The WTO deal: What has been gained?

The World Trade Organisation announced recently that a deal has been reached to which all 159 member countries have given their assent. I am extremely suspicious. My suspicion stems from my experience of the negotiations in the Doha ‘development’ Round years ago when I was a player in such negotiations through my involvement at the time in the Guyana and Caribbean sugar industry.

I remember such negotiations becoming less and less about ‘development’ for the small developing countries like ourselves 20131215ianand more and more about increasing trade opportunities for the rich countries and the powerhouse emerging countries like China, Brazil and India. Our interests were increasingly overlooked by the already developed and soon-to-join-the-club members.

When I retired and left that frustrating, hypocritical scene where only lip service was paid to the real needs of small developing countries no agreement had been reached.

I felt this was a good thing since it was clear to me that any agreement would be seriously disadvantageous to us. Now there is an agreement and I fear that small vulnerable countries have been right royally (excuse me) screwed in the deal. If, by some miracle  this is not so I eagerly look forward to hearing exactly what advantages have come our way – and by advantages I do not mean, for God’s sake, the promise of future advantages because that was always what we were fed on – promises that never came to pass.

The powerhouses of the world were always in complete and cynical control. They insisted that trading arrangements must take place on ‘a level playing field’ – even though when it suited them they fixed playing conditions, changed rules in mid-game and moved goalposts around quite shamelessly.

The fact is that a fundamental injustice takes place unless ‘special and differential treatment’ for small, poor and vulnerable countries is systematically applied in negotiating and implementing world trading arrangements – as indeed was ‘promised’ in the original Doha Declaration.

Consider a few of the inherent disadvantages from which small, undiversified economies suffer:

Developed, diversified economies are naturally better positioned to benefit from free trade compared with poor countries dependent on a few industries; in developed countries if one or two businesses go to the wall it hardly matters among so many but in poor countries it can be a mortal blow.

Subsidies, many of them subtly hidden, continue to support businesses and whole industries in rich countries which hypocritically proclaim the need for free trade and pure market forces.

High interest rates are forced down the throats of poor countries to ensure fiscal rectitude when the one thing they need to compete and develop in a trading environment is the low interest rates enjoyed by developed countries.

 

Developed countries are past masters at imposing non-tariff barriers – rigid quality standards, intricate bureaucratic requirements, new security regulations – whilst insisting that trade with them is tariff free and so requires reciprocity. Our hypocrisy certainly cannot match theirs.

Strong, advanced economies – possessing science and technology developed to the cutting edge of modern methods in all the disciplines which business needs – must have their tongues firmly and cynically in their cheeks when they advocate reciprocal free trade for weak, backward, skills-deprived economies which cannot possibly equal their technological firepower.

Unbridled free trade is a recipe by developed countries for marginalizing small, poor countries in a global economy where, naturally, the strong will prevail and the weak will go to the wall – and remember that countries like China, India and Brazil are well on the way to being ‘developed’ in this sense.

The bridle which free trade requires is ‘special and differential treatment’ for the poor, the small and the vulnerable. But has the bridle been put in place in this latest deal?

The agronomist Alvaro Soares de Melo once described very aptly the plight of the vulnerable and the weak as they labour while academics and top negotiators in remote rooms decide their fate.

 

“Today’s favoured solution is economic liberalization and the globalisation of trade, widely promoted in developing countries by international institutions. It brings to mind the story of the scholar who puts a flea on the table and shouts “Jump!” The flea jumps. The scholar rips off its legs and again shouts “Jump!” But the flea does not jump. The scholar concludes that, without its legs, the flea cannot hear.

“We can do the same and shout to the people of poor countries that they should jump aboard the train of globalisation. But they will not be able to do so, unless we return their legs to them, unless we help them to acquire the resources they need for development.”

Speak up, please, I want to hear how the fleas have benefited in this latest deal.