The Battle to Lead the WTO

by MARK WEISBROT

Americas” were heading for collapse, the Brazilian co-chair of the negotiations, Adhemar Bahadian, colorfully described the disillusionment that had set in.  He compared the agreement to “a stripper in a cheap cabaret.”

“At night under the dim lights, she is a goddess,” he told the press. “But in the daytime she is something different.  Maybe not even a woman.”

Many countries have now gone through a similar process of disenchantment with the World Trade Organization (WTO), created in 1995 as a “multi-lateral” alternative to bilateral or regional agreements. From the beginning, the rules were stacked in favor of the rich countries. (More on this below).  But in addition to the rules, the rich countries, led by the U.S., never got used to the idea that a multilateral institution was supposed to be for the benefit of everyone, including developing countries.  They were too accustomed to the IMF and the World Bank, which have been run by Washington and its rich country allies for more than six decades. The WTO, unlike the Fund and the Bank, was set up to operate by consensus, but some members have turned out to be a lot more equal than others.

The rich countries are making this clear once again as the U.S. and EU try to ram through their choice of Director General, which will be decided on Tuesday.  Pascal Lamy of France, a former European Trade Commissioner who represents the rich countries’ point of view, will step down this year after two four-year terms. Now it is the developing countries’ turn to have the position, and the final selection round (in a less-than-transparent process) has boiled down to Herminio Blanco of Mexico versus Roberto Azevêdo of Brazil.  While this appears to be a contest between two Latin American candidates, it is clear to most of the world that Blanco is more of a candidate of the United States and its allies.

First, the government that he comes from, as the saying goes, is too “far from God, and so close to the United States.” It is not just geography and economic integration but a shared neoliberal set of policies that binds Blanco to his northern neighbors. He is an architect of NAFTA, a treaty that wiped out hundreds of thousands of farmers in Mexico (by forcing them, ironically, to compete with subsidized crops) and kept thecountry on a development path that can only be described as a failed experiment.

Since much of the business press has lately been celebrating the fact that Mexico is momentarily growing faster than Brazil, let’s compare the two countries’ performance since the Workers’ Party took office in 2003.  Brazil’s GDP per person has grown by 28.6 percent, while Mexico’s has grown only 12 percent, the second worst record (after Guatemala) in all of Latin America.  Maybe the Workers Party understands something that Mr. NAFTA-Chicago-boy doesn’t. (Blanco’s economics Ph.D. is from the University of Chicago, most infamous for producing the far right of the profession and known throughout Latin America for “Los Chicago Boys,” the Milton Friedman protégés that advised dictator Augosto Pinochet in Chile.)

The difference between Mexico and Brazil is more than the symbolism of their candidates, and goes beyond the fact that Brazil is vastly more independent of the United States; and beyond the reality that each of these candidates would inevitably be influenced by the policies and alliances of their governments.  One reason that the WTO has failed to move forward on its agenda more than 11 years is that it has a program conceived of in a different era, and one that would never have gotten off the ground if it were submitted to member countries today.

From 1980-2000 there were a pronounced slowdown in economic growth in the vast majority of the world’s countries, coupled with a decline in progress on social indicators such as life expectancy and infant and child mortality.  This coincided with what are known as “neoliberal” policy changes – which included not only tighter monetary and fiscal policies, privatization and de-regulation, but also an abandonment of state-aided development strategies that had previously been successful in many countries. The WTO rules, written by the rich countries toward the end of this period, were designed to expand trade in ways that did not take development needs into account.  Trade can certainly make a sizeable contribution to growth, as it has for China over the past three decades, but China’s trade (and foreign investment) was carefully managed as part of an overall development strategy.

The past decade, despite the Great Recession and the seemingly endless recession in Europe, both caused by flawed economic policy-making in the rich countries, saw a rebound in developing country growth.  Ironically, much of it was spurred by demand from China, the biggest economy to reject the policy “reforms” of the neoliberal era and which has now become, by the best measures, the world’s largest economy.

The world is a different place, yet the U.S. and its high-income allies act as though nothing has changed.  Imagine, after financial de-regulation contributed to the world’s worst recession since the Great Depression, they continue to push for further liberalization in financial services.  They want developing countries to lower their tariffs on manufactured goods while they spend hundreds of billions annually subsidizing their agriculture, and resist developing countries efforts to protect their own agriculture and poor farmers.

And of course they promote the most costly form of protectionism in the world: the protectionism of the pharmaceutical companies. This is the very opposite of the “free trade” that they claim to promote, with these monopolies, protected and expanded by the WTO’s TRIPS (“Trade-Related” Aspects of Intellectual Property Rights), raising the price of pharmaceuticals by hundreds or even thousands of percent – dwarfing any developing country tariffs on computers or electronics. Not to mention the health effects of over-pricing essential medicines and impeding life-saving research. In this realm, too, Brazil has led important steps to challenge patent monopolies and in favor of public health, while Blanco’s NAFTA gave further protection to the pharmaceutical companies.

In contrast to Blanco, who made his reputation by negotiating neo-liberal trade agreements driven by special interests, Azevêdo is a diplomat with long experiencein the WTO, widely seen as technically skilled and with a good reputation in WTO circles. The choice should be a no-brainer for anyone who would like to see the WTO move toward a public-interest agenda. And this should include not only developing countries: U.S. residents lose about $290 billion a year from the monopoly pricing of pharmaceuticals that the WTO was designed to protect.  But unfortunately we are not represented there, it is only our largest corporations that have a voice.

Mark Weisbrot is an economist and co-director of the Center for Economic and Policy Research. He is co-author, with Dean Baker, of Social Security: the Phony Crisis.

This essay originally appeared in Al Jazeera.

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of the forthcoming book Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

Like What You’ve Read? Support CounterPunch
August 03, 2015
Joseph Mangano – Janette D. Sherman
The Atomic Era Turns 70, as Nuclear Hazards Endure
Nelson Valdes
An Internet Legend: the Pope, Fidel and the Black President
Robert Hunziker
The Perfectly Nasty Ocean Storm
Jack Dresser
The Case of Alison Weir: Two Palestinian Solidarity Organizations Borrow from Joe McCarthy’s Playbook
Ahmad Moussa
Incinerating Palestinian Children
Greg Felton
Greece Succumbs to Imperialist Banksterism
Binoy Kampmark
Stalling the Trans-Pacific Partnership: the Failure of the Hawai’i Talks
Ted Rall
My Letter to Nick Goldberg of the LA Times
Mark Weisbrot
New Greek Bailout Increases the Possibility of Grexit
Jose Martinez
Black/Hispanic/Women: a Leadership Crisis
Victor Grossman
German Know-Nothings Today
Patrick Walker
We’re Not Sandernistas: Reinventing the Wheels of Bernie’s Bandwagon
Norman Pollack
Moral Consequences of War: America’s Hegemonic Thirst
Ralph Nader
Republicans Support Massive Tax Evasion by Starving IRS Budget
Alexander Reid Ross
Colonial Pride and the Killing of Cecil the Lion
Suhayb Ahmed
What’s Happening in Britain: Jeremy Corbyn and the Future of the Labour Party
Weekend Edition
July 31-33, 2015
Jeffrey St. Clair
Bernie and the Sandernistas: Into the Void
John Pilger
Julian Assange: the Untold Story of an Epic Struggle for Justice
Roberto J. González – David Price
Remaking the Human Terrain: The US Military’s Continuing Quest to Commandeer Culture
Lawrence Ware
Bernie Sanders’ Race Problem
Andrew Levine
The Logic of Illlogic: Narrow Self-Interest Keeps Israel’s “Existential Threats” Alive
ANDRE VLTCHEK
Kos, Bodrum, Desperate Refugees and a Dying Child
Paul Street
“That’s Politics”: the Sandernistas on the Master’s Schedule
Ted Rall
How the LAPD Conspired to Get Me Fired from the LA Times
Mike Whitney
Power-Mad Erdogan Launches War in Attempt to Become Turkey’s Supreme Leader
Ellen Brown
The Greek Coup: Liquidity as a Weapon of Coercion
Stephen Lendman
Russia Challenges America’s Orwellian NED
Will Parrish
The Politics of California’s Water System
John Wight
The Murder of Ali Saad Dawabsha, a Palestinian Infant Burned Alive by Israeli Terrorists
Jeffrey Blankfort
Leading Bibi’s Army in the War for Washington
Mary Lou Singleton
Gender, Patriarchy, and All That Jazz
Robert Fantina
Israeli Missteps Take a Toll
Pete Dolack
Speculators Circling Puerto Rico Latest Mode of Colonialism
Ron Jacobs
Spying on Black Writers: the FB Eye Blues
Paul Buhle
The Leftwing Seventies?
Binoy Kampmark
The TPP Trade Deal: of Sovereignty and Secrecy
David Swanson
Vietnam, Fifty Years After Defeating the US
Robert Hunziker
Human-Made Evolution
Shamus Cooke
Why Obama’s “Safe Zone” in Syria Will Inflame the War Zone
David Rosen
Hillary Clinton: Learn From Your Sisters
Sam Husseini
How #AllLivesMatter and #BlackLivesMatter Can Devalue Life
Shepherd Bliss
Why I Support Bernie Sanders for President
Howard Lisnoff
The Wrong Argument
Louis Proyect
Manufacturing Denial
Tracey Harris
Living Tiny: a Richer and More Sustainable Future