Date: Wed, 27 Jan 1999 23:13:29 -0400 (AST)
From: Antoni Wysocki
To: all & sundry
Subject: WTO & other news from BRIDGES

Hi there,

The International Center for Trade and Sustainable Development has released Volume 3, Number 3 of BRIDGES, its weekly trade news digest. Two interlocking themes dominate : food issues and an upcoming "millenium round" of negotiations by members of the World Trade Organization (WTO).

As detailed in CLINTON SUPPORTS MILLENNIUM ROUND the US has now joined Japan and the European Union in seeking plenary discussions at the WTO. The US had previously favored a more narrowly focussed approach arguing that global talks were too cumbersome (read : made it more difficult for the US to "divide and conquer" states insufficiently compliant with Washington's agenda).

Several elements of the US proposal are worthy of note. First is the absence of investment from the prospectus. This, along with Bill Clinton's admonition that labor and environmental standards must be incorporated in new WTO disciplines, indicates that neoliberals are still smarting from the black eye dealt them in the MAI campaign.

Sadly, the foregoing provisoes are bound to be more cosmetic than real (though if investment is kept off the ledger that at least will be something). Moreover there is also outright bad news : Clinton wants a millenium round to strengthen intellectual property rights and to smash barriers to international traffic in genetically modified organisms (GMOs).

The former measure will be used to further American domination of the Internet by making technology transfers more expensive. At the same time it would serve to undercut possible advantages accruing to developing nations from their biotic diversity by facilitating the collection by multinational firms of royalties for life patents.

The latter aspect is also examined - but from the perspective of a developing country - in INDIA HEAL THYSELF. Acknowledging that increased foreign investment within India has produced an open season on the subcontinent's rich flora and fauna, officials quoted in the article stress the need for the national government to manage the commercial development of these organisms. Attention is given to the need to safeguard aboriginal societies but only insofar as these peole function as virtual dowsing rods ("they play a significant role in the identification of new medicinal plants"). Needless to say, the notion that autochthonous populations have any sort of prior claim to these plants (never mind questions of the plants' inherent, as opposed to instrumental, value, hence entitlement) does not arise.

The change with respect to GMOs is intended to make the world safe for biotech concernments (notably Monsanto) which have been coming under increasing attack from both the developing nations and the European Union. Another BRIDGES piece ( U.S. WARNS ON GMO TRADE) indicates the seriousness with which Washington takes this issue. Outrageously, the item quotes Clinton as warning signatories to a United Nations instrument (the Convention on Biological Diversity) that health concerns cited in the covenant will not be allowed to impede commerce! Of course, this really only amounts to spelling out the prime directive of the WTO...

Clinton's agenda bodes ill for advocates both of nationalistic economic policies and of secondary boycotts. With the glaring exception of intellectual property rights WTO work on issues proceeds in one direction only : liberalisation. If Clinton has his wish and government procurement is put on the table the result is apt to be still greater obstacles to domestic bias in public sector purchasing and further travails for those who try to weaken illegitimate regimes (such as Myanmar/Burma) by blacklisting their products.

BRIDGES also has Clinton counselling integration of the activities of the International Labor Organization (ILO), the Bretton Woods Twins and the WTO. One might hope that the ILO would serve as something of a check on the other bodies but I fear it is only likely to be used as windowdressing to give the appearance that the other institutions have mellowed.


From : BRIDGES Volume 3, Number 3 (January 25,1999)


U.S. President Bill Clinton last week called for a new round of multilateral trade negotiations and for measures geared toward "institution-building" at the WTO. The Clinton Administration favours a global trade round to last about three years, shorter than previous trade rounds such as the Uruguay Round that took seven years to complete. The U.S. would call for the launch of a new round when it hosts the Third WTO Ministerial in November-December this year.

The EU and Japan have already called for a Millennium Round of trade talks. The U.S. risked being politically embarrassed at the Third Ministerial, playing host to trade ministers but not supporting a global trade round.

Included on the U.S. Millennium Round agenda are agriculture (talks for which are already scheduled to begin late this year), elimination of discriminatory trade barriers against genetically modified food products, trade in services, further work on protection of intellectual property, a permanent ban on electronic commerce duties, and government procurement.

Further, the Clinton Administration said it would require that the talks ensure that labour and environmental standards are protected and that the WTO is more open and accountable. "We must ensure that ordinary citizens in all countries actually benefit from trade, trade that promotes the dignity of work, the rights of workers, the protection of the environment," Mr. Clinton said.

The Clinton Administration faces a major domestic hurdle to its Millennium Round agenda in that the president has been unable to win renewal of so called fast track negotiating authority. Fast track is critical to U.S. credibility at the negotiating table since trading partners are reluctant to negotiate with the U.S. if hard work can become unravelled in the Congress.

Democrats will not pass fast track without labour and environment linkage and Republicans vigorously oppose such linkage. Democrats have proposed a moderated version of fast track in which Congress would have the right to "check in" on trade negotiations, although such an approach could meet opposition from U.S. trading partners. The Clinton Administration, meanwhile, said that Millennium Round agenda could be achieved with or without fast track.

The Clinton Administration also announced that it would push for "institution building" at the WTO. Institution-building priorities include technical assistance to least developed countries; customs reform; trade and environment collaboration; better collaboration with the International Labour Organisation; and co-operation between the International Monetary Fund, World Bank, and WTO to improve world financial systems. U.S. Trade Representative Charlene Barshefsky noted also that the U.S. would focus on reforming the Dispute Settlement Understanding (DSU) in ways that promote compliance, noting that the current banana dispute highlights the need for such reform.

"Clinton Calls for New Global Trade Round Including Intellectual Property, Procurement," INTERNATIONAL TRADE REPORTER, January 20, 1999; "Back on the fast track," FINANCIAL TIMES, January 21, 1999; "Clinton seeks consensus on freer trade," JOURNAL OF COMMERCE, January 21, 1999; "Barshefsky indicates support for three-year WTO talks," INSIDE US TRADE, January 22, 1999.


As negotiators ready for the final round of biosafety accord negotiations, scheduled for Feb. 14-23 in Cartagena, Colombia, the U.S. warned that the accord should not interfere with trade in genetically modified organisms.

As part of the Convention on Biological Diversity (CBD) adopted at UNCED in 1992, it was agreed in 1995 that an international protocol on biosafety was needed to complement the CBD, to ensure the safe transfer, handling, use and disposal of living modified organisms (LMOs, often referred to as genetically modified organisms, or GMOs). At present there are no binding international agreements addressing situations where LMOs cross national borders. (See BRIDGES Weekly Trade News Digest, Vol. 2, No 33, August 31, 1998.)

The U.S. wants to narrow the scope of the protocol to include only GMOs that would be planted in the environment, and object to proposals made by a number of African and other developing countries to control imports on fruits, vegetables and even processed foods which contain GMOs. The U.S. argues that these products would be consumed directly by animals or humans and thus pose no risk to other (e.g. plant) species in the importer's environment. Ethiopia and other African countries also support labelling of products containing GMOs, a proposal with some support from the EU, but which is opposed by agricultural exporting nations including the U.S., Canada, Australia, Argentina and Chile.

Even if the labelling and import restriction provisions are included in the biosafety protocol, the Clinton Administration has said that the protocol cannot supersede countries' WTO obligations, and is reportedly pushing for language to this effect to be included in the protocol. U.S. and international environmental groups last month said in a letter to U.S. Vice President Al Gore that to include such language would undermine multilateral environmental policy. The groups urged instead that, since the WTO has admitted that it is not an expert on environmental matters, "the prudent recourse for the WTO would be to request the advice of the Protocol as to how to resolve a complaint related to the Protocol," rather than proceeding within the vacuum of WTO dispute settlement rules.

"Whether Biosafety Protocol Will Cover GMO Products or Organisms Is Key Issue," INTERNATIONAL TRADE REPORTER, January 13, 1999; "Environmental letter on Biosafety Protocol," INSTITUTE FOR AGRICULTURE AND TRADE POLICY, December 21, 1999; "U.S. fights to reduce impact of Biosaftey Protocol on GMO trade," INSIDE US TRADE, January 8, 1999.


India - home to more than 7,500 species of medicinal plants, is a leading supplier (along with China and Brazil) to the booming global market for medicinal plants, estimated to be worth US$60 billion annual. However, while the plants may provide a cure for what ails humans and animals, booming trade in medicinal plants could bring serious ills to the environment which fosters them.

"Not less than 75 percent of medicinal plant collection is from the wild and this inevitably leads to the destruction of biodiversity and genetic stocks," according to an Indian trade official. According to a study by the Exin Bank of India, medicinal plant collection leads to the deforestation of 165,000 hectares (about 425,000 acres) every year. At present nearly 100 medicinal plant species in India face extinction.

To maintain its position as a leading supplier of medicinal plants, observers note that India must adopt regulatory policies to encourage the sustainable commercial-scale cultivation of medicinal plants, lest 25 percent of its entire plant species become extinct within 50 years. At the same time, indigenous cultures must be protected as they play a significant role in the identification of new medicinal plants. Financial and technical support from foreign companies will also help promote sustainable commercial cultivation.

"India sees its opportunity as medicine returns to roots," FINANICAL TIMES, January 20, 1999.


The U.S. this week is expected to raise objections to safeguard provisions outlined in the patent regime India put forward last month to comply with a 1998 WTO ruling (see BRIDGES Weekly Trade News Digest Vol. 3, No 1-2, January 18, 1999). The U.S. objects to India's requirement of compulsory licensing, which the U.S. argues is only allowed when a product patent regime is in place, not for a process patent regime such as the one India put forward. Compulsory licensing would allow India to give companies licence to produce an otherwise patented good if it is necessary to protect public health and nutrition. "U.S. objects to EMR provisions," ECONOMIC TIMES (India), January 15, 1999.

In response to global economic turmoil and a proposed new round of WTO negotiations, the WTO is looking for ways to accelerate its accession process. The EU is reported to favour a so-called "accession round" of intensive accession negotiations. WTO Director General Renato Ruggiero has proposed extending provisional status to countries, affording them the benefits of WTO membership while they remain formally outside the WTO system. Currently 30 countries have membership applications pending. "Global economy: WTO seeks to speed up accession process," ECONOMIST INTELLIGENCE UNIT, January 19, 1999.

BRIDGES Weekly Trade News DigestŠ is published by the International Centre for Trade and Sustainable Development with support from the Institute for Agriculture and Trade Policy. Editor: Caroline Dommen, ICTSD, Geneva Executive Center, 13 ch. des Anémones, 1219 Geneva, Switzerland; email:; tel: (41-22) 917 8497; fax: (41- 22) 917 8093. Executive Director: Ricardo Meléndez-Ortiz, address as above, email:

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