Sunday, December 18, 2005

WTO: The poor revolt again

Two years ago in Cancun, a revolt of poorer nations under the banner of the G20 led to the collapse of WTO talks. Now, at the WTO ministerial in Hong Kong, they're doing it again. One hundred and twenty developing countries - more than 75% of the WTO's membership - have clubbed together in an unprecedented display of solidarity to demand that the talks' agenda reflect the interests of the majority of its members. Their key complaints are - once again - a lack of reciprocation on market access, and attempts by rich nations to hijack the agenda towards trade in services rather than development (which is what the talks are supposed to be about). The rich nations' response has been to promise more aid - in the form of loans, of course - but opening markets would deliver far more into the pockets of the poor, without burdening them with debt which could be used as leverage against them in future. Which is precisely why the rich are against it (that, and domestic political considerations, which poorer nations are expected to ignore).

A deadlock in Hong Kong would mean no progress on ending rich-nation farm subsidies, and would seriously damage the credibility of the WTO to boot. But the poorer nations don't seem to mind that prospect - and who can blame them? Every WTO summit they are faced with the same old scam: the rich promise to open their (mostly closed) markets a tiny bit more, in exchange for a few "minor" concessions which will allow them to rape the poor even worse than they already are - and then to add insult to injury they renege on their end of the bargain. It is a mug's game, designed to lock in a permanent pattern of economic subjugation and exploitation - and faced with this, refusing to play any more is a perfectly rational solution. What's surprising is how long it has taken poorer nations to get to this stage...

I do not expect the revolt of the poor to succeed in extracting concessions from the rich; the US,EU and Japan will simply walk away, just as they did at Cancun. But that is tantamount to saying that the WTO will only ever be a one-sided system of exploitation - in which case, it deserves to die rather than continue.


I don’t understand rich nations are playing double standards. One hand they talk about aid and on other they are hell bent on exploiting the poor.

Posted by Anonymous : 12/18/2005 08:01:00 AM

I am working in East Africa... people here and in lot of other countries can’t buy one litre of cooking oil in one go... since they can only afford oil worth 20 cent which can mean four table spoons, and you see countries where every cow get $2 a day of subside.. it is shame and pity... then rich counties talk about aid... instead give them level playing filed in agriculture.

Posted by Anonymous : 12/18/2005 08:09:00 AM

The poor countries play the same game. they call it protection of their economy when really its just some politicians lining their own corrupt pockets just like in the rich countries it is some group of farmers exploiting their political power.

It is a bit of a joke to pretend the poor countries are all rightious or that (in general) higher tarrif barriers will fix their problems.

Anyway I welcome their clubbing together - with any luck they can liberalize trade between themselves - and harmonize politics.

Posted by Genius : 12/18/2005 09:46:00 PM

Genius: the poor countries aren't clamouring for higher tarrif barriers around their own economies; they're asking the rich countries to do what they've bene promising to do and reduce their levels of protection. And instead, what they're being offered is an end to EU export (not production) subsidies in eight year's time, and tarriff-free access to the US for goods they don't produce and don't export (while barriers remain just as high for those they do produce, like textiles, clothing, and agricultural products). This is nothing but a bad joke.

What's really pissing me off is that rather than standing on our principles and our impressive free trade credentials to side with the poor, our government is working with the rich and demanding more concessions on trade in services in exchange for these empty promises.

Posted by Idiot/Savant : 12/18/2005 11:04:00 PM

Well if they suceed in removing the EU subsidies then I applaude that. They might actualy save the EU.

If they just destroy the WTO they are probably biting their noses to spite their faces.

Posted by Genius : 12/19/2005 06:45:00 AM

Genius: EU export subsidies make up less than 5% of the EU budget. The real problem is production subsidies - paying farmers to produce butter, sugar etc, which is then dumped on global markets, lowering the price. It's the same with the US - they give away billions in production subsidies (for milk, corn and cotton), but export subsidies total only US$250 million - chump change. And in exchange for this, third-world nations are expected to give away the world?

And remember, all of this is contingent on a general agreement, including services. Which means poor countries opening their "markets" for, say, water. This isn't much of a "victory"; it is simply paying more for the same old hot air.

No deal is better than a bad one, and with the deals on offer, I don't think the poorer nations have anything to lose by the WTO's demise. They can always try and build a better one, less stacked against their interests...

Posted by Idiot/Savant : 12/19/2005 08:57:00 AM

The fault for failure of this round can be laid squarely with the EU, particulary France and Germany.

Their farm subsidy policies are obsence. When a third of the EU budget goes on protectionist subsidies then you know something is seriously wrong.

Image if in NZ $17bn was paid out in farm subsidies.

For the so called progressive countries they seem to be fairly backward and colonist in their approach to developing nations.

Posted by Anonymous : 12/19/2005 11:08:00 AM

Yes the production subsidies too - surely when one says subsidy they would include the production export and so forth.

Of course we have a problem there as we move away from the most ovbious things we tend towards things like "is health care a worker subsidy?" Or cheap loans for small businesses? or tax breaks? How about work for dole schemes? and building of roads etc.

But anyway I would say on balance I oppose them all.

Posted by Genius : 12/19/2005 08:33:00 PM