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Globalization: Leaving the WTO behind

Globalization: Leaving the WTO behind


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By Deborah James

When the history of the seismic changes occurring today in the world economy is written, the failure in July 2008 of corporate interests and some governments to expand the World Trade Organization (WTO) through the Doha Round will pass to be a defining moment.


When the history of the seismic changes occurring today in the world economy is written, the failure in July 2008 of corporate interests and some governments to expand the World Trade Organization (WTO) through the Doha Round will pass to be a defining moment.

It was in this lakeside city that negotiators threw in the towel after seven unsuccessful years trying to broaden a particular set of corporatist policies, to which most governments had already given a "no", over and over. once (in Seattle in 1999 *, Mexico in 2003, and in Geneva in 2006). WTO Director-General Pascal Lamy tried a last-minute push to conclude a Doha deal by calling for an exclusive, invitation-only meeting for the mini-ministerial of around 30 of the 135 WTO member countries, in Geneva. last month. This despite wide divergences in political positions within the negotiating areas and despite the fact that the Bush administration does not have the authority to sign any possible agreement.

And as if it was not enough abrogation of the democratic process to exclude four-fifths of the WTO membership from the notorious "Green Room" negotiations, when the talks failed to converge between those 30 countries, Lamy continued the negotiations with barely seven members, including almost all countries in the developed world but ironically excluding all African countries altogether in a round that its proponents still blatantly call the "development round." Many developing countries such as Bolivia and Kenya, and even the host, Switzerland, raised significant procedural concerns regarding their exclusion from the meeting, but their concerns were dismissed by Lamy.

If African countries had been allowed to participate in the secret deliberations, they would have demanded resolutions on issues such as the reform of US cotton subsidies which drive 20,000 US producers to overproduce cotton, resulting in the erosion of cotton. the income of 10 million African farmers in countries like Benin, Burkina Faso, Mali and Chad. These subsidies put many of these farmers out of business and cut key revenues for health and education budgets for the poor. Some observers have highlighted the strong position of Africans on development issues when allowed to participate at the negotiating table in the past. That is why many have now argued that the desire of rich countries to avoid key issues for Africa, such as cotton, is the real reason for the collapse of the negotiations. But this part of the story would seem too ugly to be published in the American press.

Recent US media coverage of the failure of the talks has focused on the negotiating positions of various countries, mostly blaming India and China. But when one delves into the underlying issues, it is clear that what is at stake in the negotiations is much more than just "trade", and that the collapse was due to forces far greater than the positions of individual countries. . In particular, it was due to the issues surrounding the global food, climate and financial crises, as well as the lack of progress in development due to the inability of neoliberal policies to effectively promote growth or poverty reduction. Given the changes in international political dynamics as well as global agendas, the collapse in the ongoing negotiations will have far-reaching repercussions beyond the WTO.

Food sovereignty or food crisis

Take agriculture for example, which has been the topic cited by most explanations about the collapse of the negotiations. India, with the support of the vast majority of developing countries, fought within the WTO for the right to be allowed to protect its farmers, food security, rural development and against vulnerability to volatility of commodity markets. Sudden increases in subsidized foreign products have so devastated local agricultural producers, who account for three-fifths of the workforce in a population of 1.1 billion, of whom more than 100,000 peasants are said to have committed suicide. in recent years. However, US negotiators do not allow the protections and demanded greater access to poor countries' markets for their agribusiness exports, while refusing to lower the limits applied to domestic subsidies to twice below your current rate.

It is no coincidence that the talks collapsed over agriculture-related issues in a year when countries from Haiti to Pakistan and Mexico to Cameroon have seen riots break out over food prices. Although food prices are happily declining slightly, the food crisis is eroding loyalty to free trade dogmas in agriculture. Many developing countries that could previously meet their own food needs are now heavily dependent on imports. Two-thirds of developing countries are now net food importers. Decades of structural adjustment policies dictated by the IMF and the World Bank, along with "free trade agreements" as well as the policies of the WTO, have forced developing countries to cut tariffs. This, combined with high levels of allowable subsidies in rich countries, has crushed the productive capacity of many developing countries. WTO policies have also contributed to the erosion of the family farm in the United States and other rich countries. Further expansion of the WTO will not solve, and on the contrary, exacerbate the food crisis, despite Lamy's claims.

Another key factor at play in the Geneva negotiations has been the continued mobilization of global civil society against the expansion of these failed policies. For example, farmers in India have been organizing massive protests in recent years against the WTO. Their anger was sharpened by witnessing the harsh pressure his government faced during the talks, which included at least three personal calls from President Bush to Prime Minister Manmohan Singh during the negotiations. Farmers in Indonesia, India, the Philippines, Brazil and other countries lobbied their representatives in Geneva, while keeping civil society in their countries informed about the status of the negotiations. Together they pressured their governments to resist the demands that go against development and helped to ensure the victory of the collapse.

Knocking down the development ladder

A similar dynamic emerged in the other fundamental pillar of the Geneva negotiations, regarding tariffs on industrial goods. Tariffs are essentially taxes that companies pay to foreign governments for the privilege of selling their products and making a profit in another country. The strategic use of tariffs has been a fundamental strategy of any industrialization policy. Governments raise tariffs to protect infant industries from foreign competition and to promote employment and national development, and then when industries are competitive, they lower these tariffs so that consumers save money. As the Cambridge economist Ha-Joon Chang illustrates, the United States and the United Kingdom had the highest tariffs in the world at the beginning of the last century, during the period of industrialization of these countries. Now, rich countries are essentially saying, "Do like I say, not like I did," arguing that developing countries should cut their tariffs because now rich countries have lower tariffs and are richer. This is equivalent to "knocking down the ladder" of development (with which others reached that stage).


In the WTO, this happens in the realm of negotiations called "non-agricultural market access", or NAMA, in WTO jargon. Both developed and developing countries have agreed to reduce tariffs, within the Doha mandate to seek less than full reciprocity. This means that developing countries would presumably gain greater "market access" from developed countries (and thus reduce their own tariffs by a lower percentage) than vice versa. However, in the negotiations rich countries are demanding that developing countries cut their tariffs by an average of about 60 percent, while offering to cut their own tariffs by only half of that (roughly 28 percent). This reversal is obscured by the fact that in reality, the negotiations center on a "Swiss formula with coefficient", which appears to be deliberately intended to confuse the common observer immersed in technical obscurity.

According to the International Trade Union Confederation, these tariff cuts would translate into tens of thousands of jobs lost in the newly industrialized countries, amid a crisis of poverty and lack of progress in development in many countries. Furthermore, the Third World Network has pointed out that the cuts would also limit the possibilities for industrial development for many of the poorest countries. The United Nations Conference on Trade and Development estimates that tariff losses (which represent a significant part of the health and education budgets of many developing countries) would amount to almost four times the amount of the small "benefits" projected for developing countries of the Doha Round.

Fortunately, trade unionists from South Africa, India, the Philippines, Argentina, Brazil, Mexico and other countries have increasingly begun to voice their concerns and traveled to Geneva to pressure their governments, raise their voices in the media and ensure that the workers in their countries put pressure on governments to defend their interests. Although the issue of industrial tariff reductions was not presented as the factor that prevented an agreement from being reached this time, it is clear that it will continue to be a main objective of the rich countries in the negotiations.

WTO enlargement would aggravate, rather than solve, environmental and financial crises

Agriculture and the mix of jobs and development are not the only areas where it is becoming increasingly clear that the WTO is a factor, rather than offering a solution, contributing to today's global crises. The global environmental crisis will also require new innovative solutions. Unfortunately, many of those ideas collide with WTO bans on regulatory policies that could somehow inadvertently restrict trade. We already know that shipping products tens of thousands of kilometers across the globe so that companies can take advantage of cheap labor in some countries, weak environmental standards in others, and develop markets for consumption in a third country contributes significantly to global warming. Do we really want our ability to preserve life on our planet to be limited by the WTO?

No issue has dominated the headlines this year more than the global financial crisis, there is now broad consensus that this has been facilitated by the lack of adequate regulation in financial markets. However, in the WTO negotiations on services, rich countries actively seek further deregulation and liberalization of financial markets, which represents the interests of their financial industries. It is illogical that the WTO Director-General, Pascal Lamy, has called for the completion of the WTO expansion agenda as a solution to the global financial crisis, when his actual policies, with any reasonable calculation, will contribute to a increased instability.

Although the services negotiations did not make the headlines very often, they were an essential part of the WTO agenda in July. While the chair of the services negotiations tried to pressure countries to expand the current level of services liberalization "to the maximum extent possible," a group of countries - Bolivia, Cuba, Venezuela and Nicaragua - successfully rejected the move. . Facing the situation even more critically, the group also circulated a proposal to remove the health, education, water, telecommunications and energy sectors from the WTO using the argument that these essential public services are human rights that governments have an obligation to provide. and, therefore, they should not be treated as marketable products. These efforts were immediately supported by more than 100 civil society organizations around the world within 36 hours. Bolivian President Evo Morales had already made the same argument in a statement issued shortly before the WTO negotiations.

Where do we go from here?

Many fear that the collapse of the multilateral talks will lead to increased pressure for bilateral and regional deals that use the same (and often even more extreme) WTO policies. Furthermore, each time the Doha Round has "collapsed", it has subsequently been raised from the dead and negotiations have been resumed. And of course, no matter what caused the collapse of the expansion attempt, the WTO will continue to regulate world trade in favor of corporate profits and against the interests of workers, farmers, consumers and the environment.

However, this time is different. Confidence in the corporate policies of globalization has eroded significantly since the founding of the WTO, mainly due to the abysmal failure of these policies to promote growth, equity and sustainable development in both countries of the North and South. in the last three decades (and the failure of the WTO to do the same since 1995). Additionally, studies projecting the "benefits" of a Doha Round, which have been greatly exaggerated by WTO proponents, have reduced their estimates of these benefits over time and remain insignificant - about a penny a day per person in the developing world. The latest best summary of WTO gains and losses can be found here.

At the same time, some governments are increasingly experimenting with alternative policies, such as regional integration, nationalization of resources, South-South trade, and increased budgets for health and education, which are generators of growth and development. much more effective prosperity. Just to give one example, the increase in growth above the Latin American growth average of just Argentina and Venezuela in the last four years has brought combined gains of $ 140 billion to those two countries. This real economic growth brings projected gains of $ 16 billion for all developing countries in the world combined (based on the most recent World Bank projections for a likely Doha conclusion; both figures in constant 2001 dollars) are very small.

Equally important is that world politics have been realigned since Doha was initially launched. Developing countries are much less likely to accept the policies dictated by the governments of rich nations, and many of them have also gained economic freedom from the dictates of the IMF in recent years. Although Brazil, India and China may be the most frequently cited emerging market powers, developing countries from Latin America to Africa to Asia are increasingly demanding a stronger voice in international forums.

Incredible efforts are being made in the United States to make sure that our next President and Congress truly implement fair trade policies, demanded by citizens who have suffered from job losses, stagnant real wages, and companies that have gotten away with it. yours for far too long, including through the new Trade Reform, Responsibility, Development and Employment Act (TRADE Act).

Civil society organizations over the years have developed multiple ideas for a different paradigm for expanding global prosperity and sustainable development through policies that establish global financial stability, contribute to the solution rather than exacerbate the climate crisis, and that promote the ability of countries to feed their populations, among other objectives. By defeating the expansion of the WTO once again, the political space has been created in which these alternative policies and paradigms can flourish. That space could also disappear if civil society does not continue to work to ensure that negotiations do not resume.

What is needed now is ongoing organization to keep that political space open, along with the political will to turn policy innovation already underway into a new global economic paradigm that can discipline harmful corporate practices, while actually increase growth, reduce poverty and expand sustainable development globally. Only then can the victims of that fourth and one of the most neglected crisis - in which more than a billion of our fellow human citizens today suffer from extreme and often deadly poverty - find hope for a better future. .

* A new Stuart Townsend film starring Charlize Theron, The Battle in Seattle, is running in select theaters from September 19-21 and September 26-28. See www.battleinseattlemovie.com for more information. You can also ask that the movie be shown in your city. It is not often that Americans get to see the political power of civil society on the big screen when they come together to challenge corporate power and successfully change the course of history!

* Deborah James is the Director of International Programs for the Center for Economic and Policy Research, and a member of the Global Exchange Board of Directors. He is a key figure in the global movement against the WTO, "Our World Is Not For Sale", having participated and led civil society activities during ministerial meetings in Seattle, Cancun, Hong Kong and Geneva. This article was published by Alternet on August 21, 2008. To view the original version in English, please click here.


Video: Trade Liberalization Explained. IB Development Economics. The Global Economy (July 2022).


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