WTO Gains New Life in Qatar

One Win, Mostly Losses for People at 2001 Ministerial

The World Trade Organization (WTO) ministerial meeting that concluded in overtime on Nov. 15 had one win, but mostly losses for the people and the environment.

The WTO agreed to let poor countries manufacture and use generic drugs, after pressure by India, Brazil, Thailand and a coalition of African countries. Drug patents can now be overridden in times of health "crises" such as AIDS. Several countries where major pharmaceutical companies are based, including the US, had opposed this humanitarian measure.

The meeting of all 142 WTO member nations was the follow-up to the failed 1999 Seattle meeting. Despite WTO pledges at the time to dialogue with civil society, the present meeting was scheduled for Doha, the capital of the tiny Persian Gulf Emirate of Qatar. The emirate has no labor unions, no political parties and no domestic antiglobalization groups. Demonstrations are not permitted and visas are difficult to obtain. Throughout October, officials waffled on moving the meeting to Singapore or Geneva, but eventually decided it was politically important to trust the Qatari officials' pledge of security. However, many delegates, NGOs (nongovernmental organizations) and journalists did not attend.

The final agreement is less ambitious than the free-traders wanted. It does not include new talks on investment and government procurement, elements of the proposed (and so-far failed) MAI (Multilateral Agreement on Investment). But the Doha declaration fails to address the developing countries‚ continued outrage at unfair policies and their exclusion from decision-making, which had scuttled the Seattle meeting.

The new round: The US' top priority in Doha was to launch a new round of talks. After much arm-twisting, compromises and promises of development aid to poor countries, the WTO members agreed on a new three-year round of talks. That would show investors that the WTO can indeed guarantee a stable environment for foreign investment. The WTO is a fragile and deeply divided organization. The price of a new round was a sharply diminished scope for the new talks, and concessions that will hurt US and EU farmers and textile industries.

The Economist perceptively points out that a new round of talks helps many of the new allies in the US war. Pakistan, for instance, will greatly benefit from the elimination of trade barriers to its textiles.

Arm-twisting: Filipino activist Walden Bello wrote that the developing countries were pressured to agree to a new round of talks by "manipulation of the WTO's undemocratic system of decision-making and blunter forms of trade blackmail." The BBC reported that African nations had been threatened by the US with the loss of trade concessions if they did not back a new round of talks.

Summary Results of the Meeting: China and Taiwan were accepted for membership in the WTO. The US agreed to talks on its anti-dumping policies in the steel industry. The European Union (EU) gave up on advocating the precautionary principle for food imports and GMO labels, because the US and ministers of many developing countries persisted in seeing it as solely an excuse for protection of EU farmers. Food exporters including the US successfully pressured the EU and Japan to approve the gradual elimination of popular subsidies for their farmers. No commitments on improving labor standards were made. The meeting did not address the ongoing scandal of patenting life, or local community rights to seeds and biological materials.

China's Entry: With 1.3 billion people, China is the new 800-pound gorilla in the global economy. It has effectively no labor or environmental standards. Having burned the bridges to its history in the Cultural Revolution, China's leaders seem to be emulating repressive, paved-over Singapore. Chinese businesses are diligently raping its environment and converting its natural resources into plastic gadgets for export.

The main beneficiaries of China's WTO membership will be state-owned enterprises and large foreign companies. Lori Wallach, director of Public Citizen's Global Trade Watch, warned, "For people in China, this will cause lost jobs and ruined livelihoods. And in the United States and in other countries around the world, big multinational companies will be using China; this is especially bad for the middle-income countries like Mexico, because all the companies that have relocated to those places are more likely to move to China now." Protection for human rights in China will become far more difficult. The US has agreed to stop the annual review procedure wherein Congress considers whether to end "normal trade relations" with China because of its record on human rights.

China is such a large and fast-growing trading nation that it will change the balance of power in the WTO. It will weaken the dominant position occupied by the US and the EU, and reshape the power relationship among developing countries.

Dumping: WTO member countries can use WTO rules to impose tariffs on imports that are sold below cost. Steel exporters like Brazil and South Korea claimed the US has misused this right to protect its domestic steel industry. The House of Representatives passed a resolution urging the US negotiators not to adopt policies that would hurt national defense, but Zoellick and his boss answer to a higher authority: Wall Street. And Wall Street wanted a new round (which will keep the stock market up, and allow the US to again propose fewer restrictions on foreign investment). To get the new round, Zoellick agreed to weaken the US steel industry. The US now must reopen talks on its anti-dumping policies, which means more foreign steel.

Agriculture and the Environment: The EU and Japan agreed to phase out subsidies for their farmers. Their rural economies, their touristic countrysides and their sense of their own pasts will weaken and disappear. People are not starving in those countries now, so why is it essential to provide lower priced food by importing it? Answer: it was the price of a new round of talks.

The beneficiaries of lower subsidies will be developing countries, and large exporters in countries like the US, Canada and New Zealand, such as Cargill and Tyson Foods.

Faced with opposition from the US and developing countries, the EU gave up its attempt to get WTO approval on its GMO policy. The EU had wanted to allow its member states to require labeling of genetically modified food products and to use the precautionary principle in food imports.

On the environment, the EU tried to represent its citizens' green consensus that the environment belongs in the WTO talks. But it obtained only a weak promise of future talks on harmonizing WTO rules with international agreements like the Kyoto protocol.

Labor Standards: The ministers of developing countries oppose western labor standards as protectionist. The Bush administration did not push for labor standards. Zoellick said the weak International Labor Organization, rather than the WTO, will be responsible for getting labor issues into the globalization debate. The status quo remains -- no sanctions allowed for child, prison or sweatshop labor.

From the Nov. 15 Statement of the Coalition of Civil Society Groups in Doha: "Most of the positive proposals from civil society have not been considered. These include protection of the rights to development, promotion of local economies, food security, social, cultural and labor rights, and protection of the environment. These proposals recognize that the competence of the WTO must be limited to trade, and that conflicts between trade and other international agreements must be resolved outside the WTO system. Reform of the global system must also include regulation of the main actors in the global economy, the multinational corporations."

On the Ground in Qatar: Qatar was chosen because it enabled the WTO to avoid street protests and another Seattle debacle. Because of limited hotel space and visa restrictions, fewer than 200 NGO representatives were allowed to attend. Only accredited delegates, journalists and NGOs were given visas. The only way to protest was to arrive by boat, or to be in Qatar already.

Although many delegates and NGOs stayed away, 50-100 members of NGOs staged a protest in the conference center the first night of the meeting. Indymedia.org joined up with Greenpeace to broadcast from the Greenpeace ship Rainbow Warrior, which docked in Doha.

Economic Principles: US family farm activist Ben Lilliston wrote from Doha, "Although countries seem to enthusiastically buy the WTO's line that free trade is good for everyone, it quickly becomes clear that most don't believe the propaganda." We need look for hypocrisy no further than the Bush II White House. By refusing to accept the Kyoto Protocol on industrial emissions, it provides US industry with the equivalent of an enormous hidden subsidy that can't be negotiated under WTO rules.

From a political point of view, the WTO is run by a gang of lobbyists and free-trade fundamentalists who work for the global elites. From an economic point of view, it's an organization set up to facilitate trade within the framework of race-to-the-bottom, linear-future, chew-up-the-planet economics. When free-trade globalization has to be justified by economic theory instead of actual outcome, the principles of "comparative advantage" and Adam Smith's invisible hand are invoked to justify its "rationality."

Imagine that Indonesia produces cloth for $1/yard and oranges for $1/case, and the US produces cloth for $5/yard and oranges for $2/case. The theory states that both countries benefit if Indonesia specializes exclusively in the product for which it has the greater comparative advantage, in this case cloth. Then they trade. Supposedly, Indonesia will then produce cloth and import oranges, and the US will produce oranges and import cloth, and both will be better off than at first. Economist Herman Daly has pointed out that this scenario works only if capital is immobile -- it cannot leave the nation, and must allocate itself most efficiently (as with an invisible hand) within the nation. In the 18th century that was a reasonable assumption. But now that capital is mobile, it all migrates to the country with the absolute advantage (in this case, Indonesia for both products). Daly rightly calls the argument for globalization based on comparative advantage "too illogical for words."

Future Activism: Activists have four choices: We can ignore the WTO and focus on local activities. We can demand the abolition of all international governance. We can try to reform the WTO. Or we can try to change the economic theory in the halls of power. Greenpeace and Public Citizen, for example, favor reform, or shrinking and partial replacement with other international bodies. That political approach is essential, but inadequate. The EU's inability to get any other country interested in the precautionary principle shows that national agendas at the WTO are nearly always driven by maximizing self-interest within the economic rules that exist.

Protesters should advocate institutional change, but also an economic theory that recognizes the environment as a limited and valuable resource, and that rests on the reality that humans are social (not completely independent, rational, self-seeking) beings. That economics must become the basis for the reconstruction of world governance and trade. Otherwise the race to the bottom will continue.

Danila Oden is a food system activist. writer of essays, opinion, journalism and humor and an observer of the global protest movement. A version of this appeared in Sentient Times, Ashland, Ore. (Dec 2001-Jan 2002 issue).

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