It is very important that both a new WTO agreement and a new climate agreement give priority to development. The intention of the WTO negotiations this time is to get in place a “development round”. Development will be good for the climate through the fact that the more developed countries have more resources to spend on environmental and climatic measures. Thus we can always hope that trade + climate = development.
A genuine development round in the WTO is necessary to get a sound climate agreement
This autumn may be of crucial importance to developing countries. The WTO’s ministerial conference will be held in Geneva (November 30th – December 2nd). The Indian Trade Minister Sharma indicated after the mini-ministerial meeting in New Dehli (September 3rd-4th) that the negotiations could speed up within two weeks. Not unexpectedly, there is still uncertainty regarding the USA’s willingness to enter into any compromises. However, these signals may indicate that the finish of the “marathon negotiations” in the WTO’s development round is within sight.
The Copenhagen Climate Change Summit will be held about a week later (December 7th – 18th). Undoubtedly there is a correlation between a breakthrough on a genuine development round in WTO and what will be possible to attain at the climate summit. In short, a result of the WTO’s Ministerial that is unfavourable for developing countries will also be detrimental for the Climate Change Summit. The present WTO agreement blocks a good climate agreement by preventing poor countries from developing sustainable agriculture and acquire environment-friendly technology. It is therefore of vital importance that Norway’s new government gives priority to development in both agreements.
Development, the environment and trade are inter-related issues
This WTO round of negotiations is called ”the development round”, but has as such been very disappointing. The rich countries cannot expect the developing countries to give way on every issue, both regarding climate and trade, without the rich countries offering something in return. The question is how we wish to encourage poor countries to participate and cooperate on solving the climate problems that have been caused mainly by the rich part of the world.
Development in itself is an advantage for the environment in the sense that more economically developed countries have more resources to spend on climate and environmental measures. Trade may be conducive to development if poor countries are afforded political space to choose by themselves: whether to, when and how much market-opening they want to allow. It is therefore about time that Norway and the rich countries start to listen to the needs and wishes of poor countries instead of pushing our own demands for better access to their markets.
Agriculture and Climate
With good reason, agriculture is presented as the problem as well as the solution to the climate crisis. Poor people are those who are hit hardest by the climate crisis. Among the world’s one billion starving people, 60% are small farmers who are very vulnerable to climate change. For this reason there is almost general agreement that agriculture should also be discussed in climate negotiations, and consequently a group of countries is now planning separate meetings on agriculture at the next climate negotiation meeting in Bangkok (September 28th).
In 2008, poor people were hit hard by a food crisis caused by an extreme rise in prices. According to UN Food and Agriculture Organization’s (FAO) calculations (i) , prices have again been rising since July this year after dipping for a period. In addition, it is the poor people in Africa South of Sahara and South Asia that will be hit the hardest by the climate crisis. Estimates show that corn crops that depend on rainwater will decrease by 17%, and rice crops that depend on irrigation will be reduced by 20% by 2050. Therefore, it seems natural to start by facilitating and supporting agricultural build-up in developing countries, in order for them to be able to face the challenges of climate change.
Agriculture and Trade
Agriculture is the key to achieving a breakthrough in the WTO. Within development assistance there is agreement about the need to prioritise building up agriculture in developing countries. However, there is rarely any talk about making the same priority regarding trade with agricultural products. Norway and other rich countries know very well what measures to take, but the question is whether there is political will or not to do so?
In WTO negotiations, the agriculture negotiations are crucial. Unfortunately, rich countries refuse to give poor countries the right to use the safeguards they ask for regarding vulnerable products. On top of the climate crisis and food crisis, the financial crisis has lead to increased protectionism in the North. As a response to the food crisis the Norwegian Minister of Agriculture and Food, Mr Lars Peder Brekk, announced that we must produce more food in Norway. This is a flawed strategy. The United Nations Special Rapporteur on the Right to Food, Olivier de Schutter, said to the UN in March of this year that an incorrect diagnosis was given with regards to the food crisis last year. There was too much focus on increased production, especially export-directed production. The real challenge is to make small farmers able to sustain their own basic needs, as well as to confront the lack of purchasing power amongst the poor in urban areas. Norway also continues to pursue a subsidy policy that backs up indirect export subsidies and dumping.
In the WTO negotiations in March, 53 African heads of state of the African Union (AU) demanded that not only the agreed full elimination direct export subsidies but, furthermore, that other production promoting subsidies be cut. The AU thinks that rich countries must open their markets, whereas poor countries must be given the flexibility to protect their infant industries and markets with customs barriers.
Apparent climate measures related to trade undermine development
Rich countries, like the EU and the US, wants to use trade to introduce climate measures. Currently, the issue of carbon tax is an issue under discussion. It will function as an extra tax or customs fee on goods where the production is carbon-intensive. This is a measure that developing countries are against, because it will establish new trade barriers in the North for goods from the South that are considered not very climate-friendly. It is very easy to imagine that such trade barriers can be abused in protectionist manner to keep the goods from developing countries out of rich countries’ markets. This is sometimes called “eco-imperialism”.
Furthermore, there are negotiations in the WTO on environmental services. These negotiations are mainly focused on opening up developing countries’ markets to rich countries’ environmental services. Even though such measures may be well intended at first sight, there is a great danger that this will contribute to hold back local producers of environmental services in developing countries, and prevent them from establishing themselves in their own market, as we have already seen examples of within agriculture. It is therefore important that Norway does support such proposals in the WTO.
Climate and protection of patents in the WTO
The Norwegian Church Aid is of the opinion that, instead of starting to introduce new trade obstacles based on climate considerations, we have to concentrate on breaking down old trade barriers in the North that are an obstacle to climate-friendly measures in the South. The agreement on trade related intellectual property rights (TRIPS) is the part of the WTO agreement that, in this context, is directly related to the climate negotiations. Among other things this agreement concerns the patent protection of private companies.
Patent protection defenders claim that this will promote innovation. However, it has been established that it does not promote innovation in all areas of medical research, such as the area of malaria and hiv/aids, which mainly affect the poor parts of the world. Furthermore, patents lead to less biologically diverse agriculture and makes it difficult for farmers to make use of their traditional knowledge. This makes farmers and plants more vulnerable to climate change. Additionally, the agreement is questionable in the sense that it does not encourage technology transfer to poor countries. This is something Norway can make efforts to change within the WTO.
Climate and Technology Transfer
In the WTO, Norway must promote developing countries’ flexibility to transfer environment-friendly technology, through copying of patented products. The model for this should be the patent agreement on medicines that has an in-built flexibility to allow developing countries compulsory licence and parallel export of essential medicines to protect the health of the population.
A new climate report produced by the UN (ii) calls for flexibility and change of the TRIPS agreement in order to help developing countries gain access to technology. The patent ownership to climate-friendly technology is presently unequally distributed to the benefit of countries in the North. At present it is very expensive to acquire such new technology. The TRIPS agreement is therefore a hindrance to both climate adaptation and damage control measures for countries in the South.
Therefore, the TRIPS agreement must be put at the top of the agenda of the WTO negotiations. The agreement either has to incorporate a new flexibility or be totally modified in order not to obstruct developing countries from tackling the climate crisis and thereby safeguarding the future of its population.
WTO and the UN Convention on Biological Diversity
Moreover, the present WTO agreement allows extended practice regarding patent piracy. This affects poor countries and people. They are obstructed from making use of knowledge and technology that have been used for generations, for instance within traditional medicine. This is because private companies require the ownership to, and want to be free riders, or in other ways want to exploit traditional medicine and technology in developing countries.
Therefore, it is important that Norway continues to work hard in order to contribute to bring the WTO agreement in harmony with the UN Convention on Biological Diversity (CBD). This means companies applying for patents would have to give extensive information on the origin of genetic resources and traditional knowledge. In the WTO Norway has made a proposal (2006) in which we, as the only OECD country sided with the developing countries on this issue.
This is a good starting point for further work to link trade and climate at this autumn’s ministerial conference in the WTO.
- Article author: Advisor Global Economy, Helene Hoggen,
