Volume 4, No. 12, December 2003

Never before did any of the earlier four Ministerial Conferences of the WTO end so abruptly as at Cancun, Mexico. All earlier Summits, in fact, went late into the night or were even extended by a day, to come up with an imperialist extracted ‘consensus’. But, at Cauncun, on the last day, when discussions on the final declaration was at its peak, the Conference was abruptly called off in the afternoon itself.

By afternoon, even though three out of the four Singapore issues had been dropped (by the EU who were the most adamant to pass it) from the Agenda, countries of Africa, the Caribbean and others started to protest against the Singapore issues. Surprisingly those countries who staged the first walk-out at the official press conference are those closest to the US — the walk-out was initiated by Kenya and followed by South Korea and India. Within minutes, the Mexican Foreign Minister (a US stooge, who was running the show) abruptly closed the Conference, without even allowing a closing session, saying that the talks had collapsed. Several Africans had been seen conferring with the US Trade Representative (USTR), Zoellick, before their protest.

Till today it is a mystery as to why the Cancun show was so suddenly brought to a close. The Indian media has shown it as a victory for the third world; and the Commerce Minister, Arun Jaitley, as a leader of this bloc, battling the domination by the US/EU combine. But, the real facts have to be deciphered from continuous media spin on the Conference. No doubt, the Jaitley posturing was much needed publicity for the BJP and the RSS to cover up their servility to the US, in a period when the country is in for elections.

But, one thing was strange, or perhaps coincidental — most issues on which Jaitley and Co. raised the most noise happened to be those that raised by the US themselves, and sought to be pushed through by the EU. On this occasion the US took a low profile not bringing its contradictions with the EU to the fore and allowing the third world countries to be pitted against the EU, in order to score a diplomatic gain after what was lost to them by the Iraq war.

India’s dubious role at Cancun was probably planned in New Delhi a month before Cancun when the Assistant USTR visited India. The Economic Times of August 6, 2003 reported "The US sought the backing of India in the ongoing WTO negotiations on agriculture to press for reduction in production subsidies, export subsidies and import tariffs (i.e the main points of contention with the EU since Seattle — Editor). Efforts are also on to support each other on similar areas of mutual interest. E. Ashley Wills, Assistant USTR, looking after S. Asia said at New Delhi that liberalization of trade in farm goods would be a key factor for success. The US was also confident of success in clinching more market access for non-agricultural products. The US officials met the Commerce Minister, Arun Jaitley, to discuss WTO-related issues. The US was of the opinion that regional trading arrangements will emerge as a key factor promoting trade and investments".

After the collapse at Cancun the USTR, Zoellick, said that the US would redouble efforts to reach bilateral/regional trade deals with "favoured countries". With contention for spheres of influence growing amongst the imperialists, multilateralism is bound to ebb as that serves a common imperialist goal. In the post World War II scenario it was a common block against the communists; then, a common block of the West against soviet-social imperialism; then in the 1990s, a common offensive of finance capital against the backward countries of the world in the name of globalisation. But since 2000, amidst the growing economic crisis, the earlier imperialist blocs are crumbling and severe contention is growing amongst them, with that between the US and the EU in the forefront. In such a new situation the earlier joint offensive becomes more and more difficult for the imperialists as each is more interested in ousting the other from their spheres of influence and consolidating regional/bilateral ties, culminating later in blocs. It is this that the USTR was referring to when he spoke at Delhi and what Zoellick meant when he spoke after the collapse of Cancun.

Besides with the increasing scramble between the imperialist powers some third world countries were able to bargain for a few extra crumbs from the imperialist table. But the imperialists preferred to see the talks collapse rather than grant even this pittance.

But more on this later; first let us see what exactly happened at Cancun.

The new Doha Round was pushed through at the Doha Summit held a few weeks after 9/11. In the atmosphere of anti-terrorist hysteria whipped up by the attack, the imperialists were able to push through a new round to phenomenally increase the trade and financial attacks on the backward countries of the world. As a sop they put in the Declaration postscript the "implementation issues" (i.e. those issues not implemented by the developed countries and a part of the WTO understanding); and as a camoflouge, to appease third world sentiment, they called it the "Development Round".

Since Doha all the mini-Summits to carry forward the Agenda, at Tokyo, Montreal and elsewhere, totally failed to move even a step forward. The reason was twofold: First, the inability of the US and EU to come to an agreement, particularly on the issues surrounding agriculture. Second, the total bypassing of the "implementation issues" and others concerning the third world, particularly on that of TRIPS & Public Health. The "implementation issues" were consciously ignored, while on that of TRIPS & Public Health, the US backtracked on even what was decided in the Doha Declaration.

In mid-August the EU and the US supposedly buried their differences and put forward a Draft proposal on agricultural trade. As commented by an observer, the proposal was so vague, full of blanks and uncertainties that it appeared to be a joint draft of disagreements between the two. This was discussed, but satisfied no one.

Finally, on the penultimate day the Chairperson of the Summit, the Foreign Minister of the Host country, Mexico, presented the final Draft. An American stooge, the Draft reflected the viewpoint of the US on most of the three contentious issues: (i) agriculture, (ii) Singapore issues and (ii) and the question of cotton subsidies opposed by West Africa.

The media made out that the final draft was a US/EU one and opposed by the backward countries of the world. This was not fully true. The final draft was opposed by France on both questions of agriculture and Singapore issues. Earlier, in June the EU had come out with a Common Agricultural Policy (CAP). Though this made some nominal changes on a few basics it differed little with the earlier policies. France complained that the new Draft on the question of "internal support to agricultural commodities" went against the very basis of the CAP. Also they said, that the paragraph on the "green box" called into question the right of every WTO member to have an agricultural policy.

On Singapore issues too the Draft reflected the US viewpoint. The Singapore issues comprise four items — multilateral investment policy, competition policy, trade facilitation and transparency in government procurement — so called, as they were first raised in Singapore in 1997. Doha agreed to put it on the agenda and it was to be settled at Cancun. The EU has been the most aggressive on the Singapore issues, while the US has strongly opposed the first two items and has agreed to the last two. Exactly this standpoint was reflected in the final Draft. In it, trade facilitation and transparency was to be taken up for immediate negotiations, while investment and competition policy was put aside for "clarification". Quite obviously the EU was opposed to this as well.

On the question of subsidies to cotton farmers the final Draft was silent.

So, what has been portrayed in the media as a battle between the backward countries and a united imperialist block is only a part truth. No doubt there has been some assertion by the countries of the third world, due to the obvious discrepancies and hypocrisies of the developed countries vis-à-vis the backward countries, as throughout the period of the WTO, the US and the EU have systematically increased protection to their own economies while demanding free trade from all others. But, in most cases the major issues raised by them were with the backing of one or the other power blocks. Primarily the major alliances of the so-called G-21 and G-16 were focused on issues being pushed by the EU and opposed by the US. The G-21 ‘fought’ on questions of agriculture, where, earlier, the EU and Japan had rejected the US proposal calling for elimination of export subsidies, lower tariffs and trade-distorting subsides. The G-16 ‘fought’ the Singapore issues, also opposed by the US.

So, the battle was quixotic; with a Jaitley playing to the galleries and his cheer-leaders in the Hindutva media applauding vociferously the mock battle with the imperialists. The question is will the Jaitleys oppose similar bilateral agreements being signed with the US? But on this we will come a bit later.

The fact of the matter is the OECD developed countries give a massive $350 billion subsidies to their farmers, flooding the world with cheap products, thereby destroying agriculture in the backward countries of the world. This amounts to over $ 1 billion per day. The total equals six times the amount given by these countries as overseas ‘aid’. Total rich country subsidies to agriculture are greater than the GDP of Africa as a whole. Quite naturally this ditortion is an obvious case of imperialist hypocrisy.

Also, for example, an EU cow gets a subsidy of $ 2 per day, this is above the income of billions of people in the backward countries living in the worst imaginable conditions.

The US gives an annual subsidy of $ 4 billion to its 25,000 cotton farmers pushing thousands of farmers in the backward countries to suicide. 10 million West African cotton farmers (four of these countries depend fully on cotton exports) have been pushed to misery. Cotton subsidies have driven down world cotton prices 10-20%, costing West Africa alone $250 million annually in export earnings.

In the Philippines, due to the WTO, employment in agriculture dropped from 11.3 million in 1994 to 10.8 million in 2001. In 1993 it had an agricultural trade balance of $292 million; in 2002 a trade deficit of $794 million. Imports of agricultural commodities rose from near zero in 1999 to 2 million kg in 2002, destroying lakhs of rice and maize farmers.

In addition, in the last year, about 6 million face famine in six countries of Southern Africa due to drought.

In fact during the period since the WTO’s formation agricultural subsidies of the OECD countries has nearly doubled from $182 billion to $318 billion in 2002. And, in fact, this was hiked even further in the US when in May 2002 the Bush administration pushed though a huge hike in subsidies to its farmers by 80% — i.e. a massive $190 billion in new subsidies over 10 years; or $ 19 billion per year. So much for free trade. Now the US swarms the world agricultural market, being the major exporter of wheat, soyabean, maize and cotton. Dumping of US agricultural commodities have jumped enormously as shown by the table below:

Not only this, the Bush administration also introduced a huge hike in duty on imported steel of 40% around the same time. Steel is one of the major commodities for most industries and such a major hike in this basic raw material would amount to protectionism for all these industries of the US. In other words, through these two measures the US, soon after Doha, took protectionist steps to protect the bulk of its agriculture and industry, while chanting the most loudly about free-trade.

But this was not all; the US even sought to retract what was decided at Doha on the question of TRIPS & Public Health. This agreement was supposed to enable WTO members to make effective use of compulsory licensing for producing life-saving drugs to deal with public health emergency situations. Though this itself was a very half-hearted agreement, the Americans, acting at the behest of their pharmaceutical companies, sought to sabotage it. First they said that this would only be applicable to three diseases — AIDs, TB and malaria. The US refused to agree to a compromise in Dec.2002, though the original 2001 Declaration had already been diluted. On the eve of Cancun, the US dropped the restriction on three diseases, but introduced two new clauses, which, in effect, destroyed the very basis of the clause on TRIPS & Public Health in the 2001 Declaration. This was pushed through with the assistance of India.

Finally, all the "implementation issues" agreed to be taken up at Doha have been totally sidelined by the developed countries. Obviously the rules of the WTO are not to be "implemented" by them and only by the backward countries!! They also saw scarce mention in the draft final declaration.

We have already seen the serious differences between the two trade giants on the issue of agriculture and Singapore issues. We have also, in this period witnessed the heightening conflict between the two on the question of Iraq — which too, in essence, boils down to differences on control over markets and sources of raw material, ie. Oil. On TRIPS too the EU has an interest in protecting their products through GIs (Geographical Indications), like the wines of France, which are identified with a particular region where grapes are grown. The US remains a staunch opponent of enhancing the scope of GI protection, supported also by Canada, Australia and New Zealand (the so-called Cairns Group), which are major agriculture exporting countries.

In yet another trade conflict between the two, the EU has threatened to impose sanctions on the US by end 2003 for its tax breaks for exporters; a WTO judicial panel has found this to be in violation of WTO rules. The US has threatened to retaliate this move by filing a case in the WTO against the EU’s moratorium against genetically modified foods.

In addition, new spats have occurred over alleged export subsidies for American companies (the so-called Foreign Sales Corporation case in the WTO), over data and privacy protection in telecommunications, and most corrosively, over genetically modified organisms (GMOs). In May, despite warnings that it would damage prospects for joint leadership in the Doha Round, the United States instituted a WTO case against the European Union over restrictions on trade in GMOs.

As these trade wars hot up protectionism will grow and that is why the imperialist powers will no longer be very interested in multilateral agreements, but more in carving out specific spheres of influence through bilateral and regional agreements. Already this has become a major trend and both the US and the EU have been pushing through this method with vehemence. The advantage of this to a particular imperialist power, is not that they will merely pries open economies generally, but open up economies to its specific control and influence. It is then that the WTO will seize to serve much purpose and could die a natural death. The process has already started, particularly since the Seattle WTO meet. At Cancun it has taken a leap forward and it is unlikely that the WTO will ever again play the role that it once did, as trade conflicts are only bound to increase.

Today there is a veritable stampede of the major imperialist powers to sign bilateral and regional agreements. Each is trying to corner the maximum of the world cake. This is taking place in the realm of the economy as also in the political and military sphere. Today, it is Free Trade Agreements (FTAs), like NAFTA (US, Canada & Mexico), that are shutting out trade from other countries in this bloc, or putting them at a major disadvantage. Both America and the EU have been moving ahead in this direction at a frantic pace of late. The WTO has been officially notified of as many as 250 Preferential Trade Agreements (PTAs) by end 2002. Of these, as many as 130 had been notified after 1995.

The US has been pushing ahead with the proposed Free Trade Area of the Americas (FTAA) and similar agreements in East and Southeast Asia. Even after capturing Iraq the fist thing that they proposed was a Free Trade Agreement with Arab countries. It now has FTAs with Jordan, Chile and Singapore and negotiations underway with Australia, Morocco, five members of the South African Customs Union (Botswana, Lesotho, Namibia, South Africa and Swaziland), and five nations of the Central American Common Market (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua). Future plans include a FTAA, which will encompass the western hemisphere except Cuba, {though this is facing some problems from Brazil & Argentina, which passed a Buenos Aires Consensus in mid-Oct. — as a result of this the US is now trying for a CAFTA (Central American Free Trade Area)} Enterprise for the ASEAN Initiative announced in Oct.2002, and a number of additional FTAs.

The EU’s Agreements include the Europe Agreements with the Eastern and Central European countries of Bulgaria, Czech Republic, Slovak Republic, Poland, Hungary, Romania, Slovenia, Estonia, Latvia, and Lithuania; Euro-Mediterranean Association Agreements with Tunisia, Israel, Morocco and Jordan; and free trade areas with Switzerland, Denmark, Iceland, Mexico and Chile. Under the Barcelona Process, launched in 1995, the EU plans to have FTAs with all its 12 Mediterranean partners and establish a WTO consistent Euro-Mediterranean free-trade area by 2010. Likewise under the Cotonou Agreement, which recently replaced Lome IV, it plans to establish FTA agreements in a large number of countries in Africa, Caribbean and the Pacific (ACP) that are the least developed countries.

Japan, Russia and China are also working in this direction but much more slowly.

So, it is clear that the two major trading giants are now moving in another direction. If united on certain issues against the backward countries, through arm-twisting they may still utilize the WTO to push their common imperialist agenda further. If they cannot; to hell with it, they will use the bilateral/regional path for exactly the same agendas. In all probability the former will get more difficult and the latter path will become the trend.

In the August 29, 2003 issue of the Economic Times Jaitley wrote an article taking a very ambiguous stand on most of the controversial issues before the WTO. On agriculture he said, " we do not wish to stall the negotiations on agriculture, but we do hope adequate window of exception for economies like India are created". A similar vagueness is to be found on the Singapore issues, which he did not oppose in principle but merely wrote that a conclusion may be difficult as "countries have diverse stands" and that there is no "explicit consensus" on it.

On the much publicized opposition to the Singapore issues, particularly that on investments, it is well known that the most vehement opposition to it is coming from the US and UK. In fact a UK Parliamentary report itself argues against bringing investments into the WTO on the grounds that it is not the right forum. India has merely echoed this stand. In fact on the question of the multilateral investment agreements India stand is as usual hypocritical, as it already has in place 42 bilateral agreements to secure foreign investments. Besides, it has systematically been opening up the financial sector and even moving towards capital account convertibility. The fact of the matter is that the US is opposed to it as it primarily seeks to push through these investment agreements through bilateral ties, as it wants the benefit not for imperialist capital in general, but for US capital in particular.

Worst still, on patent rights and TRIPS, India stabbed the African countries in the back. They had been asking for an outright ban on patents on all life forms, a position that they had held consistently since 1999. This proposal was very much in the interests of the underdeveloped countries since patents on life forms at the early stage of development of key technologies would strike at the self-reliant development in agriculture and pharmaceuticals. India opposed the Africans, saying it goes against its interests in biotechnology. No doubt, as these interests in biotechnology are deeply tied up with US companies. Besides, this is not of much worry to the Indian rulers even though with the new patent act being passed in Jan.2005 over 25,000 small pharmaceutical companies in the country will have to wind up (displacing lakhs of workers). The ruling elite could not care for the small-scale sector as long as the big comprador pharmaceutical houses, like Ranbaxy, Reddys Labs., etc will not be affected.

No wonder Christina Rocca was all praise for the Indian rulers when she visited the country in the midst of the WTO Summit. While addressing a meeting of the CII (one of the three big business associations) on Sept.12 2003, she said "We are grateful to India for its key role in resolving the complicated issue of TRIPS. This is the kind of cooperation we hope to continue with India, both bilaterally and multilaterally".

Finally, in mod-October, India sabotaged the planned meeting of the G-22, saying it will "wait and watch" (in fact, this has now shrunk to 12 as many Latin American countries have since capitulated to US pressures and bribes).

In fact even earlier at the Doha meeting in 2001after much hard-line posturing, the then Commerce minister, Murasoli Maran, did a somersault and meekly signed on the dotted line.

So, on all the key issues — i.e. agriculture and Singapore issues — India de facto acted as a proxy of the US taking up those issues which were already being raised by the US. Not surprisingly, it said not a word on the question of agricultural subsidy to cotton, which was a major issue brought up by the African countries, even though thousands of our cotton farmers have been committing suicide!! It is important that one looks below the surface to fathom the reality and not be taken in by media spin.

The protests at Cancun, though relatively subdued attracted worldwide attention by the suicide of a South Korean farmer at the barriers. Around 14,000 farmers and indigenous peoples, with the delegation of South Korean farmers carrying a coffin in the funeral procession of the WTO, marched towards the convention center, at the opening of the ministerial. They were stopped at the police barricades while the signboards welcomed visitors to the resort city of Cancun. Barriers and a massive security deployment kept them more than 10 kilometers away from the convention center where ministers from the 146-member WTO started the ministerial to further their ‘free’ trade agenda. The Korean farmers rammed the coffin into the steel barricades as the Mexican military police watched in their full riot gear. Chanting "Death to the WTO," the farmers broke down and toppled a part of the barricades. Then the Korean farmers burnt the American flag, the sign of imperialism and a symbol of a colonizer to the poor, the indigenous, the starving, and homeless the world over. Kyung-Hae Lee climbed up with his banner and stabbed himself in the heart, protesting the free trade agreements, which have enslaved our food producers.

On other days roughly 30,000 people participated in the demonstrations each day, and the damage done by anti-globalization demonstrators on businesses and municipal infrastructure totaled 2.72 million dollars. The entire conference enclave was like a fortress guarded by barriers and thousands of Mexican police and military.

In India too many anti-WTO demonstrations were held throughout the country. Notably there was good response to the FAIG (Forum Against Imperialist Globalisation) country-wide call to rally against the WTO on the eve of the Cancun Summit. FAIG anti-WTO rallies and conventions were held in Punjab, Patna, Hyderabad and many other places around the country.

But whatever the strength of the demonstrations, the WTO is on the decline. The media and the establishment will try and give an anti-imperialist colour by portraying the compradors inside the WTO as warriors against the US/EU. This was sought to be portrayed at even the present WTO event. But the collapse of the latest WTO Summit is primarily due to the growing contention amongst the imperialists, and particularly the US and the EU; and any minor resistance of the backward countries is only a by-product of this. Let us not get taken in by the media hype, which seeks to give credibility to the so-called resistance by the agents and stooges of the imperialists and thereby indirectly detract from the need for real resistance.

Actually with the collapse of the Cancun Summit it was clear that the imperialists are not willing to give even a small concession to either the backward countries or to rival imperialist powers. With the growing crisis in the world economy the chances of any small concession gets less and less, as the capitalists will seek to extract more and more to prop up their falling rate of profits. Also, with this crisis the desperation to grab markets and sources of raw materials will grow, and so contention is only bound to increase. And it is this that will finally pull down the WTO.

So, today it is not sufficient to merely say "Down with the WTO" as the WTO itself may decline under the weight of its own contradictions. The NGOs and other fake progressives will then portray this as a victory to the people’s movement. But the so-called victory will be illusory, as the multilateral trade agreements will merely be replaced by numerous bilateral agreements with one or the other imperialist power. So the call of the hour must be to scrap not only the WTO but also all trade and investment agreements signed with any imperialist power.

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