The first global trade deal in 20 years has been a source of great celebration. The story goes that it’s a modest start but it’s got the World Trade Organization (WTO) back on track, maybe even adding US$1 trillion to the ailing global economy.
The agreement to ease barriers to trade took place in Bali after years of bitter disputes where Majority World countries have attempted to protect their agricultural and industrial sectors while allowing them to access markets in the rich world.
We are told that the so-called Bali package reflects the new world – symbolized by India’s hard-nosed negotiating to shape the deal. And, as always, the victors are the poorest people in the world.
But this story is deeply flawed. Certainly the scale of the ambition in Bali was much smaller than the establishment of all-out pro-corporate global government which the body tried to embrace 15 years ago. But the Bali WTO was characterized by hypocrisy, blackmail and power politics – just as it ever was.
First the hypocrisy. The centrepiece of the summit was the battle between the US and India. India’s widely supported position was that it be allowed to buy and distribute food to the poor, outside of free-market mechanisms. The US and EU blocked it, despite their own subsidy programmes. US subsidies are enormous and do effect international trade, unlike India’s.
What’s more, on two other packages, including trade in cotton, rich countries blocked free-trade solutions that would have been beneficial for developing countries. Such hypocrisy is actually built into trade rules, where rich countries have negotiated to be allowed to keep high levels of subsidies simply by stating they don’t distort trade, and by having had higher subsidies to begin with.
At the WTO, free trade is good for the poor, but the rich live by a different set of principles.
Bribery and blackmail have always been a part of WTO negotiations. This time, rich countries held out the promise of a special package of measures to support Least Developed Countries. The package itself is extremely modest, benefiting these countries little in practice. But it was better than nothing. Disgracefully, its passage was used as a bargaining chip to get low-income countries onside.
What’s more, huge effort by the US and EU was put into making it appear that India stood alone – a belligerent country being totally unreasonable. Actually, India was supported by a wide range of developing countries, which saw this as an issue of sovereignty.
So again, at base what you see at the WTO is power politics. The real prize for the EU and US was the ‘trade facilitation’ package – essentially reducing customs procedures. Again and again, this was sold as helping Africa, though African delegates didn’t seem to be pushing it too hard. Little wonder, as they, not the rich countries, will have to bear the work and cost.
Indeed, in the Bali package as a whole, it is developing countries that bear all the responsibilities. The rich can simply pick off the benefits.
It’s not surprising, in an international forum representing most countries in the world, that politics between the powerful and powerless will be expressed. But the problem with the WTO is that the politics take place in an organization hard-wired to promote the interests of rich countries and big corporations. How absurd it is, as Indian delegation leader Anand Sharma told a press conference ‘that we can be condemned, by those who have signed the Millennium Development Goal to end world hunger, for speaking up for the poorest people on the planet?’
Ultimately, Bali follows the same pro-corporate logic as earlier negotiations. If you take the WTO together with the far-reaching trade deals on the agenda next year – the EU-US trade deal, the Transatlantic Trade and Investment Partnership (TTIP) and a new Trade in Services Agreement – we are looking at the biggest shift in power from people to corporations in 20 years. The WTO provides the global model in which these very far-reaching deals will sit.
Don’t be taken in by the hype. It’s the same old WTO, and it needs to be opposed.
Nick Dearden is director of the World Development Movement.