NEWS FROM CUTS

Civil society representatives from North and South and intergovernmental organisations at the World Summit on Sustainable Development, today launched the Jubilee 2010/2020 Campaign to dismantle trade barriers.

The Campaign draws on the success of the Jubilee 2000 campaign for debt relief to address an issue of even greater importance to developing countries: reaping the benefits of international trade. It is being orchestrated by an alliance of civil society groups from all over the world under the leadership of CUTS Centre for International Trade, Economics & Environment, based at Jaipur, India; Lusaka, Zambia, Nairobi; Kenya and London, UK.

“There is growing disillusionment with trade liberalisation in the South,” according to Dr Hafiz Pasha, Assistant Secretary General, United Nations. “These countries may retreat from liberalisation if the North maintains protection in all the areas where Southern producers are competitive,” he said. Jubilee 2010/2020 calls for dirty tariffs on labour intensive goods, especially textiles, clothing and leather goods to be dismantled by the year 2010, and dirty tariffs and subsidies on agricultural products by the year 2020.

The Uruguay Round of world trade negotiations promised benefits to developing countries which have not materialised and while many countries in the South have lowered their trade barriers, the North has not reciprocated in the important areas. Even the European Union’s Everything But Arms initiative to offer zero tariffs to Least Developed Countries excludes key agricultural products.

Malcolm Damon, Director, Economic Justice Network, Christian Councils in Southern Africa, emphasised the moral imperative to bring down protection in these markets. “The Jubilee 2000 Campaign was based on the conviction that people should have the freedom to start anew in shaping their own lives and development. Jubilee 2010/2020 carries forward these same aims,” he said. Global welfare and global equality must be defended by global civil society as governments only pursue national and sectional interests.

“Protectionism is one of the global problems that has actually grown worse in the last decade”, said Ricardo Melendez, Executive Director of the International Centre for Trade and Sustainable Development in Geneva. “Subsidies on agriculture in the OECD countries are now six times as much as overseas development aid flows, which means a huge flow of resources from South to North, further exacerbating inequalities between countries”.

CUTS Secretary General, Pradeep S Mehta, said that there are problems of high tariffs and supply side capacity in developing countries, but the rich country protectionism only exacerbates the problem of market access for the poor countries.

“We also need to empower people to participate in trade policy making in both the rich and the poor countries, so that people can bring pressure on their governments to be fair in the conduct of their trade policies”, said Mehta.

Civil society in the North also needs to be mobilised against the damaging policies maintained by their governments. Paul Barbour, from the UK’s Department for International Development, Southern Africa office in Pretoria, speaking in a personal capacity, said it is an excellent campaign.

Barbour emphasised that Northern consumers would benefit hugely from the reform of agricultural policies and should counter the special interest groups that are holding back change. The impact of this is a whopping US$102.6bn per annum.

WTO external relations department’s counsellor, Bernie Kuiten, also in personal capacity, felt that it is an important campaign, but the time line is too long, i.e. 2010 and 2020. It was suggested that one can break it down so that people can relate to the idea of a long drawn campaign. “It maybe possible to organise a dialogue on this issue at Geneva with trade delegates, which will be extremely useful”, suggested Kuiten.

Several Southern and Northern NGOs participated actively in the launch event, with indications to support the Campaign: Consumer Rights Commission of Pakistan; Integrated Strategies Forum, USA; SAWTEE, Nepal; ANPED and SOMO, The Netherlands; MWENGO, Zimbabwe; and FIELD, UK.

International trade issues are complex, and developing countries face non-tariff barriers such as sanitary and technical standards as well as severe supply side constraints. However, participants agreed that the focused approach of the campaign on the single issue of tariffs would make it more effective. Reducing tariffs is an important first step on the road to justice in the international trading system.

A statement for the Jubilee 2010/2020 Campaign is being circulated and organisations from all over the world are invited to participate in the Campaign. Already over 50 groups and networks have supported the Campaign, which is expected to increase over time. It is available at.

2^nd National Seminar on Competition, Regulation & Investment: Role in Economic Growth, 8-9 June 2002, Chennai, India

BABUDOM STIFLING REGULATION
Chennai, June 9, 2002

“Because of the faulty approach to regulation, the regulatory authorities of the country have become ineffective. The regulatory bodies are dominated by the former bureaucrats who suffer from the legacy of erstwhile command and control regime and hinder promotion of competition and consumer welfare," observed T H Chowdary, the founder Chairman & Managing Director of VSNL and presently IT Advisor to the Government of Andhra Pradesh.

Chowdary was speaking at a national level seminar on ‘Competition, Regulation & Investment: Role in Economic Growth’ at Chennai on 8-9 June, 2002. He also pointed out that the predominant source of information for the regulators, paradoxically, are those who are regulated and the consumers are given the least importance.

The seminar, second in a series, was organised by Consumer Unity & Trust Society - Centre for International Trade, Economics & Environment (CUTS-CITEE), Jaipur, in collaboration with the National Council of Applied Economic Research (NCAER), New Delhi. The first seminar in the series was organised on 11-12^th January, 2002, at Jaipur. The seminar series is a part of the two major multi-country studies on competition and investment taken up by CUTS-CITEE with support from DFID, UK. Similar activities are going on in select developing and transition countries from different parts of the world.

The seminar series is aimed at generating and enhancing understanding on competition and regulatory issues and their interface with investment. The Chennai event, like the earlier one, is being attended not only by the experts in the field but also by representatives of different stakeholder groups, including government departments, regulatory authorities, academia, media, and consumer and other civil society organizations from all over India.

The predominant view at the seminar was that a proper regulatory framework needs to be established to make the ongoing process of economic reforms, especially the privatisation drive, successful in the country. It was also pointed out that an uncertain and poorly managed regulatory environment is likely to thwart our efforts to attract foreign capital, if it is not already doing so.

On its first day, the seminar focused on competition concerns in general and the new Competition Bill of India, consumer concerns in the de-regulated sector etc. It came out very clearly that although the proposed Competition Bill is a lot of improvement over the existing Monopolies and Restrictive Trade Practices Act, there is some scope for further improvement.

“The proper implementation of the forthcoming new law will be a big challenge and the government needs to take it seriously,” commented Prof. T C A Anant of Delhi School of Economics.

It was emphasized that, the Monopolies and Restrictive Trade Practices Commission has been always saddled with mediocre (and sometimes crazy) judges and bureaucrats, thereby it has not been able to establish a good competition culture in the country. It is therefore on strong reason that business is opposing the law, for they are worried that it will throw up another super-cop.

Setting up of the new Competition Commission under the new law would therefore give us a golden opportunity to change the approach and bring a good competition culture and we must not miss this chance, felt the participants.

“People are however, keeping their fingers crossed that the competition authority visualised under the new bill will also be another haven for more of the same, especially because the retirement age of the Chairman has been kept at 70 years,” observed Pradeep S Mehta, Secretary General of CUTS.

On the second day the seminar looked at the interface between investment and regulatory reforms, policy performance and perceptions on FDI (Foreign Direct Investment) in India, determinants of FDI as well as the gap between approved and actual flows. It came out that the general perception about the desirability of FDI is quite positive. It was also pointed out that making the so-called distinction between ‘silicon chips’ and ‘potato chips’ while talking about FDI is rather naïve.

If we need technology only, then it may be fine. But if we need more exports and employment, the export potential is likely to be higher in the ‘potato chips’ industries and similarly they are likely to be more employment-oriented. “Thus we need to define our objectives clearly and set priorities and strategies to see that we get it in our own terms and it actually benefits the country,” observed Manoj Pant, Professor at Jawaharlal Nehru University.

Towards the end, Prof. P V Indiresan, former Director of the IIT Madras, in a refreshing talk, brought to notice some of the deadly diseases afflicting our system. Lack of long-term planning is one of them.

“We fail to understand that building an airport bigger than what is required now may seem to silly but it saves money in the long-run apart from preventing major dislocations in the future. We must learn from China in this regard where all infrastructural facilities are in surplus, whereas in India, there is shortage everywhere” said Indiresan.

He also emphasised that it is absolutely essential to reform our judicial system, which is the culprit behind promoting and maintaining a corrupt system. Even if we accept that judiciary itself is not corrupt, it has spoiled the system by delaying everything.

In his concluding observation during the seminar, S Sundar, an eminent expert and Distinguished Fellow at the Tata Energy Research Institute said, “Issues like WTO has come to reinforce our concerns on regulations. But unless public opinion is generated on regulatory reforms, change is difficult to achieve. Civil society has a major role to play in this regard”

Lamy hails new EU-India trade research initiative

Brussels, 22 May 2002: EU Trade Commissioner, Pascal Lamy, emphasised the increasingly important role of non-governmental organisations in global governance at a meeting in Brussels on 21 May organised by the India-based organisation Consumer Unity & Trust Society (CUTS) in association with the European Institute of Asian Studies, Brussels. The meeting launched the new EU-India Network on Trade and Development, which brings together leading institutions from the two regions.

He praised the effort to initiate an independent network that would provide extremely useful inputs to the policy debate. Initially this network would address five topics of particular relevance for India and the European Union: mobility of labour, anti-dumping, textiles and clothing, investment, and competition. Tackling such issues, especially contentious issues like investment and competition takes “real political courage,” Lamy said.

Politics inevitably has an important influence on trade policy, and the two cannot be disconnected, he said, replying to one of the queries by a representative of the Indian government on EU’s preferential treatment to Pakistan for textiles and clothing in the wake of September 11. India has expressed concern about the impact of this on its garment export industry.

Opening the session, Pradeep S Mehta, Secretary General of CUTS, who is leading the network in India, stressed the need for coherent and cogent research on topics which are the cause of heated debates both inside and outside the World Trade Organisation. The network will encourage continued collaboration between the Indian and European research communities, which have sometimes found themselves at odds in the past.

Professor Alan Winters, noted trade economist from the University of Sussex, UK, the lead European institution for the network, pointed out the growing importance of academics and civil society in shaping trade policy. Winters explained that the research areas covered long-running challenges as well as newer issues brought to the fore by the WTO Doha Ministerial Declaration through which developed and developing countries both have potential to benefit.

The workshop, which took place over two days, attracted leading academics, journalists, civil society representatives and government officials. Among the notable participants were T. N. Srinivasan of Yale University, Suman Bery of National Council of Applied Economic Research, New Delhi, and Pierre Defraigne, Trade Directorate, European Commission.

Researchers will now develop detailed proposals on each of the five issues. They will submit their findings to policy makers in the run up to the next WTO Ministerial meeting due to be held in September 2003 in Mexico where it should make a valuable original contribution to the negotiations.For event report please click here.

For further information, please contact

Mr. Pranav Kumar at CUTS, India, Ph: 91.141.20 7482
Ms.Olivia Jensen at CUTS, London, Ph: 44.20.7720 3215

Trade measures to raise labour standards may end up hurting people

Brussels, 21 May 2002: “Labour standards in trade agreements could be fine for the people covered by them, but disastrous for those who are not,” cautioned Alan Winters, the noted trade economist from Sussex University at a meeting held in Brussels on 21 May. Participants at the meeting, “Linkages: How do we bridge the gap?” discussed the issues surrounding trade and labour standards as they affect developed and developing countries.

Some believe that the issue has dropped out of the trade debate because no mention was made of labour standards in the Doha Declaration of the members of the World Trade Organisation. However, although it is not part of the negotiating agenda at the WTO, it is still being pursued by the EU and the US in their preferential trading arrangements and bilateral treaties with developing countries, Winters pointed out, and developing countries need to beware of this.

P. Kamalam, representing the International Confederation of Free Trade Unions, noted the negative impact that globalisation has had on some vulnerable communities in the world and argued that including labour in the WTO would help to balance the power of business lobbies.

However, T. N. Srinivasan, the eminent trade economist from Yale University, said that using trade measures to force countries to raise labour standards may end up hurting the people that they are designed to help. The problem is further complicated by the fact that labour standards are lower in sectors that are not traded. Srinivasan said that policy-makers and activists should constantly keep in mind the goal of reducing poverty when they are making recommendations so that policies do not backfire.

Pradeep S. Mehta, Secretary General of CUTS, which organised the event, drew attention to the inequities in the global trading system and in the functioning of the WTO, but emphasised that broadening the scope of the WTO even further risked exacerbating the problems rather than alleviating them.

Participants at the seminar included non-governmental organisations, academics, media and other representatives of civil society as well as government officials from Europe, India and other countries.

The seminar was organised by the Consumer Unity & Trust Society, an advocacy and research organisation based in Jaipur, India with the support of the European Institute of Asian Studies, Brussels. The meeting was one event in the CUTS Linkages Project aiming to stimulate an objective and informed debate on the links between trade and labour.

For further information, please contact:

Mr. Pranav Kumar at CUTS, Jaipur, Ph: 91.141.20 7482
Ms. Olivia Jensen at CUTS, London, Ph: 44.20.7720 3215

Poor Countries Urged to Plan Cautiously for WTO Talks

Lusaka, 28^th March 2002. The poor countries need to critically look at the decisions emerged out of the Doha Ministerial Conference of the World Trade Organisation (WTO) and compare them against the human, institutional and resource capacities of their economies. “We must assess whether we have the capacity to benefit from and not simply to implement new obligation which we may commit ourselves at the imminent new round of trade negotiations,” said Sindiso Ngwenya, Assistant Secretary General of Common Market for Southern and Eastern Africa (COMESA). He was speaking at a regional seminar organised by Lusaka-based Consumer Unity & Trust Society-Africa Resource Centre (CUTS-ARC) at Mulungushi Village Complex, in the Zambian capital.

Mr. Ngwenya urged the stake holders of the new trade talks to devote sufficient time to analyse the critical issues involved in the WTO processes and cautioned against agreeing to advance the 5^th WTO Ministerial from its schedule time in end 2003 to any early date as it gives only very little time for the poor countries to prepare for the negotiations. He was commenting on the sluggish preparation for the new round by the poor countries, as some countries in Africa have not even made an assessment of the decisions taken at Doha. The next Ministerial Conference of the WTO is expected to take place in Mexico.

During the run up to the Doha Ministerial Zambia worked with other least developed countries (LDCs) in their effort to get meaningful market access of their products in the rich country markets. In its effort to involve stakeholders at the national level, Ministry of Commerce and Industy took deliberate attempts to involve civil society groups in the Doha delegation, said Dr. M. Lewanika, Permanent Secretary at the Ministry. In this context, he suggested that the outcome of the seminar should be fruitful and beneficial not only to enrich the national agenda but also the regional and African agenda.

Participants drawn from civil society, government and intergovernmental organisations of South Africa, Zimbabwe, Mozambique, Kenya, Uganda, India, Zambia and the Netherlands attended this two-day seminar held during 25^th and 26^th March 2002. It looked at ways and means that could help poor developing countries to emerge with meaningful result on market access during the forthcoming trade negotiations.

According to CUTS–ARC, the seminar is part of its effort to enable the stakeholders to review the outcomes of the Doha Ministerial Meeting of the WTO and promoting south-south co-operation in global trade negotiations. Many poor countries and civil society organisations emerged out of the Doha meeting lamented that the rich countries not only sidelined issues that affect their economic development but also brought in New Issues such as environment that might adversely affect their trade prospects in the rich country markets.

The seminar concluded with the adoption of a set of recommendations for further research and advocacy work in certain critical areas. One notable recommendation was that “country representatives should be held accountable for decisions they take during international negotiations that affect the people”. Further, the negotiators of poor countries should be equipped to participate meaningfully in the various parleys taking place at the WTO, especially on issues crucial for economic development.

In a move aimed at bringing WTO issues while mainstreaming national plans for economic development and poverty reduction, the seminar recommended that policy makers, particularly members of parliaments in the poor countries should be targeted for awareness campaigns and capacity building on the WTO processes. Regarding the WTO processes, the general assessment of the meeting was that the positions of poor countries have been weak in the past, because they were divided and ill-prepared for the talks.

For further information please contact

Conference-WTO and South Asia: Lessons and Strategies

South Asian Cooperation – the need of the hour at the WTO.

If developing countries make a concerted effort, then they can achieve their objectives at the World Trade Organisation (WTO), Muchkund Dubey former Foreign Secretary, said at the seminar “WTO and South Asia: Lessons and Strategies” held in New Delhi on 9^th & 10^th March.

S N Menon, Additional Secretary, Ministry of Commerce, said that Doha Ministerial Meeting of the WTO, held in November 2001, proved that developing countries now have to be listened to if they take a common stand and much had been achieved in comparison with previous meetings on important issues like TRIPS (Trade Related Intellectual Property Rights) and agriculture.

South Asian countries have many common interests in the international trade regime and can make progress if they work together, delegates at the seminar agreed. Mr Dubey suggested that regional cooperation could be enhanced by forming working groups on issues at the regional level.

Saman Kelegama, Head of the Institute of Policy Studies, Sri Lanka, said that the approach of South Asia had been reactive in the Uruguay Round of negotiations but in Seattle and Doha, South Asian countries had developed a common statement. However, this had not been reflected in the course of the meetings.

Speaking in the Inaugural Session, Pradeep S Mehta, Secretary General, CUTS, said that the Doha Declaration had generated a huge work programme. Most developing countries do not yet have the capacity to develop their negotiation positions and require technical assistance and capacity-building to do so.

On the Singapore issues, which include competition and investment, developing countries have to prepare themselves for negotiations. “The clock is ticking,” Mr Menon said, and research and analysis was required urgently for the governments to prepare their positions. According to Mr Dubey, the key issues in the agreements have already been outlined in the Declaration and discussions on the details have begun in the working groups of the WTO.

HAC Prasad, Economic Adviser, Ministry of Commerce, pointed to the missing link between international and domestic policies. Governments have to make domestic legislation consistent with globalisation. In the Closing Session, delegates noted that the development agenda has to be pursued at the national level as well as at the international level. Sharad Joshi, Chief of the Shetkari Sangathan and Chairman of the Taskforce on Agriculture, Government of India pointed out that a single market in agriculture needs to be created at the national level in India before cross-border liberalisation can take place.

Delegates at the seminar agreed that coalition-building between South Asian nations are the need of the hour. The seminar brought together experts working in the South Asian region and included representatives from international organisations, governments, business representatives and civil society groups.

The seminar was organised by the Centre for International Trade, Economics and Environment of CUTS (Consumer, Unity & Trust Society), a Jaipur-based research and advocacy organisation. The event was supported by the International Development Research Centre, Canada.

For further information, contact Mr Bipul Chatterjee/Pranav Kumar.

CONSUMER GROUPS WANT A NEW AND STRONGER COMPETITION LAW

Jaipur, 15 November 2001

Consumer groups have welcomed the new Competition Bill but have suggested further fine-tuning, in submissions made before the Parliamentary Committee to which the Bill has been referred.

The existing MRTP Act cannot deliver justice to the country's consumers, is the message conveyed to the Committee, which is headed by Pranab Mukherjee.

A coalition of consumer groups in association with Consumer Unity & Trust Society (CUTS) maintain that inadequate coverage has been given in the Bill to Intellectual Property Rights (IPRs). A good competition law today cannot afford to be silent on IPRs, which are used as market strategy in modern knowledge-based economies. Licensing arrangements that restrict 'parallel imports' for instance, can be extremely injurious to competition. Similarly, the provision in TRIPS (Trade Related Intellectual Property Rights of the World Trade Organisation) for 'compulsory licensing', can be quite useful in correcting anti-competitive practices. CUTS has proposed a whole separate chapter on Intellectual Property Rights in the new Competition Bill.

The consumer groups' coalition comprises Consumers' Forum (CF) New Delhi, Federation of Consumer Organisations (FEDCOT) Tamil Nadu, Consumer Education & research Centre (CERC) Ahmedabad, Consumer Unity & Trust Society (CUTS) Jaipur among others.

Glaring escape hatches have been left open for the perpetuators of hard-core cartels, in that the prosecution must prove that the offending trade practice (such as price-fixing) has actually injured market competition. In such serious misdemeanor, proving purpose and intent ought to be enough to take cognizance.

Moreover, some cartels may in fact be in the better interest of the consumer, while hard-core cartels are really damaging to consumer interest. In other countries there is clear recognition of the various kinds of cartels that may exist in the market place, and the differential treatment meted out to the perpetuators. The Indian Bill under consideration, however, largely paints all conducts with the same brush. Hence, the prescribed fines may be too harsh a punishment for certain cases of abuse of dominance and vertical agreements, while may be less than required deterrent for hard-core cartels.

Another surprising omission in the Bill pointed out by consumer groups is the lack of protection for the whistleblower, or a leniency programme for the colluding firm turned approver. A stick and carrot policy of heavy fines and punishments coupled with the promise of amnesty for the whistleblower has proven effective in uncovering and prosecuting cartels in many countries including the US and in the European Union.

In a rare matching of views between consumer groups and business lobbies, both feel that the given criteria of eligibility and age-limit for membership of the Competition Commission could easily make it into another sinecure for retiring and retired judges and bureaucrats. This must not be allowed.

For further information please contact:

Tapas Das

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Consumers would welcome competition law and policy at the international level, but not sure if the WTO is the best place

Doha, 12 November 2001

The proposed multilateral competition policy is about enabling cooperation at the international level, and not imposing an international competition law.

Frederic Jenny, chairman of the WTO working group on trade and competition law, made this point at a panel discussion on “Trade and Competition Policy” organised by Consumers International and CUTS Centre for International Trade, Economics & Environment here on the sidelines of the 4th WTO Ministerial Conference.

“The purpose of this meeting is to explore how we can move forward in ensuring that consumers are adequately protected from anti-competitive practices by business in a globalising economy,” said Pradeep S. Mehta, Secretary General of CUTS. “In 1995 only about 50 countries had a competition law, and due to the discussions at the WTO, which resulted in an increased profile, today over 100 countries have a competition law.”

Julian Edwards, Director General of Consumers International, in his welcome address noted that an effective competition policy and law enhances consumer welfare, and that CI members are actively engaged in pursuing the same. CI is currently involved in a multi-country research project which is examining issues under the agreements on agriculture and services, and on competition policy in 16 countries through member organisations. He said that the preliminary results of the research are very enlightening.

Jenny went on to say that no one is suggesting that there should be one uniform style of competition law. One size doesn’t fit all and countries need to design their own law according to their needs, culture and size of the economy. As regards the issue of a multilateral competition policy, he felt that due to its rules-based approach the WTO is the best place to situate it. UNCTAD cannot be a host because it doesn’t have any negotiating mandate or teeth to enforce any future agreement.

George Kiriazis of the European Commission was the third speaker, who kicked off discussions with the classic statement: “With increasing trade liberalization, competition abuses are also growing. The negative effects need to be checked through a good competition law.”

As regards the issue of a multilateral competition policy (MCP), the WTO already has references to competition policy in several agreements such as TRIMs, services and TRIPs so it cannot be considered to be a new issue. All these need to be given strength and we seek their convergence for the purpose of coherence, Kiriazis added.

“Under the proposed MCP, countries will be able to deal with cross border issues through cooperation mechanisms. If the Doha meeting doesn’t agree to having negotiations on an MCP, the EU will go ahead with bilateral and pluritaleral agreements. For example, the Cotonou Agreement with 73 ACP countries already has a provision on competition policy, and we will launch negotiations there”, asserted Kiriazis. “Technical assistance and capacity building will be an integral part of any MCP.”

“At any level, a country requires a competition law, as I have seen in my own country: Slovenia,” said Breda Kutin, head of the Slovene Consumers Association. “We are a transition economy with only 2mn population and also a candidate for membership of the EU. For that reason, Slovenian economy is already open and liberal, and we are already witnessing many restrictive business practices which cost consumers. Therefore, we need effective implementation of our competition law and closer cooperation with other countries.”

In a lively interactive session which followed the preliminary remarks, some participants questioned the necessity of having an international competition policy. Jenny and Mehta drew attention to the international cartels which have a deleterious effect on developing countries and their consumers, and can only be properly tackled through an MCP.

Quoting from the latest World Development Report, Jenny pointed out that developing countries have experienced the effects of cartels in vitamins, electrical equipment, graphite electrodes etc. However, no action has been taken.

Mehta added that in the case of the recent vitamins cartel, action was taken in the USA, Canada and Australia, as result of which over a billion dollar fine was levied on three European manufacturers and six Japanese manufacturers. Even a developing country like Brazil has taken action by getting cooperation from the US Justice Department, but India, where all three companies are operating, has not taken any action.

James Musonda of the COMESA (Common Market for Eastern and Southern Africa) Secretariat noted that cross border mergers and acquisitions are taking place across the region, potentially threatening competition. “The issue of cooperation between different competition authorities is becoming more necessary than ever before, and therefore too an MCP is desirable.”

In response to a question on the link between competition policy and corruption, Jenny pointed out the benefits of a transparent and predictable system on checking abuses. For example, in collusive tendering, where corruption is inherent, an action under competition law has often deterred corruption.

Participants as a whole recognised the potential benefits, but wondered whether WTO is the best place to locate it. It was pointed out that developing countries are not favour of an MCP at the WTO because of several problems there that are not directly related to the outline of the agreement: the inherent inequities in the system; an overloaded agenda and lack of capacity; and how can cooperation be ensured, when it will be voluntary.

For further information, please contact:

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Afro-Asian NGO Coalition Condemns the Reintroduction of Labour Standards on the Ministerial Agenda

Doha, 12 November 2001.

The attempt to re-introduce core labour standards in the WTO negotiations was widely condemned by a number of NGOs--from Africa and Asia--who are in Doha for the 4^th ministerial conference of WTO.

In a statement released here today a coalition of NGOs from Africa and Asia stated: “Introduction of core labour standards in WTO agenda would once again sabotage the success of the ministerial, as it happened at Seattle. We are not surprised at all. The European Union and other supporting countries are foisting an agenda with the clear intention of annoying the poor countries.” It was issued by Sustainable Development Policy Institute, the Network for Consumer Protection and Noor of Pakistan, CUTS Centre for International Trade, Economics & Environment of India and Zambia, South Asia Watch on Trade, Economics & Environment of Nepal, Bangladesh Environmental Lawyers Association, Zambia Association for Research and Development, Uganda Consumer Protection Association, and Consumer Information Network, Kenya.

Poverty is the major problem in our countries. There are millions of families in Africa and Asia who are depending on the income that their children generate. In Bangladesh they tried to stop child labour and the result was that the working children turned into street beggars and prostitutes.

“Why do they think that one size can fit all? Their issues are entirely different from our issues. I appreciate that they take care of their citizens and try to improve the working conditions in their countries. In most of the cases their social security system is strong enough to protect the livelihood of a family if a person leave the job. However, in our case it is entirely opposite. It is not the matter of choosing the best work conditions. It is the matter of subsistence and livelihood,” said the representative of the Bangladesh Environmental Lawyers Association.

In a country like Nepal, India, or Pakistan where 40 to 50 percent people live below poverty line the main problem is finding a job. If the rich countries are really that sincere in improving the work conditions then their first priority should be to eradicate the poverty not by loans but by better terms of trade etc.

The proponents of the revised effort: EU, New Zealand, Canada etc are not sincere in improving the condition of labour. They just need another excuse to block the entry of developing countries into their markets. The idea of labour standards is too premature to be considered in the new round of issues. The WTO should give top priority to other main issues, such as implementation of the Uruguay Round commitments, better terms of trade, TRIPs and concerns of the poor.

The statement asserted that: “Core labour standards are very important. However, the WTO is not the right forum to deal with the issue. The Dispute Settlement Undertaking of the WTO would penalise countries deemed to operate below the agreed standards. This approach would make the situation worse, especially the least developed countries would suffer the more because the penalty from the WTO will be punitive whereas the International Labour Organisation will try to assist the country reach to an acceptable labour standards.”

Responding to the statement of ICFTU (International Confederation of Free Trade Unions) that introduction of core labour standards would put an end to the WTO’s isolationism from the other bodies of the United Nations, and most notably the ILO, the statement noted: “EU and Canada are hypocrites and have double standards. We are advocating that patenting of life forms under TRIPs should be made compatible with Convention of Biological Diversity. On the issue of patents of medicine we are demanding that the World Health Organisation should decide when the situation arises in a country to give her exemption from TRIPs. Similarly we are trying hard that FAO should decide when a country’s food security is under threat to give her exemptions from tariff reduction, but the developed countries do not pay any heed and now when their own interest is involved they are supporting the proposal of core labour standards. It is simply unethical and we reject it categorically.”

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Capacity Building of the Rich Countries is a Must, if the Poor have to Gain from the WTO

Doha, 11 November, 2001

Capacity building of consumers in the rich countries is essential to enable development of pragmatic standards, which will enable improved market access for producers in the poor countries.

This was one of the key recommendations, which emerged at a panel discussion on “Standards and Market Access” organized by the CUTS Centre for International Trade, Economics & Environment (CUTS-CITEE), India and Zambia; the Sustainable Development Policy Institute (SDPI), Pakistan and the South Asia Watch on Trade, Economics & Environment (SAWTEE) on the sidelines of the 4^th Ministerial Conference of the WTO.

It is often consumers in the rich world who demand quality, which is more stringent than what is normally available, without any substantial safety gains. They need to be educated about the problems which producers in the developing world face, so that the demands are practical and not utopian.

Standards are a tool to gain or block market access in the present international trading system but unfortunately their sole use seems to be to block exports from developing and the least developed countries to the rich world, was the common refrain from the delegates at the meeting.

The meeting was attended by trade officials and representatives of civil society from Uganda, Zambia, Kenya, Zimbabwe, Nigeria, Egypt, India, Pakistan, Nepal, Sri Lanka, Belgium, Austria, Switzerland, The Netherlands, USA, and United Kingdom. Representatives of Consumers International, Oxfam International and IFOAM were also participating.

“Market access is a vast issue and in fact the whole of the WTO is about better market access, but rules, such as Sanitary and Phyto-sanitary Measures (SPS) and Technical Barriers to Trade (TBT) prevent easy entry and are creating problems for the poor countries,” said Mr. Pradeep S. Mehta of CUTS in his opening remarks. “These rules need to be interpreted in a fair and equitable manner otherwise the benefits of trade liberalization will not accrue to the poor countries, thus creating a further backlash against the multilateral trading system.”

Furthermore, certification, testing, and accreditation are major trade barriers for Southern exports and the developed world imposes its standards on developing nations, which are often inappropriate to conditions in the developing world and pose a threat to traditional knowledge, indigenous practices and local customs.

“We ought to leave it up to the discretion of the consumers in the developed world what they want to consume and should not frighten them with false alarms or create a false sense of insecurity,” said Alexander Daniel of IFOAM.

The meeting also noted that the whole issue of standards is in fact being misused to play the dirty game of power politics and the powerful ones are exploiting the powerless nations of the South. Konrad von Moltke, Adviser to the WTO Director General, said that he was surprised to see how negotiators are arguing at the meeting without having any clear goals. “Coming from an environment background, I find a huge difference between trade negotiations and environmental negotiations, which have a clear purpose. Here, people are speaking with each other, without one understanding the other,” said Moltke. “This reflects even in the issue of standards and trade.”

It is simply not possible to have a universally accepted standard or set of standards as ONE SIZE CAN’T FIT ALL. “The developing world should have autonomy to decide whether their products are safe for consumption and the whole business of certification should be made much simpler and easier,” said Henry Kimera, an Ugandan delegate.

“It was wrong to state that the dispute around standards is only between the rich and poor. For example one of the biggest disputes—on the beef hormone case—is between the US and EU,” said Julian Edwards, Director General of Consumers International. “The dispute has its origin in the EU invoking the precautionary principle provision in the SPS Agreement, an issue which needs further study and development. This should not become another trade barrier for the South.”

“Developed nations should look at the ‘end product’ and not on the processing method if they are really sincere in implementing some standards. They ought to understand the culture of the developing world”, said Dr. Abid Suleri of SDPI in summarising the lively discussions. “Standards should not become an end but a means to achieve sustainable development.”

Instead of doing capacity building in the South, they should educate and do the capacity building of their own consumers (who are more sensible than the trade giants) that everything in South is not ‘unhygienic’ and ‘harmful’. This would lead to equitable development as well as to the broader goal of integrating developing countries under the globalisation era.

In proposing the vote of thanks, Dr. Ramesh Arya of SAWTEE stated that their network is engaged in a two-pronged programme: building capacity of testing and other institutions in South Asia, so that producers can cope with standards set in the north, and engaging in political discussions of this nature so that process of standards-setting is more fair, transparent and equitable.

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CUTS' REPRESENTATIVE FOR DOHA,

CRITICISES GOVERNMENT OF INDIA FOR DISCRIMINATION

Jaipur, 6 November 2001

Consumer Unity & Trust Society (CUTS), a leading international NGO working on trade policy issues, will be represented by its Secretary General: Pradeep S Mehta at the WTO Ministerial Conference at Doha from 9-13 November.

In a press release issued today, CUTS said that Mehta will also be participating in the several NGO events to be organised on the sidelines of the main event, and will be writing for the Financial Express on a daily basis.

Commenting on the constitution of the official delegation, CUTS has severely criticized the Government of India for having ignored their repeated request of being nominated on the official delegation to Doha, and taken other non-officials such as business representatives from chambers of commerce.

"The government thinks that wisdom only resides in the bureaucracy, and that a little more can be found in business representatives, who are willing to kow tow with the government is strident position so that they can continue with their protectionist agendae", said the CUTS press release.

"As consumer representatives, CUTS is a lobbyist for the whole economy". Mehta serves on the Government of India's Advisory Committee on International Trade, and has been actively participating in its deliberations over the last several years. Not only that but Mehta has participated in all the WTO ministerial meetings ever since Marrakesh, and is considered an authority on international trade policy issues.

CUTS states that serving on the Government's trade advisory committee is a sufficient proof of its claim for being nominated on the official delegation. Besides this, it is increasingly a pattern where civil society representatives are taken on government delegations in both developed and developing countries to WTO ministerials.

Mehta is also an UNCTAD expert on trade, investment and competition policy issues and has been consulted widely by several governments including India. He also writes frequently for business papers in India and abroad.

The CUTS Centre for International Trade, Economics & Environment is the specialised body of CUTS dealing in WTO matters, whose advisory committee is chaired by the renowned economist: Professor Jagdish Bhagwati.

For the Government of India to have ignored the CUTS claim the second time is a poor reflection on the part of a country, which is the largest democracy in the world. At the earlier ministerial at Seattle, the government had done a similar act.

For further information please contact:

Bipul Chatterji/Pranav Kumar

CUTS, Jaipur

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Is our Entire Democracy based on Corruption?

Jaipur, 27 October 2001

“Every Political Party wants to remove corruption from the other parties. But when we come to think of it, our entire democracy is based on corruption. Every political party has to collect cash and this is in the form of black money. Black money is the oxygen for corruption and vice-versa. The political corruption in turn leads to a vicious cycle of bureaucratic corruption, business corruption and criminalisation of politics”.

These are the words of wisdom of Shri N.Vittal, The Chief Vigilance Commissioner, Govt. of India, expressed in his preface for the research report on corruption in Hindi, published by CUTS, titled “Bhrashtachar-Ek Nazar”.

“Bhrashtachar-Ek Nazar” which is to be released on the 3^rd November, 2001, traces the evolution of corruption and corrupt practices in the country over periods of time and makes an analyses of what has bred corruption and what is required to stem corruption in the first place and then to completely eliminate it from the Society. It carries actual cases of reported corrupt practices and also documents as to how these cases of corrupt practices have affected the common man.

According to Srinivas Krishnaswamy, Assistant Director of CUTS, through this research report, CUTS has made an attempt to mobilise civil society to fight corruption, after all corruption cannot be fought by only agencies like the Central Vigilance Commission, Central Bureau of Investigation etc., but is possible only through a mass mobilisation.

While acknowledging and appreciating the efforts of CUTS, Shri N.Vittal said that out of 100 crore people of India, hardly 5 crore may be corrupt. Rest 95 crore non-corrupt people are not united or mobilsed”.

This is perhaps the reason as to why India, which has the potential to become an economic and military superpower has not realised its full potentials. It is corruption that is coming in the way of achieving this objective. Corruption is anti-national, anti-economic development and anti-poor.

Besides the release of the book, CUTS is organising a number of other programmes in order to observe “Vigilance Awareness Week” from 31^st October to 6^th November, 2001, announced by Vigilance Commission of India.

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Strengthen consumers to fight anti-competitive abuses, cartels

Geneva, 13 October 2001

A strong consumer movement is essential for a healthy competition culture, according to delegates at an international symposium on competition policy and consumer interest in the global economy that took place in Geneva on October 12 and 13.

Representatives of consumer organisations worldwide, from rich, poor and poorest countries - from Bolivia and Malawi to Bangladesh and Zambia, from the United Kingdom and Canada to India and Malaysia, Poland and Slovenia - gathered with competition experts and trade negotiators at the event. Overall, more than 70 delegates from 35 countries were represented at the highly interactive meeting.

The meeting was organised by the Consumer Unity & Trust Society (CUTS), an India-based NGO, and supported by the Canada-based International Development Research Centre (IDRC). Experts from the WTO, UNCTAD, European Commission, Commonwealth Secretariat, the SAARC, and various country delegations deliberated with the participants on a variety of issues.

“Developing countries have been jumping out of the frying pan into the fire by privatising before putting in place independent regulatory regimes, which is bad for both consumers and investors,” said Pradeep S. Mehta, Secretary General of CUTS. “Consumers, especially the poor, suffer when prices go up while companies underinvest because of the unpredictable legal environment.”

The meeting noted that effective competition and consumer protection policies are essential to achieve fair markets and consumer welfare. Developing countries need assistance from developed countries to build capacity in this area and achieve their national social and economic objectives. Delegates cautioned that the assistance should bear in mind that the poor countries often learn from each other better than they can from rich countries.

Consumers all over the world, in both rich and poor countries, are robbed of billions of dollars each year by cartels and over-charging by dominant firms. Competition authorities of developing countries are making efforts to protect their consumers from these abuses. But they will need cooperation from agencies in rich countries, where the cartels are usually located and/or cooked up.

Experts also agreed that there is no ‘one-size-fits-all’ in competition policy. “An ideal law will fail when you try to put it into practices,” said Prof. Hassan Gemei, Vice President of the National Legal Alliance for Consumer Protection of Egypt, who is also advising the government on trade and competition policy.

It was widely agreed that each country should shape its competition law to meet national economic and social conditions. Small economies can take advantage of the strong competition regimes of their large neighbours or a regional arrangement to overcome their own capacity constraints as Nepal can benefit from the Indian regime, or Fiji from Australia and Trinidad & Tobago from Caricom.

At the international level, representatives of India and the EU engaged in a lively debate on whether competition should be on the WTO’s agenda. Developing countries have lost faith in the WTO system because of its inherent inequities the way in which rich countries have reneged on their commitments. Rajesh Agarwal, Counsellor at the Permament Mission of India pointed out that most developing countries do not have the information or the experience to define their needs and take part effectively in international negotiations on the issue.

On the other hand, a multilateral competition agreement may be necessary to combat cross-border competition abuses effectively. Technical assistance to build capabilities on competition issues from the US, EU and others is urgently needed if poor countries are to defend themselves against the powerful firms that are currently exploiting consumers.

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Development Concerns Must be Kept Upfront, said UK’s Minister

London, 10 October 2001

"To discuss the relationship between trade policy, the environment and labour standards, one has to start by looking at the link between trade and the reduction of poverty because this goes to the heart of the debate about globalisation," said Hilary Benn, Under Secretary of State, Department for International Development, UK.

He was delivering the keynote address at the inaugural session of a one-day Symposium titled ‘Linkages: How do we bridge the gap?’ jointly organised by Jaipur, India-based CUTS Centre for International Trade, Economics & Environment and London School of Economics and Political Science in London on 10th October 2001. More than 50 participants from governments, non-governmental organisations, academia and media participated in the discussion.

Benn pointed out that globalisation is helping in eradicating poverty all over the world but its negative aspects need to be looked into as well. Focussing on linkages between trade and labour standards and trade and environment, he said that while it is important to improve these standards, protectionism should not be allowed at any stage. "Trade sanctions approach should not be used to enforce labour and environmental standards in developing countries, and in any future trade negotiations at the World Trade Organisation (WTO) development concerns of developing countries should be discussed and addressed,"

"There are substantial inequities in the existing international trading system. Developed countries have long preached the virtues of openness, but practice lags behind the rhetoric. Despite progress over the last 50 years, developed countries maintain significant tariff and non-tariff barriers against the exports of developing countries. We all agree that there need be changes in the international trading system to better promote the interests of developing countries," he commented.

Welcoming the participants, Pradeep S. Mehta, Secretary General of Consumer Unity & Trust Society (CUTS) said that in the past many rich countries have made use of non-trade issues to deny market access to developing countries. They rightly see these issues as new forms of protectionism. Razeen Sally, Senior Lecturer of International Political Economy of the London School of Economics and Political Science pointed out that the WTO should not be allowed to become an institution governing domestic policy formulation on issues relating to labour standards and environmental standards.

Responding to Benn’s speech, Sanjay Baru, Editor of The Financial Express, New Delhi pointed out that these two linkages – trade and labour and trade and environment – were only the beginning of using trade policies to influence domestic policies. "Trade policies cannot and should not be used to deal with the negative impacts of globalisation on certain groups of people," he argued.

Discussions were held on issues of trade and labour standards, voluntary instruments and fair trade, multilateral environmental agreements and the WTO, and investment and the environment. Noted speakers were Simon James of the Trade Union Congress of UK, Amit Dasgupta of the SAARC Secretariat, Kathmandu, Stephen Pursey of the International Labour Organisation, Fiona Gooch of Traidcraft Exchange of UK, Ritu Kumar of Commonwealth Secretariat, London, Charles Arden-Clarke of the United Nations Environment Programme, Veena Jha of the United Nations Conference on Trade and Development, Oduor Ong’wen of EcoNews Africa, Nairobi.

Speaking at the closing session, Robert Madelin, Director General of Trade, European Commission, discussed EC’s agenda on trade and environment. He said that the European Union wants to promote environmental standards without allowing any scope for protectionism. "Developing and developed countries should come together and sort out the problems in this regard as soon as possible," he suggested.

The symposium was organised as a part of the CUTS-CITEE’s work programme on linkages between trade and non-trade concerns. A series of such events will be organised all over the world to address the issues of linkages between trade and non-trade concerns in an unbiased manner and try to find solutions to the problems by evolving a roadmap through consensus rather than creating roadblocks. The next event, in association with the Brookings Institution, will be held on 19th October 2001 in Washington DC, USA.

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Minister Prasad Delivers Valedictory Address to International Meeting in Goa

12th September 2001, Goa, India

The Minister of State for Consumer Affairs, Food & Public Distribution, V. Sreenivasa Prasad said that the Indian Government has accorded high priority to the programme on consumer protection and promotion of consumer welfare. Recalling that India was one of the first countries in the developing world to enact a comprehensive consumer protection legislation, namely the Consumer Protection Act of 1986, he expressed the view that in developing countries, the focus of consumer protection needs to be different from that of developed nations and the right to basic needs has to be given priority in view of the widespread poverty. He also emphasized the need for an integrated national consumer policy to guide all government departments to bring consumer perspective in their decision making process.

He was speaking on the occasion of the closing of the Regional meeting of the Asia-Pacific on New Dimensions of Consumer Protection in the Era of Globalisation held in Goa on 10^th & 11^th September. The meeting organized by the United Nations Conference on Trade and Development (UNCTAD), Consumers International (CI) and Consumer Unity & Trust Society (CUTS) was attended by representatives of consumer organizations from several countries of the region including India, Pakistan, Bangladesh, Nepal, Sri Lanka, China, Malaysia, Indonesia, Thailand, Vietnam, Mongolia, Australia and Fiji.

The meeting was the third in a series of regional events, coming after similar seminars in Latin America and Africa to provide inputs to the forthcoming Expert Meeting on Consumer Interests, Competitiveness, Competition and Development, which is to be held in Geneva on October 17-19, to emphasize UNCTAD’s work in the consumer protection field.

Speaking on the occasion, the Chief of the Competition and Consumer Policies branch of UNCTAD, Philippe Brusick observed that enhancing competition is not only about opening borders but primarily about increasing competitiveness by adopting appropriate competition policy and rules to ensure that competition is protected in the interest of both economic efficiency and consumer equity. To this effect, competition law enforcement should be complemented with appropriate consumer protection systems.

The Secretary General of CUTS, Pradeep S Mehta emphasized that an appropriate competition and regulatory mechanism is essential not only to protect consumer interest but also to enhance competitiveness and promote development. He also observed that a strong and vibrant consumer movement is the sine qua non to proper enforcement of the regulatory policies adopted by the Government.

The meeting agreed that properly implemented competition and consumer policies can make a key contribution to competitiveness and sustainable development. Before concluding, the meeting adopted a set of recommendations that came out as the “Goa Declaration”, pronounced by the Minister, Mr. Prasad on behalf of the participants.

The “Goa Declaration” calls upon UNCTAD, at its forthcoming Geneva meeting on Consumer Interests, to increase the United Nations’ involvement in consumer protection, and in this respect, to extend the United Nations Guidelines on Consumer Protection taking into account recent developments in globalization and advances in information technology, and to strengthen UNCTAD’s work to monitor the Guidelines’ implementation and to launch further studies on the impact of recent developments on the consumers.

For further details please contact: Mr. Nitya Nanda

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THE PARTICIPANTS OF 7 Up PROJECT PHASE-I CULMINATION MEETING

Boost Competition Policy to Crack International Cartels

Goa, 10^th September, 2001

An international vitamin cartel operating in the world has ripped off consumers by millions of dollars in the developing world, but no competition authority is investigating the same. However competition authorities in the USA, Canada etc have already fined the carteling companies over a billion US dollars.

This fact came up at a meeting here on a project looking at the competition regimes in the developing countries held in Goa on 7-8 September.

Research partners presented the results of the first year of the 7-Up Project, a groundbreaking study comparing the competition regimes of India and six other developing countries of Asia and Africa: Pakistan, Sri Lanka, Zambia, Tanzania, Kenya and South Africa. The project is being implemented by the Jaipur-based CUTS Centre for International Trade, Economics & Environment. The project is supported by the Department for International Development of the United Kingdom.

“What emerged as a very crucial recommendation, is that the consumer movements in developing countries must be strengthened if competition policy is to be implemented effectively” noted Mr Pradeep S Mehta, secretary general of CUTS. “Consumer awareness of competition issues is vital to create a vibrant national competition culture that will stimulate equitable growth”.

The Meeting launched the second phase of the project which will examine cross-border competition concerns such as international cartels and the effects of mega-mergers in developing country markets. The second phase is expected to generate valuable insight into developing country interests in relation to multilateral discussions on these issues.

International experts from various organisations such as the UNCTAD, WTO, OECD, World Bank, Consumers International, International Development Research Centre also participated as resource persons to take stock of the progress of the project and share their experiences about the subject.

“India would be the first country to support a multilateral competition arrangement that made the UNCTAD Competition Rules and Principles a binding agreement,” said Dr V S Seshadri, Joint Secretary, Ministry of Commerce at one of the sessions on the international scenario on competition policy.

However, he rejected the EU’s thrust for multilateral competition policy at the WTO, saying it would not be in the interest of developing countries. The discussion of new issues at the WTO could only come after progress was made on implementation issues.

He said the WTO Working Group on Trade and Competition Policy was overstepping its mandate by discussing multilateral competition policy rather than establishing whether there is a concrete relationship between trade and competition policy. Before negotiating multilateral competition policy at the WTO, he said that developing countries needed to have enough experience with competition policy at the domestic level to understand its pros and cons.

Frederic Jenny, Chairman of the WTO Working Group on Trade & Competition Policy, said that the Project would facilitate much needed communication between competition authorities and trade officials on competition abuses which affect trade and vice versa. Jenny emphasised the unique role of CUTS in bridging the gap between competition officials and other stakeholders.

Emphasising the main objective of UNCTAD of a more efficient and more equitable world economy through a competition-rules-based globalisation process, Philippe Brusick, Head of Competition and Consumer Policy, UNCTAD, commended the achievements and future role of the project in strengthening the competition culture in all the project countries.

The Meeting presented the results of the first year of the Project which examined and compared the domestic competition regimes of India, Pakistan, Sri Lanka, South Africa, Kenya, Zambia and Tanzania. The study focused on how the differences in economic structure and policies of these countries affect their competition policy requirements.

The project revealed the importance of a vibrant consumer movement for the meaningful enforcement of competition law. However, most of the project countries lack consumer awareness of these issues.

For further details please contact Ms Anjali Bansal

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Determined to make a difference

WWSF Global Newsletter No 10-July 2001

Ratni Bai Khatik (28) has been awarded the ‘Prize for Women Creativity in Rural Life 2001’ by Women’s World Summit Foundation (WWSF).

Ratni Bai Khatik, from a backward caste and being a girl, did not receive an education but was instead married at 13, She soon left her husband, however, who was of an immoral character, and went back to live with her parents Ratni Bai attended a meeting held by the Center for Human Development (CUTS) and expressed her desire to collaborate in projects in Keer Kheda (Chittorgarh District, Rajasthan State). Her first initiative was to create a school for the children of her village taking advantage of a government announcement of opportunities to open self-governing schools. Her careful monitoring during construction of the school ensured that it is the only school in the area with a proper construction. She visited parents to motivate them to send their children, especially girls, to school functions. Ratni disseminated education on health and on the environment with the result that people now boil or filter their drinking water and take care to preserve this resource. Thanks to her efforts, health personnel pay more frequent visits to the village, and medicines are made available in a timely manner. She has also formed self-help groups for income generating activities and helped them obtain credit from the bank. Ratni Bai has become a public figure who villagers and even government officials consult.

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Globalisation: Need for introspection!

Panel Discussion "Globalisation: Where do we stand?

27 June 2001, New Delhi, India

New Delhi: 27.06.2001

The ongoing economic reform process in the country is irreversible and the government will keep on supporting it to ensure that the benefits of globalisation reach to the poorest of the poor said Mr. Muni Lall, the Union Minster of State for labour and employment. He was speaking at a panel discussion "Globalisation: Where do we stand?" organised by CUTS Centre for International Trade, Economics &Environment at Indian International Centre, New Delhi in this week (27th June).

The other prominent panellists were Mr. Sharad Joshi, Chairman, Task force on agriculture, Government of India, Mr. Suman Bery, Director General, National Council of Applied Economic Research (NCAER), New Delhi and Mr. Jagdish Shettigar, Member, Prime Minster's Economic Advisory Council.

The government is doing its best to support domestic industry to become globally competitive. "But it should be clearly understood that we can no longer afford to give undue protection to inefficient and mismanaged enterprises" stressed the minister.

Responding to concerns voiced by participants regarding ill effects of globalisation Sharad Joshi said that the time has come for us to introspect and analyse our own domestic policies. He said that "producers have a social responsibility to provide low cost and good quality products to consumers, who the have been neglected in the past". Globalistion enhances consumer welfare, as in a highly competitive market the consumers get the best product at lower price. Moreover, it has provided Indian consumers with a variety of choices.

Speaking on the occasion Jagdish Shettigar criticised Indian trade negotiators for their shortsightedness while negotiating some of the GATT/WTO agreements. According to him "we have sacrificed a lot in Agreement on Agriculture". India accepted lower bound rate for agricultural products such as soybean when we had the option to impose higher import duties, which ultimately proved to be harmful to the domestic producers, he said.

"We should also bear the possible risks of globalisation in mind. However if pursued with proper planning, globalisation and liberalisation can do wonders to poverty eradication efforts" cautioned Suman Bery of NCAER.

In his concluding remarks as moderator to the Discussion, the minister said "globalisation is going to create more and more opportunities for different sections of the society. Further, the industry should not look up on the government for each and every malady and should stand on their own feet". He however said that the government is making special efforts to help the domestic industry sectors, which are facing serious adjustmental problems in the transitional period in the context of the WTO Agreements and also the domestic trade reforms.

For more details please contact:

K. S. Sajeev/Sandeep Singh

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Cabinet Nod on Competition Bill Welcomed

New Delhi: 27.06.2001

Though clearance of competition Bill by the Cabinet is a welcome move, much work has to be done to inform the public and lawmakers on the issue for a healthy debate as well as further improvements.

That was the central message, which emerged at a Symposium entitled "Existing & Proposed Competition Law of India", organized on 27th June, jointly by the National Council of Applied Economic Research and Jaipur-based Consumer Unity & Trust Society.

At theoretical level it was felt that presently there is no standardized relationship between competition policy, competition law and competition authority in India, creating high expectation on the proposed regime to achieve such relationship.

"MRTP Act is not at all dealing with competition issues since 1991," commented Mr. Naresh Mathur, a Supreme Court lawyer. "To call it a competition authority, would be a misnomer," he added.

While rejecting the existing regime in the liberalizing and globalizing economy, several lacunae were pointed out in the draft Bill that was made public a few months back. While speaking on ‘exemptions,’ Professor Rakesh Basant of the Indian Institute of Management, Ahmedabad was critical of the fact that the Bill has left the matter solely on the Government to notify, without proper guidelines or directions. Prof. Basant, who had done a comprehensive study on competition issues for the Government in early 2000, opined that pre-notification of all mergers should be necessary, at least for maintaining the data base, even if all of them are not examined.

Focusing on ‘cartels’ being dealt under the Monopolies and Restrictive Trade Practices (MRTP) Act, Mr. G R Bhatia, Additional Director General (Investigation & Registration), spelt out weaknesses in the Act. It was suggested that to prevent and crack cartels, high fines and criminal liability coupled with leniency programs for the firms and protection to the whistleblowers is sine qua non and should be reflected in the new law. In the MRTP Act there is even no mention of the word ‘cartel’.

Furthermore, based on the past experiences, the participants were critical about the high retirement age for the chairperson and other commissioners, which could open doors for the appointment of retired judges and civil servants. "That would be counter-productive, as most such appointees will have little understanding of economic issue in a modern context, and can do more harm than good in fostering competition," said a participant.

Also a prima facie case was made out for addressing flexibility under TRIPs Agreement in the new law, particularly that under Articles 6, 31 and 40 (of TRIPs), i.e. provisions for parallel imports, compulsory licensing and control of anti-competitive practices in contractual licenses respectively. "This has not been addressed in the new bill at all," said Ujjwal Kumar, researcher with CUTS. "When the issue of TRIPs is so hot and current, the framers of the new competition law seems to have been sleeping".

Earlier, inaugurating the Symposium, Dr. Suman Bery, Director General of NCAER, asked the participants to consider carefully the risk of misuse of the new competition law to harass the private sector, despite the best intentions of the framers of the legislation. An example of such an unintended outcome is the evolution of anti-dumping measures in international trade. Citing the Microsoft case, he further highlighted how anti-trust concerns had evolved from a ‘concern for concentration’ to ‘concern for impact on innovation’. Increase in freedom of entry (or contestability) was seen as the best check on concentration and exercise of monopoly power.

The Symposium was a part of a project on comparative study of competition regimes of India, Pakistan, Sri Lanka, Kenya, Tanzania, South Africa and Zambia, being funded by the Department for International Development, UK and implemented by CUTS.

The Indian component of the Study, done by NCAER, shows that the Commission is mostly staffed by either retirees in the judiciary and civil service or government officials on deputation and lacks significantly in technical competence. At present, apart from the Chairman, the Commission has four members as against the sanctioned strength of eight. There are seven professional and 87 support staff against the sanctioned strength of 10 and 95 respectively. Furthermore, out of the average annual budget of about 2 crore, around 66% goes towards salaries, 31% contributes to establishment cost and 2% is travel cost.

No new investigation with respect to monopolistic trade practices (MTPs) has been launched by the Commission since 1997. At present the MRTP Commission has about 5000 pending cases, of which, eight cases relate to MTPs and of the remaining, around 55% relate to unfair trade practices while 45% are related to restrictive trade practices. There are about 125 pending cases with the Commission, which were initiated between 1983 and 1990. However, due to inefficient data management system of the Commission, the field researcher was not able to obtain enough data. It was recommended that the new regime should have a better system to maintain administrative data as well as data for the purpose of various economic analyses involved in the decision making.

Some of the other drawbacks of the existing regime such as lack of independence, no clear definition of competition offences, non-proactive authority, lack of flexibility, lack of teeth, conflict between the investigative and judicial wing, absence of merger regulation etc., surfaced during the discussions. It was hoped that these drawbacks would be taken care of in the new regime.

For more information please contact

Ujjwal Kumar/Anjali Bansal,

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'Gandhiji’ led a March to Commemorate the World Environment Day

Jaipur: 05.06.2001

A little boy attired as and resembling Mahatma Gandhi, the Father of the Nation, led a march on the occasion of the World Environment Day. ‘Gandhiji’ presented pollution masks to traffic policemen at various crossings between the Ajmeri Gate and Gandhi Circle, University Road. Braving the heat, a good number of school children, carrying posters, banners etc participated in the event. Leaflets were distributed as well. Parents, showing citizens’ concerns for making this world a better place to live in, also accompanied them.

The event was organised by the Consumer Unity & Trust Society (CUTS), a public interest non-governmental organisation (NGO), with its headquarters at Jaipur. The objectives were to educate the people of Jaipur on the ill-effects of environmental pollution, generate environmental awareness, invoke a sense of responsibility among the concerned citizens of Jaipur and provoke debates among the common people in their quest for a better environment.

“We need personalities like Gandhiji to save our planet from any further environmental degradation and ensuring people’s right to a healthy environment,” said Rajnish Jayaswal of CUTS, while addressing the participants at the Gandhi Circle, University Road.

For further information, please contact:
Mr. Rajnish Jayaswal/Ms. Alka Gupta

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South Asian Parliamentarians to form Caucus to Address Atmospheric Issues

New Delhi, May 13: “There is a great danger for South Asia to be marginalized on global atmospheric debates and negotiations. I strongly feel that the time has come to look at the various viable initiatives and an important one would be to create a caucus of South Asian Parliamentarians to bring atmospheric concerns separately into public policy debate” said Mabel Rebello, Member of Parliament from India.

She was speaking at the South Asian Consultation on Atmospheric Issues organised by United Nations Environment Programme (UNEP), Consumer Unity & Trust Society (CUTS) and South Asia Watch on Trade Environment and Economics (SAWTEE) at New Delhi recently.

The Consultation was organised to find out how five South Asian countries, namely Bangladesh, India, Nepal, Pakistan and Sri Lanka have responded to atmospheric issues like ozone depletion and climate change. Each of these countries have made certain commitments to phase out ODS (Ozone Depleting Substance) under the Montreal Protocol in several sectors like the refrigeration and air-conditioning sector.

The Consultation also took stock of how much these commitments have been fulfilled till date. The Consultation also took stock of the initiatives taken by each these countries in reduction of emission of greenhouse gas under the Kyoto Protocol.

The build up of greenhouse gases, responsible for global warming, is continuing at a disastrous rate and if immediate steps are not taken then the situation is likely to worsen. The Kyoto Protocol puts an obligation on developed countries to cut greenhouse gas emissions that are responsible for climate change.

At present the Kyoto Protocol is under uncertainty with no political agreement being reached last year during the 6th Conference of Parties. None of the five South Asian countries have any binding commitment to reduce greenhouse gas emission. As climate change is a global problem it was felt that each of these countries should be asked to take more initiative to reduce greenhouse gas emissions.

Speaking at the inaugural, Suresh Prabhu, Power Minister of India explained the how ozone depletion and global warming could adversely affect the agricultural sector in this region. He said that atmospheric issue is not a rich man’s issue, as thought by strong lobby operating in this region. It is as important an issue like eradication of poverty, hunger and raising the standard of living of the people. People must understand that our very survival is threatened due to damage caused to the environment. If we fail to survive, then all other issues relating to human development become irrelevant so we need to take environmental issue very seriously.

“Often Parliamentarians are not adequately on informed on these issues so force the desired legislative changes needed to address these issues better,” said Abdul Moin Khan, Member of Parliament from Bangladesh.

Prabhu also suggested that there is a need to institutionalise the present effort put by CUTS, UNEP and SAWTEE. Prabhu proposed that there is a need to build three separate fora: Forum of Parliamentarians, Forum of NGOs, and Forum of Media. These fora should work together to discuss environmental problems in the South Asian region so as to develop a common strategy to address them collectively.

“Developing countries need financial as well as technical help in order to meet their international environmental commitments so we need to team up and ensure that we get this financial and technical help from the developed countries mainly responsible for the pollution,” said Mr. Hemkumara Nanayakkara, Member of Parliament from Sri Lanka.

Deliberations took place on the present measures of the five South Asian Countries on Ozone Depleting Substance (ODS) phase-out and the actions that have been taken by these countries to reduce greenhouse gas emissions.

Working groups consisting of Members of Parliament, Ozone Unit Officials, Scientists and NGOs from five South Asian countries discussed a whole range of issues pertaining to Montreal Protocol and Kyoto Protocol as also the role of parliamentarians in the region to support the implementation of these protocols. The discussions can be broadly catagorised into i) role of information, ii) role of legal and institutional mechanisms, iii) imperative of regional cooperation and iv) setting up of multi-stakeholder forum at national and regional level.

As atmospheric issues recognise no borders and boundaries, participants stressed the role of regional cooperation to combat environmental problems. Environmental problems have an ambivalent scope of both triggering conflicts and generating peace and cooperation. Participants felt that existing regional institutions like SAARC at Kathmandu and SACEP at Colombo should be strengthened and revitalised with necessary resources to kick-start this kind of regional cooperation.

Participants also agreed on the need to make efforts to take local initiatives to deploy adequate human and financial resources on their own at national levels in order to prove their commitments and initiative.

The South Asian Consultation drew several representatives including Members of Parliament, National Ozone Unit officials, academicia and environmental groups from five South Asian countries Bangladesh, India, Nepal, Pakistan and Sri Lanka. The event not only created awareness among key parliamentarians but also evaluated the “on the ground” situation in each country and outline appropriate policy responses for addressing atmospheric issues under the Montreal Protocol and Kyoto Protocol.

All the participating Parliamentarians unanimously agreed to form caucus to address atmospheric issues.

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MEHTA APPOINTED MEMBER OF TRADE BODY

Jaipur 4 May, The Ministry of Commerce and Industry of India has renominated Pradeep S. Mehta, Secretary General of CUTS, Jaipur as a member of the Advisory Committee on International Trade.

This is a high powered 17-member committee chaired by the Union Minister of Commerce & Industry, Mr Murasoli Maran. Its role is to advise the government on WTO matters, international trade policy and domestic policy issues.

The Committee assumes great importance in light of the current negotiations at the WTO and the possibility of a new round of trade negotiations being launched at Doha, Qatar in November 2001.

The body include the Commerce Secretary, Mr Prabir Sengupta, the noted agricultural scientist Dr M S Swaminathan, Dr R A Mashelkar, Director General, Council for Scientific & Industrial Research, former Commerce Secretaries: Mr Abid Hussain and Mr P P Prabhu, former foreign secretary, Mr Muchkund Dubey, Mr Tarun Das, Director General of Confederation of Indian Industry and Mr Amit Mitra, Secretary General of FICCI among other eminent persons.

Noted economists like Dr V R Panchmukhi and Dr Isher Ahluwalia, and social activist: Ms Suman Sahai of Gene Campaign are also members of the committee.

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WTO Rules and Market Access: Need for A Proactive Agenda

Jaipur, 29th April.

"We need to go beyond 'technical assistance' if developing and least developed countries are to benefit from the multilateral trading system," said John Cuddy, Director, Division on International Trade in Goods and Services and Commodities of the United Nations Conference on Trade and Development (UNCTAD).

Cuddy was speaking at the closing session of an international workshop on "Negotiating Agenda for Market Access: Cases of Sanitary and Phyto-sanitary Measures and Technical Barriers to Trade". The event was organised by the Jaipur, India-based CUTS Centre for International Trade, Economics & Environment, with the cooperation of UNCTAD and the International Centre for Trade and Sustainable Development, Geneva.

The event was organised in Geneva on 24-25 April 2001. More than 70 participants from civil society organisations, government officials, academics and representatives of trade missions in Geneva participated in the meeting. Officials from the WTO (World Trade Organisation) and the UNCTAD secretariat also participated and spoke on the occasion.

Most importantly, case studies were presented by experts from the developing world, such as Kenya, Nepal, Uganda, Mozambique, Chile, Zambia, Tanzania, Sri Lanka, Bangladesh and India.

"This is the first time I have been hearing ground realities. In the meetings of the WTO Committee on SPS we hardly discuss such cases as we do not have access to ground realities," said Erik Wijkstrom, Economic Affairs Officer of Agriculture and Commodities Division of the WTO.

Wijkstrom was referring to various presentations of case studies on the difficulties of getting market access in industrialised countries due to increasing use of SPS and TBT measures. The event provided a fertile platform for the experts to present ground realities in implementing the provisions of WTO agreements on SPS and TBT.

"The main criticisms against the global standard setting process were lack of transparency and participation of consumer organisations," expressed Allan Asher, Global Campaigns Director of Consumers International, London, UK.

Hector Torres of the Argentinean trade mission at Geneva drew attention to the fact that developing countries have comparative advantage in agricultural exports but they cannot utilise this advantage under the present system.

"The opportunities offered by the WTO Agreement on Agriculture were not being realised properly because of market access barriers that these countries are facing due to improper use of standards" said Torres.

While presenting a study on the European Union ban on exports of shrimp products from Bangladesh on health grounds, Mustafizur Rahman of the Centre for Policy Dialogue, Dhaka, Bangladesh highlighted the adverse effects of the ban on the country's economy, its foreign exchange earnings, the employment of small fishermen etc.

"The cost of compliance with EU's standards was too high. If a product is perfect for domestic consumption why can it not be considered for consumption abroad", asserted Rahman.

In 1997, the ban was imposed on the ground that exports of this commodity did not meet the stringent provisions of the European Community's HACCP (Hazard Analysis Critical Control Point) regulations. It put the country's shrimp export industry under severe strain and led to serious market disruptions from which the country is still trying to recover. The cost was equivalent to US$ 65.1 million.

"During the last three years, the country has witnessed two bans of its fish from the Lake Victoria into the EU market. They had adverse impact on the fish industry, in terms of foreign exchange earnings, income and employment generation. Following the ban, about 4,000 people (let alone small fishermen who could not find a market for their catch) were suspended from work" said Flora Musonda of the Economic and Social Research Foundation, Dar Es Salaam. She presented a case study on the impact of implementing the WTO Agreement on SPS and fish exports from Tanzania.

Tanzania lags behind in complying with the provisions of the SPS Agreement because of insufficient technical know-how and human and financial resources and facilities. She called for institutional strengthening of the Fisheries Department through training of fish quality assurance and control staff, provision of communication and transport facilities to enhance logistical capacity etc.

Thomas Cottier of the Institute of European and International Economic Law, University of Berne, Switzerland spoke about the concerns of developing countries while implementing the provisions of the TBT Agreement. He pointed out that there was not only lack of analytical capacity of the national focal points but also little coordination between various stakeholders.

Elisabeth Tuerk of the Centre for International Environmental Law, Geneva, Switzerland presented a study on the dispute of asbestos exports from Canada to the European Union. She explained the implications of the dispute for the developing countries and what lessons could be learned.

Speaking at the inaugural, Carlos Fortin, Deputy Secretary General of UNCTAD applauded the initiative that CUTS has taken in bringing forth the views of developing and least developed countries on WTO rules.

Fortin urged CUTS to prepare a proactive and positive agenda on the issues and organise similar events in Geneva in future. "This is an education for us and required for the benefit of the multilateral trading system as a whole."

"CUTS should organise similar events in Geneva on issues of rules of origin, anti-dumping etc and implement a programme on WTO rules and market access in developing and least developed countries by forming a network of civil society organisations, academics, research institutes, representatives of inter-governmental organisations etc", said Mina Mashayekhi, Legal Officer of the International Trade Division of UNCTAD.

"The initiative is not only the need of the hour but with specific case studies the exercise will feed into the process of setting the agenda for the Doha Ministerial Conference of the WTO," said a trade diplomat from a large developing country. The Ministerial Conference will be held at Doha, Qatar in November 2001 and developing countries are coming up with a set of proactive agenda.

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