FacebookTwitterGoogle+RedditEmail

The Collapse of the WTO Talks

Predictably, the cheerleaders for corporate globalization are bemoaning the collapse of World Trade Organization negotiations.

“This is a very painful failure and a real setback for the global economy when we really needed some good news,” said Peter Mandelson, the European Union’s trade commissioner.

Even worse, says the corporate globalization rah-rah crowd, the talks’ failure will hurt the developing world. After all, these negotiations were named the Doha Development Round.

“The breakdown of these talks is bad news for the world’s businesses, workers, farmers and most importantly the poor,” laments U.S. Chamber of Commerce President Tom Donohue.

But don’t shed any tears for the purported beneficiaries of the WTO talks. If truth-in-advertising rules applied, this might have been called the Doha Anti-Development Round.

The alleged upside of the deal for developing countries — increased access to rich country markets — would have been of tiny benefit, even according to the World Bank. The Research and Information System for Developing Countries points out that Bank analyses showed a successful conclusion of the Doha Round would, by 2015, increase developing country income in total by $16 billion a year — less than a penny a day for every person in the developing world.

The World Bank study, however, includes numerous questionable assumptions, without which developing countries would emerge as net losers. One unrealistic assumption is that governments will make up for lost tariff revenues by other forms of taxes. Another is that countries easily adjust to import surges by depreciating their currencies and increasing exports.

In any case, the important point is that there was very little to gain for developing countries.

By contrast, there was a lot to lose.

The promise to developing countries was that they would benefit from reduced agricultural tariffs and subsidies in the rich countries. Among developing nations, these gains would have been narrowly concentrated among Argentina, Brazil and a few other countries with industrial agriculture.

What the spike in food prices has made clear to developing countries is that their food security depends fundamentally not on cheap imports, but on enhancing their capacity to feed themselves. The Doha rules would have further undermined this capacity.

“Opening of markets, removal of tariffs and withdrawal of state intervention in agriculture has turned developing countries from net food exporters to net food importers and burdened them with huge import bills,” explains food analyst Anuradha Mittal of the Oakland Institute. “This process, which leaves the poor dependent on uncertain and volatile global markets for their food supply, has wiped out millions of livelihoods and placed nearly half of humanity at the brink of hunger and starvation.”

Farmers’ movements around the world delivered this message to government negotiators, and the negotiators refused to cave to the aggressive demands made by rich countries on behalf of agricultural commodity-trading multinationals. Kamal Nath, India’s Minister for Commerce and Industry, pointed out that the Doha Development Round was supposed to give benefits to developing countries — especially in agriculture — not extract new concessions.

The immediately proximate cause of the negotiations’ collapse was a demand by developing countries that they maintain effective tools to protect themselves from agricultural import surges. Rich countries refused the overly modest demand.

And agriculture was the area where developing countries were going to benefit.

The rough trade at the heart of the deal was supposed to be that rich countries reduce market barriers to developing country agricultural exports, and developing countries further open up to rich country manufacturing and service exports and investment.

Such a deal “basically suggests that the poor countries should remain agricultural forever,” says Ha-Joon Chang, an economics professor at the University of Cambridge and author of Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. “In order to receive the agricultural concession, the developing countries basically have to abolish their industrial tariffs and other means to promote industrialization.” In other words, he says, developing countries are supposed to forfeit the tools that almost every industrialized country (and the successful Asian manufacturing exporters) has used to build their industrial capacity.

In sum, says Deborah James, director of international programs for the Washington, D.C.-based Center for Economic and Policy Research, this was a lose-lose deal for developing countries. “The tariff cuts demanded of developing countries would have caused massive job loss, and countries would have lost the ability to protect farmers from dumping, further impoverishing millions on the verge of survival,” she says.

By the way, it’s not as if this is a North vs. South, rich country vs. poor country issue. Although there have been multiple lines of fragmentation in the Doha negotiations, the best way to understand what’s going on is that the rich country governments are driving the agenda to advance corporate interests, not those of their populations. That’s why there is so little public support for the Doha trade agenda, in both rich and poor countries.

Says Lori Wallach of Public Citizen’s Global Trade Watch: “Now that WTO expansion has been again rejected at this ‘make or break’ meeting, elected officials and those on the campaign trail in nations around the world — including U.S. presidential candidates — will be asked what they intend to do to replace the failed WTO model and its version of corporate globalization with something that benefits the majority of people worldwide.”

Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and director of Essential Action.

More articles by:

ROBERT WEISSMAN is president of Public Citizen.

January 17, 2019
Stan Cox
That Green Growth at the Heart of the Green New Deal? It’s Malignant
David Schultz
Trump vs the Constitution: Why He Cannot Invoke the Emergencies Act to Build a Wall
Paul Cochrane
Europe’s Strategic Humanitarian Aid: Yemen vs. Syria
Tom Clifford
China: An Ancient Country, Getting Older
Greg Grandin
How Not to Build a “Great, Great Wall”
Ted Rall
Our Pointless, Very American Culture of Shame
John G. Russell
Just Another Brick in the Wall of Lies
Patrick Walker
Referendum 2020: A Green New Deal vs. Racist, Classist Climate Genocide
Kevin Zeese - Margaret Flowers
Uniting for a Green New Deal
Matt Johnson
The Wall Already Exists — In Our Hearts and Minds
Jesse Jackson
Trump’s Flailing will get More Desperate and More Dangerous
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party: Part Three
January 16, 2019
Patrick Bond
Jim Yong Kim’s Mixed Messages to the World Bank and the World
John Grant
Joe Biden, Crime Fighter from Hell
Alvaro Huerta
Brief History Notes on Mexican Immigration to the U.S.
Kenneth Surin
A Great Speaker of the UK’s House of Commons
Elizabeth Henderson
Why Sustainable Agriculture Should Support a Green New Deal
Binoy Kampmark
Trump, Bolton and the Syrian Confusion
Jeff Mackler
Trump’s Syria Exit Tweet Provokes Washington Panic
Barbara Nimri Aziz
How Long Can Nepal Blame Others for Its Woes?
Glenn Sacks
LA Teachers’ Strike: When Just One Man Says, “No”
Cesar Chelala
Violence Against Women: A Pandemic No Longer Hidden
Kim C. Domenico
To Make a Vineyard of the Curse: Fate, Fatalism and Freedom
Dave Lindorff
Criminalizing BDS Trashes Free Speech & Association
Thomas Knapp
Now More Than Ever, It’s Clear the FBI Must Go
Binoy Kampmark
Dances of Disinformation: The Partisan Politics of the Integrity Initiative
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party: Part Two
Edward Curtin
A Gentrified Little Town Goes to Pot
January 15, 2019
Patrick Cockburn
Refugees Are in the English Channel Because of Western Interventions in the Middle East
Howard Lisnoff
The Faux Political System by the Numbers
Lawrence Davidson
Amos Oz and the Real Israel
John W. Whitehead
Beware the Emergency State
John Laforge
Loudmouths against Nuclear Lawlessness
Myles Hoenig
Labor in the Age of Trump
Jeff Cohen
Mainstream Media Bias on 2020 Democratic Race Already in High Gear
Dean Baker
Will Paying for Kidneys Reduce the Transplant Wait List?
George Ochenski
Trump’s Wall and the Montana Senate’s Theater of the Absurd
Binoy Kampmark
Dances of Disinformation: the Partisan Politics of the Integrity Initiative
Glenn Sacks
On the Picket Lines: Los Angeles Teachers Go On Strike for First Time in 30 Years
Jonah Raskin
Love in a Cold War Climate
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party
January 14, 2019
Kenn Orphan
The Tears of Justin Trudeau
Julia Stein
California Needs a 10-Year Green New Deal
Dean Baker
Declining Birth Rates: Is the US in Danger of Running Out of People?
Robert Fisk
The US Media has Lost One of Its Sanest Voices on Military Matters
FacebookTwitterGoogle+RedditEmail