TORONTO, Monday, June 24, 2002 -- The Robarts Centre for Canadian Studies at York University today released its second WTO Report Card on Trade and the Social Deficit, calling on the G-8 leaders meeting in Kananaskis to remove barriers to African development at the World Trade Organization.
“The legitimacy and effectiveness of the WTO as an institution is threatened by its insistence on a universal trade principle that is narrow in focus and obsolete,” said Daniel Drache, director of the Robarts Centre and co-author of the report with Marc Froese, Mark Fuller and Nirmala Singh.
Drache said the G-8 leaders should advocate principles of diversity at the WTO, particularly as they affect developing countries in Africa. The Kananaskis summit this week is expected to endorse a new development partnership between rich countries and Africa that will open markets to African exports. But the report says the WTO continues to block trade-based tools for the promotion of development. “Universal trade principles applied equally to unequal partners will continue to produce negative effects that undermine rational trade regulation,” said Drache.
While the report concurs that the WTO is not the appropriate forum to deal with non-trade issues, it calls for more effective interaction with other international bodies like the United Nations’ Food and Agriculture Organization, the World Health Organization, and the International Labour Organization, to inform WTO deliberations about the non-trade impacts of its decisions.
“The diverse needs of both developed and developing countries can only be met through flexibility in designing, implementing and interpreting global trade rules. Such a change would dramatically reshape the purpose of the World Trade Organization,” the report states. The authors analyze three WTO cases to illustrate their view. Noting the relevance of these cases for the development round of trade negotiations launched by the WTO in Doha, Qatar in November, 2001, the authors say the WTO lacks the political will to be a positive force on the international development scene.
The European Community beef hormone case (1997): Canada and the United States requested panels concerning EC restrictions and bans on the use of growth hormones in beef cattle. The WTO ruled that the precautionary principle -- a legal means of allowing governments to take action to protect human welfare in the absence of certainty regarding potential health risks – could not be employed to permanently establish food safety standards higher than international norms unless the EU could scientifically prove its concerns using techniques developed by the relevant international organizations. The decision created a policy gap: international norms in food safety were not only minimum limits but became maximum standards as well. The European Union refused to abide by the ruling, accepting massive punitive tariffs instead, and underscoring the increasing illegitimacy of the WTO.
The EC bananas dispute (1997): The bananas dispute was brought to the WTO by the United States on behalf of two transnational fruit producers, Chiquita and Dole, and four Latin American countries. The EC is a major market for bananas and banana products, which is largely serviced by African, Caribbean and Pacific least-developed countries. The EC had historically provided special consideration to some of the poorest countries with a quota system that guaranteed them a market share. Recognizing the economic benefit to those countries, the General Agreement on Tariffs and Trade had granted a special waiver (Lome Convention, 1989) to the EC to permit the practice. The WTO struck it down, rejecting the use of trade as a tool for development, and market share will inevitably go to multinational corporations at the expense of poor countries
The Canadian periodicals dispute (1997): This dispute involved a challenge by the United States against Canadian measures to protect its magazine industry in order to promote Canadian culture. It is estimated that US magazines account for approximately 80 per cent of shelf space in the Canadian retail market. In 1995, Canada adopted an excise tax of 80 per cent on advertising revenue for magazines originating abroad. To avoid the tax, a split-run magazine would have to produce a publication that featured 80 per cent Canadian content. The United States objected to the measures and the WTO ruled in its favour, narrowing the scope for cultural diversity and the opportunity for countries to implement national policies and goals aimed at protecting their national cultures in the face of globalizing forces.
The WTO Report Card on Trade and the Social Deficit is available on the Robarts Centre for Canadian Studies Web site: www.robarts.yorku.ca Click on “New & Forthcoming”.
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For further information, contact:
| Prof. Daniel Drache Robarts Centre for Canadian Studies York University 416-736-5415 contact in Paris June 24-27: 33-1-4705-4186 drache@yorku.ca |
Susan Bigelow Media Relations York University 416-736-2100, ext. 22091 sbigelow@yorku.ca |
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