The World Trade Organisation (WTO)
The WTO came into being on 1st January 1995 after the
completion of the General Agreement on Tariffs and Trade (GATT) Uruguay
Round in 1994. It is headed by its highest authority the Ministerial
Conference comprising member states and meets at least every two years.
The day to day operations notably dispute settlement procedures and
trade policy review are overseen chiefly by the General Council which
reports to the Ministerial Conference and a number of subsidiary bodies.
The WTO is not a part of the UN, nor is it a specialised agency of the
UN like the World Bank and the IMF. Although the WTO is a successor to
GATT, it covers not only areas pertaining to trade in goods but includes
trade in goods, services and ideas and knowledge systems. Unlike GATT
which is only an Agreement the WTO has a formal identity as an
intergovernmental organisation. It contains a framework for the
enforcement of rights and obligations to Agreements.
The WTO is the body that governs international trade.
It is the maker and enforcer of rules that limits every nation’s
ability to make its own laws and policies to protect its national
interests. It is thus vested with immense power and authority over trade
matters overriding nations and their right to sovereignty. The WTO
administers and enforces more than 20 international trade agreements and
its rules and agreements have an enormous impact on all facets of life
affecting nations and societies namely, in the economic, political,
social, environmental and cultural spheres.
WTO’s central premise is that global free trade
must not be impeded by national governments even if national laws have
been put in place to protect the environment, vulnerable groups and
social justice. National governments must apply the ‘least trade
restrictive measures’ to achieve environmental and health protection.
For example laws that allow a government to protect the environment, or
workers and consumer health; subsidies to promote energy conservation or
sustainable farming methods will be against free trade and WTO rules.
Under ‘nontariff barriers’ any measure that is not a tariff but
inhibits trade is forbidden by governments. In this manner, it becomes
illegal when governments ban dangerous technologies, contaminated or
toxic foods and products, and culturally unsuitable TV programmes and
films. What is even more alarming is that the WTO requires that the
future laws of all member states must also comply with WTO rules. Thus
national governments when promulgating new laws or amending them must
ensure that their national legislation conform to WTO rules. Under WTO,
all corporations must be given ‘national treatment’ which means that
national governments cannot give preference or favour domestic companies
and their citizens.
Thus under the WTO, the rule of governments are
weakened and the unfettered power of the transnational corporations are
strengthened. It serves as the government of the world order for
corporate interests. Although it is and inter-governmental body
comprising member states, it is the TNCs that sit on the important
advisory committees which decide policy and set the agenda. In the case
of the US, members of the Advisory Committee for Trade Policy and
Negotiations include IBM, AT&T, Bethlehem Steel, Time Warner,
Corning, Bank of America, American Express, Dow Chemical, Scott Paper,
Boeing, Mobil Oil, Amoco, Pfizer, Eastman Kodak, Hewlett-Packard,
Weyhauser and General Motors (Clarke 1996: 301-02). The US proposal for
an agricultural agreement was not only written by a Cargill senior
executive, but Cargill (the largest agricultural corporation in the US)
employees lead the US negotiations throughout the Reagan, Bush and
Clinton presidencies (Koivusalo 1999). WTO trade agreements have been
described as a bill of rights for corporate business.
The Dispute Settlement Body (DSB)
The WTO operates under rules of secrecy as the most
important negotiations are held behind closed doors among the cabal of
the most economically powerful nations from the North namely the US, the
European Union, Canada and Japan (also known as the Quad). WTO control
is carried out under the dispute settlement system. It is a very
powerful instrument to pressure governments to fall in line. The dispute
settlement is conducted by secret tribunals. Under the WTO Dispute
Settlement Understanding (DSU), administered by the Dispute Settlement
Body (DSB) the latter will establish a panel comprising normally three
persons who sit in closed sessions. These persons are bureacrats (not
elected officials) from member nations with expertise in trade policy
and trade laws only. The panel members upon receiving written
submissions from the parties in the dispute, will submit a report to the
DSB. When a party makes an appeal, it will be referred to the Appellate
body (AB) of seven members. The report of the AB has to be adopted by
the DSB (Das 1998:133). The panel will hear only the trade
representatives of the national government. Citizens groups, the press
or other non-commercial interests are not allowed in.
Thus should a dispute arise or an issue with
important health or environmental implications be challenged, the panel
of three has the authority to define and determine what is considered a
health or environmental issue in the context of competing trade
interests. Decisions of the panels are thus not made on the basis of
social and environmental judgements. For instance in the hormone beef
case, concerns of carcinogenicity based on studies carried out by the
International Agency on Research of Cancer (IARC) were dismissed as not
sufficiently specific for the purpose (WTO 1998). The WTO rules requires
conclusive scientific evidence of a risk before a trade in food products
can be restricted.
Once a ruling is made, the country which has lost its
case can change its national laws to conform to WTO rules; pay permanent
compensation; or face punitive trade sanctions from the other member
country. The DSB has had a record of ruling against health,
environmental and social concerns. These decisions invariably favour
corporate interests. Thus commercial considerations are deemed higher
than social and human rights and the laws of nations or international
laws that are in the public interests. Little wonder then that the DSU
is considered by no less than the WTO Director General as the ‘jewel
in the crown’ of the WTO system.
For example, in 1997 the WTO dispute settlement panel
sided with the US in its challenge to a European Union (EU) ban on beef
treated with growth hormones that have been scientifically linked to
cancer and other serious diseases. In a January 1998 appeal the WTO
upheld its decision ruling that the EU law violated WTO rules. In July
1999, the US imposed WTO approved retaliatory sanctions on the EU for
its refusal to accept US hormone - treated beef, slapping 100 percent
tariffs on $116.8 million worth of European imports including fruit
juices, mustard, pork, truffles and Roquefort cheese (Brown et al
2000a: 192).
The WTO Appellate Body had ruled that the EU ban was
not based on adequate scientific evidence. The EU’s defence was that
the ban was justified by the Precautionary Principle - a basic tenet of
international law. The Precautionary Principle allows countries to
protect their citizens based on scientific evidence of risk, but before
the scientific proof of harm is conclusive (Goldman & Wagner 1999).
The WTO’s rejection of the Precautionary Principle opens the
floodgates to public health and environmental threats and undermines the
ability of states to protect the environment and the health of its
citizens.
Recent developments have revealed that the DSU has
been used to tilt the balance against the South in a system which was
already highly skewed and imbalanced and unjust. Through a steady
process of interpretations usurping the authority vested in the WTO
Ministerial Conference and the General Council, the dispute settlement
system and its panels have with single minded purpose eroded the rights
of the South and increased their obligations. The interpretations of the
panels and the Appellate Body have further enhanced the rights of the
North especially the US. For example when the EC brought a case against
the US S.301 in January 1999 (The S.301 family of laws include Special
301 and Super 301 refers to Sections 301-310 of the US Trade Act of
1974), the panel ruled that while the US law was in violation of the
WTO, WTO members and the trading community could be satisfied with the
US administration which has given an assurance to Congress (which was
repeated before the panel) that in implementing the law it would do so
in a manner that is not in violation of its WTO obligations.
The WTO rules that every member must bring its laws
into conformity with the WTO. However instead of ruling that the S301
should be brought in line, the panel gives no finding or ruling on this
basis instead says the DSB can in view of the US assurances, accept it
and not make any recommendations to the US. This ruling is ‘so
blatantly based on politics rather than a legal interpretation of the
rules that it strengthens the view that the WTO is basically a power
based institution in terms of not only its negotiated agreements but
also their administration’ (Raghavan 2000:5)
The US had used a Special 301 Watch List to threaten
South Africa in April 1998 concerning its Medicines Act which the former
claimed had violated intellectual property rights; it also threatened
Thailand with Super 301 to prise open the Thai tobacco market and to
prevent the latter’s production of AIDs related drugs.
Health Implications
It can be seen that the WTO has far reaching
implications for health and health policy. Although broad public health
concerns are deemed to have been dealt with in the clauses on public
health, public order and slave labour set out in Article XX of the GATT
and its consequent elaboration in relation to sanitary and phytosanitary
measures (SPS) they are heavily biased towards trade considerations. The
nature of these public health measures is not defined and in the process
of dispute settlement, there is a danger that the decisions of the WTO
DSB will prioritise the interests of trade and restrict definitions of
what are considered public health measures, given the non-transparent
nature of the DSB and its partisan views.
The DSB panel may seek information from any relevant
source and consult experts and with respect to factual issues concerning
a scientific or other technical matter, a panel may request an advisory
report in writing from an expert review group. However, whilst expertise
on health and social policy issues may be heard in the panel discussion,
decisions of panels are not made on the basis of the judgements of these
experts (Koivusalo:1999; Rowson:2000), as can be seen in the beef
hormone case.
The WTO rules stipulates that in a trade dispute,
products must be compared to ‘like’ products regardless of the
methods or practices, which have produced them. Thus a country should
not exclude a product from its imports, even if they deem that the
production of that product involves risks to health, society or the
environment. For example, foreign beef imports derive from cows fed with
hormones or antibiotics must be treated as similar to beef without
hormones or antibiotics in them even when domestic laws ban such
practices. In the same manner, the US has argued that genetically
modified (GM) products are technically ‘like’ non GM products
especially in cases where GM organisms have been used in part of the
production process, so member states have no grounds for imposing import
restrictions. Similarly, products made by compromising labour rights and
or safety measures are considered to be identical to those which have
been produced with respect for these standards (Ibid).
The requirement to treat ‘quite like’ products as
‘similar’ even if they differ in fat, alcohol, salt, fibre, tar,
nicotine or any content whose level is important for health will
undermine government attempts to promote healthier diets and lifestyles.
Similarly, if countries restricted market access, imposed higher taxes
or set higher prices for products with negative health impacts eg
alcohol and tobacco, problems of discrimination will arise. For instance
the dispute between Japan and the European Commission on taxation of
alcohol resulted in a ruling that the price and alcohol content could be
considered as discriminatory if they set foreign producers at a
disadvantage compared to domestic producers (Koivusalo 1999). In the
case of the tobacco dispute concerning the lifting of import
restrictions on imports of foreign cigarettes, under GATT between the US
and Thailand, the panel’s definition of necessary measures gave way to
trade principles instead of public health and required Thailand to
abolish restrictions on cigarette imports (Kinnon 1998).
To date, the dispute settlement decisions have shown
that ‘least restrictive trade measures’ should be applied to address
public health and safety concerns. As a result, there appears to be
pressure to use labelling as a guide to matters of health concern e.g.
labelling of GMO foods in place of systematic regulatory mechanisms like
taxation, banning of access, advertising or use (Koivusalo 1999; Rowson
2000).
Although labelling can improve consumer choice and
address concerns about food allergens, its effectiveness remains
questionable, as in mass food catering, which will affect the ability of
consumers to make a choice and how labelled products will be dealt with;
and how much data can be presented on labels; and how far this
represents real and accurate information. Labelling puts the burden of
responsibility to regulate and make decisions on health and safety
issues on the individual thus undermining the responsibilities of public
health and environmental authorities to provide sufficient safeguards
covering production methods and processes used (Ibid).
The WTO has included many issues not pertaining to
trade but which are crucial to the economic interests of the North; for
example the Agreement on Agriculture (AOA); Trade Related Intellectual
property Rights (TRIPs); the General Agreement on Trade in Services
(GATs); and the Agreement on Technical Barriers to Trade (TBT). Although
the Agreement on the Application of Sanitary and Pytosanitary Measures
(SPS) relates to the protection of human, animal and plant health and
life, all the above mentioned Agreements have important implications for
public health and safety.
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