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TUC Response to Suspension of WTO talks

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TUC Response to Suspension of World Trade Talks, July 2006

The World Trade Organisation negotiating process was suspended on Monday 24 July. This suspension followed the failure of talks amongst the G6 group of countries (USA, EU, India, Brazil, Japan and Australia) to break the deadlock that has been afflicting the so called, 'Doha Development Round' almost since its inception. The breakdown is not a great surprise; however, it is a sad reflection on the lack of vision and political will on the part of many of the governments involved.

The blame game has now begun in earnest, with the United States responsible for the immediate impasse due to its refusal to countenance further reduction of massive trade distorting subsidies to US agro-businesses. However, the EU has also contributed to the failure by its insistence on only limited reductions in European subsidies and slow progress on the opening of markets to agricultural produce from developing countries. The UK's commitment to less than full reciprocity, the principle that poorer countries should have to concede less in this round of talks, seems to have been forgotten. This principle was established to try to create a more level playing field for developing countries and to begin to address some of the historic imbalances in the global trading system; for example, the fact that the US and EU have 2% of the worlds farmers but account for 50% of global agricultural trade. Less than full reciprocity meets with little support among several other European governments and seemingly at the level of the European Commission. It is arguable that the EU insistence that progress on agricultural subsidies could only happen if developing countries agreed to 'ambitious' market openings in services and manufactured goods, took us back to a 'zero sum' mercantilist approach that has reinforced developing countries suspicions that yet again they were being asked to give more than they would ever receive.

Many elements of the WTO process to date have caused great concern to trade unionists and all those who want to see genuinely sustainable global economic development. The potential devastating impact of proposals in the Non Agricultural Market Access (NAMA) talks on employment in 'middle income' developing countries, alongside the threat to public service provisions in both developed and developing countries posed by elements of the General Agreement on Trade in Services (GATS) negotiations, being just two of the most significant. These specific concerns were coupled with the fact that the key link between trade, labour standards and decent work isn't even on the agenda of this round, but the collapse of the talks in this manner is still a source of serious concern.

The WTO is an imperfect body, but it is at least a multilateral institution in which, in theory, all members, big and small, have a voice. A return to a system of regional and bilateral trade agreements risks giving powerful countries and trade blocs even more leeway to impose 'agreements' on others. Some of the limited measures already agreed at the Hong Kong Ministerial in December that would have helped developing countries such as an 'aid for trade package' and duty and quota free access for 97% of products from the least developed countries now risk of being lost altogether. The prospect in the longer term of a fair and sequenced opening of markets (including greater access to that of the US) for British goods and services, with the associated benefits to employment in the UK, are also greatly reduced.

No one can be sure how long the suspension of the round will last, it could be months or years, but it is to be hoped that in this time the parties involved will reflect on the intransigence that has led us to this position. The time now available should be used to focus on the key question of WTO reform and the refocusing of its agenda to add public legitimacy to the process of trade negotiations. First and foremost, there needs to be a recognition that trade talks and their outcomes do not occur in a vacuum divorced from their social, political and wider economic ramifications. To get the talks back on track people must be convinced that they are in their interests; we need to see proper impact assessments of the outcomes of proposals for employment and the poorest in society, far greater policy coherence between international organisations (specifically ensuring that the WTO doesn't take precedence over UN bodies like the ILO) and ensuring that trade rules don't encourage the pursuit of short-term advantage by destroying workers rights.

It is hard to see where progress will now come from, but unless we are to continue the slide into an ever more unequal and unbalanced form of globalisation with all the risks this entails in terms of increased poverty and global instability, it most come from somewhere. The TUC will continue to work with our international trade union partners and, in particular, our sister union organisations in the developing world and wider civil society globally, to make the case for real trade justice within an equitable multilateral trade system. We will also seek to ensure that where regional and bilateral trade negotiations take place any agreements contain strong social elements and, in particular, facilitate rather than undermine adherence to core labour standards by those countries involved.

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