World Trade Organisation - An Irrelevance As Jobs Are Traded Away
Published Monday, November 30, 2009 - 22:21
The body (WTO) responsible for setting global trade rules is in danger of sliding into irrelevance - Dave Tucker writes as he discusses the impact of global trade on developing economies and the most vulnerable people on earth.
As trade ministers meet in Geneva today for World Trade Organisation talks, the body responsible for setting global trade rules is in danger of sliding into irrelevance. After eight years of failed talks, developed countries are increasingly finding ways to sideline the WTO, especially through bilateral deals with individual countries and regions, in order to gain the access to the new markets and raw materials they crave.
The WTO’s director-general, Pascal Lamy, is calling for the conclusion of the negotiations. Lamy claims this will lift the poorest countries out of poverty and is vital to keep trade flowing in the fight against protectionism and to avoid worsening the economic crisis. Ranged against him are trade unionists, farmers, environmentalists, fishermen, consumer representatives and development advocates from across the world, demanding that the Doha round must be scrapped.
Why is global civil society against the conclusion of the ‘Doha Development Agenda’ talks? These were supposed to be about helping developing countries. But the agenda predictably turned out to be little more than a con, designed to drag developing countries back to the table after they had rejected earlier proposals that held little or no benefit for them.
Lamy's claim that the poorest will benefit from the conclusion of the Doha round is utterly without foundation. Academic assessments concur that the deal currently on the table will mostly benefit the world's richest countries, as well as certain export sectors in powerful developing countries. The World Bank's analysis shows that 80% of gains from the Doha round will go to high-income economies, and that the six countries of China, Thailand, India, Indonesia, Argentina and Brazil will scoop up almost all the rest.
By contrast, the countries of sub-Saharan Africa are set to lose out once again, as are other states that will see their existing trade preferences eroded, such as Bangladesh. Just as the Uruguay round left the least developed countries hundreds of millions of dollars worse off than when they started, so too will the Doha round. Within individual countries, too, it is the poorest and most vulnerable who are set to suffer.
Agriculture talks still focus on expanding global markets for exporters and large agribusinesses from developed and some developing countries - instead of addressing food sovereignty, livelihood concerns and the survival needs of hundreds of millions of farmers worldwide. The European Union and the United States steadfastly refuse to reduce their domestic subsidies in real terms, making competition impossible for small farmers. Proposals on the industrial sector continue to revolve around access for rich country businesses to new markets for their goods. This directly causes local ventures to go out of business and cripples those countries’ ability to climb out of poverty.
War on Want’s report Trading Away Our Jobs shows a clear pattern of mass job losses, deindustrialisation and wage deflation as a result of trade liberalisation in Latin America and Africa over the last 30 years. Fifty million more Africans are now trapped in poverty than in 1997, while three in four workers in sub-Saharan Africa now face insecure employment following three decades of neoliberal economics, with only a quarter in waged and salaried posts. Trade liberalisation in the 1980s and 1990s brought massive job losses in Malawi, Côte d'Ivoire, Ghana, Kenya, Morocco and Zimbabwe. Four in five Zambian workers now struggle to survive as street traders, 95 per cent of them earning less than two dollars a day. In Latin America, during the free trade 1990s, unemployment soared from 7.6 million to 18.1 million, with 2.7 million jobs lost in Brazil alone. Now a third of all the region's workers face job insecurity.
Incredibly, Lamy is promoting these same policies as solutions to the food and employment crises that are causing misery for millions around the world. This is hardly a surprise. A Doha deal would indeed create benefits, but only for multinational corporations, and, as European trade commissioner, Lamy was notorious for driving through EU corporate interests with little regard for poverty or inequality concerns.
Yet the folly goes even deeper. Developed countries are keen to see a deal on services liberalisation which would allow their telecoms, construction, water, energy and other companies to access lucrative government contracts and to invest or disinvest at will around the globe. The threat of moving their factories overseas already enables multinationals to drive down tax, working conditions and wages. As well as further entrenching this dynamic, a WTO deal would further liberalise and deregulate financial services. It was this approach that agreed caused the financial meltdown and economic fallout. Indeed, more than ever before, the current economic crisis has exposed deregulation and ever-increasing liberalisation as ill-conceived and the source of huge global instability and harm.
It is no coincidence that the summit takes place just a few days before critical climate talks in Copenhagen. The WTO is trying to rehabilitate itself as a key part of the response to climate change - for example, by pushing sales of “green” technologies to developing countries, promoting false solutions such as carbon trading and claiming that a failure of the WTO would destroy hopes for any multilateral agreements on global problems.
The traditional attitudes to trade, industry and agriculture promoted by the WTO will negate any gains from reducing greenhouse gas emissions in Copenhagen. Escalating international trade in natural resources and the commodification of plants and animals is likely to damage global biodiversity and increase poverty for millions in the world's poorest communities. It is clear that following the same path that now threatens the planet will not lead us out of danger. A WTO deal would represent a heavy blow to hopes that we can avert disastrous climate change.
The time has come to admit that the current WTO system will not result in a pro-development deal. The single-minded pursuit of trade liberalisation has thrown millions of people into grim poverty and threatens to devastate many more lives. Any attempt to transform the institution into a body concerned with development, poverty or people’s rights would be futile. The only chance for a real development agenda is to bury the Doha round. Rich nations must completely re-evaluate their trade policy. We must demand that the way trade negotiations are conducted should be fundamentally changed to prioritise human rights and the elimination of poverty before commercial gain.
