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ALTERNATIVES TO THE COLLAPSED WTO DOHA ROUND TALKS
by Stephen lendman
Email: lendmanstephen (nospam) sbcglobal.net
24 Aug 2006
ALTERNATIVES TO THE FAILED WTO GLOBAL TRADE MODEL
Alternatives To the Collapsed WTO Doha Round Talks - by Stephen Lendman
On July 24, 2006, World Trade Organization (WTO) Director-General Pascal Lamy was forced to halt the five years of negotiating of the so-called Fourth WTO Ministerial Doha Round that began in Doha, Qatar in November, 2001 and ended (for now, at least) in Geneva, Switzerland. The talks had been ongoing to strike a trade deal but broke down because the US, as usual, demanded all take and little give in return expecting it could strong-arm developing nations to accept whatever it proposed as it's always been able to do in the past.
No longer, apparently, as nations with growing clout like Brazil, India and others justifiably refused to knuckle under. Even European (EU) Trade Commissioner and US ally, Peter Mandelson expressed his ire when he accused the US of trying to exact a "disproportionate" price from developing countries. He added: "Surely the richest and strongest nation in the world, with the highest standards of living, can afford to give as well as take." Mandelson is right, of course, but he also understands the US considers itself the de facto ruler of the world and claims the right in that status to make all the rules and expect all other nations to agree to and obey them. It wasn't to be this time in Geneva and may never be again as a growing number of nations are fed up with Washington's notion of trade that's "free" in words but never "fair" in fact. The tone of frustration was expressed by India's Commerce and Industry Minister in his concluding comment that Doha is "definitely between intensive care and the crematorium." He and others thought it would be months to years before further talks could be restarted and likely never again on same basis as the current round that broke down.
That basis is the same business as usual one when the US is involved - promise them (the developing nations) everything, or at least an equitable arrangement for rich and poor countries alike, but in the end deliver little or nothing. It's just another example of US duplicity and disingenuousness as the initial Doha declaration promised that the rich nations would make most of the concessions and the poorest ones would need make few or none. It never happened, and the biggest obstacle was over farm subsidies so important to developing world countries that need protection for the major part of their economy along with ease of access to the US and European Union (EU) to assure growth. The US and EU made no teeth proposals to end their agricultural subsidies by 2013, but less developed countries rejected the kind of vague forked-tongue language the US especially has used before which in the end always failed to deliver what it promised.
A clear example of the kind of trade agreement the US wants is reflected in its subsidies to cotton farmers the WTO ruled illegal last year. Despite the ruling, the US did nothing to bring the subsidies into compliance, and Brazil may now ask the WTO to allow it to impose $1 billion in punitive duties on US imports in compensation. Brazil and other countries may also have justifiable rice, soybean and other crop claims against the US. Uruguay has complained about unfair US rice subsidies depressing world prices, and Oxfam International charged that these illegal subsidies, valued at $1.2 billion a year, hurt rice farmers in a dozen countries.
Call it just more of the "same old US same old." A key provision of the Doha "development round" clearly shows it. With a backdrop of high-sounding language promising to help poor countries grow their way out of poverty by granting them greater access for their goods, the EU extended the "Everything but Arms" initiative (EBA) under which it would unilaterally open its markets to developing countries. That was before the US hypocritically muddied things up by purportedly agreeing to a 97% opening of its markets to the developing world. These countries were initially disappointed with the original EBA initiative, and the EU promised to address their concerns to reach a more equitable compromise. US intentions, however, were quite different. While using market-opening language, the US, in fact, proposed just the opposite by claiming the right to choose a different 3% exclusion for each country to rig the deal to end up allowing developing countries the right to freely export everything but what they produce. So while they can freely export aircraft, jet engines, supercomputers and computer chips, they can't have free access for their agricultural products, processed foods or textiles. Hardly a fair trade initiative, and one sensible trade ministers would never accept. They didn't.
The net result is that the 3% EBA initiative is just another disingenuous multilateral trade scheme corrupted by US undermining to unfairly give this dominant country free access to world developing markets without having to grant equivalent access here in return. Based on the outcome in Geneva, developing countries, led by those with the most clout, no longer are buying it and walked away. They did it before at Cancun in 2003 and no doubt will stand firm in any future WTO negotiations.
A Disturbing Cloud on A World Trade Silver Lining
At the same time developing nations are resisting sweeping trade deals like Doha, some of them are agreeing to bilateral ones with the US with terms just as unacceptable as the WTO ones they rejected. So far the following countries have agreed to such "free trade agreements" with the US or are in the process of negotiating them: Australia, Chile, Peru, Colombia, Panama, Bahrain, Israel, Jordan, Malaysia, Vietnam (seeking WTO admission), Morocco, Oman, Korea, Singapore, Thailand, South Africa, the United Arab Emirates (UAE), and the Central American nations included under the Dominican Republic Central American Free Trade Agreement (DR-CAFTA) of the Dominican Republic, Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica (the only CAFTA country that hasn't so far approved the agreement).
In addition, and less publicized, there are other agreements in place and being negotiated under various names like the so-called US-India Knowledge Initiative in Agriculture that gives US giants like Monsanto free access to the Indian market for their GMO products ravaging Indian farmers since gaining entry and causing thousands of suicides among them because of onerous debts they were forced to assume that ended up killing them; Cargill and Archer Daniels Midland for wheat at unaffordable prices increasing hunger and malnutrition and destroying the lives of still more small farmers; and the king of giants - Walmart - that wants to dominate the Indian retail market, and if successful, will do to thousands of small retailers in the country what Monsanto alone did to its small farmers.
By using the tactic of one-on-one negotiations, the US is showing it's not standing pat in the face of overall trade defeat that first erupted on the streets of Seattle in 1999, began in earnest in direct talks in Cancun in 2003 and culminated with the collapse of those talks in Geneva in July. It's trying to overcome it by undermining the unity of the developing world one nation at a time and do it with selective agreements covering products and services it's able to get its negotiating partners to agree on. In the case of India that stood firm against a sweeping Doha agreement, it's clear that country so far has been willing to trade away its food and retail small business security for whatever benefits it hopes to gain in return that when dealing with the US may turn out to be meager at best.
It's too early to know how successful this US strategy will be over time, but so far it's had enough success to show developing nations determined to hold their ground that their battle to do it has just begun, and it won't be easy prevailing in the end. Nonetheless, the ones willing to resist US bullying tactics have decided, so far at least, that sweeping agreements on US one-way terms are unacceptable. At most, they'll go for a limited one hoping for some expected gain in return for what they have to give up. So the bottom line thus far is that while Doha is either dead or on life support, so-called US-style "free trade" is very much alive and thriving.
Alternatives to the WTO Doha Round
Despite US trade ingenuity and chicanery to turn defeat into partial victory, challenges to its dominance have emerged showing a spirit of resistance and unwillingness to continue the old corrupted one-way neoliberal way of doing things that's little more than a race to the bottom. That spirit wanting change is more alive in Latin America than anywhere else, even though so far it's more hope than reality. Still, for the first time, more people in the region are fed up having to live under the oppressive heel of US dominance and are inspired by what's happening in Venezuela to overcome it and beginning in Bolivia as well. Call it a start, but all great social movements have modest beginnings. There's never a guarantee how far they'll go, and many just fade away or are destroyed by those of privilege using their power to do what they know how to do best - remove all threats to the interests of capital by whatever means it takes to do it.
That battle is now being waged in Venezuela against its democratically elected President, Hugo Chavez and his Movement for the Fifth Republic Party (MVR). Chavez was first elected in December, 1998 and from the start created the beginnings of a new mass social and political Bolivarian revolution based on participatory democracy and social justice. Privileged "sifrinos" and the corporate ruling class in the country aren't happy with the way things are now and have engaged the Chavez government in confrontation relentlessly since he came into office. Those forces have a strong ally in the Bush administration that's done all it can to aid them and continues to relentlessly.
The reason is because of all Chavez has done to help his overwhelmingly poor people emerge from their desperate state and have the essential social services and other help they need. He's accomplished much in a short time despite everything done to subvert him by powerful and determined internal rogue elements and the far more hostile threat from the huge shadow cast on his government from Washington that's tried and failed three times to oust him and now is planning a fourth attempt that may include an armed assault and invasion and likely attempt to assassinate him as well.
Chavez began in 1999 by drafting a new constitution that was put to a nationwide referendum and overwhelmingly approved by the Venezuelan people. It established the principle of participatory democracy for all Venezuelans, mandated quality health care and education, housing, an improved social security pension system for seniors, free speech, rights for indigenous people and banned discrimination. Chavez is revered by the great majority of his people because of all he's done for them since taking office in 1999. He currently enjoys an approval rating of over 80% and likely will have no trouble remaining President when he runs again for reelection in December unless an attempt is made to remove him from office forcibly before then that succeeds. Chavez is well aware of the threat against him and is doing all he can to prevent it.
ALBA - The Bolivarian Alternative to the Fourth WTO Ministerial Doha Round
Hugo Chavez is pursuing his progressive agenda abroad as well as at home. Key to it is his alternative to the US dominated WTO neoliberal type trade agreements that are called "free" but aren't "fair." The ones now in force under mandated WTO trade rules along with IMF and World Bank imposed structural adjustments and privatizations of state industries have caused growing poverty and human misery throughout the developing world. The harmful one-way trade rules are in place for agriculture, services under GATS, intellectual property under TRIPS, and the mostly unpassed corporate wish list from hell covered under MAI that would establish a single global economy run by these corporate giants. Led by the US and its giant transnational companies, the goal of these agreements is to establish a supranational "economic constitution" based on WTO mandated rules of global trade that would override the sovereignty of member states - in other words, to establish a global constitution with a binding set of trade rules favoring rich countries and giant corporations allowing them the right to dominate world markets and exploit developing nations and ordinary people everywhere for their benefit.
Hugo Chavez has opted out of this corrupted system with his alternative plan called ALBA or the Bolivarian Alternative for the Americas. It's impressive goal is to achieve a comprehensive integration among Latin American countries to develop "the social state" that will benefit ordinary people. It's far different than the WTO structured deals explained above that only benefit large corporations and wealthy nations at the expense of developing ones and all people everywhere. ALBA is bold and innovative and based on the principles of complementarity, not competition; solidarity, not domination; cooperation, not exploitation; and respect for each participating nation's sovereignty free from the control of other nations and giant corporations.
Chavez hopes ALBA will unite participating nations in solidarity to benefit the people in them by providing essential goods and services, achieve real economic growth at the grassroots and improve the lives of ordinary people by reducing and one day eliminating poverty. A key feature of the plan is the exchange of goods and services outside the usual international banking and corporate trading system. For example, Venezuela has exchanged Venezuelan oil and building materials with Cuba paid for in kind by Cuba, in turn, sending 20,000 doctors to work in medical clinics and hospitals in the barrios plus staffing literacy programs to teach Venezuelans to read and write.
Venezuela, Bolivia and Cuba have also agreed on an ALBA and People's Trade Agreement that will operate on the same basis. The agreements contain many articles and provisions of complementarity and mutually beneficial exchanges that will benefit all three countries and their people and also work with other Latin American countries to help them eradicate illiteracy using the methods that have virtually eliminated it in Venezuela and Cuba. Compare what's been accomplished in those two countries with limited resources to the US where the Department of Education in the richest country in the world estimates over 20% of the population to be functionally illiterate. That startling and shameful fact is but one of many noteworthy testimonies to the failure of the so-called neoliberal "free market" race to the bottom model the US wants to export to all other nations and do it by force if necessary.
The Mercosur Alternative
Mercosur, or the Southern Common Market, is a much less impressive and radical alternative to the WTO model than is ALBA. It's a customs union comprising Brazil, Argentina, Uruguay, Paraguay and most recently in July, 2006 Venezuela as a formal member. It was founded in 1991 by the Treaty of Asuncion and amended by the Treaty of Ouro Preto in 1994. Mercosur was formed to promote free trade in goods and services among its member Latin American states that also include Bolivia, Chile, Colombia, Ecuador and Peru as associate members as well as Mexico in temporary observer status prior to becoming an associate member.
As a functioning trade body, Mercosur is far different than ALBA. It was never meant to be an alternative to the dominant WTO model but rather to be complimentary to it. It was formed by and represents the ruling class of its Latin American member states that have long been dominated by the Global North. They believed by unifying into a regional trade block, they would have more negotiating clout in combination than each one could have acting separately. Despite the standoff at Cancun in 2003 and the just failed Doha round in Geneva, its results have been mixed at best in its dealings with the US primarily. Even as a more powerful regional trading block, these nations haven't been able to get the US to soften its negotiating position in trade talks and thus be willing to offer fairer terms, especially on products most important to each Latin country.
The failed Doha round especially proved that, but it also proved that when developing nations stand firm together, they can hold their own, bring talks with the US to a standstill, and prove they mean business and no longer are willing to cut one-way deals hurting themselves. So maybe after three years of failing to get its way in spite of all the pressure the US can bring to bear, Washington may finally be getting the message. But with the hardline Bush administration still in charge moving ahead boldly with bilateral deals, that possibility may only be wishful thinking.
Enter Venezuela into Mercosur
On July 21, Venezuela formally became the fifth member of Mercosur making this body the world's third largest economic bloc and adding to the strength of Latin American unity that may better enable it to hold its own in future trade negotiations with the US and other dominant Global North nations. Hugo Chavez joined this alternative trade bloc just months after withdrawing from the Andean Community of Nations (CAN) pact in April, 2006 in response to CAN members Colombia and Peru signing Free Trade Agreements with the US. The benefits of Venezuela's addition are significant, and Hugo Chavez signaled it by saying: "We are entering a new stage of Mercosur." He went on to add: "Latin America has all it needs to become a great world power (he didn't mean a military one). Let's not put any limits on our dreams. Let's make them reality." Chavez's words were backed up by Brazil's President Lula da Silva when he added "no one is talking anymore (about the US-backed) FTAA." And Argentina's President Nestor Kirchner added emphasis with his comment that "Democracy, human rights, liberty and the fight against poverty (are the basis for) a new world order." In his comments, Hugo Chavez was expressing his hope that with the addition of his country and likely other nations to follow, Mercosur would take more steps to "prioritize social concerns" and begin a process of no longer being beholden solely to "the old elitist corporate models" that put profits ahead of people needs. Hopefully, to some degree at least, Lula and Kirchner were expressing the same sentiment. So far though in their own style of governance, these two leaders differ markedly from Hugo Chavez and mostly follow the neoliberal "free market" rules prescribed by the US that the corporate giants benefit from.
But those leaders as well as those from Uruguay and Paraguay got a hint of what their people want at the summit when social activists representing the interest of labor, the environment, women's issues, human rights, and campesinos marched on the streets in solidarity with demonstrators of left-wing parties to present their progressive alternative proposals for regional integration to the Mercosur leaders. The street event marked the close of the summit at which the Peoples' Summit for Sovereignty and Integration ran for the first time parallel to a Mercosur summit meeting. The Peoples' agenda addressed issues that included anti-poverty measures, indigenous peoples' rights and demands, the protection of natural resources, investment in education, trade liberalization and matters of concern to women.
Participating organizations prepared a final document that proclaimed "South America is entering a new era," and they intend to create and fight for an alternative plan to the failed neoliberal so-called "free market" ones they reject. They made their goals clear stating: "No to free trade agreements and yes to peoples' integration. No to foreign debt and to meddling by the international financial institutions. Yes to economic independence. No to militarization, yes to self-determination. No to hunger and poverty, yes to better distribution of wealth."
Those attending also rejected a US Senate initiative to create a counter-terrorism organization in the tri-border area connecting Argentina, Brazil and Paraguay, demanded Latin American UN MINUSTAH "blue helmet" so-called "peacekeepers" (that, in fact, serve as thuggish enforcers) be withdrawn from Haiti, and protested against the illegal US war against Iraq and the joint US-Israeli equally illegal ones against Lebanon and Palestine. This is likely to be a taste of further protest activism to come with various NGO groups representing ordinary people demanding their political leaders address the vital issues of greatest concern to them. With Hugo Chavez as a formal Mercosur member and already governing that way in Venezuela, these groups have an important regional leader as an ally who'll back and help them by addressing their needs and advocating Mercosur nations adopt them.
Chavez and Mercosur have already had one notable achievement last November when Venezuela successfully led the opposition that thwarted the US's attempt to conclude its Free Trade of the Americas agreement (FTAA) with South American countries. It's very likely FTAA is now dead, and the US may only attempt to resurrect it in bilateral form to get the best deals it can, even ones less acceptable to its giant corporations that would rather have all they get bilaterally than nothing at all resulting from the demise of FTAA.
The US task, however, will be all the harder with the addition of Venezuela as a full Mercosur member. The country has clout and intends to use it. Besides its immense oil reserves Chavez is willing to share equitably on an ALBA-type arrangement with his trading partners, Venezuela is South America's third largest economy after Brazil and Argentina. It's addition to Mercosur means this trade bloc now has a combined market of 250 million people and a total output of $1,000,000,000,000 ($1 trillion) in goods and services annually - 75% of the continent's GDP. Further, with its associate members and possible addition of Mexico (especially if Lopez Obrador manages to assume the office of President he won but so far has been denied), Mercosur is poised to become even larger and more powerful. At the Mercosur summit on July 20 - 21 in Cordoba, Argentina, Chavez called for Bolivia and Cuba to be included in the trade bloc. Bolivia already is an associate member, and in a clear rejection of how the US treats Cuba with its 45 year-old embargo aimed at trying to topple Fidel Castro, Mercosur nations just concluded an Economic Complementation Accord with the island state designed to eliminate tariffs and boost complementary trade.
Mercosur's growing strength is more political than economic, and therein hopefully lies its clout. It can't compete in size with the Global North or any trade bloc with the US as a member. As impressive as its market size and combined GDP numbers are, they're quite small compared to the three nation NAFTA bloc dominated by the US that has 450 million people in it and a combined Gross Domestic Product (GDP) of $14 trillion. But just as the Hezbollah resistance humbled the mighty Israeli Defense Forces (IDF) fourth most powerful military in the world by its resilience, so too might economically small Mercosur hold its own in its dealings with its powerful and dominant northern neighbor - especially with some help from other developing nations like India, China and Russia that are also unwilling to trade across the board on any basis they consider unfair and are getting away with it when determined to do it.
Recent Russian muscle-flexing is an example of how one nation is able to stand up to the US successfully. Relations between the two countries have been frosty for some time, and as a result the Bush administration blocked Russia's desired entry into the WTO. In return, Russian President Vladimir Putin retaliated by denying US oil giants Chevron and Conoco-Phillips the right to develop oil and gas fields in the Barents Sea. Putin also cemented a relationship with US nemesis Hugo Chavez by concluding an arms deal involving 24 advanced Russian fighter jets, 53 helicopters, and 100,000 Kalashnikov rifles in addition to discussing the possibility of Russia becoming involved in building an oil pipeline in Venezuela.
In addition, Russia earlier joined in an important energy alliance in 2001 with China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan called the Shanghai Cooperation Organization (SCO) that reportedly will shortly include Iran as a full member because of the Persian state's vast energy reserves so important to the other members, especially China. The intent of this alliance appears to be an effort to counter US attempts to control the hydrocarbon-rich Eurasian/Caspian Basin region and establish its own foothold in this vital part of the world. The SCO may be looking to add still another new member to its alliance after the CIA instigated fake 2004-05 "orange revolution" installed Ukrainian President Viktor Yushchenko was forced to accept pro-Russian Viktor Yanukovich as his Prime Minister on August 3. The CIA election tactic "coup" robbed Yanukovich of the presidency he won, and he now may look to get even by moving Ukraine into the Russian orbit dealing the US another defeat as opposition alliances gain in strength at the expense of the ruler of the world wannabe that looks a little vulnerable.
The US may face still further obstacles as Russia, China and Iran have announced or signaled their intentions to shift a portion of their dollar reserves away from the US currency into others like the euro. Russia also plans to make its ruble convertible into the other major currencies, and Iran intends to open an oil bourse, (its scheduled opening now delayed several times) and sell at least part of its oil in euros. China, in fact, just did it by opening its Shanghai Petroleum Exchange on August 18, began trading in gasoline, announced bitumen, methanol and glycol will follow and soon thereafter will trade in other petroleum and chemical products including crude and refined oil and liquified gas. The announcement didn't mention what currency trading would be done in, but likely initially at least it will be in the Chinese yuan with possible euro trading to follow.
If China, Russia, and Iran ally to reduce their dollar holdings, trade oil in euros, rubles and/or other non-dollar currencies and can get other oil producing states to join with them and do the same like Venezuela, it will pose a serious threat to US dominance in the region as well as undermine it's position as the world's economic leader. It will also increase world instability, as the US won't stand pat in the face of actions it sees as a challenge to its preeminence or anything that may harm its economy. Nonetheless, it shows what's possible when enough nations join together to counter the hostile effects of US dominance in trade and all else. In alliance these nations have strength in numbers, may attract others to join with them and thus be able to hold their own against US hegemony, weaken it significantly in the process, and end up negating whatever steps the US may attempt to fight back.
The Lesson Learned May Be Resist and Ye Shall Succeed
To prevail, it's just a matter of enough nations joining in their common self-interest to find out how successful they may be if they try. It's like the old story of the schoolyard bully who's able to get away with beating up on weaker kids until one or more fight back, strike a telling blow, and get away with it. At that point, the game is up, and the bully knows his bullying days are over. Others picked on know they too can fight back, some will if picked on, and bullies only like picking on the ones who won't. It's the same story with nations as with schoolyard bullies. The developing world can put down the US bully if enough of them in it refuse to be pushed around any more, join together for added strength and fight back.
History is on their side as the US seems to be repeating the same fatal errors all other dominant empires in the past did that overreached and paid for it with their own demise. Grandiose imperial plans and dreams and super weapons to back them up are no insulation against the rest of the world determined to resist them. That's what Yale Senior Research Scholar Immanuel Wallerstein believes in his 2003 book The Decline of American Power. In it he said the US "has been a fading global power since the 1970s, and the US response to the (9/11) terrorist attacks has accelerated this decline......the economic, political and military factors that contributed to US hegemony are the same factors that will inexorably produce the coming US decline." Retired professor Chalmers Johnson also predicts the dissolution of the US empire if present trends continue. He outlines a disturbing scenario in his 2004 book Sorrows of Empire including a "state of perpetual war," a loss of democracy, and the US going bankrupt because of its inability to maintain its "grandiose military projects." The conclusion is the US is acting recklessly and imprudently like all other dominant empires before it and is increasingly vulnerable as a result. It just remains for enough other nations joining together in a common purpose for them likely to be able to achieve what they set out to do.
It's already happening with positive results that holds promise of resonating and inspiring others in the developing world to join the struggle for their own rights. It happens in schoolyards, and it's now beginning to happen in global trade. It may just be a matter of time before the fight is carried to the larger issues of war and peace, social equity and global justice. All that's needed to advance the ball are a few more dedicated leaders like Hugo Chavez and Bolivia's Evo Morales combined with enough good people acting with courage and determination on their own behalf throughout the developing world to spread their message of resistance, ignite it into a raging bonfire, and extend it to others willing to join the fight for the possible big reward of a better world. That may be happening now on the streets of Mexico as millions there are rallying behind their candidate Lopez Obrador so far denied by electoral fraud of the office of President he clearly won. Win or lose, their voices are being heard in Mexico and throughout the region. Their resonance may inspire others to battle as courageously for the social equity and justice they too deserve.
Hugo Chavez is on a mission to help them by trying to build unity among developing nations to "confront the great challenges of this imperialist neo-liberal era." As part of it, he just concluded a whirlwind tour of seven nations including Russia, Iran, Vietnam, Belarus, Mali and Benin, and beginning August 22 he'll spend a week in China (his fourth visit there) to strike energy and investment deals and try to build political support with this important Asian country in need of the oil Venezuela can supply it. Chavez and his allies know how important these alliances are, and if they can convince enough other nations to join with them their strength in combination may give them the power they need to challenge US dominance and end its bullying days forever. For now it's just a glorious dream. But isn't that the way all great social movements begin?
Stephen Lendman lives in Chicago and can be reached at lendmanstephen (at) sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com.
This work is in the public domain