A CATASTROPHE in the making for the poor. That’s the reality of the latest World Trade Organisation (WTO) agreement.
The disastrous deal was announced last weekend after an intense round of negotiations in Geneva, Switzerland.
But the mainstream press presented the Geneva agreement as a triumph for the poorer nations of the world.
New Labour’s trade secretary, Patricia Hewitt, described the WTO deal as a “crucial step on the road to delivering a trade round that will benefit all of us, especially developing countries”.
In truth, the deal will open more avenues to the multinationals so that they can rampage through public services.
It will intensify the pressures towards privatisation, and could further break open the lucrative health and education markets to companies whose only concern is profit.
The US and European Union (EU) claim to have made big concessions over the subsidies they pay to their own big farmers to compete against poorer ones in the Third World.
But, writing in the bosses’ paper the Financial Times, Arvind Panagariya says:
“The biggest beneficiaries of the rich country cuts in farm subsidies will be the rich countries themselves.”
Export subsidies to agribusiness in the West will not be abolished but merely relabelled, according to Aileen Kwa, an analyst at Focus on the Global South who has been monitoring the WTO since the trade body’s inception in 1995.
“It’s very clear they’re legalising the status quo,” she says.
“The same people will get the same amount of money, and there are a lot of loopholes in the agreement.”
Mark Curtis of the World Development Movement says that the US and EU have not set any dates for the withdrawal of export subsidies.
“There’s no timetable, and there’s plenty of time for them to go back on these commitments,” he says. In any case, Curtis stresses, export subsidies are only one part of a much larger picture:
“Developing nations have promised to open up their economies to manufactured goods and services. There’s a whole raft of other issues that haven’t been discussed.”
One such issue is “industry protection”, he says. This would allow poorer nations to use tariffs to protect their developing industries from being undercut by firms in richer countries.
But developing nations have not managed to gain any significant concessions on this issue.
Instead they are being forced to sign up to the “liberal paradigm” of free markets and open up their industries to global competition.
The WTO is obsessed with “liberalisation” that works in their favour at the expense of poorer countries, he says. But it’s precisely this dogma that “has to be reversed” if those nations are to develop their economies.
The text adopted at the Geneva meeting was almost identical to the text rejected at last year’s WTO gathering in Cancun. On the critical issue of US cotton subsidies, for instance, the only change was a few lines offering a vague promise on future negotiations.
So why weren’t the Geneva talks derailed in the same way as the Cancun meeting?
Kwa blames commercial pressures on larger developing nations such as Brazil and India.
“Brazil played a critical role in Cancun,” she notes, acting as the leader of a bloc of developing nations. “But they were not prepared to put themselves forward in the same way this time.”
Kwa suspects this change of heart is due to “internal conflicts” in the Brazilian economy, which pit small farmers against huge agricultural companies.
“There are strong agribusiness interests in Brazil,” she notes.
“Those interests are very keen to have some market access.”
Secretive club that serves elites
THE WTO comprises 147 members. In theory each of these has an equal voice in setting the rules that govern international trade.
But in practice a handful of rich countries set the agenda, bullying and bribing developing nations into signing up to their trade rules.
This arm-twisting is aided by the secrecy that surrounds its dealings, says Aileen Kwa. The agriculture negotiations weren’t even open to all the affected parties, let alone press scrutiny.
“For the first half of the week, the main negotiations were held only among five members— the US, EU, Australia, Brazil and India.”
Mark Curtis adds that the richer countries link WTO negotiations to issues such as international aid: “The aid programmes all push in the same direction—they’re only going to grant aid if you liberalise.”
The pressure on developing countries to comply with US and EU wishes has intensified since the collapse of last year’s round of WTO negotiations in Cancun, Mexico.
As thousands of demonstrators protested against the talks, negotiating teams from developing nations formed a bloc and threw out US and EU proposals.