Another WTO failure: Oxfam calls for reform of unfair WTO accession process

Yesterday there was a further blow to the deeply unfair process for countries joining the World Trade Organisation (WTO). After ten years of painful negotiations, Tonga joined the WTO at the Hong Kong Ministerial meeting in December last year. But the deal was subject to ratification. Now, in an unprecedented move, the Tongan government has decided to delay further consideration for at least a year to allow time for public consultation and impact assessment.

Oxfam New Zealand welcomes Tonga’s courageous decision to look more closely at the terms they are being offered for joining the WTO. “The Government of Tonga is to be congratulated for their willingness to engage in consultations and research on the likely impacts of the deal,” commented Barry Coates, Executive Director of Oxfam New Zealand.

“It is a great sign for the future of government accountability in Tonga that the voices of the people have been heard. A statistically sound survey found that 89.3% of Tonga’s people wanted to delay this deal until there has been more consultation and research. It is to the credit of the Tongan government that they have listened and responded positively,” continued Coates.

“The commitments being made by Tonga under their WTO accession would be binding on all future governments. It is vital that there be strong public scrutiny before ratification.”

This decision comes after almost a year of awareness-raising by determined and committed Tongan citizens. “It is a tribute to the efforts of civil society leaders who have repeatedly called for more democratic scrutiny of the accession package. They have managed to turn highly complex legal texts into simple language, with examples that demonstrate the potential risks. This has been crucial in building public awareness across Tonga,” commented Barry Coates.

Oxfam was involved early in the process when it analysed leaked documents that had not been made available to the wider public. Oxfam’s analysis showed that the powerful nations, including New Zealand, Australia, the US and the EU had made outrageous demands of Tonga, asking that Tonga undertake commitments well beyond those of other developing country members of the WTO. In a blatant display of hypocrisy and abuse of power, these rich nations demanded that Tonga undertake liberalisation well beyond what they themselves would agree to.

Released at the WTO Ministerial meeting in Hong Kong, Oxfam International’s report ‘ Blood from a Stone’ showed:

  • Tonga has been forced to bind its tariffs at 20%, a lower level than any other country in the WTO, with the exception of Armenia. In comparison, the US applies a 350% tariff on beef imports and the EU 300% on sugar imports.
  • These tariff cuts would affect Tonga’s ability to provide basic health care, education, water supply and other essential services for its people. Until recently, Tonga earned over two thirds of its revenues from trade taxes. Tariff cuts are already affecting Tonga’s financial situation. Binding these tariffs would risk a financial crisis.
  • Tonga has committed more of its basic services (like education and health care) than any of the rich nations that made demands during Tonga’s accession.
  • Many of the concessions that Tonga was forced to make will cost a huge amount to implement and will not benefit its people, and other provisions (eg. on patents) that go beyond existing WTO agreements.

The last Pacific country to consider joining the WTO was Vanuatu. They dramatically withdrew at the Cancun Ministerial meeting of the WTO, saying that the deal was unacceptable. “Vanuatu jilted the WTO at the altar. Now Tonga has decided not to consummate the relationship. It is about time that the WTO went into serious relationship counselling,” commented Barry Coates.

Oxfam New Zealand is now calling on the government to press for reform of the archaic free-for-all on WTO accession. “The cases of Tonga and Vanuatu demonstrate the dangers for our Pacific neighbours from such an unfair process. In the wake of the collapse of the Doha Round of trade negotiations, the New Zealand government needs to turn its attention, not to bilateral and regional deals, but to reforming the processes of the WTO.”

Samoa is currently engaged in accession negotiations with New Zealand and others. Oxfam New Zealand is calling for the processes of reform to be instituted as soon as possible, to avoid Samoa being subjected to a similarly unfair accession process. “The New Zealand government can no longer pretend that they are an innocent bystander to this playground bullying. They are a member of the gang and they have the power to stop it” said Barry Coates.

“It is time that our government lived up to its rhetoric about being a good Pacific neighbour. It is time to stop being Dr. Jekyll when it comes to aid and Mr. Hyde on trade.”

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