The WTO: The dead-end street of trade liberalisation and the need for an alternative – now!

With the sixth World Trade Organisation (WTO) ministerial meeting taking place in Hong Kong, the core of on-the-streets protest will be drawn from organisations in Asia. Pambazuka News asked Nicola Bullard from Focus on the Global South, a Bangkok-based group that researches international finance and globalization issues, about strategy, messages, WTO reform and the links between African and Asia in resisting an unfair deal.

PAMBAZUKA NEWS: In April, Focus on the Global South articulated a "strategy of derailment" for the WTO in an article 'The End of an Illusion: WTO Reform, Global Civil Society and the Road to Hong Kong'. The article said: "Essentially, derailment involves zeroing in on the key point of vulnerability of the WTO: its consensus system of decision-making. Concretely, it means working to prevent consensus from emerging in any of the key negotiating areas prior to and during the Sixth Ministerial in Hong Kong." Has anything changed and does this strategy remain the focus of activity?

NICOLA BULLARD: Well, the first thing to say about preventing a consensus is that it’s a short term strategy, aimed to slow down the process in the WTO, and the reason we want to slow it down is because we firmly believe that under the present conditions of unfair agreements, unequal power and undemocratic processes, most developing countries have little to gain in the WTO.

Our larger critique is that the overarching model, based on the assumption that export oriented trade liberalisation will lead to growth and hence development, is based on a faulty model. This critical view is supported by economic data on employment, incomes and growth which show that over the past 10 years, although there has been a boom in the volume of trade, this has not resulted in increased living standards, employment or broader benefits to the society.

In terms of the concrete strategy leading to Hong Kong, we are still working in every way that we can to strengthen the solidarity of developing country groups and to maximise the contradictions and disagreements between the negotiating countries in an effort to stall a consensus: we are working with trade delegations in Geneva, working at the national level to increase the pressure on the domestic front, and working with the media to heighten their awareness of what’s at stake and who is calling the shots in the WTO. So, blocking consensus remains an important objective.

PAMBAZUKA NEWS: What is the role of mass public pressure in pursuing the goal of derailment and how successful has it been in the run up to the WTO meeting? What role do you expect it to play in the immediate period before the meeting, as well as during the meeting?

Public pressure, mobilisations and demonstrations are key: the work that we do “inside” the WTO, like policy analysis and lobbying, is pointless unless it is part of a larger process of mobilising public opinion, democratising the debates over trade, and bringing real in-the-streets pressure to bear on politicians at the national level. In addition, demonstrations can draw the media spotlight to what is going on inside the WTO. However one of the perennial struggles is to get the press to focus on the content of our arguments against the WTO rather than whether or not there will be violent protests in Hong Kong. However, I think this battle is being slowly won as the press becomes better informed about trade and development.

PAMBAZUKA NEWS: What are the key messages that you are pushing ahead of the summit?

NICOLA BULLARD: One of the slogans that many groups agree to is “no deal is better than a bad deal”. By this we mean it’s better for developing countries to walk away from the table than to accept a shoddy deal that is not in their interests.

We are also focussing on the ten year record of the WTO. What we see is a litany of broken promises as the rich countries time and time again refuse to deal with the issues of central concern to developing countries such as ending dumping, protecting their agricultural sectors, access to life saving drugs, an assessment of the impacts of the Uruguay Round liberalisation (that is, the last ten years of trade liberalisation) and consideration of the costs of adjusting to the WTO trading rules. All of these issues, and many more, have been systematically ignored by the powerful countries who stand to gain from the system.

So our overarching message is that the WTO is a faulty system, there is a fundamental design flaw in the trade model it is promoting, and we need a different approach before the damage gets even worse.

PAMBAZUKA NEWS: From Africa, it often seems as if some of the most dynamic and powerful resistance to the policies of the WTO and the World Bank and IMF take place in Asia. How much of a mass public awareness is there and if you think there is, what do you think are the factors that have contributed towards its creation?

NICOLA BULLARD: Funnily enough, from Asia we think that some of the most powerful resistance to the WTO comes from Africa! After all, it was the African ministers who walked out in Seattle, it was the G90 that walked out in Cancun, it was four small cotton producing countries – Benin, Mali, Bukino Faso and Chad – that brought the scandal of US cotton subsidies into the public eye, and it was the African countries who fought so hard to get a reconsideration of the TRIPS and health provisions.

Of course they may not be winning these battles but they are certainly courageous, especially when you consider how vulnerable they are to pressures from the EU and the US, threats about not having their debts rescheduled and so on.

Many Asian countries are much more competitive in the global trading game and often their positions are more aggressive. This is partly because of the industrialisation that took place in the 1970s and 1980s, which saw many of the East Asian “tigers” made tremendous economic leaps by adopting state-driven development strategies, such as directing investment to certain sectors and protecting fledgling industrial sectors. Many of these measures are now illegal under the WTO regime or the bilateral trade agreements which are proliferating in the region. In addition, many sectors of the society, especially workers and farmers and even small local enterprises, realise that the WTO does not protect their interests. For these reasons, there are now large, vocal national campaigns against the WTO and FTAs across the region, including in Thailand, the Philippines, South Korea, Indonesia, Pakistan and India.

PAMBAZUKA NEWS: There still seems to be a school of thought that maintains that the WTO can be reformed. From your perspective, is there any credibility left to this view? Why?

NICOLA BULLARD: The WTO refuses to reform itself, even in the most fundamental aspects of its operations. For example, there are no clear rules about decision making, keeping records, making information available to the members and so on. A long list of proposals made by a large group of developing countries post-Doha on how to improve internal procedures was shelved, never to reappear. As one commentator remarked, a local Scout Club is more transparent than the WTO.

On substantial issues the rich countries have been intransigent – and why wouldn’t they be: the name of the game in the WTO is to maximise access to other people’s markets, while protecting your own. It’s a game that can only be played by rich countries, and these are the very same countries who make the rules. There is no incentive for them to reform the WTO.

Let me give you an example: in Doha the membership agreed to the TRIPS and health declaration which aimed to improve access to low-priced generic drugs to combat life threatening diseases. So, there was a small victory. However, after 12 months of wrangling that “victory” was tuned into a failure because the EU and the US hatched a deal between them which imposed a so-called “solution” which did nothing to resolve the problem and everything to protect the interests of the pharmaceutical companies and the intellectual property regime.

No, there is no hope for reforming the WTO.

PAMBAZUKA NEWS: A great deal of euphoria was felt after Cancun. Our own publication, Pambazuka News, carried an article that stated: "Africa emerged from the talks a major negotiating player, no longer the dinner of other trading partners, but defining the direction and outcome of the talks in Cancun." (http://www.pambazuka.org/index.php?id=17486) Somehow it seems like that euphoria hasn't been carried forward, not only in Africa, but globally. What happened to the promise of victory?

NICOLA BULLARD: Well, we let our guard down! Cancun was a great victory, but the EU and the US were able to turn the tables when they pushed through the framework agreement at the July General Council meeting the following year. And they did this in a very clever way by bringing India and Brazil into the “inner circle” of negotiations by creating the FIPS – the five interested parties which is the EU, the US, Brazil, India and Australia. By getting the agreement of this group they were able to enforce it on the rest of the members, despite rumblings in the corridors.

PAMBAZUKA NEWS: Lastly, how can stronger links be built between the people of Africa and Asia in pursuing a common agenda with regards the WTO?

NICOLA BULLARD: Of course one can’t talk about Africa as a whole or Asia as a whole: there is so much diversity and different realities in each region. However, many countries have similar problems; rural livelihoods are disappearing, the agricultural sector is being destroyed by dumping, unemployment and underemployment is the norm, incomes are falling due to declining terms of trade, industries are being driven to the ground by cheap imports, and foreign direct investment is proving to be an unreliable development partner. In addition, many countries shoulder a heavy debt burden. However, it’s terribly difficult to build solidarity amongst these countries when they are operating in a trading system which is based on competition, and this competition is particularly destructive when all countries have to trade is cheap labour and cheap natural resources and raw materials.

However, I am optimistic that things can change: there is a new discourse emerging in many different quarters which talks about “policy space” – the idea that countries should be able to set their own economic and development strategy rather than having one imposed by the rich and powerful countries through the WTO and the IMF.

The evidence is clear that trade liberalisation is a dead-end street for many countries and they need an alternative – and they need it now. Civil society stands ready to support any governments that are brave enough to put the interests of their people ahead of the interests of the local and global elite. For our part, all we can do is to strengthen the ties between the people of Asia and Africa, to share information and strategies, and to support each other’s campaigns not only on trade but also on issues such as debt, democracy, and against the ongoing domination of the big powers and the big institutions.

Ironically, one issue that might bring many countries together is the impact that the impressive entry of China into the global markets is having, and will continue to have, on smaller and less competitive countries. But it’s too early to tell how this will evolve.

* Interview conducted by email. Please send comments to [email protected]