World Trade Organisation: Framework will hurt Third World

November 17, 1993

Eva Cheng

If you believe the corporate media's spin, on July 31 the World Trade Organisation's 147 members agreed democratically on a "framework" that will help revive negotiations on world trade rules that were scuttled last September. Poor countries, such media claim, will emerge as the biggest winners when the rules are eventually sealed, expected at the end of 2006.

The reality, however, is quite different. A petition circulated among non-government organisations in late July explains: "Not only does the substance of the framework fail to address the life and death concerns of developing countries but the process is so rotten that developing countries are being bullied and pressured, behind closed doors, to accept positions that are not in their interests".

On July 20, veteran trade analyst Chakravarthi Raghaven, chief editor of South-North Development Monitor (SUNS), wrote: "The entire paper [Raghaven was referring to the first draft], and its approaches, are viewed by developing country delegations and by civil society as imbalanced and lacking equity, and heavily weighted in process and substance in favour of the developed countries, in particular the US and [European Union]." The final version of the paper was not much changed.

On July 30, Friends of the Earth International's (FoEI) trade and sustainability program coordinator Alexandra Wandel strongly denounced the framework's push for underdeveloped countries to open their markets in non-agricultural goods. Wandel said this, wanted by the EU and the US, could endanger the ability of these countries "to use national policies to protect their environment and promote development".

"If adopted", Wandel went on, "WTO negotiations could further deepen the deindustralisation crisis and accelerate unemployment and poverty. This would force them to rely more heavily on unsustainable and harmful exports of natural resources."

Many non-government groups and grassroots communities have also called on the WTO to exempt essential services such as education, water, health and energy, from the proposed "trade liberalisation" agenda. Their intention is to insulate at least such critical services from the profit-driven market imperatives. However, Wandel pointed out, the current framework has ignored that call.

Past battles

Since the end of World War II, wealthy countries have tried to recolonisalise the Third World through a world trade regime — initially the General Agreement on Tariffs and Trade, the job was taken over and expanded by the WTO created in 1995. Impartial-looking trade rules were introduced into each negotiation "round" since the late 1940s, but the underdeveloped countries invariably were forced to open more of their vulnerable markets to the harmful onslaught of First World products. Both carrots and sticks were used to extract "consent" from these poor countries.

As the 1986-94 Uruguay Round of trade negotiations were expanded beyond the trade of physical goods, to the trade of "services" and "intellectual property rights", its impact on the underdeveloped countries became even more devastating.

In order to get the deal passed by underdeveloped countries, the advanced capitalist countries made several promises, which have not been delivered. The poor countries' fight to get them delivered, is called the "issue of implementation' in WTO speak.

Rich countries have not only turned a blind eye to such calls, they are trying to further expand the scope of the "trade rules" to areas with a flimsy connection with trade. Expanding those rules to cover public services of all kinds is one such example.

Despite its economic superiority, the First World has had no hesitation in protecting its markets from Third World products, while trying to force poor nations to open up theirs.

Third World resistance to such oppressive policies formed the background to the collapse of the world trade talks in Seattle in 1999, which had been intended to kick off a new trade round. However, that round was eventually kick-started at the summit in Doha, Qatar, in late 2001 in the shadow of the post-9/11 imperialist war drive. Pretending to take Third World concerns seriously, the WTO called the new round of trade negotiations the "Doha Development Round".

Led by the US and the EU, the imperialist camp had wanted the round to have made substantial progress by the WTO summit in Cancun, Mexico, last September. But that summit collapsed.

Dirty tricks

Since then, the WTO secretariat and its US-EU masters have scrambled to resuscitate the process. Thus, theJuly 31 "framework" was supposed to deliver the strategic map for negotiations for the remainder of the Doha Round, originally scheduled to be completed by January 2005.

In the lead-up to the Cancun meeting, Third World countries formed various alliances to strengthen their bargaining positions. G90, G20, G33 (comprised of 42 countries) and the African Group are examples.

In a report released on July 26, development Agency ActionAid revealed how the US and the EU have used bullying, blackmailing and arm-twisting tactics to try and split these alliances. Examples are the threat and actual cut of aid budgets or loss of trade preference, the blocking of essential loans and debt relief.

Reported the July 27 SUNS: "Guatemala, Peru, Ecuador, Colombia and Costa Rica all left the G20 in the weeks following Cancun in response to threats that their trading arrangements with the US would be jeopardized if they continued as members." However, Tanzania and Zimbabwe joined the G20 in December 2003 while Thailand and the Philippines, according to the SUNS report, resisted the pressure to leave the group.

On the make-or-break issue of agriculture, the EU and the US promised to mitigate the devastating effect of their and other rich nations' US$330 billion annual support for wheat, cotton, rice, beef, dairy and sugar farmers.

A FoEI July 30 statement calls those promises "empty". Due to the EU's subsidised sugar export, the ActionAid report points out, some 36,000 poor in Swaziland have lost their means of livelihood.

It continues: "On domestic support, the [framework] text clearly opens the door for the EU and US to almost maintain their entire level of current subsidies and keep on dumping [their agricultural goods cheap].

On services, the FoEI statement claims that the disallowing of exemption of any service sectors from liberalisation "puts undue pressure on developing countries to open up their service sectors".

One of the key factors initially luring Third World countries to join the world trade regime was the promise of more lenient rules for them, given their underdevelopment. These promises were enshrined in "special products" and "special safeguard mechanism" provisions. But even these are under attack.

In a statement on July 28, the G33 firmly defended the importance of SP and SSM, saying they are "crucial for addressing food and livelihood security as well as rural development of a vast number of rural poor..."

From Green Left Weekly, August 11, 2004.
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