Multinational companies have an undue influence over the making of global trade rules at the World Trade Organization (WTO). Big business lobbyists have privileged access to government policymakers and use it to push trade agreements that undermine the fight against poverty.

ActionAid’s report Under the Influence highlights many examples of privileged corporate access to, and excessive influence over, the WTO policy-making process. It argues that governments must take urgent action to curb corporate influence in the WTO and put the rights of poor people before the profits of multinationals in the current round of global trade talks.

Lobbying the trade superpowers

In recent years, huge lobbying industries have mushroomed in the EU and US capitals, where the two trade superpowers develop their policies for WTO negotiations.

in the EU

 ·       around 15,000 lobbyists are based in Brussels – roughly one for every member of staff at the European Commission (EC);

 ·        more than 70% of Brussels lobbyists represent business interests, while only 10% advocate for environmental, human rights, public health and development interests;

·        annual corporate lobbying expenditure in Brussels is estimated to be between €750 million and €1 billion.

in the US

·      around 17,000 lobbyists work in Washington DC, outnumbering lawmakers in US Congress by about 30 to one

  ·        nearly half of all US legislators who go into the private sector when they leave Congress join the lobbying industry

  ·       corporations and lobby groups spent nearly $13 billion influencing US Congress and federal officials from 1998 to 2004 – equivalent to the combined economic output of Cambodia and Ethiopia in 2004

·       the pharmaceutical industry spent over $1 billion lobbying in the US in 2004 alone.

  Companies have a legitimate interest in shaping the policies that affect how they do business in the global economy. But ActionAid believes the WTO’s policy agenda is being dominated by a narrow set of corporate interests, while poor people’s interests are largely excluded.

The EU and US’s corporate trade agenda

The EU and the US are home to 80% of the world’s biggest multinational corporations. They are also the world’s dominant trade powers, and have a publicly stated commitment to promote their commercial interests by opening up markets in developing countries through the WTO.

The EU and US continue to claim they are acting in the interests of poor countries in the current ‘development’ round of trade negotiations, due to conclude this year. But the outcome of last December's WTO summit in Hong Kong shows the reality is very different.

By offering small cuts in agricultural export subsidies in return for greatly increased access to the developing countries’ markets for services and manufactured goods, the EU and US are aggressively pursuing a self-interested agenda on behalf of their multinational companies. This threatens to undermine poor people’s rights and outlaw the trade policies that developing countries need to build thriving economies.

ActionAid’s report exposes how multinational companies are:

1) given privileged access to WTO policy-makers that is denied to poor people and public interest groups:

in the EU

The European Services Forum (ESF) – a corporate lobby group set up by former EU trade commissioner Leon Brittan when he was still in office – represents services multinationals such as British Telecom, Lloyds and Suez. Despite denials from top EC officials, new evidence confirms ESF enjoys privileged access to senior policy-makers in EU commissioner Peter Mandelson’s trade department.

ESF also has easy access to the ‘133 Committee’, a powerful but secretive body made up of EC officials and trade experts from the EU’s member states, which formulates important EU policies for WTO negotiations. In contrast to ESF’s easy access, details of 133 Committee meetings are kept secret from the public and parliaments in the EU.

in the US

Business lobbyists representing corporations such as Coca-Cola, McDonalds, Pfizer and Wal-Mart dominate the US Trade Policy Advisory Committees, giving multinationals a free rein to influence the development of the US’s WTO negotiating positions in Washington DC.

A total of 742 official external advisors to the US’s trade department have access to confidential WTO negotiating documents and attend meetings with US trade negotiators. Of these 742 advisers, 93% represent business lobby groups and corporations including Burger King, Halliburton and Monsanto.

at the WTO’s base in Geneva

The US government brought corporate lobbyists on to its delegation at the WTO’s base in Geneva to negotiate directly with developing country officials during the run-up to the WTO’s Hong Kong summit in 2005. These meetings are meant to take place between governments only. The US included the business lobbyists in its delegation to promote its negotiating positions on food aid and cotton subsidies. These policies benefit US agribusiness multinationals including Archer Daniels Midland and Cargill, but often hurt poor communities in developing countries.

2) having undue influence over WTO policies that has damaging impacts on poor communities:

in WTO negotiations on services

The EC adopted key demands made by corporate pressure group the European Services Forum (ESF) to force open services markets in poor countries for multinational companies. The EC is pushing ESF’s agenda aggressively in WTO negotiations, including by the use of ‘arm-twisting’ tactics.

Despite massive opposition from developing countries, the EC and ESF got almost everything they wanted into the services text of December’s Hong Kong WTO ministerial declaration. If adopted as it stands, the deal is set to increase pressure on poor countries to open up their markets for basic services such as water, healthcare and education. Previous episodes of liberalisation in these sectors have restricted poor people's access to these essentials.

in WTO negotiations on intellectual property

Senior officials from Pfizer, the world’s largest drug company, negotiated directly with the director-general of the WTO and officials from WTO member states in 2003 to block a proposal from developing countries that would allow them to import cheaper copies of patented drugs during public health emergencies, including the HIV and AIDS pandemic.

 The drug lobby also helped to make sure the WTO’s agreement on intellectual property means key countries that are able to manufacture cheaper copies of patented medicines – including Brazil, India and Thailand – are only permitted to do so under compulsory license. This is in spite of the fact that large numbers of people in poor countries suffering with conditions such as HIV and AIDS rely on cheaper drugs from these countries for treatment.

 3) setting up global networks of influence to shape countries’ WTO positions and national trade policies:

global networks – the Yum! Brands alliance

Yum! Brands, a group of multinational fast food chains including KFC, Pizza Hut and Taco Bell, has helped set up new global lobbying networks to influence the WTO’s agriculture talks. It formed the US Food Trade Alliance in 2005, whose members include the food multinationals Burger King, Dominos, Dunkin’ Donuts, McDonald’s and Starbucks.

 Yum! Brands’ corporate coalition heads the Global Alliance for Liberalized Trade in Food and Agriculture, which is made up of food industry lobby groups from 15 countries including Australia, Brazil, Canada and Japan. The Global Alliance’s members are pushing governments to prise open agricultural markets through the WTO, including in developing countries.

influencing national laws – India’s new patent act

PhRMA, a US drug industry group whose members include Pfizer and Merck, waged a comprehensive lobbying campaign in India that helped push through a new WTO-compliant patent law in 2005. Drug industry representatives lobbied the Indian prime minister’s office and used their easy access to government officials to put pressure on the Indian government to bring in the new law. Campaigners fear it will deny AIDS treatment to up to 350,000 people who depend on low-cost Indian drugs worldwide.

4) funding think-tanks and front groups that advocate trade policies harmful to poor communities

 A large number of hardline pro-business think-tanks have grown rapidly in the EU recently. Analysts believe donations funnelled from corporate backers are a major factor behind their expansion. Institutes such as the Centre for a New Europe, the Edmund Burke Foundation and the International Policy Network promote policies that benefit a narrow set of corporate interests, including stronger intellectual property protection for the multinationals’ patented drugs in developing countries.

Almost all of the radically pro-business think-tanks that were asked to disclose their funding sources in a recent survey failed to do so. However, recent investigations reveal Pfizer gave $470,000 to the Edmund Burke Foundation between 2001 and 2004 on condition that it would promote private healthcare policies.

ActionAid’s recommendations

 Big business’s privileged access to policy-makers is contributing to global trade rules that undermine the fight against poverty. Governments must take urgent action to curb corporate influence in the WTO, and to address the WTO’s anti-democratic policymaking procedures.

ActionAid calls on WTO members to put the needs of poor people above those of multinational corporations, and calls on the EU and US to stop pushing developing countries to open their markets to foreign multinationals through the WTO.

If the final trade deal is anything like the declaration that came out of the recent Hong Kong ministerial meeting, ActionAid believes poor countries must reject it.

the WTO secretariat and WTO member countries must

 ·        take action to include poor people’s groups in the trade policymaking process, as well as address the WTO’s anti-democratic and non-transparent negotiating procedures

 the EU must

 ·        introduce new laws to increase transparency and accountability in lobbying, as well as put an end to cases of privileged access for corporate lobbyists

the US must

corporations should

·        disclose their lobbying positions on key public policy issues, as well as membership and funding of trade associations, think-tanks and campaigns to influence public policy.