FacebookTwitterGoogle+RedditEmail

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  Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

January 18, 2017
Gary Leupp
The Extraordinary Array of Those Questioning Trump’s Legitimacy (and Their Various Reasons)
Charles Pierson
Drone Proliferation Ramps Up
Chris Floyd
Infinite Jest: Liberals Laughing All the Way to Hell
Stansfield Smith
Obama’s Hidden Role in Worsening Climate Change
Ron Leighton
Trump is Not Hitler: How the Misuse of History Distorts the Present as Well as the Past
Ralph Nader
An Open Letter to President-Elect Donald Trump
Binoy Kampmark
NATO and Obsolescence: Donald Trump and the History of an Alliance
Zarefah Baroud
‘The Power to Create a New World’: Trump and the Environmental Challenge Ahead
Julian Vigo
Obama Must Pardon the Black Panthers in Prison or in Exile
Alfredo Lopez
The Whattsapp Scandal
Clancy Sigal
Russian Hacking and the Smell Test
Terry Simons
The Truth About Ethics and Condoms
January 17, 2017
John Pilger
The Issue is Not Trump. It is Us
John K. White
Is Equality Overrated, Too?
Michael J. Sainato
The DNC Hands the Democratic Party Over to David Brock and Billionaire Donors
John Davis
Landscapes of Shame: America’s National Parks
Andrew Smolski
Third Coast Pillory: Politicians and Rhetorical Tricks
Chris Busby
The Scientific Hero of Chernobyl: Alexey V. Yablokov, the Man Who Dared to Speak the Truth
David Macaray
Four Reasons Trump Will Quit
Chet Richards
The Vicissitudes of the Rural South
Clancy Sigal
“You Don’t Care About Jobs”: Why the Democrats Lost
Robert Dodge
Martin Luther King and U.S. Politics: Time for a U.S. Truth and Reconciliation Commission
Jack Sadat Lee
I Dream of Justice for All the Animal Kingdom
James McEnteer
Mourning Again in America
January 16, 2017
Paul Street
How Pure is Your Hate?
Jeffrey St. Clair - Alexander Cockburn
Did the Elites Have Martin Luther King Jr. Killed?
Robert Hunziker
Global Warming Clobbers Ocean Life
Patrick Cockburn
The Terrifying Parallels Between Trump and Erdogan
Kenneth Surin
The Neoliberal Stranglehold on the American Public University
Lawrence Davidson
Is There a Future for the Democratic Party?
Douglas Valentine
Who Killed MLK Jr?
Robert Fisk
The Foreign Correspondent in the Age of Twitter and Trump
Dale Bryan
“Where Do We Go from Here?”
David Swanson
The Deep State Wants to Deep Six Us
Dan Bacher
Obama Administration Orders Speedy Completion of Delta Tunnels Plan
Mark Weisbrot
Obama Should Make Sure that Haitian Victims of UN-Caused Cholera are Compensated
Winslow Myers
The Light of the World
Bruce Mastron
My Latest Reason to Boycott the NFL: Guns
Weekend Edition
January 13, 2017
Friday - Sunday
Gregory Elich
Did the Russians Really Hack the DNC?
Jeffrey St. Clair
The President Who Wasn’t There: Barack Obama’s Legacy of Impotence
Anthony DiMaggio
Ethics Fiasco: Trump, Divestment and the Perversion of Executive Politics
Joshua Frank
Farewell Obummer, Hello Golden Showers
Paul Street
Hit the Road, Barack: Some Farewell Reflections
Vijay Prashad
After Aleppo: the State of Syria
John Wight
Russia Must be Destroyed: John McCain and the Case of the Dodgy Dossier
FacebookTwitterGoogle+RedditEmail