[Peace-discuss] Fwd: The Stalemate in the WTO - By Walden Bello and Aileen Kwa
Alfred Kagan
akagan at uiuc.edu
Fri Jun 13 08:53:26 CDT 2003
I think this Walden Bello article is well worth reading.
>Date: Thu, 12 Jun 2003 08:20:18 -0700
>From: "Tom Childs" <childst at groupwise.douglas.bc.ca>
>To: <mai-list at moon.bcpl.gov.bc.ca>
>Subject: The Stalemate in the WTO - By Walden Bello and Aileen Kwa
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> http://www.corpwatch.org/issues/PID.jsp?articleid=7089
>
>
> The Stalemate in the WTO
>
> An Update on Global Trends
>
> Special Series
> By Walden Bello and Aileen Kwa
> Focus on the Global South
> June 11, 2003
>
>
> Recent Developments in the WTO
>
> 1. Perhaps the best way to characterize recent developments in
>Geneva is that the negotiations are practically at
> a stalemate.
>
> - This stalemate is perhaps exemplified in the polarized
>situation in the agricultural negotiations. The Harbinson
> draft (prepared by Agricultural Negotiations Chairman Stuart
>Harbinson) is an orphan. The US and the Cairns
> Group consider its proposed tariff reductions too shallow while
>the European Union and Japan see them as to
> deep. The developing countries are concerned that the draft
>requires very substantial tariff cuts from them. They
> are also demanding a broadening of Harbinson's proposed
>"strategic products" concept, which reserves a few
> "strategic products" for shallower tariff cuts.
>
> One thing that must be noted is that the EU and the US, in
>pushing for negotiating advantage, have split the ranks
> of the developing world. The countries in the Cairns Group, like
>Brazil, Uruguay, and Thailand, are siding with the
> US against the EU and Japan. The EU has hit back by gaining the
>support of India and many other developing
> countries for a counterproposal for agricultural liberalization
>that would replicate the allegedly more flexible
> liberalization formula of the Uruguay Round. The long and short
>of it is that it is very unlikely that there will be
> agreement on the modalities of negotiation before Cancun.
>
> - In the Trade-Related Intellectual Property Rights (TRIPs) and
>public health area, there has been no give on the
> part of the US. It continues to maintain its position that only
>in the case of drugs for three diseases-HIV-Aids,
> malaria, and tuberculosis-should patent rights be loosened.
>Since this has been rejected by developing countries,
> the US is now talking not about loosening patent rights for
>public health problems but for "public health crises."
>
> American negotiators have reportedly told developing country
>negotiators that they can't change their positions,
> and if they want any movement in the negotiations, they should
>talk directly to the pharmaceutical giants. Another
> disturbing occurrence is that the Director General, Dr Supachai
>himself is spreading the blame for the stalemate
> from the US to Brazil and India, whose manufacturers, he
>alleges, will be the ones that will principally benefit from
> looser patent rights.
>
> - On the new issues-investment, competition policy, government
>procurement, and trade facilitation-the EU is now
> trying to delink the decision to commence negotiations on these
>issues from movement on the part of the EU to
> liberalize agriculture. They are telling the developing
>countries that liberalization in these issues is for their own
> good. To bring about some movement, the US has reportedly
>proposed to "unbundle" the four areas so that
> negotiations could proceed on them separately. The EU has
>publicly agreed with the US, but its preference is still
> to take the four areas together. The EU is also side-stepping
>developing countries' concerns about substantive
> modalities, preferring to narrow down the negotiations on
>modalities to be agreed on in Cancun to procedural
> modalities - how many meetings should be held, etc. This has
>been criticized by developing countries as
> attempting to elicit from them a blank cheque to start
>negotiations without first agreeing on the substance of these
> negotiations.
>
> - In two negotiating areas of great interest to developing
>countries, there has been absolutely no movement. These
> are the issues of Special and Differential Treatment and
>Implementation. On the latter, it might be of interest that
> when we met with him in Bangkok at few weeks ago, Pascal Lamy,
>Trade Commissioner of the EU, placed the
> blame squarely on the developing countries, whom he accused of
>not being able to agree to what were the two or
> three top priorities regarding implementation that needed to be tackled.
>
> 2. What does all this add up to? What does it mean for the
>Cancun Ministerial? We posed the question to Pascal
> Lamy a few weeks ago. Interestingly, his answer was to sidestep
>the question and simply say that if one views
> the process from the Doha Ministerial's mandate for the
>negotiations to end by 2004, then things don't look so
> bad, since "in some areas, negotiations are 2/3rds of the away
>through, in some halfway through, in others a third
> through, in TRIPs 98 per cent through."
>
> Now, the role of ministerials is to carry out negotiations in
>several areas simultaneously in order to bring about a
> comprehensive settlement. Since member countries cannot even
>agree on the modalities of negotiations in so
> many key areas, the WTO faces a great problem of what they will
>do in Cancun. Perhaps this is the reason why
> key WTO officials are now talking about coming up not with a
>declaration announcing agreements on issues being
> negotiated, but a "communiqu?" serving as a "progress report" on
>the ongoing negotiations, drawing upon short
> reports made by the various negotiating groups on the work they
>have undertaken since Doha.
>
> 3. The hopes for a Doha-type outcome in Cancun have been further
>doused by the recent worsening of trade ties
> between the United States and Europe. The EU has threatened to
>impose sanctions on the US by the end of 2003
> for tax breaks for exporters that a WTO judicial panel has found
>to be in violation of WTO rules. In what has been
> perceived as a retaliatory move, the US said it will file a case
>with the WTO against the EU's de facto moratorium
> against genetically modified foods.
>
> Taken in the context of already existing trade conflicts as well
>as the bitter conflict between the US and France
> and Germany over the US intervention in Iraq, these recent moves
>do not bode well for both parties arriving at
> consensus positions on negotiating modalities in agriculture and
>other trade issues before Cancun. It must be
> remembered that it was not only the revolt of the developing
>countries at the Seattle Convention Center and the
> mass mobilizations in the streets that brought down the third
>ministerial in Seattle in 1999 but also unresolved
> conflicts between the US and EU on agriculture, the environment,
>and labor standards.
>
> US Trade Representative Robert Zoellick and EU Trade
>Commissioner Pascal Lamy, who are close personal
> friends, are said to be moving to bridge the Washington-Brussels
>gap before Cancun, but the contextual
> conditions are more difficult now than before the Doha
>Ministerial in November 2001, when the US and EU shared
> a common position on combating terrorism and intervening in
>Afghanistan and Washington had not yet imposed a
> 40 per cent protecting tariff on steel imports and passed its
>$100 billion subsidies for American farmers.
> Nevertheless, it is important not to underestimate the capacity
>of Zoellick and Lamy to engineer a US-EU
> concordat as they did in the leadup to Doha.
>
> The Global and Conjunctural Context of the WTO Negotiations
>
> The context for understanding the stalemate at the WTO is the
>crisis of the globalist project and the emergence of
> unilateralism as the main characteristic of US foreign policy.
>
> 1. First of all some notes on the character and development of
>the globalist project.
>
> - Globalization is the accelerated integration of capital,
>production, and markets globally driven by the logic of
> corporate profitability;
>
> - It is a process accompanied by the coming to dominance of the
>ideology of neoliberalism, centered on "liberating
> the market" by institutionalizing privatization, deregulation,
>and trade liberalization;
>
> - Globalization has had two phases, the first lasting from the
>early 19th century till the outbreak of the First World
> War in 1914; the second from the early 1980's till today. The
>intervening period was marked by the dominance of
> national capitalist economies marked by a significant degree on
>state intervention and an international economy
> marked by significant restraints on trade and capital flows.
>
> 2. The apogee of the second phase of globalization was reached,
>in my view, with the founding of the WTO in
> 1995. The triumphalism marking this event was conveyed by the
>joint statement of the World Bank, WTO, and
> IMF in 1996 at the Singapore Ministerial of the WTO, where the
>three institutions said that the task at hand was
> bringing about the "coherence" of the policies of the WTO, IMF,
>and the World Bank to create the framework of
> international economic governance that would assure global prosperity.
>
> The Economist and the rest of the establishment press toasted
>the WTO as the gem of capitalist global
> governance, setting up a "rules-based" system of world trade
>that both powerful and poor economies would submit
> themselves to. According to George Soros, the significance of
>the WTO lay in its being the "only global institution
> to which the United States was willing to subordinate its national laws."
>
> 3. In just five years, however. the globalist project, whether
>in its "hard" Thatcher-Reagan version or its "soft"
> Blair-Soros version (globalization with "safety nets") was in
>very serious trouble. There were three key moments to
> this crisis:
>
> - First was the Asian financial crisis of 1997. This revealed
>that one of the tenets of globalization, the liberalization
> of capital account, could be profoundly destabilizing. It was
>main factor in the collapse of East Asian economies,
> with 22 million people in Indonesia and one million in Thailand
>falling below the poverty line in just a few months.
>
> The Asian financial crisis was the Stalingrad of the IMF, the
>prime global agent of liberalized capital flows, bringing
> about a review of its record in Africa and Latin America, which
>showed that the program of structural adjustment
> that it had promoted alongside the World Bank had failed almost
>universally, institutionalizing instead stagnation,
> greater poverty, and greater inequality.
>
> Along with economic crisis, the Asian financial crisis spawned a
>massive crisis of legitimacy and credibility of the
> globalist project, resulting in the defection from neoliberalism
>of several of its key intellectuals: Jeffresy Sachs,
> Jagdish Bhagwati, Joseph Stiglitz, and George Soros.
>
> - The second moment of the crisis was the collapse of the third
>Ministerial of the WTO in Dec. 1999. This was due
> to the fusion of three volative elements into a deadly
>explosion: the revolt of developing countries at Seattle
> Convention Center, the massive mobilization of 50,000 people in
>the streets, and unresolved trade conflicts
> between the EU and the US, particularly in agriculture.
>
> - The third moment was the collapse of the stock market and the
>end of the Clinton boom in March 2001. This
> was essentially the onset of a crisis of overproduction, the
>main manifestation of which was massive overcapacity.
> Prior to the crash, corporate profits in the US had not grown
>since 1997. This was related to overcapacity in the
> industrial sector, the most glaring manifestation of which was
>in the leading telecommunications sector, where
> only 2.5 per cent of installed capacity globally was being used.
>The stagnation of the real economy led to capital
> being shifted to the financial sector, resulting in the dizzying
>rise in share values. But since profitability in financial
> sector cannot deviate too far from profitability of real
>economy, a collapse of stock values was inevitable, and this
> occurred in March 2001, leading to the prolonged stagnation and
>recession that we are seeing today.
>
> The current crisis is not simply the downside of the normal
>business cycle. It is the downside of the so-called
> Kondratieff Wave (named after the economist Nikolai
>Kondratieff). Kondratieff observed that capitalism progresses
> via 50-60 year "long waves" marked on the upside by the
>exploitation of new technologies and on the downside by
> the exhaustion of new technologies, leading to a prolonged
>period of stagnation before the next upswing. We are
> now on the trough of a wave the crest of which occurred around
>the late sixties and seventies.
>
> 4. The crisis of globalization, neoliberalism, and
>overproduction provides the context for understanding the
> economic policies of the Bush administration, notably its
>unilateralist thrust. The globalist corporate project
> expressed the common interest of the global capitalist elites in
>expanding the world economy and their
> fundamental dependence on one another.
>
> However, globalization did not eliminate competition among the
>national elites. In fact, the ruling elites of US and
> Europe had factions that were more nationalist in character as
>well as more tied for their survival and prosperity to
> the state, such as the military-industrial complex in the US.
>Indeed, since the eighties there has been a sharp
> struggle between the more globalist fraction of ruling elite
>stressing common interest of global capitalist class in a
> growing world economy and the more nationalist, hegemonist
>faction that wanted to ensure the supremacy of US
> corporate interests.
>
> As Robert Brenner has pointed out, the policies of Bill Clinton
>and his Treasury Secretary Robert Rubin put prime
> emphasis on the expansion of the world economy as the basis of
>the prosperity of the global capitalist class. For
> instance, in the mid-1990's, they pushed a strong dollar policy
>meant to stimulate the recovery of the Japanese
> and German economies, so they could serve as markets for US
>goods and services. The earlier more nationalist
> Reagan administration, on the other hand, had employed a weak
>dollar policy to regain competitiveness for the US
> economy at the expense of the Japanese and German economies.
>With the George W. Bush administration, we
> are back to economic policies, including a weak dollar policy,
>that are meant to revive the US economy at the
> expense of the other center economies and push primarily the
>interests of the US corporate elite instead of that of
> global capitalist class under conditions of a global downturn.
>
> 5. The Bush administration has supplanted the globalist
>political economy of the Clinton period with a unilateralist,
> nationalist political economy that intends to shore up the
>global dominance of the US corporate elite economically
> that parallels the aggressive military policy that is meant to
>ensure the military supremacy of the United States.
>
> I would just like to point out some of the distinguishing
>features of this approach:
>1. T
> - Bush's political economy is very wary of a process of
>globalization that is not managed by a US state that
> ensures that the process does not diffuse the economic power of
>the US. Allowing the market solely to drive
> globalization could result in key US corporations becoming the
>victims of globalization and thus compromising US
> economic interests. Thus, despite the free market rhetoric, we
>have a group that is very protectionist when it
> comes to trade, investment, and the management of government
>contracts. It seems that the motto of the
> Bushites is protectionism for the US and free trade for the rest of us.
>
> - It is wary of multilateralism as a way of global economic
>governance since while multilateralism may promote the
> interests of the global capitalist class in general, it may, in
>many instances, contradict particular US corporate
> interests. The Bush people's growing ambivalence towards the WTO
>stems from the fact that the US has lost a
> number of rulings there, rulings that may hurt US capital but
>serve the interests of global capitalism as a whole.
>
> - For the Bush people, strategic power is the ultimate modality
>of power. Economic power is a means to achieve
> strategic power. This is related to the fact that under Bush,
>the dominant faction of the ruling elite is the
> military-industrial establishment that won the Cold War. The
>conflict between globalists and unilateralists or
> nationalists along this axis is shown in the approach toward
>China. The globalist approach put the emphasis on
> engagement with China, seeing its importance primarily as an
>investment area and market for US capital. The
> nationalists, on the other hand, see China mainly as a strategic
>enemy, and they would rather contain it rather
> than assist its growth.
>
> 6. So among the key components of Washington's unilateralist
>economic strategy are:
>
> - Control over oil, a move strategically directed not only
>against the EU but also against oil-poor China;
>
> - Aggressive protectionism in trade and investment matters;
>
> - Aggressive manipulation of the dollar's value to stick the
>costs of economic crisis on rivals among the center
> economies and regain competitiveness for the US economy.
>
> - Aggressive manipulation of multilateral agencies to push the
>interests of US capital-something we see not only
> in the WTO but also in the International Monetary Fund, where
>the US Treasury recently torpedoed the IMF
> management's proposal for a Sovereign Debt Restructuring
>Mechanism to enable developing countries to
> restructure their debt while giving them a measure of protection
>from creditors. Already a very weak mechanism,
> the SDRM was vetoed by US Treasury in the interest of US banks.
>
> 7. The great advantage of multilateralism as a system of global
>political and economic governance was that it
> dispersed the defense of the system to many allies and created a
>degree of legitimacy and consensus among the
> masses that did not benefit from it. The great problem for
>unilateralism is overextension, or a mismatch between
> the goals of the United States and the resources needed to
>accomplish these goals.
>
> A key base for successful imperial management is an expanding
>national and global economy. That will not be
> here for a long time. Moreover, resources include not only
>economic and political resources but political and
> ideological ones as well. For without legitimacy-without what
>Gramsci called "the consensus" of the dominated
> that a system of rule is just-imperial management cannot be stable.
>
> Faced with a similar problem of securing the long-term stability
>of its rule, the ancient Romans came up with the
> solution of extending Roman citizenship to ruling groups and
>non-slave peoples throughout the empire, creating
> what was till then the most farreaching case of collective mass
>loyalty ever achieved till then and prolonged the
> empire for 700 years. The US unilateralists have no such "moral
>element" to accompany their military domination.
>
> 8. Overextension is relative, that is, it is to a great degree a
>function of resistance. An overextended power may, in
> fact, be in a worse condition even with a significant increase
>in its military power if resistance to its power
> increases by an even greater degree. Among the key indicators of
>overextension are the following:
>
> - Washington's inability to create a new political order in Iraq
>that would serve as a secure foundation for colonial
> rule;
>
> - its failure to consolidate a pro-US regime in Afghanistan
>outside of Kabul;
>
> - the inability of a key ally, Israel, to quell, even with
>Washington's unrestricted support, the Palestinian people's
> uprising;
>
> - the inflaming of Arab and Muslim sentiment in the Middle East,
>South Asia, and Southeast Asia, resulting in
> massive ideological gains for Islamic fundamentalists-which was
>what Osama bin Laden had been hoping for in
> the first place;
>
> - the collapse of the Cold War Atlantic Alliance and the
>emergence of a new countervailing alliance, with Germany
> and France at the center of it;
>
>
> - the forging of a powerful global civil society movement
>against US unilateralism, militarism, and economic
> hegemony, the most recent significant expression is the global
>anti-war movement;
>
> - the coming to power of anti-neoliberal, anti-US movements in
>Washington's own backyard-Brazil, Venezuela,
> and Ecuador-as the Bush administration is preoccupied with the
>Middle East;
>
> - an increasingly negative impact of militarism on the US
>economy, as military spending becomes dependent on
> deficit spending, and deficit spending become more and more
>dependent on financing from foreign sources,
> creating more stresses and strains within an economy that is
>already in the throes of stagnation.
>
> We have, in short, entered a historical maelstrom marked by
>prolonged economic crisis, the spread of global
> resistance, the reappearance of the balance of power among
>center states, and the reemergence of acute
> inter-imperialist contradictions. We must have a healthy respect
>for US power, but neither must we overestimate
> it. The signs are there that the US is seriously overextended
>and what appear to be manifestations of strength
> might in fact signal weakness strategically.
>
> In conclusion, let me make important clarification regarding the
>implications of the foregoing analysis to our task
> in the run-up to the WTO Ministerial in Cancun. They should not
>be mistaken as leading to a strategy of saving
> multilateralism and siding with the competitors of the US to
>shore up the IMF, World Bank, and the WTO. Neither
> US hegemony institutionalized in multilateral institutions nor
>US hegemony exercised unilaterally has brought
> about anything good for the poor and oppressed countries. Both
>have spelled trouble for us. On the contrary, the
> task at hand is to take advantage of the sharpening competition
>among the US and the other big economic
> powers to disempower, if not dismantle, the WTO, World Bank, and
>the IMF. The task at hand is to redouble our
> collective efforts to derail the Cancun Ministerial.
>
> From this vantage point, let us beware of the proposal being
>floated by the WTO leadership to form an NGO
> Advisory Committee for the WTO. This idea is nothing more than a
>Trojan Horse planted in our midst to split our
> ranks and shore up an institution of the global capitalist elite
>that is in the grip of an irreversible crisis of
> legitimacy.
>
>
> Walden Bello, Ph.D., is the director of Focus on the Global
>South based in Bangkok, Thailand. He is
> concurrently also professor of sociology and public
>administration at the University of the Philippines. He has
> authored many books and numerous articles on Asian economies,
>political systems, and security issues.
>
>
>
>
>
>
>
>
>
>--
>Tom Childs - Learning Resources, A/V
>Douglas College Library
>New Westminster, B.C. Canada
>T: 604 527-5713 - library
>T: 604 524-9316 - Lulu Island
>E: childst at douglas.bc.ca
>U: BCGEU Local 703
>W: http://www.globaljustice.ca
>
> "There's no way to delay, that trouble comin' everyday."
> --Frank Zappa
> "In the contradiction lies the hope."
> --Bertholt Brecht
>
>---------------
>To change membership in BCLA's mailing lists,
>visit www.bcla.bc.ca/bcla/listservs/
--
Al Kagan
African Studies Bibliographer and Professor of Library Administration
Africana Unit, Room 328
University of Illinois Library
1408 W. Gregory Drive
Urbana, IL 61801, USA
tel. 217-333-6519
fax. 217-333-2214
e-mail. akagan at uiuc.edu
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