A4-0320/96

Resolution on the World Trade Organization (WTO)

The European Parliament,

- having regard to the Commission communication entitled The Global Challenge of International Trade: A Market Access Strategy for the European Union (COM(96) 0053),

- having regard to the Commission communication on the links between the world trade system and internationally recognized work standards,

- having regard to its resolution of 15 December 1994 on the conclusion of the Uruguay Round and the future activities of the WTO ((OJ C 18, 23.1.1995, p. 165.)),

- having regard to its resolution of 14 December 1995 on the communication from the Commission entitled 'A level playing field for direct investment world-wide¨ (COM(95)0042 - C4-0118/95) ((OJ C 17, 22.1.1996, p. 175.)),

- having regard to its resolution of 24 May 1996 on the negotiations in the World Trade Organization (WTO) on trade and the environment ((OJ C 166, 10.6.1996, p. 260.)),

- having regard to its opinion of 6 June 1996 on the proposal for a Council Decision concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the results of the WTO negotiations on financial services and on movement of natural persons (COM(96)0154 - C4-0272/96 - 96/0105(CNS)) ((OJ C 181, 24.6.1996, p. 20.)),

- having regard to the outcome of the public hearing held by its Committee on External Economic Relations on 23 November 1995 on the future of the international trade order,

- having regard to the motion for a resolution by Mr De Clercq and others on the World Trade Organization (WTO) - Institutional aspects (B4-0170/94),

- having regard to Rule 148 of its Rules of Procedure,

- having regard to the report of the Committee on External Economic Relations and the opinions of the Committee on Agriculture and Rural Development, the Committee on Economic and Monetary Affairs and Industrial Policy, the Committee on Social Affairs and Employment and the Committee on the Environment, Public Health and Consumer Protection (A4-0320/96),

A. recalling the establishment of GATT, which is meant to help raise living standards, ensure full employment and increase prosperity, and emphasizing, therefore, that world trade must contribute to the creation of jobs, not to ruinous competition for jobs,

B. whereas the volume of world trade has grown to an unprecedented degree and has constantly been higher than the increase in production since the multilateral world trade system came into being,

C. whereas the growth of world trade became possible only with the lowering of tariff and non-tariff trade barriers agreed at the previous eight rounds of multilateral negotiations in GATT,

D. whereas the expansion of foreign trade reflects the progressive globalization of markets, restricting the scope for action under national economic policies and making a global legal framework, such as the WTO, necessary, partly with a view to the environment and development cooperation,

E. whereas, since the multilateral world trade order came into being with the establishment of GATT in 1947, the growing interlinking of economies has made a major contribution to the rise in incomes and employment, at first mainly in the industrialized countries, but increasingly of late in developing and newly industrializing countries,

F. aware that progressive economic liberalization, allied to the globalization of the means of production, has created new phenomena which pose social threats and new economic challenges that also need to be duly incorporated into the new world economic order, for example the internationalization of world trade by multinational undertakings (MNU), greater potential for business concentration and product specialization, to which may be added the establishment of cartels or market monopoly positions, as well as relocation, with all their inherent regional and social effects,

G. whereas further liberalization of world trade is of great importance, but whereas this must take place within the framework of a responsible policy towards the environment, social policy and development cooperation,

H. whereas the plans to establish an international trade organization were thwarted by the non-ratification of the 1947 Havana Charter,

I. having regard to the pertinent and significant role that the EU may play at the Singapore Ministerial Conference, either in defending the introduction of social and environmental standards into multilateral trade or in recalling the important role that the ILO may be asked to fulfil with regard to the standardization of social requirements,

J. whereas the WTO must be an area in which multilateral trade is monitored, and whereas, therefore, its credibility is directly linked to its ability to settle disputes and ensure that all its members, without exception, accept the decisions taken,

K. whereas the European Parliament was represented by a delegation at the most recent GATT Ministerial Conferences and will be more heavily involved in future WTO negotiations and conferences,

L. whereas the first WTO Ministerial Conference is to be held in Singapore in December 1996,

The institutional aspects of the WTO

1. Emphasizes the importance of the WTO's establishment for the enforcement of the rules of the multilateral system of trade in goods in services, the implementation of the results of the Uruguay Round and the continued development of the world trade system necessitated by the economic challenges of the coming millennium;

2. Emphasizes the need to reform the international organizations through improved international cooperation and at last to achieve fair world trade through the improvement of the WTO rules;

3. Welcomes the standardization of the various agreements and codes negotiated in GATT that has been achieved with the establishment of the WTO, since they make for a world trade system with a far clearer legal framework for the contracting parties and the business community;

4. Advocates once again the strengthening of the multilateral trade system, which is based on legal rules and replaces the right of the stronger in international trade, as usually reflected in bilateral or unilateral trade policy measures, with enforceable respect for legal rules adopted by agreement;

5. Calls for a study into the fears that the strengthening of the multilateral trade system does not take adequate account of the developing countries' diverse interests and the increasing disparity between their stages of development and considers, in this connection, that an investigation is required into the social situation in the more than 30 developing countries which have joined the WTO;

6. Calls, furthermore, for full market access for the poorest developing countries without their being required to open their markets fully, but considers world trade terms to be inadequate for certain groups of countries, criticizes the inadequacy of the aid granted to food-importing countries and insists on compliance with the obligations entered into in Marrakesh;

7. Calls at the same time on the industrialized nations to put into practice as far as possible the many concessions to the developing countries which are incorporated in the various trade agreements so that a further boost may be given to the requisite economic development of the developing countries;

8. Welcomes the new procedure which is helping avoid and/or settle trade disputes and calls for the participation of NGOs, the social partners and private undertakings in the dispute settlement procedure in the interests of transparency and legal certainty;

9. Is concerned at the discrimination to which small countries and developing countries are subjected as regards access to the panel procedures, which became manifest at the first panel meeting convened to consider the complaint brought by the USA and various Central American countries against the EU banana market regulation;

10. Calls on all the contracting parties to settle their trade conflicts by the WTO dispute settlement procedure and to respect the decisions of the panels and appeal body by adjusting their trade policies accordingly;

11. Sees the dispute settlement actions hitherto brought before the WTO as an encouraging sign of willingness, particularly on the part of the industrialized countries, to recognize the outcome of the WTO's dispute settlement, which will increase the WTO's international credibility;

12. Calls on the USA to refrain in all due form from taking unilateral trade measures under section 301 of the US Trade Act, given that the new WTO dispute settlement procedure, which covers all aspects of the WTO's terms of references, is functioning satisfactorily and makes such measures superfluous;

13. Calls on the Commission in this context to have the new US legislation concerning the embargoes on Cuba (Helms-Burton Act) and Iran and Libya (Kennedy-Damato Act), and especially their extraterritorial implications, reviewed in the WTO framework to see whether they accord with the provisions of GATT;

14. Welcomes the desire expressed by the Commission in its communication on a market access strategy for the EU to gain acceptance for market access concessions agreed at multilateral level and the emphasis it places in its bilateral relations on the conclusion of free trade agreements;

15. Endorses in this context the coordinated approach to an active market access strategy for the EU, which, through the pooling of information from the business community, the national administrations and the Commission's services, will enable the Commission rapidly to identify problem areas affecting the marketing of EU goods and services in third countries and to take the necessary action, extending even to the application of the regulation on trade barriers, but stresses that the EU's market access strategy must be in line with its development policy and, in particular, that it must not adversely affect the interests of the poorest developing countries;

16. Points out that for their protection undertakings in the EU need better information on the use of trade policy instruments against unfair and underhand trade practices;

17. Hopes that such important trading nations as the CIS republics, China and Taiwan can be admitted to the WTO in the near future;

18. Emphasizes that the creation of a market economy framework, a liberal foreign trade system, the acceptance of WTO obligations commensurate with their level of economic development and a balanced offer of market access opportunities are essential requirements for such admission;

19. Notes with regret, particularly with regard to China's application for membership, that these requirements have not yet been satisfied;

20. Can but conclude that this is blocking Taiwan's application to join the WTO as an independent customs territory, although it has long since satisfied all the requirements for WTO membership;

21. Calls for even closer cooperation between the WTO and such other international organizations as the International Labour Organization (ILO), UNCTAD, the International Monetary Fund (IMF) and the World Bank;

22. Emphasizes the need for stable international monetary cooperation on Bretton Woods lines for world trade, increased prosperity and employment, and regards European Monetary Union as a contribution to a stable international monetary order;

23. Points out, in view of the WTO's increased powers, that the absence of any democratic monitoring of its activities may eventually lead to public opposition in the member countries to the expansion of the multilateral trade system and advocates that such monitoring at European Union level be performed by the European Parliament;

24. Urges the WTO contracting parties, therefore, to involve their parliaments in the WTO's activities as closely as possible in accordance with the provisions of their constitutions, so that these activities may become transparent and comprehensible and command the support of the majority of the general public;

25. Considers that it is necessary and would be useful for the non-governmental organizations to be more heavily involved in the work of the WTO than hitherto;

26. Regards a public debate on the evaluation of the trade policies of the WTO contracting parties within the framework of the Trade Policy Review Mechanism, which should be conducted in the contracting parties' parliaments, as a particularly useful point of departure in this respect;

27. Calls on the Commission and Council, therefore, to involve the European Parliament as far as possible in the WTO's activities through the appropriate parliamentary committees; explicitly acknowledges in this context the Commission's efforts to keep Parliament informed;

28. Calls in particular for all agreements negotiated within the WTO framework to be submitted to Parliament for its approval pursuant to Article 228(3);

29. Considers it essential for the EU to act as a single entity in the WTO and to be represented by the Commission as sole negotiator in all areas falling within the WTO's terms of reference;

30. Calls on the representatives of the Member States gathered at the Intergovernmental Conference to approve the amendments to the Treaty provisions, especially Article 113 of the EC Treaty, which this will entail;

31. Regards it as only logical, in view of economic globalization and the completion of the internal EU market, that the EU should replace the EU Member States and become the sole contracting party to the WTO in the medium term;

32. Emphasizes the need for the WTO to be equipped with the funds and manpower required for the performance of a far wider range of tasks than those undertaken by the GATT secretariat;

The implementation of the results of the Uruguay Round

33. Notes with satisfaction that during the implementation of the results of the Uruguay Round negotiations since the beginning of 1995 the EU's and other contracting parties' compliance with the treaty obligations has not given rise to any appreciable difficulties in the various areas concerned;

34. Calls for better and speedier transposition and implementation of the multilateral trade agreements under the Uruguay Round;

35. Acknowledges the valuable work of the WTO committees in supervising the implementation of the results of the Uruguay Round negotiations, which enables all the WTO contracting parties to review compliance with treaty obligations on the basis of mutual notification of the implementing measures;

36. Calls on the Commission to keep Parliament informed through the appropriate parliamentary committees of all difficulties encountered in the implementation process;

37. Calls on the Commission, the OECD and the WTO to submit reports on the actual impact on prosperity and employment of the implementation of the Uruguay Round by 31 December 1997;

38. Calls on the WTO contracting parties not only to implement the agreed tariff reductions but also to consider how far they can be brought forward and further reductions can be negotiated with a view to lowering peak duty rates and alleviating the escalation of tariffs, which is making it particularly difficult for raw materials to be processed in the developing countries;

39. Believes, however, that, where tariff reductions are brought forward, account must be taken of the current restructuring processes and of the social and economic costs they entail and that they should not be undertaken without an in-depth discussion within the EU of gains and losses;

40. Believes that the WTO must produce a report assessing the measures to dismantle non-tariff barriers to trade, so that countermeasures may be taken against the abuse of such protectionist devices;

41. Expresses concern about the tendency for further grey-area measures to be taken as a substitute for protectionism and emphasizes that trade protection measures must not be allowed to disable the pricing mechanism;

42. Points out that the implementation of the results of the negotiations in the agricultural sector has not led to any additional burdens on the budget and that rises in the prices of cereals due to various circumstances, including weather conditions and the restriction of production in the European Union and the United States, have resulted in a significant reduction in the budget resources needed for the export sector in the first year of the implementation of the GATT agreement on agriculture;

43. Points out that, by making greater use of support measures that have no effect on output, the EU can develop the common agricultural policy further without breaching GATT obligations;

44. Points out that, because of the reform of the policy in the cereals sector, EU budget expenditure from the early 1990s was largely devoted to income support payments, with the result that the scope for wider-ranging reforms is restricted from the budgetary point of view;

45. Calls on the Commission to ensure, by completing the reform of the CAP, that the EU does not again have to negotiate from a defensive position at the WTO negotiations scheduled for the year 2000, but is able to submit to its negotiating partners practical proposals previously agreed within the EU for an improvement in the international division of labour in agriculture, with account taken of socio-economic and environmental limiting conditions;

46. Considers that, with respect to some markets, the EU will in all likelihood be able to meet GATT/WTO requirements only with great difficulty and that CAP reform will therefore be necessary ahead of 1999;

47. Refers in this context to the positive effects of the WTO agricultural agreements on the international competitiveness of the EU food-processing industry;

48. Calls on the Commission, when implementing the European Union's obligations in the agricultural sector, to ensure that, with a view to the EU's retaining a significant share of the world market, the possibilities for subsidized and for unsubsidized exports are fully exploited;

49. Deplores the fact that existing GATT/WTO provisions have failed to take account of the standards attained in the ecological and social spheres and calls on the Commission to act as a driving force in the discussion on agriculture and the environment, especially within the WTO Committee on Trade and Environment, and to defend farmers' interests when contributing to the social debate;

50. Fears that GATT/WTO provisions will jeopardize European Union health and plant protection standards and calls on the Commission resolutely to defend EU standards as regards hormones and all matters relating to the health and plant protection code;

51. Welcomes the fact that the Union intends to observe the Codex Alimentarius; considers, however, that the Codex Alimentarius Commission, as presently constituted, is an inappropriate forum to be recognized as a standard- setting organization;

52. Believes that, in a number of sectors, the standards laid down in the Codex Alimentarius should not be considered suitable for the European Union and that the Union should expressly reserve the right to enforce more stringent standards;

53. Calls on the Commission, in anticipation of the negotiations, to conduct a study on the level of agricultural aid granted in the various WTO member countries and believes that comparison with the OECD as regards subsidy levels could serve as a basis for that purpose;

54. Considers it essential for the Commission rapidly to work out an underlying strategy with a view to the forthcoming series of negotiations in 1999;

55. Notes that almost all the countries which import textile and clothing products have, when implementing the first stage of the agreement on the re-integration of this sector into the GATT rules, liberalized the import of products of little interest to the textile-exporting countries;

56. Points to the need for the promised liberalization of the trade in textiles as part of the tariff reductions and commitments to opening up markets to proceed on schedule, not keeping the largest steps towards liberalization until last, so that the adjustment burdens on the European textiles industry may be spread more evenly over time;

57. Refers to the considerable adjustment burdens that face the European textile industry if liberalization is very largely concentrated on the final stage of implementation, which is scheduled for the year 2005;

58. Advocates, therefore, a balanced product mix that takes account of the interests of importing and exporting countries alike, and so underlines the credibility of the importing countries' obligations, when the various steps to liberalize the textile trade are taken;

59. Refers, moreover, to a separate report on the implications of the Uruguay Round for the EU textile industry;

60. Calls for the start of negotiations to harmonize the preferential rules of origin;

61. Emphasizes that, with the implementation of the agreements on trade in services (GATS) and the protection of intellectual property (TRIPs), EU enterprises enjoy similar conditions in third markets to those enjoyed by foreign enterprises in the EU since the completion of the internal market;

62. Calls for further rules and sanctions to protect intellectual property because in the era of globalization and information technologies the competitiveness of undertakings and economies depends on the knowledge and skills of people;

63. Realizes the difficulty of opening up markets for services but calls on the EU to press for progress towards the liberalization of services in world trade, including the developing countries, similar to that which proved possible in the internal market; stresses the importance of the trade in services to the EU, regrets the inadequate progress made in the GATS and calls for the as yet only partial liberalization of the trade in services to be completed and for treatment on an equal footing with nationals to be made the norm;

64. Calls on the WTO Ministerial Conference to consider by how much the very long periods allowed for compliance with the obligations arising from the GATS and the TRIPs agreement can be reduced;

Aspects on which the negotiations have not been completed

65. Welcomes the conclusion of the interim agreement on financial services, but regrets that the USA found itself unable to accede to this agreement despite improved offers of market access from major contracting parties;

66. Calls on the WTO contracting parties to lay the foundations for the conclusion of a multilateral agreement involving all the contracting parties by offering improved market access on the expiry of the plurilateral interim agreement at the end of 1997;

67. Is concerned that neither the negotiations on basic telecommunications services nor those on sea transport could be completed by the agreed date, this being not least due to the USA's inflexible attitude in both spheres;

68. Calls on the WTO Ministerial Conference to create the conditions for the successful completion of the negotiations on the liberalization of the telecommunications markets by February 1997 as planned; emphasizes the need, however, for the culture of all peoples to be preserved and for the information and communication society to be shaped in a democratically and socially acceptable way within the framework of an international code of conduct;

69. Urges that, in the context of the liberalization of the telecommunications markets, the concept of public service does not disappear and that it does not prejudice or discriminate against potential consumers;

70. Is disappointed at the suspension of the negotiations on the liberalization of sea transport markets, which should have been completed by July 1996; appeals to the contracting parties to resume the negotiations as soon as possible and not to defer them until the year 2000;

The new areas covered by the WTO

71. Appeals to the contracting parties gathered in Singapore to adopt a programme of work to ensure the best possible preparation of the negotiations scheduled for the year 2000, particularly in the areas of trade in agricultural products and trade in services;

72. Emphasizes the need for the WTO to delay no longer in linking trade issues to environmental, social, cultural, consumer and animal protection issues, with the aim of balancing interests, and insists that WTO decisions must on no account jeopardize international or EU standards;

73. Notes the proposals which the WTO Committee on Trade and Environment has submitted to the Ministerial Conference; regrets, however, that the committee has not succeeded in arriving at practical conclusions in all ten spheres;

74. Appeals to the WTO Ministerial Conference, therefore, to set the negotiators clear targets concerning in particular the relationship between environment and trade policy and relations with non-governmental organizations so that they may achieve practical negotiating results as soon as possible;

75. Strongly endorses the opinion that the prices of goods and services do not fully reflect the associated environmental costs; further notes that the present mechanisms of international trade do not appropriately consider either this problem or the question relating to the inadequate information given to consumers on the environmental impact of their choices;

76. Is firmly of the view that the environment should be considered in the entire range of issues covered by the WTO, not only the general rules and disciplines laid down in GATT, the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Intellectual Property (TRIPs), but also the specific rules on agricultural subsidies, sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT), the subsidies code and dispute settlement;

77. Calls for the environmental compatibility of world trade to include polluter-pays levies on the carriage of goods from industrialized and developing countries to reflect its external cost, which in the past has been borne by society as a whole;

78. Condemns distortions of competition caused by social and environmental dumping and calls for such dumping to be curbed by the introduction of environmental and social clauses by way of an amendment of Article XX of the WTO regulations, to allow a minimum of import restrictions in the case of infringements of fundamental standards of the International Labour Organization, such as the ban on child and forced labour, the freedom of association and international environmental conventions, but also draws attention to the scope for promoting socially and environmentally compatible trade by positive action involving social and eco-labels;

79. Advocates that Article XX of the GATT be so amended that the WTO contracting parties are permitted to impose, under multilateral environmental agreements, trade restrictions against products and manufacturing processes which have a global impact on the environment;

80. Refers, moreover, to its resolution of 14 November 1996 on the communication from the Commission to the Council and European Parliament on trade and the environment (COM(96)0054 - C4-0158/96) ((Minutes of that Sitting, Part II, Item 3(b).));

81. Considers it essential, at a time when, with advancing globalization, the business community has gained primacy over politicians and economic interests dominate social interests, for a world social policy to be initiated and urges that the discussion of minimum social standards as part of the international trade order be placed on the agenda for the WTO Ministerial Conference;

82. Advocates in this context the setting up of a Committee on Trade and Social Human Rights and Minimum Standards, which, in close cooperation with the International Labour Organization (ILO), would draw up proposals for internationally binding minimum social standards designed so that specific decisions could be taken at the second WTO Ministerial Conference;

83. Suggests that this debate on minimum social standards should begin with the freedom of trade union activity, including the possibility of concluding collective wage agreements, the prohibition of forced labour, child labour, labour carried out under degrading conditions and - as women are frequently exploited in export industries - discrimination on the grounds of sex;

84. Is aware that child labour, especially in the family context, is due to poverty in developing countries and is therefore primarily opposed to industrially organized forced child labour;

85. Appeals to the industrialized countries in the WTO to help to ensure that the bases for child labour are eliminated by means of programmes to combat poverty and to improve the educational and social systems and by providing information;

86. Emphasizes that WTO social clauses must on no account be abused for protectionist policy purposes or prevent developing countries and economies in transition from exploiting their comparative cost advantages;

87. Considers it essential for the successful preparation of the WTO Ministerial Conference in Singapore that the Commission should have regular consultations with the social partners and rapporteurs/draftsmen from the relevant committees of the European Parliament;

88. Appeals to the WTO Ministerial Conference to prepare negotiations aimed at including in the international trade order rules on the liberalization of international direct investment; these rules should be based on the principles of transparency, most-favoured-nation treatment and non- discrimination and might be guided by the preparatory work undertaken in the OECD;

89. Believes that such rules should be included because, with the globalization of economic activity, international direct investment is increasingly needed to safeguard marketing opportunities in third markets;

90. Points out that the liberalization of trade and investment will lead to more technology transfers that stimulate growth and employment, and therefore calls for the continued liberalization of investment begun in the WTO;

91. Considers it necessary for the liberalization of direct investment to be complemented by the creation of a supporting multilateral legal framework to prevent the misdirection of international investment flows and consequent social and/or environmental dumping and emphasizes that extensive liberalization of investment flows is making the multilateral harmonization of other terms and conditions, especially in the area of social and environmental legislation, increasingly urgent;

92. Expresses concern about the increasingly market-dominant position of the 100 large multinational corporations that use their economic power to play off countries competing as locations for economic activity one against the other, thus enabling them to gain acceptance for trade and investment decisions without regard for employment, welfare concepts and the environment, which runs counter to free and fair world trade and the objectives of the GATT and WTO;

93. Advocates, further, in this connection the drawing up of a Code of Conduct for multinational corporations based on the preliminary work undertaken by the UN and the OECD, compliance with which should be monitored by means of an annual report;

94. Points out that, with the liberalization of investment flows, the need to harmonize competition rules at multilateral level between the main trading partners will become even more urgent;

95. Considers that the WTO work programme to be adopted by the Ministerial Conference should also include the preparation of negotiations on the inclusion of international rules on competition policy;

96. Considers this addition to the international trade order necessary because the market access opportunities negotiated by the WTO contracting parties may be eroded by private enterprises acting in contravention of the rules on competition unless such action is prevented by an effective competition policy;

97. Insists on the introduction of an international competition system with minimum competition policy standards for business activity and a court-type procedure; calls in particular for a ban on price and territorial cartels, control of cross-border mergers and a code for state aid;

98. Recommends that agreement should first be reached on a number of essential basic principles with which the competition policies of the WTO member countries should comply; they should concern the abuse of market-dominating positions, cross-frontier agreements that contravene competition rules (cartels) and discipline in the granting of state aid;

99. Considers that bilateral cooperation agreements between various WTO contracting parties would be a useful complement to the multilateral approach;

100. Refers, moreover, to its resolution of 14 November 1996 on the report of the Group of Experts on competition policy in the new trade order: strengthening international cooperation and rules (COM(95)0359 - C4-0352/95) ((Minutes of that Sitting, Part II, Item 3(a).));

101. Notes the efforts being made throughout the world to create regional areas of economic integration and, provided that these processes conform to the model of open integration, does not regard them as inconsistent with the multilateral international trade order but rather as the germs of a global internal market, which is the long-term goal of the liberalization process in GATT and the WTO;

102. Suggests that the WTO's work programme should include clarification of the procedures for determining what constitutes customs unions and free-trade areas pursuant to Article XXIV of GATT, so that clearer criteria for assessing the compliance of individual economic groupings with GATT may be established;

103. Instructs its delegation attending the Ministerial Conference in Singapore to put the views expressed in this resolution to the other WTO contracting parties; considers that these views should be put by its delegation to the special EU Council session to take place in Singapore on 10 December 1996, and that the delegation should be informed on this occasion, according to Article J.7 of the EU Treaty, of the common positions adopted by the Council on the texts which will be submitted for approval to the Conference;

104. Instructs its President to forward this resolution to the Commission and Council, the governments and parliaments of the Member States and the contracting parties gathered in Singapore for the WTO Ministerial Conference in December 1996.