By Martin Khor Kok Peng
In mid-April, trade and commerce ministers from more than 100 countries will sign the Final Act of the Uruguay Round in a glittering ceremony at Marrakesh in Morocco. They will be putting the seal on a seven-year-long series of negotiations.
Conducted under the auspices of the General Agreement on Tariffs and Trade (GATT), the Uruguay Round was concluded in Geneva on December 15, 1993, amidst euphoria in much of the Western-dominated media.
A systematic analysis of the results would, however, show that on the whole the round has benefited the rich industrial nations, and most Third World countries have lost out. Worse, many poor communities of the South, especially farmers, will have their livelihoods threatened, and become more dependent on foreign companies for their supply of seeds and other in puts.
A telling critique of the round has been made by Luis Fernando Jaramillo as chair of the Group of 77 (a negotiation bloc of more than 100 Third World countries) and Colombia's permanent representative to the United Nations. "The Uruguay Round is proof again that the developing world continues to be sidelined and rejected when it comes to defining areas of vital importance for their survival", he said in a speech on January 14.
"... One of the principal issues for the developing countries, that of bilateral negotiations on market access, was left unresolved. The countries of the Third World have been put in a situation in which they already paid the price of accepting the new terms in different areas of interest for the industrialised countries, without obtaining in exchange satisfactory conditions of market access ... Unquestionably, the developing countries are the losers both individually and collectively."
Protection for the North
When the round began in 1986, many Third World countries were strongly resisting the Northern countries' push to expand GATT's powers into new areas such as services, investments and intellectual property rights. Up to then, GATT's jurisdiction was only in keeping the rules in trade in manufactured goods.
The Southern countries were rightly concerned that the North was interested in liberalising economic areas in which it had an advantage, where its corporations could penetrate and capture new markets which till then had been relatively protected by Southern governments.
This was certainly the case in services, a fast expanding sector, with transnational enterprises ranging from banking and insurance to motion pictures eagerly awaiting the removal of barriers to their advance into Third World markets.
The negotiations over "trade-related investment measures" (TRIMs) were similarly initiated by the North to pressure Third World governments to give up their powers to impose conditions on the entry and operations of foreign companies. The "liberalisation" of investments would clearly benefit the North, where most transnational companies are based. The South was concerned that smaller-scale domestic businesses may not survive the onslaught of foreign investments.
On the other hand, when it came to technology transfer, the North took an aggressively anti-liberalisation stance and pushed for all GATT members to compulsorily introduce a standard set of national laws to protect "trade-related intellectual property rights" (TRIPs). Since most patents are owned by transnational companies, this in effect meant the legal protection of technological monopoly by these firms, and a drastic curtailment of possibilities for the South to learn and use new technologies.
The Northern push in TRIPS proved that "freer trade" and "liberalisation" were only nice slogans to move the round forward. The reality was "liberalisation if it benefits me, protectionism if it benefits me, what counts is my self-interest".
Although in the early and middle stages of the round, several Third World countries (including India and Brazil) put up a stiff resistance to the Northern push, by the final two years the Southern fight had melted, and in the end the round adopted texts to liberalise services and to protect international "intellectual property rights".
The issues have thus become integrated with trade in manufactured and agricultural goods, and all now fall under the jurisdiction of the new World Trade Organisation (WTO), which will vastly expand the powers of GATT and give it a proper legal footing.
The WTO will have jurisdiction not only over trade in new areas such as agriculture and services, but also over investments in services, rules governing entry and operations of foreign investments in general, and over each member country's intellectual property rights regimes.
The Uruguay Round has most benefited the transnational corporations. The "free trade" so much bandied around has come to mean, in reality, the vastly expanded freedom of transnational corporations to trade and invest in most countries of the world, whilst governments now have significantly reduced powers to restrict their operations. At the same time, these corporations have "freedom" from potential new competitors whose possibilities to develop technologically are now curbed by intellectual property provisions in TRIPs.
The big companies, which have been the real power in the lobbies behind the Northern governments propelling the round from start to end, have won many more rights without having to meet new obligations; indeed, previous obligations they may have had are now dropped.
Patenting life forms
For Southern countries as a whole, TRIPs was the aspect in which their collective loss was most obvious. Most countries have exempted agriculture, medicines and other products or processes from their national patent laws, but with the passage of TRIPs everything is subject to strict intellectual property protection, unless explicitly exempted in the agreement.
In Third World countries that now have national pharmaceutical industries, it is expected that the prices of medicines will rise significantly and that foreign pharmaceuticals will make deep inroads.
The TRIPs agreement also opens the door to the patenting of life forms such as micro-organisms and modified genetic materials, thus providing the boost in incentives so much desired by the biotechnology industry. Many environmentalists are concerned that this will be detrimental to the global environment, as the present lack of controls and accountability in biotechnology research and application will likely accelerate biodiversity loss and could threaten natural ecosystems.
Many farmers' groups (especially in India, where huge farmers' demonstrations and rallies have been held against GATT) and environmentalists are concerned that in the end Third World farmers will be disallowed the traditional practice of saving seed for the next season's planting.
In services and investments, the final agreements may not be as extreme as the original proposals of some Northern governments. In services, Third World countries are asked to make "offers" on how much they can liberalise and in which sectors. In investments, original US proposals that governments must grant entry to an intending foreign investor and give it equal treatment with local companies have not been included; but certain "investment measures" such as requiring foreign firms to make use of local intermediate products and raw materials (to meet a minimum degree of "local content") will be prohibited.
That the final agreements on services and investments were not as bad as original texts sought by the North may prove only temporary relief. Already several countries are being pressured to "open up" during the course of post-December 15 negotiations.
More seriously, what the round has achieved for the North is to bring services and investments under the jurisdiction of the WTO. Once the foot is inside the door, the remainder of the body can be dragged in more easily. [Third World Network Features.]