After the Failure of the World Trade Conference

By Karl Mueller

[This article originally published in: Die Zeit, September 22, 2003 is translated from the German on the World Wide Web, http://www.zeit-fragen.ch/ARCHIV/ZF_109a/TO1.HTM.]

There are different reactions to the failure of the World Trade conference in Mexican Cancun. Governments of the European Union regret this failure because it opposes their efforts in the area of the world economy to resolve worldwide multilateral agreements within the UN framework. Along with the International Monetary Fund (IMF) and the World Bank, the EU views the World Trade Organization (WTO) as an instrument of a UN regiment. In Mexico, demonstrating WTO critics celebrate the failure as a success in their struggle against the WTO, which they see as nothing, but an instrument of capitalist globalization, of the hegemony of the rich industrial states and the deepening gulf between poor and rich. Governments of developing- and threshold countries seem proud of not yielding to the demands from the US and the EU. Lastly, the government of the US reacts ambivalently. On one hand, it would like to prevail with its plans for more open markets in developing- and threshold countries along with more freedoms in foreign investments. On the other hand, the breakdown of negotiations suits their rejection of multilateral institutions. The American government can now enforce its worldwide economic interests in bilateral negotiations.

Controversial Points

The failure of the conference was clear before the conference began. The following points were controversial:

· The demands from the US and the EU for an agreement protecting investments from the rich industrial lands in all states of the world in the sense of unhindered freedom of capital and the preeminence of international capital forces are a kind of reissue of the MAI (Multilateral Agreement on Investments) that failed in 1998. Many developing countries protested this during the preceding WTO-conference in Doha (Katar) in 2001.

· The sub-agreement GATS (General Agreement on Trade and Services) should regulate the privatization of services like education, the health system and the water supply.

· The sub-agreement TRIPS (Trade Related Intellectual Property Rights) involves property rights, patents on inventions and living organisms. Despite promised concessions of industrial states, developing countries still complain that they are hindered in producing vital medicines against epidemics or seed important for survival because the rights are with the industrial countries and the prices are too high.

Skepticism toward the WTO

In addition there is a growing skepticism toward the past structure of the WTO and the procedures and results of previous world trade conferences. With the founding of the WTO in 1994, all 148-member countries were promised that there would “only be winners”. This has not proven true. The prosperity disparity between rich and poor countries has become greater. The gulf between poor and rich also becomes ever larger within the countries. Some say the problem is that free trade is not yet realized worldwide. Others say free trade with countries with different development is nothing but the growing predominance of the economically stronger. Arguments and evidence exist for both assertions. Both approaches are half-truths when they become rigorous principles. The whole is obscured, the public interest orientation of the economic life in a concrete historical-political environment. For example, a high degree of regional self-sufficiency in agriculture and elsewhere has a great importance even if this, viewed in a short-term superficial way, is connected with higher prices.

World Economy in Disorder

Critics found their skepticism toward the WTO processes confirmed in the negotiations in Cancun. Whether a “completely disastrous negotiating leadership of the EU and the US” caused the breakdown of the conference or whether “the two most powerful trading blocks impressed everyone with a mixture of breath-taking arrogance, imperial power plays and pitiable stupidity” as WTO critics claim may be left undecided. A glance at the press releases of the WTO on the five days of negotiations showed that essential decisions were made in double quick time…Nothing more than a minor role was planned for most participants.

The world economy is in disorder. The failure of the conference of Cancun did not change this disorder. Hopefully this failure will be a signal for the governments and states of the world to relate differently with one another. Remembering that listening, seeing and taking seriously others as equals and emphasizing the well being of all people in all steps forward would be a great advance.