WTO: trade deal stops slide to deglobalisation- for now
8 August 2004

A collective sigh of relief from EU, US and Japanese governments could be heard last week. The reason was that the so-called Dohar Round of international trade talks was still on track after into-the-night negotiations reached a series of compromises to produce an agreed text and keep the process alive.

Coming nearly five years after the collapse of the Seattle WTO talks and one year after a failed attempt in Mexico to re-launch a round of multilateral talks, the price of a further failure was likely to have been a gradual break-up of the WTO system and a new wave of bilateral trade deals, brokered by the US above all, that could have seen globalisation go into decisive reverse.

The agreement last week averts that short-term scenario but in truth the fate of the Dohar Round remains in doubt. The original timetable set out in 2001 envisaged the round of negotiations to be finished by 2005. But in Cancun last year the Third World countries combined to effectively block "progress" on the round since the EU and US negotiators refused to countenance any reduction in the huge subsidies they provide to their rich agro-businesses which allow them to dump exports of food onto Third World markets.

So this time Washington and Brussels had to come with some concessions or repeat a further fiasco. In order to appease countries such as India and Malaysia, the 30 July agreement says that negotiations on investment, competition and government procurement will not form part of the Doha Round.

Of course this does not mean that these issues are out of the WTO system, as the developing countries have demanded – they can be resurrected in some future round of negotiations but the imperialist countries belatedly realised that to secure any of their objectives on agriculture they had to back down for now.

So what did last week's agreement nail down? On agriculture the EU, US and Japan have agreed – on paper – to eliminate all export subsidies. The EU has said it will eliminate $3bn of them if the USA agrees to cut a similar amount in export credits. However, both have refused to be tied down to a date! Similarly G8 countries have agreed in principle to cut the level of aid to their big rich farmers by 20 per cent, but no date has been set.

But on one of the most contentious issues – the level of cotton industry subsidies made by the US to its producers – the US insisted the negotiations take place separately. African countries wanted "fast track" talks to eliminate the $3bn year given to US cotton growers that effectively destroy the living of African cotton farmers, but the US government has refused, saying only that the talks will be carried out "expeditiously".

Even the Financial Times said that the agreement "has resulted in only a sketchy blueprint for cutting agricultural tariffs".

On areas like liberalising trade in industrial products the FT said plans "are equally skeletal" and the provisions on liberalising trade in services – the fastest growing sector in many countries – "amount to little more than an exhortation to governments to negotiate harder".

Since Seattle and the rise of the anti-capitalist movement the governments of the Third World have been forced to not lie down and roll over in the face of every demand for more trade liberalisation from the USA and EU. Of the 147 members of the WTO most are poor or very poor and exploited ruthlessly by the multinational corporations present in their countries and by unfair system of trade rules.

In recent years a Group of 30 stronger semi-colonial countries, led by Brazil, have co-ordinated their negotiating strategy; since Cancun this group has been able to pull more African countries behind their stance.

To date, this strategy has forced the G8 to drop its more ambitious goals for now - in the liberalisation of services for example – but the G30 still operate within the WTO rules framework which in itself refuses to recognise the legitimacy of using trade and investment barriers by poor countries as a weapon for fending off the destruction of their domestic markets by G8 multinationals.

The WTO itself – together with the IMF and World Bank – must be torn down. Trade and finance rules written by rich countries for the benefit of their major corporations cannot deliver "development" for the Third World. Only the ending of capitalism and the rapacious movement of capital for profit can put and end the growing inequality between nations and classes that is the hallmark of globalisation.