Monday, 28 January 2008

Thoughts on the Seattle to Brussels Network

Hi Karen,

Greetings from Athens. Thank you for forwarding to me the Statement of the Seattle-to-Brussels Network. There are a number of major conceptual and experiential problems with this statement and the noble sentiments it represents. I'd like to address of a few of these here, and I'd appreciate it if you could post my statement on the HELADA List Serve as well, in the interests of a balanced debate.

Very briefly, one of the largest problems facing living standards in the ACP region is not EU-South free trade, but South-South free trade. If we take the ACP region, which I have worked in extensively, most entrepreneurs and managers from that region are relatively happy with the trade agreements they get under Lome and its follow-up conventions. Where they cannot compete is with Chinese and Indian exports, which are simply too price-competitive. What they need is protection from WTO regional agreements, not EU-ACP conventions. Unless the statement is addressing food aid in the form of US and EU food products, which I agree is bad practise: it's better to use the money to buy local or regional products, with the goal of price equilibrium, rather than price-destruction through an external, cost-free increase in supply.

On the issue of "huge financial transfers from the EU to the South" and related development assistance: I'm honestly not convinced that this is the answer. There have been generations of bilateral assistance to the ACP region, yet the record of development is actually negative in inflation-adjusted terms. This means that if you took real GDP in 1960 and compared it to inflation-adjusted real GDP in 2007 in either market rate or PPP terms, you'd have a negative growth rate. Even if you remove factors such as the AIDS crisis and demographic change, the growth is well below comparative growth rates in other regions.


I'm also not convinced that the practise of direct transfers to ACP government budgets - as the British government has pioneered - is the answer. The record of corruption and instability is simply too high, and the risk of losing these transfers is a real threat. (We have examples closer to home that illustrate the dangers of pumping EU money into national accounts).

Having seen this first hand, as well as having read research on the issue, I believe that development aid and financial transfers will not solve the problem of living standards and basic food, health and hygienic needs in the ACP population. One of the main problems with such aid is that between 50-80% of the budget is usually tied to procurement of donor country or region expertise or products. Another problem is that the solutions promoted are usually "first world", rather than "third world".

I remember working on the state-owned Kafue Textile Mill privatisation in Zambia in 1993-1994: several donors had provided aid, resulting in a modern textiles mill, which for various reasons couldn't be maintained, and for which the stable outputs (markets) and inputs (ginned cotton) did not exist. Privatisation was decided as the only option for survival.

In Ethiopia, the World Bank, EU and several governments spent tens of millions developing national champions in the textiles sector. When we did an [unrelated] investment verification for UNIDO in Ethiopia in 1997, we found that used and new Chinese clothing was for sale in Addis Ababa at cheaper prices than Ethiopian inputs (cotton yarn and fabric) were. The donors had built another white elephant project, yet even if Ethiopia had achieved 100% self-sufficiency in textiles (i.e. buying only Ethiopian textiles), the national ouput that had been developed was still far too high. Donor-funded aid had developed over-capacity, with the result that competition was reduced due to excessive supply. As a result, the 10-odd companies in this sector faced major financial problems.

On the issue of agricultural competitiveness: the main factor to declining competitiveness in the ACP region besides trade barriers in developed markets (which free trade is supposed to address under WTO Doha), is local, endogenous factors: national taxation, investment in human resources (agricultural colleges and extension services), a reliance on low value-added products with a high spoilage rate, lack of transport, unreliable energy sources, a lack of regional markets, high corruption, desertification, lack of capital....the list goes on. Throwing open the gates of European agricultural markets are not a panacea. In fact, the ACP region should start focussing on exports and commercial partnerships with China and India, which are transforming the markets for agricultural products due to much higher demand. This leads to higher prices, which is the best solution for farmers in the ACP region.

The Lisbon Agenda is one of the most profoundly egalitarian treaties the EU has passed. We've done numerous analyses on this issue - I attach the Executive Summary of one of them on vocational education and training (I think I've already sent you this material). There is nothing sinister there. Don't forget that one point of the EU is the free movement of goods and people within the EU. Given that we are living in a global economy, where mobility of capital, labour and ideas is a given fact of life, I see nothing wrong with enhancing competitiveness of all EU citizens and companies. The non-governmental share of GDP in the EU is over 60% of the total, so promoting international competitiveness and a knowledge-based economy is a worthwhile goal.

Another contradiction in this platform is about free trade: we can't be selective about it. If we don't believe in the "neoliberal" EU trade policies, that means trade barriers against Chinese and Indian imports, and therefore barriers against all imports (including ACP imports). This will result in higher prices for EU consumers. What happens if the price of your airline ticket to the US doubles, or the price of your petroleum doubles, or the price of your iPod triples, or you can't shop at Zara anymore because the price of cotton fabric has quadrupled, or the price of gauze bandages in hospitals quintiples? The EU is merely seeking reciprocality in trade relations, which is not a bad thing. In the agricultural sector, it's true that this reciprocality favours the EU at present, but this is in the process of being negotiated, and the ACP producers already have quite a few exemptions.

Overall, I find this platform to be naive and ill-informed. We can all claim to want a better world, but we are all responsible for understanding the means we want to achieve such a world. I'm not convinced that what is written in this statement is the way to achieve this. Every single HELADA member is a beneficiary and exemplary of globalisation and free trade and the EU, and there are so many examples in daily life to prove this. It seems rather simplistic to say that we're going to turn our backs on generations of progress since 1958. It would be far better to make the incremental and policy-based changes needed to improve things, first of all based on a real understanding of what has been done.

I could go on to develop these ideas, but I'm afraid I'm out of time at present. It would be interesting to debate this in a proper context.

Best regards,

Philip

Statement of the Seattle to Brussels Network
http://www.s2bnetwork.org/index


Find attached the Statement of the Seattle to Brussels Network for the World Social Forum's Global Day of Action - 26th January 2008; please circulate it widely and distribute it in the actions and local forums tomorrow.


Alexandra Strickner
Institute for Agriculture and Trade Policy (IATP)
Berggasse 7
1090 Vienna/Austria
Tel: +43 1 3174014
Fax: +43 1 3174015
http://www.iatp.org/
www.tradeobservatory.org

*No to Corporate Europe - Yes to Global Justice!*

As members of the Seattle to Brussels Network (S2B), we are calling for concerted efforts to roll back the strategy of the European Union called "Global Europe: Competing in the World", the EU's unfair bilateral trade agreements and corporate power. We also reject the false solution of unfair multilateralism and the EU's proposals at the WTO, and a revival of the Doha Round in the exclusive premises of the World Economic Forum in Davos.

We, civil society activists engaged in a wide range of peoples'movements and organisations in Europe express our opposition and resistance to the neoliberal trade and investment policies that the EU governments and European Commission are implementing in our countries and worldwide. Simultaneously, we are also building the alternatives.

Global Europe: Serving European corporationsIn 2006, the European Commission (EC) unveiled its new Communication entitled "Global Europe: Competing in the World" which outlines how the EU will pursue bilateral trade agreements with major emerging economies in order to secure new and profitable markets for EU companies. While pushing for even more business-friendly 'domestic reforms', the EU sets out an aggressive so-called 'external competitiveness' strategy. As the EU Trade Commissioner puts it: "What do we mean by external aspects of competitiveness? We mean ensuring that competitive European companies, supported by the right internal policies, must be enabled to gain access to, and to operate securely in, world markets. That is our agenda.

"The core elements of this strategy are:

· Access to resources (from agricultural commodities to energy)
· New and better market access for European products
· Rules securing European investments and intellectual property rights

In addition to the ongoing multilateral WTO negotiations, the EU seeks these objectives by negotiating bilateral free trade agreements with the so-called emerging economies such as India, South Korea, the ASEAN states, and also Central America and the Andean Region. Russia, the MERCOSUR countries and the Gulf Cooperation Council are also on the priority list of the EU. The goal of these bilateral or bi-regional free trade agreements is to open and deregulate developing country markets for European companies, to increase their access to natural resources, particularly to energy reserves, and to secure their profits by enforcing intellectual property rights and other trade defence mechanisms.

This strategy not only undermines regulation in target countries. It also clearly links EU internal deregulation to this agenda. It says, for example, that future directives on social, labour or environmental issues for instance, should not be threatening the global competitiveness of European corporations. In this way, Global Europe poses a serious threat to social justice, gender equality and sustainable development not only outside the EU, but also within. The erosion of workers' rights, the worsening of the quality of jobs within the EU, the destruction of a sustainable model of farming is also intrinsically linked to the external EU trade agenda. With trade liberalisation across all sectors - agriculture, industry and services - the beneficiaries are a handful of corporations but millions lose their jobs.

Stop EPA campaign needed more than ever
Recently we met in Lisbon from 7-9 December 2007 to express our opposition to the "Africa-EU Strategic Partnership" and the so-called "Economic Partnership Agreements" (EPAs). These unfair trade deals based on an ultra-liberal perspective, threaten the livelihoods of millions of farmers and workers of both the African, Caribbean and Pacific (ACP) and European countries. We noted the historical and contemporary role of European governments and corporations in Africa, and stressed that Europe constitutes a direct source of threats and pressures on the peoples and the environment of Africa. During the last years ACP countries have been confronted with the reinforcement of policies through the EU's proposed EPAs such as trade liberalisation, the promotion of export-oriented economies, the liberalisation of capital markets, the promotion of foreign investment, and the privatisation of public services. These agreements are also motivated by the aspiration of the EU to secure or re-gain geo-political and economic influence in its former colonies.

In the last few months the EU and the EC have abused the expiration date of the Cotonou Treaty to apply pressure and push 20 ACP countries into signing very unfavourable "interim agreements". ACP Ministers, meeting in Brussels on 13th December 2007, have stated that the "European Union's mercantilist interests have taken precedence over the ACP's developmental and regional integration interests". The interim agreement on the liberalisation of goods trade have been rushed through in the last weeks on the basis of draft texts proposed by the EC that ACP negotiators have not been able to examine or amend properly. The result is devastating agreements, that contain onerous commitments on the side of the ACP countries and, among other things, do not offer adequate protection for Food Sovereignty and emergent industry. It is clear that the EC has deliberately crippled the interim agreements to maintain leverage to force the ACP countries to accept negotiations on the infamous liberalization of services and the 'Singapore issues' next year.

The Stop EPA Campaign must continue to undo these interim agreements and ward of further damaging EU demands.The EU's new external trade strategy is destroying our jobs, rights and environment.

EU policies based on so-called "competitiveness" and increasingly open and deregulated markets, have failed to deliver on sustainable development and social justice. Instead, tougher and tougher competition and trade liberalisation have lead to more insecurity, precarity, deteriorating salaries and working conditions, deepening inequalities between countries, regions and between women and men. This strategy also puts under threat environmental and health regulations.

For poor countries, market opening means the collapse of farming and industry in the face of unfair competition from European corporations - threatening the livelihoods of millions. Rural communities, often still a majority of the population in the targeted countries, will be particularly harmed as cheap, processed and subsidized agricultural goods flood developing countries' markets. Farmers, and particularly small-scale women farmers, who simply cannot compete with powerful European agribusinesses, will be driven off their land.

Trade chiefs from the EU and the United States warned recently that tackling climate change should not become an excuse for throwing up new barriers to foreign trade. Trade Ministers, whose decisions are perpetuating unsustainable modes of production, consumption and trade, are directly responsible for climate change. Global warming shows the failure of a development model based on unfettered economic growth, the irrational exploitation of fossil fuels, over-production, over-consumption and trade liberalisation.While the society has never been as conscious about the social and environmental crisis of the planet as today, the political class is still promoting "development-as-usual". Instead, we need a real paradigm shift.

We demand Climate Justice Now, with solutions including:

· Reduced consumption in the EU
· Huge financial transfers from EU to the South based on historicalresponsibility and ecological debt in order to support adaptation and mitigation costs
· Financing provided by redirecting military budgets, innovative taxesand debt cancellation
· Leaving fossil fuels in the ground
· Investing in appropriate energy-efficiency and safe, clean andcommunity-led renewable energy
· Rights-based resource conservation that enforces indigenous landrights and promotes peoples' sovereignty over energy, forests, land and water
· Sustainable family farming and peoples' food sovereignty

The Lisbon Treaty: the wrong solution to an undemocratic and unsocial Europe
We condemn the so-called EU Reform Treaty (Lisbon Treaty) which reinforces the power of the EC in matters of trade and development and further reduces the capacity of citizens to influence democratically its policies. The new treaty is deepening the neoliberal policies and the democratic deficit of the EU, perpetuating the power of transnational corporations and serving the interests of European capital, increasing the militarisation of Europe, strengthening "fortress Europe" and bringing no substantive protection to European citizens against the downward spiral in social and environmental standards.

The main substance of the antisocial character of the "Constitution"which was rejected in France and Holland, remains. The new Treaty will surely deepen the crisis of legitimacy. The Europe that is being built is a Europe of capital, that tries to defend the interests of its main economic and financial actors worldwide (entailing both alliances and tensions with the United States), guaranteeing also the same interests at home, over and above those of its peoples and the environment. And to do so, Europe needs a growing internal authoritarian structure, which will operate as a "fortress" for the migrants, based and coordinated on its reinforced nation states, and a "unified" and structured military might to project its economic and monetary-financial power worldwide.

We reject the externalization of borders policy of the European Union, the policy of detention, expulsion and deportation and the readmission agreements, the Frontex Program, which represents a huge investment in the militarization of borders control creating the basis for direct interventions in African countries and represents a real declaration of war against migrants.

Another vision for Europe: peace, sustainability, solidarity
Our purpose is to construct a world based on the concepts of peace, participatory democracy, social justice, human rights, sustainability, food sovereignty and peoples' rights to self-determination.

We aim at creating spaces to link current struggles, emerging grassroots resistance movements and alternative visions, and articulating social movements, NGOs, women organisations, trade unions, human rights organisations, farmers, ecological and indigenous movements, migrant and refugee organisations towards joint action and reflection.

We are calling for joint strategies to halt current negotiations seeking to implement "Free" Trade Agreements (FTAs) between Europe and the rest of the world; and consolidating the struggles against European transnational corporations, and deepening the process of constructing alternatives, to reclaim the right to food, education, health and other basic services.

We commit ourselves to strengthen interregional solidarity and cooperation among our social movements and organisations from all over the world against corporate power and all unfair bilateral trade and investment agreements. We commit ourselves to joint resistance against neoliberal policies and to build people-centred alternatives.In particular we continue to campaign together to

§ Stop the Economic Partnership Agreements (EPAs)
§ Stop the Global Europe Strategy
§ Stop all bilateral trade agreements
§ Suspend WTO negotiations and reconsider the multilateral tradingsystem as a whole
§ Support the Moratorium on Agrofuels and the fight against globalwarming and the energy crisis
§ Achieve freedom of movement for all peopleIn order to dismantle the power of transnational corporations (TNCs), we aim to:

§ Strengthen resistance against the operations of TNCs violating humanrights and playing a key role in the construction of the neoliberal global system

§ Expose the legal-political system and dominant institutions that serveand protect the interests of TNCs, including the FTAs and Bilateral Investment Treaties (BITS) that allow transnational corporations to operate with impunity§ Demand compliance to existing rules, the elimination of unfair laws,and progress on international regulations that respect the rights of people and the environment, with which TNCs and governments are required to comply

§ Provide tools to enhance the strategies of communities, socialmovements and organisations confronting TNCs and promoting alternatives that strive to dismantle their presence and judge their crimes.We will support policies in favour of solidarity, peace, the realisation of all human rights and the harmony between people and the planet.In the next months, we will use moments in the political calendar to link with the global justice movement:

§ The Global Day of Action of the World Social Forum on 26 January 2008
§ The UNCTAD XII meeting in Accra, Ghana (April 2008)
§ The Action Week on Global Europe and the EU-FTAs in Brussels and different European countries (April 2008)
§ The Peoples summit "Enlazando Alternativas 3" and the Permanent Peoples Tribunal Session on the occasion of the EU-LAC summit and the proposed "free trade zone" (Lima, Peru, 15-18 May 2008)
§ The Migration WSF in Madrid (11-13 September 2008)
§ The 5th European Social Forum in Malmö (17-21 September 2008)
§ The campaigns calling for referendums on (or against) the Lisbon Treaty


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