US Demands may Kill WTO Agreement
Tim Wise: After 10 years WTO Doha round negotiations supposed to be dedicated to the developing countries have reached an impasse
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. The World Trade Organization, which involves most countries in the world, although not some big ones, like Russia, but most of the big trading partners in the world are involved, is supposed to create a level playing field, somewhat fair trade, you could say–at least that’s the rhetoric. But in truth, for most of its life, it’s been seen by the developing countries as a way that the more developed countries take advantage of them. So then comes the Doha round. This is a set of negotiations taking place in Doha, Qatar, that is supposed to be aimed at increasing development and benefit for the developing countries. Well, the Doha round might be dead. Now joining us to talk about why the Doha round might be on life support is Tim Wise. Thanks for joining us.
TIM WISE, DIRECTOR OF GDAE, TUFTS UNIVERSITY: My pleasure.
JAY: So Tim is director of Research and Policy Program at the Global Development and Environment Institute at Tufts University. So why is the Doha round about done?
WISE: Well, the negotiations have been going on for ten years, which is a record since they were started, and they’ve been floundering for a good three years now. They finally hit an impasse where even the ever-optimistic Pascal Lamay, the secretary-general of the WTO, said he’s not sure that there’s the basis for an agreement, essentially, on the biggest areas of negotiation. Developing countries, particularly the larger developing countries like China, India, Brazil, feel that the United States has come in making far too severe demands on them to open their markets to US products.
JAY: Now, President Obama’s made one of his signature pieces of his foreign policy that economic development leads to democracy. Of course, I think we also heard that from President Bush. But anyway. So what is the position of the United States? If they say they want to promote development, why are the developing countries saying what President Obama wants is not going to help?
WISE: Well, I think the question in multilateral trade negotiations like this–this is the one body that negotiates one country, one vote multilateral trade negotiations–and that in the past, as you noted, rules have tended to favor the wealthier countries. This round was supposed to be different. It was called the development round when it was launched in Doha, Qatar, in 2001. And the promise there was that the least developed countries in the world would–the rules would benefit them in trade, and that other developing countries, including the growing emerging markets like Brazil, China, India, would not be expected to make the same kinds of market-opening steps that the richer countries–.
JAY: Give us some specific examples.
WISE: Well, how much do you have to cut your tariffs in manufacturing–that’s the kind of thing you negotiate. Those are called the NAMA negotiations.
JAY: And the US wants essentially no tariffs. They want an open market wherever they can.
WISE: And that’s the nature of negotiations, that people come in with the industries and the sectors they want opened, and they try to–and you negotiate, and you negotiate multilaterally. The problem is that with the financial crisis and the economic crisis, now the food crisis on top of it all, I just think the Doha round has been left talking about liberalization when in fact the world is suffering from too much liberalization, not too little. And they just have become largely irrelevant to the discussion. The financial crisis was largely the product of deregulation. And here’s the Doha negotiators talking about trying to get further financial sector liberalization.
JAY: In developing countries.
WISE: In developing countries.
JAY: And this, when we say that, we are saying American negotiators.
WISE: US negotiators, European negotiators. The food crisis is ravaging the poorest countries, which have lost, a lot of them, their ability to grow their own food as imports have flooded in under the current trade rules. And what are they talking about in the Doha negotiations? More liberalization, deeper liberalization. So the negotiations just have reached a level almost of irrelevance to world events.
JAY: Now, for the American–certainly the big American corporate sector and Europe, is it not also to their advantage that this round of negotiation collapses, in the sense they like these bilateral agreements where they can kind of beat up one or two countries at a time and try to push through what they want?
WISE: Well, I think it’s probably true that the majority of those multinational firms would prefer a multilateral system that opened trade worldwide to their operations. But it’s definitely been true in recent years that as the Doha negotiations have floundered, there’s been a period of what’s been called competitive liberalization, where developed countries, the European Union and Africa, have gone in with their economic partnership agreements and tried to–with a much stronger negotiating position, with Europe negotiating with individual African countries, to pry open those markets. The US has done the same with its own free-trade agreements, and we have three of the Bush-era trade agreements now being proposed by Obama for passage for Korea, Columbia, and Panama. All of those are second-best options, I think, but ones that from an economist’s perspective are far worse for the global economy.
JAY: Now, ten years ago when this round began, it was hard to say no to the United States. People have some options now, I should say, people, countries have some options. You know, there’s a China, there’s an India, there’s a Brazil–there are some other serious players now. How has that changed the dynamics?
WISE: Oh, the dynamics are entirely different. I mean, new trading blocs have emerged. The G-20 of the WTO, not to be confused with the G-20, the international financial powers, they emerged in the negotiations in Cancun in 2003 as a trading bloc to say, in the WTO negotiations, no, we’re not going to open up investment rules, and no, we need more movement on agriculture from developing countries, and on cotton in particular.
JAY: And how is the Obama administration in comparison to the Bush administration? Is there any–seem to be more understanding of the problems with this liberalization or not?
WISE: Well, I think the Obama administration came in showing a much stronger commitment to multilateralism, and that was very positive. They tended to treat other countries with much greater respect and treat these bodies, these negotiations, with more respect. That said, if you don’t come to the table willing to compromise,–
JAY: Meaning open your markets.
WISE: –meaning don’t demand that developing countries open their markets prematurely, earlier than the United States ever did in its own development process, then you’re really seen as being somewhat hypocritical. And, in fact, the Obama administration in some areas has come in demanding far more from developing countries than the Bush administration did in the earlier stages of the Doha negotiations.
JAY: This is to do with Obama’s strategy to try to deal with unemployment in the United States by boosting exports, which means you need to beat up some of the other economies to make room for American products.
WISE: Right. But in international trade negotiations and in an international economic crisis, every country wants to increase its exports. So it’s a nonstarter to come in and say, you have to do more than we are. And that’s where we find ourselves. Now people are, negotiators are taking this month to assess the state of disrepair in the negotiations and to try to figure out if there’s anything that could be salvaged. There are things that can be salvaged, and in a way it might be a good way to move forward. Some have suggested that some of the prodevelopment elements that have already been agreed upon, like trade facilitation–it’s just a way to aid countries in being able to access international markets better, mainly developing countries funded by the developed world–benefits everybody to have them be more capable trading partners. But that could just go forward on its own. People have cited a number of other areas. But unless there’s a much more serious push to, for example, put a moratorium on these regional and bilateral trade agreements, which are so much worse than the WTO agreements, and which put so much pressure on developing countries, and which just create what people have described as a spaghetti bowl of regulations that companies that have to navigate, depending on which trading partner they’re dealing with–.
JAY: And you might–we’re seeing it even again now: President Obama, when he said there’d be a $1 billion of debt relief and another $1 billion of loan given, but he tied it again to open markets. So it’s the same idea. And the fact is, I think, as you pointed out, is that this [incompr.] these open markets has been part of a policy that’s actually undermined all these economies.
WISE: That’s right. I think there’s a legitimate reason. Aand I think it has played a good role–so has the G-20–in saying let’s not in this financial crisis go to a period of protectionism, of closing markets, because that could in the long run be a disaster for the global economy. To the multilateral system’s credit, that has not happened. Countries have not overwhelmingly closed off their economies, even in this terrible financial crisis. That’s something to build on. But if you want to build on it, you’re going to have to build positively, and granting that developing countries need a development round, they need the kind of–.
JAY: They need to be allowed a certain amount of protection until they are able to play in a more equal way.
WISE: Just like the United States had, just like Europe had.
JAY: Right. Thanks for joining us.
WISE: My pleasure.
JAY: And thank you for joining us on The Real News Network.
End of Transcript
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