Thursday, July 31, 2008

The WTO: trading in the rights of the poor



Comment from Alex Callinicos

Gordon Brown often seeks refuge from a disastrous domestic scene by banging on about the Doha round of international talks on trade liberalisation.

At the G8 summit last month, he issued a statement with President Lula of Brazil warning that, if the talks remained deadlocked, “we will be failing the world’s poor and destroying the best basis for continued economic growth in the future”.

Assuming you ever knew what the Doha round is, you would be forgiven for having forgotten all about it. The World Trade Organisation (WTO) met at the Doha Sheraton Hotel and Resort in the Gulf state of Qatar in November 2001.

The meeting was a response to two disasters our rulers had suffered – the collapse of the WTO summit in Seattle amid mass protests two years earlier and the attacks on New York and Washington on 11 September 2001. It rallied together the world’s ruling classes to reaffirm that free market capitalism is the way forward for humankind.

The WTO launched a new “Development Round” of negotiations designed to remove restrictions on international trade. As the name suggests, the talks were supposedly to help the poor countries, whose rebellion at their exclusion from the real talks at Seattle had helped to scupper the meeting there.

In reality, the two biggest trade blocs in the world – the US and the European Union (EU) – have been offering limited reductions in the subsidies and tariffs they provide their farmers in exchange for the countries of the Global South opening their markets to the goods and services of the North.

Powerful

But the whole process ran aground when the WTO met in Cancun, Mexico, in September 2003. Amid protests marked by the suicide of a South Korean peasant leader, the G20, a bloc of relatively powerful Third World states headed by China, India, Brazil, and South Africa blocked the drive of the US and the EU to ram through a deal.

Efforts have been made recently to revive the Doha round, leading to a meeting convened in Geneva last week to which only a minority of the WTO’s 153 member states were invited. An even narrower group dominates the talks – the US, EU, Japan, Australia, Brazil, China and India.

All are major powers in global trade, providing platforms for businesses exporting industrial and agricultural goods as well as services. Anyone who thinks that the bargaining in Geneva will reflect the interests of the world’s poor, rather than of these businesses, needs their head examined.

The North’s campaign to liberalise trade in services is particularly dangerous. As Walden Bello of Focus on the Global South points out, “while financial services are just one of many services... the US and EU have made a liberalised financial sector their main demand on developing countries.

It has been revealed, for instance, that the EU has demanded that some developing countries eliminate regulations that cover the activities of hedge funds.”

This is really the most barefaced cheek. As Bello notes, the International Monetary Fund and the US treasury in the early 1990s forced Asian states to abandon the controls they had previously maintained on the movement of capital in and out of their economies.

The result was a flood of speculative capital into the main Asian countries in 1993-7. When the boom finally collapsed Bello notes, “the $100 billion that fled the region in a few short weeks in the summer of 1997 brought economic growth to a screeching halt from Korea all the way down to Indonesia”.

Now the same machine of financial speculation has broken down in the very heart of global capitalism in the US itself. But this hasn’t stopped the US and the EU demanding that the countries of the Global South dismantle their remaining defences against this machine.

As an excellent statement by social movements based mainly in Asia and other parts of the Global South says, “Doha is the problem, not the solution. Further trade liberalisation and forcing open of markets in the developing countries will leave them even more vulnerable to not only the food price crisis but also the financial crisis... Globalise hope, globalise the struggle!”

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