WORLD TRADE
ORGANIZATIONWT/MIN(03)/W/14
10 September 2003
(03-4786)
MINISTERIAL CONFERENCE
Fifth Session
Cancún, 10 - 14 September 2003Original:  Spanish
GIVING PRECEDENCE TO THE RIGHT TO DEVELOPMENT
Considerations and Positions of the Government of Venezuela
in the Context of the International Trade Negotiations
Communication from Venezuela
The following communication, dated 10 September 2003, has been received from the
delegation of Venezuela.
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At this, the Fifth Ministerial Conference of the World Trade Organization, it is my
responsibility to communicate to the internationa l community and organizations the work of which
relates to the critically important issues which we are addressing some of the Government of
Venezuela's considerations in respect of the current  status of the WTO negotiations and their future
implications.
1. Balance between the commitments arising from and the results of the Agreements
The basic claim which has been made about the multilateral trading system since it was
established is that international trade would per se  achieve sustainable human development, in
particular through its liberalization, which would supposedly give Members improved access to each
others' markets.  To this end, a series of rules were devised and adopted in the different areas of thissystem.
In spite of the reciprocity requirement with regard to compliance with many of the agreed
rules, I am unaware of any major differences be tween the economies linked to the multilateral system
and different development levels.  Compelling countries with unequal economies to behave as thoughthey were equal has caused considerable harm to developing nations.
Although it is true that some special and differential treatment provisions have been adopted,
most have not been complied with.  In some cases, developing countries lack sufficient capacity to be
able to secure any advantage by implementing such rules, which only serves to bring about evengreater inequality in trading relations between developed and developing countries.
In these circumstances and given the characte ristics of the present international trading
system, there can be no doubt as to which countries  have come out on the winning side and which on
the losing.  As the United Nations Development Programme (UNDP) " Human Development
Report 2003 " shows, the share of world exports corresponding to countries with a low human
development index (HDI) was 0.86 per cent in 1990, as against 82.82 per cent for nations with a highWT/MIN(03)/W/14
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HDI.  In 2001, the share of world exports of countries with a low HDI had declined to 0.66 per cent -
clear and unquestionable proof of who have been the losers in the Uruguay Round.
2. No further commitments
As can be appreciated, the gulf with regard to inequality and benefits stemming from full
compliance with such mechanisms persists and merely  increases with time.  This calls into question
the effectiveness of free trade itself, both in the terms in which it is presented and the way in which it
is conducted, and prevents the system from truly becoming a key factor for addressing human
development in a fair and balanced manner.
There is evidence that, in spite of developing countries' endeavours to adapt to these rules,
their standard of living has not risen and the restricted access of most of the world's populations tobasic subsistence goods and services is cause for concern.
Hence the Delegation of Venezuela suggests that there is a need to refrain from undertaking
further commitments until the wide and extensive range of pending issues, basically those affecting
developing countries, has been resolved.
The Government of Venezuela considers that, before entering into any new negotiations, a
public review should be conducted of the implications of the Marrakesh Agreements and their impact
on economic growth, the reduction of inequalities between countries in accordance with their
development levels, employment and the environment, as requested of the European Union by theEconomic and Social Council (ESC).
3. Priority given to combating poverty and social exclusion
Whereas the trade problems of the industrialized world are restricted to market competition,
the basic problem facing the developing world is poverty alleviation - the aftermath of erroneouspolicies based on exclusive endogenous liberalization models.  There is no escaping the fact that, as
the problems to be resolved are radically different, so too are the approaches and solutions.
Little importance has been accorded to the fight against poverty and social exclusion in
negotiations aimed at trade and investment liberalization and deregulation.  For free trade to be able to
translate into higher standards of living and greater well-being for the world's populations, the WTO
will have to tackle the real barriers to free trade, namely:
(a) The unequal terms of trade which prevail as an expression of an unfair international
economic order;
(b) access by developing countries to information, knowledge and technology;(c) the disparities and imbalances which place countries of the South at an
insurmountable disadvantage in comparison with powerful Northern nations;
(d) the burden of an unpayable foreign debt which absorbs a growing percentage of funds
that could be earmarked for public investment and trade;
(e) the negative impact of the structural adjustment policies imposed by international
financing institutions;
(f) the obstacles to accessing international financing;WT/MIN(03)/W/14
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(g) the failure of the industrialized world to  allocate at least 0.7 per cent of its GDP to
development aid, as agreed at the Monterrey Summit;
(h) the barriers which prevent developing countries from establishing individual growth
and development plans in keeping with their own realities and potential.
4. Implementation of public policies
The last few years have witnessed a strong ideological bias in favour of the market over State
action, which fails to take into consideration either the overall negative experience at global level or
the ways in which the State has played a successful role in a number of historic development actions.
The market itself will not be, and has never been, capable of guaranteeing either economic
growth or poverty alleviation nor of achieving equity within the developing world.  All evidence is to
the contrary: the last two decades have witnessed accelerated global liberalization and deregulation
whilst, at the same time, intra-and inter-state inequality has proliferated.
Undisputed facts such as these call for the issue of appropriate State intervention to be
considered anew and a role claimed for public policies .  These are conditions without which achieving
the sought-after goal of equitable, democratic and environmentally sustainable development would
prove impossible.
Market-State relations is not an issue that can be resolved now on the basis of theoretical
assumptions or general policies in preparation for future situations and trends.  Neither State
hegemony nor market fundamentalism are alternatives which will hand Venezuela and countries of
the South the keys to economic and social development.
Our principle is "Market to the extent possible and State to the extent necessary".  The issue
of harmonizing the role of the State and market forces must be resolved in each individual instance in
accordance with its specific conditions and the democratic will of citizens and in exercise of
sovereignty.  No trade agreement may claim to strike a definitive balance in favour of either State or
market.
It is not, therefore, a question of restricting State regulatory action in order to smooth the road
towards economic liberalization by means of the irreversible adoption of mandatory internationalagreements.  Trade and investment liberalization will not suffice to guarantee progress towards higher
levels of growth and collective wellbeing.  Without specific mechanisms to facilitate the design and
implementation of public policies aimed at significantly reducing the disparities between the different
regions, countries and production activities, free competition between unequal parties can only serve
to reinforce the stronger parties and further erode weaker ones.
5. New players in the multilateral trading system
Only by way of a truly participatory negotiating process for society as a whole - business
sectors, workers, indigenous, women's, cultural and environmental organizations, political parties,
Parliaments, the Press - can we affirm that we are moving towards a process which can be describedas truly democratic and a source of wealth.
The current negotiating model does not allow social organizations to take part in follow-up
work on critical issues or in the outcome of the agreements.  Representatives of major powers,
however, are granted a considerable degree of discretion, thereby transforming their positions intovirtually secret decisions which deny developing countries in advance the opportunity to participate in
discussions on crucial issues.WT/MIN(03)/W/14
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The incorporation of new and valid players in the multilateral trading system is a democratic
requirement.  Transparency, full access to informa tion and the right to participate in the decision-
making process are strongly rooted in the fact that the WTO is much more than a trade agreement
given that its rules have a decisive impact on the broadest spectrum of collective life and on its
institutional, political, social and even cultural dimensions.
6. Democratization of decision-making and negotiations
Yet another issue which needs to be considered is transparency, as a democratic and
democratizing experience for the trading system.  The endeavours of the present Director-General of
the Organization to make crucial WTO rules and decisions public, as well as the growing interaction
with social organizations over the last few years, should be acknowledged.
However, it is no less certain that some decidedly untransparent informal mechanisms
continue to exist in the negotiating process, whereby the interests of the major powers generally end
up prevailing.  One such example is the mini-ministerials, with their restricted participation and issues
of specific concern, etc., and where the possibility of negotiating for countries which are excluded
puts them at a disadvantage, as is reflected by results which are less positive than expected.
7. Precedence of human rights over trade
There is a marked tendency in these processes to give commercial rights precedence over
human rights, bringing them closer to the trade se ctor.  The philosophy of human rights is therefore
changed by making free trade and profitable investment a paradigm for their materialization.
The establishment of a new subject of rights in commercial rights puts businesses on a level
equivalent to people and States.  The supremacy accorded to commercial rights over human rights
becomes a serious threat to the latter.  This is particularly worrying given that trade and investment
liberalization treaties generally have much more effective mechanisms to guarantee compliance - bymeans of severe penalties - than those provided for in agreements and treaties on human, labour,
cultural and environmental rights.
For the Government of Venezuela, economic, cultural and civil rights are and will remain
independent, indivisible and inalienable.  Trade interests will therefore not take priority over human
rights and the sovereignty of States.
8. Agriculture and protectionist policies
Article 305 of the Constitution of the Bolivarian Republic of Venezuela states the following:
"The State shall promote sustainable agriculture as the strategic basis for comprehensive rural
development and shall therefore guarantee the population's food security;  meaning that sufficient and
stable stocks of food shall be available at the national level and that consumers shall have timely anduninterrupted access to these stocks.  Food security shall be achieved by developing and giving
priority to domestic agricultural and livestock production, meaning production derived from
agriculture, raising livestock, fishing and aquaculture.  Food production is of national interest and is
fundamental for the Nation's economic and social development.  For this purpose, the State shall take
such financial, commercial, technology transfer, land-ownership, infrastructure, vocational trainingand other measures as may be needed to achieve strategic levels of self-sufficiency.  In addition, it
shall promote action in the national and international economic context to offset the disadvantages
inherent in agricultural activities. "
On the basis of this constitutional mandate, at the Fifth Ministerial Meeting the Venezuelan
delegation endorses the diminution of protectionist policies and the ruinous subsidies given by
industrialized countries, but this demand should not become a generalized obligation that preventsWT/MIN(03)/W/14
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developing countries from making use of such instruments and other government policies intended to
compensate for the disadvantages experienced in comparison with the major powers which subsidize
their farmers.
Even if tariff barriers to exports from developing countries are limited, it is impossible to
compete with the subsidized prices in countries of the North.  These practices prevent or hamper
access to global markets.  Subsidized products compete unfairly on our own domestic markets and
their competitive advantage would be even greater if our tariffs were lowered or eliminated.  Even if
the powerful countries eliminate such subsidies and support for their products, the relationship would
still be unequal.  This is why we should not be asked to do the same thing and assume greater
liberalization commitments.
Our countries lack the large financial resources of developed countries to support agriculture;
all we have is the firm determination to design and develop policy instruments to offset the harmful
effects of protectionist and distortional policies applied by countries of the North for several decades
and which they now seek to deny to countries of the South.  These should be maintained as an
expression of special and differential treatment and to allow us to take advantage of our potential, anaspiration which is constantly thwarted.
In our countries, agriculture is essential for the survival of millions of people who have
traditionally occupied and preserved vast geographical areas in a rational manner for the benefit of
humankind.  The living conditions of millions of indigenous farmers would be seriously affected ifthere was a flood of imported agricultural products, even if there are no subsidies.  Agricultural
production is much more than the production of a good:  in the broad sense, it is a way of life, it is the
fundamental basis for cultural choices, it is a means of occupying the land, it defines modalities for
relating to nature and is directly linked to the critical issues of food security and sovereignty so it
cannot be dealt with in the same way as any other economic activity or product.
9. Intellectual property rights or the right to health
Intellectual property is another of the areas in which there is a clear conflict of interest
between countries of the North and those of the South, especially between large multinationals and
farming and indigenous communities.
The powerful countries of the North have imposed a mandatory and global regime for the
protection of intellectual property that corresponds to their requirements and oblige us to adopt its
standards without taking into consideration special and differential treatment for developing countries.
Although paragraph 6 of the Doha Declaration stat es that "no country should be prevented from
taking measures for the protection of human, … life or health", there is still insistence on building a
broad regime for the protection of intellectual property that is most prejudicial to poor countries.
In the asymmetrical relations of today, the North's advantages precisely lie in the areas of
science and technology.  The international regime  for the definition and protection of intellectual
property is designed to accentuate this imbalance.  It protects sectors in which the major powers have
more advantages while it unjustly leaves out sectors in which countries of the South have undeniableadvantages:  genetic diversity in their countries and the traditional knowledge of farmers and
indigenous peoples.
The intellectual property agreements in the World Trade Organization compel all countries to
establish very restrictive protection regimes that are contrary to the interests of countries in the South,after a grace period for the "least-developed".  For example, as a result of the monopolistic rights
granted under such agreements, pharmaceutical countries will, in the end, eliminate competition and
receive prices that are way in excess of the purchasing power of millions of people.  According to a
number of studies, it has been estimated that there will not only be marked price increases as a resultWT/MIN(03)/W/14
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of the introduction of patents but also a sharp drop in consumption;  large sectors of the population
will not have access to good quality medicines at reasonable prices.  This is unacceptable.
The intellectual property agreements should not become obstacles to peoples' right to enjoy
scientific and technological progress, access to medicines, education and good quality food.Venezuela recognizes the supremacy of international agreements on human rights, health, food
security and biological diversity over and above the intellectual property of multinationals.  As far as
health is concerned, the right to grant compulsory  licences to domestic enterprises to enable them to
make generic versions of medicines to meet the needs of the poorest sectors of the population should
be protected and maintained.
The Government of Venezuela also supports the right of indigenous peoples and peasants to
protect their ancestral knowledge and the right of farmers to protect and use the seeds they have
produced.
10. Protecting the State's obligation to provide strategic services
The proposals on full liberalization, deregulation and privatization of trade in services
(financial, telecommunications, consultancy, engineering, tourism, health, etc.) involves a serious
threat to our constitutional provisions and domestic legislation and to government promotion and
development policies that affect and regulate the imperfect market mechanisms.
The need for greater or lesser levels of regulati on or intervention by the State is an open issue
that has to be decided according to the situation, which continually changes.  Transferring the public
services market, such as education or health, threatens the basic rights of citizens by making them into
simple consumers of the services.
The Government of Venezuela considers that countries should be able to liberalize their
services in the light of their national development priorities and not because they are obliged to do so
by international agreements or treaties.  Services that are essential to the population and services
determined by the Constitution and the legislation should remain public.  In this connection, it is
necessary to ensure a proper margin of protection and exclude such services from any attempts to
liberalize them that prevent access by the population, particularly by the poorest sectors, to basic
services such as health, education, justice, security, etc.
Regarding the negotiations on services, investment, competition and trade facilitation in
respect of natural energy resources and related industries, Venezuela remains faithful to the principles
laid down in its Constitution and will retain the ownership, management and control of these sectors.
As they are deemed to be of public interest and strategic for the Venezuelan nation, during the
negotiations and in international agreements these sectors may not be the subject of any liberalization,deregulation or privatization process that restricts the sovereign right of the State and the Government
to formulate and implement development policies and strategies best adapted to the national interest.
Consequently, any initiative or negotiating strategy regarding natural energy resources and related
industries is subject to the relevant constitutional and legal provisions, which respond to the vital
interests of the Venezuelan State.
At this Fifth Ministerial Meeting of the WTO, the Venezuelan delegation will firmly and
categorically propose that this trading system, in the same way as other proposals that are also aimed
at liberalization, should neither restrict nor supersede the power and sovereign right of States to
regulate those services sectors they deem to be of strategic importance in order to meet the basic andessential needs of the population.
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