New Internationalist

A world turned upside down

Issue 334

David Ransom talks to seasoned observers about what to do with the WTO – and how to set the world the right way up again.

If the wto really is such a bad deal then why, you may well ask, do so many countries feel they have no choice but to belong?

I ask Murray Gibbs. Another North American, he speaks for the UN Conference on Trade and Development (UNCTAD). He says his boss, Secretary-General Rubens Ricupero, has been off in the Yemen telling Arab states that anyone who stays out of the WTO will be left on the sidelines and no-one will listen to them. The evidence suggests that no-one will listen to them once they get in, either. The incentives seem entirely negative.

But, over the years, I guess Murray Gibbs must have pretty much seen it all – and it shows in an alert expression that has escaped the stony glaze of the typical trade negotiator. His office overlooks the WTO building from the Palais des Nations of the UN. I very much doubt whether I’d be able to engage in the freewheeling conversation I have with Murray Gibbs down the hill at the WTO. I tell him so.

'There is a feeling that their interests should not be subordinated to some overall idealogy'

‘Don’t be silly!’ he scolds. ‘Of course you couldn’t! They have to toe the line. It’s not because they’re cowards or anything. It’s because every time they say something out of line somebody slaps them on the wrist for it. For some of them, of course, after years and years, it becomes a natural reaction. There have been many cases, particularly under the last Director General, where he was told by major countries that he’d better keep his people in line, you know. He was having people coming out with opinions that the United States in particular told him they didn’t like at all.’

Then he makes what sounds to me rather like an admission. ‘I think nobody had any idea where the Uruguay Round was headed, you know. There wasn’t some great conspiracy. There were just all kinds of pressures. I mean, everybody has to look after themselves… The pharmaceutical companies, American Express, they know what’s going on. No-one has to tell them. They tell governments what’s going on! So they can protect their interests, and they take the initiative. It’s just normal.’

So how about putting the WTO out of its misery?

‘Come on!’ he says. ‘That’s not really constructive… That’s just ostrich mentality!’

He’s exasperated. He has devoted a great deal of energy to a ‘Positive Agenda’; 200-plus proposals that, with the help of UNCTAD, were put on the WTO’s table by developing countries before Seattle – and are still there gathering dust now.

‘These countries are starting to get their act together,’ he says. ‘They’re starting to realize. They’re making proposals. They’re not going to give up so easily.’

I ask Murray Gibbs what he thinks of the ‘Shrink It or Sink It’ agenda.

‘I don’t think they’re going to sink it,’ he says.

A surfeit of realism or a failure of the imagination?

‘But what would be the alternative?’ he asks. ‘Some kind of chaos and anarchy?’

Maybe something a good deal better, I suggest. Perhaps, I add – only partly in jest – UNCTAD should take over from the WTO?

‘We don’t want it!’ he exclaims with alarm.

A young woman, Ms Shirotori, has joined us hotfoot from the negotiations on the Agreement on Agriculture. They are reaching a critical stage. There is, she says, very little left for smaller countries to negotiate with. ‘They already liberalized most of their rules and protection in the agricultural sector because of structural adjustment. Since they didn’t have the money or the possibility of domestic support, there was nothing left for them to claim they wanted to retain. They should have the right to raise tariffs, like developed countries already have.’

Ms Shirotori has other worries. ‘We informally deal with a lot of delegates from developing countries,’ she says. ‘Especially African countries. There are 2,000 trade-related meetings every year – and only two people to attend them from these African countries!’

‘If there is one thing that is really reprehensible,’ intervenes Murray Gibbs, ‘it’s the attitude taken by some that you can’t reopen agreements. The whole GATT process since 1947 has been a continual process of renegotiation…

‘I don’t know whether I should say this or not, but… There is a feeling in many countries that their interests should not be subordinated to some overall ideology… The worst situation is in the countries that are acceding to the WTO. We see very extraordinary things, really disturbing. Some countries are asked to make many more commitments than existing members are. They’re being pushed to liberalize to the maximum.’

He cites the example of Vanuatu, which was negotiating to join the WTO but kept being pushed to make more concessions – particularly on subsidized agriculture and import controls – until it finally suspended negotiations. ‘There’s no point in talking about “transition” for small-island economies,’ says Murray Gibbs. ‘They are different. They’re always going to be small-island economies.’

This doesn’t sound to me very much like what Rubens Ricupero told Arab countries in the Yemen. Nonetheless, I feel I’ve got a little closer to the truth with Murray Gibbs. For all its faults the UN still employs people who evidently feel free to speak their minds.

Martin Khor, on the other hand, has been ‘speaking truth to power’ all his life. As Director of the Third World Network in Penang, Malaysia, he has become one of the key architects of a distinctively Southern viewpoint on global issues. I get to talk to him as he passes through London. He has the relaxed manner of someone at ease with himself – rather than with prevailing orthodoxy.

‘The WTO today is less than a multilateral trading system and it is also more than a multilateral trading system – and that is its problem,’ he says.

‘It is less than a multilateral trading system because there are many big chunks of international trade that don’t come under the WTO. For example, commodity prices. To a normal developing country that is often the number-one trade issue. And you know what has happened. Commodity prices have collapsed. The rich countries have grown rich at the expense of the poor…

‘On the other hand, the WTO is more than a multilateral trading system. It has accumulated issues that are non-trade and not in its mandate. An example – the prime example – is TRIPs. This is not a liberalization device, it’s a protectionist device…

‘Why is this happening? One reason is that the WTO has an enforcement mechanism. That’s why they have chosen it as the vehicle. In fact, I heard this from a European Commission official: “The WTO is now our vehicle of choice for global economic governance.” They want to extend the principles that originally applied to cross-border trade in goods to services, then to intellectual property, then to competition policy, then to everything.

‘The founding Charter of the International Trade Organization had broader basic principles. But then they ditched the commodity agreements. They ditched the technology-transfer code. They ditched the code on restrictive business practice. They ditched the code of conduct for transnational corporations and the UN Centre on Transnational Corporations. The Uruguay Round was the Empire striking back against all these attempts to regulate.’

Looking at this bleak history it’s hard not to concede what the liberalizers expect us to believe – that the tide of history flows in their direction. But tides, remember, always reverse their flow.

‘We at Third World Network turn the whole thing upside down,’ continues Martin Khor. ‘Instead of “trade-distorting” we say “development-distorting”… We want to examine all the existing agreements under a new principle called “Development and Equity”. That should be the operational principle of the WTO – sustainable development. Actually, if you look at its constitution, its objective is “sustainable development” – not trade liberalization, which is only a means.’

So here we are again – in a world turned upside down, not by the likes of Martin Khor, but by the ‘neoliberal project’ in which the WTO has become a key player. In such a world, what appears at first glance to be floating may in reality be sinking – and dragging the rest of us down with it.

‘I think Seattle was a real watershed,’ says Martin Khor. ‘It raised the awareness of the world. Before that, people didn’t even know what the WTO was – maybe they thought it was the World Tourism Organization or something. And developing countries began to stand up for themselves. As the chairman of the G77 group of developing countries, Clement Rohee, described it at Seattle: “We want to review, repair and reform the WTO.”

‘Now, more than a year after those talks, the situation has got even worse. There is still no progress on the reform agenda… A lot of what has to be done is in the North, by groups like the World Development Movement (WDM) talking to their governments and expressing their outrage. In the developing world our whole future is at stake.’

Barry Coates, Director of WDM, adds this: ‘The WTO is increasingly intruding into people’s lives, no matter who they are or where they live. There should be a set of strong rules to protect the interests of the weak against exploitation by the powerful. These rules should encourage democracies at all levels to prioritize their social aims above the interests of transnational companies. If the WTO cannot be reformed so that it agrees new rules and administers some of them as part of an overall framework, we need a new organization that can.’

The problem is not the absence of alternatives. First, there has to be an assessment of the human-development and environmental impact of the WTO. Informed by this, its members will be better placed to reach democratic decisions and make international trade serve humanity rather than vice versa. Meanwhile, the WTO must shrink, divest itself of ‘trade related’ issues like services, patents and investment, open itself up to democratic control and close itself off from corporate manipulation. Then, perhaps, there may be scope for a renewed ‘development’ round of trade negotiations. Otherwise the WTO is going to sink in any event. It now faces, for the first time in its brief history, the real prospect of a ‘downturn’ in the US economy and the world recession that would then be imposed on the rest of us.

No, the real problem is the narrowness of orthodoxy; the breadth and brute force of the WTO’s imperial ambition. Despite its claim to democratic credentials, in practice the WTO functions like the corporations it apes. So in November it makes off to Qatar for another ‘full board’ meeting – the first since Seattle – another off-shore power-laundering exercise of the kind so beloved of corporate strategists. There will be, it now seems certain, nothing whatever to show for all its protestations of reform.

Environmental collapse and deepening inequity are a visible, tangible, audible calamity everywhere on earth. The liberalization of world trade is the most active agent in this calamity. No amount of camouflage can conceal its responsibility. An undemocratic WTO is blinkered against its own responsibility and lacks the ability to make the radical changes so urgently required. Shrink or sink – it will have to be one or the other. You can have free trade, or you can have freedom. You can’t have both.

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