November 2005

Notes:

[1] I have benefited greatly from discussions and comments provided by Roberto Lavagna, Guillermo Nielsen and Pedro Lacoste. I am particularly thankful to José Costa and Cecilia Todesca Bocco for their insightful suggestions. This article, however, expresses only my own personal views. The author is Executive Director at the IMF for the Southern Cone countries.

[2] See Independent Evaluation Office (IEO), "Report on the Evaluation of the Role of the IMF in Argentina 1991-2001", July 2004. Available at:

[3] The paper was drafted in September 2005.

[4] "Performance Criteria" are mandatory targets, i.e. variables or measures whose observance or implementation is established as a formal condition for the making of purchases or disbursements under a Fund arrangement. Performance criteria should be applied to clearly-specified variables or measures that can be objectively monitored by the staff and are so critical for the achievement of the program goals or monitoring implementation that purchases or disbursements under the arrangement should be interrupted in cases of nonobservance (based on "Selected Decisions and Selected Documents of the International Monetary Fund", Twenty-Eight Issue, December 31, 2003, Use of Fund Resources, page 238).

[5] According to "Guidance on the Design and Implementation of IMF Conditionality, June 3, 2002" instruments such as prior actions or performance criteria are "to be used sparingly and should be focused on those measures that are necessary for the achievement of the macroeconomic goals of the program and to safeguard Fund resources." (emphasis added). Unfortunately, as we will discuss further, this is far from being the practice.

[6] Mr. Eduardo Duhalde was Argentina’s President between January 1, 2002 and May 25, 2003. He was elected by Congress at the climax of the crisis and after the resignation of President De la Rúa and three other ephemeral successors.

[7] Incidentally this was presented as a sort of prior action on the part of the Fund to enter into formal discussions with Argentina on an economic program to be supported by the Fund. The prior action was met but, nevertheless, the year 2002 passed by and Argentina was unable to get the desired support during this most critical time of its economic history, despite the fact that the key macroeconomic indicators were already pointing in the right direction.

[9] According to Argentina’s constitution each province is represented by three senators, regardless of its number of inhabitants (Article 54 of the Argentine Constitution).

[10] Since 2003, the Government has accomplished primary fiscal surpluses (at the National Public Sector, i.e., including provinces) well above 3% of GDP.

[11] During the crisis, several provinces issued provincial bonds that were circulating together with the peso in Argentina’s territory. The federal government withdrew these cuasi-money and the provinces remain indebted to the federal government.

[12] The government suspended the pursuance of this performance criterion when it came to the conclusion that achieving it attempted against its decision to put together an ambitious primary surplus

[13] Please find attached at the end of this document the net payments figures for Argentina to the IFIs as well as the net payments to the IMF from Argentina and other emerging markets.

[14] Nouriel Roubini and Brad Setser depict two moral hazards, as IMF lending to manage debt crisis could be interpreted as a form of "insurance" that could "encourage reckless policies in emerging economies (debtor moral hazard) and reckless lending by creditors in industrial countries (creditor moral hazard)", Bailouts or Bail-ins? Responding to Financial Crises in Emerging Economies, Institute for International Economics, Washington DC, August 2004, page 77.

[17] I acknowledge that some potential creditors, in particular professional investors, may be willing to take advantage of the short-term bonanza that could follow a debt-restructuring proposal that defaulted creditors could find particularly appealing. However, they will surely be ready, at the same time, to quickly revert their positions at the first symptoms of distress that would likely appear at the first hint of the country’s difficulty to borrow enough to honor its restructured commitments.

[18] The "careless promisor" attitude is a breach of good faith in itself. In French civil law, the "overriding rule is that ‘one must not create the expectation that a contract will be forthcoming unless one so intends’". Very much in the same line, in German law, Jhering, the undisputed father of the doctrine of "Culpa in Contrahendo" (loosely translated as "fault in negotiating"), considers that a "careless promisor", namely a party making promises that are unlikely to be fulfilled, would be acting with "lack of diligence". It follows that a "careless promisor" would be acting in bad faith and, therefore, liable.

[19] Guidance on the Design and Implementation of IMF Conditionality, June 3, 2002.

The Monumental Struggle for Trade Justice

A pre-occupation with ‘free trade’ and ‘liberalization’ by the powerful members of the World Trade Organization, as opposed to respect for people and their welfare, makes for a narrow view of priorities, according to the UK-based World Development Movement. And it leads to a perverse set of rules. WDM’s Head of Policy, Peter Hardstaff, looks at what’s at stake at the WTO in the following article. He notes that rich countries’ development history was characterised by economic advances resulting from industrial policy; in other words, government policies aimed at boosting the competitiveness and success of domestic businesses. Yet the same is now sought to be denied top developing countries and that too, in a so-called development round of trade negotiations.

Europe’s Trade Commissioner Peter Mandelson has a "passion for trade justice", or at least so he claimed in early October. While it may be easy to laugh-off the faux sincerity of New Labour’s alleged ‘king of spin’, his appropriation of the ‘trade justice’ message presents a major challenge.

What is trade justice?

As ‘trade justice’ becomes increasingly well recognised, it is vital that we explain what it means. Contrary to Peter Mandelson’s version of reality, trade justice is about regulating trade to benefit people and the environment, not more liberalisation.

Yet the focus of the World Trade Organisation (WTO) and powerful members like the EU, is solely on liberalisation. In the name of market forces, WTO rules elevate above all else the goal of eliminating so-called ‘distortions’ or ‘restrictions’ on trade.

But since when has this been a guiding principle on which we base our societies? You can have human rights – as long as they don’t distort trade; workers rights – on condition that they don’t distort trade; environmental protection – but not if it distorts trade; development – fine, if it is not trade-distorting.

Such a narrow view of priorities leads to a set of perverse rules (see below). And the current round of talks is aimed at tightening them yet further which could be a disaster for the world’s poor.

Re-writing history

The ‘end of history’ – as proclaimed by author Francis Fukuyama in 1992 – was supposedly the ultimate triumph of western style free market capitalism. However, the real triumph seems to have been convincing people that rich countries really developed and grew wealthy through free markets and so-called ‘free trade’.

The reality is very different. Rich countries’ development history was characterised by economic advances resulting from industrial policy; in other words, government policies aimed at boosting the competitiveness and success of domestic businesses. The same is true of more recent developers such as Taiwan or South Korea.

So far so obvious, but the problem is this: once countries get rich and their companies globally competitive, those at the helm develop amnesia. They decide that so-called ‘protectionism’ is a bad thing and must be stamped out. They develop a near theological belief in free markets and become vociferous cheerleaders for what they call ‘free trade’.

This is because the best way of protecting the interests of many European companies is now by promoting so-called ‘free trade’ and stopping other countries from using the same policies we used to develop. As one writer has described it, now that we have reached the top, we want to kick away the ladder to stop others following us.

So rich countries – including our own – are telling poor countries to liberalise more in order to develop; this is despite the fact that we did the opposite when we were developing.

Now, such a stunning and audacious bit of hypocrisy might not be such a problem if it constituted a bit of friendly – albeit erroneous – advice over a pint in the pub. However, poor countries are caught in a pincer movement by the industrialised world.

On one side they have the IMF and World Bank requiring more liberalisation in return for aid, loans and debt relief.

On the other, they have got rich country pressure to ‘lock-in’ these policies through the WTO, most obviously through the ‘grand bargain’ being demanded. That is, some agricultural reform in Europe and other rich countries in return for liberalisation of industrial products and services in the developing world.

The grand bargain at the WTO

In the run up to, and at the December WTO Ministerial meeting in Hong Kong, there is a danger that getting a deal – any deal – becomes more important than whether or not that deal will benefit the poor.

If a deal is done, it will no doubt involve some degree of agricultural reform in Europe. No doubt Peter Mandelson will go into spin cycle, claiming this as a massive victory for developing countries. Yet it will be quite possible for positive outcomes in agriculture to be far outweighed by negative outcomes in industrial goods or services liberalisation.

The EU has made it crystal clear that it wants developing countries to open their markets to European service multinationals and European industrial products in return for agricultural reform.

This ‘bargain’ is a false one.

Reforming Europe’s Common Agricultural Policy will not have a long-term impact on development policy options in Europe, nor will it affect the lives of most Europeans. If done properly, it could benefit the environment, protect the livelihoods of small farmers and it may also benefit consumers.

It is a policy change of a completely different magnitude to prohibiting developing countries using import taxes and investment regulations – policies critical for long term development. It is a disgrace that our politicians argue that these policies should be ‘given up’ so that Europe can be ‘compensated’ for the mythical economic ‘pain’ it is claimed Europe will suffer as a result of agricultural reform.

Fighting for trade justice

At September’s UN summit in New York, Tony Blair said that he would not accept failure in the trade talks without a ‘monumental struggle’. But the questions are: on whose behalf will Tony be struggling and what does he define as failure?

The Prime Minister and his ally European Trade Commissioner Peter Mandelson are using the language of ‘development’ and ‘trade justice’ to justify doing the bidding of European multinationals in pushing for sweeping liberalisation in developing countries in return for agricultural reform in Europe. So we, not they, are the ones faced with a monumental struggle; to challenge our government on what it does, rather than what it says.

(Prof Dani Rodrik,

Harvard University)

"The outcome [of the negotiations] will be judged by the extent to which developing countries achieve greater market access without their policy options being restricted."

(Rubens Ricupero,

former Secretary General,

United Nations Conference on Trade and Development)

Timely Demise for Free Trade Area of the Americas

For the protagonist of free trade and those who champion development first, the fourth summit of the Americas, held earlier this month at Mar del Plata on the Argentinean coast, it was clearly a showdown. A recent report by Laura Carlsen of the US - based International Relations Center (IRC) sums up what happened. Based in Mexico City, she directs the Americas Program of the IRC. "The death of the FTAA opens up room for the nations of the region to explore alternatives to a model that has lost support both among governments and civil society," writes the author. Presented below is her recent article.

The stage was set for a showdown. When the Bush cabinet announced intentions to revive the moribund Free Trade Area of the Americas at the Fourth Summit of the Americas in Mar del Plata, the countries of the Southern Common Market closed ranks to prevent it. What followed was a diplomatic melee that reflects not so much divisions within Latin America, as a growing resistance to the current free trade model throughout the developing world.

The November summit was officially billed as a forum to discuss employment, and the issue of creation of a Free Trade Area of the Americas was not even on the agenda. However, well before landing in the Argentine beach town the Bush administration made clear its intentions to leave with a specific commitment to restart negotiations.

The U.S. government was determined to come out of the meeting with a revitalized FTAA because the administration feared that if the negotiations were left to languish, momentum could be lost for the initiative at a crucial time. The FTAA was first launched by George W. Bush’s father, but after ten years of inconclusive talks and significant differences between the countries, the goal of a hemisphere-wide NAFTA remained elusive.

Since the FTAA meeting in November of 2003, when the two co-chairs United States and Brazil failed to agree on a basic model, substantive talks have been suspended completely. Against the backdrop of the upcoming December meeting of the World Trade Organization in Hong Kong, where disagreements similar to those that have held back the FTAA will be prominent, the United States wanted a formal statement of common purpose from its own hemisphere.

The administration has also presented its pro-business trade strategy as an essential pillar for democratization and freedom in developing countries. Latin America has been moving to the center-left recently and upcoming elections point to an even further shift left. Venezuela’s Hugo Chavez has become a lightning rod in the region for criticism of the Bush government, which flared after the invasion of Iraq. In this context, Washington hoped for a clear affirmation of loyalties among nations of the Americas .

These hopes were dashed in Mar del Plata. Despite the efforts of Mexico’s President Vicente Fox to push through a commitment to FTAA talks, the 34 nations represented in the Organization of American States (OAS) failed to reach a consensus on renewed negotiations due to the firm resistance of the four nations of the Mercosur and Venezuela .

Given the impasse, in a last-ditch diplomatic move worked out after several presidents including Bush had already left the Summit, paragraph 19 of the final declaration split into two positions.

Twenty nine countries stood behind the resolution that they would "remain committed to the achievement of a balanced and comprehensive FTAA Agreement that aims at expanding trade flows …" These nations resolved to "instruct our officials responsible for trade negotiations to resume their meetings, during 2006, to examine the difficulties in the FTAA process, in order to overcome them and advance the negotiations within the framework adopted in Miami in November 2003."

The second position, put forth by the four nations of Mercosur—Brazil, Argentina, Paraguay, and Uruguay—plus Venezuela, states: "Other member states maintain that the necessary conditions are not yet in place for achieving a balanced and equitable free trade agreement with effective access to markets free from subsidies and trade-distorting practices, and that takes into account the needs and sensitivities of all partners, as well as the differences in the levels of development and size of the economies."

Mercosur’s Position

The nations of the Mercosur took a stand against renewing FTAA talks to declare their opposition to free trade agreements along the NAFTA model that do not take into account the needs of developing countries while locking in competitive advantages for developed nations. Since the WTO meeting in Cancun in 2003 the focal point for Brazil has been the question of agricultural subsidies. Brazil has called for elimination of all agricultural export subsidies in the United States and the European Union and a schedule for review and elimination of trade-distorting domestic subsidies. The United States has made it clear that it will not enter into a discussion of its agricultural subsidies in the FTAA, so Mercosur refused to agree to further negotiations.

Agricultural subsidies are not the only bone of contention. Other issues have also impeded progress and caused Mercosur members to question the long-term value of the FTAA. While the United States demands almost unhampered access to Latin American countries’ markets, it maintains protectionist barriers in many of the same products exported by their countries, including sugar and textiles. Unrestricted U.S. imports could destroy poor country sectors currently serving the domestic market. Intellectual property and the resulting barriers to access to life-saving medicines, government purchases, and investor guarantees are other areas that have been sticking points in negotiations and that are extremely sensitive to developing nations.

Both Brazil and Argentina announced before the summit that they did not want to discuss FTAA prior to the World Trade Organization meetings in December. Brazil, in particular, prefers the WTO for trade negotiations because there it can leverage the power it has built up since leading the still-strong Group of 20 developing countries at the WTO ministerial in Cancun in 2003. Alliances with emerging economies of India, China, Africa, and Latin America gives Brazilian trade negotiators a far broader base to confront the United States and the European Union on subsidies. As it plans to stage its battle at the WTO, Brazil did not want its hands tied by a commitment to an FTAA.

Dead, Dying, or Reincarnated?

Many analysts on both the right and the left have insisted in the FTAA post mortem that the patient is not dead.

At a time when the Bush administration is encountering serious problems—from the illegal exposure of a CIA agent to mounting opposition to the war—the last thing needed was to present Mar del Plata as a defeat. Although Sec. of State Condoleezza Rice was visibly upset at the refusal to commit to FTAA, the official U.S. press statement on the summit stressed agreement on a number of specific U.S. proposals and did not even mention the FTAA setback.

Despite Summit events, proponents cite the advance of bilateral free trade agreements as evidence that U.S. free trade strategy is still alive and kicking in Latin America. The model defined by NAFTA in 1992 continues to be the template for a growing number of free trade agreements. Central American nations and the Dominican Republic have entered into a free trade agreement (CAFTA-DR) and the Andean nations are now in the fourteenth round of difficult negotiations. Chile signed the U.S.-Chile FTA two years ago.

They also point out that in Mar del Plata 29 countries called for FTAA talks in 2006, and only five cited a lack of adequate conditions for negotiations. But the numbers argument is fallacious and masks hard realities. Calling for renewed talks is a far cry from agreeing with the FTAA model promoted by the United States and its free trade partners. In fact, many of the countries who called for talks to begin have had serious problems within there own bilateral negotiations due to differing views and a perceived U.S. intransigency. Even Panama , whose government presented the text to continue negotiating the FTAA, has been at an impasse in bilateral FTA talks with the United States since January of 2005. The sticking point is agriculture again—the demand of small Panamanian farmers to protect their internal markets from import surges in basic staple crops. Although this point is extremely important to the many smaller, largely rural-based economies of the continent, the United States has shown little flexibility.

Caribbean countries have also expressed major differences with the free trade model as expressed in the FTAA in other forums. The Caribbean Community (Caricom) has been concentrating its efforts on the World Trade Organization where it has received severe blows lately in banana and sugar rulings. In response, many of its leaders have formulated demands to take into account developing countries’ needs through exemptions and compensations that would go against the terms of a NAFTA-style FTAA. Tens of thousands of protestors against CAFTA and AFTA have filled the streets in Costa Rica and Ecuador, and if Evo Morales wins the presidency in Bolivia’s December elections, neither FTAA nor AFTA will have a prayer in that country.

The defeat of prospects for a hemisphere-wide agreement deals a heavy blow to Washington’s commercial strategy in the region. Since its inception in 1994, the FTAA has constituted the most ambitious forum for imposing a very specific model of free trade, dictated by U.S. interests and those of its transnational companies. Meanwhile, Latin American countries have expanded integration with Europe, and China has made major inroads into the region. What appeared a consensus among nations ten years ago has now become a focal point for deep-seated differences in perspectives on development and integration.

The death of the FTAA opens up room for the nations of the region to explore alternatives to a model that has lost support both among governments and civil society. Diversified trade, increased regional agreements, democratization, and policies oriented toward national development should be the guides along the new route.

The EU Corporate Trade Agenda

A just published policy paper by the Seattle to Brussels Network, which groups a number of well-known international and local NGOs, presents an interesting spotlight on the role and the interests of corporations and their lobby groups in Trade Policy-Making in the European Union. In the following extracts taken from the paper, the focus is on the three key segments of the WTO negotiations – agriculture, NAMA and services. Authored by Christina Deckwirth, the study finds that small-scale farmers are increasingly becoming dependent on a few agribusiness TNCs, and the liberalisation of trade in industrial goods may not only represent a barrier for the economic development of some of the poorest countries but could also further undermine environmental standards. And in the services sector, the TNCs are trying to conquer those areas that are not yet already under the realm of corporate control, often resulting in higher prices and a loss of democratic regulation.

Agriculture, goods and services: Corporations contra development and the environment

Three issues are at the forefront of the current round of WTO negotiations: agriculture, industrial goods and raw materials, and services. In all three areas, some European TNCs are amongst the largest global competitors. These companies are influential players in Brussels and closely involved in formulating the EU’s trade agenda. A closer analysis of the agendas of the European Commission and the corporate lobbyists reveals some striking similarities. Moreover, the impact of the EU corporate trade agenda on development and the environment is highly problematic.

Although extremely important for food security in Europe, the agricultural sector in the EU only accounts for 2% of the GDP and about 5% of employment. It is the sector with the highest loss in economic importance in terms of GDP during the last decades. Yet agriculture has been the stumbling block in WTO negotiations for decades. There are some good reasons for this. Firstly, a functioning agricultural sector is of vital importance to maintaining food security. Besides this, in developing countries, an average of more than half of the population, i.e. more than 1.3 billion people, live from agriculture. Thus, agriculture is the sector where the world’s poorest in developing countries have either much to win from a fair trade regime – or much to lose. Secondly, and this is where the European TNCs come into play, agriculture is not just about farming. Farmers are dependent on both upstream firms, such as the chemical industry, which provides the pesticides, and even more so on the downstream economy, which deals with processing, trading and selling agricultural products, i.e. food processors, trading companies and retailers. These agribusiness TNCs are to a large extent concentrated in the hands of a few global operators. Highly influential European corporations in the agricultural sector include the chemical corporation Bayer, the food processing giants Unilever, Nestlé and Danone, and the retail sector’s Carrefour, Metro, Ahold and Tesco.

These agribusiness corporations also play a role in the WTO Agreement on Agriculture (AoA). The first draft of the AoA was written by Dan Amstutz, who after serving on the US government, returned to his job with Cargill, the largest global grain trading TNC. Thus, it is no surprise that the beneficiaries of the WTO Agreement on Agriculture are the agribusiness TNCs:

The EU and the EU corporate lobbyist play their role in maintaining this devastating system. The EU’s position in the WTO agricultural negotiations is quite complex since it depends on many conflicting parties. Lobby groups from the industrial and services sector pressure the EU for substantial concessions towards developing countries, so that their specific interests will not lose out in trade-offs: "The much more exciting question is how the non-agrarian market access will progress and what sort of offers will be tabled for the services sector," states the Federation of German Industries BDI with regard to the current standstill in the WTO agricultural negotiations. Germany’s and also the UK’s main ambitions in the WTO – backed by large industrial and services companies – are geared towards the NAMA and GATS negotiations. On the other hand, the large farmers’ lobby has asked for continuous financial support, accounting for the largest share of the total EU budget. This is especially true for farmers from those countries with a largely concentrated agricultural sector, such as France. The main umbrella organisation of European national farmers association is COPA-COGECA (Committee of Professional Agricultural Organisations in the European Union - General Confederation of Agricultural Co-operatives in the European Union). As one of the first European lobby organisations, it mainly represents the interests of large-scale industrial farmers and big cooperatives as the main beneficiaries of the European Common Agricultural Policy (CAP).

In the current trade negotiations, COPA-COGECA has defended export subsidies and sought to maintain domestic subsidies. A recent Oxfam analysis shows why: The European Commission’s own statistics show that the top 15% of French farming businesses consume a massive 60% of its direct payments. Most small French farmers – 70% of them – receive only 17% of the subsidies doled out by Paris. About 70% of EU agricultural payments goes to 20% of the largest farms in Europe. But not just largescale farmers benefit from EU payments. As Oxfam has shown, some of the EU’s largest TNCs, such as Nestlé, Campina and BASF, as well as the Dutch arm of Mars and Heineken, receive high payments out of the EU agricultural budget. At the same time, millions of farmers in the North – knowing that their products will be sold below the cost of production - had to leave their job, farm incomes in the UK have declined by 40% in recent years and France has lost half of its farmers over the past 20 years. It is these farmers that would require support in order to maintain a sustainable agriculture in Europe. However, they do not have much say in Brussels. Although COPA-COGECA’s role is not as important as it was in the 1970s, when it was regularly consulted by national government before each agreement, it is still a highly influential player in Brussels.

One issue that the Commission, including DG Trade and DG Agriculture, the largest farmers’ lobby, as well as the food and drink industry all agree on is market access for European exports. This stems from the fact that by the 1960s, the CAP had achieved self-sufficiency, at the same time that it was elaborating an agro-export policy to finance the dumping of surpluses of butter, milk, cereals and beef on the world market. In France, the slogan was "Produce to export: agriculture is France’s green petrol". This set of policies, by generating food surpluses, led to an intensifying competition for world market outlets via export dumping – with some devastating effects on family farmers in developing countries.

Since liberalisation in agriculture trade began in the 1980s, developing countries have increasingly become dependent on agricultural imports. Between 1979 and 2000, agricultural imports rose by 115%. Family farmers have lost their income and driven into poverty because they cannot compete with these imports. Coupled with shrinking commodity prices, some developing countries are now highly dependent on large food importers to cover their needs for food, the consequence are further dependencies and debts. According to UNCTAD, these chronic power imbalances in the structure of global commodity markets contribute to a cycle of economic stagnation and extreme, persistent poverty in commodity- dependent developing countries.

Thus, European agribusiness exporters benefit from structural imbalances to the disadvantage of the world’s poorest rural population in developing countries. Developing countries, such as the G-33, consisting of Indonesia, India and China, but also some ACP-countries and members of the LDC-group have promoted measures to protect their markets. But even these harmless trials to introduce more "balance" within the WTO system are, to a large extent, stripped or even blocked by the EU. But EU agricultural policy does not only have detrimental effects on family farming in the Global South. Only recently, the EU has again reformed its agricultural policy: But the much praised "decoupling"-policy, i.e. payments decoupled from production, leads to sinking prices within the EU, making it impossible for many European family farmers to live on selling agricultural products.

This new model allows downstream agribusiness, i.e. processors and supermarkets to buy products below production costs – which according to the European Farmers Coordination (CPE, Coordination Paysanne Européenne) "was probably the purpose number one of the CAP reform." The direct payment paid to the farmers therefore can be considered "as an indirect payment to agro-industry and supermarkets, far from the benefits for farmers and consumers claimed by the European Commission."

The largest industrial sector in the EU – the food and drink Industry – is naturally highly interlinked with the agricultural sector and thus has high stakes in the WTO agricultural negotiations. With a production value of over € 800 billion, the food and drink industry relies heavily both on exports (€ 44 billion a year) and imports of raw material to the EU, as the largest importer of agricultural raw materials globally. In Brussels, the food and drink industry join forces in the CIAA (Confédération des industries agroalimentaire de l’UE), a mixed trade association with Unilever, Danone and Nestlé among their most powerful corporate members.

The CIAA has two priorities: a very limited and conditioned reduction of support for the agricultural sector and market access for processed food. Regarding export subsidies, it states: "As these export refunds are a compensation for higher EU agricultural prices, their elimination will result in export being no longer viable in certain sectors of the food industry, if it does not go hand in hand with n ecessary internal market reforms and if there is no access to competitive agricultural raw materials".

In other words: No cuts to export subsidies, if prices and tariffs are not lowered within the EU, so that processed food can still rely on cheap input products to continue exports at low price. But most of all, CIAA demands "the opening up of new trade opportunities for food and drink industries and their products". The demand for high tariff cuts to open up new export markets is coupled with the blocking of developing countries’ efforts to introduce measures to protect their markets from cheap imports.

The agribusiness lobby is well respected by EU officials, as former trade commissioner Lamy clearly expressed to the CIAA: "With such five-star treatment, your industries naturally have – I hope I am right in saying – excellent relations with the Commission, and [...] it does have the merit of encouraging you to present well-defined positions on trade issues, in the knowledge that a united stand will increase your leverage [...]". Thus, when the CIAA offers to "provide information on products and countries for which improvement of market access will be key to obtain positive responses to food and drink industry offensive interests", this will most likely be taken into consideration by the Commission. And indeed, the EU’s priorities in the run-up to Hong Kong are to maintain its current Common Agricultural Policy (CAP), while at the same time pushing for market access in its export markets. Even the EU’s promise to eliminate all export subsidies will only be realised if the US makes some concession in its agricultural policy. Besides, the EU uses agricultural negotiations to exert pressure in other negotiating areas such as NAMA and GATS.

What has unofficially always been the case is now official: The November 2005 agricultural offer by the EU is conditional upon the stipulation for major concessions in NAMA and GATS to meet the demands of lobbies in the services and NAMA sector.

Trade in industrial goods accounts for more than 75% of total world trade and is thus the largest sector that is currently being negotiated within the WTO. Since the 1990s, global production has increasingly been organised through large production networks that operate in various countries, either through direct affiliates or through contracting systems. These networks and "global supply chains" are dominated by a few "lead firms", i.e. the largest global TNCs with their headquarters in the U.S., Japan and, of course, Europe. The evolution of these global production networks resulted from technological developments but also from trade liberalisation that has increasingly allowed the TNCs to move their goods from one place to another without facing high transaction costs and to relocate their production to the regions with the lowest labour costs. In the current WTO Non-Agricultural Market Access (NAMA) negotiations, the TNCs are now asking for further elimination of any "barriers" they encounter. These include industrial tariffs which are still high in some countries of the developing world, as well as other measures such as export restrictions or environmental and social standards, the so-called non-tariff barriers (NTBs). The EU’s strongest export sectors are the following: chemical products with BASF and Bayer, pharmaceuticals with GlaxoSmithKline and the Swiss companies Novartis and Roche, the automotive industry with DaimlerChrysler, Volkswagen, Peugeot, Fiat, Renault and BMW, non-electrical machinery with ThyssenKrupp and Siemens and finally, paper products. The EU’s primary aim in the current round of NAMA negotiations is to gain market access through the broad and drastic tariffs cuts.

For their part, developing countries are not only highly dependent on state revenues derived from tariffs, but also on policy space to regulate their infant industries:

UNICE (The Union of Industrial and Employers Confederations of Europe) is certainly the strongest lobby group in the NAMA negotiations, since most national trade associations still have a strong industrial basis. "NAMA negotiations rank among UNICE’s highest priorities in the DDA. Ambitious tariff liberalisation and elimination of non-tariff barriers (NTBs) will be one of the main criteria by which UNICE determines its overall support for the final deal." This is also indicated by the fact that UNICE’s last lobby mission to Geneva before the General Council will have a focus on NAMA, as well as the fact that throughout the year 2005, it has been involved in a good deal of activity around NAMA in Geneva. Under the lead of the U.S. National Manufacturers Association (NAM), UNICE and representatives from national employers’ federations from Germany, the UK, France and Denmark in the EU, and Norway, Japan and Korea outside the EU jointly formed a "manufacturers’ fly-in to Geneva". In bilateral meetings with key negotiators, they asked for drastic tariff cuts and the elimination of non-tariff barriers in the current NAMA negotiations. UNICE already claims its first success story: The Council changed the Commission’s mandate from the original 25% maximum tariff line as a target in the current negotiations to what is now 15%.

Next to UNICE, some sectorial lobby groups are heavily involved in the NAMA negotiations. CEFIC (European Chemical Industry Council) not only rallies against the planned REACH regulation (Registration, Evaluation and Authorisation of Chemicals) but also pushes for zero tariffs in chemicals. In a survey conducted by Burson-Marsteller among senior Commission officials, the effectiveness of lobbying the chemical industry scores the highest. Among the most influential players within CEFIC is BASF. The European Automobile Industry ACEA has just opened a new office in China and thus its main interests in the WTO negotiations are focused on China’s implementation of the accession commitments. Nevertheless, the interest of the automobile industry in the WTO negotiations was apparent during the WTO Ministerial conference in Cancún in 2003, in which DaimlerChrysler organised a reception for the decision makers and delegates present.

According to a European Parliament report, one of the most effective actors at the European level is the European Federation of Pharmaceutical Industry Associations (EFPIA). While the focus of its ambitions lies in the TRIPs agreement, it also seeks the cut of – already fairly low – tariffs in the pharmaceutical industry through a sectoral initiative. The China textile dispute during the first half of 2005 was followed closely by the importers lobby. Eurocommerce, the Foreign Trade Association (FTA), fought for unlimited market access, while Euratex, the European trade associations of textile producers, made the case for further quotas in order to protect the European textile industry, especially in Italy.

The EU is the world’s largest exporter of services, accounting for nearly a quarter of the world’s total services exports. In the EU, services constitute "the single most dynamic economic activity", accounting for at least two thirds of the GDP and employment. As DG Trade puts it: "The EU therefore has much to gain from further opening of trade in services and it is consequently one of its key priorities in the Doha Development Agenda." In the same document, DG Trade names the services sector "as perhaps the EU offensive interest". Services have not always been of such high importance in the EU. Only over the past ten years have European services companies transnationalised by increasing their FDI activities. Most importantly, a large group of new TNCs has emerged – notably telecommunications, electricity and water. In all these sectors, emerging TNCs are former stateowned monopolies that developed into global players after the liberalisation of the EU internal market, i.e. France Telecom, Deutsche Telekom, Telecom Italia and Spain’s Telefónica in the telecommunications sector, Electricité de France and the two German companies RWE and E.on in the energy sector, and finally Suez, Veolia and again RWE for water. In two other sectors, European companies are challenging the US. European firms have taken the lead in both insurance and retailing. But according to the EU, the EU’s services sector, though strong, still faces "challenges" for the years ahead and thus it has a clear position for the GATS negotiations to come: "The EU […] should push negotiations in sectors where it has a comparative advantage and where little commitments have been made so far by third countries (maritime, environmental services, distribution are good examples)." Unlike the AoA and the NAMA negotiations, the GATS negotiations are still at the beginnings – and it is hard to show what the impacts have been so far. Nevertheless, the GATS will certainly accelerate some tendencies, such as privatisation and deregulation, which have had considerable impacts on livelihoods, development and the environment. Next to further market access, European TNCs will also endeavour to lock in existing liberalization imposed by other fora, such as IMF and World Bank.

The process to include services in the multilateral trade regime during the Uruguay Round was very much driven by corporations. As David Hartrigde, former director of the WTO’s Services Unit puts it: "Without the enormous pressure generated by the American financial services sector, particularly companies like American Express and Citicorp, there would have been no services agreement." At first, mainly US-American companies brought in the idea of an international agreement on services to the multilateral trade agenda. European companies took more time to join the intense business campaign that led to the GATS. It was the Commission which set up the European Community Services Group (ECSG) to represent business views during the Uruguay Round. The ECSG was mainly driven by the British financial sector, which was already well organised in the area of international trade through British Invisibles (BI), having set up its Liberalisation of Trade in Services (LOTIS) committee as early as 1981.

In 1999, just before the start of the new GATS round, the European Commission again took the initiative to form a renewed GATS lobby group. Trade Commissioner Leon Brittan initiated the founding of a European services lobby group, the European Services Forum (ESF), which has since developed into a strong voice within trade policy making in the EU. The ESF is the best example of a truly incestuous relationship between corporations and the Commission. Having invited business into EU policy-making, the co-operation between the Commission and ESF has stayed very close ever since. At the opening meeting of the ESF, Brittan’s invitation reads as follows: "You are the driving force of the consultation system which we have established, my door is open for any matters of concern […] I am in your hand to listen to what are your objectives, your priorities for the liberalisation [...] I count on your support and input, at the company, CEO and Chairman as well as at the European or National Federations levels, so that we can refine our strategy and set out clear, priority negotiating objectives which will make a difference in the international expansion of service business." The key idea behind setting up the European Services Forum (ESF) was to revamp the former services organisations, the ECSG and its successor the European Tradable Services Network (ETSN), which had "no proactive leadership, nor driving force, because it is composed of over-worked bureaucrats of a few European-level sector trade associations." The ESF now mainly represents the interests of large transnational service companies.

Through direct high level representatives from individual companies, the interests of transnational corporations are as well secured as in the ERT. The "European Service Leaders Group" within the ESF consists of CEOs from Europe’s largest services corporations. From its foundation in 1998 onwards, ESF members regularly go on "missions" to Geneva in order to directly lobby "reluctant" WTO delegates from both developing and developed countries. ESF members and secretariat staff meet Commission officials on a very regular basis, not to mention the very active e-mail correspondence which takes place on their joint agenda in the WTO services talks. E-mails obtained by the Corporate Europe Observatory reveal that the ESF is also in close contact with WTO staff. In September 2004, for example, they were encouraged by both Alejandro Jara, then Council of Trade in Services Chairman, and Hamid Mamdouh, WTO Services Division, "to make an assessment of the publicly available GATS Initial Offers, as to give the view of the private sector on the current state of play of the negotiations". The assessments were then personally discussed between DG Trade officials and the ESF. On an international level, the ESF is represented in the Global Services Coalition. The Coalition has conducted several joint advocacy missions to Geneva to press for greater progress in the WTO negotiations. In September 2005, for example, the ESF went on a lobby mission to Geneva together with services industry representatives from Australia, Chile, India, Japan and the United States. According to a report by the US Coalition of Services, the Global Services Coalition played a key role in ensuring the proper treatment of services in the 2004 WTO "July Package", which put the Doha Round back on track following the Cancún Ministerial.

The common goal of the European Commission and the European services companies was and still is "to liberalise services markets throughout the world and to remove trade and investment barriers for the European services sector", i.e. to create a market for the expansion of European services companies.

The ESF has repeatedly made clear that basic services such as the public water supply, healthcare, etc. all should be part of negotiations, just like all other services sectors: "Our understanding of public services is that they do something for the public, and the public are businesses that trade internationally" says one ESF representative. But especially these sectors, i.e. infrastructure including water distribution, energy, telecommunication, construction and retailing, which are of great interest for the EU and its TNCs, have largely been left outside negotiations by many WTO member countries.

The ESF and other services lobby organisations do not hide its disappointment with the current status of the negotiations: "A Round that ends with agriculture and goods agreements but no meaningful progress on services is unacceptable. Services are an integral part of the negotiations, and must be accorded the same stature, and addressed with the same negotiating intensity, as agriculture and goods."

Thus, at the end of the Doha Round, the EU is currently pushing for a new approach to tackle the impasse in the GATS negotiations. The EU aims to significantly reduce the current "request-offer approach" of the GATS negotiations, which allows WTO members to make liberalisation commitments to their own liking. With its new proposal on "complementary negotiating methods" (paper), the EU aims to introduce "quantitative targets" or "benchmarks" for new and revised liberalization commitments.

Additionally, the Commission is pushing for the launch of sectorial negotiations in construction, computer and related services, distribution, environmental services (including water distribution), financial services, telecommunications and maritime transport. WTO members would then need to sign on for a certain number of these sectorial agreements. The sectorial negotiations will be worked out in so-called "friends groups" comprising those countries with a specific interest in a certain sector. These sectorial negotiations will be preferred and probably easily accessible havens for corporate lobbyists – this was the case for the plurilateral negotiations on financial services and telecommunications. In the NAMA negotiations, such instances have, once again, only been revealed in the minutes from a plurilateral meeting on electronics. The ESF is among the strongest supporters of the new EU proposals.

The ESF is the strongest and most focussed Brussels lobby group in the GATS negotiations. Nevertheless, many companies and associations have also voiced their specific interests through additional channels. A DG Trade official names the maritime sector as one of the most vocal lobbyists and further adds other sectors, such as energy, telecommunications, insurance companies and postal services.

Past lobby successes are depicted in the GATS annexes that were concluded after the end of the Uruguay round but before the launch of the new GATS negotiations in 2000. Above all, financial services play a key role. A report by the US Coalition of Services notes that the 1997 financial services negotiations were "the first negotiations in which a multinational industry group, in this case the major financial services companies and associations of the U.S., Canada, the UK, and continental Europe, organized to advocate liberalization of services trade."

They formed the Financial Leaders Group (FLG) and the Financial Leaders Working Group (FLWG) to present a common agenda to their governments’ negotiators. This agenda included the presentation to negotiators of agreed lists of barriers in banking, insurance, securities, fund management and other financial services.

The USCSI further reports: "Industry representatives from as many as 40 companies and associations in Europe and North America regularly met jointly with the chief financial services negotiators of both the EU and the US, and with representatives of the EU member states. This remarkable industry/government cooperation resulted in a well sustained common position". The FLG and FLWG continue to actively advocate further liberalization in the Doha Round, and now include representatives of Japan, Hong Kong and Australia. It is now mainly the insurance lobby which is pushing for further GATS commitments.

Secondly, the Telecommunication Agreement became a reality through positive cooperation between EU officials and the telecommunications sector, represented both by the ESF and the telecommunication services trade association ETNO (European Telecommunications Network Operators’ Association). An ESF representative reports that the "positive" results in these negotiations were only made possible through direct involvement at the CEO level.

As a services lobbyist puts it: "If CEOs ring up Peter Mandelson or their national government – or even better – the respective government of the country where they are active and say we need that commitment or we need that regulation to be withdrawn otherwise we’ll leave the country, then this has weight. And this is what happened in the financial services and telecommunication negotiations."

In the current trade negotiations, it is also the rapidly globalizing retail sector, which has - next to world largest retail corporation Walmart (US) - a strong economic base in Europe. EuroCommerce, as a mixed trade association with individual members such as Metro and Tesco, and the European Retail Round Table (ERRT) have all made themselves heard and are welcomed with open arms: "European commerce fully supports the Commission’s ambitious strategy for improved market access to services markets worldwide, and we count on the continued support of both the Commission and the European Parliament in the forthcoming – decisive – negotiating phase."

The European Commission repeatedly mentions retailing as a priority sector and heavily relies on Eurocommerce’s inputs when drafting its GATS positions. It is mainly Metro and Royal Ahold that are involved in ESF lobby activities but the French Carrefour and the British Tesco also rank among the largest Global Players in the retail sector.

European companies have become very strong in some infrastructure services, such as energy and water services. After the privatisation backlash caused by some failures in developing countries and increasing resistance against privatisation, European TNCs have become very quiet in their lobbying activities. Suez has quit the ESF after a change of CEO, RWE has repeatedly spoken out against including water in the GATS and in November 2005, the company announced that it would sell Thames Water. Finally, Veolia is not vocal in the GATS debate either, although it remains a member of the ESF.

Nevertheless, the EU still has not withdrawn its requests on water distribution services to developing countries, so Suez and Veolia will probably continue their lobbying activities behind the scenes. Shortly before the Hong Kong WTO Ministerial, Suez’ CEO Gérard Mestrallet signed an international CEO statement in support of the current WTO round of negotiations. In the energy sector, the European trade association Eurelectric has lost Enron as a strong free trade proponent from the other side of the Atlantic to push for a re-classification of the GATS list to explicitly include energy services.

Internet Governance

The governance of the internet was and remains a controversial issue. Attempts to broaden the sphere of influence over the internet from the United States to other countries and regions met with stiff resistance. Even the United Nations Secretary General had to write to a leading US daily, saying the United Nations had no intentions to take over the internet. At the World Summit on the Information Society (WSIS) second phase held in Tunis (16-18 November, 2005), governments agreed on a number of related issues, notably the setting up of a new forum for multi-stakeholder policy dialogue - called the Internet Governance Forum (IGF). Following are some extracts from the outcome document ‘Tunis Agenda For The Information Society’ on Internet Governance.

29. We reaffirm the principles enunciated in the Geneva phase of the WSIS, in December 2003, that the Internet has evolved into a global facility available to the public and its governance should constitute a core issue of the Information Society agenda. The international management of the Internet should be multilateral, transparent and democratic, with the full involvement of governments, the private sector, civil society and international Organisations. It should ensure an equitable distribution of resources, facilitate access for all and ensure a stable and secure functioning of the Internet, taking into account multilingualism.

30. We acknowledge that the Internet, a central element of the infrastructure of the Information Society, has evolved from a research and academic facility into a global facility available to the public.

31. We recognise that Internet governance, carried out according to the Geneva principles, is an essential element for a people-centred, inclusive, development oriented and non-discriminatory Information Society. Furthermore, we commit ourselves to the stability and security of the Internet as a global facility and to ensuring the requisite legitimacy of its governance, based on the full participation of all stakeholders, from both developed and developing countries, within their respective roles and responsibilities.

32. We thank the UN Secretary-General for establishing the Working Group on Internet Governance (WGIG). We commend the chairman, members and secretariat for their work and for their report.

33. We take note of the WGIG’s report that has endeavoured to develop a working definition of Internet governance. It has helped identify a number of public policy issues that are relevant to Internet governance. The report has also enhanced our understanding of the respective roles and responsibilities of governments, intergovernmental and international organisations and other forums as well as the private sector and civil society from both developing and developed countries.

34. A working definition of Internet governance is the development and application by governments, the private sector and civil society, in their respective roles, of shared principles, norms, rules, decision-making procedures, and programmes that shape the evolution and use of the Internet.

35. We reaffirm that the management of the Internet encompasses both technical and public policy issues and should involve all stakeholders and relevant intergovernmental and international Organisations. In this respect it is recognised that:

58. We recognise that Internet Governance includes more than Internet naming and addressing. It also includes other significant public policy issues such as, inter alia, critical Internet resources, the security and safety of the Internet, and developmental aspects and issues pertaining to the use of the Internet.

59. We recognise that Internet Governance includes social, economic and technical issues including affordability, reliability and quality of service.

60. We further recognise that there are many cross-cutting international public policy issues that require attention and are not adequately addressed by the current mechanisms.

61. We are convinced that there is a need to initiate, and reinforce, as appropriate, a transparent, democratic, and multilateral process, with the participation of governments, private sector, civil society and international Organisations, in their respective roles. This process could envisage creation of a suitable framework or mechanisms, where justified, thus spurring the ongoing and active evolution of the current arrangements in order to synergise the efforts in this regard.

62. We emphasize that any Internet Governance approach should be inclusive and responsive and should continue to promote an enabling environment for innovation, competition and investment.

63. Countries should not be involved in decisions regarding another country’s country-code Top-Level Domain (ccTLD). Their legitimate interests, as expressed and defined by each country, in diverse ways, regarding decisions affecting their ccTLDs, need to be respected, upheld and addressed via a flexible and improved framework and mechanisms.

64. We recognise the need for further development of, and strengthened co-operation among, stakeholders for public policies for generic top-level domain names (gTLDs).

65. We underline the need to maximise the participation of developing countries in decisions regarding Internet Governance, which should reflect their interests, as well as in development and capacity-building.

66. In view of the continuing internationalization of the Internet and the principle of universality, we agree to implement the Geneva Principles regarding Internet Governance.

67. We agree, inter alia, to invite the UN Secretary-General to convene a new forum for multi-stakeholder policy dialogue.

68. We recognise that all governments should have an equal role and responsibility, for international Internet governance and for ensuring the stability, security and continuity of the Internet. We also recognise the need for development of public policy by governments in consultation with all stakeholders.

69. We further recognise the need for enhanced cooperation in the future, to enable governments, on an equal footing, to carry out their roles and responsibilities, in international public policy issues pertaining to the Internet, but not in the day-to-day technical and operational matters, that do not impact on international public policy issues.

70. Using relevant international organisations, such cooperation should include the development of globally-applicable principles on public policy issues associated with the coordination and management of critical Internet resources. In this regard, we call upon the organisations responsible for essential tasks associated with the Internet to contribute to creating an environment that facilitates this development of public policy principles.

71. The process towards enhanced cooperation, to be started by the UN Secretary-General, involving all relevant organisations by the end of the first quarter of 2006, will involve all stakeholders in their respective roles, will proceed as quickly as possible consistent with legal process, and will be responsive to innovation. Relevant organisations should commence a process towards enhanced cooperation involving all stakeholders, proceeding as quickly as possible and responsive to innovation. The same relevant organisations shall be requested to provide annual performance reports.

72. We ask the UN Secretary-General, in an open and inclusive process, to convene, by the second quarter of 2006, a meeting of the new forum for multi-stakeholder policy dialogue—called the Internet Governance Forum (IGF).The mandate of the Forum is to:

73. The Internet Governance Forum, in its working and function, will be multilateral, multi-stakeholder, democratic and transparent. To that end, the proposed IGF could:

74. We encourage the UN Secretary-General to examine a range of options for the convening of the Forum, taking into consideration the proven competencies of all stakeholders in Internet Governance and the need to ensure their full involvement.

75. The UN Secretary-General would report to UN Member States periodically on the operation of the Forum.

76. We ask the UN Secretary-General to examine the desirability of the continuation of the Forum, in formal consultation with Forum participants, within five years of its creation, and to make recommendations to the UN Membership in this regard.

77. The IGF would have no oversight function and would not replace existing arrangements, mechanisms, institutions or organisations, but would involve them and take advantage of their expertise. It would be constituted as a neutral, non-duplicative and non-binding process. It would have no involvement in day-to-day or technical operations of the Internet.

78. The UN Secretary-General should extend invitations to all stakeholders and relevant parties to participate at the inaugural meeting of the IGF, taking into consideration balanced geographical representation. The UN Secretary-General should also:

79. Diverse matters relating to Internet Governance would continue to be addressed in other relevant fora.

80. We encourage the development of multi-stakeholder processes at the national, regional and international levels to discuss and collaborate on the expansion and diffusion of the Internet as a means to support development efforts to achieve internationally-agreed development goals and objectives, including the Millennium Development Goals.

81. We reaffirm our commitment to the full implementation of the Geneva Principles.

82. We welcome the generous offer of the Government of Greece to host the first meeting of the IGF in Athens no later than 2006 and we call upon the UN Secretary-General to extend invitations to all stakeholders and relevant parties to participate at the inaugural meeting of the IGF.

Agreement finalized on Trans-Asian Railway

Bangkok, 30 Nov -- (United Nations Information Services) -- Countries in the Asia-Pacific region finalized a draft Intergovernmental Agreement on the Trans-Asian Railway Network today at UNESCAP headquarters in Bangkok. The Agreement was finalized at the conclusion of an Intergovernmental meeting organized by UNESCAP from 28-30 November 2005.

The Agreement is the outcome of three days of constructive discussions among transport officials from across the region who agreed that it could play a catalytic role in the construction and upgrading of railway lines in Asia.

The Trans-Asian Railway Network constitutes a major step towards the identification of an integrated, international, intermodal network in the region. A similar agreement for the Asian Highway Network came into force in July 2005.

"Through the two agreements, UNESCAP wants to provide a solid basis for a regional approach to transport development, ushering in a new era of cooperation and creating a partnership for regional integration," said UNESCAP Executive Secretary Kim Hak-Su.

The Agreement will be presented to the 62nd session of the UNESCAP Commission for adoption in April 2006. A signing ceremony will be held at the Ministerial Conference on Transport later that year. Under the terms of the Agreement, a Working Group will be established and meet every two years. "It will be a forum within which transport policy makers and railway managers will define a common vision, adopt joint programmes of action, identify investment requirements and sources, and benchmark progress," noted Mr. Kim.

The Trans-Asian railway network comprises of over 80,000 km of rail routes of international importance linking 27 UNESCAP member countries in the region. The aim of the network is to offer efficient transport services for the movement of goods within the UNESCAP region and between Asia and Europe as well as provide improved access for landlocked countries to its major ports. The Trans-Asian Railway was initiated in the 1960s with the objective of providing a continuous 14,000-km rail link between Singapore and Istanbul, with possible onward connections to Europe and Africa. The link offered the potential to greatly shorten the distances and reduce transit times between countries and regions, while being a catalyst for the notion of international transport as a tool for trade expansion, economic growth and cultural exchanges.

The international events that punctuated the 1960s, 1970s and early 1980s influenced the momentum of the concept during these three decades. However, with the political and economic changes that took place in the region in the 1980s and early 1990s, the development of the TAR concept received new support and momentum.

Given the extent of the territory covered, the differences in standards, and differences in the levels of technical development between railways in the region, UNESCAP adopted a step-by-step approach to define the TAR network. The network was initially divided into four major components which were studied separately. These components included:

In close collaboration with concerned countries, UNESCAP’s Transport and Tourism Division has already started operationalizing the TAR network. Four demonstration runs of container block-trains have been successfully implemented along key segments of the TAR Northern Corridor between November 2003 and July 2004. Through these demonstration runs, the railways concerned have gained greater awareness of international trade patterns arising from globalization, and exercised new skills effectively to respond to the industry requirements for efficient transport and logistics services.

South Centre News

Executive Director

Prof. Yash Tandon, the Executive Director of the South Centre, participated in the following: Senior African Union Experts Meeting on Commodities and Second Extraordinary Session of the African Union Ministers of Trade in Arusha, Tanzania (21-24 Nov.); a SEATINI Workshop on Development Benchmarks for Hong Kong and Beyond in Arusha (21 Nov); and the meeting of ACP Ministers in Brussels (27-30 Nov).

Trade and Development Programme

- Recent research and publications

- Participation in conferences and in meetings outside the centre

- Program of work with delegations in Geneva

-Meetings in South Centre

Editorial

Development – A Fight Not a Right

If we believe in the sanctity of human rights - where the right to Development is also well enshrined – all this nagging concern about the increasing loss of policy space should not have come about in the first place. The so-called developed countries of today never had a similar problem when they were developing – they reserved the right to ban unwanted imports or simply make it not worthwhile, and employed all kinds of means to promote exports. And they could easily pursue the infant-industry case to shield off foreing competition. But now when the developing world is trying to improve the lot of its own people – most having emerged from the yoke of colonialism only in the last couple of decades – all kinds of barriers are being thrown around it. It stands to reason that developing countries are not strangling themselves, that the obstacles being thrown in their path are originating basically in the North. It is no secret that the industrially advanced countries have failed to keep their promises made at numerous world summits and conferences – the most obvious being not able to meet even the 0.7 per cent of GNP as official development aid after nearly 35! The barriers to the development of the South come mainly from the international arena – which globalization knits together – like the international trade rules dispensed at the World Trade Organization and the suffocating conditionalities that international financial institutions lay down for countries burdened already with massive foreign debts. Of course, now even bilateral trade deals between countries are laying down conditions that are more severe than those contained in the multilaterally agreed rules at the WTO.

Attached please find the latest issue of the South Bulletin no. 115 in pdf

and word formats. Focus on 'Fight for the right to Development.'

Best regards,

(See attached file: bull115.pdf)

(See attached file: South Bulletin 115 Word.doc)

Someshwar Singh

Senior Editor

South Centre

Ch. du Champ d'Anier 17

1211 Geneva 19

Switzerland

Tel-(4122)7918044

Fax-(4122)7988531

email-singh@southcentre.org