WTO Mock Summit

Department of Political Science

Beyero University, Kano – Nigeria

 

 

 

Briefing Paper No.4

 

 

 

Politics of Globalization: WTO and International Trade in Services

 

 

By

 

M.M. Yusif – Director of the Mock Summit

 

 

 

March, 2011

 

 

 

Politics of Globalization: WTO and International Trade In Services

 

Introduction

Politics is an expression of struggle to get an upper hand in reaching a common goal or at best to say between different interests. This is as between individuals and groups at local level as is between states and other global interests at international arena.

 

Politics of globalization becomes a tendency among Third World analysts that every social, economic and political problem of developing countries is a product or reflection of the process of globalization. Indeed, there are several theoretical and empirical shortcomings on this approach.

 

From empirical point of view neo-liberal globalization has opened an avenue for the emergence of alternative resources which provides developing countries with opportunities to tackle social, economic and political problems. These resources which could be reached around made some developing country regimes to build the political will to capture and utilize these opportunities and benefit immensely from the new world market created by neo-liberal globalization.

 

Thus, globalization – development nexus which raises debate on globalization role in bringing development does not see these changes impeding efforts to bring about fundamental systemic positive change both at the world-scale and within Third World countries.

 

Nevertheless the discourse rages between pro-globalists who insist that globalization does not put any obstacle for development and anti-globalists who think otherwise. In any case, there are globalization skeptics who argued that there are good and bad sides of globalization for development of human society. (Held, 1999).

 

Theories on this relationship have not ended there. There are many others of a globalist theorizing such as neo-classical and Ricardian economic theory, class conflict approach to the world economy, various versions of dependency, development and underdevelopment, regulation and transformation of capitalist relations at national level, etc.

The World Trade Organization (WTO) which is the core of this discussion. Perhaps, because the WTO governs the world market and is the organization which sets rules and regulations for movement of goods and services, the complex global power relations is openly and clearly seen working there.

 

WTO and the Politics of Globalization

There are diverse interests and network of interests each trying to by-pass the other within the structure of operations in the WTO. That was later development. From the beginning quads i.e. U.S.A., E. U., Canada and Japan enjoyed some years of dominance. Other members were only "screaming". They did not know what to do. The "seattle" opened their "eyes" and they began to put diverse interests into groups, Alliances and Coalitions. All within the structure of the governance of the WTO.

 

Now, this organization has become ungovernable. It remains all of it now is full of opposition, negativity, and struggle. The recent financial crisis which is deliberately triggered to bring harmony among the bigger global interests and to impose their solution on others, did not work.

 

Consultations are still going on, but of the type which has produced the World Trade Organization from the womb of General Agreement on Tariff and Trade. The outcome may be either to allow WTO to die like "dracula" or to give it a reform. What kind of reform? The kind which brought GATT from ITO or as said above WTO from GATT?

 

Whatever is going to happen the question is what would be the fate of the Agreements and other Rules which have governed the functions of WTO.

 

GATS

Yes! Many Agreements and Rules. The General Agreement on Trade in services (GATS) is one of them. Trade in service was first covered by international trade agreements during the Uruguay Round, but the history of such discussions and negotiations dates to the late 1970s. At that time the US based communications multinational corporations wanted to expand GATT rules to facilitate the expansion of the global operations of communication transnational corporations within a predictable and universal legal framework.

 

Mick Brooks (2001) noted that "before going into negotiations about the on-going GATS liberalization, Charlene Bersheosky (head of the US delegation) asked the coalition of service industries, a big business forum what they wanted. They gave her a shopping list – health care, hospital care, home care, dental care, child care, elder care, education, museums, libraries, law, social assistance, architecture, energy, water resources, environmental protection, real estate, insurance, tourism, postal service, transport, publishing, broadcasting …".

 

What of others equally very important or even of more ramifications in globalization of the world such as basic telecommunication, financial services, movement of natural persons and services in investment?

 

No doubt, the logic of capitalist development today is to capture and control the lives and means of living of the people.

 

That is what GATS contains. The meaning of services as provided in the Agreement is not precise. The Agreement does not give exact description of what not services are. Sometimes trade in services is distinguished from trade in goods, by goods that are manufactured. Yet, there are still goods that are manufactured which could be covered by other agreements, but could also be covered by GATS. There is therefore no point in searching for a definitive meaning and categorization of services.

 

This is a conscious manipulation by legal and diplomatic framework which would create a wider space which at any moment something could be found to appease an unsatisfied party for example, from the beginning, developing country members of WTO refused definition of services which includes investment in services but then movement of natural persons came in to console them. The game worked well to protect the interest of monopolies, as while negotiation in investment in services is concluded successfully, negotiation on movement of natural persons still is not.

 

The growth of service sector in Europe, USA and Japan became an alternative to declining profitability, and the risk of social as well as health hazards of the manufacturing production system. A new capitalist form of production with higher growth rate at least from 1970s, must be internationalized in order to survive as a response to decline of capitalism.

 

The story of promoting trade and investment in service internationally goes to show how changes in the structure of industry in USA led to shift in US trade and foreign policy with a view to project the interest of the growing service sector in the economy of the United States of America. This gave rise to New Trade Act, 1980 and the undiplomatic and unilateral foreign policy strategy of USA to force developing countries to open their markets for the service industry.

 

This throws further light on the inclusion of trade in services under the Uruguay Round of Trade Negotiations. At the end of the Round, there emerged general Agreement on Trade in services. Since, then Agreements have been reached on telecommunications and financial services, resulting in substantial liberalization commitments, but negotiations have to continue on other sectors.

 

There was also a gap left for future negotiations on how some WTO rules such as government procurement, emergency safeguard mechanism, subsidies and market access are to be applied on trade in services.

 

The Doha controversy did not spare trade in services. Therefore, negotiations are not concluded when another dimension as "trade for development" of developing countries is introduced into already existing problem. The Doha work progremme (2005) observed that "the negotiations on trade in services shall proceed to their conclusion with a view to promoting the economic growth of all trading partners and the development of developing and least developed countries, and with due for the right of members to regulate" (WTO, 2005).

The negotiations, it is restated should aimed to a higher level of liberalization of trade in services, but as the said Doha work programme noted "with appropriate flexibility for individual developing countries as provided for in Article xix of the GATS" (ibid.).

 

Furthermore, the programme emphasized that "negotiations shall have regard to the size of economics of individual members, both overall and in individual sectors" (ibid.).

 

The objective of the negotiations is that the economic circumstances of less developed countries, including the difficulties they face must be taken into consideration, and therefore, "not to be expected to undertake new commitment".

 

The conflict of interests between many different groups in global trade, over principle of trade for development, which now virtually made WTO as if it does not exist, does not spare trade and investment in services. But from Uruguay through concun, there were no new difficulties. Negotiations were smooth. As Hong Kong comes closer the situation changed. The chair of the WTO Services Trade Negotiations Committee, Alejandro Jara, concluded in July 2005 that "Notwithstanding the fact that the number of offers has improved…. Most members feel that the negotiations are not progressing as they should. It is clear that much more work will be necessary in order to bring the quality of the package to a level that would allow for a deal".

 

Recent assessment on where do things stand is generally the same as in other agreements under WTO regime. Negotiations based on request-and-offer process have not proved to be fruitful. May be a complementary negotiating methods could have been more useful. Yet, there is the need to secure wider sectoral coverage and certain degree of openness and transparency.

 

The greater challenge in negotiation is to complete the negotiations within the WTO framework of rules – safeguards, government procurement, subsidies, market access, and domestic regulation – to conclude and seal General Agreement on Trade in Services (GATS).

 

References

Aaditya Mattoo (2006). "Services in a Devlopment Round: Proposals for Overcoming Inertia". In Richard Newformer (ed.). Trade, Doha and Devlopment: A Window into the Issues. The World Bank Trade Department. Washington D.C.

 

Held D., McGrew, A.G., Gold blatt, D. and Perration, J. (1999). Global Transformation: Politics, Economics and Culture. Cambridge: Polity.

 

Harry G.B. (1994) "GATS: The Uruguay Round Accord on International Trade and Investment in Services". The World Economy vol. 17 No. 3

 

Peoples Health Movement (2006). The General Agreement on Trade in Services: Globalization and the Impact on Health – A Third World View. Website.

 

UNDP (2008), Making Global Trade work for People. New York: Earthscan Publication

 

WTO (1993). The Legal Texts.

 

WTO (2005). Doha Work Programme. Draft Ministerial Declaration. Ministerial conference, Hong Kong.

 

WTO (2006). The General Agreement on Trade in Services. WTO website.

 

WTO (2006). A Handbook on the GATS Agreement: Coambridge: University Press.

 

WTO News (N. D.) The General Agreement on Trade in Services )GATS): Objectives, Coverage and Disciplines. WTO Website.

 

 

 

Appendix I

WTO – Mock Summit Group

Bayero University, Kano – Nigeria

 

Programme of Mini Ministerial Conference August, 2011

 

Politics of globalization

WTO and international trade in services – negotiation continuous

 

Introduction

WTO mock summit has become a major event in Bayero University, Kano – Nigeria campus which hundreds of people around the campuses, the Kano Community and from across Nigeria, are waiting of the date to come.

 

In December, 2010 we held the sixth round – a Mini – Ministerial conference called "Geneva 2010". We are not unaware of the stalemate which arrested the normal functions of the WTO. Since Qatar Ministerial Summit which came up with Doha Development Agenda, the Great global trade Organization i.e. the WTO is set moving at a snail motion. From Cancun in 2003 through Hong Kong in 2005, the disagreements and conflicts over trade issues became sharper.

From the period after Hong Kong to 2007 there were many Consultative meetings of various group interests in the organization to break the deadlock to continue with management of international trade to serve the development benefits of all members.

 

The 2008 financial crisis introduced another dimension to the problem as liberalization of financial services could be seen as cause of the global financial meltdown. Consultation continues to find away forward but the last known mini-ministerial consultative forum was in Delhi 2009.

 

In general, consultations and negotiations are going, what will be the outcome is not yet clear. The WTO-Mock Summit Group is following and noting the performance of the real WTO. In the Group, there is global trade monitor unit, also trade research group. There is also WTO News Monitor and we receive mails directly from the secretariat of the WTO.

 

Therefore, we make informal intervention in the work of the WTO. For example, in 2009 we examined Agreement on Agriculture and the question of food security, and then recommend for immediate review of the Agreement, which we sent to the Director-General of WTO through the website of the WTO-Mock Summit. In 2010 it was a brainstorm on Doha Round, the global financial crisis and the implication for multilateral trading system. The objective is to break the deadlock over Doha Agenda to pave the way for a fresh trade talk under WTO regime.

 

The 2010 Mock Conference imagined three Scenarious:

1. That there is going to be an understanding by resolving the major problems which will lead to agreement to call a full Ministerial delegate trade talk.
   
2. That the consultation itself will breakdown as delegates could not find a meeting point to map a new path for WTO.
   
3. That all delegates may agree that there is progress but consultation and negotiations are to continue to concretize creating a road forward.
   

The end of 2010 WTO-Mock Mini-Minesterial summit is a substantial progress in some areas but consultation and negotiations continue in others. The general Agreement on Trade in Services is a potent instrument of globalization and economic integration with numerous unresolved offers and questions to be clarified and yet has not appeared to members and the general public as controversial.

 

The importance of GATS to globalization and to multilateral trade is that it is it that presents many elements of analysis and understanding of globalization beyond marketisation and expansion of trade, but neo-liberal globalization as new relations of production of a post-modern capitalism.

Furthermore, the recent global financial crisis could be traced to liberalization of movement of money under the WTO Agreement on Financial services which is an Annex to GATS.

 

Even with recovery, there are different layers of conflict and struggle including on trade and investment in services. This year we are going to reflect deeply on issues pertaining to international trade in services.

 

The theme of the mock summit is "The politics of globalization: WTO and international trade in services – Negotiation continues.

 

Accordingly, it is going to be a Mini-Ministerial Mock Summit to hold in Mock Geneva Organised by the General Council of the WTO.

 

After Uruguay Round of Negotiations which delivered GATS, the first negotiation to define general terms of the Agreement was in January, 2000. Negotiations with understanding, resulted in progressive liberalization, especially of financial and telecommunication services. From there to 2003 it was normal. But by 2005 Ministerial conference and since then GATS become infested by Doha demands.

 

See attached Annex IB of the World Trade Organization Agreements which is "General Agreement on Trade in Services". You would see that the Agreement has six parts with further six Annexes which are integral part of the Agreement.

 

Major highlights are progressive liberalisation of services; trade in service as economic integration; labour markets integration under GATS provisions; harmonization of WTO principles i.e. market access; subsidies; transparency; government; procurement; safeguard measures; under GATS administration; domestic regulation to meet national interest; general exceptions including security exceptions; national treatment etc.

 

The outlook of the provisions of the Agreement would reveal many development implications when implemented:

1. Market access measures would have implications for member governments ability to pursue development strategy.
   
2. The principle of National Treatment enshirined in the Agreement which said foreign companies are to be treated like national companies in giving any favour is a very serious development challenge to developing countries.
   
3. The growth of service industry is stronger and more consolidated in developed countries than in developing ones. Therefore, there is obvious imbalance which if is treated the same in both countries will be at disadvantage of countires from the developing world.
   
4. Developing countries have not yet committed themselves to total commercialization of public services, such as health and education, services that governments have traditionally provided or heavily subsidized. Yet they face pressures relating to the deregulation of these services. These can be seen at three main sources of concern.
   
   1. Whereas GATS rules do not apply to services provided in the exercise of Government authority. But the criterion of government authority does not necessarily prevent the agreement from intruding into the basic services critical to the poor, because the agreement does not clearly define the key terms if not commercial or if not in competition with:
      
   2. GATS do not force governments to privatise, but it facilitates, the commercialization of basic public services either through structural adjustment programmes or by any other pressures.
      
   3. Article vi:4 on domestic regulation is aimed at ensuring quality of public services. In order to achieve quality governments may be forced to deregulate.
      
5. As history has shown, liberalization of financial services such as banking and insurance is likely to cause instability in already weak economies. But under GATS there is already a provision for liberalization of financial sectors which may be inconsistent with developing countries interests and effort for development. And then government regulatory interventions will likely be inconsistent with the GATS.
   
6. A country with deregulation of financial markets may be unable to protect its own banking industry, which would ultimately undermine the creation of financial institutions for longer-term credit support to firms generating new technologies or employment, as well as the development of new financial instruments for small and medium- size enterprises.
   
7. The GATS does not cover labour migration, but skilled and unskilled labour to get market for their services. From developed countries side there are significant barriers against movement from developing world to industrialized countries. Yet! There is lack of commercially meaningful commitment by industrial countries on the movements of natural persons which became a source of imbalance in services trade.
   

Finally, unlike other agreements under WTO regime, what is needed about GATS is not repealing its provisions but to operationalise the development-friendly aspects of it. This means that the developing countries could negotiate the modalities of effective implementation at the sector level, for example at construction services sector; on the movement of natural persons sector the energy sector; the environment sector; financial services sector; transport sector; telecommunication sector; others are about investment, education, water, health, services.

Proposed Countries to be Represented

United State of America

European Union

Japan

Canada

China

India

Brazil

South Africa

Argentina

Peru

Cuba

Malaysia

Nigeria

Venezuela

Ghana

 

Proposed Mock Ministers

1. Audu Saidu
   
2. Samirah Baban Mairam
   
3. Mohammed Mahmoud Hassan
   
4. Zainab Mayaki
   
5. Sagir Mustapha
   
6. abdulmuhsin Ahmad Nuhu
   
7. Hajara Abdulkadir
   
8. Haruna Atama
   
9. Ibrahim Ismail
   
10. Kabiru Basiru
    
11. Five others later
    
12. Also two observers later
    
13. Junior O.
    
14. Najibullahi Abdullah Nuhu
    

Others

1. Mohammed Umar Usman
   
2. Abdulhamid Abbas Rabiu
   
3. Mukhtar Mohammed (Computer Science)
   
4. Junaidu Abdulkadir (Sociology)
   

The Working Groups

1. Maryam Sunusi Sani
   
2. Abdulganiyu Rufai Yakubu
   
3. Mansur Abdullahi
   
4. Mohammed Salisu Ismail
   
5. Aminu Bello
   
6. Aremu Adamu Alhassan
   
7. Adamu Adamu Alhassan
   
8. Muhammad Naziru Halliru
   
9. Rilwan Abdussalam
   
10. Umar A. Alkali
    
11. Kingsley O.
    

Topics of the Working Groups Respectively of the Names Above

1. GATS: An assessment
   
2. GATS: implications for development of developing countries
   
3. The Uruguay Round of Trade Negotiations; The case of Agreement on Services
   
4. WTO, GATS and the impact on Health services in Third World Countries
   
5. WTO, GATS and the impact on Education in Third World Countries
   
6. Financial services, liberalization and globalization: social and Economic Consequences.
   
7. Growth of Global Trade: Services Perspective
   
8. GATS and integration of labour market: Myth reality?
   
9. GATS: An instrument for faster globalization
   
10. GATS and multilateralisation of trade
    
11. GATS, investment services and development of developing countries
    
12. GATS and challenges in National Policy
    

Media Coverage

A common message which I send to every annual media team of WTO-Mock Summit is that "…the beauty and excitement of the summit and ability to carry the audience depend on what the media actors have creatively organized to project the performance".

 

Since we have started in 2005 one of the creative elements we have displayed to general public within the campus is that the media crew with many members, each playing a role, reports the performance alive.

 

Educationists say experience is a store of knowledge and in the mock-Summit we have collection of it which makes us to raise the summit to higher standard every annual performance.

 

From 2008 the organization and reporting by the media crew became professional. In 2009 it was given international standard and was televised alive on the campus through the existing facilities of the Department of Mass Communication. The last one i.e. 2010 WTO-Mock Summit saw another path breaking improvement both in a professional organization of reporting and in using of new facilities. The 2010 media team has beautiful ideas which would cause to televise the performance alive beyond BUK campus and produce the play for sale. I have no doubt that 2011 would move these to reality.

 

As in 2010 performance, in this year we will also open up for voluntary services and advice from media practitioners around Kano and beyond. We would particularly continue to appreciate and welcome Sadiq Tamimuddari – ex-member of the Mock Summit in the media crew who returns every year to give helping ideas – and Garzali Yakubu, from Freedom Radio.

 

In 2011, we call for more innovations and improvement on the reporting from the media crew. Meanwhile, the most important preparatory things for media roles are:

1. To read all the necessary papers prepared for the performance
   
2. To understand the issues, subject-matter and the message intended to put across
   
3. To know the actors identities and mock names for the purpose of accurate reporting
   
4. To be able to add "media jokes" to the performance to be impressed by any one who sees it.
   
5. To introduce modern information technology facilities and if possible to televise it alive to be monitored outside the campus.
   
6. To organize media chats with participants either before the mock summit commences or after or both
   
7. To encourage various student associations to cover the occasion and report in their newsletters and magazines.
   
8. Finally, to invite national media houses to cover the occasion
   

Members of Media Crew

1. Habu Abubakar
   
2. Abubakar Idris
   
3. Hassan Abdussalam
   
4. Basirat Abdulwahab
   
5. Others to join
   

 

Members of the Organizing Committee 2010/2011

S/N	Name	Dept.	Position	Phone No.
1.	Maryam S. Sani	Pol. Sc.
2.	Abdulganiyu R. Y.	Agric. Sc
3.	Mohd S. Ismail	Pol. Sc.
4.	Mansur Abdullahi	"
5.	Aminu Bello	"
6.	Aremu Lateef	"
7.	Alhassan Adamu A.	"
8.	Rilwan Abdussalam	"
9.	Mohd Naziru H.	"
10.	Umar A. Alkali	"
11.	Salisu Ado Bayero	"
12.	Farida Kombo	"
13.	Haruna Atama	"
14.	Rep. Media Crew
15.	Rep. Security Team
16.	Rep. HR Activities

 

Terms of Reference

1. To mobilize funding for hosting a get together for mock summit actors who graduated in 2011
   
2. To raise fund for WTO-Mock Summit 2011
   
3. To take care of all other logistics and the administration of the summit 2011
   
4. To disseminate the mission of the summit in and out of Bayero University, Kano
   
5. Any other assignment that may arise.
   

 

Preparation for the Mock-Summit

• Roles would be assigned within the first five weeks of the New Academic year.
  
• The Organizing Committee would be inaugurated by the Director during the same period.
  
• The participants would be guided to start an independent research work and preparation on the position papers they are going to present during the summit.
  
• There are going to be series of working groups discussions and workshops on the subject-matter of the summit before the end of the first semester.
  
• Also to pay a courtesy call to the vice-chancellor before the end of the semester.
  
• As we open for the second semester each participant is expected to submit his/her paper for assessment, corrections and editorial work.
  
• In the end all reports of commission chairmen, observers and trade delegates would be computer processed and bound for circulation during the summit.
  
• Then some further discussions and training which all participants are expected to attend. Those who do not without convincing reason would be dropped there.
  
• Finally, a period of one or two weeks, of re-thinking and preparing the logistics.
  

The summit will hold during the first half of the second semester.