WTO Makes Exception for Kimberley Rules

March 4, 2003

WTO Makes Exception for Kimberley Rules

The World Trade Organization agreed on Feb. 26 that countries can sidestep one of its basic principles and join a ban on trade – refusing to import so-called "blood diamonds" that have financed civil wars in Africa, according to the Associated Press.

The WTO agreed by consensus that Kimberley Process participants will be allowed to reject for import rough diamonds from areas of conflict. "Trade in conflict diamonds is a matter of serious international concern, which can be directly linked to the fueling of armed conflict, the activities of rebel movements aimed at undermining or overthrowing legitimate governments, and the illicit traffic in, and proliferation of, armaments, especially small arms and light weapons," the WTO said in a statement. It cited "the extraordinary humanitarian nature of this issue and the devastating impact of conflicts fueled by the trade in conflict diamonds on the peace, safety and security of people in affected countries" as the reason.

At a meeting last November in Interlaken, Switzerland, 52 governments and the diamond industry reached a worldwide accord to stop trade in blood diamonds. The agreement comes after more than two years of discussions that took place after the disclosure that diamond production was financing deadly conflicts in nations such as Angola and Sierra Leone. Batches of exported rough diamonds must be accompanied by government certification that they do not come from territory held by rebels. No gems can be imported by another country without the certificate. Anyone breaking the rules, including private exporters or importers, will lose their trading licenses. Exporting countries that fail to respect the deal also would be barred from selling diamonds and could face international sanctions.

Conflict diamonds are estimated to make up about 3% of the annual global production of rough diamonds, which totaled US$7.8 billion in 2001. The issue was taken to the WTO because one of the founding principles of the 145-member world trade body is that a government must offer the same conditions to all trading partners and cannot refuse to accept goods from one country that it accepts from another. The new waiver applies to any country that took part in the Kimberley Process and any other WTO member that announces it wants to be part of the agreement. The waiver must still be rubber-stamped by the WTO General Council.

Led by Canada, 11 countries that took part in the Kimberley Process formally sponsored the request for the WTO waiver. The other sponsors were Australia, Brazil, Israel, Japan, South Korea, the Philippines, Sierra Leone, Thailand, the United Arab Emirates and the United States.

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