Monica A. Rivera LSL2 Why is WTO bad for you?

March 2, 2012 Prof: Susan Lucero

The World Trade Organization, better known as the WTO is an international organization that aims to open trade for the benefit of all. Moreover, (WTOs Director-general, 2012) the WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. Likewise, the WTO is dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible (WTOs Director-general, 2012). But according to the documentary film (Why is WTO bad for you?) that I viewed, it is completely the opposite. The WTOs primary concern is the interest of the transnational corporations and to turn the services into profit. Furthermore, WTO protects and promotes the interests of big corporations and indirectly addresses the local government or the state that they can no longer help and protect its citizens and cannot apply its own laws to the corporations due to the fact that the WTO agreements are being applied. The enforcement mechanism requires all countries to conform their domestic laws, regulations and administrative procedures to the WTO agreements. Hence, the corporations take advantage to their benefits by escaping its states laws and regulations by applying the said agreements. Moreover, the government is given economic sanctions when they want to revise some laws or if they disobey the agreements. Lastly, the WTO prioritizes the corporations to come in and intervene in the state and let all the benefits be given to them, and not to the people. The issue in food security is a serious dilemma for all the third world countries.

(Postnote, parliament.uk) Food security and insecurity are terms used to describe whether or not people have access to sufficient quality and quantity of food. They are affected by factors such as poverty, health, food production, political stability, infrastructure, access to markets, and natural hazards. Improved food security is important for global reduction of hunger and poverty, and for economic development. One aim of the Millennium Development Goals is to reduce by half the proportion of people suffering from hunger by 2015. Currently, 820 million people are affected by hunger in developing countries and numbers are not falling quickly enough to achieve the goal, particularly in Africa and Southern Asia (Postnote, parliament.uk). In relation with WTOs goal of helping the developing countries to fight poverty, it is clear that it is not achieved because these countries have been struggling from survival and by meeting their basic needs. According to Jason Cainglet of the WTOs Public Symposium explained about the food dumping on food markets. Jayson Cainglet described the effects of the current WTO rules which allow for food dumping on international markets. Six years ago, when Philippine accession to the WTO and the ratification of the GATT-UR was being debated in Senate, "free traders" in the Philippines government painted a rosy picture of what the country stands to gain from the GATT. But rapid import liberalization has led to massive increase in imports of rice and other staples in the Philippines and job losses in the farming sector. He questioned the validity of a model that was leading to food insecurity and threatened livelihoods in rural areas of his country. He

argued for regaining flexibility in the use of tariffs in order to protect livelihoods in the rice sector, promote food security. He also defended the need for public policies that would help the farm sector become more competitive before this sector has to face foreign competition (Dumping and the WTO Agreement on Agriculture --food security implications, Public Seminar). In Cainglets explanation, he mentioned about the unfair competition of the WTOs rule on food dumping because it allows big corporations from highly industrialized countries like the UK and the US to import their subsidized food crops to the third world countries provided with a lower or cheaper price compared to the local products or food crops of the local producers from the small business firms. (Sharma, Devinder 2002) Dumping food on to poorer nations (i.e. free, subsidized, or cheap food, below market prices) undercuts local farmers, who cannot compete and are driven out of jobs and into poverty, further slanting the market share of the larger producers such as those from the US and Europe (Sharma, Devinder 2002). The specific principle that the WTO that has been violating is the non-discrimination principle because the principle states that the local products shall not be discriminated in export markets and in international trades and shall be given the same treatment with the other competing countries. The MFN aims to give equal treatment or must not be treated differently in international trades. The national treatment refers to the imported products that are subjected to special taxes and charges that are not applied to the local products. On the other hand, this restricts the domestic businesses to trade outside the country or to export, which can hinder the ability to cope with the import competition.

The principle explains that there should be non-discrimination to the developing countries, but the WTO allows food dumping which kills the local farmers because the big corporations are directly competing with the local producers. Hence, makes an unfair competition through discrimination of the third world countries. The North with 30% to 50% of farmers' income is provided by state subsidies, while the South has been hindered because of the agreement on agriculture demands liberalization, lifting of tariffs and market access to these countries whereas these countries are not subsidized by their state because they do not have the money to subsidize. Although the WTO provided an anti-dumping agreement, it is still very clear that this is being violated because the private firms are still importing cheaper products to the developing countries which make free trade agreements to turn food into a commodity for profit rather than a human right. According to the WTO, they have special provisions that take into account the situations that developing countries face. They also spell out when and how governments can protect their domestic producers, for example from imports that are considered to have unfairly low prices because of subsidies or dumping. Here, the objective is fair trade (WTO). The WTO has been making revisions in their agreements regarding this issue. They have come up with the Agreement on Agriculture, also known as the AoA which has three main pillars: market access, domestic support, and export competition. Nevertheless, this agreement is not being achieved because the unfair competition among the third world countries is still rampant. The USA and UK are just two of the first world countries that have been practicing food dumping in the third world countries which kills the local producers. Therefore, these two countries USA and UK are on the side of WTO because the agreement is basically at an angle in favor of developed countries interests.

The WTO has made an agreement on anti-dumping which aims to protect the local producers by not imposing unfair competition or direct competition of the big corporations against the small business firms. 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? 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 (WTO). Noticeably, the big corporations are also on the side of WTO because it is their interests that are being forwarded. In addition, the big corporations benefit from these developing countries because the consumers would likely to buy products which are cheaper than the products that are available in the market. The people would prefer to buy the food that has lower prices, without them knowing that these food or crops are imported from the USA or UK which are subsidized by their government, leaving our local products with higher prices due to the fact that these are not subsidized by the local government because the state cannot afford to subsidize and support the local farmers. I have read a blog about the peoples disagreement on the laws and regulations of the WTO. Although this blog is not updated, I have read a lot of good points regarding the bad effects of WTO to the developing countries, most especially in Asian countries. (International Labor Groups Unite) We say "Junk WTO!" and we unite with everyone who opposes the WTO for various reasons. We encourage you to participate in the People's Action Week spearheaded

by the HK Peoples' Alliance on WTO (HKPA) of which we are a part. We hope that this blog continues even after MC6 in Hong Kong (International Labor Groups Unite). I suggest that we join these kinds of forums, blogs and get involved in watching the WTOs agenda on making or breaking the developing countries. I believe that if most of us will be well educated on the negative issues regarding the WTOs controversial agreements, people will unite and will agree with the idea of junking the WTO. Another approach in addressing the WTOs issues is by creating a fan page on facebook and putting a forum online to spread the negative effects that the WTO has been doing to the developing countries. Since teenagers and a lot of people have been religiously getting involved in social networks, we should grab this opportunity to use the media and the social network to educate not only the mass, but also the people all over the world. Let us not stop until we get heard by the big people like the government or better yet, the first world countries. I personally believe that the WTO cannot do anything else to stop the abuse that they have been causing the poor people from developing countries because whatever reform they do, it will still end up satisfying just the first world countries and its big corporations and abusing the poor countries and leaving these poor people struggling for survival, most especially those who do not have money to sustain their living.

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References: David, Cristina C., 1999 Constraints to Food Security: The Philippines http://ideas.repec.org/p/phd/dpaper/dp_1999-31.html Celine Charveriat, OXFAM: Seminar on Dumping and the WTO Agreement on Agriculture: food security implications Public symposium http://lawdigitalcommons.bc.edu/cgi/viewcontent.cgi?article=1273&context=lsfp&seiredir=1&referer=http%3A%2F%2Fscholar.google.com.ph%2Fscholar%3Fhl%3Den%26q%3D WTO%2Bviolationg%2Bhuman%2Brights%26btnG%3DSearch%26as_sdt%3D0%252C5%26a s_ylo%3D%26as_vis%3D0#search=%22WTO%20violationg%20human%20rights%22 http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1403&context=auilr&seiredir=1&referer=http%3A%2F%2Fscholar.google.com.ph%2Fscholar%3Fhl%3Den%26q%3D WTO%2Bviolationg%2Bhuman%2Brights%26btnG%3DSearch%26as_sdt%3D0%252C5%26a s_ylo%3D%26as_vis%3D0#search=%22WTO%20violationg%20human%20rights%22 http://www.investopedia.com/articles/economics/dark-side-of-the-wto.asp#axzz1nY2quNWj http://www.thirdworldtraveler.com/WTO_MAI/WTOThreatensDemocracy.html http://socyberty.com/organizations/negative-aspects-of-the-world-trade-organization/ http://lawdigitalcommons.bc.edu/cgi/viewcontent.cgi?article=1273&context=lsfp&seiredir=1&referer=http%3A%2F%2Fscholar.google.com.ph%2Fscholar%3Fhl%3Den%26q%3D WTO%2Bviolationg%2Bhuman%2Brights%26btnG%3DSearch%26as_sdt%3D0%252C5%26a s_ylo%3D%26as_vis%3D0#search=%22WTO%20violationg%20human%20rights%22 http://www.wto.org/english/res_e/doload_e/10b_e.pdf http://www.ifc.org/ifcext/mekongpsdf.nsf/attachmentsbytitle/wto-eng-chapter4/$file/wto-engchapter4.pdf http://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr00_e.htm http://www.parliament.uk/documents/post/postpn274.pdf http://www.globalissues.org/issue/9/food-dumping-aid-maintains-poverty http://www.globalexchange.org/resources/wto/agriculture http://www.glow-boell.de/media/de/txt_rubrik_5/SuS_Arze_RuralWomen.pdf http://www.karyiuwong.com/confer/Sea01/papers/park1.pdf http://junk-wto.blogspot.com/