HONG KONG: Anti-development outcome from WTO summit


Eva Cheng

The sixth ministerial summit of the World Trade Organisation on December 13-18 was only saved from the brink of yet another collapse after strong-arm tactics and divide-and-rule manoeuvring by the imperialist countries defeated the fragile coalitions of the highly diverse Third World countries.

Officially, the 149 member countries were to nut out differences on how much they protect or open up their markets in a mutual trade-off. The reasonable outcome for all members would then be enshrined as "modifications" to the existing global set of trade rules. However, the much greater economic and political clout of the rich countries means they have mostly prevailed in the so-called global trade negotiations since the second world war. The WTO took over the running of this global trade framework in 1995.

United interventions by Third World governments, helped by anti-corporate globalisation protests, managed to scuttle the WTO's ministerial summit in Seattle in 1999, and again in Cancun in 2003.

This time, the Third World countries clearly lost more than they gained. The biggest defeat was in services. First World countries have for years sought to open up the so-called service market of the Third World, including critical public utilities such as water and electricity supply, health care, postal and phone services, education, banking and insurance. Previously, a country had the right to decide which sectors to open up and by how much. But now, with the excuse of allowing for a "plurilateral and sectoral" method of negotiation and increased foreign investment in this sector, poor countries will be under enormous pressure to open up sensitive service areas critical to their national well-being.

Unprecedented concessions were extracted on "non-agricultural market access" — relating to industrial tariffs on which fragile Third World industries and their basic national industrial framework depend. This is likely to worsen the already devastating de-industrialisation in many poor countries.

The "least developed countries" — the world's poorest — have long demanded access to First World markets, free of quota and duty. Yet not only is the new promise on this not binding, it applies to only 97% of products, thus allowing the rich countries to continue protecting "sensitive products" such as rice, sugar, fishery, textile and clothing, and leather products, which many of the poorest countries depend on for survival.

Rich countries' subsidies for their own cotton exports will be eliminated this year, but the pivotal domestic subsidies, to which most financial support goes, have been left untouched. These fat handouts — US$4 billion a year in the US alone — have long devastated the poor-country competitors.

Little change occurred in areas of "special and differential treatment" (allowing poor countries more time to meet less demanding rules), "developmental issues", and "implementation issues", which poor countries have long demanded improvements on.

The only move marketed by the rich countries as a key "gain" for the Third World is the European Union's promise to eliminate agricultural export subsidies by 2013. But the EU has made many similar "promises" before that have remained undelivered, but which they used to extract concessions from the Third World. Even if implemented, the cut would be of very little help, amounting to about 1 million Euros. This contrasts to EU agricultural domestic subsidies of 55 billion Euros a year, many of which enhance exports and are merely export subsidies in disguise.

On a brighter note, Cuba and Venezuela put up a great fight to counter the highly manipulative WTO processes. During the summit's last session, when chairperson and Hong Kong commerce secretary John Tsang was rushing through "agreement" after "agreement" without giving proper chance for dissenting voices to be heard, Venezuela's foreign affairs vice-minister Mari Pili Hernandez took the unprecedented move of going up to the stage to interrupt Tsang, demanding that those with reservations be given a voice in the meeting. Tsang reluctantly agreed.

Cuban and Venezuelan delegates were the first to speak, registering their reservations and opposition to the so-called agreements.

From Green Left Weekly, January 25, 2006.
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