D-Day for the WTO
By Professor Walden Bello Executive Director, Focus on the Global South Professor of Sociology, University of the Philippines
In the ten months since the collapse of the World Trade Organization ministerial meeting in Cancun in September last year, there have been warnings aplenty, directed at the developing countries, that if they did not cooperate, the multilateral trading system would be eroded beyond repair.
The last chance for saving the multilateral system, they were told, was swift approval of a post-Cancun framework for trade negotiations that would, among other things, be geared to making trade an instrument of development. Two influential blocs of developing countries, the Group of 20 and Group of 90, were skeptical but were nonetheless open to the possibility that the WTO hierarchy would break with tradition and produce a negotiating document that would respect their interests.
They were right to remain skeptical. The so-called “July Framework” issued by the head of the WTO General Council over a week ago is so unbalanced in favor of the interests of the United States and the European Union that one wonders where these governments have been since the unraveling of the trade body’s ministerial in Seattle in 1999.
In the most contentious area, agriculture, the framework amounts to nothing other than an intricate exercise to accommodate influential agro-trade interests in Brussels and Washington. For the latter, the July Framework proposes an enlarged “Blue Box” that would house much of the $100 billion in subsidies appropriated for farming interests by the US Farm Bill of 2002. For the EU, the document proposes protection from substantive tariff for so-called “sensitive products,” meaning agricultural commodities that make up to 20-40 per cent of its tariff lines.
Meanwhile, nothing concrete is offered to meet the developing countries’ demands for market access restrictions that would preserve their food security and protect their small farmers from unfair competition. These concerns are left to “future negotiations.” Perhaps the most blatant example of double standards is the text’s postponing to future negotiations the West African cotton producing countries’ demand for an end to the scandalous $2.8 billion in cotton subsidies by the US, which has caused much hardship among West African farmers by triggering the collapse of the price of cotton globally.
The bias against the interests of developing countries goes beyond agriculture. The July Framework’s proposal in the area of industrial commodities simply resurrects the so-called “Derbez Text” that was roundly rejected in Cancun. With its proposal of steep cuts in many of their manufacturing tariff lines, developing countries have denounced the July text as nothing but a prescription for their de-industrialization.
The Framework also unilaterally brings back for negotiation the issue of “trade facilitation,” one of the so-called “New Issues” that the Doha Ministerial in 1991 agreed could not be negotiated unless there was explicit consensus among all members. Also infuriating is its mentioning its intention to address the global South’s central issues—implementation of onerous WTO rules and the principle “special and differential treatment” for developing countries —without offering any specific proposals but leaving these, as in agriculture, to “future negotiations.”
Not surprisingly, India, one of the central developing country actors in the WTO, formally rejected the July Framework as a basis of negotiations very soon after it appeared. Many other governments have also expressed opposition, as have many civil society organizations such as Third World Network, Public Citizen, Council of Canadians, Focus on the Global South, and other groups belonging to the influential Our World is not for Sale Network.
The developing countries have waited nearly 10 years for the trade superpowers that dominate the WTO to show sensitivity to their efforts to change global trade from being an instrument of their domination to serving as a mechanism to advance their economic development. For this patience, they have been rewarded with a succession of anti-development negotiating frameworks and texts culminating in the July Framework. Thus, as they deliberate on the text during the last days of this month, developing country governments should consider the fact that rejecting the July text may no longer suffice. It is time they actively explore or create other trade mechanisms or frameworks to make development and trade complementary. Development is a goal that can no longer be pursued within a WTO paradigm.