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Position of the Venezuelan government in the fifth ministerial meeting of the WTO

Venezuela emphasizes the need for democratizing the decision-making processes and the negotiations inside the WTO.

In this Fifth Ministerial meeting of the WTO, I have the great responsibility communicating to you the position of the Government of the Bolivarian Republic of Venezuela with respect to the current state of the WTO agreements.

1. A Review of the Balance between Commitments and Results Derived from the WTO Agreements

Since the creation of the multilateral trading system, its proponents have maintained that international commerce will result in sustainable human development, particularly through the liberalization of trade and improved conditions of market access for all the member countries. To this end, a series of norms in different areas of the international trading system were designed.

However, the requirement of reciprocal compliance with many of the agreed-upon norms has ignored the large differences between the economies linked to the multilateral trading system and their varying levels of development. Requiring unequal countries to act as equals has done serious damage to developing countries.

While it is true that some provisions were adopted with respect to Special and Differential Treatment, these have, for the most part, not been implemented. Moreover, a number of developing countries lack sufficient capacity to benefit even if such norms were applied. This has generating ever-greater imbalances in the trade relations between developing and developed countries.

In these circumstances, it is clear who has gained and who has lost in the current system of international trade. As noted in the 2003 United Nations Development Program (UNDP) Human Development Report, the countries with low Human Development Index (HDI) scores in 1990 accounted for 0.86 percent of world exports, compared with 82.82 percent for countries with high human development. By 2001, the low HDI countries’ share of world trade had fallen to 0.66 percent—clear and incontrovertible proof of who has lost out from the Uruguay Round.

2. No Adoption of New Commitments

Clearly, inequality has persisted and grown over time as the benefits from faithful compliance with international trading rules have been unevenly distributed. This leads one to question the efficacy of free trade, at least in terms of the goal, put forth at the system’s inception, of furthering human development in a just and balanced way.

The evidence indicates that despite the efforts of developing countries to adapt to the norms established by the multilateral trading system, their quality of life has not improved, and there remain troubling limitations on the access of the majority of the world’s population to basic subsistence products.

Therefore, the delegation of the Bolivarian Republic of Venezuela insists on the need to refrain from adopting new commitments until the long list of pending issues that fundamentally affect developing countries is resolved.

Before the beginning any new negotiations, the government of the Bolivarian Republic of Venezuela considers that a public review of the Marrakech Accords should be carried out, a review similar to that solicited from the European Union by the Economic and Social Council (ESC). This review would assess the impact of the Marrakech Accords on economic growth, employment, the environment, and the inequalities between countries with different levels of development.

3. Prioritizing the Fight against Poverty and Social Exclusion

In the negotiations to liberalize and deregulate trade and investment, scant attention has been paid to the fight against poverty and social exclusion. In order for free trade to translate into better quality of life and welfare for the people of the world, the WTO must confront the true obstacles to free trade:

a. The unequal exchange that prevails as an expression of an unjust international economic order;

b. The obstacles that prevent developing countries from having access to information, knowledge, and technology;

c. The asymmetries and disparities that put the countries of the Global South at a hopeless disadvantage in their dealings with the powers of the Global North;

d. The weight of the unpayable external debt that absorbs a growing percentage of the funds that could be used for public investment and commercial exchange; and

e. The negative impact of the structural adjustment policies imposed by the international financial institutions.

4. Defending the Ability of Governments to Apply Public Policies

In recent years, a strong ideological bias has prevailed, a bias that considers the market to be preferable to the actions of the state and which does not take into account global experiences and the ways in which the state has successfully intervened to promote development in different historical contexts.

The market alone can guarantee neither growth, nor the overcoming of poverty, nor equity. The evidence suggests the opposite: recent decades have seen an accelerated process of liberalization and deregulation on a planetary scale, while simultaneously, inequalities have been accentuated, both within countries and between countries.

In light of these indisputable facts, it is necessary to re-introduce the idea of an appropriate level of state intervention, and to emphasize the role of public policy as tool without which it is impossible to achieve the stated goal of equitable, democratic, and environmentally sustainable development.

The subject of the relations between the state and the market is not an issue that can be resolved once and for all, for all future situations and all circumstances, based on theoretical assumptions or general policies. Neither state hegemony nor market fundamentalism are alternatives through which Venezuela and the other countries of the Global South will be able to achieve social and economic development. Our principle is “As much market as possible, and as much state as necessary.” The harmonization of the role of the state and the dynamics of the market is an issue that should be decided in each concrete context, in agreement with the particular conditions, according to the democratic will of the citizens, and with due respect for national sovereignty. No trade agreement can pretend to resolve once and for the tension between the state and the market.

Therefore, it is not a question of limiting the regulatory activity of the state in order to clear the way for economic liberalization through the irreversible adoption of binding international agreements. Liberalizing trade and investment cannot guarantee higher levels of growth and collective welfare. Without specific mechanisms to facilitate the design and execution of public policies geared to significantly reduce the disparities between different regions, countries, and productive activities, free competition between non-equals can only lead to a strengthening of the strongest and a further weakening of the weakest.

5. Incorporating New Actors into the Multilateral Trading System

Only through a negotiating process that is effectively transparent to society as a whole—to the business sector, to the workers, to indigenous organizations, to women’s groups, to cultural associations, to environmental organizations, to political parties, to legislatures, and to the press, can we affirm that we are advancing in the direction of a process that can be characterized as democratic.

Without transparency in the negotiating process, it will not be possible for social organizations to participate in the course of the negotiations and in the resulting accords. However, until now transparency has been very limited. This has granted a high degree of discretion to the representatives of the powerful countries at the negotiating table. In effect, the proposals of the representatives of a few dominant countries are often adopted as virtually final decisions in practically secret talks that negate developing countries’ participation in discussions of the most crucial issues facing the WTO.

The incorporation of new actors into the multilateral trading system is a democratic necessity. Transparency, open access to information, and the right to participate in the process of decision making have their main foundation in the fact that the WTO is much more than a trade agreement. On the contrary, it impacts a wide spectrum of collective life in its institutional, political, social, and even cultural dimensions.

6. Democratizing the Decision-Making Processes and the Negotiations

Another element of evaluation related to transparency is the need for democratization within the system. Here, one must recognize the efforts of the current WTO Director-General to make public much information about the Organization’s norms and fundamental decisions, as well as the interaction with social organizations that has evolved over the years.

However, it is equally true that there exist informal, nontransparent mechanisms in the negotiation process, through which the interests of the powerful countries generally end up being imposed on smaller and less-developed countries. Examples of these mechanisms include mini-ministerial meetings with very limited participation and with parallel agendas of specific interests. The diminished possibility of negotiation for those countries left out of such meetings puts them at a disadvantage and produces results contrary to their interests.

7. Putting Human Rights Before Corporate Rights

The recent processes of liberalization and deregulation of trade and investment have tended to put corporate rights before human rights, thereby shifting the subject of these rights from people to commerce. This alters the very philosophy of human rights by enshrining freedom of trade and the profitability of investment as fundamental manifestations of those rights.

Endowing juridical persons with commercial rights places corporations on an equal level with people and states. Indeed, the supremacy being given to commercial rights over human rights presents a serious threat to the latter. This is made even more serious by the fact that “free trade” agreements in general have stronger enforcement mechanisms—through strong sanctions—than those generally included in human, labor, cultural, and environmental rights agreements.

For the Bolivarian Government of Venezuela, economic, social, cultural, and civil rights are and will always be interdependent, indivisible and inalienable. As a consequence, commercial or investor interests cannot have supremacy over human rights or national sovereignty.

8. Agriculture: Much More Than a Commodity Sector

Article 305 of the Constitution of the Bolivarian Republic of Venezuela states:

“The State shall promote sustainable agriculture as the strategic basis for overall rural development, and consequently shall guarantee the population a secure food supply, defined as the sufficient and stable availability of food within the national sphere and timely and uninterrupted access to the same for consumers. A secure food supply must be achieved by developing and prioritizing internal agricultural and livestock production, understood as production deriving from the activities of agriculture, livestock, fishing and aquiculture. Food production is in the national interest and is fundamental to the economic and social development of the Nation. To this end, the State shall promulgate such financial, commercial, technological transfer, land tenancy, infrastructure, manpower training and other measures as may be necessary to achieve strategic levels of self-sufficiency. In addition, it shall promote actions in the national and international economic context to compensate for the disadvantages inherent to agricultural activity.”

With this constitutional mandate, the Venezuelan delegation to the Fifth WTO Ministerial meeting will call for the reduction of the protectionist policies and ruinous subsidies granted by the main industrialized countries, without requiring that this become a generalized obligation preventing developing countries from using these instruments and other public policies that would narrow their competitive disadvantage relative to the wealthy nations who have subsidized their agricultural sectors for decades.

Even if all tariff barriers against developing countries’ exports were eliminated, it would be impossible to compete with the subsidized prices of Northern countries. Such practices make it difficult or impossible for us to access world markets. Subsidized products compete unfairly even in our own internal markets, and their competitive advantage is only increased when we eliminate our tariffs. Even if wealthy nations were to eliminate such subsidies and other aid to producers, the playing field would not be leveled. For this reason, it cannot be demanded that developing countries do the same. Our countries lack the level of financial resources that developed countries use to support agriculture; what we have are policy tools that can diminish the perverse effects of several decades of international price distortions, tools that should be preserved as an aspect of Special and Differential Treatment.

For developing countries, agricultural activity is fundamental for the survival of the nation. The living conditions of millions of peasants and indigenous peoples will be severely affected if they are inundated with imported agricultural goods, even if those imports are not subsidized. Agricultural production is much more than the production of commodities. Rather, it is a way of life. It is the basic foundation for the preservation of cultural diversity, it is a means of occupying the national territory, it defines modes of relating to nature, and it directly involves food security and sovereignty. As such, it cannot be treated like just another economic activity or product.

9. Intellectual Property Rights or the People’s Right to Health?

Intellectual property is another of the issues that most clearly exposes the conflict between the interests of large transnational corporations and those of the poor countries of the South, particularly their peasant and aboriginal populations.

Appealing to what are called “trade-related issues”, efforts in this area attempt to consolidate a wide-ranging protectionist regime for intellectual property with very disadvantageous terms for poor countries. The countries of the North were able to impose a mandatory global regime of protection for intellectual property in accordance with their own interests and based on proposals formulated by transnational pharmaceutical companies.

In today’s asymmetric relations, the North’s advantages reside precisely in the areas of science and technology. The international regime of definition and protection of intellectual property is oriented towards accentuating this asymmetry. It protects those areas where the powerful countries have an advantage, while it basically leaves unprotected those areas where the Southern countries and peoples have an undisputed advantage: in the genetic diversity of their territories and the traditional knowledge of their peasant and aboriginal communities.

The agreements on intellectual property included in the WTO require all countries—after a grace period for the “less developed” countries—to establish patent regimes that guarantee strict protection of intellectual property. As a consequence of the monopoly rights granted by these agreements, pharmaceutical companies will be able to eliminate competition and charge prices out of the reach of millions of people. Several studies have calculated that the introduction of patents will not only result in significant increases in price, but also in a dangerous reduction in consumption. Wide sectors of the population will remain excluded from access to quality medicine at affordable prices, and this is simply intolerable.

The agreements on intellectual property cannot be obstacles to people’s right to benefit from scientific progress, from technological advances, and from access to quality foods and medicines. Venezuela recognizes the supremacy of international agreements in the areas of human rights, health, food security, and biodiversity over the intellectual property rights of the transnational corporations. Therefore, it is necessary to defend and preserve the right to grant compulsory licenses to national companies so that they can produce generic versions of patented medicines and foods, without this implying their having to confront the numerous hurdles that the transnationals are erecting to force them to demonstrate the safety of these products. The Bolivarian Government of Venezuela also supports the right of indigenous peoples and peasants to protect their traditional knowledge, and the right of farmers to protect and utilize the seeds that they themselves produce.

10. Defending the Obligation of the State to Offer Essential services

The proposals to totally liberalize, deregulate, and privatize trade in services (finance, telecommunications, consulting, engineering, tourism, education, health, etc.) implies a serious threat to the Constitutional provisions, national laws, and government policies that affect the status of the market mechanism as the sole regulator of the economy.

The value of greater or lesser degrees of regulation or state intervention is an open issue that each country must decide in accordance with local conditions that are constantly changing. The transference to the market of public services like education and health threatens the fundamental rights of citizens insofar as it transforms them into mere consumers of these services.

The Bolivarian Government of Venezuela maintains that countries should liberalize their services in accordance with their national development priorities and not because they are required to do so by international treaties. They should keep public those services that are indispensable for the population, as determined by their Constitution and laws. In this sense, it is necessary to ensure an adequate margin of protection for this type of service and exclude them from any liberalization attempt that impedes the access of the population, particularly of the poorest sectors, to essential services such as health, education, justice, security, etc.

In this Fifth WTO Ministerial Meeting, the Venezuelan delegation will firmly and categorically insist that international agreements cannot limit the authority and the sovereign right of states to regulate, through laws and rules, the distinct service sectors that they consider to be of strategic importance in satisfying the basic and essential necessities of their populations.

Ramon Rosales was the Chief of the Delegation from the Bolivarian Republic of Venezuela to the fifth Ministerial Meeting of the WTO in Cancun, Mexico.