When Oliver Becomes Fagin

Here’s something on the WTO now up at Comment is Free.

When the World Trade Organisation talks collapsed in Seattle in 1999, there were parties in the streets, and a wailing and renting of clothes in the corridors of power. The failure of the Doha round of WTO talks in Geneva this week has drawn a more muted reaction from both its boosters and critics. In Seattle, it was possible to tell a story in which the voices of people on the streets mattered, and in which the disenfranchised had scored a victory against an unaccountable front company for international capital. This week’s failure had less to do with global justice, and much more to do with the growing pains of international capitalism.

To the untrained eye, it’s hard to tell that anything’s different. Today’s ducks of international capital still look, walk and quack the same as they did yesterday. The financial markets didn’t seem to care, with major indexes untroubled by the bottom falling out of the talks. In part, this is because the contribution that the Doha round would have made to a global economy of $54 trillion, by the WTO’s own generous figures, was $50bn.

Yet some countries clearly lament the collapse. In a press conference yesterday, Burkina Faso’s trade minister Mamadou Sanou said, that “We can hardly control our anger.” And he’s right to be annoyed at the rules of international trade. As a cotton-exporting country, his farmers are being wiped out by the multimillion dollar support that the US gives its cotton exporters, but which Burkina Faso is prohibited, under WTO rules, from doing anything about. “They wanted me to be here to negotiate on cotton. I have been here for 10 days and I haven’t been able to discuss cotton,” Sanou said.

For its part, the US was particularly keen to blame India and China for failing to enter into the spirit of the negotiations. Beneath the sighed pronouncements of United States trade representative Susan Schwab, was a thinly veiled lament of “when will they learn?” To be clear, the historical spirit of the WTO has been for developing countries to shut up and do what they’re told and, if they’re very good or very big, they’ll get a scrap or two from the EU and US’s table.

On that table was a tentative agreement between the main negotiating parties reached in the dark of Friday night. The EU and US had given some ground to demands that skilled workers from Asia be allowed entry to the EU and US markets, and more visas were promised, and it looked as if the deal might be sealed.

Over the weekend, though, India squirmed. Winning visas for the IT industry would certainly keep a slice of the middle class happy. But the majority of Indians are poor, live in rural areas and depend on agriculture. While the country’s politicians are often happy to genuflect before a rural Mother India and then bankroll her urban sons, with an election looming, they needed to do a little more. The Indian government has already this year promised to cancel a slice of farmers’ debt in a spectacular and utterly cosmetic pre-election stunt.

But this isn’t enough. And a sell-out at the WTO wouldn’t play well in the fields at home. So the Indian delegation insisted that there be some protections for their farmers from the surge in imports that inevitably follow tariff cuts. It’s a serious concern: in Ghana in 1998, for example, local rice production accounted for over 80% of domestic consumption. By 2003, after liberalisation, that figure was less than 20%. What India wanted was the right to protect farmers if this happened. The US and EU proposed a threshold for support that was too high to be meaningful. India, backed by a range of other countries, held its ground.

So the talks collapsed.

Now, to be clear, this doesn’t flag an end to US and EU hegemony. It merely confirms the arrival of more big players into the international trade arena, and the re-configuration of that hegemony. India, China and Brazil can no longer be taken for granted, and the EU and US will need to learn to negotiate accordingly. But it would be foolish to think that, as poorer cousins, the ascending developing countries might become a voice for the disenfranchised. When China joined the WTO back in 2001, fingers were crossed and double-crossed in the “global south” with the hope that China might fight the good fight for all poor countries.

That hasn’t happened. And it’s no surprise. The most successful beggars around the international trade club have now graduated. Oliver has become Fagin. The Indian, Chinese and Brazilian negotiators at the WTO, like those of the EU and US, represent the interests not of the majority, but of a certain bloc of capitalists. After the elections pass, business will return to normal.

After all, none of the main parties have walked away from the WTO altogether. The institution remains a useful instrument in service of the interests they represent. No one has given up on multilateralism either. With a wave of elections this year and next, the WTO isn’t the only international negotiating venue where diplomacy has turned into thumb-twiddling while everyone waits for Bush to leave.

Trade talks are diplomacy’s most rugged zombies, able to rise despite a thousand deaths. We can expect to be reading about the tentative resumption of the WTO talks next year. In the meantime, of course, farmers in developing countries will still be exposed to the inequities of the current world trade system. Those inequities haven’t worsened, but the failure of the talks is a small whoop. When the poor are so comprehensively pinioned by international economics, it’s a slim victory that the screw hasn’t turned further.

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