ActionAid, an anti-poverty development agency, revealed that hundreds of millions of dollars are spent by lobby groups to push trade agreements that maximise corporate profits. In the US alone, pharmaceutical companies spent over USD 1 billion in 2004 on professional lobbying consultants, lawyers, public relations experts, and even ex-government officials and academicians.
Privileged access to policymakers
FYI: How do companies peddle influence?
Directly:
face-to-face meeting with policymakers
serving on government advisory committees
making presentations to policymakers
sending letters, memos, and emails to policymakers
making formal submissions to government consultations
Indirectly:
securing media coverage
making financial donations and giving gifts to political parties and candidates
funding think-tanks and research projects
funding “grassroots” and public relations campaigns
bringing policymakers to corporate hospitality events
Source: “Under the Influence,” ActionAid, page 10The corporate lobby group representing services for multinationals called European Services Forum (ESF) admitted it had regular access to European Commission (EC) officials to talk about trade strategies in WTO negotiations. ESF also held regular meetings with EC’s trade policy setting committee—the 133 Committee—a powerful body working with the EU to decide on trade policies.
Although the Committee is highly secretive and public access to its documents is restricted, ESF is able to meet with them regularly. “We have regular emails with officials, we have telephone calls, we go to their meetings, they come to our meetings, we invite them, they invite us,” declared ESF Managing Director Pascal Kerneis.
In the US, lobbyists representing such TNCs as Coca-Cola, McDonalds, Pfizer, and Wal-Mart dominate trade policy advisory committees, and have access to confidential WTO documents as well.
TNCs get what they want
During the Hong Kong WTO ministerial in December, the European Commission pushed for and succeeded in incorporating the ESF’s demands in the declaration. This included developing countries liberalising “a minimum and a mandatory number of services sectors,” including water delivery services.
Corporate lobbyists have claimed that with trade liberalisation, poor people will benefit from lower prices, technology transfer, and economic efficiency but history has shown otherwise. With liberalisation, cheap imports have flooded the markets of developing countries and left local farmers with unsold goods. Liberalisation has also forced local factories to close, causing massive unemployment.
Sarah Arum, a 40-year-old sugar farmer in Kenya, described life following the closure of a local sugar factory. “Before the collapse, it was easy to pay school fees and lease tracts of land for farming. It is not so now. It has become a daily struggle to survive.”
Water liberalisation promoted by the ESF has also created misery for Africans. Residents of Kanyamanze for example, were supplied water by the UK-based Biwater in 2001. Following the installation of new water metres, bills increased 4,185%, leaving most households waterless. This resulted in an increase in water-based illnesses, including cholera, diarrhoea, and gastroenteritis since residents were compelled to drink from the local river.
Pharmaceutical companies also succeeded in lobbying for a new WTO-compliant patent law in India. The old law allowed local pharmaceuticals to manufacture brand name drugs at low prices. This resulted in a strong generic drug industry, which became a major world supplier of cheap anti-retroviral (ARV) drugs. It led to an increased the life expectancy of HIV/AIDS sufferers, 80% of whom are in Africa.
With the new law, however, the ability of generic drug firms to manufacture ARVs will be severely limited. If the patent law is amended to include “data exclusivity,” Indian drug firms will also be denied access to information needed to produce drugs.
The Medicins Sans Frontieres (MSF) says that approximately 350,000 AIDS sufferers depend on Indian drugs, but with the new law, most of them will probably be denied treatment since the drugs will be 12 times more expensive.
Source: “Under the Influence,” ActionAid, page 14. |
Recommendations
The report cites other examples of how global businesses have a hand in WTO policymaking and its negative consequences on the South.
ActionAid recommended steps to curb corporate influence on trade policies. It asked WTO members to combat poverty, and oppose transnational corporations’s profiting at the expense of people’s welfare.
“Governments meeting at Davos (for the World Economic Forum) must not be influenced by the business heavyweights in their midst,” said Aftab Alam Khan, head of ActionAid’s Trade Justice campaign. “Unless there is radical change in the direction of trade talks and we put poor people’s interests above those of (MNCs), then no deal is better than a bad deal.”
Source:
ActionAid International. 24 January 2006. “Under the Influence.” Downloaded from ActionAid International, <http://www.actionaid.org/wps/content/documents/174_1_under_the_influence_PREVIEW.pdf>.
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