education, and tourism. The agreement up principle” means that developing countries includes four so-called “delivery forms”: have the possibility to adjust market trade across national borders (for ex. legal liberalization in relation to their own counsel given by a foreign firm); development stage. consumption in a foreign country (for ex. tourism); consumption; trade presence (for ex. Many developing countries are worried about establishing a bank in a foreign country); and the consequences of further liberalization in the presence of individuals (for ex. stationing the services sector. They fear that local sup- employees in a foreign country). pliers will not be able to compete with international concerns , for ex. in tourism. Al- though foreign concerns start ventures in de- Most forms for international trade in services veloping countries, the jobs that are created is a rather new phenomenon – especially for are often poorly paid; and in many cases the developing countries. A fundamental problem companies and firms key employees come from the concerns’ countries of origin. Fur- be possible for the individual developing thermore, a large share of the profits can be country to decide which sectors and transferred back to the parent concern. In which delivery forms should be given these cases, the contribution to the host coun- better market access to foreign suppliers. try’s development is very modest. 8.2 Realization of postive discrimintion/spe- Education and health sectors are not as yet in- cial and differential treatment of develop- cluded in the concrete GATS Agreement’s ing countries through obligatory and op- obligations to liberalize. Especially the USA erational measures in the GATS Agree- is pressuring to include these two sectors in ment which include the rich countries’ trade liberalization negotiations. If this suc- obligation to both open their markets to ceeds and also obligates the developing coun- services provided by developing countries, it will be even more difficult for countries and to provide technical and eco- tries’ governments to control the quality and nomic assistance to developing countries supply of these services. so they can increase their participation in trade in services. According to the present GATS Agreement, developing countries’ participation in trade in See also proposal 2.1 concerning analysis of services should be increased. There are how- trade liberalization’s impact on sustainable ever no concrete measures that describe how development. this statement of intent should be carried out. Danmark og EU should work for:

8.1 Retention of the ”bottom-up principle” ap- proach to the GATS Agreement, so it will

9. The Democratization of WTO

One reason for the collapse of negotiations at the Ministerial Conference in Seattle was the In addition to this, a number of other problems lack of democracy. The important negotiations make it difficult for many developing countries took place among an exclusive group in the co- to make their views and positions count in the called “Green Room” where only countries WTO system. Almost half of the least invited by the chairman of the conference - who developed countries are not represented in was also the chief US negotiator - could Geneva where the headquarters of the WTO is participate. This meant that a number of poor situated and where the ongoing negotiations countries were prevented from defending their take place. The developing countries with interests. This situation has truly put the need offices in Geneva are often only represented by for institutional reform on the agenda of the one person who then has to cover the many WTO. It is therefore hard to imagine that the different negotiations and meetings. Another negotiation model from Seattle will be used at problem is that very few developing countries future ministerial conferences. have the expertise to analyze the consequences of proposals presented in the WTO. But more extensive reforms are needed. The power in the WTO is extremely unevenly The innovative with the WTO compared to distributed. Even though every member state other international institutions is the binding has one vote in the WTO, the reality is that a decisions and the dispute settlement system few rich countries have the decisive influence. which make it possible to sanction countries Because of their economic strength, EU, USA, that do not comply with WTO regulations. But and Japan are the central players. the dispute settlement system is not equally accessible for all countries, since it requires that all documents are restricted until the great expertise to take legal action under the meeting in question is held. This applies among WTO’s dispute settlement understanding. other thing to agendas, proposals for decisions, background notes. Denmark and the EU should work for: A few types of documents are automatically 9.1 The abolition of the use of the Green Room. publicized. The rest of the documents are It should not be the prerogative of the publicized, only if there are no countries that chairperson of the ministerial conference object to the publication. nor of the WTO’s director general which countries are allowed to participate in the Ensuring transparency in the WTO is critical. key negotiations. Most kinds of meeting papers should be avail- able before the decisions are made. Otherwise it 9.2 The introduction of an “early warning sy- will still only be the ones with the best contacts stem” so meetings, agendas, and all other that are able to influence decisions. In practice initiatives are announced in time for all it will probably primarily mean American and countries’ representations to reflect and European industrial and agricultural decide on their position and participation. organizations, as well as transnational companies. 9.3 The provision of support to the least developed countries to enable the The secretiveness furthermore results in the maintenance of representation in Geneva. lack of independent, critical examination of data and analyses upon which the negotiations are 9.4 The formulation of a concrete strategy for based. institutional and technical support to developing countries in order to enable Denmark and the EU should work for: their participation in policy processes of the WTO. 9.7 The publication of provisional agendas well in advance of meetings; and the de- 9.5 Improvement of developing countries’ pos- restriction of proposals from member states sibilities to use the WTO's dispute and background notes from the WTO settlement system by ensuring them access Secretariat, as soon as they are officially to qualified advice. accessible. In more closely defined exceptions, such documents can restricted 9.6 The requirement for rich countries to pay for a short period. case costs for both parties, when they lose WTO dispute settlement suits to developing 9.8 The inclusion of information about national countries. positions that member states have expressed in the minutes of meetings, and Historically, trade liberalization negotiations in the de-restriction of minutes as soon as they the GATT were marked by secretiveness, and are approved. this tradition has continued in WTO. But in the course of including a larger number of products 9.9 The submission of written contributions by and a wider range of issues in the WTO NGOs to WTO meetings and the possibility agreements, it has now become more necessary for NGO-representatives to observe certain to involve politicians and populations in the parts of WTO meetings. Open parts of the decision-making processes. meetings should be broadcasted on the internet. The WTO Secretariat has in more recent years actively begun to inform the outside world 9.10The submission of written contributions by about what is going on in WTO. Via the WTO NGOs to the WTO dispute settlement website it is today possible to access a large bodies, when they are treating concrete number of documents. But the main rule is still disputes concerning countries’ compliance with WTO agreements. internet and the provision of courses for NGO from developing countries. 9.11The convening of regular information meetings between NGOs and chairpersons 9.13The involvement of national parliaments in or other government representatives in the work of the WTO, for ex. by WTO councils and committees. establishing a parliamentary assembly in connection to WTO ministerial 9.12The obligation of the WTO Secretariat to conferences. inform developing country NGOs, including the establishment of information channels for NGOs without access to the