SENTIENT TIMES Dec/Jan 2002

World Trade organization Continues to Fail Developing Countries

By Danila Oder and Debi Weiss

The explicit way the US, the EU, Canada and Japan bludgeoned their way into gains on virtually every issue on the agenda at the WTO Ministerial, shows the world is certainly up for sale. The greatest tragedy is that the world’s richest economies, which invariably swear in the name of democracy, used all undemocratic norms and arms to force a “consensus” down the throat of developing countries. The autocratic process of takeover of the global economy puts at risk millions of people, especially women and children, without basic rights and opportunities. -Devinder Sharma, New Delhi-based trade policy analyst

The World Trade Organization’s fourth ministerial meeting held in Qatar last November concluded in overtime with one win, but mostly losses for the people and the environment. Although they had pledged to dialogue with civil society following the Seattle debacle, the WTO avoided doing so by meeting in Qatar—a tiny Persian Gulf Emirate which does not allow demonstrations, has no labor unions, no political parties, and no domestic antiglobalization groups. With limited hotel space and visa restrictions, fewer than 200 NGO representatives were allowed to attend, although 50-100 members of NGOs did stage a protest in the conference center the first night of the meeting.

The nonbinding but politically important agreement to let poor countries manufacture and use generic drugs was the single positive outcome. Drug patents can now be overridden in times of health “crises” such as AIDS. Several countries where major pharmaceutical companies are based, including the U.S., had opposed this humanitarian measure. The final agreement also fails to address the developing countries’ outrage at unfair policies and their exclusion from decision-making, which had scuttled the Seattle meeting.

According to a report from the Coalition of Civil Society groups, the lessons of the Seattle debacle in 1999 were ignored: The negotiations process in Geneva was untransparent and deeply unfair to the majority of WTO members and the inequities continued in Doha. The much criticized “Green Rooms” used in Seattle were used again, as were powerful unelected facilitators of these informal groups. These civil society representatives exposed unethical negotiating practices by some governments of the rich world, such as linking aid budgets and trade preferences to the trade positions of developing countries, and targeting individual developing country negotiators. The major trading nations in the rich world arrogantly attempted to impose their agenda on the rest of the world.

The BBC reported that African nations had been threatened by the US with the loss of trade concessions if they did not back a new round of talks. Filipino activist Walden Bello wrote that the developing countries were pressured to agree to a new round of talks by “manipulation of the WTO’s undemocratic system of decision-making and blunter forms of trade blackmail.” Bello went on to say that the demand for a “development box” to promote food security and development which was being pushed by a number of developing countries was completely ignored; and there is no commitment to change the TRIPs agreement to outlaw biopiracy and patents on life, which was a key developing country concern coming into Doha.

The EU had wanted to allow its member states to require labeling of genetically modified food products (GMOs) and to use the precautionary principle in food imports, but gave up because the US and ministers of many developing countries persisted in seeing it as solely an excuse for protection of EU farmers. The food exporters including the US successfully pressured the EU and Japan to approve the gradual elimination of popular subsidies for their farmers. No commitments on improving labor standards were made.

The EU tried to represent its citizens’ Green consensus that the environment belongs in the WTO talks, but obtained only a weak promise of future talks on harmonizing WTO rules with international agreements like the Kyoto protocol.

US family farm activist Ben Lilliston wrote from Doha, “Although countries seem to enthusiastically buy the WTO’s line that free trade is good for everyone, it quickly becomes clear that most don’t believe the propaganda.” By refusing to accept the Kyoto Protocol on industrial emissions, the Bush administration provides US industry with the equivalent of an enormous hidden subsidy that can’t be negotiated under WTO rules.

China and Taiwan were accepted as new WTO members. China’s leaders seem to be emulating repressive, paved-over Singapore—without labor or envi-ronmental standards, Chinese businesses have free reign in raping its environment and converting its natural resources into plastic toys for export. The main bene-ficiaries of China’s membership in the WTO will be state-owned enterprises and large foreign companies. Lori Wallach, director of Public Citizen’s Global Trade Watch, warned, “For people in China, this will cause lost jobs and ruined livelihoods. And in the United States and in other countries around the world, big multinational companies will be using China; this is especially bad for the middle-income countries like Mexico, because all the companies that have relocated to those places are more likely to move to China now.” Protection for human rights in China will become far more difficult. The US has agreed to stop the annual review procedure wherein Congress considers whether to end “normal trade relations” with China because of its record on human rights.

The ministers of developing countries oppose western labor standards as protectionist and the US did not push for labor standards. The weak International Labor Organization, rather than the WTO, will be responsible for getting labor issues into the globalization debate. The status quo remains—no sanctions allowed for child, prison or sweatshop labor.

The House of Representatives passed a resolution urging the US negotiators not to adopt policies that would hurt national defense, but US trade representative Robert Zoellick and his boss answer to a higher authority—Wall Street—and Wall Street wanted a new round (which will keep the stock market up). To get the new round, the US now must reopen talks on its anti-dumping policies, which means more foreign steel and a weakened US steel industry.

The EU and Japan agreed to phase out subsidies for their farmers. Their rural economies, their agricultural country sides and their sense of their own pasts will weaken and disappear. People are not starving in those countries now, so why is it essential to provide lower priced food by importing it? Answer: it was the price of a new round of talks. The beneficiaries of lower subsidies will be developing countries, and large exporters in countries like the US, Canada and New Zealand, such as Cargill and Tyson Foods.

According to the Coalition of Civil Society Groups: “Most of the positive proposals from civil society have not been considered. These include protection of the rights to development, promotion of local economies, food security, social, cultural and labor rights, and protection of the environment. These proposals recognize that the competence of the WTO must be limited to trade, and that conflicts between trade and other international agreements must be resolved outside the WTO system. Reform of the global system must also include regulation of the main actors in the global economy, the multinational corporations.”

From a political point of view, the WTO is run by a gang of lobbyists and free-trade fundamentalists who work for the global elites. From an economic point of view, it’s an organization set up to facilitate trade within the framework of race-to-the-bottom, linear-future, chew-up-the-planet economics. When free-trade globalization has to be justified by economic theory instead of actual outcome, the inapplicable principles of “comparative advantage” and Adam Smith’s invisible hand are invoked to justify its “rationality.”

Activists have four choices: We can ignore the WTO and focus on local activities. We can demand the abolition of all international governance. We can try to reform the WTO. Or we can try to change the economic theory in the halls of power. Greenpeace and Public Citizen, for example, favor reform, or shrinking and partial replacement with other international bodies. That political approach is essential, but inadequate. The EU’s inability to get any other country interested in the precautionary principle shows that national agendas at the WTO are nearly always driven by maximizing self-interest within the economic rules that exist.
  
Protesters should advocate institutional change, but also an economic theory that recognizes the environment as a limited and valuable resource, and that economics must become the basis for the reconstruction of world governance and trade. Otherwise the race to the bottom will continue.

Danila Oder is a writer and activist in Los Angeles; Debi Weiss is a writer in southern Oregon.

SENTIENT TIMES
PO Box 1330 Ashland, OR 97520
PHONE (541) 512-1084 • FAX (541) 512-1085
dmokma@jeffnet.org