A new opportunity in Cancun's failure

Balakrishnan Rajagopal, Director, Program on Human Rights and Justice, Massachusetts Institute of Technology, Cambridge, U.S.A, Yale Center for the Study of Globalization

In 1955, twenty-nine nations from Africa and Asia gathered in Bandung, Indonesia in the first-ever meeting of the former- colonized, non-white nations.

The emergence of the bloc of G-22 countries at the recent Cancun World Trade Organization meeting can be seen as a continuation of the spirit of Bandung, a desire by Third World states to catch up with the North and effectively challenge the overwhelming power of their former colonial masters. And just as Bandung defined North-South and led to the formation of the Non- Aligned Group of countries, the new trade bloc will likely have a far-reaching impact.

At Cancun, the G-22 group of developing countries, which comprises well over 50 percent of the world's population and includes Brazil, China, India and South Africa, was able to present a coherent stand on a variety of issues that are of importance to the Third World in trade negotiations.

The issues of particular concern were cross-border investment, competition policies, trade facilitation, and government procurement. Cancun also marked a new solidarity between G-22 states and a coalition of civil society organizations from around the world.

How should we interpret these new developments? Is G-22 the re-initiation of a Third World bloc, carrying forward the spirit of Bandung? And what is the significance of the new alliance between Southern states and a global social movement focused on economic justice?

First, it is likely that the G-22 is here to stay, though some members of the group such as Peru and Colombia have opted out under U.S. pressure. The Chairman of the U.S. Senate Finance Committee, Charles Grassley, has warned that the behavior of Latin American countries at Cancun would influence future decisions. Yet despite such pressure from the U.S. and the EU, the G-22 seems to have a core that is capable of holding on.

That "core" consists of the three large Southern industrial democracies -- Brazil, India and South Africa -- which are now attempting to challenge the hegemony of Northern democracies. They have recently formed a G-3 -- perhaps as a counterweight to the G-7 -- and have announced a range of measures to strengthen their trilateral relationship.

Trade between the three has increased rapidly in recent years; Brazil and India are exchanging top-level visits; and MERCOSUR is concluding preferential trade agreements with South Africa and India. In 2002, Brazilian exports to India were larger in percentage terms than to any other country. The total bilateral trade in 2002 reached US$1.2 billion.

If similar relations emerge between other members of the G-22, especially China, Egypt, and Turkey, it would constitute a very significant challenge to Euro-American hegemony of the world economy. Celso Amorim, the foreign minister of Brazil, doesn't hide that the G-3 aims for expansion to China and perhaps even to Russia.

Consider this. Between 2000 and the end of 2002 China received 21 Brazilian trade missions, and Brazil received 24 Chinese trade missions during the same period. In May of this year exports from Brazil to China increased by 375 percent compared to three years previously. Moreover, Brazilian exports to India were larger in percentage terms than to any other country including the U.S., UK, China, Germany, and Japan.

Along with their closer economic ties, the G-3 democracies may influence global politics as well -- all share an ideological critique of the current world order, which they perceive to be western-dominated. They may jointly advocate for global changes, from the reform of the UN Security Council to reduction of agricultural subsidies.

Secondly, the new alliance between civil society and Third World states at Cancun is also likely to be a powerful world political player, and could last for decades. The civil society movement began with the onslaught against the WTO meeting in Seattle in 1999, which also collapsed without an agreement, and has continued in virtually every world economic gathering.

The World Social Forum in Porto Allegre gave shape to the institutionalization of "alternative-globalization" viewpoints. For middle-ranking states such as India or Brazil, the emergence of this movement is a useful political development which gives them additional tools. Civil society actors who may oppose the neoliberal reforms or right-wing rulers of host states are often willing to work with their state representatives in international negotiations when doing so is clearly pro-poor or pro- environment.

The deepening of democracy in major Southern states has also led to linkages inside countries between ruling elites and civil society actors. The clearest example of this comes from Brazil, where the Lula-led Workers Party continues to have strong links to trade unions and to social movements of landless workers.

In this sense, what these countries are now saying is not very different from what the U.S. used to claim in trade negotiations: We are a democracy and therefore it is harder for us to make too many painful reforms.

Also, in these Southern countries, democratic deepening is also a nationalist enterprise, which leads elites to strive for grand bargains in trade negotiations as it solidifies their political gains domestically. The nationalist impulse in democracies such as India comes from a sense that as large, important civilizations, they ought to assume their proper place in world affairs, and they see their increasing economic power as key to that goal.

The civil society-state linkage has also emerged at a more pragmatic level. Organizations such as Oxfam have often provided technical assistance on complex trade issues, such as by providing background papers, to poor, smaller countries that lack such knowledge. When global power depends so much on expertise, the provision of such assistance by NGOs enables poor countries to have more say in negotiations. The civil society movement is not without internal tensions, especially about attitudes towards the WTO and trade liberalization in general. Nevertheless, the coalition of states and civil society organizations seems likely to persist, and will affect future trade negotiations and exert a profound influence on world politics.

Guessing the future course of the G-22 is hazardous, but if what happened in the recent FTAA (Free Trade Area of the Americas) talks in Miami is any yardstick, the small countries are likely to be bullied into accepting bilateral deals with the U.S. and EU while the larger ones, facing domestic opposition to liberalization, will survive by accepting whatever they can.

The meeting in Bandung in 1955 was a milestone simply because it took place -- a meeting of the former colonized attempting to define a "third way" free of western and Soviet hegemony. It was also important because it placed on the global agenda issues such as racism and decolonization, which had not until then been considered subjects of global politics. On its face, Cancun was less momentous. Nevertheless, the emergence of state-civil society coalitions, aided by the increasing power of middle- ranking countries, may mount a serious challenge to western hegemony over the long-term.

This article appeared in YaleGlobal Online, (www.yaleglobal.yale.edu) a publication of the Yale Center for the Study of Globalization, and is reprinted by permission.