World

Mass protests fail to prevent Western powers from exploiting poor countries at WTO

Usman Khan

Dhu al-Hijjah 01, 14262006-01-01

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The latest round of trade negotiations held by the World Trade Organization (WTO) was characterised by all the features that have become familiar parts of such high-profile gatherings. The trade ministers of the 150 member-states, and 6,000 other delegates, spent six days in intensive negotiations at a major international conference venue, barricaded by hundreds of police and security personnel to protect the WTO and the Western powers that run it from the wrath of ordinary people from all over the world who recognise the talking shop for what it really is: a way of forcing the world’s poorest countries to accept and legitimise a trade regime designed to protect and further the interests of the economic elites of the world’s richest countries.

The talks in Hong Kong from December 13-18 were the latest stage of the so-called “Doha Round” of talks that were launched in 2002. This was supposed to have been a “free round” for the developing countries, meaning that they would secure benefits in terms of trade rights without being expected to make concessions to the developed world. The reality, however, has proven very different, with Duncan Green, Oxfam’s head of research, concluding that “the developed world has won a round for free”.

The agreement announced at the end of the Hong Kong talks sets a deadline (April 30) for the WTO members to agree a framework for the completion of the Doha round. The problem is that developing countries have far more to lose if no agreement is reached, meaning that the western powers, particularly the US, can threaten to walk away from the talks if the developing countries refuse to accept the terms offered to them. This is precisely what happened in Hong Kong.

The agreement reached in Hong Kong makes much of a supposed concession to developing countries in terms of export subsidies for agricultural produce. It was agreed that developed countries would end such subsidies by 2013. Less developed countries (LDCs) had been hoping for a deadline of 2010.

This is, however, largely a red herring, as most Western countries had already agreed to end such subsidies. In recent years, the European Union (EU) has restructured its support for agricultural produce in such as way that export subsidies have fallen from 50 percent of its total support to less than 2 percent, even though its total support for its farmers has increased. Export subsidies currently make up less than 1 billion euros, out of the 55 billion total subsidy that the EU provides to farmers.

The US had already committed to cutting export subsidies on agricultural produce before the Hong Kong talks. At Hong Kong, it also agreed to cut subsidies on cotton exports, although this was also something that it had been required to do by a previous WTO ruling in any case. Here, too, however, most of its $4 billion in subsidies is in the form of domestic support, which will not be cut.

In return for these cosmetic concessions on their part, Western countries have extracted significant concessions from poor countries in the areas of services and manufactured goods. A major agreement was signed by which poor countries will be forced to open up key sectors, including essential public services such as healthcare, education and water, to foreign providers. They are also being pushed to drastically cut their tariffs in the crucial area of manufactured goods, opening their new and fragile industrial bases up to competition from the West’s established industries and multinational corporations.

It is clear that although the trade talks are proclaimed as being intended to promote development, end inequalities and eradicate poverty, the reality is the precise opposite. As the world’s poorest countries have tried to protect themselves from the predatory interest of the West’s economic elites, the Western countries have decided to use the established international trade organizations to impose a regime of trade rules that will protect their interests while legitimising their exploitation of the world’s poorest countries and peoples.

Even the ideal of a “level playing field” is a false one, for that would only be one on which the strong will be able to dominate the weak without affording the weak any protection, for such protections would be regarded as unfair impediments to fair trade. Yet even that is unacceptable to the western powers, who insist on maintaining their own protectionist strategies, albeit under different forms, rather than permitting even a level playing field.

What is more, many poor countries fear that they have more to lose from the collapse of the WTO talks because the Western powers, particularly the US, would then make bilateral trade agreements with the larger developing countries that it regards as significant and important trading partners, such as Brazil and India, while leaving the smaller and most needy countries out in the cold. Even as they work through the WTO, the US government and the EU are also stepping up talks towards comprehensive bilateral or “less-than-multilateral” agreements, partly to exert pressure on poor countries to accept their terms at the WTO. Thus in essense, the world’s poorest countries are in a lose-lose situation.

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