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The World Trade Organization’s (WTO) Fifth Ministerial Conference took place in Cancun, Mexico from September 10 to 14, 2003. These meetings are some of the most important to the world due to the various issues discussed that can impact, positively and negatively, various countries, especially poor ones, and their economic futures.
Over 10,000 people are thought to have attended the meeting: among them 3,000 journalists, 2,000 NGOs and 5,000 government delegates (including trade ministers and other ministers of agriculture, environment, finance and development).
The trade talks opened with key speakers warning of the importance and urgency of these issues.
We are told that trade can provide a ladder to a better life and deliver us from poverty and despair... Sadly, the reality of the international trading system today does not match the rhetoric.
— Kofi Annan, Secretary General, United Nations. (In a statement read at the opening session of the WTO meeting.)
We can no longer permit well-being to be limited to a few nations. We can no longer postpone the battle against poverty and marginalization.
— President of Mexico, Vicente Fox, Speaking as host of the event
(The above were Cited from Diego Cevallos, Trade Ministers Unfazed by Criticism as Meet Begins, Inter Press Service (IPS), September 10, 2003.)
But these talks collapsed.
- Richer countries wanted to talk about newer issues that mostly they themselves would have benefited from. (This is part of the free trade and liberalization ideas that they promote, which have been under increasing criticism from many angles in recent years.)
- Poorer countries wanted to finish older issues mostly on agriculture that affected them the most, especially the impact of European and U.S. subsidies on their own agriculture and lack of access to those markets. (This actually goes against the free trade ideas that these two regions especially promote.)
- This impasse led to the end of the talks for now but for the first time showed the developing countries make a successful and united stand to represent their concerns.
Joseph Stiglitz, a Nobel Prize winner in 2001 for economics, former World Bank Chief Economist, and now prominent critic of the ideology of the Washington Concensus Side NoteSee his book, Globalization and its Discontents, (W. W. Norton and Company, 2002) that at one time he helped to push, made a prediction about a month before the meeting took place:
The Cancun round of WTO talks is a chance for developing countries to get a fairer deal. But don’t count on that happening.
— Joseph Stiglitz, Trade imbalances, The Guardian, August 15, 2003
This web page has the following sub-sections:
As with previous such meetings, even before starting there were debates and concerns on various issues such as:
- The apparent lack of democracy in the meeting processes;
The WTO and the meeting and decision-making processes, especially seen in previous ministerial meetings, have been long criticized as being non-transparent, often behind closed doors, and on the whole undemocratic, due to the strong influences and power of the richer nations. In the past there have even been closed-door Green Room meetings and consultations by richer countries, who then basically determine the agenda of the Ministerial meetings.
Leading up to this ministerial meeting, heads-of-delegations met to discuss the draft text. Amongst many concerns, it is interesting to note Botswana and the African-Caribbean-Pacific (ACP) countries comments on the decision-making process, as it highlights some of the concerns, quite politely, at the lack of democracy in various ways. Martin Khor of the Third World Network reports on this:
To improve the decision-making process during the Ministerial, the ACP Group proposed the adoption of procedural rules to enhance transparency and inclusiveness.
These rules should ensure that:
- All WTO members decide on the appointment of the Chairpersons of Working Groups formed at the Ministerial Conference.
- The draft text that forms the basis of negotiations reflects the proposals of all members or groups of members.
- All WTO members be informed of consultations and are entitled to participate in them.
- All issues of importance, including consideration of a proposal to extend the length of the Conference, be put before WTO members as a whole for a decision.
— Martin Khor, North-South divide on Cancun draft at General Council, Third World Network, August 27, 2003
That these issues are being raised suggests there is concern at the decision-making process, once again. In the previous round in Doha, though not necessarily reported in much detail, developing countries and non-governmental organizations charged rich countries and regions, such as the European Union (E.U.) and U.S of things like bullying and arm-twisting. See this site’s section on the Doha round.
- Market access issues for developing countries (or Southern countries);
- Protectionism by industrialized (or Northern) countries and regions such as the U.S. and European Union (EU) Side NoteFor example, The agricultural subsidies of the first world or industrialized countries result in their agricultural over-production and thus a downward pressure on prices leading to artificially-low global agricultural prices. Combined with years of disastrous structural adjustment policies upon the third world commodity prices have further plummeted;
- Rich countries dumping agricultural commodities on international markets at prices below the cost of production, and other unfair agricultural trade rules;
- Patent rules that appear to deny poor countries access to affordable medicines;
- Trying to introduce new issues before issues raised in the previous Ministerial, the Doha round, have been resolved. Side NoteSome of these additional issues include those around investment, competition policy, transparency in government procurement and trade facilitation. Some of the existing issues include agriculture and patents. WTO member countries have been polarized over these issues. For example, developing countries in general want to avoid extra issues (especially investment), while some rich countries want to introduce these. (These issues are also known as the Singapore issues, to reflect where they were raised — Singapore in 1996 — not who raised them);
- And many more
Leading up to the meeting there was a Draft Cancun Ministerial Text being discussed. However, at a meeting of heads-of-delegation of WTO members at the end of August, various developing countries were very critical of it and said that the draft text is imbalanced and does not take account of their development needs and of their proposals in many areas.
It is interesting to note how various concerns that were raised here before the meeting, were very similar to those being raised before and at the previous ministerial meeting. In addition, previous meetings have highlighted continued non-democratic decision making processes, and arm-twisting type negotiation tactics of more powerful and wealthier countries. (See this site’s section on the Doha round for more details.) Many therefore feared that this round would not be different and according to some, it did indeed look like this is the way it was going before the talks ended.
The authoritative Joseph Stiglitz, mentioned further above, is worth quoting as he also highlighted before the meeting, how concerns from previous years were real:
At their last meeting in Doha in November 2001, ministers recognised the inequities of the previous round of trade negotiations, the Uruguay round. This round was supposed to redress those imbalances.
One would have thought that the developing countries would look forward to the meeting as a chance to achieve a fairer global trading system. Instead, many fear that what has happened in the past will happen again: secret negotiations, arm twisting, and the display of brute economic power by the US and Europe aimed at ensuring that the interests of the rich are protected.
While some progress has been made in making the negotiations more open and transparent, efforts to go further have met with resistance, and for good reason: unbalanced processes help ensure unbalanced outcomes. Ironically, the World Trade Organisation (WTO), where each country has one vote, might seem far more “democratic” than, say, the International Monetary Fund (IMF) where a single country, the US, has a veto. Yet the realpolitik of economic power has ensured that the interests of the developed countries predominate.
— Joseph Stiglitz, Trade imbalances, The Guardian, August 15, 2003
Trade is said to be the way to enhance growth and development and eliminate poverty. That might be the case in theory, but, currently, the 49 least developed countries that make up the world’s poorest countries have not shared in the growth of world trade. The 646 million people in the top exporting countries — the US, Germany, Japan, France and UK — have 100 times more trade than their poor counterparts. Those 49 countries have a similar population as those top five.
Some third world groups have been very critical of the WTO and how it is being used. Seeing it from their side, and the impact on the poor countries, a geopolitical dimension to what may sound like economic issues is added, and some suggest the WTO represents a continuation, but in different forms, of power struggle. Take for example what policy analyst at Focus on the Global South, and author, Aileen Kwa notes:
The WTO perpetrates a subtle and pervasive form of re-colonisation and warfare. It calls on members to relinquish their sovereign rights and policy freedom (by constraining their ability to put in place domestic regulations) in order to allow pillage by transnational corporations. The saturation of Northern markets makes it imperative that transnational corporations get access to markets in the South. The ever-expanding ambit of WTO rules are designed to do just that; pry open developing country markets, not only through the drastic reduction of tariffs, but by “beyond the border” measures. The result is the further subjugation of economies and peoples in the developing world.
— Aileen Kwa, Cancun and the Battle for Developing Counties' Markets: Another Form of Warfare, Focus on the Global South, August 29, 2003
But this time round it seems that the poor countries have tried to resist such “re-colonization.”
Trade Talks Collapse
The trade talks collapsed over the rich countries attempts to discuss new issues without finishing off the existing and most pressing ones for the poor countries, while poorer countries resisted such an attempt.
But this time round, this talk signified perhaps a new state of affairs too: poorer countries, for one of the first times, have been able to make a united stand against the richer countries, who in the past have also used non-democratic pressures to get their interests represented in the WTO meetings and their outcomes, often at the expense of the poorer countries who have made even more concessions.
This has left rich countries blaming poor countries for the failed talks.
- Depending on who you are and how you look at it, the talks can be seen as a failure for not being able to make progress, but in some respects can be seen as a sort of success for poorer countries.
- For the first time then, the poorer countries have been able to take a bold stance.
- While the trade talks didn’t progress, the fact that it appears not to have made things worse for poorer countries could be seen as a success.
The developing countries that took a stand included larger ones such as China, India, Brazil and South Africa but also other blocs such as the African, Caribbean and Pacific (ACP) group, the African Union, the Least Developed Countries (LDCs) and Asian countries such as Malaysia.
- They all said they would not like to launch negotiations at the conference on the “Singapore issues” (or new issues) before existing ones are resolved.
- The existing ones impact the poor the most.
- The new ones are the ones that the rich countries and their corporations would like the most, because they are about more market access into poorer countries.
It is not clear how beneficial multinational companies (MNCs) having more market access to poorer countries is for the poorer countries themselves.
- It is clearly beneficial to the MNCs, else they wouldn’t be backing this heavily.
- It could be argued that they bring in knowledge and investment which is much-needed.
- What many people are concerned about is that this is more concentration in things like ownership, wealth and knowledge and that local and other regional companies would not be able to compete with such giants, of even get off the ground, without help from their governments, which richer countries frown upon.
- To that extent, and as exemplified by Aileen Kwa above, for example, some in the developing world, fear the MNC pressure represents a new form of colonialism where there will be more dominance and influence by foreign owners and less ability for poor countries to gain a strong foundation and be equal partners in an international arena.
IPS reported (September 15, 2003) that “Roberto Bissio, director of the Uruguay-based Social Watch said [that developing countries standing firm despite Europe offering to concede some of the Singapore issues] was not surprising. The Doha Development Agenda agreed two years ago in the capital of Qatar clearly stated that the Singapore issues would be discussed only after ‘an explicit consensus’ had been reached. But that had clearly not happened, he said.”
The same IPS report also asked why consensus was not reached. Some, such as the European Trade Commissioner appeared to blame (indirectly) poor countries, and implied that the way the talks were structured it was difficult to get so many countries to talk and to direct the meetings properly. Unfortunately, what that trade commissioner perhaps did not recognize was that in the past, the efforts to “steer” these meetings have been mostly done by the rich countries who have decided the agenda:
EU Trade Commissioner Pascal Lamy had his own explanation [why consensus was not reached]. “Despite the commitment of many able people, the WTO remains a medieval organisation,” he said.
“The procedures and rules of this organisation have not supported the weight of the task. There is no way to structure and steer discussions amongst 146 members in a manner conducive to consensus,” Lamy told media representatives.
He said the decision-making needed to be revamped and that the EU would continue to work in that direction within the WTO.
Director of the Third World Network Martin Khor went a step further: “The deeper reason is the untransparent and undemocratic system of drafting of texts in the WTO. The decision-making system in the WTO should be reformed so that there is more transparency and democracy, so that developing country members can participate more effectively, especially in the drafting of texts.”
— Ramesh Jaura, Mixed Feelings About The Debacle, Inter Press Service, September 15, 2003
In addition, UK’s representative, Patricia Hewitt on an interview on BBC Radio 4 on the morning of September 15, 2003, also highlighted just a partial reaction, implying that everyone (i.e. the rich countries) were ready to make a concession, and that it was totally surprising and unfathomable as to why the poor countries could not agree. (These were not her exact words, but the main thrust of her point as I interpreted it, listening to her speak.) UK’s Channel 4 news programme also highlighted on the same day that the U.S. spun the reasons for the failed talks as all other nations not trying to negotiate, while the U.S. tried its best.
There were “deals to be done” as some delegates such as Hewitt had said, but as the Channel 4 program highlighted, if the stance this year by the developing countries is not seen in a wider historical context it looks like they were stubborn and not prepared to negotiate and balance off concerns. In a wider historical context, the poorer countries have always lost out in these “negotiations”, so the temptation to brand poor countries as not wanting to participate or not wanted to “deal” fairly has to be resisted.
Indeed, perhaps even opposite to the interpretation of Hewitts' stance, some development organizations suggest that it wasn’t the poor countries who were stubborn, but the rich ones.
The British newspaper, The Guardian, reported that international development organization Oxfam blamed the U.S. and E.U. for the collapse. “Oxfam said the refusal of the EU and US to cede any ground to developing countries on agriculture — and Europe’s attempt to force a global investment and competition treaty on to the table — had forced poor countries to walk out.” The Guardian adds further that the collapse could be a blow to the world economy, which is already fragile.
In addition, another Guardian article reports another organization, ActionAid who say that the victory for poor countries might be hollow because all that has happened is that there will be no change to the unfair rules that allow rich countries to continue to subsidize their farmers at the expense of millions of poor people, though on the positive side, further deals have not made that would have made a bad situation far worse.
How could it be that some of the most senior ministers from rich countries such as Lamy, Hewmitt and others could make such comments that ignore the views and concerns of the third world? From one angle, these people are just doing their jobs: representing their countries interests. In the world of realpolitik power is a factor that the modern economic theories don’t seem to account for.
From a historical perspective, Cancun is also an example of continued attempts by the rich countries to siphon wealth from the poor. Being locked into this process for centuries, perhaps many politicians from the rich world today do not see a way out or even realize these aspects. George Monbiot, writing in The Guardian recognized that the stance of the poor countries was a A threat to the rich, which, historically has been enough reason for the powerful to attempt to do whatever they can to ensure they remain influential. In fact, he is quite blunt about it. Referring to Thomas Hobbe’s 1651 work Levaithan, Monbiot notes that
the nasty and brutish behaviour of the powerful ensures that the lives of the poor remain short.
At the talks in Cancun, in Mexico, Lamy made the poor nations an offer that they couldn’t possibly accept. He appears to have been seeking to resurrect, by means of an “investment treaty”, the infamous Multilateral Agreement on Investment. This was a proposal that would have allowed corporations to force a government to remove any laws that interfered with their ability to make money, and that was crushed by a worldwide revolt in 1998.
In return for granting corporations power over governments, the poor nations would receive precisely nothing. The concessions on farm subsidies that Lamy was offering amounted to little more than a reshuffling of the money paid to European farmers. They would continue to permit the subsidy barons of Europe to dump their artificially cheap produce into the poor world, destroying the livelihoods of the farmers there.
— George Monbiot, A threat to the rich, The Guardian, September 16, 2003
(For far more detailed insights into these historical aspects and how this has led to the extreme disparities seen in the world today, and how it has influenced, shaped and impacted the world system today, see the Institute for Economic Democracy web site. For more about the Multilateral Agreement on Investment that was derailed in 1998 that Monbiot was referring to, see this site’s MAI page.)
Monbiot’s observation on what is now possibly happening is interesting to note too. He tries to see some positive outcomes here in the long term for poor countries, and is quoted at length:
...something else is now beginning to shake itself awake. The developing countries, for the first time in some 20 years, are beginning to unite and to move as a body.
That they have not done so before is testament first to the corrosive effects of the cold war, and second to the continued ability of the rich and powerful nations to bribe, blackmail and bully the poor ones. Whenever there has been a prospect of solidarity among the weak, the strong — and in particular the US — have successfully divided and ruled them, by promising concessions to those who split and threatening sanctions against those who stay. But now the rich have become victims of their own power.
Since its formation, the rich countries have been seeking to recruit as many developing nations into the WTO as they can, in order to open up the developing countries' markets and force them to trade on onerous terms. However, as the rich have done so, they have found themselves massively outnumbered. The EU and the US may already be regretting their efforts to persuade China to join. It has now become the rock — too big to bully and threaten — around which the unattached nations have begun to cluster.
Paradoxically, it was precisely because the demands being made by Lamy and (to a lesser extent) the US were so outrageous that the smaller nations could not be dragged away from this new coalition. Whatever the US offered by way of inducements and threats, they simply had too much to lose if the poor countries allowed the rich bloc’s proposals to pass. And their solidarity is itself empowering. At Cancun the weak nations stood up to the most powerful negotiators on earth and were not broken.
The lesson they will bring home is that if this is possible, almost anything is. Suddenly the proposals for global justice that relied on solidarity for their implementation can spring into life. While the WTO might have been buried, these nations may, if they use their collective power intelligently, still find a way of negotiating together. They might even disinter it as the democratic body it was always supposed to have been.
The World Bank and the International Monetary Fund had better watch their backs now. The UN security council will find its anomalous powers ever harder to sustain. Poor nations, if they stick together, can begin to exercise a collective threat to the rich. For this, they need leverage and, in the form of their debts, they possess it. Together they owe so much that, in effect, they own the world’s financial systems. By threatening, collectively, to default, they can begin to wield the sort of power that only the rich have so far exercised, demanding concessions in return for withholding force.
So Pascal Lamy, “our” negotiator, may accidentally have engineered a better world, by fighting so doggedly for a worse one.
— George Monbiot, A threat to the rich, The Guardian, September 16, 2003
Whether Monbiot’s optimism for the third world is premature is hard to judge. But noting the hypocrisy of the arguments of the rich countries compared to their actions and then the possibility of this coming back to them is interesting.
For now, activists and third world/social justice and development organizations are on the whole happy that the talks ended in this way because it showed that the poorer countries can resist the pressures of the richer ones. In the long run though, this has raised questions about the future of the WTO itself. Whether those fears are just exaggerations or not is hard to tell. However, it would seem that in some form (hopefully democratic) global rules for trade and therefore maybe an organization to help see that, are needed. To some, the WTO could still be the answer, while to others it is to be scraped and replaced completely.
For Foreign Trade Minister for the Netherlands, Karien Van Gennip, for example, the WTO is the way. Talking to IPS, her following comments could be applied to others who feel some other organization can do the job instead, as underlying this all is that trade should be about creating prosperity, not an ends to itself: “trade is not an objective in itself. Trade needs to play its role in creating prosperity as a precondition all over the world. To that end, the WTO is the vehicle and the Doha Development Agenda the map ahead.”
But as well as raising the issue to do with trade (or lack of it) between the rich and the poor, or between North and the South, South-South, or trade between poor countries themselves should also be strengthened, as the same IPS report also highlights. In addition, in the Behind Consumption section on this site, for example, it has been hinted at for a while, how damaging some aspects of North-South trade relationships have been in those cases where the economies of poor countries are so dependent on richer markets, and that local markets and economies cannot get started.
Without international rules on trade, especially ones that are fair and democratically agreed to, you could end up with the old power games of colonial and imperial times. Rich countries could vie for bilateral agreements with poor countries in various ways and a plethora of those could get very complicated, and in their worst forms very ugly, as history has warned us with at least two disasters of massive proportions when trade disputes between more powerful countries impacted their economies severely enough: the great European/World Wars...
“Watchlist” Of Critics
Perhaps shocking to some, and not surprising to others, has been that according to a document leaked and made public by the Mexican newspaper, Reforma, leading up to the meeting the Mexican police and military had a watchlist of people to observe very closely at the meeting.
Some of the people on the list include prominent, outspoken and even popular critics of various aspects of the global system. For example, as reported by the citizen watchdog organization, Council of Canadians:
- Noam Chomsky, MIT Faculty and outspoken critic of U.S. Foreign Policy (U.S.);
- Ralph Nader, consumer advocate and former leader of the Green Party (U.S.);
- Ignacio Ramonet, Editor-in-Chief of the widely respected Le Monde diplomatique (France);
- Lori Wallach, Director of Global Trade Watch, a division of Public Citizen (U.S.);
- Waldon Bello, Economist and director of Focus on Global South (Philippines);
- Vandana Shiva, Director of the Research Foundation for Science, Technology and Ecology (India);
- Barbara Stocking, Director of OXFAM Great Britain;
- Maude Barlow, National Chairperson of the Council of Canadians;
Maude Barlow’s reactions (also in the previous link) perhaps sums up some of the reactions to this:
“This is sickening,” says Barlow. “We are listed for no other reason that we disagree with the powers that be on the effects of economic globalisation. The message is clear: if you have a dissenting opinion from your government’s, then you are a potential threat.
“On the other hand, what can you expect of an organisation that decided to hold its previous gathering in a place, Qatar, where protests are illegal? The ironic thing is that WTO officials are always offended when we remind them how their organisation is working against democracy... What could be more undemocratic than putting a tag on opponents of your philosophy, of your ideology?
“The fact of the matter is, the WTO proceedings are highly controversial and the whole international trade debate should be transferred to the public and political stage, from where it has consistently been absent. The WTO negotiations will be affecting millions of citizens without them having much of a say on the desirability of the WTO policies. No one should be surprised that much of civil society feels excluded and powerless.”
— Maude Barlow on the Mexican authorities “watch list” for WTO Meeting, Council of Canadians, August 19, 2003
Throughout history, powerholders have tried various ways to stifle dissent. As critics of the current form of globalization are growing and their voices are trying to be heard more and more, so are the means to try and silence such critique.
- In recent years, global protests have highlighted various concerns at the impacts of what appears to be overly corporate led and oriented globalization, even though large protests have been occurring for decades.
- At the same time, the protests have been met with violence (or themselves have turned violent).
- Since the terrorist attacks on the U.S. on September 11, the world over, security organizations have been put on higher alert, but as was also seen in Doha at the fourth WTO Ministerial Conference, terrorism and other factors were raised as excuses to undermine protestors and critics of the current form of globalization in various ways.
- This is a large topic itself but one place to find out more is this sites section on global protests.
- Third World Network
- WTO Observatory
- Focus on the Global South
- South Centre
- International Centre for Trade and Development
- Global Economics subsection from the ZNet web site
- Global Trade Watch from Public Citizen
- WTO Cancun Special Coverage from Inter Press Service
- The Battle over Trade from the BBC
- Spotlight on Cancun from OneWorld.net
- From this web site:
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