SOCIAL WATCH E-NEWSLETTER - Issue 33 - April 20, 2011

Issue 33 - April 20, 2011

Canada: Maternal Mortality Worsens

St. Mary's Home for maternal
services in Ottawa
(Photo: Nancy MacNider)

Women in Boznia and Herzegovia now have a greater chance of surviving childbirth than women in Canada, according to the Feminist Alliance for International Action (FAFIA), focal point of Social Watch in that North American country.

A Thousand Economists Recommend the Robin Hood Tax
In a letter to the G-20 economy ministers assembled in Washington, a thousand economists have expressed their support for the Robin Hood tax on speculative financial transactions. Those who signed the letter include leading figures from universities like Oxford, Cambridge, Harvard, Berkeley and the Sorbonne.
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Climate Change: The Rich North Won’t Show its Cards
In the last round of negotiations about climate change, which was held at the start of the month in Bangkok, the developing countries of the South asked the countries of the industrialized North to definitively clarify once and for all whether they wish to remain within the limits of Kyoto Protocol or renounce the convention, writes Martin Khor, executive director of South Centre.
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Free Trade’s Feeble Metaphors
The negotiations of the Doha Round of multilateral trade negotiations, also known as the “development round” because they ought to include subjects of interest to countries on the periphery, began in 1991 and have now bogged down. To get the press interested, some pro-free trade negotiators are making an effort to find intelligible metaphors to save journalists the time and effort involved in actually analyzing the figures and documents, wrote Roberto Bissio, executive coordinator of Social Watch. Some of these metaphors are extremely feeble, like comparing trade liberalization to bicycles (as the United States did) or to mules (an idea from the Director General of the WTO, Pascal Lamy).
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Woman Bites Pig

Even as the Prime Minister identifies reducing maternal and child mortality as “the most important initiative we have right now,” Canada’s own maternal mortality rates are rising. According to the World Health Organization, Canada has seen a steady increase in the maternal mortality ratio over the past decade. Women in Boznia and Herzegovia now have a greater chance of surviving childbirth than women in Canada, warned the Feminist Alliance for International Action (FAFIA).

In spite of the $1.1 billion committed to maternal and child health outside of Canada, there appear to be no investments aimed at addressing the increase within Canada. Rather, the 2011 Federal Budget would have invested $24 million in research aimed at decreasing mortality rates for pigs, rather than women.

The economy may be the central concern of Canadian voters, but at the heart of the debate about spending and taxes are the priorities that are reflected in economic choices. The Harper Government’s Economic Action Plan has focused on job-creation in industries where few women work, diminished the social safety nets that protect Canadians during difficult economic times, and provided tax breaks in which women have little share.

In Canada today, two-thirds of all mothers with children under the age of six do paid work. The Harper Government cancelled a national child-care plan that would ensure that all working parents would have increased access to safe, affordable child care while they are working.

“Throughout northern and rural areas of Canada women don’t have access to basic medical services. Pregnant women are forced to travel long distances alone, often leaving their older children behind, while they wait for weeks to give birth in regional centres,” says FAFIA Chair, Mira Hall. “Our government should be working to ensure that everyone in Canada has access to essential services, and is able to meet their basic needs and less on the well-being of those who are already well-off.”

Source: Canadian Feminist Alliance for International Action (FAFIA)



A Tax Against Hunger, Climate Change and the Economic Crisis

On 13 April more than 1,000 economists from 53 countries sent a letter to the economy ministers of the G-20 countries - who were to meet the following day in Washington - urging them to implement the Robin Hood tax to help in the fight against poverty, to combat the effects of climate change and to reduce social inequalities.

They also sent the letter to the businessman Bill Gates, who the President of France, Nicolas Sarkozy, in his capacity as President of the G-20 in 2010, asked to study innovative ways to finance development.

This initiative has now been backed by more and more governments including the French and the Germans, who support levying a tax of 0.05% on speculative financial transactions, and by renowned economists like the Nobel Prize winners Paul Krugman and Joseph Stiglitz.

Among those who signed the letter are economists like Jeffrey Sachs, Director of the Earth Institute of the University of Columbia and special adviser to the Secretary General of the United Nations, Ban Ki Moon; Christian Fauliau, ex-head of the World Bank, Dani Rodrik from Harvard and Ha Joon Chang from Cambridge University.

Sachs said, “It is time for the G-20 to come to a consensus in favour of the (Robin Hood) tax on financial transactions to help developing countries in their fight against hunger, climate change, and the economic crisis, which they did not cause. This tax should also contribute in a fair and efficient way to the fiscal consolidation of our countries.”

The initiative has also received support from figures from Spanish universities like the Complutense, the Pontificia Comillas and that of the Basque Country, in addition to economists from Spanish academic institutions like the Real Instituto Elcano and the Alternativas and IDEAS foundations.

The letter sent to the ministers points out that “…the crisis has laid bare the risks of not regulating financial activities, and of their increasing disconnectedness from the real economy. The financial sector now has a responsibility to contribute to repairing the damage its excesses have caused, and it should pay back to society a fair portion of the profits it has made. A tax of 0.05% would also act as a disincentive to excessive speculation, which underlies current economic imbalances”.

The letter says that if the Robin Hood tax was levied it could yield 300,000 million euros per year to help millions of people suffering the effects of the economic crisis and climate change.

Susana Ruiz, the spokesperson for Intermon Oxfam, said, “The G20 should listen to this international movement, which is growing stronger every day and which has now been joined by specialists in economics. The fact that a large number of people from the elite of world economic thought are involved in this initiative makes it unanswerable”.

Source: Intermon Oxfam

New Battle Lines Are Drawn

by Martin Khor*
THE United Nations’ climate talks resumed last week in Bangkok. There was a lot of drama, with developing countries throwing a challenge to developed countries to proclaim themselves once and for all, whether they intend to continue with the Kyoto Protocol or to kill it.

This North-South battle had already been boiling the whole of last year, especially at the big climate conference in Cancun in December, when Japan brazenly stated it had no intention to join a second period of the protocol, after its first period expires in 2012.

Japan’s announcement had evoked outrage among the developing countries, especially since the country had hosted the meeting that created the Kyoto Protocol (KP). The KP is the main pillar of the UN Climate Convention; all the developed countries (except the United States) have made legal commitments under it to cut their emissions of greenhouse gases.

Eliminate the KP, and there is little or no teeth left in the convention to hold the rich countries to their emission-reduction pledges.

India reminded an official workshop that the developed countries have put three quarters of the greenhouse gases (that are causing the climate crisis) in the atmosphere, they are still over-polluting, and they should bear the main responsibility for global gas reductions.

Japan’s Cancun pronouncement was the important tip of the iceberg because several others (including Russia, Canada, Australia) are also known to want to abandon the KP, while the United States being a non-member seems delighted at their wanting to jump ship.

But the cracks in the global climate regime were papered over at the end of Cancun to prevent another high-profile breakdown, after the traumatic Copenhagen conference the year before.

Last week, the developing countries got their act together and challenged the developed countries which are members of the KP whether they are committed to a second period.

The tiny island state of Tuvalu (which will be covered by rising seawater when climate change takes effect) made the first challenge. It called on parties who wished to continue with the KP to stand up and say so; those who do not do so should leave the room.

Its call for a political decision to be made explicit now was supported by an overwhelming number of developing countries, including the least developed countries, small island states, the African and Arab groups, China, the Philippines, Bolivia and Saudi Arabia.

The Group of 77 and China led by Argentina said the adoption of the KP’s second period was the key to success at the next Climate Conference in South Africa in December. It was a political imperative and also a legal obligation that must be met.

Many developing countries stressed there was no point in going round in circles on technical issues and it was time for a political decision. The Philippines said the KP was “in an intensive care unit and that instead of being given life-saving oxygen, its respirators are connected to a tank of carbon-dioxide”.

The countries also said that if there was no commitment to a second KP period, there was little point in negotiating other issues in the parallel working group on long-term cooperative action (LCA).

Under this group, developed countries have put developing countries under intense pressure to take emission-reduction actions.

The Arab Group said that agreeing on KP’s second period was sine qua non for agreement under the LCA track. This view was echoed by the African Group.

At a subsequent session, European countries (backed by Australia and New Zealand) stated there were conditions to be met for them to commit to a second period. These included adequate actions by other countries and agreements on rules on how their pledges should take account of land use and market mechanisms.

There was a deafening silence from Japan and Russia, the two countries explicitly opposed to joining a KP second period.

Commenting on the conditions, Saudi Arabia asked how KP parties could force actions from non-members before committing to the second period. This seemed an indirect way of not accepting a second period.

China said if the pre-conditions are aimed at enhancing the levels of emissions reduction, then the technical aspects can be discussed. But if the pre-condition was linked to whether or not to undertake a second commitment period, there was no room for discussion.

Meanwhile, the LCA group spent the whole week in intense battle over the agenda for this year’s work. Some developed countries led by the United States wanted only an agenda to follow up on the Cancun conference decisions.

But the G77 and China argued that this would be a selective choice of issues. The mandate of negotiations was still the Bali Action Plan, adopted in Bali in December 2007, which launched the group and the current negotiations.

Many key issues (such as the adequacy of emission-reduction commitments of all developed counties, including the United States; the need to avoid trade protection on climate grounds; the issue of patents and technology transfer) were not resolved in Cancun and should be included in the talks, according to the developing countries.

Not so, said the other side. What was explicitly stated in Cancun for follow-up work are the only agenda items.

At the last hours in Bangkok, the developing countries won the agenda battle. It was agreed that the Bali Action Plan would remain as the framework for future talks.

It is an indication of the state of disarray and confusion of the global climate talks, that it took a week of tumultuous negotiations to persuade some developed countries to agree to retain the original mandate and agenda that launched the negotiations in the first place.

There is a deep divide on how to go about solving what is arguably the Number One problem in the world. That makes the climate talks so painful to watch.

The silver lining is that the developing countries got their act together again, after suffering a blow to their interests in Cancun.

*Executive Director of South Centre
Source: Agenda Global

Of Mules and Bicycles and Free Trade 
by Roberto Bissio*
The rounds of negotiations about world free trade go on for years. The Uruguay Round, which set up the World Trade Organization (WTO) and incorporated intellectual property, services and investments into the system, lasted all of eight years, from 1986 to 1994. The current Doha Round, also called the “development round” because it ought to include subjects of interest to countries on the periphery, began in 1991 and has now bogged down.

To combat boredom and to get the press interested, some negotiators have been racking their brains to find intelligible metaphors to feed to journalists and thus save them the trouble of actually analyzing figures and reading documents (the annexes of the Uruguay Round ran to twenty thousand pages). So, for example, the argument that trade liberalization is a permanent process that cannot be stopped without serious risks is always illustrated with the metaphor of a bicycle: if it is not moving it will fall over.

Until one day, angered by the continual pressure for faster trade opening than his country was prepared to concede, the Indian ambassador in Geneva, B.K. Zutshi, gave the North American negotiator the following sarcastic reply, “In my country we know something about bicycles, and I assure you that when the traffic light turns red all the bicycles stop and nobody falls over. I can explain to you how we do this if you like …”

On 7 April, the Director General of the WTO, Pascal Lamy, was talking to the press and he tried to make the figures that his organization had just published look better. The WTO reported record trade growth of nearly 15% in 2010 but predicted a gloomy 6% for 2011, and this figure may be revised downwards if the impact of the earthquake and nuclear emergency in Japan is greater than has been forecast. To make matters worse, the political climate for further trade liberalization is unfavourable and the Doha Round has not been able to circumvent the stumbling block of access to markets for non-agricultural products. Lamy admitted that this is “…a very difficult time, but the WTO is like a mule, reliable and tenacious”. He added that trade figures are “…like a mule: they do not go backwards. The problem with a mule is that it sometimes stops and does not go forward; it does not go back but it refuses to go forward”. He said that this is what is happening today with the world trade system.

International trade fell by 12% in 2009, but in 2010 it recovered and grew more in one year than it has done since 1950, when statistics were first produced. In 2010, total production in the world increased by 3.6%, which means that trade increased four times as much as real production. The WTO says the reason for this growth is the same as what caused the fall in 2009, “Global production chains mean that goods go across national borders several times during the production process, so the international trade we measure is growing much more than in the past”.

International trade in the goods that have been hit most seriously by the crisis, like industrial machinery and durable consumer goods, includes a far greater proportion of component parts than final products. This explains the severe fall in 2009 and the big recovery last year; they were both much greater than the corresponding fall and rise in production.

Lamy explained this in a column in the Financial Times, “Thirty years ago products were assembled in a country using inputs from that same country, and it was easy to measure trade. But today manufacturing is organized in global chains and most of goods can be said to be ‘made globally’, not ‘made in China’. And this distinction is not merely academic. Trade imbalances can cause political friction, so the way we measure trade can exacerbate geopolitical tensions”.

The veteran journalist Chakravarthi Raghavan, who has been covering trade negotiations in Geneva for forty years, disagrees with Lamy’s assertion that this is a new phenomenon. To back up his criticism he produced an 1785 copy of the Annual Register, a yearly almanac that has been in publication continuously since 1758. It says that “…the French taste for English carriages is so great that more than eight hundred sets of wheels and shock absorbers are being sent to France to be used in the production of vehicles a la mode d’Anglois”.

If production chains are such an old phenomenon, the problem is not whether Chinese exports contain 60% of imported components or if the percentage is higher, but that the proportion of value added in China is in fact profit for the transnational enterprises that organize the business.

Raghavan gives the example of the trade relations between Portugal and England that classical economists like Adam Smith and Ricardo studied more than two hundred years ago. Portuguese peasants cultivated the grapes, fermented the juice and sold it in barrels to merchants from Bristol, and they bottled it and sent it to England in English ships. This meant that the profits from Portuguese exports went to English merchants, and the Portuguese economy is still underdeveloped today while England was the leading power in the world until nearly halfway through the 20th century.

Moral: People should be more careful with the metaphors they use to defend free trade at all costs. And bear in mind that a mule is cross between a donkey and a horse, and it is sterile.

*Director of the Third World Institute (ITeM).
Source: Agenda Global





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