Is the multilateral trading system on a slippery slope?

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A photographer walks towards burning cars during a protest against the seventh WTO Ministerial Conference in the streets of Geneva,Nov. 28, 2009. Swiss police say demonstrators opposing a meeting of top world trade officials turned violent when protesters set fire to cars and broke shop windows during a march. Image credit: http://www.npr.orgThe Seventh World Trade Organisation (WTO) Ministerial Conference took place in Geneva on 30 November - 2 December 2009. The WTO Ministerial meetings have been slated for their failed negotiating rounds, the first being the collapse of the WTO talks in Seattle, followed by Cancun and the Hong Kong Ministerial meetings. … By Michelle Pressend, Trade Strategy Group, hosted by EJN.

 

 

In 2001 the Doha Declaration was meant to foster “development” in developing countries and address the adverse impact of trade liberalization and deregulation. The key issues negotiated in the Doha Round, the so-called “development agenda”, include agriculture, industrial tariffs services and the environment. However, these negotiations are proving to be anything but developmental for developing and least developed countries. The negotiations continue to be unbalanced, with developing countries still being offered a raw deal. 

Because of the current impasse in negotiations, the Seventh Ministerial will a “be stock-taking” by the WTO. It will not be a negotiating one and its outcome won’t be a binding declaration. The theme is “WTO the Multilateral Trading System and the Current Global Economic Environment”. Two sub-themes were identified, and they are: “Review of WTO activities, including the Doha Work Programme” and “WTO’s contribution to contribution to recovery, growth and development”. The general focus will be on how to improve the functioning of the WTO, including decision-making. 

The intention is to conclude the round by 2010; however, even the Director-General of the WTO, Pascal Lamy, doesn't seem very confident that this deadline will be met. He said that it would be difficult to meet the new 2010 deadline for a deal set by political leaders if the pace of negotiation does not speed up (Reuters article by Jonathan Lynn, 19 October 2009). 

The stalemate is largely over developed countries’ reluctance to make considerable reductions in their trade-distorting agricultural subsidies and unbalanced proposals for further reductions in industrial tariffs. 

What is alarming is the lack of recognition that the very rules and policies espoused by the WTO are at the core of the global economic and planetary ecological crisis, namely, to prioritise growth based on orthodox economics and unrealistic assumptions. The type of policies and rules promoted by the multilateral trading system support integration into the global economy based on neo-liberal policies that enforce global privatisation, deregulation, trade liberalization and the opening of financial markets and institutions with the aim of preventing regulated capital flows and generally promoting more market driven economies that continue to have a devastating impact on jobs, poor people’s quality of life and the planet’s resources.  

In agriculture the export-driven model has made many developing countries net importers of food because of poor productive capacity and inability to compete with susbisdised markets in the North. So the points of contestation in agriculture are the elimination and/or reduction of trade-distorting subsidies and substantial market access opportunities for developing countries’ agricultural goods. However, African countries, like many in the South, have huge peasant, family, subsistence and small-scale farming communities. In order to protect these farming communities against import surges and for them to maintain their livelihoods, it is vital that proposed mechanisms like the Special Product and Special Safeguard Mechanism must be enforced. But more importantly the current food crisis necessitates a paradigm shift in the production and consumption for food to local and regional development. The WTO policies and rules perpetuate the current export-led industrial agriculture production systems that are highly energy intensive dependent on fossil fuel-based fertilizers and chemicals for production and significantly contribute to climate change. 

On Non Agriculture Market Access (NAMA), the proposed formula to reduce industrial tariffs will severely curtail developing countries opportunities for industrial development and will have huge implications for jobs in manufacturing. A statement by the International Trade Unions Confederation (ITUC) on collapse of WTO talks in July 2008, stressed that considerable pressure was put on developing countries to accept the NAMA proposals, even though they stood to result in job losses and increased pressure on workers’ wages and working conditions, and to prevent new industrial jobs from being created. 

What is apparent in these negotiations is that developed countries want to have their cake and eat it. 

The Africa Trade Network (ATN) held a meeting in Cape Town, South Africa, from 1-3 October, 2009 and our demands strongly call for a moratorium on all negotiations under the Doha Round as it is necessary for all governments to assess the consistency of the proposals on the table with the policy measures necessitated by the global crises. 

The stalemate in the negotiations questions the legitimacy of the WTO to promote fair and balanced multilateral trade rules that will address the past and current inequities, which developing countries are faced with.

In the context of the global economic and planetary crisis, the question is: Will the WTO Ministerial seek the opportunity to question unbalanced trade rules or continue discussions within the current economic paradigm that essentially perpetuates underdevelopment in developing countries and foster policies and rules that are central to the crisis? 

Some excerpts have been taking from an original article I wrote for SACSIS, “Steamrolling the WTO Doha Negotiations” (www.sacsis.org.za).

 

 

 

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