Volume 7, No. 2, February. 2006

— Suman

Till the last day of the of the marathon six-day meet from Dec.13-18th it looked as though there would be no agreement between the thousands of delegates representing about 150 countries who had gathered for the Sixth Ministerial Conference of the WTO. This Conference was to wind up the Doha Round which had begun in November 2001. It was nowhere near that goal and finally in order to avoid a collapse some declaration was passed to be further discussed at the WTO headquarters in Geneva on April 30th 2006. On the fourth day of the 5-day meet the cynical report that came out was that there was neither "breakthrough nor breakdown".

The WTO director General, Pascal Lamy, himself said: "the last hours of the meeting were incredibly intense…..It’s like keeping your balance in a small boat, trying to reach the other side of the river in the midst of a storm". He added that the last minute negotiations were "stormy" since the trade ministers were faced with a "make or break" situation. Most agreed to the Declaration pushed through by the US/EU despite reservations as they did not want to derail the entire process. It was primarily the Indian and Brazilian delegates who broke with the unity of the underdeveloped countries and forced a decision, basically as per the wishes of the US/EU demands. Kamal Nath de facto acted as the Trojan horse of the imperialists within the G-110. All his bravado rhetoric of having fought for India’s interests was a hoax as he turned out to be one of the prime pushers of imperialist interests. The final Declaration gave all gains to the imperialists while that for the backward countries were notional.

The Conference took place amidst huge demonstrations against the WTO and its anti-poor agenda. The demonstrators gathered two days before the Conference and reached a crescendo on the pen-ultimate day of the Conference. During this period throughout Hong Kong there were big protests, many of which turned violent. On the very inaugural day demonstrators, particularly farmers from South Korea, clashed with riot police. Though they were not allowed anywhere near the venue and only allowed to have their protests at the far away Victoria Park, on the 5th day the crowds broke through police lines and there were massive clashes with the police. In the process they marched close to the venue cutting off the Wan Chai area, the location of the Conference venue, cutting off public transport and forcing thousands of delegates to walk back to their hotels. In the brutal police attacks over 1,000 demons-trators were arrested. Besides Hong Kong demonstrations were taking place throughout the world including in many parts of India. A big demonstration was also held in Delhi against the WTO meet.

The imperialists no longer hold such Conferences in their own countries, particularly after Seattle, as they fear the wrath of their people. So they shift it to distant places so that few demonstrators can attend and where police brutality can be more obscene and crude.

The worldwide anti-WTO demonstrations brought to light the aggressive imperialist nature of the Uruguay Round whose discussions went on from 1986 to 1994, when the GATT was transformed into the WTO.

When the Uruguay Round began, the imperialists put forward a supposed grand bargain to the backward countries. They demanded expansion of the trade agenda to include services and Intellectual Property Rights; in return the developed countries were to make major concessions on agriculture and textile quotas. While the backward countries implemented all the WTO stipulations the developed countries did nothing for the whole decade. Finally, when textile quotas were ended last January, they pleaded that they were still not prepared and thus negotiated a three year extension with China. What happened in agriculture was even worse. While the understanding was that rich countries’ enormous subsidies would be reduced, the US almost doubled its subsidies. In 2002 the US Farm Bill set the new subsidy rate for 10 years upto 2012. And the EU adopted the CAP (Common Agricultural Policy) which can’t reduce its subsidies before 2013.

On the issue of NAMA (Non Agricul-tural Market Access) it was rejected by the bulk of the underdeveloped countries at the Cancun meet due to its horrifying impact on the economies of these countries — leading to an even faster rate of de-industrialisation, by throwing the doors wide open to cheap imports of manufactured goods. It basically only affects the backward countries as it is they who have tariff barriers on industrial imports while the developed countries have mostly non-tariff barriers to deny market access to goods from other countries. It was the Indian government that had virtually accepted the contents of the earlier discredited text as the basis of NAMA negotiations.

Finally the Doha Round sought the liberalization and deregulation of the services sector in which have been included 160 services ranging from water, education, health, infrastructure (including energy, transport and telecommunications), financial services (banking and insurance), travel and tourism, etc. The subject matter of this GATS (General Agreement in Trade in Services) is extremely broad as the term "Service" is defined vaguely in the agreement so as to potentially include any and every activity.

Soon all began to realize that the WTO, like its sister organisations the IMF and World Bank, were nothing but tools of big capital to rob the poor and backward countries of their wealth and resources. The imperialist’s aggressive nature was further intensified at the very first Ministerial Conference after Uruguay held in Singapore in December 1996 and the putting on the agenda by the EU the so-called four Singapore issues. It was at the third Ministerial Conference in Nov/Dec 1999 at Seattle and the violent clashes there, that set the tune for the anti-globalisation movement throughout the globe.

With the vehemence of the protests the governments of the backward countries had to put up some show of protest. What is more the intense contradiction between the US and EU on trade issues, particularly on agricultural subsidies, allowed countries some maneuverability between the two imperialist monoliths. As a result of all this with the culmination of the Uruguay Round and the initiation of the Doha Round the imperialists were forced to give the appearance that this Round was being devoted to the benefit of the backward countries — so it was called the Development Round.

But that was only in name; a subterfuge to dupe the masses of the world. The essence of the Doha Declaration, which was passed in the background of the US’s aggressive posturing in the light of 9/11 that had taken place barely two months earlier, sought to put even more burdens on the underdeveloped countries of the world, while turning a blind eye to the US/EU protectionist measures. It was now clearly the formula; free trade for the world; protectionism, for the imperialists.

With the imperialist economic crisis also having deepened in 2000/2001 their desperation to shift the burden of this crisis on the backward countries became even more desperate. That is why, though they had to make a show of it being a "development" Round, to appease the huge anti-globalisation demonstrations, they in fact sought more aggressive opening-up of the economies of the backward countries of the world. In addition, the crisis intensified the trade wars between the imperialists, particularly the US-EU conflicts, making their ability to come to any joint agreement on international trade more difficult. So, while pushing their minimum common agenda at the WTO they have also been pre-occupied in forming bilateral/regional trade blocs, to further specific imperialist country interests.

For all these reasons the Doha Round never really got off the ground, though agricultural issues, which was the main bone of contention, was the core question. The Cancun 5th Ministerial Conference in Sept.2003 therefore collapsed and there was no agreement. Since then the regular meetings at the Geneva headquarters have not made much headway in being able to revive the stalemate. Yet, in mid 2004 the General Council of the WTO came out with a framework for the culmination of the Doha Round, the essence of which was to further push the joint imperialist interests against the backward countries. All that the Hong Kong meet did was to basically re-iterate the "framework" of what has come to be known as the "July decision" of the General Council, with a few changes. This "framework" sets the path for the further capitulation of the backward countries to the imperialists on all spheres of trade in agriculture, industry and services.

In September of this year Pacal Lamy took over as the Director General of the WTO — he was the earlier EU Trade Commissioner who has been in the forefront of pushing the EU’s imperialist agenda for years.

It was the second draft that was finally adopted, which basically set a framework to be finalized by the General Council of the WTO by April 2006. After five days of intense haggling, this declaration was signed by the 149 member countries, thereby keeping the Doha Round alive after its collapse at Cancun.

Much is made of the supposed victory by the backward countries for the developed countries to remove export subsidies by 2013. This itself is a big hoax. Firstly the G-90 countries were demanding that this be removed by 2010, but the EU’s own CAP agreement has fixed till 2013 and after India’s sudden change in stand the 2013 date was pushed through. Secondly, of the 90 billion euros subsidy handed out to European farmers only 3 billion goes as export subsidy. So its removal will have hardly any impact on their prices. Even this removal of export subsidies comes with conditions which if not implemented allows them scope for non-implementation. It has been made dependent on the "completion of modalities", the deadline for which is fixed for April 30 06. Given the record for failed deadlines there is no certainty that even the date 3013 will be kept.

So, in effect what has been portrayed as a big victory for India and the other underdeveloped countries in a huge farce. The subsidies for agricultural produce of the imperialist countries will stay in tact and they will continue to dump their cheap products throughout the world thereby destroying agriculture of the backward countries, including India. So, for example, in 2003 the US exported cotton at 53% of their cost of production, and wheat at 72%, rice at 74%, maize & soyabeans at 90% below their cost of production. EU’s export prices were 34% of its cost of production for wheat, 50% for dairy produce and 75% for sugar.

Also the much propagated concessions to the LDCs (Least Developed Countries) to allow the very poorest countries to export their products to the West duty-free, quota-free, was another farce. The EU pushed this hard as they already have such a programme running. But the US and Japan insisted that the duty and quota free could not apply to all products and would be applied selectively. This means that Bangladesh could exports say submarines (which it does not produce) but not textiles which make up 80% of its exports. The US offered the four cotton-producing West African states a minor concession to end export subsidies, but were silent on the huge hand-outs that Washington gives its Southern farmers in various other way. All that the US has committed is a reduction in the export subsidy on cotton, which is not even one percent of the $4.7 billion that it doles out as federal support to the cotton growers.

On NAMA, as already mentioned, it was a sell-out all the way. Heavy pressure has been mounted by the US and EU well before the WTO Summit for "substantial agreement" on NAMA requiring the backward countries substantially reduce customs duties on manufactured goods. Given the growing crisis of over-production this is a fundamental aspect of imperialist policy to push the burden of the crisis on the backs of the underdeveloped countries and cushion their own crisis. The so-called Swiss formula on this translates into a 75% cut in duties in the backward countries compared with a mere 25% for the developed countries. Yet this was welcomed by the Indian Commerce Minister, Kamal Nath.

In the Service sector too there was a further setback for the backward countries. This is a main focus point of the imperialists as today the service sector amounts to over 50/60% of the GDP of any country and the profit margins are often huge. Here too India retracted on its demand for Mode 4 concessions. In the draft declaration that went to Hong Kong, Annex C, which argued for accelerating the liberalization of services, was bracketed, implying that there was no agreement on this. In a surprising development the whole of Annex C has now been unbracketed, with some minor changes. India played a major role in mobilising the backward countries to get this change accepted. It was only Cuba and Venezuela that formally expressed their reservation on this change.

So, it can be seen that in the declaration that finally emanated from the Hong Kong Ministerial Conference a "framework" has been set for greater sell-out to the imperialists in all spheres of agriculture, manufactured goods and services. This will have a terrible impact on the lives of the people of these countries and lead to further backwardness and de-industrialisation.

At the WTO Hong Kong conference the imperialists came with their large contingents to beat back any opposition from the poorer countries. The strength of their delegations were disproportionate to their actual size. The EU had 832 delegates to the US’s 356 and Japan’s 229. 46 countries had less than 10 delegates and a few African countries had none. This massive inequality in negotiating strength allows the imperialist to further brow-beat, those from the backward countries and adopt all devious means to split their unity.

Yet, the WTO is at a cross-roads caught in a web of contradictions that threaten to derail the whole process. Basically there are four main contradictions at play that could freeze the agenda, the essence being two — inter-imperialist contradictions, particularly that between the US and EU; and secondly between the backward countries and the developed countries for a few more crumbs. These growing contradictions are linked to the deepening economic crisis which is having its ups and downs within an increasingly fragile bubble-like world economy. As a result the imperialists are not prepared to give even the smallest concession in trade negotiations to the backward countries and seek only to blatantly extract more and more. Also in their growing scramble for markets they are at each others throats for gaining greater market access for their own specific bourgeoisie. In this situation, particularly after 9/11 the US has adopted more a policy of unilateralism as against the earlier policy of leading the imperialist pack against others. This has become more and more difficult as the situation has vastly changed since the early 1990s.

The inter-imperialist contradiction has been reflected particularly in trade conflicts between the US and EU, as also between the EU and the Cairnes Group of countries (that include Canada, Australia, etc) on agricultural produce. Between the EU and US the conflicts are no longer restricted to agricultural items, but encompass intense competition between Boeing and Airbus and now also the computer software sector. In mid December 05 the European Commission, for example, threatened that it may fine Microsoft as much as $2.37 million per day unless it complies with an order to provide interface documentation to allow rival group servers to work with the company’s Window operating system. The EU also wants the US to cut down its share of subsidies while Canada, Australia and New Zealand are required to dismantle their commodity boards, which is still a point of dispute. These countries say that the commodity boards — like the Australian Wheat Board — do not push price down. The EU is vehemently opposed to this argument.

On the main contradiction between the imperialists and the backward countries; the imperialists are acting tougher each day. They would rather see the WTO collapse than compromise as anyhow they have taken the alternative bilateral/regional route to pressurize countries. The US Trade Representative, Portman, said as much: "sometimes no deal is better than a bad deal". The EU too has made clear that it will not move on the commitment to reduce subsidies — even by 2013 — unless progress can be seen on NAMA.

The trouble is that while the imperialists slug it out for greater spheres of influence and markets the compradors of the backward countries servilely fall at the imperialist feet. This they do to varying degrees, but unfortunately India is to be seen in the forefront; as is that hero of the WSF, Lula. {Lula has even sent Brazilian troops to Haiti to police US intervention there}. It is only the people of the backward countries that can reverse the sell-out process taking place both within the WTO and outside it through numerous bilateral and regional deals. So for example, India for all its chest-thumping at Hong Kong is seeing its cotton farmers die while importing $500 million worth of cotton per year with a customs tariff of a mere 10%. This low tariff is not even imposed by the WTO but the servile rulers are willingly keeping it low to the detriment of lakhs of cotton farmers in India. This year, in Maharashtra alone hundreds of cotton farmers have committed suicide; and on top of that the government has reduced the procurement rate by a massive Rs.500 (from Rs.2,200) to bring it in line with international rates.

Passive resistance brings little change in government policy. It requires a strong and militant movement if there is to be any reversal in these disastrous policies of the government at the dictates of the imperialists.

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