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WTO, NAMA, and Protecting Natural Resources
World Trade Organization (WTO) campaigners are calling for immediate international action to derail any agreement at the WTO meetings in Geneva from 27-29 July, 2004. In an effort to recover from the WTO's collapse in Cancun last September, trade ministers are trying to lock-in a framework agreement to revive the Doha round of negotiations. If they can agree on a "July Package," it would establish a dangerous structure for any future WTO talks. However, if they fail to agree, even U.S. Trade Representative Robert B. Zoellick fears that, "I do not know whether it will be revived."(1)
One of the most contentious areas of the negotiations is called NAMA (Non-Agriculture Market Access) because it proposes to eliminate barriers to trade on "all products not covered by the WTO Agreement on Agriculture."(2) The US is leading a push for a comprehensive and mandatory approach to NAMA that could require all nations to eliminate tariffs (import taxes) on all products. NAMA also aims to reduce or eliminate so-called Non-Tariff Barriers (NTBs), which may include measures for environmental protection and community development.
NAMA would undermine sustainable development by intensifying the exploitation of natural systems, which millions of poor people depend on for survival. Reducing tariffs in the absence of new environmental protections is a promise to intensify exploitation. Moreover, governments would make new environmental protections even more difficult if they eliminate NTBs that conserve natural resources and protect traditional communities.
A wide range of environmental policy tools have already been identified by the WTO as possible NTBs that could be subject to new trade penalties: the certification of wood products, restrictions on trade in chemicals and viruses put in place for 'strategic reasons', the tracing and labeling of fish and fish products; general import prohibitions for environmental purposes; and packaging, marketing and labeling requirements.(3) Indeed, the International Chamber of Commerce (ICC) is also calling for the inclusion of export duties, restrictions and export bans in the NAMA negotiations.(4)
Many governments, especially from the poorest nations, are strongly against NAMA because it would harm their efforts to develop infant industries and protect small businesses from foreign competition(5). Loss of tariff revenue would also reduce an important source of income for their national budgets. NAMA's potential impacts go against what poor nations were promised in Doha when they agreed to a new round of WTO negotiations. The G90, a grouping of the WTO's ninety poorest Member Nations, recently denounced the proposed NAMA as something that would "deepen the crisis of de-industralisation and accentuate the unemployment and poverty crisis in our countries."(6)
Free Trade and Empty Oceans
One of the natural resource sectors being prioritized for trade liberalization in NAMA is the fisheries sector, one of the most fragile natural resources already on the brink of global collapse. The UN Food and Agriculture Organization (or FAO, the international institution with the most competency in fisheries, including the trade in fish products) reports that 70% of the world's commercial fish stocks are already over-exploited or fully-exploited. FAO also estimates that some 34 million people worldwide who earn less than one dollar a day live from fishing. For poor coastal communities, access to and conservation of fisheries resources is a matter of sheer survival.
The FAO has published no review or applicable analysis of the potential impacts of liberalizing market access on fish trade, fisheries resources, or fishing communities. FAO authorities say they do not know the potential impacts nor have they any plans to assess them (7)
At the FAO's July 2, 2004 meeting in Rome to identify fisheries subsidies for WTO negotiations, the president of the World Forum of Fish-harvesters and Fish-workers (WFF, an international alliance of artesenal fishing communities committed to conserving fisheries resources) urged the FAO to assess the impacts of the broader WTO's negotiations, including market access. Not only did WFF fail to receive any response to its request, but the final report from the FAO meeting notes that its "work should not be conditioned by the work of any other international fora."(8) In other words, it would appear that the FAO has no intention of examining the potential impacts of liberalization in this sector. WTO should cease further liberalization until FAO and other competent agencies first assess the impacts of existing world trade rules and changes made to those rules.
Japan is one country that emphasizes conservation concerns by explicitly recognizing that increased trade liberalization in the fisheries and forest sectors is likely to reduce conservation of these resources (although their fish processors enjoy tariff protection against imports,(9) one can say Japan has a vested interest in taking such a position). Japan says that:
"A zero-for-zero approach in the fishery sector should not be pursued since it will abolish all tariffs regardless of the level of fishery resources, the management status and the importance of fisheries and fishing communities in each country. It will also add an extra pressure to the resources through inducing catches beyond the renewable capacity of resources, thereby impeding sustainable development of fisheries." [10]
Expanding trade without regard to the social and ecological consequences, or worse, knowing that there will be harmful impacts, is unacceptable. NAMA is yet another example of the WTO's blind ambition for free trade leading to, in the case of fish, emptier oceans.
The Economics of Deforestation
The United States Trade Representative (USTR) and the White House Council for Environmental Quality (CEQ) admitted in its own study that eliminating tariffs on all wood products would increase logging in some of the world's most sensitive forests, including Indonesia, Malaysia, and Chile.(11)
Environmentalists denounced the WTO's proposal to blindly increase logging, especially in nations where forest conservationists and traditional forest communities are calling for moratoriums on logging because so much of it is done illegally. Currently, 80% of Indonesia's logging is illegal, so a moratorium will not bankrupt Indonesia, but in fact it will prevent the loss of up to a billion US dollars through illegal logging (12). NAMA's tariff elimination could also undermine President Bush's own Initiative on Illegal Logging, which promises to be "addressing forest law enforcement in bilateral agreements, including, where appropriate, within the framework of free trade agreements(13)."
Forests in North America, where protections for conservation and communities are already being driven down by cheap imports, would face even stiffer terms of competition if trade ministers agree to eliminate tariffs. Even though cheap softwood from Canada already floods one-third of the US market, NAMA could give Canada a new multilateral mandate to remove remaining barriers in the U.S., such as the US-Canada Softwood Lumber Agreement. Environmentalists, indigenous peoples, workers, and forest community groups on both sides of the border are calling on other countries to increase current tariffs on Canadian softwood imports to counteract Canada's perverse subsidies of under-priced "stumpage fees" and lack of legal protections for indigenous rights, endangered species, and fisheries (14).
(Ideally there should be something in here about the risks to forests in developing countries, if this is to be balanced enough for use outside North America. Perhaps Meena could contribute something about forestry in Asia?)
While some nations are demanding that NTBs must be part of any NAMA agenda, other nations are hesitant to include them. Some nations view the proliferation of environmental measures as potential barriers to their natural resource exports and they want to use NAMA to restrict their use. But environmentalists successfully pressured the US in Seattle to make one of its few written environmental policy commitments: "the United States will oppose NTB proposals that would undermine the legitimate measures taken by countries to protect their forest resources."(15) All nations should adopt similar positions.
Got Chemicals?
Some other sectors likely to be under NAMA include chemicals, rubber and plastics. Toxic chemicals pose many dangers to the environment, biodiversity, human health and development. The United Nations and US President Bush recognized this threat by agreeing to phase out harmful chemicals under the new Persistent Organic Pollutants (POPs) Convention. But it is not clear if the chemicals listed for phase out by POPs are also listed by WTO to receive expanded market access.
Chemicals' toxic impacts are finally compelling governments to establish strong regulatory regimes, such as the European Union's proposed initiative known as REACH (Registration, Evaluation, and Authorization of Chemicals). REACH would shift the burden of proving health and environmental safety of most major industrial chemicals onto the companies that manufacture, use and import them.
Industry executives are mobilizing in the WTO to express their "concerns about the costs and burdens of complying with the EU's proposed chemical monitoring regime."(16) "Australia, Chile, China, Japan, Korea, Malaysia, Mexico, the Philippines, Thailand, and the United States were preparing comments to be submitted in response to the EU's notification of REACH to the WTO Committee on Technical Barriers to Trade (TBT). Then, at a July 1 meeting of the WTO's Technical Barriers to Trade Committee meeting, the US submitted general comments that parroted the U.S. chemical industry's objections to the proposed regulations.(17) If WTO agrees on a July Package, NAMA could be the venue of choice for the chemical industry's dissecting and diminishing REACH, which could also have a chill effect on similar programs being considered in the US and elsewhere.
What are "Environmental Goods"?
"Environmental goods" have also been included as a special sector for attention, on the basis that increased trade in these will be a win-win situation. However, there is a tricky debate taking place about the definition of 'environmental goods.' Are they narrowly defined 'end-of-pipe' pollution-oriented technologies, which could discourage the use of preventative measures to decrease resource use, and would favor Northern exports (a position that is supported by the ICC)? Are they products that have been produced or processed in an environmentally friendly manner (proposed by the EU but rejected by developing countries, the ICC and current WTO rules)? Or does the label incorporate all natural goods based on natural raw materials, which could favor developing country exports but lead to even more unsustainable consumption rates? More importantly, perhaps, will trade negotiators make a decision on the basis of trade concerns or environmental ones?
What You Can Do
Contact your trade ministers and recommend the following actions:
Given the serious nature of these concerns listed in this briefing, it is imperative that governments take the following actions:
Halt NAMA negotiations and agree to a full, independent review of the potential environmental and social impacts of NAMA.
Protect governments' policy space, allowing all to develop fair and sustainable economies that protect their environment through the sustainable management of natural resources.
In the United States, call House Democratic Leader Pelosi's office at (202) 225-0100 and ask her to tell the U.S. Trade Representative not to trade away our environment at the WTO. It is critically important that House Democratic Leader Nancy Pelosi knows that the WTO's NAMA negotiations could be a threat to the environment. Let her know that the WTO talks could include a number of environmentally sensitive sectors ‚ including forests, fisheries, and chemicals ‚ and that increasing unregulated trade in these sectors could be damaging. Also, tell her that the US must not negotiate away any of our environmental protections as "non-tariff barrier."
For more information contact:
Victor Menotti, International Forum on Globalization: vmenotti@ifg.org
Ronnie Hall, Friends of the Earth International: ronniehall@mailblocks.com
Thanks to IFG Intern Jackie Beaumont for research assistance.
SOURCES
1. Robert B. Zoellick, U.S. Trade Representative, at the Opening Ceremony of the G-90 Meeting Trade Ministers Meeting, Mauritius July 12, 2004.
2. "Draft Elements of Modalities for Negotiations on Non-Agricultural Products, Negotiating Group on Market Access," (TN/MA/W/35/Rev.1), WTO, 19 August, 2003.
3. Non-Tariff Barrier Notifications, TN/MA/W/46, WTO, 26 November 2003 www.wto.org
4. ICC proposals on market access for non-agricultural products, prepared by the Commission on Trade and Investment Policy, International Chamber of Commerce, May 2003, www.iccibo.org,
5. UNCTAD researchers have concluded that, "In any case, the analysis shows that, whatever the approach, the developing countries will be required to make the greater cuts in their bound tariffs and will face greater proportional increases in imports. They will also suffer substantial losses in tariff revenues – and this will be a serious concern in a number of cases." Market Access Proposals for Non-Agricultural Products, Sam Laird, Santiago Fernandez de Cordoba and David Vanzetti, Trade Analysis Branch, United Nations Conference on Trade and Development, no date, http://192.91.247.38/tab/pubs/NAMAprops.pdf
6. G90 Ministerial Declaration of the WTO Doha Work Program adopted in Mauritius on 11 July, 2004.
7. International Forum on Globalization correspondence with UN FAO Fisheries Staff, Rome, Italy, June 2004.
8. FAO Final Report, Technical Consultation on Fisheries Subsidies, Paragraph 23, July 2, 2004.
9. Tariff Schedule for imports of Fish and Fish Products to Japan, available from the UNFAO, Rome, Italy.
10. Market access for non-agricultural products, Communication from Japan, TN/MA/W/15/Add, 16 January 2003, www.wto.org. Japan submission to NAMA
11. United States Trade Representative (USTR) and the White House Council for Environmental Quality (CEQ)
12.http://lama.walhi.or.id/English/press_release/prerelWLHcallonWrldspprt2svwhtleftofindfrst_210104.htm
13. www.whitehouse.gov/infocus/illegal-logging/piail.html
14. www.forestsolutions.ca
16. The Chemical Dialogue noted in Pucon, Chile on May 25, 2004.
17. US comments submitted to WTO Technical Barriers to Trade Committee, July 1, 2004; Letter to US Trade Representative Robert B. Zoellick from Sens. Lautenberg and Jeffords, Jun. 22, 2004.