The world according to the WTO
Pierre Rousset Things have definitely quite changed! Five years ago, it was in the utmost discretion that countries ratified the constitution of the World Trade Organization. Public opinion was deliberately left in ignorance. Protest movements only mobilized the existing militant networks-people who already understood what was going on. But in Seattle in December 1999, the opening of the Millenium Round of trade talks was one of the most media-covered events of the planet. But it wasn't the heads of governments that made the headlines! It was the tens of thousands of individual citizens, and the hundreds of organizations that came to Seattle to denounce the trading order embodied in the WTO. The demonstrators occupied downtown Seattle, blocking traffic completely. The official delegates were unable to leave their hotels to attend the opening ceremony of the summit. A lesser event would have been cancelled But the authorities declared a state of emergency and curfew to regain control over the situation!
So the WTO ministerial conference was finally held - in a city under virtual martial law.
Seattle was not the only place people protested — a remarkably broad range of movements and organisations said "No!" to the WTO in cities and regions all over the world.
An amazing 1,449 organizations from over 90 countries and territories signed a call for a moratorium of the Millenium Round, until democratic structures can be established, to let the people of the world participate more directly in decisions about about future trade agreements..
A lot of people clearly don't like the WTO vision of the world! When was the last time we saw this kind of international dynamic, this kind of convergence of multiple resistances to the dominant order? These were the largest North American mobilizations since the protests againt the US war against Vietnam, a quarter of a century ago.
us, in October 1998, to gain a first and important victory, when the WTO had to give up its beloved project of Multilateral Agreement on Investment (MAI),
Other victories are possible, today and tomorrow, if the dynamic of civil and social mobilization is maintained. It is not just the efficiency of the WTO which is in question. The last two years have exposed the contradictions of capitalist globalization. The neoliberal order has exposed its Achilles' heel.
The WTO was specifically created to pursue the task of the GATT and to promote more and more free trade. Neoliberal trade policies were to take the form and the power of a law. The idea of the WTO is to define a sereis of "rights", based on the preeminence of trading relations but claiming a universal vocation. It was endowed with a permanent and complex form of organization, with considerable powers. Over the last five years, it has started to legislate, to establish its order. It draws its power from the active complicity of western governments, and from the weight of the economic interests that it serves, and that serve it.
But any machine can jam. Any social organisation can lose its legitimacy. And this is what is happening today. Inter imperialist conflicts
The WTO should constitute a neutral, global judicial framework. But its law reflects the balance of state and economic power in the world. This can be understood by analysing the differences between the United States and Western Europe regarding the International Viewpoint #317-318 January 2000 19
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* WTO agenda of the negotiations.
The US seeks to preserve maximum room for maneuver. They continue to be able to impose unilateral international regulations (such as the boycott of Cuba or Iraq). They want to still have recourse to bilateral agreements, wherever this enables them to maximise their dominant position. They wanted to limit the Seattle negotiations to the already defined Marrakesh Accords) that concluded the Uruguay Round of trade negotiations: They aim particularly to destroy the protectionist defenses of the European Union's agro-industry. The US strategy is to move forward step by step and to conclude negotiations on a "case by case" basis.
European multinationals certainly benefit from capitalist globalization, particularly in the sector. But the European Union wants to gain time, to consolidate its economic and state integration, before the next wave of deregulation,
The European Union, a secondary power (due to its military weakness and its lack of internal unity, wants the WTO to serve as a collective framework of negotiations between the three poles of the imperialist triad — USA, EU and Japan. This is why the EU wants to expand the agenda of the Millenium Round to include a number of other domains (including tition rules and investment) The EU argues for a comprehensive deal, with all sides making concessions. It rejects in advance the signing of sector-related accords and intends to negotiate a global accord over the next three years. Control over the capitalist
The WTO inherited the GATT system of decision-making. It works by formal equality of the 134 member countries (135 with China). This one government = one voice" rule is quite unlike the "one dollar = one vote" rule governing the IMF and the World Bank. The equal representation of states is in fact the only democratic credit which the WTO can claim. But the cost of such a system is slow procedures and a high risk of negotiations jamming. This is why the major powers originally decided to negotiate the MAI at the heart of the OECD (the organisation of industrial countries), and not as part of
WTO, where even the countries have a voice.
Of course, equality among countries is only formal. In reality, most governments lack the resources to 20 International Viewpoint #317-318 January 2000 follow all the procedures undertaken simultaneously at the WTO. The governments of the G7 countries are in teh driving seat. As long as they present a united front, they can impose their will. But if they are divided, the governments of the South and the East can hope to block the adoption of regulations. India and Malaysia have been particularly succesful in this regard. So have the various African governments introduction of patent rights for life
Of course, not everything can be analysed in terms of North-South relations. Notably, the conflict over the removal of agricultural subsidies rangs the countries of the North against each other. Argentina, and some other countries of the global South are part of the the ultraliberal Cairns group, which agricultural protectionsm. Within the third world, a range of governments, business leaders The absence of legitimacy
The constitution of the WTO is
The role of the organization international free trade inall economic sectors where there are at least two possible competitors. This includes markets, and biotechnology. In other words, the WTO seeks to impose the world dictatorship of the trading order.
This objective is obviously not easy to reach. In many countries, the balance of forces between the classes prevents governments from destroying the public health or education systems. For this reason, the WTO was endowed with powers that go beyond the rules of classic bourgeois democracy. When they ratified the creation of the WTO, parliaments gave up, without any public
*some of their essential prerogatives. The constitution of the WTO stipulates that national laws must conform with WTO regulations. So this unelected and unaccountable body has become a source of supra-national legislation.
The decisions of the WTO have the power of international treaty (ie superior to national laws). Until now, for almost all countries, international treaties have been exceptional political events. Their wording has often been detail in national parliaments. In many countries, international treaties must be ratified by a special majority of members of parliament. But the WTO was created with a book of blank cheques; its regulations — whatever they are — will be binding on every member country.
Furthermore, the WTO merges the legislative, the executive and the judicial within its Dispute Settlement body (DS). The Dispute Settlement body is an internal institution of the WTO, which has the powers to judge conflicts among member countries, and impose sanctions, in particular financial sanctions. For example, it legalized example "cross retaliations" of the US against EU luxury goods, after the EU refused to import hormone-treated beef from the US.
What is at stake here, is not just national sovereignty, but the role of politics, and the sovereignty of the people, whether it is manifested in the context of a country, a group of on governmental orientations in relation to their own political, social, health, cultural, economic or environmental
The devastating consequences of neoliberalism explain why the fight against the WTO has mobilised such a wide range of social, civilian, cultural and environmental resistance. A new mode of domination
The WTO rapidly became one of the globalization beside the IMF and the World Bank, the G7 and NATO. It is a powerful organisation, but it also faces great difficulties. current round of negotiations are considerable. Success is far from being reached. The Seattle summit was held at a moment when, after years of unchallenged ideological supremacy, neoliberalism was profoundly shaken by the financial crises of 1997-1998.
The emergence of a new world order is proving less natural and smooth than the advocates of liberalism had
Neoliberal globalization represents a new stage in the internationalization of capital, in the structuring global market. The dynamism of the process is reflected in the series of industrial and banking mergers in reorganization of the planetary space with the (uneven) consolidation of peripheral zones, the three poles of the imperialist triad, and the complete abandon of vast territories, particularly in Africa: From an imperialist point of view, direct territorial control has lost some of its importance.
Globalization does not only operate in the commercial, industrial requires deep social re-compositions. Within the ruling classes, we can see the and the marginalisation of several traditional elite groups. And the oppressed classes are threatened by profound processes that make our lives more precarious and our identity more
Globalisation is also reorganising the equilibrium between the centers of economic, political and military power national, international level. It is assigning new roles to global institutions - most of which were created after the Second World War. UN bodies like the ILO are increasingly international order implies a new global mode of class domination.
Neoliberalism only took a planetary dimension 10 years ago, with the fall of the Berlin wall its most potent symbol. Over the last decade, the IMF asserted its authority over Eastern Europe, the WTO was born, NATO began its eastward expansion and proclaimed its permaent, global vocation, and the G7 began to redefine its powers.
But this decade has already produced the first major crisis of the process of capitalist globalization. The crisis sheds light on the economic, social and political contradictions of capitalist globalisation, and shows how uncertain the stabilization of the new mode of bourgeois domination remains. The financial crises
The markets have again become euphoric. But the lesson from the financial crises of 1997-1998 should not be forgotten. In just 18 months, crisis hit Thailand, and then a significant part of East Asia, then Russia, Brazil and a part of Latin America, before touching, with the pension funds issue, the "systemic crisis" at the United States itself. Mechanisms that were initially supposed to reassure financial markets played a destabilizing role, because of speculative capital and the big shareholders in the stock market. Nothing is really regulated any more. With the suffocation of the previous models of development, the capacity of contemporary capitalism to consolidate its productive and social base is at stake. Do the shareholders make the right decisions for the future of the system? Do they care? Do they know?
In 1997, the advocates of neoliberalism considered the Asian crisis an opportunity for western capital to rapidly penetrate desired markets
(particularly South Korea by purchasing at low prices firms and banks near bankruptcy. Things didn't quite work out that way. The IMF contined to play the role of the sorcerer's apprentice, as it had done in 1998, during the fall of the Indonesian dictator Suharto and the opening of a major regime crisis in one of Asia's key countries (and the worlds' fifth largest society). The authority of the IMF collapsed even further when its links to the Russian Mafia were exposed.
These events aroused defense reactions from part of the dominant classes in the global South. The Malaysian regime took on an arm wrestling competition with the IMF, by imposing control over capital movements. In November 1998, the Asia-Pacific Economic Conference (APEC), revealed itself incapable of stimulating another wave of trade liberalization. Some Brazilian states entered into open dissent over their debt interest payments. This type of elite resistance to ultraliberal dictates is increasingly visible withing the WTO negotiations.
The institutions of the new world order tend to limit considerably the social margin of maneuver of national bourgeoisies. domination are denounced in the name of free-trade, competition or budget austerity: Western Europe's historical compromise between the classes, Latin America's populism, Africa's redistributive clientelism and Asia's state interventionism. The IMF and the WTO propose a single, undisguised law for financial, industrial and commercial areas, a particularly cride mode of domination, that can only function in the absence of sizeable collective resistance. Collective resistance
In many countries. trade union, social and democratic movements were significantly weakened over the 1990's. But not enough for the needs of the new world order.
The victory won against the MAI in October 1998 was short and touched only a small number of countries (Canada, the US, France). It did not give rise to important street demonstrations, but it did involve a representative range of organizations. Under this pressure, the French government was the first to decide to break ranks and to from the withdraw spectacularly negotiation at the heart of the OECD, while proposing to resume talks at the
WTO.
This victory (of course temporary)
was won much more easily than we expected at the time. Our success came about because of the already significant
Glossary
APEC: Asia-Pacific Economic
Conference
DS: Dispute Settlement body (at the heart of the WTO
G7: The Group of the seven richest countries (USA, Canada, Japan,
Germany, Britain, France, and Italy).
Sometimes meets as "G8"
, with
Russia.
GATT: General Agreement on Tariffs and Trade
ILO: International Labor Organization
(the UN body that elaborates and promotes labor standards)
IMF: International Monetary Fund
MAI: Multilateral Agreement on
Investment
NATO: North Atlantic Treaty
Organization
OECD: Organization for Economic
Cooperation and Development (the group of industrialized countries)
UN: United Nations
WB: World Bank
WTO: World Trade Organization
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International Viewpoint #317-318 January 2000
* WTO disagreements between the governments of the North, intensified by the financial crises. But also because the MAI expressed the domination of the multinationals so brutally that it became publicly indefensible. The From GATT to the WTO GATT: General Agreement on Tariffs and Trade. Created after a treaty signed in 1947 by 23 countries with an objective of ensuring a continuous liberalization of international trade, starting by lowering customs barriers. Cycle: Rounds of multilateral commercial negotiations were organized within the framework of the GATT. Each round could last for several years and carries frequently the name of the city or the country where the negotiations are taking place. Each was more long and complex than its predecessor. Uruguay Round: The name of the latest round of negotiations realized within the context of the GATT. It started in 1986, and ended in 1993. Given the wide scope of issues tackled, it was meant to be the most ambitious. It imposed a new wave of liberalization in trade of goods and services, but didn't nevertheless conclude negotiations in a series of areas (textiles, financial services, etc.). Marrakesh Accords: Signed by 120 countries on April 15, 1994, and then by 1278 at the end of the year, and by 134 in February 1995. These accords concluded the Uruguay Round and decided upon the constitution of the WTO. WTO: Replaced GATT after ratification of the Marrakesh Accords. It included 112 members and 40 observers on December 13, 1995; 135 and 30 observers today. The Seattle Conference was the third WTO Ministerial Conference (after Singapore in December 1996 andGeneva in May 1998.) 22 International Viewpoint #317-318 January 2000 absence of democratic legitimacy was clearly proved to be an Achilles' heel of the process of capitalist globalization.
Europe's social democratic governments and (to a certain extent) Bill Clinton have tried to learn from the fiasco of the MAI.
They sing about the need for "transparency" " the need to "contain" the "understandable anxieties" of antiWTO demonstrators, and invite us to "dialogue between governments and civil society"
Every politician's speech is filled with references to solidarity, justice for the third world, and cultural, and ecological preoccupations. This is a great smokescreen, in order to hide the essential: the pursuit of the process of economic liberalization and democratic dispossession.
Pascal Lamy, EU representative at Seattle, said it quite clearly: Yes to the liberalization of trade in all directions, with only certain restrictive clauses on the respect of cultural diversity, precaution in health and environment issues and a dialogue with the ILO about minimal social standards. Free trade should remain the rule and derogation (by definition provisional) the exception.
The European Union requests with particular vigor the widening of the competition areas of the WTO. This is of course one of the main things demonstrators are opposed to. There is a real ideological counter-offensive underway.
The major media are arguing a kind of social liberalism ("better have rules at the WTO than not have rules at all"). But the disgraceful media coverage of the Seattle developments where violent protest movements rejected offers for "dialogue") is failing to convince people.
Capitalist globalization tears up the social tissue and weakens popular classes by generalizing precariousness: it seeks to destroy collective rights acquired over the past struggles and to replace them, at best, by elementary strings of security targeted and individualized
But it also creates conditions for new solidarities: International institutions spreadthe same neoliberal policies in all fields, all environments and all parts of the world.
The ongoing campaign against the
WTO is destined to last at least as long as the Millenium Round itself. It gives us the opportunity to unite these new global solidarities, to enliven a new internationalism. *