Politics

Trade, Corporate Agendas, and Politics

Bilaterals.org has an excellent article analyzing the dynamics of bilateral trade and investment agreements, their relation to transnational corporations, and the impact on the developing world.

The report, Corporate conquest, global geopolitics: Intellectual property rights and bilateral investment treaties, goes far in examining the geopolitical negotiations as well as the agendas that drive these agreements:

With World Trade Organisation (WTO) negotiations failing to deliver as much as many corporations want, the US and other governments, urged on by big business lobbies, are increasingly turning to bilateral free trade and investment agreements.

TRIPS, Genetic Resources, and Trade: Emerging Battlegrounds

The expansion of IPR through FTAs and BITs (Bilateral Investment Treaties) has limited the ability of countries to use TRIPS provisions for public health to their benefit. It has also masked a crucial future battleground between the North and South - the ownership of genetic resources and traditional knowledge, such as embodied in systems such as Ayurveda. These are the next points of conflict in the IPR regime.

Typically, they (FTAs) severely limit the grounds for allowing the use of compulsory licensing of medicines, and effectively extend 20-year drug patent monopolies for an additional five years, threatening access to affordable medicines, including HIV/AIDS drugs. Moreover, this “TRIPs-plus” approach does not allow for plants and animals to be excluded from the patent laws of signatory countries. While TRIPs sets a minimum standard for intellectual property protection, these bilateral agreements are imposing an industry-driven agenda through the backdoor, locking countries into even more stringent intellectual property standards.

Colonialism, by any other name…

When viewed in isolation, these agreements are worrisome. When viewed together, and within the framework of the WTO, they portend calamity for the developing world’s ability to protect and further its economic interests and domestic social agendas.

Aware of how the international system works, the US and EU are undermining the many advantages the developing world enjoys at the WTO. In spite of its many criticisms, the WTO, in fact, allows weaker nations to negotiate as a group, expanding their bargaining power. By contrast, when negotiating BITs, each country is at the mercy of the US and EU’s economic clout:

Developing countries typically face trading sovereignty for economic clout when they surrender to BITs…

By stitching together an incomplete global web of bilaterals, issues, sectors and countries are played off against each other. The US/EU pursuit of bilateral negotiations is thus another example of classic divide and rule tactics - a strategy of weakening the actual or potential resistance to the EU/US positions being advanced in the WTO or in other venues.

In this manner, bilateral agreements systematically undermine the gains of the developing world at the WTO, garnered at much expense. Worse still, the BITs do not allow for any alternate view other than the western one. They legalize the perspective that US and EU systems are the best and should be emulated by the rest of the world:

One aggressive goal of the US BIT programme is to “support the development of international law standards”. This is important because many BITs and FTAs pushed by the US and the EU refer to “the highest international standards” of intellectual property protection. But these standards do not exist in international law. [19] In the absence of any benchmark, the inference is that the US (and EU) standards are the world’s standards. With respect to biological diversity - from sacred plants to human DNA - that means heading towards “no limits” on what can be patented by corporations.

Finally, due to the WTO’s most-favored-nation clause, any protections provided to the US through an FTA or BIT must automatically be extended to all countries. The result is that for an increasing number of countries, these agreements set the minimum standard, far higher than the standards at the WTO.

The Wrong Battleground
It turns out, then, that the developing world and civil society has been fighting the battle against unfair trade on the wrong front. Much of the focus, criticism, and negotiating power of the South has been concentrated at the Doha Round at the WTO, but yielded little. In the interim, unseen by most these FTAs have already given to the US and EU, many of the concessions they demand at the WTO - without meeting any of their own commitments, such as cuts in agricultural subsidies.

The WTO was originally created to set minimum standards for international trade. Unable to push their agenda at the WTO, the US and EU seem to be succeeding in setting those standards elsewhere.

For all practical purposes then, these TRIPS-plus standards, whether with respect to IPR or investment, may become the “new minimum standards from which any future WTO trade round will have to proceed”

© 2006 The Discomfort Zone.