We have defeated the WTO

We have defeated the WTO. The talks have collapsed after years of teetering and delay. Ok, you may say that “we” did not directly cause the collapse. But there was five years in the streets and in people’s consciences that we fought and slowly changed the way the world saw this exploitation. We started small in out towns and with friends. In 1999 we hit them hard in Seattle at the peak of their faith in “globalization” free trade, privatization and capitalism in general. The words “We are winning” appeared on walls and we felt it in our hearts even as tear gas filled our lungs and days were spent in jail. As the world economy ran into more and more problems and their neoliberal ideas failed time after time to deliver what was promises, or anything at all, public opinion shifted. The WTO lied and said it was all for the poor while rich countries refused to budge an inch while trying to take a mile. The rich countries and corporations thought they could grab it all and become lords of everything. We exposed their lies. Poor country’s governments slowly gained courage and now the WTO has been crushed.
Some people feel like we never win victories. Today it is clear-it was worth it-we won. It wasn’t easy or quick and all the same forces are still at work to suck that last drop of blood from a starving child-and we must continue the fight. Problems are everywhere but this is a huge victory for everyone in the world and we should celebrate!

remember the ultimate sacrifice of Korean farmer Lee Kyung Hae.


Here is an article by Reuters with my comments in italics and an article by activist and economist Walden Bello.


WTO suspends Doha talks Geneva July 25, 2006

Global free trade talks have collapsed after nearly five years of on-off haggling, with officials and diplomats saying it could be years before they resume.

The suspension of the World Trade Organization’s Doha Round came after major trading powers failed in a late attempt to overcome differences on reforming world farm trade.

The talks were billed (by the world’s dominant powers like the US and EU) as a once-in-a-generation chance to boost global growth and lift millions out of poverty. (Of course it was all about exploiting countries and people with less power.)

Indian Commerce and Industry Minister Kamal Nath said the suspension could last "anywhere from months to years".

WTO chief Pascal Lamy warned members of the G6 (Australia, Brazil, India, Japan, the European Union and the United States) on Sunday that he would halt the Doha Development Agenda - launched in 2001 to ease poverty (lie) and boost the global economy - unless the deadlock ended.

But 14 hours of talks between the six yielded no breakthrough in slashing farm subsidies and lowering agricultural tariffs.

The US said the EU and other WTO members that it called "protectionist" had not done enough to lower farm tariff barriers to allow it to move further on subsidies.

But EU Trade Commissioner Peter Mandelson said Washington "was unwilling to accept or indeed to acknowledge the flexibility shown by others".

Despite the debacle, all G6 members said they remained committed to the multilateral trading system and to completing the talks, even if they could not say how or when negotiations could be revived.

EU Agriculture Commissioner Mariann Fischer Boel said: "It is a big failure. Whether it is going to be definitive, only time will tell."

The crisis is similar to the 1990 breakdown during the last round of talks, which started in 1986 and ended in 1993.

REUTERS





Why Today’s Collapse of the Doha Round Negotiations is the Best Outcome for Developing Countries


By Walden Bello*


Bangkok, July 24--Today’s collapse of the Doha Round negotiations of the World Trade Organization in Geneva is one of the best things to happen to the developing world in a long while.

In the past two weeks, in anticipation of the July 27-28 meeting of the World Trade Organization’s General Council, a major rescue effort was mounted to save the “Doha Round” of global trade negotiations from collapse. The most prominent of these efforts took place at the Group of Eight Summit in St. Petersburg, where the leaders of the world’s most powerful economies called for a successful conclusion to the round, painting it as a “historic opportunity to generate economic growth, create potential for development, and raise living standards across the world.”

This was pure myth. The idea that the Doha Round is a “development round” could not be farther from the truth.

At the very outset of the Doha negotiations in November 2001, the developed country governments rejected the demand of the majority of countries that the talks focus on the hard task of implementing past commitments and avoid initiating a new round of trade liberalization. From the very start, the aim of the developed countries was to push for greater market openings from the developing countries while making minimal concessions on their part. Invoking development was simply a cynical ploy to make the process less unpalatable.

Lopsided Negotiations in Agriculture

The state of the agricultural negotiations before today’s unraveling was reflective of this. Even if the United States had conceded to the terms of WTO Director General’s compromise on cutting its domestic support, this would still have left it with a massive $20 billion worth of allowable subsidies. Even with the European Union agreeing to phase out its export subsidies, this would still have left it with 55 billion euros in other forms of export support. In return for such minimal concessions, the US, EU, and other developed countries wanted radically reduced tariffs for their agricultural exports in developing country markets.

Indeed, even at a very late stage in the negotiations, the US appeared determined to eliminate any protection for developing country farmers. US Trade Representative Susan Schwab attacked the provisions for “special products” and “special safeguard mechanisms” already institutionalized in the December 2005 Hong Kong Ministerial declaration. Admittedly imperfect, these mechanisms would nevertheless allow governments to slow down the erosion of local agriculture by exempting some products from tariff cuts and raising tariffs on subsidized imports.

The WTO negotiations, if brought to a conclusion on such lopsided terms, would result in the slashing of poor countries’ farm tariffs while preventing them from maintaining food security. This is a recipe for massively expanded hunger and threatens to further impoverish hundreds of millions of the poor worldwide. The consequences for the South were perhaps best summed up by a Philippine government negotiator before the WTO Agriculture Committee: “Our agricultural sectors that are strategic to food security and rural employment have already been destabilized as our small producers are being slaughtered by the gross unfairness of the international trading environment. Even as I speak, our small producers are being slaughtered in our own markets, [and] even the more resilient and efficient are in distress.”

The Specter of Deindustrialization

But the developed countries not only want radically reduced agricultural tariffs from developing countries. They also want maximum entry to southern markets for their industrial and other non-agricultural goods. In the NAMA (Non-Agricultural Market Access) negotiations, they have demanded that the industrializing economies of the South cut their non-agricultural tariffs by 60-70 per cent while offering to cut theirs by only 20-30 per cent. This not only violates the GATT-WTO principle of less-than-full-reciprocity. It is absurdly inequitable. The South African government reflected the frustrations of most of the global South about the Doha process when it stated that "developing countries will not agree to destroy their domestic industry on the basis of unreasonable and irrational demands placed on them by the developed countries."

The extinction of agriculture and deindustrialization is not the only price that developing countries are being asked to pay for a successful conclusion to the Doha Round. In addition, under the General Agreement on Trade in Services (GATS) negotiations in the WTO, they are being asked to allow foreign corporations more rights to buy and control public services in developing countries, at the expense of guaranteeing essential public services for the poor.

The Cost-Benefit Equation

It is no longer just the developing countries or global civil society that is warning that WTO-managed liberalization will be detrimental to the interests of the developing world. Even the most pro-liberalization agencies are now admitting that the benefits of the Doha Round to the poor have been greatly inflated. According to a fall 2005 study by the World Bank, in a “likely Doha scenario” of reforms, developing countries would gain a mere $16 billion in ten years. That’s a miniscule 0.16 percent of developing-country gross domestic product, or less than a penny a day per capita. The poorest billion people are projected to increase incomes by a mere $2 per year. That’s why it is so heartbreaking to see “the poor” being invoked to sell the project of massive corporate expansion of the Doha agenda.

Yet the 2005 World Bank study, though less unrealistic than that agency’s previous studies, is extremely inadequate, for it does not factor in many costs that the WTO regime imposes on developing countries. It fails to account, for instance, for the negative impact of corporate patent monopolies under the WTO’s “Trade-Related Intellectual Property” agreement, which force the poor to pay vastly increased prices for access to life-saving medicines.

Some estimate that these costs to developing countries are far greater than any alleged gains from liberalization. For example, a recent United Nations Conference on Trade and Development (UNCTAD) study predicts that the losses in tariff income for developing countries under Doha could range between $32 billion and $63 billion annually. This loss in government revenues – the source of developing-country health care, education, water provision, and sanitation budgets – is two to four times the mere $16 billion in benefits projected by the World Bank.

Africa, the least developed region, will be one of the most prominent victims should the round be concluded successfully. Summing up the findings of other recent research from the Carnegie Endowment, the European Commission, and the Food and Agriculture Organization (FAO), Aileen Kwa of Focus on the Global South points out that “the majority in Africa will be faced with losses in both agriculture and industrial goods liberalization. Even if agricultural export markets were open to Africa, the majority of African farmers – subsistence farmers – will not be in a position to compete. In addition, they will lose through having to open their domestic markets in the negotiations. The poorest countries in Africa will be worst hit – many are LDC countries in Sub-Saharan or East Africa.”

Breaking out of the WTO Paradigm

In sum, not only do the economic costs of a potential Doha conclusion clearly outweigh any projected benefits to the poor; the loss of policy space for developing countries – to create jobs through industrialization, guarantee public services, and protect farmers and food security – would be tantamount to kicking away the ladder of development, to use the image of Cambridge University economist Ha Joon Chang, and prevent developing nations from using the very tools used by developed nations to pull themselves out of poverty.

So clearly detrimental to development is free trade that a recent study of the United Nations Developing Program (UNDP) advised poor Asian countries to do what Japan and South Korea did successfully: protect key industries with tariffs before exposing them to foreign competition. To promote development and reduce poverty, governments should be encouraged to increase spending on health care, education, access to water, and other essential services, not pressured to sell them off to foreign corporations for private profit.

Trade can be a medium of development. Unfortunately, the WTO framework subordinates development to corporate-driven free trade and marginalizes developing countries even further. It is time to cease entertaining illusions about the alleged beneficial effects on development of the Doha Round. The collapse of the Doha Round will be good for the poor. With today’s unraveling of the WTO talks, the task should now be to