STILLBIRTH OF THE WTO

World trade round collapsed in Geneva

By Harald Neuber

[This article published in the German-English cyber journal Telepolis, 8/5/2008 is translated from the German on the World Wide Web, http://www.heise.de/tp/r4/artikel/28/28471/1.html.]




Another round will be ventured only a few days later after the surprising breakdown of the world trade talks at the end of June in Geneva. UN Secretary General Ban Ki Moon voiced his hope for a speedy resumption of the talks aiming at further liberalization of world trade. “Success is not very important now because the world faces great development problems,” Ban said in his declaration. However experts are skeptical about a successful recommencement of the talks. The disparities between industrialized states and development countries are too deep.

After nine days negotiations broke down on July 29 in a dispute between the US and India. New Delhi’s representatives insisted on mechanisms to protect developing- and threshold countries from cheap food imports from the North. Washington’s emissaries wanted a total opening of the markets. Each side blamed the other for the collapse of the talks.

The 2001 world trade talks began in Doha, the capitol of the Qatar emirate. Since then, the industrial-, threshold- and developing states have argued over the balance between a total opening of the markets and the necessary protection of the weak agricultural sectors in the South. On this background, the history of the Doha-negotiations is a history of failure. In September 2003, the ministerial round in the Mexican coastal city Cancun ended without result. This round was accompanied by loud protests of anti-globalization groups. The final negotiations were to take place at that time. That the world trade talks now break down with a delay of seven years is only consistent. The plan of resumption is just as dubious.

CRITICAL VOICES FROM THE SOUTH

After seven years, the negotiations dissolved according to the chairperson of the World Trade Organization (WTO), Pascal Lamy. “The meeting collapsed,” the Frenchman said. With this admission, he apportioned a wave of blame. According to the French news agency AFP, the head of the US trade division Tom Donahue spoke of “bad news for the poor.” It is “ironic” that the blow against the Doha-round came from the two most-favored by world trade India and China. On the other hand, Indonesia’s trade minister Mari Elka Pangestu said the developing states were ready for compromise. “We are deeply disappointed,” Pangestu said on behalf of the G33 group of developing countries. The states that could have gone a step further did not take that step. The industrial nations were to blame for the breakdown.

The negotiating round in Geneva in which only 35 of the 153 WTO members participated was accompanied from the start with passionate protests. A few days before the first meeting, Bolivian president Evo Morales published a public letter. The negotiations in the WTO changed into a “battle of the developed countries for their mammoth corporations over the market-opening of developing countries,” Morales wrote.

“In the negotiations, liberalizing more and more service sectors was urged. Essential areas like education, health care, water- and energy-supply and telecommunications should be definitively excluded from the General Agreement of the WTO on services. Access to these areas is a human right that cannot be an object of trade- and liberalization rules aiming at `privatization.’”

Bolivian president Evo Morales on the collapse of the Doha round

The Bolivian head of state spoke critically about the conflict over intellectual property in the WTO. In the conflict over patents, “transnational corporations could force up…the prices of medicines and other important products.” The WTO “still believes dogmas of the past instead of doing justice to the world reality before our eyes in the food crisis, the energy crisis, climate change and destruction of cultural diversity.” That is Morales’ assessment.

The judgment of the Bolivian president found a positive resonance from non-governmental organizations. Given the negotiation possibilities, “no deal is better than a bad deal,” said Deborah James from the US center for economic- and political policy. Walden Bello from Focus on the Global South criticized world trade on principle because of the enormous emissions. Whoever champions protection of the atmosphere must also oppose further liberalization of global goods traffic, Bello emphasized in his essay “Derail Doha, Save the Climate.”

Ben Lilliston from the Institute for Agricultural- and Trade Policy based in Minnesota summarized the problem very concisely. The talks in Geneva broke down because most WTO member states, especially the poor countries that suffer most intensely under the food crisis, demanded back the possibility of guaranteeing food security. The US administration of George W. Bush and the exporting agricultural states within the WTO wanted more access to the markets of the South. At the end, this problem was not solved.

ALTERNATIVES TO THE WTO MODEL

A cautious optimism prevails among critics of neoliberal globalization. Activists from the Attac network in Germany welcomed the collapse of the Doha round. After seven years of tenacious negotiations, “a free trade policy only benefiting corporations from the North has no chance any more,” Alexis Passadakis from Attac Germany says.

The aggressive thrust of the US and the European Union in the consultations of the last years took its toll in Geneva. Opening new markets for the German automobile industry was the sole objective of German economics minister Michael Glos (CSU). “For him, social dislocations through liberalization in the South are merely collateral damage of the German export world championship,” Passadakis criticizes. A second Attac-expert, Roland Suss sees the apportioning of blame to countries of the South as “extremely hypocritical.” The negotiations actually broke down “because the rich industrial nations only made demands and ignored the most elementary needs of developing countries like minimal food security.” At the same time Suss cherishes the hope for new “possibilities for a political change.”

The truth behind the temporary collapse of the Doha round is also that new possibilities have long arisen in the South. Unlike the 1980s and 1990s, alternatives to trade structures have been created there. Especially in Latin America, the “backyard” of the US, countries have organized in regional unions: Mercosur, Andes’ pact, Caricom and the Bolivarian Alternative. Cooperation in the so-called Tricot – Africa, Asia and Latin America – is developing in giant steps. The long politically dominant industrial states – above all the US and the EU – must recognize this new reality if they want to be successful in any future trade discussions.