WTO gridlock may remain despite EU and US talks

Walden Bello, Executive Director, Focus on the Global South, Inter Press Service, Bangkok

With the fifth ministerial of the World Trade Organization (WTO) fast approaching, the organization that was hailed at its founding in 1995 as the crowning point of global economic governance is in gridlock.

A last-minute attempt by the European Union and the United States to set up a negotiating framework to revive the stalled talks on agricultural liberalization appears to have backfired, as developing countries bitterly criticized the two trading superpowers for regressing to their behavior during the last years of the Uruguay Round (1986-94), crafting a backroom deal with no participation from the 144 other member countries.

Brazil, India, and China -- the powerhouses of the developing world -- immediately responded with a paper telling the Europeans and Americans to quit beating around the bush and radically cut the high levels of subsidization responsible for the dumping of cheap grain and meat on world markets that is putting hundreds of thousands of developing country farmers out of business.

Talks aimed at subordinating intellectual property rights to public health concerns are stalemated as the U.S. refuses to budge from its position that loosening of patent rights should be limited only to HIV-AIDS, malaria, and tuberculosis drugs, defying the declaration of the Fourth WTO Ministerial in Doha, 2001, which clearly placed public health issues above corporate intellectual property rights.

There has been no movement whatsoever on negotiations to bring under WTO jurisdiction the "trade-related" issues of investment, competition policy, transparency in government procurement, and trade facilitation, which Brussels and Washington have regarded as the centerpiece of the Doha Declaration. Indeed, there is fundamental disagreement over whether or not there is a mandate to even begin negotiations.

Some observers say that the three key ingredients are emerging of the famous collapse of the Third Ministerial in Seattle in December 1999: The EU-U.S. stalemate in agriculture is again center-stage; developing countries are more resentful than ever; and civil society is on the move.

The civil society factor must not be underestimated. The numbers are not clear, but at least 15,000 people from all over the world may show up in Cancun. Then there is the possibility that Zapatistas, the armed insurrectionary force based in indigenous and peasant communities in Chiapas in southern Mexico, might throw their weight behind the protests, which turn the meeting into a massive national protest.

The current travails of the WTO are a continuation of the institutional crisis that first broke in Seattle in December 1991, triggered by resistance of civil society groups to the WTO's drive to subordinate critical dimensions of social life to corporate trade.

No reforms followed in the wake of Seattle, and only U.S.-EU strong-arming of the developing countries in the shadow of Sept. 11 produced a declaration mandating a limited set of negotiations to further trade liberalization during the Fourth Ministerial in Doha, Qatar, in November 2001. But the "Doha Round" quickly degenerated into a stalemate.

The WTO's institutional crisis, however, is itself a reflection of an even deeper, more comprehensive crisis -- that of the globalist project of accelerated integration of production and markets.

The Asian financial crisis of 1997 discredited a key tenet of the globalist project -- that trade liberalization promoted prosperity.

Then came the stock market collapse of March 2000, inaugurating an era of global recession and deflation caused by the excesses of speculative capital as well as global overproduction. Faced with rising joblessness and slow growth, economic elites in both Europe and the U.S. have increasingly turned away from the project of an integrated global economy and moved towards policies of protecting the interests of national or regional capitalist elites.

With its brazen defense of U.S. corporate capital exemplified in its stand on TRIPs and public health, Bush's unilateralist economics is likely to deepen both the crisis of the globalist project and the crisis of the multilateral institutions that were used to advance the globalization agenda.

For with the EU and the U.S. at loggerheads on a whole range of issues, it has become that much more difficult for them to mount a coordinated strategy to split and intimidate developing countries at the WTO on matters where the two capitalist centers share a common interest, like pushing through a WTO-enforced investment agreement, which the developing counties have stubbornly opposed.

Despite their deepening differences, the U.S. and the EU may still pull together to coerce developing countries into approving new initiatives in trade and trade-related liberalization in Cancun.

However, the increasingly likely scenario is a ministerial that will produce no agreements on significant new liberalization, essentially reproducing the stalemate in Geneva.

For developing countries constantly under siege to open their markets or cede control to the Washington and the WTO of areas thus far the preserve of national policy-making -- like investment and competition -- a failed, stalemated ministerial is the best outcome.

It would give them the breathing space necessary to organize and coordinate their defense and allow them and global civil society the opportunity to mount the reversal of corporate-driven globalization that even the free-trade mouthpiece The Economist sees as a very real threat to the future of capitalism because of the "excesses" of global capital.

The writer is also professor of sociology and public administration at the University of the Philippines in Manila.