What Global Economy? By William Bowles

15 September 2003

The collapse of the WTO meeting in Cancun has, by and large, been met with a deafening silence in the British media. My ‘paper of ‘choice’, the Independent, chose not to mention Cancun at all in its Monday edition! Yet given the parlous state of the capitalist world’s economy and how much is at stake, one would have thought that the failure of the talks would warrant a front page story. Dream on.

BBC Radio 4 chose to refer to the collapse of the meeting essentially as one of ‘bickering’ between the rich and poor worlds. Any analysis of substance as to why the talks failed was conspicuous by its absence.

So what did go on at Cancun? A search of the Web was revealing, with most of the coverage coming from the developing world’s media and the various NGOs involved with the issue of ‘fair trade’.

Western media’s coverage is typified by Forbes Magazine’s ‘analysis’ which offered no explanation as to why the talks collapsed aside from making a point of blaming the poor countries for refusing to accede to Western demands:

“Yet Yeo [Singapore’s trade minister] said delegates from some poor countries applauded and hooted with delight after the talks collapsed over a failure to agree on whether to write new rules to eliminate the red tape and corruption that slows cross-border shipments — trade facilitation in WTO jargon.

“Poor countries were joyous because they had cemented their growing power in the 146-member WTO by refusing to accede to demands made by the EU, South Korea, Japan and others.”

Note that Forbes neglects to mention the US’s role in sabotaging the talks. Predictably, the US trade representative, Robert Zoellick, blamed the poor countries accusing them “pontificating, rather than negotiating.”

And British Trade and Industry Secretary Patricia Hewitt made the following vague comment on the failure of the talks:

“This is a huge setback. It’s a setback to the WTO. It’s a blow to the Doha Development round, and it’s a setback for the world economy, which very badly needed a boost to confidence.”

As ever, the Western countries are more concerned with their own short-term objectives rather than the issue of redressing the gross imbalances between the rich and poor world when it comes to trade even whilst recognising that without a ‘new deal’ there is a real risk of global economic meltdown.

Moving the goal posts

The essential problem revolves around the fact that the EU, the US and Japan insisted that the poor countries open up their economies to penetration by transnational corporations (the so-called Singapore issues) without making commensurately deep cuts in the billions in subsidies they hand out to their own farmers. Instead, the issues they chose to insist on discussing were:

  • How poor countries treat foreign investors
  • Standards for anti-monopoly and cartel laws
  • Greater transparency in government purchasing which would open up developing world economies to big capital
  • Trade facilitation – making things like customs procedures simpler

Translated, these demands mean that developing countries would have to hand over control of their investment strategies to foreign capital and due to the technical complexity of the demands, the developing countries would be at a severe disadvantage when it came to negotiating any deals. In other words, whilst making only the most minimum concessions over subsidies and opening up their economies to products from the developing world, the developing world would have to open up its economies to the depredations of western capital. A move which to the dismay of the US and the EU backfired badly. How times have changed.

We have to turn to coverage from the various aid agencies for any kind of real analysis of what went on at Cancun. Patrick Nicholson of the Catholic Agency for Overseas Development said that it was:

“The EU’s insistence on pushing the WTO members to start negotiations on the “new issues” of investment, competition, government procurement, and trade facilitation effectively caused the talks to break up…. Over 100 countries had categorically stated that they did not even want to talk about the new issues until a deal on agriculture had been struck.”

“”Dave Timms of the British development lobby group, the World Development Movement…. “The collapse of the talks was the only option for the developing countries – walking out was better than the deal on the table. It is the EU that must take responsibility for the failure.””

Sabotaged

So rather than negotiate, the EU and the US decided that ‘divide and rule’ was preferable, as the failure of the talks will only benefit the rich countries, at least in the short-term, who will now be in a position to try to dictate bilateral deals with individual countries rather than obey a set of rules that cover all 146 members of the WTO, the vast majority of whom are developing economies. Whether this will happen remains to be seen, but given the anger and the newfound solidarity of the developing countries, sabotaging the talks may well have the opposite effect than the one intended.

But the old way of doing business with the US and the EU bullying and browbeating the poor world is over. And perhaps it’s this reality more than any other that illustrates why the Western media has chosen to downplay the failure of the talks at Cancun.

The following comments highlight the real gains that have come out of the Cancun talks:

“No deal is better than a bad deal. Despite intense pressure from the business lobbies and bullying by the EU and the US, developing countries have stood their ground,” ‘Friends of the Earth International Trade Coordinator Ronnie Hall said.”

“World trade negotiations will never be the same again. On paper, this meeting has failed but the new power of developing countries backed by campaigners around the world has made Cancun a turning point,” Phil Bloomer of Oxfam said.”

What is clear is that from the wreckage of Cancun, a new and powerful alliance is being forged between the developing world and ‘fair trade’ NGOs based in the developed world. And this is an alliance that has broad support from the populations of the developed world.

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