21 April 2005
Contents:
- Report on Global Week of Action for Trade Justice events
- Howard announces China FTA negotiations … and then
releases Feasibility Study
- Call for public submissions: China Free Trade Agreement
- Trading on Labour Rights, Aust Financial Review
- WTO appellate body ruling on internet gambling case
- Brasillia Declaration on GATS and the right to education
- Call for public submissions: Australia-United Arab Emirates
FTA
- Sydney event: Politics in the Pub discusses the US FTA, 29
April
1. Report on Global Week of Action for Trade Justice events
AFTINET held two events in the Global Week of Action. Both events were very
well-attended and received good media.
On Tuesday 12 April, AFTINET and the Australian Catholic Social Justice Council (ACSJC)
launched the publication, Trade Justice. Trade Justice is part of ACSJC
series of publications on social justice issues and is written by Sister Suzette Clark of
the ACSJC and Dr Patricia Ranald of the Public Interest Advocacy Centre. It analyses the
global trade system from the critical perspectives of social justice, human rights and
Christian values. It shows how current trade agreements are influenced by the most
powerful economies and transnational corporations at the expense of the majority of the
world's people in developing countries. The book argues for changes to Australia's trade
policy and the global trade system to achieve trade justice goals.
The publication was launched by Bishop Patrick Power at the Pitt Street Uniting Church.
Sharan Burrow, President of the Australian Council of Trade Unions, spoke on the impact on
workers rights of trade agreements and of the importance of collective action between
church groups, unions and community groups. Suzette Clark and Pat Ranald also briefly
spoke. About 70 people attended this event. To get a copy of this book, please email
info@acsjc.org.au.
Following the launch, AFTINET and the Australian Services Union held a rally outside
Sydney Water. This rally called on the Government not to trade away our water rights and
include water services in the WTO’s trade in services agreement (GATS). To include
water in the GATS would treat water as a traded good. It would be a step towards
privatisation of water services and would reduce the ability of governments around the
world to regulate to ensure water services are affordable and environmentally sustainable.
In May 2005, the Government will list the services it wants to include in the ‘second
round’ of the GATS negotiations and negotiations will continue over the next 18
months.
The rally was energetic and dotted with placards calling for ‘Quality water for
all, not corporate greed’. It was well-attended by over 200 people. Speakers included
Sharan Burrow (President of the ACTU), Pat Ranald and Colin Lynch and Robert McLean from
the Australian Services Union. We conducted interviews on 2SM, ABC News Radio and Radio
National, as well as print media with AAP.
Thank you very much to all AFTINET members and friends who attended and helped organise
these events and made them so great.
Top of page
2. Howard announces China FTA negotiations … and then releases
Feasibility Study
Late on Monday 18 April, John Howard and Chinese Premier Wen Jiabao, signed a formal
statement of intent to begin negotiations on a Free Trade Agreement. In signing this
formal statement of intent, Howard also conceded full market economy status to China. The
Government released the Feasibility Study into the China FTA the following afternoon.
The Chinese Government has already expressed reluctance to agree to concessions to open
their agricultural market to protect the welfare and viability of China’s 700 million
farmers. The Australian Manufacturing Workers’ Union (AMWU) and the Textiles Clothing
and Footwear Union of Australia have made public statements about job losses from a China
FTA. The clothing industry alone stands to lose 21,000 jobs by 2015.
AFTINET is preparing a summary and analysis of the Feasibility Study. The Feasibility
Study is available to download at http://www.dfat.gov.au/geo/china/fta/.
Top of page
3. Call for public submissions: China FTA
The Department of Foreign Affairs and Trade (DFAT) is inviting public submissions on
issues relevant to the negotiation of a FTA with China. This will be an important
campaigning opportunity to raise community concerns about workers’ rights and
environmental standards in China, as well as the impact on communities in Australia.
Please consider making a submission. AFTINET will prepare a draft submission and
distribute this to members for comment.
Submissions are due on 17 June 2005. Submissions can be lodged at chinafta@dfat.gov.au or to:
China FTA Task Force
Department of Foreign Affairs and Trade
RG Casey Building, John McEwen Crescent
Barton ACT 0221
Top of page
4. Trading on Labour Rights, Australian Financial Review
21 April 2005, Tracey Sutherland
The scope for demanding improved labour standards and human rights reforms within
bilateral free-trade negotiations like that being contemplated with China is hotly
contested. At issue is whether the drive to improve labour standards in developing
countries in an FTA context reflects genuine concern from developed-world workers for
their poorer cousins - or is instead a de facto protectionist push to counter any
comparative advantage poorer countries have in their lower wages and manufacturing costs.
"For governments and employers to say that the rights of working people have no
place in the discussion around trade is simply to say that neither business nor government
has any concern about how working people are treated in their own country or another
country - that's not a very humane approach to either democracy or development," says
ACTU president Sharan Burrow, who insists no free-trade agreement with China can exclude
labour issues - a point rejected by the government that argues the issues must be dealt
with separately.
At the heart of the debate are the core international labour standards incorporated in
the International Labour Organisation's declaration of fundamental principles: the right
of association; the right to organise and bargain collectively; a prohibition on forced
labour and child labour; and non-discrimination in the workforce. The WTO's 1996
Ministerial Conference in Singapore endorsed the promotion of these core standards but
rejected their use as protectionist measures and identified the ILO as the body to deal
with the issue.
"It's not that labour market issues and humanitarian issues are not important,
they should be discussed at the international bilateral level - for example with China -
but not in the trade context," Australian Chamber of Commerce and Industry chief
executive officer Peter Hendy argues.
With its mandate to tackle workforce issues internationally, the ILO is the proper
vehicle for tackling these issues, according to the ACCI. Countries bring labour market
issues onto the trade agenda "basically to jeopardise the comparative advantage that
particularly developing countries have," Hendy says, noting that "often it's
trade union movements ... the ACTU is one of these".
Burrow unsurprisingly takes umbrage at such an assessment: referring to the
"inhuman" exploitation of workers in China's special Export Processing Zones,
Burrow concludes "if that's what they want to label protectionism, we say that they
are merely culprits in human rights abuses". The ACTU supports the principle of the
ILO dealing with labour standards internationally but argues that in practice it does not
have the teeth (or mandate) to pursue grievances. "If I was to raise at the ILO or
WTO - as we regularly do - the role of those bodies in grievance procedures around the
exploitation of labour, they would both say they have none," Burrow says.
"Unless the role of the ILO is recognised in a bilateral trade agreement - or
multilateral through the WTO - it's simply avoidance on behalf of employers."
However, it is not universally accepted that weak labour standards and the more
exploitative working environments which they embody, actually give developing countries a
trade advantage over developed countries. A 2000 OECD report into trade and labour
standards found that "there is no robust evidence that low-standard countries provide
a haven for foreign firms seeking to gain competitive advantage by this route".
The US-Australian FTA which came into effect in January incorporated labour standards
and environmental issues, because the 2002 trade promotion authority given to the
president by the US Congress, insists that these issues be incorporated. The Australian
government is under no such obligation and citing the OECD report, trade expert and former
deputy director-general of the WTO Andrew Stoler, says it should not be.
But the Australian Fair Trade and Investment Network embraces the Congress mandate -
and takes it even further - arguing that the demand for improved human rights must be also
on the agenda in any Australia-China FTA negotiations.
Human rights debates belong in forums like the United Nations, Stoler says. "A
trade negotiation is an extraordinary complicated endeavour, let alone mixing in things
like that - the next thing you know maybe the Chinese want to mix in the price of iron ore
[which the Chinese want Australia to sell at a lower price]," Stoler says. "Why
ask for trouble?"
Top of page
5. WTO appellate body ruling on the US internet gambling case
By the Council of Canadians
On April 7, the WTO Appellate Body published its decision on the US-Gambling case.
In November, 2004 a panel had largely ruled in favour of a complaint by
Antigua-Barbuda that US federal and state laws prohibiting cross-border gambling violated
US commitments under the General Agreement on Trade in Services (GATS).
The immediate ramifications for the US stemming from the Appellate Body decision
require the US to change some of its gambling laws. While the Appellate Body
concluded that US federal laws violated US GATS commitments, they decided they were mostly
justifiable as "necessary" protections for public morals and public order.
But because the Interstate Horse Racing Act seems to permit domestic but not
foreign suppliers to provide remote betting services, the Appellate Body found that in
this regard US federal laws appear to discriminate against foreign suppliers of gambling
services. To bring its laws into conformity with the Appellate Body decision, the US
will have to revise this Act.
However, the longer term ramifications of the Appellate Body decision are much broader.
The Appellate Body agreed with the panel that the US had, in fact, made a commitment of
gambling services despite protests from US officials that they had never intended to do
so. The US attempted to claim that the meaning of the categories it used for its
services commitments were not the same as the ones used by most WTO members, which are the
WTO Secretariat's categories supplemented by more specific UN classifications - the
"CPC codes". The Appellate Body ruled, however, that "notwithstanding
the absence of CPC codes in the United States' Schedule", that the US commitment for
recreational services corresponds to "Class 964 of CPC, along with its
sub-categories" (paragraph 205 of the decision).
Since one of the sub-categories in UN 964 is gambling, according to the ruling the US
effectively has made all of its gambling regulations subject to the GATS. Internet
gambling regulations are not the only ones affected by the Appellate Body's conclusion
that the US has committed gambling. Regulations over casinos, state lotteries, racetracks
and slot machines, activities all based entirely within US borders, are subject to the US
obligation to provide market access for and national treatment of "commercial
presence" trade in gambling services. Local regulatory bans or restrictions in
these areas would be very hard for the US to defend at the WTO because it argued in its
case with Antigua that remote gambling poses exceptional problems not faced with
"bricks and mortar" operations. In addition, state monopolies over lotteries
appear to be a clear violation of market access commitments not to maintain limitations in
the form of monopolies. Indian tribe casino licenses appear to be a clear violation of
both national treatment and the market access prohibition on "exclusive service
suppliers."
This conclusion that the US schedule of commitments corresponds to WTO and UN codes
unless deviations are explicitly identified means the US is open to more challenges where
the UN codes can now be read into the US schedules. For example, the US
administration is currently trying to prohibit cross-border sales of pharmaceuticals.
Yet using the UN codes to interpret the US retail commitments, the US has committed
"Retail sales of pharmaceutical and medical goods and cosmetics" - UN Class
6321. According to the Appellate Body's reasoning in US-Gambling, the US cannot
prohibit cross-border trade in this class of retail services without violating its GATS
commitments.
The Appellate Body's decision needs to be thoroughly understood not only by the US but
also by all WTO members, since they are in the midst of negotiations to expand their GATS
commitments and are under pressure to deliver up significant new concessions by May 2005.
Two GATS panels and now the Appellate Body have concluded that a violation of market
access does not have to take a specific form such as a quota, despite wording that would
lead to a contrary conclusion in the actual agreement. The Appellate Body stated: "we
are satisfied that a prohibition on the supply of services in respect of which a full
market access commitment has been undertaken is a quantitative limitation on the supply of
such services."(para. 250)
By concluding that a ban on a service is equivalent to a "zero" quota, the
meaning of GATS market access has been interpreted very broadly. Wherever countries
have made full market access commitments, any prohibitions they impose – eg, bans on
the dumping of toxic wastes - are equivalent to a zero quota and a violation of
market access. This interpretation of market access is a severe constraint on the
regulatory authority of WTO members.
Despite these findings, US officials characterized the Appellate Body's decision as a
win for the US because it overturned the panel on a number of grounds. The Appellate
Body did reverse the panel's conclusions that:
- Antigua had made a specific enough case against
state laws to warrant the panel ruling on their compliance with US GATS commitments;
- The US had an obligation to consult with Antigua
on alternative measures under the "necessity" requirements defined in the GATS
exceptions article (Article XIV.)
- The US had failed to meet its burden of proof
under the Article XIV requirement that to qualify as an exception, regulations be applied
in a discriminatory way.
But these positive findings for the US were based on the inadequacy of Antigua's
arguments rather than the fundamental GATS compliance of US regulations on cross-border
gambling. In contrast with what press reports are saying about the decision, the
Appellate Body did not conclude that state prohibitions on Internet gambling complied with
the GATS, only that Antigua failed to make a case that addressed them specifically.
When it ruled on the necessity of US federal regulations, the Appellate Body faulted
Antigua for not proposing a "reasonably available alternative measure" to the US
ban on cross-border gambling. When it ruled that discrimination in the application
of US federal law generally had not been proven, the Appellate Body said that the cases
cited by Antigua were inadequate, requiring more evidence to be put in "their proper
context."(para. 356).
The Appellate Body's reasoning for these conclusions suggests that, unlike the tiny
island of Antigua, a WTO member with more significant resources might successfully
challenge US federal and state prohibitions on cross-border gambling.
Top of page
6. Brasilia Declaration on GATS and the right to education
At the recent 4th meeting of UNESCO’s High Level Group on Education For
All, Brazil and Argentina signed a declaration on GATS, education and debt. The
Declaration was signed jointly by the countries’ respective Ministers for Education
and education trade unions.
Brasilia Declaration
On the occasion of the 4th meeting of UNESCO’s High Level Group on Education For
All, the Ministers of Education of Brasil, Mr Tarso Genro, and Argentina, Mr Daniel
Filmus, as well as the representatives of education workers confederations, CNTE President
Ms Jucara Dutra Vieira and CTERA General Secretary Mr Hugo Yasky, approved the following
declaration:
Considering:
- That education is a social right and, at the same time, a strategic instrument to
enhance programmes for sustainable development and in democracy in our nations.
- The risk of the commercialisation of education and the potential loss of national
sovereignty through the inclusion of the former in the General Agreements for Trade in
Services (GATS).
- The problematic impact of the payment of foreign debt, as a compromise to stability,
reduces the growth of resources assigned to social policies.
Express the following commitments:
- Concerning both Ministries: the conviction of the exclusion of education in GATS,
- Concerning trade union organisations: to raise the awareness in our countries and
regions of the principle of education as a right and not as a merchandise, and to mobilise
for such principle,
- Concerning our fields of action: to promote institutional and social debate on the need
to transform a part of the foreign debt into resources for social and educational
instruments.
Top of page
7. Call for public submissions: Australia-United Arab Emirates FTA
On 15 March, Trade Minister Vaile announced plans to commence negotiations on a
bilateral Free Trade Agreement. The UAE is a federation of seven Emirates (Abu Dhabi,
Dubai, Sharjah, Ras Al Khaimah, Ajman, Umm al Qaiwain and Fujairah).
The Department of Foreign Affairs and Trade is calling for public submissions and
comment on issues relevant to the FTA. Further information on the FTA and the submission
process is available at http://www.dfat.gov.au/geo/uae/fta/index.html.
AFTINET has prepared a brief draft submission raising preliminary concerns about the
FTA. Namely, that negotiations were announced prior to any community consultation or
modelling and that the agreement may undermine the ability to governments to regulate in
the public interest. A copy of this draft submission is attached. To comment on this
submission, please contact Jemma Bailey at jbailey@piac.asn.au
or on 02 9299 7833.
At this stage, AFTINET’s estimation is that the UAE FTA will not have significant
social impacts, either in Australia or in the United Arab Emirates. Accordingly, we are
not urging members to make a submission.
The deadline for submissions is 29 April. Submissions can be sent to uae-fta@dfat.gov.au or
Australia-UAE FTA
Trade Development Division
Department of Foreign Affairs & Trade
RG Casey Building, John McEwen Crescent
Barton ACT 0221
Top of page
8. Sydney Event: Politics it the Pub discusses the US FTA, 29 April
Please come along to a Politics it the Pub event, ‘Australia’s devastating
trade deal with the United States’. It is on Friday 29 April from 6pm –
7.45pm at the Gaelic Club, Level 1, 64 Devonshire St, Surry Hills.
Speakers at this event are Dr Pat Ranald, of the Public Interest Advocacy Centre and
AFTINET, and Professor David Henry, an academic at Newcastle University and a former
member of the Pharmaceutical Benefits Advisory Committee.
Hope to see you there!
