“Government’s decision to relax restriction on trade in several essential agricultural commodities is a step in the right direction. The policy of decontrol is required for removing distortions in the market, thus creating pockets of surplus and shortage,” said Bipul Chatterjee, Associate Director of CUTS Centre for International Trade, Economics & Environment, a Jaipur-based civil society think-tank.

The proposed regime would result in a win-win situation for the producers and consumers, as it improves the marketability of crops and easier access to goods, respectively. However, this could be the ideal situation and much depends on implementation of the new policy, he added.

Recently the Centre has done a study on food distribution system in India, which found that the issue of food security could best be approached by looking at access to food, rather than availability alone. At the same time, an appropriate social security system has to be introduced for making the poor able to buy food from the market or otherwise. The present system of public distribution of food has failed to achieve its objective, because of inherent weaknesses and distortions, such as over-emphasis on the supply-side, and should be replaced by a system based on demand and by taking into account issues of access to food.

Freeing farm trade within the country will not only provides a fillip to value-addition in agricultural, but also will attract more investment in food processing. Such domestic reforms are the need of the day if the country is to realise its potentiality in agriculture, not only in the domestic context but also in this era of international trade under the auspices of the World Trade Organisation.

For more information, please contact

Ms. Purnima Purohit

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Call for making textiles and clothing sector competitive in the global scenario

Hyderabad, 19^th January 2002

“Indian textiles and clothing sector is too fragmented and efforts are to be made to develop synergies between different players. The process of making policies compatible with changes happening in the global scenario has to start immediately to grab opportunities in the WTO (World Trade Organisation) era,” said Anil Kumar, former textiles secretary of the Government of India.

He was speaking at a training seminar titled “Competitiveness of Indian Industries in the WTO Era” focussing on textiles and clothing. The event, held at the Centre for Management Education, Administrative Staff College of India (ASCI), Hyderabad, was organised by the CUTS (Consumer Unity & Trust Society) Centre for International Trade, Economics & Environment and ASCI.

More than 20 representatives from industries, industry associations, financial institutions and research organisations participated in this three-day event. Among others, Tejinder Khanna, former commerce secretary, S. Narayanan, former Indian ambassador to the WTO, P. K. Anand, former director of the ministry of textiles, T. S. Vishwanath of Confederation of Indian Industry, Sharad Bhansali of Strategic Law Group shared their views with the participants.

According to Mr. Narayanan, the question, whether WTO is good or bad for the country, should not arise at all because the rules-based multilateral trading system is the need of the hour and we should make our industries more competitive for making benefits out of the system. It may be true that some industries may suffer during initial phases of transition towards market-driven environment, but protectionism is not a way-out. However, it will be an utterly irresponsible thing to think that India should get out of the WTO.

Participants were unanimous in their view that lots of soul-searching is required for taking positive steps, which are necessary for the sector to be dynamically competitive and for taking advantages of full integration of international trade in textiles and clothing from the year 2005 onwards. Among others, they were of the view that there should an united effort by the industry to take positive steps. According to many, the knowledge on WTO is not disseminated to the industry and they urged that such programmes should be organised at regular intervals and in different places so as to overcome blissful ignorance of industry managers on WTO issues.

Mr. Yousuff Ahmed highlighted the fact that global retailers & Fortune 500 Companies like Wallmart, Ikea, J C Penny, Nike, Reebok, Marks & Spencers etc have set shop in India to outsource their requirements. He recalled that when textile units were turning sick way back in the 70s, Anglo French Textiles Ltd. Pondicherry was putting up a new weaving plant with Belgium hardware- to manufacture fabrics exclusively for exports- this when the concept of EOU was not yet heard of. We have a virgin domestic market & the full potential of our textile exports has not been realised. Manufacturers must avoid dual standards of quality for the home & overseas markets, he cautioned. Mr. Yousuff Ahmed outlined as to how India can be positioned as a strong value added sourcing base for apparel & clothing.

Mr. Khanna was of the view that since per capita consumption of fabric is very low in India, as compared to China or the US, making domestic market stronger will be advantageous for the industry. Also, the industry should be assertive to improve the quality and structure of governance. For making our mark in the global marketplace, we need to have cutting-edge technology. Furthermore, we should have lead-time information through a continuous source of intelligence for facing more and more non-tariff bariiers in future.

For more information, please contact

Mr. Bipul Chatterjee

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Call for the institutionalisation of the National Development Council

Jaipur, 13th January, 2002

“Competition is necessary for the economic development of India, but one needs to be careful in framing a competition policy, which should take care of initial distribution and that there is no unfair competition. Civil society, especially consumer organisations, have a major role to play in making competition, regulation and investment work for the benefit of the Indian economy,” said Prof. Kirit Parikh, an eminent economist and a member of the Prime Minister’s Economic Advisory council.

He was speaking at a national seminar on ‘Competition Regulation and Investment: Role in Economic Growth’ which was held in Jaipur on 11-12 January and organised by the National Council of Applied Economic Research (NCAER), Delhi and Consumer Unity & Trust Society (CUTS), Jaipur.

Participants ranged from consumer organisations to government officials to regulatory authorities to research institutions to academia to media. They discussed inter-linkages between competition, regulation and investment and how could there be policy convergence for the economic growth of the country. One of the major problem areas identified was lack of policy coherence among and between the states, and the centre. It was suggested that the National Development Council should be institutionalised to take on board systemic issues concerning economic growth and there should be more and more public participation in the policy-making process and their implementation.

There was a consensus that the proposed competition bill of India is significantly better than the Monopolies and Restrictive Trade Practices (MRTP) Act. However, more work needs to be done to look at competition issues from different perspectives, like anti-competitive practices arising out of intellectual property rights.

An interesting debate was whether India requires foreign direct investment for developing critical infrastructure for economic growth and development. Majority was of the opinion that more investment is required; domestic and foreign. The seminar offered a draft declaration, highlighting the following points. A final version will be drafted, adopted and to be taken forward at appropriate levels after receiving participants’ feedback.

· Institutionalise the National Development Council, with enhanced role for the states.

· Competition law should balance between consumer interests and business interests.

· Create an enabling environment – good governance etc – for attracting and absorbing investment for development.

· Demystify economic reforms to the public at large by engaging civil society.

For more information, please contact

Mr. R. D. Mathur/Mr. S. Krishnaswamy

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Government Urged to Institutionalise the National Development Council to Ensure Success of Reforms

Jaipur, 8th January, 2002.

Consumer Unity & Trust Society (CUTS) has urged the Government of India to institutionalise the National Development Council to ensure success of the second stage of reforms. It becomes necessary more than ever before in view of the coalition politics at the centre, with powerful states who pull and push according to their own exigencies rather than prudentiality.

In a pre-budget memorandum to the Finance Minister, who met consumer organizations today, CUTS has pointed out that though there is a wide consensus on reforms, it is not sufficient to implement all tough measures, because of politicking by the local opposition on issues, which are in the state list. These include crucial consumer issues such as power, water, health, education etc.

“While supporting reforms in the power sector at centre, the BJP makes a big issue of it in the states, which are being ruled by the Congress party, and vice versa, thus making it difficult for proper implementation,” said Mr Pradeep S Mehta, Secretary General of CUTS, who participated in the meeting with the Finance Minister.

The institutionalisation of the NDC would involve having regular meetings of the concerned ministers, including the chief ministers, to agree on the common agenda, the work plan, and a review and monitoring process. The NDC would have its own permanent secretariat, which will be governed by a committee of chief ministers, rather than be beholden to the central government. Such an arrangement may sound radical, but is worth exploring if the country has to move forward in its agenda for eradicating poverty.

Furthermore, if the reforms have to be accelerated, the government must seriously consider proper resourcing of consumer groups. This will enable them to advocate for better appreciation of governance issues by people, including payment of user charges for utilities, which is becoming so crucial to the success of reforms.

In the submission, CUTS has also commended the government on bringing in a new bill on competition, and rooted that appointments to the new competition authority should be based on merits and professional qualifications, and no retired persons be appointed. Furthermore, the new authority should include persons with the background of consumer activism. Most importantly, the government should provide sufficient budget for the effective implementation of the new laws.

The CUTS memorandum can be found at www.cuts-international.org/cuts-adv-prebudgetmeet.htm.

For further information please contact:

R D Mathur/S. Krishnaswamy

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Government should start talking to public……….

Jaipur, 7^th January 2002

Consumer Unity & Trust Society (CUTS) has urged the government to become more transparent and start talking to the people on WTO issues, on both the pros and cons of the international trading system, and the domestic agenda surrounding it.

In its submission at the 9^th meeting of the Advisory Committee on International Trade of the Commerce Ministry, CUTS has emphasised the need of restructuring the current trade policy formulation process and involve professionals and public interest groups in it. The high-powered advisory committee, chaired by the Commerce and Industry Minister, Murasoli Maran, is meeting on 8^th January, 2002 for the first time after the Doha Ministerial Conference.

"The government has agreed, under para 10 of the Doha Declaration, to ensure more effective and prompt dissemination of information related to WTO, and to improve dialogue with the public," said Mr. Pradeep S Mehta, Secretary General of CUTS who is one of the two active NGO members of the advisory committee.

"All member states of the WTO have also agreed to promote a better public understanding about the WTO and to communicate the benefits of a liberal, rules-based multilateral trading system. However the government of India hasn't done much after the Doha meeting, except the Minister’s speeches in the parliament and few meetings attended by officials" Mehta added.

During the fourth Ministerial meeting in Doha, India secured major gains in several areas of the hard fought agenda. However we couldn't make satisfactory breakthroughs on non-trade issues like environment and labour standards. These issues could have been tackled better if the official delegation had included representatives of public interest non-governmental organisations and trade unions.

"The government has to recognise that in the era of globalisation, international trade has direct impact on lives of the common man. It has to come out of the mindset that trade policy formulation and negotiations are reserved affairs of business organisations and government officials. Voices of public should also be heard at every stage", said Mr. Mehta.

CUTS, in its submission, has included an Agenda for India at WTO to be pursued both at international as well as domestic levels. The international agenda talks about what India should do at the international fora. There is a domestic agenda too, which requires our Government to take note of, in implementing our commitments under the WTO as also to make the best out of it.

The submission highlights the need to involve all stakeholders and take into confidence the public at large to attend this huge domestic agenda before India can reap any perceived gains that future trade negotiations can throw up.

Click here to get Agenda for India on International Trade Policy from CUTS

For further details please contact:

Bipul Chatterji/Sandeep Singh,

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International Meet on Investment concludes

Jaipur, 14^th December 2001

Countries must think with their heads, not with their hearts, when it comes to International Investment, according to the delegates of the “Investment for Development” conference that concluded today in Jaipur, India. The entry of foreign multinational companies to the economy often gives rise to a strong emotional reaction but dispassionate study of the impact of these firms on the economy is needed before countries can design policies that meet national development criteria.

Behavior by multinational companies in the past including intruding in political affairs, abuse of monopoly, environmental cover-ups and other issues have made civil society deeply sceptical of FDI according to representatives at the meeting. But FDI also provides access to finance, markets and technology and countries need to move up the development ladder.

The two-day meeting was attended by representatives of civil society from Asia, Africa and Latin America and international organisations such as UNCTAD, OECD and WTO. Senior representatives of the Department for International Development of the UK also participated in the meeting, which formally launched the Investment for Development project.

Whether an international agreement would help developing countries to attract greater flows was hotly debated by the participants. The Doha Declaration that was signed last month, commits WTO members to start negotiations for such an agreement after the next Ministerial Meeting due in 2003. According to Pradeep S. Mehta, Secretary General of CUTS, which organised the meeting, many developing countries do not have the negotiating capacity to take on new issues at the WTO. The benefits of the agreement are also unclear as most countries now have a network of bilateral treaties with their key investment partners.

However Mehta added that if an international agreement is struck as a deal against issues of developing country interests, such as movement of natural persons or increased market access, then negotiations could be launched, which will aim at an agreement with all safeguards.

Roger Nellist, Head of the Investment Climate and Competition Team, DFID, UK, underlined the fact that an international agreement would reduce risks for investors and therefore draw more investment into countries that are currently ignored. But he agreed that the eighteen months of preparation was not sufficient to build the necessary capacity in the developing countries. Developed countries are committed to ploughing resources into technical assistance to help this situation. This is vital if developing countries’ faith in the WTO system is to be restored.

For more information please contact: Mr. Rajeev D. Mathur, Phone: 91-141-2207482/ Fax: 2207486, Email: cuts@cuts.org

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Pink City Hosts International Meet on Investment

Jaipur, 13 December, 2001

Foreign direct investment (FDI) is vital for poverty reduction through economic growth. However, governments have to make sure the right policies are in place if they are to attract and benefit from world FDI flows. This was the view of the international experts on investment issues who attended a meeting held today in Jaipur to launch the “Investment for Development” project. The meeting was organised by CUTS Centre for International Trade, economics and Environment (CUTS-CITEE), Jaipur.

Almost all the FDI flows to developing countries go to a handful of countries, while 90 percent of countries are effectively forgotten by investors according to Khalil Hamdani, of UNCTAD, which is also collaborating on the project. Vicki Harris, Department for International Investment, UK, said that investment in developing countries will increase if the investment climate is improved. But other delegates emphasised that FDI will only work for development if the government introduces policies to harness the benefits like good regulation and competition policy.

Behaviour by multinational companies in the past including intruding in political affairs, abuse of monopoly, environmental cover-ups, and other issues have made civil society deeply skeptical of FDI according to representatives at the meeting. But FDI also provides access to finance, markets and technology that countries need to move up the development ladder.

These civil society concerns need to be addressed and civil society groups have to be integrated into the policy-making process for FDI policies to be effectively implemented. This is one of the key aims of the IFD project, said Pradeep S Mehta, Secretary General of CUTS in his introduction.

Countries are under pressure to reduce domestic regulations from multinational firms. According to D.K. Chhangani of the All India Trade Union Congress (AITUC), foreign investors are putting pressure on the Indian government to soften labour legislation to make it easier to ‘hire and fire’, putting workers’ livelihoods at risk. G.S. Gill of the Bhartiya Mazdoor Sangh (BMS) added that acquisitions of domestic firms by multinational companies often lead to job losses, undermining the aim of equitable development.

On the other hand, Arvind Mayaram, Secretary, Ministry of Industry of the Government of Rajasthan, said that policy should focus on job creation rather than job protection. In the long run, increased competition improves productivity and drives growth.

Good investment policies are not enough to create the right environment to attract investors–these policies need to be coherent and carried through. This lesson is highly apparent in India where liberalisation of the investment regime in India has not left foreign direct investment flows stagnant at around $2.4bn per year. Contradictions need to be ironed out before India can improve its performance.

Investment is the subject of international discussions at the national, regional and international level. Research is needed so that developing countries can identify their key investment priorities and engage successfully in negotiations. The IFD project will contribute to this body of knowledge.

The Investment for Development (IFD) project is a research and advocacy programme on investment issues being conducted in seven developing and transition economies across the world. The project is being conducted by CUTS, an NGO based in Jaipur.

For further information: Mr. Rajeev D. Mathur, Phone: 91-141-2207482/ Fax: 2207486, Email: cuts@cuts.org

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DEVELOPING COUNTRIES EXPLORE WAYS TO ATTRACT MORE FDI

Jaipur 12th December 2001

International experts in Foreign Direct Investment from Asia, Africa, Europe and America are meeting on 13 & 14 December, 2001 in Jaipur to debate the policies that countries should implement to attract more FDI. The seminar, organised by CUTS-CITEE*, will also launch a cross-country research and advocacy project, “Investment for Development,” to build awareness and capacity on investment issues in developing countries.

Officials from UNCTAD and the OECD will join economists from Brazil, Hungary, South Africa, India and other countries working on “Investment for Development” to present the latest research on investment policy and performance across the world. World FDI flows are expected to fall significantly in 2001 and experts will present their views at the seminar on the impact of this contraction for developing countries. The discussions will also cover the implications of the World Trade Organisation’s Doha Declaration in relation to investment.

Attracting FDI to India’s core industrial sectors has been a clear Government policy in recent years. However, the recent controversy over breach of contract in Enron’s investment in the Dabhol Power Company may have made it more difficult to draw in foreign investors. India’s inflows have stagnated at around $2.5bn annually compared to more than $40bn in China despite opening up to many sectors to FDI in the last decade. At the meeting, Arvind Mayaram, Secretary, Ministry of Industries, Government of Rajasthan, will look at the reasons behind this poor performance while Suman Bery, Director-General, NCAER, will outline how FDI can be used to meet national development goals.

The role of civil society is important to sustain momentum towards policy change, a point which will be underlined by Khalil Hamdani, UNCTAD, in his keynote address. Meeting participants are drawn from all major stakeholders groups, including chambers of commerce, government, academia, media, as well as civil society.

The conference will take place on 13 & 14 December from 09.30-18.00 at The Trident, Amber Fort Road, opposite Jal Mahal, Jaipur-302002; Ph: 91-141-63 0101; Fx: 91-141-63 0303

For further information please contact Olivia Jensen; Em: ifd_cuts@rediffmail.com ; Website: www.cuts-international.org/ifd-indx.htm ; Ph: 0141 2207482; Fx: 0141 2207486/203889

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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:

E-mail: cuts@cuts.org

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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.”

For more information, please contact at cuts@cuts.org

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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.

For further information, please contact Ms. Purnima Purohit at CUTS, Jaipur

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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

Em: cuts@cuts.org

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CONTACT US

Consumer Unity & Trust Society

D–217, Bhaskar Marg, Bani Park,

Jaipur 302 016, India,

Ph: 91.141.2282821

Fax: 91.141.2282485

Email: cuts@cuts.org

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