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In the Mayan language, the word
‘Cancun’ means a snakepit. The
beach resort of Cancun wasn’t
exactly trying to live up to this meaning, when it saw the WTO summit transformed into a snakepit of sorts finally.
In the Mayan language, the word ‘Cancun’ means a snakepit. The beach resort of Cancun wasn’t
exactly trying to live up to this meaning, when it saw the WTO summit transformed into a snakepit of sorts finally.
The Summit turned out to be a pitched battle between the developing and developed nations, emphasising the rift between the north and south. There are questions being raised about the intentions of the developed world, as it appears to foist its own agendas in the name of globalisation. Nations such as Japan, Korea and European Union members, and America played a dubious role during the negotiations. On the other hand, developing countries led by Brazil, China, India and Russia stood firm on their stand that WTO provide a level field to all the participant countries.
The American dilemma
The negotiations turned sour when the American delegation rebuffed the rightful demands of West African nations that the US commit itself to a clear phasing out of its harmful cotton subsidies. America didn’t help the cause of the summit and went as far as dropping a less than subtle hint that it was considering turning its back on the multilateral system in favour of bilateral deals with friendly countries. Robert Zoellick, US Trade Secretary, said that the deadlock at Cancun may leave the US with no choice but to take its trade aims elsewhere. Elsewhere, American policymakers were reported to have said that, since Cancun, America might take the bilateral route. This could well mean the real route after the Cancun phase, unless the December 15 meeting of the WTO in Geneva decide something concrete.
Nobody had expected the summit to end on such a volatile note as it did. The western countries weren’t amused by the show of strength from the developing countries. Now, the displeasure is threatening to turn into vindictiveness. Chuck Grassley, chairman of the US Senate committee on finance, is supposed to have made a statement to the effect that the US would evaluate potential partners for free trade agreements on an ongoing basis with or without a global policy framework. In such a scenario, nations, which played a ‘constructive role’ in Cancun, stand a better chance in terms of their trade and economic ties, than ‘those that didn’t’. Such an indifferent stance is likely to give substance to the argument that the organisation exists only to serve the interests of the rich and powerful.
The rise of the G-21
On the flip side, at Cancun, a number of international groupings led by developing countries emerged, particularly the G21, led by China, India and Brazil. These groupings demonstrated that developing countries are becoming increasingly well organised. The significance of this new force may not be felt until well after Cancun. But if these three nations were to forge closer links, the United States and Europe would not be able to ignore them. G-21, an ad hoc alliance of poor countries, argues that the world-trading regime is organised for the sole benefit of America and Europe. If this alliance has resisted some pressure during the Cancun talks, they seem committed to carry on this compulsive arrangement as they meet prior to the WTO Geneva talks on December 15. In their meeting at the Brazilian capital of Brasilia, the G-21 is firm that agriculture holds the main key to any further talks of WTO, and the subsidy issue will continue to hold priority.
WTO: To be or not to be
The WTO poses a difficult dilemma for everyone involved. Several campaign groups in India and abroad have dismissed WTO as an uncaring agent of global capitalism, incapable of addressing the needs of the poor. Their justification is that WTO enshrines the economic power of wealthy nations, because they will always be the ones, who are best suited at exploiting opportunities in new markets opened up through global trade liberalisation. Such opinions might have been subdued for a while, but it would be difficult to quell the dissident voice as WTO threatens to become another UNO.
It is alleged, there are plenty of nations, especially in Asia, who built their own economic success by shielding their key domestic industries from external trade. Korea, it is claimed, would not be where it is today had it been forced to open its domestic market to foreign goods and services by the WTO.
However, there is another side to the story. Arguably, there has not been enough trade liberalisation, rather than too little. Those campaign groups, who have targeted the shameless agricultural protectionism in Europe and the US, have a compelling case. Trade can lift people out of poverty, but only if the poor can export their agricultural products to Europe and the US in the first place. That requires a demolition of the trade-distorting subsidies that continue to prop up US and European farmers.
To the protesters in Cancun, the scrapping of the WTO might appear to be an answer. This is one issue, which is not going to be solved so easily. Whatever its flaws, the WTO is possibly the most sophisticated multilateral institution around. It has binding rules and a binding dispute settlement system, which are aimed at maintaining a level playing field for economic superpowers and minnows alike.
Sure, as many critics point out, Europe and the US tend to play procedural and legal games in Geneva better than most. But if the WTO did not exist, there would be no constraint on their behaviour at all. The law of the economic jungle would replace the rule of law and that might once again become right. The weakest would be left entirely at the prey of lopsided bilateral agreements with the EU and the US, which they would feel compelled to accept.
Beyond Cancun
WTO is far from dead! The globalisation clock ticks along. Countries like India and Brazil have benefited from the liberalised reforms. The gains of these reforms would feed millions in the developing countries. Anomalies do exist, but it would be injudicious to revert to protectionist regimes. There are disparities in policy frameworks of the developed and the developing countries, yet the need for an institutionalised mechanism for international trade and investments could hardly be denied. WTO or no WTO, the globalisation process shall not cease.
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