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Ten Years of the WTO and Current State of Play

Ten Years of the WTO and Current State of Play. Session Five Day 2. Brief Background on the WTO. What? Replaced the old GATT of 1947 (General Agreement on Tariff and Trade) New set of global rules to promote the free flow of goods, services & capital (but not labor) When ?

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Ten Years of the WTO and Current State of Play

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  1. Ten Years of the WTO and Current State of Play Session Five Day 2

  2. Brief Background on the WTO • What? • Replaced the old GATT of 1947 (General Agreement on Tariff and Trade) • New set of global rules to promote the free flow of goods, services & capital (but not labor) • When ? • 1994 – end of the Uruguay Round of Trade Talks and establishment of the WTO; Uruguay Round was the most comprehensive • 2001- launch of the Doha Round

  3. The GATT-Uruguay Round Agreements • A total of about 60 agreements, annexes, decisions and understandings; but basic structure involves six main parts: 1. Agreement establishing the WTO (umbrella agreement) 2. Agreement on goods: expanded General Agreement on Tariffs and Trade (GATT); includes AoA, SPS, ATC, investment measures, anti-dumping and safeguard measures, rules of origin, etc. 3. Agreement on services: General Agreement on Trade in Services (GATS) 4. Agreement on intellectual property: Trade-Related Aspects of Intellectual Property Rights (TRIPS) 5. Trade Policy Reviews – transparency through “notifications” 6. Dispute Settlement - gives teeth to international trade rules by giving the WTO “police powers” through trade sanctions

  4. Real Reasons for Creation of the WTO • Crisis of global capitalist economy– overproduction, overcapacity, over-accumulation of capital • Neo-liberal Globalization: Ideology of Global Capitalist Market - Need of global capital to expand markets by eliminating barriers on trade of goods - Making financial markets and labor flexible - Eliminating barriers to foreign capital - Relaxing government control of the market - Need to protect monopoly of the NORTH on technology and services through a more regulated system of protecting intellectual property rights

  5. What Happened under Ten Years of the WTO? • Ten years of trade liberalization under the WTO proved disastrous to developing countries • North retained protectionist policies (e.g. on agri subsidies) while South followed WTO rules and even implemented unilateral trade lib policies • Promises of special and differential treatment for developing and least developed countries did not materialize

  6. What Happened under Ten Years of the WTO? The WTO reinforced the assigned roles of women under globalization: - increased female labor force participation but conditions of work are highly exploitative - “gender equalizing down effect” (general lowering down of wages and labor standards) - marketization of social reproduction

  7. Impact on Gender Relations: Trade Intensification in Exports Manufacturing • International subcontracting scheme in exports manufacturing mainly of garments and electronics in developing countries boosted “feminization of labor” • Employs around 60-90% women • Low wages, flexible labor conditions; “race to the bottom” philosophy • Putting-out system in garments => home-based work; highly informalized

  8. Impact on Gender Relations: Trade Intensification in Exports Manufacturing • WTO Agreement on Textile and Clothing - replaced the quota regime of the Multi-Fiber Agreement; last stage of MFA phase-out was 2004 - non-competitive markets that relied on quota concessions and textile imports are losing out (e.g. Phils.,Thailand, Sri Lanka, Bangladesh); led to massive displacement of women workers - China, India, Pakistan and South Korea are said to gain

  9. Impact on Gender Relations: Trade in Services • Services sector in developing countries are highly informalized • Women predominate in highly informalized service sectors e.g. wholesale and retail trade, community and personal services • Women predominate in overseas contract work as domestic helpers, entertainers and professional caregivers (e.g. nurses) • Mode 4 of GATS does not include low-skilled migrant labor as a mode of service supply that is up for liberalization

  10. Impact on Gender Relations: Agricultural Trade • 50% or more of farm employment are women working as unpaid family workers or seasonal waged workers; female work in agriculture not recognized by official statistics • Loss of farm livelihoods due to import dumping and import surges (as a result of agri trade lib, reduction of domestic support under AoA and SAPs) • Impact on food security at the national and household levels; lack of household food security worsens the women’s reproductive burden • Export-intensive production may generate high demands for female labor but paid returns to labor is minimal aside from exploitative work conditions; Export-intensive production is detrimental to food security and environmental sustainability

  11. Impact on Gender Relations: Deregulation and Privatization of the Public Sector • Withdrawal of government regulation in the market including the public sector • Privatization of public services is a precondition to liberalization of trade in services under GATS; already done thru SAPS • Public services such as healthcare, education, water and power utilities are essential to social reproduction; Eliminating public provisioning of these services compounds the women’s double burden • Lack of reproductive healthcare services also worsens the women’s reproductive burden

  12. Current State of Play in the WTO The WTO Doha Round • Launched in November 2001 during the 4th Ministerial Conference in Doha, Qatar; called Doha Development Agenda (DDA) • 5th Ministerial Conference in Cancun collapsed; Negotiations proceeded in Geneva and in July 2004 the WTO General Council came up with the so-called July Framework

  13. The WTO Doha Round • July Framework Agreement outlining the ff. AREAS for NEGOTIATION: • AoA (market access, domestic support, export subsidies) • NAMA or Non-Agricultural Market Access (100% tariff binding, tariff reduction formula; a recipe for de-industrialization in the South; includes fisheries and forestry products) • GATS (no a priori exclusion; quality offers) • Trade Facilitation (customs regulations, etc)

  14. Who are the key players? • QUAD – US, EU, Japan and Canada (note: EU wants expanded WTO to counter US hegemony) • CAIRNS Group – QUAD Plus developing countries that seek to liberalize agriculture • GROUP OF 77 – “review, repair & reform of deficiencies in WTO” • LDC (Least Developed Countries) – seeks “differential treatment” measures

  15. Who are the key Players (2) New Re-alignments in Cancun Ministerial: G20 – developing countries that are agricultural exporters pushing for market access (India, Brazil, China, South Africa) G33 – developing countries pushing for protection of domestic agricultural market Five Interested Parties (FIPs) – US, EU, Australia, India and Brazil

  16. Possible Scenarios towards HK Ministerial Meeting • WTO General Council meeting on July 27-31and in October in Geneva - “first approximations” - if successful, HK ministerial will be reduced to a “stamp pad” - if unsuccessful, another Cancun or Seattle may happen in HK

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