FROM DOHA TO JOHANNESBURG: GLOBAL GOVERNANCE
USURPED
The World Trade Organization's new mandate raises a key
question for next year's UN World Summit on Sustainable
Development: Who will decide our common future?
By Victor Menotti*

Exactly what was decided at the November 2001 WTO Ministerial
in Doha is still unclear, even for the 144 governments who signed
the final declaration. As of December, trade ministers continue
arguing over whether or not the final declaration actually launches
negotiations on the so-called Singapore issues (investment,
competition, government procurement, and trade facilitation). If
negotiation of these issues is recognized as officially launched, the
WTO may soon be able to prevent citizens from using their
governments to regulate foreign investment or to channel tax
dollars toward poverty alleviation and conserving natural systems.
Liberating global capital from serving the needs of people and
nature would represent the ultimate triumph for the world trade
body whose very mission is to exclude civil society from shaping
economic systems. Launching negotiations on the Singapore
issues would expand WTO's mandate to set global rules for both
private investment and public spending, two key sources of
financing development. If taken, these WTO decisions will have
enormous influence over the outcomes of the 2002 United Nation's
World Summit in Sustainable Development (WSSD, or Rio Plus
Ten) in Johannesburg .

But even without the Singapore issues, what has become
increasingly clear is the realization that governments gathered in
Doha handed the WTO an historic new mandate that will expand
its powers over fundamental questions whose answers will
ultimately define our common future. Unless civil society fights
back, Doha will have resolved the question of global governance,
with WTO becoming the arbiter of all things.

At the very least, the Doha agenda has empowered WTO to:
1. eliminate more conservation and community development
policies as unfair "barriers" to trade;
2. intensify destructive export activities in forestry, fisheries,
mining, fossil fuels, and other natural resources.
3. determine who gets the remnants of collapsing natural
resources, starting with the world's depleted fisheries;
4. define, apparently unilaterally, its relationship with multilateral
environmental agreements;
Below is an overview of the implications of the Doha agenda for the
following issues: energy, fisheries and forestry

While the oil and gas sector is largely exempt from current WTO
rules, the broader energy sector could be penetrated by WTO's
proposed expansion. To understand how WTO might cover the
energy sector, it is useful to look at how other existing trade
agreements have already handled the subject, as well as how
proposed expansions of WTO powers could advance into energy.

ENERGY IN OTHER INTERNATIONAL TRADE AGREEMENTS
Most relevant are the rules established by the United States for
Canada under the existing North American Free Trade Agreement.
NAFTA is widely considered to be the "state of the art" in trade
deals because it goes more deeply into restricting government
powers than any other agreement to date. As Maude Barlow
explains in the IFG Special Report "The Free Trade Area of the
Americas," NAFTA removed Canada's control over its vast energy
resources by:

• establishing rights for foreign companies to invest in the energy
sector;
• stripping Canada's National Energy Board of its powers and
dismantled the "vital-supply safeguard" that required Canada to
maintain a twenty-five year surplus of natural gas (the US
maintained its 25 year reserve for national security purposes);
• imposing a system of "proportional sharing" that guaranteed
Canadian energy
supplies to the US, in perpetuity;
• lifting requirements for export applicants to file an impact
assessment;
• banning export taxes (a major source of government revenue);
• banning preferential pricing for domestic customers.

As a result, Canada's exports to the US more than quadrupled in a
decade while oil exports doubled. Now, President Bush is
preparing to deepen access to Mexico's energy resources via
expanded NAFTA talks. The US has also introduced this energy
policy framework throughout the hemisphere, covering Venezuela,
Colombia, Ecuador, via the so-called Free Trade Area of the
Americas (FTAA). Building acceptance of this agenda in regional
trade fora is important for introducing the topic, and similar agenda,
at the global level in the WTO.

INCREASING FOSSIL FUEL USE BY EXPANDING WTO
WTO's could penetrate the energy sector by either creatively
expanding existing agreements, or by introducing new subject
areas for negotiation. Below are three negotiating themes
(Services, Investment, and Competition) currently in the WTO, in
which new rules over energy and oil could expand to remove the
ability of citizen's to use their governments to control the oil and
gas industry.

ENERGY AND GATS
The General Agreement on Trade in Services, or GATS, is an
existing accord in the WTO which is mandated to restrict
government actions in a broad range of "services" via WTO-
enforced trade sanctions. The WTO's current work plan calls for an
expansion of GATS, and negotiators in Geneva have been
proposing which sectors might be covered in an expanded set of
rules.

Even before September 11, US President George W. Bush had
made accessing new energy resources a top priority in his
administration's new energy plan. The Bush White House has
explicit plans to use GATS negotiations to widen access to gas
and oil reserves. The key policy document (see
www.bushenergy.com) laying out the policy goals and strategies
reads, "The US has called upon WTO members to open markets
eligible for private participation in the entire range of energy
services, from exploration tot he final customer. The energy
service proposal would ensure non-discriminatory access to foreign
provider energy services. Equally important, the US proposal
suggests that WTO members consider how to create a pro-
competitive regulatory environment for energy services, so that
opaque or discriminatory regulatory practices do not undermine
their commitments to open their domestic markets to foreign
service providers...The National Energy Policy Document (NEPD)
group recommends that the President direct the Secretaries of
Commerce, Energy, and the US Trade Representative, to support a
sectoral initiative to expand investment and trade in energy-related
goods and services that will enhance exploration, production, and
refining, as well as the development of new technologies."

Canada has already submitted the following proposal to WTO
Energy Services negotiations:

"oil and gas services include a wide range of services, such as:
drilling services; derrick erection; repair and dismantling services;
services necessary for oil or gas extraction such as well casing;
cementing, pumping and plugging wells; as well as specialized fire
extinguishing services...In addition to services incidental to mining,
different related oil and gas services may be included in real estate
services, rental/leasing services, technical testing and analysis
services, services incidental to energy distribution, related scientific
and technical consulting services, and construction and related
engineering services...

"Typical obstacles to trade in energy services include:
-restrictions for the entry and stay of energy services managers,
professionals and experts;
-restrictions for the entry of the equipment and tools needed to
provide the service;
-arbitrary business and licensing requirements; and
-absence of transparence of regulatory framework."

It is clear from GATS energy proposals such as the one above that
nearly everything related to oil and gas is on the negotiating table
in Geneva. One only needs to compare how these "services"
compare with those of the world's largest players in the industry,
such as Halliburton Energy Services, formerly overseen by Dick
Cheney until he became Vice President in the Bush White House.
Halliburton describes itself as a company whose "capabilities
range from initial evaluation of producing formations to drilling,
completion, production enhancement and well maintenance."
Enron Corporation, another leading energy services giant, until its
spectacular collapse in November 2001, also played a leading role
in advising the Bush negotiators on how to advance the fossil fuels
agenda via the WTO.

ENERGY AND INVESTMENT
The Bush energy plan goes on to say that, "The NEPD group
recommends that the President direct the Secretaries of State,
Commerce, and Energy to use our membership in WTO to
implement a system of clear, open, and transparent rules and
procedures governing foreign investment, to level the playing field
for US companies overseas and to reduce barriers to trade and
investment."

A proposed expansion of WTO investment rules is an important,
yet still disputed, part of the WTO's new Work Programme.
Among other things, the new WTO investment agenda aims to:

- establish the right of foreigners to invest in any sector, including
energy;
- establish the right of foreign investors to receive the same
treatment as domestic companies, so-called National Treatment
(which WTO currently applies only to goods an services, not
investments) Any benefit offered to domestic companies, i.e.,
preferential tax breaks or interest free loans, would also have to be
made available to foreign investors. Other restrictions, such as
Venezuela's recent limits on joint ventures and foreign ownership
would likely be banned;
- establish rights for foreign investors in the event of privatizing
state-owned assets, whereby they would be offered terms no less
preferable than those offered to domestic investors;
- ban performance requirements, which are measures that make
foreign investors leave on certain outcomes, such as retaining a
portion of profits to be reinvested domestically, or operating for a
minimum period of time.

An important question to ask in considering these issues is, for
instance, how might major foreign investors gain new leverage over
the country's control of its own energy supplies when new WTO
investment rules are applied? Under the new WTO investment
rules, authorities charged with regulating foreign investment, such
as the Supreme Council on Investment in Saudi Arabia (who is
currently bidding for WTO entry) or Venezuela's foreign investment
review board, could become politically irrelevant.

ENERGY AND COMPETITION
WTO's competition agenda could eliminate government practices
that protect national monopolies, both state owned and private, for
example Petroleros de Venezuela, Mexico's PEMEX, or Aramco of
Saudi Arabia. To promote competition, WTO would impose
disciplines on what governments can and can not do, including
activities of state-owned businesses, resulting in the break up. The
benefits of exploiting those energy resources would be transferred
from nations like Mexico and Venezuela to global energy
corporations. American and European energy companies would
surely consolidate their power over these resources, making harder
to challenge their manipulating the debates over global climate
change.

FISHERIES
The world's fisheries are spiraling into total collapse due to
overexploitation by industrial trawlers that literally mine the oceans.
The European Commission says that at least 12 different fish
stocks were now close to collapse and that dramatic cuts in
quotas are imminent. Governments have finally acknowledged that
their subsidies have played a central role in financing the enormous
over-capacity in the industry. However, their plan to address what
is arguably the planet's most advanced natural resource collapse is
to extend WTO disciplines over the industry, incorporating various
elements of the Doha agenda: expanding exports (tariff
elimination), de-regulation (non-tariff measures) wider access to
fisheries resources (competition), privatization of fishing quotas
(investment), and scaling back government financing (Subsidies
and Anti-Dumping).

The last item is of particular concern because it establishes a
dangerous precedent for the WTO to become the arbiter of natural
resource collapses and determine who will benefit from the
remnants (See "Subsidies" below).

FISHERIES AND MARKET ACCESS
WTO's market access agenda combines two dangerous impacts
that undermine sustainable fisheries: 1) the expansion of exports
and consumption of fish whose stocks are possibly being depleted,
and 2) the deregulation of legal protections that ensure the
sustainability of fisheries and the local communities who survive off
them.

1. Tariff Elimination: Lowering tariffs in the absence of adequate
safeguards for marine ecosystems and fisher peoples will only
accelerate the death spiral of the world's fisheries. No one has yet
assessed the health impacts on species that are being prioritized
for tariff elimination, yet day after day the UN Food and Agriculture
Organization finds more bad news about dwindling stocks. Nor
has anyone even consulted the fishing communities themselves,
such as the Pacific Coast Federation of Fishermen's Associations
in the US or the National Forum of Fishers in India, about what
issues they want addressed in trade policy. It seems the only
ones who are aware of the WTO fisheries agenda are the very
importers, processors, and distributors who are driving the agenda
for market access via the WTO. For them, eliminating tariffs would
be tantamount to a tax cut on the goods they trade, with no
guarantees that the savings get passed to consumers.

2. Non Tariff Measures: NTMs can be any government measure,
policy, or practice that has the effect of "distorting" trade, such as
harvesting restrictions, bans on destructive gear, embargoes on
species suspected of disease, residency requirements (fish here,
live here), or even ecolabels. APEC has already surveyed the
various NTMs in Pacific Rim markets, with a view to taking it to
WTO as a framework for negotiations on market access.
Governments have yet to make this report public, as it could reveal
a laundry list of regulatory measures being targeted for elimination
via WTO negotiations. The NTM agenda is the final push to remove
all government control from regulating fisheries, where any policy
objective, such as resource conservation or community
development, becomes subservient to expanding trade.

FISHERIES SUBSIDIES
This item on the Doha agenda, which at first glance may appear
innocuous if not helpful, could turn out to be the tip of a corporate
iceberg bound for capturing the remnants of the planet's collapsing
resources. While governments absolutely need to cut subsidies
and reduce overcapacity in the fishing industry (too many boats
chasing too few fish), the WTO is not the appropriate venue to
handle this subject. Letting a trade body, whose main constituents
are global trading firms and not people tied to the land and sea,
decide which subsidies are allowable almost ensures that what
happened with small farmers under WTO's last round will now be
repeated with the world's small fishers.

Beyond WTO's well-documented history of cutting subsidies for the
poor while further enriching the rich, the true WTO agenda for
fisheries subsidies is revealed by who has been at the table in the
discussion to date. Attempts by national networks of fisher
peoples organizations to get to the table have been ignored, while
the US trade association of importers, processors, and distributors
(the National Fisheries Institute) has long been an official advisor to
US trade negotiators. Few NGOs wanted to give the WTO
anything that would expand its powers over new areas of
policymaking, let alone allow WTO to greenwash its image. Yet
that is exactly the spin out of Doha, as WTO claims a "win-win" for
trade and environment.

The World Wildlife Fund seemed to play the leading role in putting
fisheries subsidies on the WTO agenda, despite being informed
repeatedly of the concerns of small fishermen's organizations.

The Doha text inserts the subject of fisheries subsidies under the
section calling for the strengthening of the Agreements on
Subsidies and Countervailing Measures (Anti-Dumping). But it has
no explicit conservation mandate, nor even an implied one. Indeed,
its only specific directive is the "taking into account the importance
of this sector to developing countries," which likely signals an
orientation toward maximizing exports of fish products from poor
countries, where, not coincidentally, rich countries are increasingly
investing in fisheries because they have over-fished their own
territories.

Subsides disciplines via WTO is a subject also being considered
by other natural resource industries, including forestry. The US
forest industry has already asked the American government to
document the role of subsidies in the global industry, building the
case that other nations enjoy an unfair advantage. Depending on
how the fisheries subject develops, other industries may be
encouraged or discouraged from introducing their agenda into
WTO. One can compare it to asking hedge fund managers to
design a new architecture for global finance. This prospect is
precisely the danger of giving the WTO new mandates to sort out
ecological crises that have been the direct results of export-
oriented development policies.

FISHERIES AND INVESTMENT
One of the most rapidly advancing domestic policies for dealing
with depleting fisheries is the creation of so-called Individual
Transfer Quotas. ITQs' effectively privatize fisheries, making
possible an enormous concentration of resources if combined with
the WTO's investment agenda. By dividing up the allowable catch
of a fishery into quotas, and giving individuals the right to either
catch those fish or sell the rights to someone else who will. Many
fishing communities, especially small fisher people, criticize ITQs
because they privatize the catch and concentrate resources in the
hands of the one with the most purchasing power, which can often
be a multinational enterprise. In some places where ITQs are
being implemented at the nation level, parliaments are attaching
conditionalities to ensure large players do not swallow up
everyone's quota. But when WTO's investment agenda is applied,
many of these conditionalities will become viewed as barriers to
free investment that need to eliminated. The safeguards that made
fisheries privatization palatable at the national level could be made
illegal in the global policy arena of WTO.

FISHERIES AND COMPETITION
Many nations still prevent foreign entities from fishing in domestic
waters, either protecting them for local fisherpeople, or, more likely,
for domestic industrial fishing operators who export, such as in
South Africa. WTO's competition agenda could break-up these
domestic monopolies, removing local control to allow the entry of
foreign fishing ships.

FORESTS
FORESTS AND MARKET ACCESS
Tariffs: One of the issues of great concern to protesters in Seattle
was the Global Free Logging Agreement. Forest and trade
campaigners succeeded in getting the USTR to publish its first ever
environmental assessment of trade liberalization before 1999
Ministerial.

Non-Tariff Measures: NTMs are broadly defined as any measure
that "distorts" trade. Even potentially distorting measures, such as
eco-labels, are under the microscope for the impacts on trade.
APEC has inventoried so-called NTMs in the forestry, fishery, and
other sectors throughout the 34 nations of the Pacific Rim. The
USTR plans to use this laundry list as a "negotiating framework" for
market access talks in Geneva.

In the midst of Seattle's teargas and police riots, forest activists
managed to extract a written commitment from the White House
that forest conservation measures would be defended in trade
negotiations. Not only does the Bush White House need to follow
through with that promise but other governments need to take up
similar positions, less of cross-deregulation that will "discipline"
everything from harvesting restrictions to residency requirements to
endangered species protections.

Another fundamental question for all natural resource management
is how to conserve ecosystems and livelihoods when one can not
control what is entering and exiting the country? WTO's Article XI
(Elimination of Quantitative Restrictions, or QRs) prevents nations
from limiting both the export and import of natural resources (either
raw or processed). North America's forests and forest workers are
feeling the impacts of the QR ban. Canada's rampant clearcutting,
failure to enforce protections for fish habitat, absence of protections
for endangered species, and subsidized timber from public lands
make it nearly impossible for US producers to compete. As
Canadian softwood exports flood the US (making up one-third of
the US market), small US mills are being driven out of business
while forcing the survivors to log even more recklessly. US
measures to impose countervailing tariffs and quotas are being
challenged by Canada in the WTO. If producers from a nation as
rich and powerful as the US can not survive, how then are smaller
(and often more responsible) producers in less powerful nations
expected to survive. WTO's ban on QRs punishes responsible
producers while rewarding the most destructive.

* Victor Menotti is with the International Forum on Globalisation.

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