Principles of the trading system

The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with setting the rules of the trade policy games. Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO:

Non-discrimination. It has two major components: the most favoured nation (MFN) rule, and the national treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members, i. e. a WTO member has to grant the most favorable conditions under which it allows trade in a certain product type to all other WTO members. "Grant someone a special favour and you have to do the same for all other WTO members.National treatment means that imported and locally-produced goods should be treated equally (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e. g. technical standards, security standardes et al. discriminating against imported goods).

Reciprocity. It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions intend to ensure that such gains will materialize.

Binding and enforceable commitments. The tariff commitments made by WTO members in a multilateral trade negotiation and on accession are enumerated in a schedules (list) of concessions. These schedules establish "ceiling bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute settlement procedures.

Transparency. The WTO members are required to publish their trade regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO. These internal transparency requirements are supplemented and facilitated by periodic country-specific reports (trade policy reviews) through the Trade Policy Review

Mechanism (TPRM). The WTO system tries also to improve predictability and stability, discouraging the use of quotas and other measures used to set limits on quantities of imports

Safety valves. In specific circumstances, governments are able to restrict trade. There are three types of provisions in this direction: articles allowing for the use of trade measures to attain noneconomical objectives; articles aimed at ensuring "fair competition"; and provisions permitting intervention in trade for economic reasons.

Uruguay Round
Well before GATT's 40th anniversary, its members concluded that the GATT system was straining to adapt to a new globalizing world economy. In response to the problems identified in the 1982 Ministerial Declaration (structural deficiencies, spill-over impacts of certain countries' policies on world trade GATT could not manage etc.), the eighth GATT round known as the Uruguay Round was launched in September 1986, in Punta del Este, Uruguay. It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles; all the original GATT articles were up for review.
1. Agreement on trade in Services

In the Uruguay Round, for the first time, trade in services like banking, insurance, travel, labour movement, transportation etc. Was brought under negotiations. THE GENERAL AGREEMENT ON TRADE IN SERVICES (GATS) is the first multilateral agreement on trade in services and it has as its objectives, the liberalization of trade in all services. All members nations are bound to open their services sector to domestic private and foreign competition.

2. Agreement on Manufactured Good

The developed countries agreed to reduce tariffs on manufactured goods other than textiles, by 40 percent. The tariffs would now be brought down to an average of 3.8 percent from the earlier 6.3 percent.

3. Agreement on Agriculture The objective of this agreement is to increase market orientation in agriculture in the member nations. The members are required to transform their non tariff barriers like quotas into equivalent tariff measures. The tariffs resulting from such transformation and other tariffs on agricultural products are to be reduced on an average by 36 percent over

a period of 6 years in case of developed countries, and 24 percent over a period of 10 years in case of developing countries. No such commitments were necessary in case of least developed countries.

4. Agreement on Textiles and Clothing (Multi Fibre Arrangement)

The Multi Fibre Arrangement (MFA) is in force since 1973. In the Uruguay Round it was agreed that the import quotas on textiles and clothing in force under the MFA, would be phased out over a span of 10 years, by the end of transition period on January 1, 2005.

Trade Related Intellectual Property Rights (TRIPs)

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation. It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

TRIPS contains requirements that nations' laws must meet for: copyright rights, including the rights of performers, producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents; monopolies for the developers of new plant varieties; trademarks; trade dress; and undisclosed or confidential information. TRIPs also specify enforcement procedures, remedies, and dispute resolution procedures. The TRIPs agreement introduced intellectual property law into the international trading system for the first time, and remains the most comprehensive international agreement on intellectual property to date. In 2001, developing countries concerned that developed countries were insisting on an overly-narrow reading of TRIPs, initiated a round of talks that resulted in the Doha Declaration: a WTO statement that clarifies the scope of TRIPs; stating for example that TRIPs can and should be interpreted in light of the goal "to promote access to medicines for all." TRIPS has been criticised by the alter-globalization movement, regarding for example its consequences with regards to the AIDS pandemic in Africa.

TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) treaty in 1994. Its inclusion was the culmination of a program of intense

lobbying by the United States, supported by the European Union, Japan and other developed nations. Campaigns of unilateral economic encouragement under the Generalized System of Preferences and coercion under Section 301 of the Trade Act played an important role in defeating competing policy positions that were favoured by developing countries, most notably Korea and Brazil, but also including Thailand, India and Caribbean Basin states. In turn, the United States strategy of linking trade policy to intellectual property standards can be traced back to the entrepreneurship of senior management at Pfizer in the early 1980s, who mobilized corporations in the United States and made maximizing intellectual property privileges the number one priority of trade policy in the United States (Braithwaite and Drahos, 2000, Chapter 7). After the Uruguay round, the GATT became the basis for the establishment of the World Trade Organization. Because ratification of TRIPS is a compulsory requirement of World Trade Organization membership, any country seeking to obtain easy access to the numerous international markets opened by the World Trade Organization must enact the strict intellectual property laws mandated by TRIPS. For this reason, TRIPS is the most important multilateral instrument for the globalization of intellectual property laws. States like Russia and China that were very unlikely to join the Berne Convention have found the prospect of WTO membership a powerful enticement. Furthermore, unlike other treaties on intellectual property, TRIPS has a powerful enforcement mechanism. States can be disciplined through the WTO's dispute settlement mechanism.

The requirements of TRIPS

TRIPS require member states to provide strong protection for intellectual property rights. For example, under TRIPS:

Copyright terms must extend to 50 years after the death of the author, although films and photographs are only required to have fixed 50 and 25 year terms, respectively. Copyright must be granted automatically, and not based upon any "formality", such as registrations or systems of renewal. Computer programs must be regarded as "literary works" under copyright law and receive the same terms of protection. National exceptions to copyright (such as "fair use" in the United States) must be tightly constrained. Patents must be granted in all "fields of technology," although exceptions for certain public interests are allowed (Art. 27.2 and 27.3 [1]) and must be enforceable for at least 20 years (Art 33). Exceptions to patent law must be limited almost as strictly as those to copyright law. In each state, intellectual property laws may not offer any benefits to local citizens which are not available to citizens of other TRIPs signatories by the principles of national

treatment (with certain limited exceptions, Art. 3 and 5 [2]). TRIPS also has a most favoured nation clause. Many of the TRIPS provisions on copyright were imported from the Berne Convention for the Protection of Literary and Artistic Works and many of its trademark and patent provisions were imported from the Paris Convention for the Protection of Industrial Property.

Controversy Since TRIPS came into force it has received a growing level of criticism from developing countries, academics, and Non-governmental organizations. Some of this criticism is against the WTO as a whole, but many advocates [attribution needed] of trade liberalization also regard TRIPS as bad policy. TRIPS' wealth redistribution effects (moving money from people in developing countries to copyright and patent owners in developed countries) and its imposition of artificial scarcity on the citizens of countries that would otherwise have had weaker intellectual property laws are a common basis for such criticisms. Access to essential medicines The most visible conflict has been over AIDS drugs in Africa. Despite the role which patents have played in maintaining higher drug costs for public health programs across Africa, this controversy has not led to a revision of TRIPs. Instead, an interpretive statement, the Doha Declaration, was issued in November 2001, which indicated that TRIPs should not prevent states from dealing with public health crises. After Doha, PhRMA, the United States and to a lesser extent other developed nations began working to minimize the effect of the declaration. A 2003 agreement loosened the domestic market requirement, and allows developing countries to export to other countries where there is a national health problem as long as drugs exported are not part of a commercial or industrial policy. Drugs exported under such a regime may be packaged or coloured differently to prevent them from prejudicing markets in the developed world. In 2003, the Bush administration also changed its position, concluding that generic treatments might in fact be a component of an effective strategy to combat HIV. Bush created the PEPFAR program, which received $15 billion from 2003-2007, and was reauthorized in 2007 for $30 billion over the next five years. Despite wavering on the issue of compulsory licensing, PEPFAR began to distribute generic drugs in 2004-5. Software and business method patents Another controversy has been over the TRIPS Article 27 requirements for patentability "in all fields of technology", and whether or not this necessitates the granting of software and business method patents

Anti-dumping actions If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be dumping the product. Is this unfair competition? Opinions differ, but many governments take action against dumping in order to defend their domestic industries.

The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping it disciplines anti-dumping actions, and it is often called the Anti-Dumping Agreement. (This focus only on the reaction to dumping contrasts with the approach of the Subsidies and Countervailing Measures Agreement.) The legal definitions are more precise, but broadly speaking the WTO agreement allows governments to act against dumping where there is genuine (material) injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporters home market price), and show that the dumping is causing injury or threatening to do so. GATT (Article 6) allows countries to take action against dumping. The Anti-Dumping Agreement clarifies and expands Article 6, and the two operate together. They allow countries to act in a way that would normally break the GATT principles of binding a tariff and not discriminating between trading partners typically anti-dumping action means charging extra import duty on the particular product from the particular exporting country in order to bring its price closer to the normal value or to remove the injury to domestic industry in the importing country. There are many different ways of calculating whether a particular product is being dumped heavily or only lightly. The agreement narrows down the range of possible options. It provides three methods to calculate a products normal value. The main one is based on the price in the exporters domestic market. When this cannot be used, two alternatives are available the price charged by the exporter in another country, or a calculation based on the combination of the exporters production costs, other expenses and normal profit margins. And the agreement also specifies how a fair comparison can be made between the export price and what would be a normal price. Calculating the extent of dumping on a product is not enough. Anti-dumping measures can only be applied if the dumping is hurting the industry in the importing country. Therefore, a detailed investigation has to be conducted according to specified rules first. The investigation must evaluate all relevant economic factors that have a bearing on the state of the industry in question. If the investigation shows dumping is taking place and domestic industry is being hurt, the exporting company can undertake to raise its price to an agreed level in order to avoid antidumping import duty. Detailed procedures are set out on how anti-dumping cases are to be initiated, how the investigations are to be conducted, and the conditions for ensuring that all interested parties are given an opportunity to present evidence. Anti-dumping measures must expire five years after the date of imposition, unless an investigation shows that ending the measure would lead to injury. Anti-dumping investigations are to end immediately in cases where the authorities determine that the margin of dumping is insignificantly small (defined as less than 2% of the export price of the product). Other conditions are also set. For example, the investigations also have to end if the volume of dumped imports is negligible (i.e. if the volume from one country is less than 3% of total imports of that product although investigations can proceed if several countries, each supplying less than 3% of the imports, together account for 7% or more of total imports). The agreement says member countries must inform the Committee on Anti-Dumping Practices about all preliminary and final anti-dumping actions, promptly and in detail. They must also report on all investigations twice a year. When differences arise, members are encouraged to consult each other. They can also use the WTOs dispute settlement procedure.

Trade Related Investment Measures (TRIMS)

The WTO Agreement on Trade Related Investment Measures (TRIMs) are rules that apply to the domestic regulations a country applies to foreign investors, often as part of an industrial policy. Policies such as local content requirements and trade balancing rules that have traditionally been used to both promote the interests of domestic industries and combat restrictive business practices are now banned. Trade related Investment Measures is the name of one of the four principal legal agreements of the WTO trade treaty. TRIMs are rules, which restrict preference of domestic firms and thereby enable international firms to operate more easily within foreign markets. Some investment measures that discriminate against foreign investments were identified as a) Obligation on Foreign investors to use local inputs b) To produce for exports as a condition to obtain imported inputs Finally, In November 1992, the US and EU settled most of their differences in a deal known informally as "the Blair House accord", and on April 15, 1994, the deal was signed by ministers from most of the 123 participating governments at a meeting in Marrakesh, Morocco. The agreement established the World Trade Organization, which came into being upon its entry into force on January 1, 1995, and replaced GATT as an international organization. It is widely regarded as the most profound institutional reform of the world trading system since the GATT's establishment.

Ministerial Conferences

Ministerial conferences First ministerial conference The inaugural ministerial conference was held in Singapore in 1996. Disagreements between largely developed and developing economies emerged during this conference over four issues initiated by this conference, which led to them being collectively referred to as the "Singapore issues". Second ministerial conference Was held in Geneva in Switzerland. Third ministerial conference The third conference in Seattle, Washington ended in failure, with massive demonstrations and police and National Guard crowd control efforts drawing worldwide attention. Fourth ministerial conference Was held in Doha In Persian Gulf nation of Qatar. Fifth ministerial conference The ministerial conference was held in Cancn, Mexico, aiming at forging agreement on the Doha round. An alliance of 22 southern states, the G20 (led by India, People's Republic of China and Brazil), resisted demands from the North for agreements on the so-called "Singapore issues" and called for an end to agricultural subsidies within the EU and the US. The talks broke down without progress. Sixth ministerial conference The sixth WTO Conference Ministerial was held in Hong Kong from December 13 - December 18, 2005. It was considered vital if the four-year-old Doha Development Agenda negotiations were to move forward sufficiently to conclude the round in 2006. In this meeting, countries agreed to phase out all their agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of 2006. Further concessions to developing countries included an agreement to introduce duty free, tariff free access for goods from the Least Developed Countries, following the Everything But Arms initiative of the European Union - but with up to 3% of tariff lines exempted. Other major issues were left for further negotiation to be completed by the end of 2006.

DOHA Development Round (DDR)

At the Fourth Ministerial Conference in Doha, Qatar, in November 2001 WTO member governments agreed to launch new negotiations. They also agreed to work on other issues, in particular the implementation of the present agreements. The entire package is called the Doha Development Agenda (DDA). The negotiations take place in the Trade Negotiations Committee and its subsidiaries, which are usually, either, regular councils and committees meeting in special sessions, or speciallycreated negotiating groups. Other work under the work programme takes place in other WTO councils and committees. This round was to have begun at the WTO Ministerial Conference of 1999 in Seattle, and was to have been called "The Seattle Round" but some developing countries refused to launch the second round by blocking the "explicit consensus" needed at the final Heads of Delegation meeting. Severe demonstrations distracted attention [neutrality disputed] from the refusal of developing nations to expand the WTO after having been devastated by the Uruguay Round. The new round could only be launched at a meeting in Doha, Qatar. The explicit consensus at the conclusion of the Doha Conference was reached only after some delegations of the developing nations had been forced to leave the country [citation needed]. The new trade agenda of the developed world was dubbed the Doha Development Agenda, and from there all countries were committed to negotiations opening agricultural and manufacturing markets, as well as services negotiations and expanded intellectual property regulation. The intent of the round, according to its proponents, was to make trade rules fairer for developing countries. Opponents charged that the round would expand a system of trade rules that were bad for development and interfered excessively with countries' domestic "policy space". The round was set to be concluded in four years (December 2006) after two more Ministerial Conferences had produced a final draft declaration. The WTO pushed back its self-imposed

deadline to slightly precede the expiration of the U.S. President's Congressional Fast Track Trade Promotion Authority. Any declaration of the WTO must ultimately be confirmed by the U.S. Congress. Trade Promotion Authority prevents Congress from amending the draft. It expired on June 30, 2007 There are 19-21 subjects listed in the Doha Declaration, depending on whether to count the rules subjects as one or three. Most of them involve negotiations; other work includes actions under implementation, analysis and monitoring. They are as follows: 1. Implementation-related issues and concerns 2. General Agreement on Tariffs and Trade (GATT) 3. Agriculture 4. Sanitary and Phytosanitary (SPS) measures 5. Textiles and clothing 6. Technical barriers to trade 7. Trade-related investment measures (TRIMs) 8. Anti-dumping 9. Customs valuation 10.Rules of origin 11.Subsidies and countervailing measures 12.Trade-related aspects of intellectual property rights (TRIPS) 13.Cross-cutting issues 14.Outstanding implementation issues 15.Final provisions 16.Agriculture 17.Services 18.Market access for non-agricultural products 19.Relationship between trade and investment 20.Interaction between trade and competition policy 21.Transparency in government procurement 22.Trade facilitation 23.Dispute Settlement Understanding 24.Trade and environment

25.Electronic commerce 26.Small economies 27.Trade, debt and finance 28.Trade and technology transfer 29.Technical cooperation and capacity building 30.Least-developed countries
GATT and WTO trade rounds Sources a)The GATT years: from Havana to Marrakesh, World Trade Organization b)Timeline: World Trade Organization A chronology of key events, BBC News c)Brakman-Garretsen-Marrewijk-Witteloostuijn, Nations and Firms in the Global Economy, Chapter 10: Trade and Capital Restriction

Name

Start

Duration Countries

Subjects covered

Achievements

Geneva

April 1947 7 months

23

Tariffs

Signing of GATT, 45,000 tariff concessions affecting $10 billion of trade

Annecy

April 1949 5 months

13

Tariffs

Countries exchanged some 5,000 tariff concessions

Torquay

September 8 months 1950

38

Tariffs

Countries exchanged some 8,700 tariff concessions, cutting the 1948 tariff levels by 25%

Geneva II

January 1956

5 months

26

Tariffs, admission of Japan

$2.5 billion in tariff reductions

Dillon

September 11 1960 months

26

Tariffs

Tariff concessions worth $4.9 billion of world trade

Kennedy May 1964

37 months

62

Tariffs, Anti-dumping

Tariff concessions worth $40 billion of world trade

Tokyo

September 74 1973 months

102

Tariffs, non-tariff Tariff reductions worth more than $300 measures, "framework" billion dollars achieved agreements

Uruguay

September 87 1986 months

123

The round led to the creation of WTO, Tariffs, non-tariff and extended the range of trade measures, rules, negotiations, leading to major services, intellectual reductions in tariffs (about 40%) and property, dispute agricultural subsidies, an agreement to settlement, textiles, allow full access for textiles and agriculture, creation of clothing from developing countries, and WTO, etc an extension of intellectual property rights.

Doha

November 2001

141

Tariffs, non-tariff measures, agriculture, labor standards, environment, competition, investment, transparency, patents etc

The round is not yet concluded.

The November 2001 declaration of the ministerial conference in Doha, Qatar provides the mandate for negotiations on a range of subjects and work including issues concerning the implementation of the agreements. The 21 subjects were listed in the Doha Declaration. Most of them involve negotiations and other works including actions under implementation, analysis and monitoring. In Doha First, ministers agreed to adopt around 50 decisions clarifying the obligations of developing Country member Governments with respect to issues including agriculture, subsidies, textiles and clothing, technical barriers to trade, trade-related investment measures and rules of Origin. Agreement on these points required hard bargaining between negotiators over the course of nearly three years. Many other implementation issues of concern to developing countries have not been settled. For these issues, Ministers agreed in Doha on a future work programme for addressing these matters. The ministers established a two-track approach. Those issues for which there was an agreed negotiating mandate in the declaration would be dealt with under the terms of that mandate.

HIGHLIGHTS ON DOHA ROUND Agriculture

Negotiations on agriculture began in early 2000, under Article 20 of the WTO Agriculture Agreement. By November 2001 and the Doha Ministerial Conference, 121 Governments had submitted a number of negotiating proposals. The declaration reconfirms the long-term objectives already agreed in the present WTO Agreement i, e to establish a fair and market-oriented trading system through a programme of fundamental reform. The programme encompasses strengthened rules, and specific commitments on Government support and protection for agriculture. The purpose is to correct and prevent restrictions and distortions in world agricultural markets. Without prejudging the outcome, member governments commit themselves to comprehensive negotiations that aimed at as follows 1) Market access: substantial reductions 2) Exports subsidies: reductions of, with a view to phasing out, all forms of these 3) Domestic support: substantial reductions for supports that distort trade The declaration makes special and differential treatment for developing countries throughout the negotiations. It declares that the outcome should be effective in practice and should enable the developing countries for meeting their needs, in particular in food security and rural development. The ministers also take note of the non-trade concerns (such as environmental protection, food security, rural development, etc) reflected in the negotiating proposals already submitted. They had confirmed that the negotiations would take these into account, as provided in the Agricultural Agreement.

SERVICES
The WTO General Agreement on Trade in Services (GATS) commits member governments to undertake negotiations on specific issues and to enter into successive rounds of negotiations to progressively liberalize trade in services. The services negotiations started officially in early 2000 under the Council for Trade in Services. In March 2001, the Services Council fulfilled a key element in the negotiating mandate by establishing the negotiating guidelines and procedures. The Doha Declaration reaffirms the negotiating guidelines and procedures, and establishes some key elements of the timetable including, most importantly, the deadline for concluding the negotiations as part of a single undertaking

Market Access for non-Agricultural Products

The ministers came to an agreement to launch tariff-cutting negotiations on all nonagricultural products. The aim is to reduce, or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff

barriers, in particular on products of export interest to developing countries. These negotiations shall take into account the special needs and interests of developing and leastdeveloped countries, and recognize that these countries do not need to match or reciprocate in full tariff-reduction commitments by other participants. Another example is tariff escalation, in which higher import duties were applied on semiprocessed products than on raw materials and higher still on finished products. These practices protect domestic processing industries and discourage the development of processing activities in the countries where raw materials originate.

Trade related Intellectual Property Rights (TRIPS)

TRIPS and Public Health In the declaration, ministers have stressed that it is important to implement and interpret the TRIPS Agreement in a way that supports public health by promoting both access to existing medicines and the creation of new medicines. They refer to their separate declaration on this subject. This special declaration on TRIPS and public health is designed to respond concerns about the possible implications of the TRIPS Agreement for access to medicines. It emphasizes that the TRIPS Agreement does not and should not prevent member governments from acting to protect public health. It affirms governments right to use the agreements flexibilities in order to avoid any reticence the governments may feel. The separate declaration clarifies some of the forms of flexibility available, in particular compulsory licensing and parallel importing. (For an explanation of these issues, go to the main TRIPS pages on the WTO website)

Transparency In Government Procurement

The Doha Declaration says that the negotiations shall be limited to the transparency aspects and therefore that will not restrict the scope for countries to give preferences to domestic supplies and suppliers it is separate from the plurilateral Government Procurement Agreement. The declaration had stressed development concerns, technical assistance and capacity building. Since the 1 August 2004 decision, this subject has been dropped from the Doha agenda.

WTO Rules: Anti Dumping and Subsidies: The ministers agreed on negotiations concerning the Anti-Dumping (GATT Article 6) and Subsidies agreements. The aim is to clarify and improve disciplines while preserving the basic, concepts, principles of these agreements, and taking into account the needs of developing and least-developed participants.

In overlapping negotiating phases, participants first indicated which provisions of these two agreements they think should be the subject of clarification and improvement in the next phase of negotiations. The ministers mention specifically fisheries subsidies as one sector important to developing countries and where participants should aim to clarify and improve WTO disciplines.

1. The WTO Is Fundamentally Undemocratic The policies of the WTO impact all aspects of society and the planet, but it is not a democratic, transparent institution. The WTO rules are written by and for corporations with inside access to the negotiations. For example, the US Trade Representative gets heavy input for negotiations from 17 "Industry Sector Advisory Committees." Citizen input by consumer, environmental, human rights and labor organizations is consistently ignored. Even simple requests for information are denied, and the proceedings are held in secret. Who elected this secret global government? 2. The WTO Will Not Make Us Safer The WTO would like you to believe that creating a world of "free trade" will promote global understanding and peace. On the contrary, the domination of international trade by rich countries for the benefit of their individual interests fuels anger and resentment that make us

less safe. To build real global security, we need international agreements that respect people's rights to democracy and trade systems that promote global justice. 3. The WTO Tramples Labour and Human Rights WTO rules put the "rights" of corporations to profit over human and labour rights. The WTO encourages a 'race to the bottom' in wages by pitting workers against each other rather than promoting internationally recognized labour standards. The WTO has ruled that it is illegal for a government to ban a product based on the way it is produced, such as with child labour. It has also ruled that governments cannot take into account "non commercial values" such as human rights, or the behavior of companies that do business with vicious dictatorships such as Burma when making purchasing decisions. 4. The WTO Would Privatize Essential Services The WTO is seeking to privatize essential public services such as education, health care, energy and water. Privatization means the selling off of public assets - such as radio airwaves or schools - to private (usually foreign) corporations, to run for profit rather than the public good. The WTO's General Agreement on Trade in Services, or GATS, includes a list of about 160 threatened services including elder and child care, sewage, garbage, park maintenance, telecommunications, construction, banking, insurance, transportation, shipping, postal services, and tourism. In some countries, privatization is already occurring. Those least able to pay for vital services - working class communities and communities of color - are the ones who suffer the most. 5. The WTO Is Destroying the Environment The WTO is being used by corporations to dismantle hard-won local and national environmental protections, which are attacked as "barriers to trade." The very first WTO panel ruled that a provision of the US Clean Air Act, requiring both domestic and foreign producers alike to produce cleaner gasoline, was illegal. The WTO declared illegal a provision of the Endangered Species Act that requires shrimp sold in the US to be caught with an inexpensive device allowing endangered sea turtles to escape. The WTO is attempting to deregulate industries including logging, fishing, water utilities, and energy distribution, which will lead to further exploitation of these natural resources. 6. The WTO is Killing People The WTO's fierce defense of 'Trade Related Intellectual Property' rights (TRIPs)patents, copyrights and trademarkscomes at the expense of health and human lives. The WTO has protected for pharmaceutical companies' 'right to profit' against governments seeking to protect their people's health by providing lifesaving medicines in countries in areas like sub-saharan Africa, where thousands die every day from HIV/AIDS. Developing countries won an important victory in 2001 when they affirmed the right to produce generic drugs (or import them if they lacked production capacity), so that they could provide essential lifesaving medicines to their populations less expensively. Unfortunately, in September 2003, many new conditions were agreed to that will make it more difficult for countries to produce those drugs. Once again, the WTO demonstrates that it favors corporate profit over saving human lives. 7. The WTO is Increasing Inequality Free trade is not working for the majority of the world. During the most recent period of rapid growth in global trade and investment (1960 to 1998) inequality worsened both internationally and within countries. The UN Development Program reports that the richest 20 percent of the world's population consume 86 percent of the world's resources while the poorest 80 percent

consume just 14 percent. WTO rules have hastened these trends by opening up countries to foreign investment and thereby making it easier for production to go where the labor is cheapest and most easily exploited and environmental costs are low. 8. The WTO is Increasing Hunger Farmers produce enough food in the world to feed everyone -- yet because of corporate control of food distribution, as many as 800 million people worldwide suffer from chronic malnutrition. According to the Universal Declaration of Human Rights, food is a human right. In developing countries, as many as four out of every five people make their living from the land. But the leading principle in the WTO's Agreement on Agriculture is that market forces should control agricultural policies-rather than a national commitment to guarantee food security and maintain decent family farmer incomes. WTO policies have allowed dumping of heavily subsidized industrially produced food into poor countries, undermining local production and increasing hunger. 9. The WTO Hurts Poor, Small Countries in Favor of Rich Powerful Nations The WTO supposedly operates on a consensus basis, with equal decision-making power for all. In reality, many important decisions get made in a process whereby poor countries' negotiators are not even invited to closed door meetings -- and then 'agreements' are announced that poor countries didn't even know were being discussed. Many countries do not even have enough trade personnel to participate in all the negotiations or to even have a permanent representative at the WTO. This severely disadvantages poor countries from representing their interests. Likewise, many countries are too poor to defend themselves from WTO challenges from the rich countries, and change their laws rather than pay for their own defense. 10. The WTO Undermines Local Level Decision-Making and National Sovereignty The WTO's "most favored nation" provision requires all WTO member countries to treat each other equally and to treat all corporations from these countries equally regardless of their track record. Local policies aimed at rewarding companies who hire local residents, use domestic materials, or adopt environmentally sound practices are essentially illegal under the WTO. Developing countries are prohibited from creating local laws that developed countries once pursued, such as protecting new, domestic industries until they can be internationally competitive. California Governor Gray Davis vetoed a "Buy California" bill that would have granted a small preference to local businesses because it was WTO-illegal. Conforming with the WTO required entire sections of US laws to be rewritten. Many countries are even changing their laws and constitutions in anticipation of potential future WTO rulings and negotiations. 11. There are Alternatives to the WTO Citizen organizations have developed alternatives to the corporate-dominated system of international economic governance. Together we can build the political space that nurtures a democratic global economy that promotes jobs, ensures that every person is guaranteed their human rights to food, water, education, and health care, promotes freedom and security, and preserves our shared environment for future generations. 12. The Tide is Turning Against Free Trade and the WTO! International opposition to the WTO is growing. Massive protests in Seattle of 1999 brought over 50,000 people together to oppose the WTOand succeeded in shutting the meeting down. When the WTO met in 2001, the Trade negotiators were unable meet their goals of expanding the WTO's reach. The WTO met in Cancn, Mexico this past September 10--14, and met thousands of

activists in protest and scoring a major victory for democracy. Developing countries refused to give in to the rich countries' agenda of WTO expansion - and caused the talks to collapse! The ten benefits 1. The system helps promote peace 2. Disputes are handled constructively 3. Rules make life easier for all 4. Freer trade cuts the costs of living 5. It provides more choice of products and qualities 6. Trade raises incomes 7. Trade stimulates economic growth 8. The basic principles make life more efficient 9. Governments are shielded from lobbying 10. The system encourages good government