WTO: US, EU bully Third World in trade talks

Issue 

BY EVA CHENG

After being stalled for two years by the Third World's objections, a new round of haggling on world trade rules being pushed by the imperialist governments was launched at the World Trade Organisation's (WTO) fourth ministerial meeting in Doha, Qatar, in November 2001. The resumption of talks was agreed to in response to the dark shadow of Washington's post-9/11 war threats. A year later, the progress of the negotiations has fallen short of what the major powers had hoped.

The WTO "mini-ministerial" in Sydney in mid-November failed to make much progress, fuelling speculation that the talks — dubbed the Doha round — might not reach various agreements before the deadline of late 2004.

However, based on the imperialist countries' notorious record of arm-twisting during previous trade talks, bullying tactics are likely to escalate in the remaining negotiation period.

The last round of trade talks — the Uruguay round (1986-93) — took twice the scheduled time to complete, also due to Third World resistance. That round's conclusion paved the way for the formation of the WTO in 1995 as a body to police the implementation of the much increased array of trade rules.

The rules from the previous seven rounds of trade talks since 1947 covered a smaller scope, which were carried out under the auspices of the General Agreement on Tariffs and Trade which has been superceded by the WTO.

The Doha round is seeking to make trade agreements that cover very broad areas, such as agriculture, services (with at least 155 sectors identified), market access of non-agricultural products, intellectual property rights (which covers everything from CDs and medicine, to the patent of life forms), WTO rules' possible conflicts with existing environment agreements and standards, problems related to implementation of existing rules and "special and differential treatment" (the need for concessions for the weaker economies).

The Doha round is also examining four additional issues which the major powers have been pushing since the WTO's first ministerial meeting in Singapore in 1996. Called the "Singapore issues", they are investment, competition, transparency in government procurement and trade facilitation.

Resistance to agreements on these issues is stiff because they involve limiting governments' options for setting rules to protect their domestic economies and undermine national sovereignty. It is also clear that only the bigger and stronger imperialist economies will benefit, while the dependence and vulnerability of many Third World economies will increase.

Although many Third World countries made it clear in Doha that the study of the "Singapore issues" did not mean they should be included in the full-blown negotiations (after which sanctions-backed rules would follow), the major economic powers have been manoeuvring to do just that.

In fact, Mike Moore, who was WTO director-general until two months ago, was quoted in the September 3 International Trade Daily as saying that the failure to include the "Singapore issues" in the formal negotiations was one of his "biggest regrets" of the Doha meeting.

Agriculture

The trickiest issue now is agriculture. The Agreement on Agriculture (AoA) requires all WTO members to reduce protection from imports. Total tariffs and other trade barriers were to be reduced by 36% for developed countries before 2000, and by 24% for developing countries before 2004.

The reduction applies to a country's average level of protection, which enables governments to avoid serious reductions on items that really matter to their economies. Attempts to circumvent the AoA are rampant.

According to Asian Development Outlook 1997-98 (ADO), the European Union (EU) has overstated its original protection levels by 61% and the US by 44%, which has resulted in their projected levels in 2000 actually being 63% and 77% higher respectively than they were originally!

Third World countries also try to circumvent their obligations, but their ability to do so is much smaller, especially in relation to the WTO-permitted domestic support and export subsidies on agriculture. According to the ADO, such subsidies were estimated to be more than US$190 billion a year in the industrial countries in the late 1980s and US$27 billion in the developing countries. The former figure has increased to US$350 billion a year with no indication that the gap is narrowing.
Higher productivity from more mechanised production has given the First World producers a big edge. Heavy subsidies have further increased their price competitiveness. When the Third World's economic doors are forced open, a victory for First World producers is guaranteed. That's why the agricultural production of many Third World countries has been devastated in recent times.

As a result of these WTO-instigated distortions, according to a Food First statement in November, 320 million people in India are starving (with starvation-related deaths being reported in 13 states last year). Yet, these people are denied access to the 80 million tonnes of "excess" food grain, which is rotting from long storage and might be dumped in the sea in order to free up storage space.

First World hypocrisy increased to new heights in May when the US announced a new, six-year US$249 billion subsidy package for US farmers, under the excuse that it was within WTO-permitted parameters. Two months later, Washington proposed that all WTO members should further reduce their agricultural subsidies under the Doha round.

Meanwhile, the EU in October decided that it will not reduce the huge farm subsidies it provides under its Common Agricultural Policy (which is also "WTO-consistent") between 2007-13.

Despite this farce, a framework for further negotiations on agricultural trade rules is scheduled to emerge next March according to the Doha timetable. All members, especially the big countries which call the shots, are to submit their liberalisation "offers".

The US proposal carries little credibility, while Japan's, coming at the 11th hour, delivers little substance. The EU has as yet failed to make any offer, prompting the November 26 London Financial Times to warn that the EU's failure "could trigger a crisis" at the WTO's next ministerial in Cancun, Mexico, in September 2003.

Services

While the EU is dragging its feet on offering reductions in agricultural trade barriers, it is being highly aggressive in pushing for the extension of trade rules to cover the "Singapore issues" and trade-related environment matters.

A major concern about applying WTO rules to investment is that it will likely replicate the North America Free Trade Agreement — which is in effect a "bill of rights" for big capital — under which government measures to address social issues will have to be overturned if they conflict with investors' profits.

The rich countries made a big push at the August-September World Summit on Sustainable Development in Johannesburg to ensure that multilateral environment agreements be "WTO-consistent". Though that move was averted, the EU will try to launch a new assault on the environment through more pro-profit trade rules.

The attempt to tighten WTO discipline in relation to service industries is another major concern. This sector encompasses many economic activities, including telecommunications, insurance and other financial services, energy, transport and essential public services such as water supply, public health and education.

Despite the big powers' assurances that governments will retain discretion to decide what service sectors to open up and by how much, there is grave concern that some poorer countries will yet again be coerced into accepting the demands of the rich countries, which are often crucial donors or trading partners.

Many Third World countries want the rich countries to keep their promises made during the Uruguay round. However, it has been reported that some rich countries are now demanding that poorer WTO members make new commitments to open their economies in exchange for further discussion on "implementation issues".

From Green Left Weekly, December 11, 2002.

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