Collapse of WTO talks: Historic victory over neo-liberalism

The Guardian 6 August, 2008

Anna Pha

After nine days of high pressure negotiations the Doha Round finally collapsed. At previous World Trade Organisation (WTO) conferences and those of its predecessor, GATT, the developing nations were subjected to heavy bullying, all manner of threats and standover tactics. In the end they would capitulate with little more than promises in their hands in return for huge sacrifices.

The tactics were no different in Geneva last week, but on this occasion the Third World countries came well prepared. Under the strong leadership of India and with the weight of China behind them, 100 united and determined developing countries refused to cave in to policies that would only result in greater poverty and add to the millions of undernourished in their countries.

The outcome is a historic victory for the people of the world, in particular the most poverty stricken, and a blow against the neo-liberal policies of US imperialism. Despite not getting everything they were seeking from the Doha round, it is still a huge victory for developing countries. It was a decisive rejection of neo-liberalism that speaks for hundreds of millions of people globally. It is also strikes a blow at the transnational corporations (TNC) whose bidding Western governments were doing.

The US’s chief negotiator, Susan Schwab, blamed China and India for their defeat. She told journalists the dispute with China and India "really wasn’t a political discussion" but one over trade policy. She said the two emerging powers were demanding a "free-for-all" that would regularly allow them to raise tariffs on goods such as soybeans, poultry and palm oil, hurting American exporters.

China and India did play an important leadership role, steadfastly refusing to accept a further opening up of their markets in return for more promises. They did so speaking on behalf of the 100 developing countries which had signed a joint statement which was distributed during negotiations. China was admitted to the WTO at the Ministerial Conference in Doha in November 2001 and up until now had taken a low-key approach.

India’s chief negotiator Kamal Nath received a heroes’ welcome on his return to India. "The vulnerability of poor farmers cannot be traded off against the commercial interests of developed countries", he said having refused to bend to pressure. "I can negotiate commerce but I cannot negotiate livelihood security", said Nath, who laid blame on the intransigence of the US.

In Australia, the President of the National Farmers’ Federation (NFF), David Crombie, lamented the breakdown of talks, saying that it would prevent Australian farmers from selling into new and expanded markets.

"The collapse, caused by hardline demands for unacceptable flexibilities in … market access by countries such as India, has cost Australian farmers the opportunity to export to new and expanded markets", Crombie claimed. Developing countries, he warned, would be the biggest long-term losers. This viewpoint represents the agro-industrial complexes. Smaller family farms would stand to lose a great deal from heavily subsidised imports into Australia. Australian farmers already face stiff competition from cheaper imports.

Bradley S Klapper, writing in the Washington Post (30-7-08) reflected the attitude of the US and other wealthier nations when he said: "… the talks hit a snag over an obscure ‘safeguard’ for protecting agricultural producers in the developing world from a sudden surge in imports or drop in commodity prices."

This so-called "obscure safeguard" is a matter of life and death for millions of people. Developing countries at the UN Food Crisis Summit earlier this year emphasised the importance of re-establishing their agriculture sector as a means of feeding their people.

The free market policies which the developing countries firmly rejected are the very same polices that led to the present global food crisis.

The conference should have been about negotiating developing countries’ access to developed countries’ agricultural markets in return for developing countries opening up to foreign investment and services. Instead it was a very one-sided affair with developed countries expecting everything for peanuts in exchange for more empty promises. The developing countries were also demanding previous promises be included in the agreement.

The developing countries were calling for:

  • "Policy space" for governments of poor nations to be able to take actions to assist with development, and food security, in particular to have the flexibility to raise tariffs where necessary to protect a fledgling industry.

  • Recognition of the Doha principle of?"Special and Differential Treatment" for poorer nations, whereby developing countries can take a slower pace in reducing tariffs according their needs.

  • The roll-back of patent laws that prevent?poorer nations from manufacturing cheaper generic medications.

  • The exemption of staples such as corn,?rice, and wheat from deregulation in line with the Doha principle of protecting "Special Products".

  • Technical and financial assistance from?rich nations with the IMF, World Bank, etc, required to develop industrial and agricultural sectors.

  • The US and EU to honour WTO rules, in?particular WTO rulings that found their subsidies for cotton and sugar to be in violation of exiting trade rules under the prior agreement.

  • Mutually advantageous trade relations.

  • Action on the part of developed countries?to reduce their subsidies and other trade barriers and practices.

  • An end to the double standards practiced by the developed countries. For example, the tariffs collected by the US on US$2 billion worth of imports from Bangladesh are higher than those imposed on US$30 billion of imports from France. The huge subsidies and other assistance given to the agricultural sector enable the US, France and other developed countries to dump products on Third World markets, at prices that put local farmers out of business.

    Needless to say such demands fell on deaf ears even though they were consistent with WTO principles.

    As at the Food Crisis Summit, developed countries lacked the political will to negotiate an agreement that would assist the development of poorer nations. They expected developing countries to slash tariffs and further open their markets to imports and foreign investment with no restrictions on the operations of TNCs, a recipe for disaster not development.

    If the EU and the US redirected some of the billions of dollars they spend every year subsidising their agricultural sectors to the poor nations, those nations would have a chance of developing their agricultural and manufacturing sectors.

    The budgets of many developing countries are heavily reliant on tariffs — as much as 40 percent of tax revenue in countries such as Madagascar, Sierra Leone, Uganda and Swasilan.

    The demands of the developed countries were "business as usual", with the expectation that they would be able to force agreement on their agenda in the dying hours of the conference, as in the past. They were in for a shock.

    A question of survival

    Developing countries have in past rounds reluctantly agreed to tariff reductions on imports. In return they were promised, amongst other things, technical assistance, greater access to developed countries’ markets and flexibility. These promises, repeated yet again have never been honoured while the TNCs and developed nations were yet again demanding further concessions.

    It was the same "North-South" divide in Geneva last week. On this occasion the North did not get its own way; even its usual divide and rule tactics failed

    Several decades of structural adjustment programs, WTO policies, and IMF conditions and US puppet governments, are largely responsible for the destruction of agricultural sectors in many developing countries. As was reported to the UN Food Crisis Summit, former net exporters of agricultural products have become highly dependent on food imports. Millions of people have been driven off their land and added to the urban poverty of cities.

    The Food Crisis Summit heard the same tragic stories repeated one after another from the poorer nations. Their pleas for financial assistance and technical knowledge largely fell on deaf ears. The hunger and malnutrition of more than 350 million people is a direct result of the operations of the TNCs under the umbrella of the WTO and Western governments.

    Unity cemented

    According to estimates by World Bank researchers, the Doha Development Round of negotiations would lift only 2.5 million people out of extreme poverty from an income of $1 to $1.10 per day by 2015 — not exactly eradicating poverty.

    The development of various groupings of developing countries on a regional basis or round an issue at recent WTO ministerial meetings took an important step forward with the presentation by India of the joint statement from the 100 developing countries.

    The statement pointed to the shortcomings of the draft text prepared by the Director General of the WTO Pascal Lamy. The statement put forward a very reasonable but firm position as to what was required.

    Events in Geneva should act as a warning to the big imperialist powers and the corporate giants that it no longer "business as usual". The small and relatively powerless nations standing hand in hand with the likes of China and India, have gained a voice and power — no doubt their voices will be heard at other international conferences, including on another life and death matter — climate change.

    The political change taking place in Asia, Central and South America, amongst African nations, and in the Pacific, together with the closer relations between developing countries are leaving the US behind. China, India, Russia, Venezuela, Cuba and other countries are forming closer economic and political ties.

    Some of he most reactionary puppets of US imperialism have been thrown out of office and replaced by left and relatively progressive governments. This change for the better in the political landscape reflects the growth of mass movements behind the stand taken in Geneva by Third World governments. More and more people are becoming very conscious of the source of their hardship and expect real change from their governments.

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