Cancun: Why You Should
What's at stake in the upcoming WTO negotiations; and
why it matters.
The Ecologist, June 2003
Half the point of the World Trade Organisation is
that hardly anybody understands it. Its founding documents
are hundreds of pages long,, its committees and subcommittees
proliferate endlessly, its language is obtuse, and the
end result is that anyone who doesn't work there, study
it for a living or have several years of hard graft
as a trade lawyer behind them has a lot of trouble working
out what the hell is going on. Modalities. Appelate
bodies. Singapore issues. Built-in agendas. Single undertakings.
Got it? No? Good.
Conveniently, this has meant that for the entire eight
years of its existence most of us have had a hard time
working out what effect the WTO's corporate-led agreements
will actually have on our lives - at least until it's
too late. And there's no reason this should change now.
Thus it is that when we try to find out what decisions
are actually likely to be made at the WTO's upcoming
ministerial conference at Cancun - and what difference
they are likely to make in the real world - the answer
can seem as hard to fathom as the outcome of the WTO's
recent ruling on 'anti-dumping duties on corrosion-resistant
carbon-steel flat products from Japan' (pay attention
at the back).
Nevertheless, if we persevere we can dimly make out
- through the shifting fog of tariff preferences, compliance
rulings, technical co-operation and countervailing measures
- the approach of a whole regiment of decisions and
pre-decisions that, if they are made as planned at Cancun,
will expand the project the WTO has been engaged in
since it began life in 1995.
That project is to extend the organisation's remit
far beyond trade to cover almost every aspect of the
global economy and, in the process, create new rules
would tie the hands of governments and free those of
corporations - effectively redistributing power from
the elected to the unelected. And we can take more than
an educated guess at what the effects of this would
be on our everyday lives.
Likely Cancun Outcome 1
Ability of corporations to sue governments when 'denied'
Would it bother you if corporations were given the
legal right to sue your government for the inconvenience
of having to abide by your country's laws? Would you
mind if, faced with such pressure on a regular basis,
your elected representatives started to water down or
remove your environmental and social protection laws
so as to keep multinational companies happy?
If so, then start worrying about the upcoming discussions
at Cancun on the so-called 'new issues'. Led by the
European Union, some governments want to begin discussions
at Cancun about how to turn four new WTO subjects into
international law. The topics themselves sound as numbingly
dull and technical as most of the WTO's agenda: investment,
competition, government procurement and trade facilitation.
As ever, though, the language conceals the potentially
enormous impact that these negotiations could have on
Of these four topics, one in particular stands out:
investment. That seemingly innocuous word could be used
to justify a new WTO agreement that could prove more
dangerous - and controversial - than anything yet seen.
NGOs are already mobilising against this possibility;
more than 40 of them from all over the world signed
a statement in March demanding that investment negotiations
are not launched at Cancun. They, and many others, fear
the rebirth of the notorious Multilateral Agreement
on Invest-ment (MAI), a treaty that was drawn up by
corporations and launched behind closed doors in the
Had it gone ahead, the MAI would have allowed multinational
corporations to sue national governments if the corporations
felt they had been denied 'investor rights'. It would
have gutted government control over where and when foreign
companies invested in their countries. It would have
banned governments from supporting local or national
investment over that of multinationals. In short, it
would have removed virtually all the power of elected
local and national governments to control how multinationals
invested and behaved in their countries.
Fortunately, the MAI was killed off in 1998 by an international
NGO campaign sparked by a leak of a negotiating text
of the treaty. But those corporations and governments
that were pushing for the MAI in the 1990s are now using
the WTO to try and put something similar into practice.
What would it mean if this were to happen? A good place
to go to find out is Canada, one of the three countries,
along with Mexico and the US, that are part of the North
American Free Trade Agreement (Nafta). Nafta contains
Chapter 11 - a highly controversial 'investor rights'
clause that is similar to the MAI proposals, and which
may form the basis of any new investment agreement at
The premise of Chapter 11 is frighteningly simple:
if a government prevents a foreign company from investing
in its country, or if it changes any conditions affecting
its investment once it has arrived, that company has
the right to sue the government for 'compensation' for
any lost or potential profits.
The reason for the government's action doesn't matter;
whether the government is trying to protect the environment,
enforce labour or planning laws or promote local economies
- even if it's all legal -, a company can sue. Chapter
11 is the first international agreement that allows
corporations to sue governments. The MAI was supposed
to be the second. The WTO may be about to claim that
honour instead and take it global.
Does it matter? Ask the people of Canada, Mexico and
the US. Chapter 11 has massively undermined their democratic
rights, and has been used by foreign corporations to
systematically undermine their national environmental
and health regulations (see box opposite). Corporations
there can now define environmental laws, health regulations
and other limits on their investment activities as 'appropriation'
of profits they might have made if those laws were not
in place. By suing governments they can effectively
demand payment for having to abide by the law. Any new
investment law that comes out of the WTO may contain
a similar clause; that's certainly what corporations
want. The results of that happening would be disastrous.
Corporations could sue our elected governments for daring
to protect our countryside or for regulating what goes
into our food and the quality of the air we breathe.
Our governments would be faced with a choice: compensate
the corporation, with our money, for the inconvenience
of having to obey the law, or change the law until it
suits the corporation.
Likely Cancun Outcome 2
Public contracts forcibly opened up to international
How does your government spend your money? Who does
it hire to clean your hospitals, cook your school dinners,
build your roads, equip your police force? Does it give
preference to local firms? Does it employ voluntary
organisations? Does it source the things it buys from
your own country, to help boost your economy? If so,
it may not be allowed to do so for much longer - by
order of the WTO.
Another of the 'new issues' being pushed in the run-up
to Cancun is 'government procurement', which in English
means 'the things your government buys, for public use'.
At the moment, it's up to governments to decide how
they spend tax-payers' money. Many of them spend it
in ways that deliberately support native industries,
traditions, companies and products. Fair enough, you
might think; it's their money. But at Cancun, some governments
are lobbying for the WTO to set up a new agreement on
'transparency in government procurement'. Opponents
of this proposal say it is the thin end of a wedge that
would lead within a few years to new WTO rules to force
governments to open up all their purchasing decisions
to international competition.
Government procurement can amount to up to 12 per cent
of a country's GDP. That's a huge market. Unsurprisingly,
multinational corporations are eager to access this
market by requiring governments to give them equal treatment
in spending contracts.
When the UK's Department for Education and Skills decides
who will be employed to run school canteens, for example,
it wouldn't be allowed to simply choose a local firm;
it would have to allow foreign corporations to bid for
the contract. McDonald's in your nurseries, anyone?
KFC school dinners? It already happens all over the
US. Why not here? And why not Nike making police uniforms
or Starbucks providing hospital meals? This is what
corporations are aiming at. It's nothing at all to do
with trade - it's about forcing corporate activity into
ever more areas of our lives, whether we need it or
Likely Cancun Outcome 3
Public services handed over to corporations
How do you feel about your public services? Would you
like them to stay public? Or would you prefer it if
they were forcibly prised open to foreign corporate
competition by way of a new international law? All in
the name of trade, of course.
The WTO's General Agreement on Trade in Services (Gats)
would allow for the 'liberalisation' (ie,the deregulation
and potential privatisation) of 'services'. It would
apply to many key public services in countries with
public healthcare, education, transport, welfare, water
and energy systems. Gats was proposed when the WTO began
life in 1994, and is due to be finalised by the end
of 2004. In the meantime, negotiations on the final
agreement are progressing in secret. They are due to
be reviewed at Cancun, where the WTO will undertake
a 'stock-taking' of Gats' progress. Governments and
corporate lobbyists will undoubtedly use Cancun as an
opportunity for some more arm-twisting on Gats.
They have a lot to win by doing so, for governments
have recently been submitting to the WTO the list of
services that they are willing to open up to foreign
corporate competition - and the list of those services
in other countries that their companies want to get
their hands on. The EU recently submitted its own list
of requests to the WTO. The list was promptly leaked
to NGOs, and shows what you will have to contend with
if you are the resident of any of the countries that
Europe's multinational lobbyists have their beady eyes
on. The EU wants its companies to be granted access
to the water provision, telecommunications, energy and
transport networks of 109 of the world's poorest countries.
The effects of this could be enormous. Imagine, for
example, that you are a resident of the Bolivian mountain
city of Cochabamba. Imagine that you were one of the
thousands of people who took to the streets there in
early 2000 - protesting at the sell-off of your city's
water system to the US multinational Bechtel, which
raised your water bills by up to 300 per cent (and is
now being paid by the US government to rebuild Iraq).
Imagine that you had celebrated with the rest of the
city after your protests had driven the corporation
out and led to the water system being taken back into
public ownership - an unprecedented reversal of a major
privatisation. Now imagine how you would feel were you
to learn that the EU has requested that the Bolivian
government should open up all its water delivery systems
to foreign corporate competition under Gats. If that
were to happen, it would be enshrined in the text of
an international treaty that your government, even if
it wanted to, would have no power to reverse.
If you live in Europe and can't or won't imagine this,
there are effects closer to home that you might like
to consider. For, wherever you are, you're not safe
from Gats; it is European corporations, not European
citizens, whose interests it promotes. If you live in
Britain, for example, you might be interested in the
list of your public services that other WTO members
would like their corporations to mount a snatch-and-grab
raid on. The list includes your postal service, your
railways (as if privatisation hadn't 'improved' them
enough already) and your public service broadcasting
(otherwise known as the BBC, which Murdoch et al have
been itching to get their hands on for years). Sweet
This is the story of Cancun - the story of a continuing
power grab by private corporations operating under the
fig leaf of the World Trade Organisation; a global colonisation
of pretty much everything by profit-seeking private
interests. And this is the key thing to grasp: this
is not about 'trade' at all; it's about power and who
gets it. Governments or corporations? Ordinary people
or profiteers? The answers to those questions will affect
all of our lives.