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September 26, 2003
Collapse of Another WTO Summit
The 5th ministerial summit, Sept. 10-14, 2003, of the 148-member World Trade Organization (WTO) ended in Cancun, the Mexican resort city, in frustration and failure. It wasn’t the first top-level WTO conference that had ended in shambles. Four years ago, the high-profile WTO summit held in Seattle, Washington, had ended similarly in a fiasco amid an unexpected din of protests within and without the convention halls.
Internally, the Third World member nations had rebelled against what they saw as their exclusion from crucial talks dominated by the US and the European Union. Externally, a motley mass of tens of thousands of protesters, some dressed as turtles and some topless, shouted their demands that trade officials pay heed to the possible effects of their decisions on the environment, labor, public safety, health and human rights.
To appease the Third World delegations, WTO officials had promised to work out a scheme for involving all members in all major decisions. But before any step could be taken in pursuit of this promise, the conference collapsed, mainly because of the external mayhem caused by over 40,000 protestors most of whom had arrived in Seattle from different parts of Europe and America.
The summit held at Doha, Qatar, November 9-13, 2001 did not admit of such mass protests. The tiny state of Qatar - a peninsula jutting into the Persian Gulf from Saudi mainland with a population of less than 700,000 - could hardly accommodate tens of thousands of foreign protestors. Then, all along the route to the site of the conference, soldiers armed with automatic weapons sat every 50 yards under tents.
Although there were some external demonstrations this time too, the conference in Cancun ended in a debacle mainly because of the emergence of a solid group of 21 developing nations who spoke with one voice on an issue on which their stand was morally and logically correct. The ground swell of the internal resistance to the rich countries’ earlier steamroller tactics was the chief factor this time that caused the conference to end in a fiasco. This ostensible setback was not altogether without its positive aspect. That will be discussed later on.
Banding together, the developing nations argued that the $300 billion subsidies paid every year to the world’s richest farmers by their own governments virtually snatched the livelihood of millions of poor farmers in developing countries around the world. The proposals made by Europe and the US to redress this injustice fell far short of the expectations of the developing member states. The Group of 21, comprising Asian, African, Caribbean and South American countries, found therefore no choice but to walk out of the talks. The Brazilian Foreign Minister, a spokesman of the Group, saw in the newfound unity the emergence of a new force in the world trade regulating set-up. China and India were the other two prominent leaders of this group. All three qualify as middle-rung economies as against the other poor members of the developing nations.
The summit in Cancun was not expected to finalize any trade deal but to develop consensus on various trade issues aimed at liberalizing trade between rich and poor countries. Agricultural subsidies constituted a key sticking point. There was much rhetoric accusing the rich countries of hypocrisy for urging the poor countries to open their markets without opening their own and for maintaining the enormous subsidies, $300 billion a year, to their own farmers which destroy callously in price wars the poor farmers of developing countries.
The farmers of poor countries have lived for centuries by the rhythm of the seasons at the mercy of the vagaries of the climate and pestilence. The rich countries have developed technologies stonewalling their agriculture from such vagaries and pestilence. On top of that, the rich farmers of these advanced countries receive subsidies to be able to undersell the poor farmers elsewhere.
Although the rich countries were willing to give up some subsidies, they demanded in return concessions to their multinational corporations and financial companies to have an easy access to the markets of the developing countries and greater transparency in how governments evaluated and awarded procurement and supply contracts - in effect an access to even their very decision-making process. Many delegates of the developing countries saw these moves as depriving them of their control over their own industries and policy-making apparatus. They argued that the proposals were beyond the pale of WTO and could not therefore be considered in that forum.
Without any concession in return, Europe and America were unwilling to unilaterally agree to withdraw the agricultural subsidies.
It may be recalled here that only a month earlier, a deal was made that should make inexpensive life-saving medicines, in the form of generic drugs, available to poor countries in the next six months particularly for the treatment of HIV and AIDS. India having an advanced pharmaceutical industry is likely to hugely benefit from this facility.
Under another agreement, rich countries have agreed to fully open up their textile and clothing markets by the end of 2004. Many developing countries will benefit from this.
These and other changes have to be viewed in the context of economic globalization that is called by its opponents as neo-colonialism. Whatever its weaknesses, that is the only system in operation at this point of time. It remains unchallenged by any alternative. It has to correct itself the distortions that develop within its parameters.
The main weakness in the unhindered operation of this system is the incongruity of a global economy in the absence of a global polity. National priorities will continue to come in the way of the free flow of capital as envisaged, if not dictated, by a global economy. The continuing conflicts within the WTO framework emanate from the mismatch between these pulls. WTO is an arm of global economy. It has to exist and to continue correcting itself by smoothing out the wrinkles. It cannot, nor should it be allowed to, fade into irrelevance.
By the time the next meeting of WTO is held in Hong Kong next year, some of the wrinkles would have lost their sharpness and others would have been smoothed out by quiet diplomacy under the aegis of its Geneva headquarters.
It is acknowledged on all hands that world trade has been the engine of world economic growth over the past 50 years from $200 billion in 1950 to $6,000 billion in 2002.
The high hopes expected from the Cancun meeting have not been fulfilled. But, it has contributed in giving a forceful voice to the developing countries. In fact, the developing countries’ ability to maintain a common bargaining position despite pressure from the rich and despite their own differences on some issues, has proved decisive in the proceedings. These countries that have been on the receiving end all along have now emerged as a power to be reckoned with in the WTO. This is no small achievement for a thriving, throbbing world economy.
arifhussaini@hotmail.com
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