Commentary: Outmaneuvering the WTO (03/02)

In the sheikdom of Qatar last November, the World Trade Organization (WTO) managed to launch a far-reaching new round of negotiations. But the trade talks almost collapsed, and not because of terrorism or mass protest. What nearly sank the WTO was something many people in the US can relate to: corporate greed.

In the US, senior citizens confront corporate greed every month when they go to fill their prescriptions. High prices for brand-name drugs mean that many elders have to choose between buying pills and eating. In Africa and Asia, millions of people don’t even have that choice. They simply can’t afford to buy AIDS drugs and other medications at pharmaceutical company prices. That’s one reason why people are dying unnecessarily as you read this article.

What’s the WTO connection? It mandates that you must buy drugs only from the company that holds the patent, at their prices, even if there is a medical emergency in your country and generic drugs are available.

At the WTO meeting, poor countries rebelled against those global trade rules, threatening to sink the summit. Faced with that breakdown, US trade negotiators finally stood up to the drug companies and brokered a statement that the WTO “does not and should not prevent members from taking measures to protect public health.”

Developing countries also won small victories by reducing European taxes on agricultural imports and some US quotas. Overall, though, the summit was a loss for poor countries, workers, and the environment. The powerful European, US, and Japanese delegations managed to launch new negotiations that could cut down governments’ powers to regulate corporate investment or use their own tax money to build up their economies. If these new trade talks on investment, “competition,” and “procurement” succeed, they will give giant corporations more power to dominate undefended economies.

Holding most of the WTO’s votes, developing countries did extract a promise that new investment and competition treaties won’t take effect unless every WTO member country agrees. Otherwise, intense manipulation overruled their agenda. WTO chair Stuart Harbison drafted an agreement that omitted input from African and Asian nations, and refused to change it when they challenged him. Meanwhile, the US Trade Representative’s office called in one country’s ambassador, accused him of being anti-American, and told him that the US was making a list of countries that were not the US’s trade friends.

Other countries’ representatives at the WTO were undercut by calls to their governments that threatened to cut aid and trade preferences if they didn’t go along with US and European proposals. The threats were so bad that British nonprofit groups asked the industrialized countries to sign a “no-bullying pledge” at the summit. Nevertheless, the strong-arm tactics continued in late-night sessions.

It is remarkable that the world’s poorest countries resisted this kind of pressure at all. The arrogance and racial disparities they confronted may have stiffened their spines. A bigger factor was the past failure of the WTO to deliver the prosperity it has promised. Developing countries, whose economies are mostly agricultural, entered the trade organization with the promise that they would gain access to rich countries’ markets. Instead, they encountered high taxes and quotas on imports, while heavily subsidized US corn and wheat flooded into their countries. Desperate farmers poured into the cities, creating a cheap labor pool that sweatshop operators exploit.

People in the US are also hurt by the WTO’s free trade rules. The wages and bargaining power of US workers are undermined when corporations threaten to move factories overseas. Partly because of overseas competition, hourly wages for half of all US workers fell between 1979 and 2000, even after years of economic boom. When they fall ill or grow old, they encounter high prescription prices due to the same drug patents that are killing Africans, Latin Americans, and Asians. Billions in taxes and out-of-pocket dollars go to the drug industry, which is twice as profitable as any other business, and heavily subsidized and protected by the government.

Yet, the WTO summit also demonstrated that these common interests can actually produce victories. The drug industry was “outmaneuvered by activists,” said the Wall Street Journal; protests around the world supported AIDS activists pressuring trade delegates in Qatar. But US trade negotiators kept delegates from changing the actual language in the WTO’s patent rights treaty. Thus, poor countries could still be challenged legally if they make or import drugs to fight the AIDS epidemic. In the end, Qatar illustrated how far the globalization movement still has to go.

Mike Prokosch coordinates the globalization program at United for a Fair Economy, and is co-editor of The Global Activists Handbook, to be released by Nation Books this spring.