The time for change at the WTO is NOW!

Although Seattle was supposed to be a ‘wake-up’ call, there is little evidence that the developed nations have got the message that the protestors wished to convey. Correction to the WTO’s inequities should be done now, said the SUNS Chief Editor at the TWN seminar.

Someshwar Singh

THE Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), Rubens Ricupero, has urged developing countries to use the current ‘period of waiting’ to prepare for new challenges in multilateral negotiations at the World Trade Organisation (WTO).

Inaugurating the seminar on ‘Current Developments in the WTO: Perspective of Developing Countries,’ on 14 September, Ricupero said the uncertainty surrounding a new round of multilateral trade negotiations in the WTO had been compounded by other unforeseen circumstances such as the rise in oil prices, and possible volatility in interest rates and stock exchanges.

‘We are in a moment of waiting,’ said Ricupero. ‘Waiting is not a bad thing for developing countries - understandably, to prepare themselves for when the moment of negotiations comes. This may prove useful. The main challenge is to make the best possible use of the time.’

But Ricupero also cautioned developing countries to not just focus on preparations for a possible new round, but also look carefully at bilateral and regional agreements as these may already be bringing in controversial issues such as the introduction of labour standards and their linkage to trade.

‘There is a clear development in relation to some of the issues,’ Ricupero said. ‘Important decisions are already entering the books at the bilateral and regional levels and changing the perspective.’ He cited the recent agreements between the European Union and the African, Caribbean and Pacific (ACP) countries, the Africa Act recently approved by the US Congress and bilateral agreements involving countries such as China and Cambodia.

‘If you get something on a bilateral basis, why bother about a multilateral round?’ the UNCTAD chief pointed out.

Moreover, significant changes in trade rules have occurred without there having been recourse to a new round, Ricupero said, citing rules in the telecommunications and financial services sectors.

Talking about developments in the WTO, Ricupero observed, ‘Nowadays, it is frequently more important to use the dispute settlement procedure to gain market access than to rely on the rules and procedures.’

Paradoxes and confrontations

In his opening address, Chakravarthi Raghavan, Chief Editor of the South-North Development Monitor (SUNS), pointed out some of the glaring paradoxes and inconsistencies that characterise the international political economy today.

‘Meeting in this second half of  year 2000, the sixth year of the WTO, we cannot but be struck, and, what is more, be confused and concerned too, at the many paradoxes and confrontations in our world. These are difficult enough to comprehend, but are made more so by some deliberate obfuscations too,’ Raghavan said.

‘The first and foremost is this whole business of globalisation,’ he said. ‘Since about the mid-1990s, we have had a great deal of sense and nonsense that have been thrown about over globalisation and its inevitability, irreversibility, etc. More recently, we have been told that resisting it is like defying gravity.

‘In 1994-95, as UNCTAD began preparations for UNCTAD IX, ours was perhaps a minority, if not a lone, voice challenging the myths surrounding this term. We made our views known at informal consultations, and later at a formal meeting of the Trade and Development Board. Ours is no longer a lone voice, but one that has gathered much strength and support in the world outside. We challenged the view that globalisation is something inevitable and has to be accepted and cannot be changed by governments.

‘At UNCTAD X, at least in terms of analysis of the nature of globalisation, the Director-General of the ILO [International Labour Organisation] in a sense voiced a similar view; and perhaps even more to the point, the Secretary-General of UNCTAD addressed some of these issues in his closing address.’

There can be little doubt that globalisation is benefiting a few at the top, and marginalising and hurting the vast majority of the population of the world - in both the rich and the poor countries, Raghavan asserted. ‘No amount of econometric modelling and jugglery of data, or neoliberal economists quoting each other, can get around these facts that are visible to people in the real world out there.’

He urged heads of international organisations to get more competent political economists. ‘When they try to trivialise the major confrontation in today’s world through such allegories - forces of gravity or high-speed trains, etc. - the credibility of their words and the prestige attached to their offices are lost. Holding hands with big business or being cheered by big corporate heads will not restore credibility to the international system.’

He reminded the seminar participants of a lecture in Dublin last year by Henry Kissinger, who said that globalisation was just another term for US hegemony and attempts to force a particular model of economic and social organisation on the rest of the world. ‘And it will result in creating the same social disorders and breakdown of the systems that came as the result of the 19th-century efforts at globalisation under British hegemony or imperialism.’

Globalisation, and economic globalisation at that, is neither natural nor inevitable, Raghavan said. ‘It is a product or outcome of fiscal laws (favouring corporations and their profit maximisation as against the ordinary consumer), trade laws and regimes, rules of origin, and other trade policy and monetary and financial policy instruments. These can be and will be reversed.’

Elaborating, he said there is growing poverty and marginalisation, and ever-increasing uncertainty and insecurity for the overwhelming majority of the world population, coexisting with the abundant wealth and affluence of a small minority. The contrast between the very small minority at the top and the bottom and the middle is so sharp that it is difficult to accept that it can be sustained for long.

Though Seattle was supposedly a ‘wake-up’ call, Raghavan said there was little sign anyone has received any wake-up call. ‘Soon after Seattle, civil society and unruly street protestors were blamed for the failure. Now the focus has been slightly shifted, in the effort to find a blameworthy target. Whatever the effect and impact of confidence-building measures inside the WTO, it has not evoked any confidence outside.’

‘A simple, glaring fact is that few in the developing world were really aware of the full implications of the Uruguay Round and its outcome - the WTO and its multilateral trade agreements. The UR and its child, the WTO, entered the developing world like a thief in the night. But unlike thieves who merely rob and run away, the WTO and its machinery is now functioning in developing countries like an imperial occupying power.

‘As trade officials, diplomats and negotiators, and neoliberal academics and economists talk about the pros and cons of an inclusive or comprehensive or a maxi new round or a mini new round, one thing is very clear: it will no longer be possible for any government, in the developed or developing [countries], or any trade establishment, to repeat the history of the UR and force upon countries a whole new bundle of agreements and accords under the guise of a single undertaking.’

A remarkable thing, Raghavan said, that struck observers at Seattle was not the frenzy of the street protestors and whether they were right or wrong in blaming everything on the WTO, but the fact that the NGOs which came to Seattle seemed better prepared and more knowledgeable than many, if not most, international organisations and their secretariats or the government ministers and officials about trade theories, the UR agreements and their impacts on countries.

The world was also posing other contradictions and contrasts that point to the fragility and vulnerability of the current order, Raghavan added. ‘[W]hether it is being presented as ‘implementation’ problems or as issues needing ‘renegotiations’, the fact is that civil society, more so in the South, sees the WTO and its outcome as extremely imbalanced and iniquitous, and enforced by a dispute settlement mechanism and system that is functioning against all canons of rule of law and judicial processes, but which is increasing the obligations of developing countries for the benefit of corporations.

Demand for immediate change

‘As far as civil society is concerned, this is the first order of business, post-Seattle. The WTO and its machinery has been given a small window of opportunity, in the wake of the failure of Seattle, to redress these imbalances and inequities and make the trading system serve the people everywhere, and not the interests of the hundred and odd giant corporations. This correction has to be achieved NOW,  not at some future point. Whether it is achieved by change of rules, agreed interpretation or any other techniques is for negotiators and governments [to decide]. But the public and civil society want the changes now. If they don’t come about, the system will collapse - losing all legitimacy and public support. A recently launched civil society initiative  that  is  gathering  strength  has called for the WTO to either shrink or sink.’

Contrary to much received wisdom of the neoliberal economists, trade and growth are necessary but not sufficient conditions for development and eradication of poverty, Raghavan said. ‘Nor can these be left to private charity. There is no empirical evidence, and certainly no cause-and-effect relationship that has been established, about free trade, free markets and growth and trickle-down of benefits or of convergence within and across societies. If anything, there is some evidence, at least in Europe (as also in the US if data are carefully read), that post-war convergence took place in times when the state played an active role.

‘The efficiency of markets and their allocation has to be balanced with interests of equity and social justice and distribution of gains - and all these require an active state role and involvement.

‘Developing countries not only need more space and understanding, but must have the choice and space to experiment and be able to reverse policies in the economic arena. They can’t be held prisoners of rules and rulings of the trading system whose main objective appears to be favouring the major world corporations.’

If the global system will not accept or accommodate the overwhelming majority of the world’s population, the system will be brought down, Raghavan observed. ‘There should be no illusions about it.’

Welcoming participants to the third such seminar organised by the Third World Network since 1996, Martin Khor, Director of TWN, recounted some of the features that have led to a general disillusionment today compared to when the WTO was created six years ago.

While there are changing views now on the nature and effects of globalisation on the South, Khor said the perception of an imbalance in the WTO - overall and within particular areas - is growing. ‘There is a continuing lack of transparency in the WTO and participation by developing-country Members is lacking - as shown before and during Seattle.’

Khor said there was a genuine apprehension on the part of developing countries over continuing pressures from the North to introduce new issues in the WTO to further open up developing-country markets. Linking trade with labour standards and the environment were just new protective devices being employed by the North, he added.