With the collapse of the World Trade Organization’s (WTO) September summit, Cancun looks destined to join Waterloo, Stalingrad, and Seattle as a place name that becomes shorthand for an historic event. The second of the institution’s five summits to end in deadlock, this one will likely assume landmark status as the first time that the Global South (Asia-Pacific, Africa, the Caribbean, and Latin America) united to reject the economic aggression of wealthy Northern countries, specifically the United States, European Union (EU), and Japan.
No one should confuse the WTO (in Spanish, OMC) with a democratic institution. Its flaws, and in particular the unfair advantage wealthy countries have in negotiations, have been explored at length since its founding in 1995. But some hope always flickered, particularly because the organization makes decisions through consensus of its 148 government members. Practically speaking, only the US would probably feel able to face down the rest of the world alone and scuttle an agreement. In fact, it’s becoming alarmingly adept at this. But with sufficient mutual support, even a group of poor countries can stop the WTO.
In Cancun, the boldest effort yet to take advantage of the potential leverage held by each member was launched the night before the official opening. Represented by Brazil, Argentina, China, India, South Africa, and Costa Rica, the Group of 21 countries (G-21) held a press conference to declare the draft text submitted by the WTO Secretariat unacceptable and introduce its alternative. Their declaration built on objections expressed at WTO headquarters in Geneva, Switzerland, just two weeks before. There, the groups that would become the G-21 agreed that the official text failed to reflect concerns consistently expressed by developing countries since the last summit, held in Doha, Qatar, in November 2001.
The official version was based primarily on a joint submission by the US and the EU. Yet WTO Director-General Supachai Pantichpakdi offered no assurances that the G-21’s alternative would also be considered, even though it was already clear that ignoring it risked losing the support of China, Egypt, India, Brazil, Mexico, and South Africa, among others.
The G-21’s agenda included demands for agricultural subsidy cuts and greater access to markets in Northern countries. But the group’s attitude was arguably more important. Speakers at the press conference dwelt on their determination not to succumb to inducements or threats designed to split them. "We will maintain our unity, which will be tested repeatedly, starting from this very moment," said the group’s coordinator, Brazilian Foreign Minister Celso Amorim. They took comfort, he added, from the knowledge that they have "the support of our producing classes and of world opinion in general." Many speakers emphasized the significance of the constituency they represented – 63 percent of all farmers and over half the world’s population.
Confronted by resistance, Northern negotiators expressed indignation and shock: How could these countries issue such an ultimatum? Were they essentially saying they would let the summit collapse unless the EU, Japan, and the US relaxed their "trade barriers"? How could they be so intransigent? Didn’t they come to negotiate? And how could they be so demanding, without indicating what they were prepared to offer in exchange?
It’s a wonder that members of the Northern delegations didn’t collapse from vertigo. The level of hypocrisy and bad faith required to make such arguments was certainly enough to make one dizzy.
The US and its allies were essentially being tested by their own rules. For over two decades, through their manipulation of the World Bank, International Monetary Fund (IMF), and trade negotiations, they have successfully demanded that developing countries liberalize their economies and open their markets to products from the North. Throughout, they have always maintained that they are not on some selfish quest for private profit that would be repatriated to their countries. Rather, they have argued that trade and investment liberalization are the most effective ways to address the plight of the millions of impoverished people living in the developing world.
Moreover, they secured the agreement to begin the "Doha round" of negotiations by labeling it a "development round," suggesting that the urgent need to make developing economies more viable would take precedence over the usual concerns with short-term profit maximization.
However, as organizations like Oxfam have pointed out quite forcefully since Doha, Northern countries don’t practice what they preach. In fact, they routinely erect barriers to the goods that developing countries can produce most readily, and dump – that is, sell at below the cost of production – their own goods in developing countries’ markets. After 20 years of insisting that borrowing countries open up their markets, give up on self-sufficiency, and trust in the global marketplace, the World Bank finally acknowledged that their prescription would not work if the wealthy countries, which were supposed to be the eager markets, refused to play their part. For the last two years, the Bank has been urging the North to reduce or eliminate its subsidies and open its markets, but has deftly avoided taking the blame for the policy advice that only further marginalized the South.
Struggle in the Suites
G-21 members immediately came under pressure from the US and EU. But only El Salvador left during the meeting, and it was replaced by two much larger countries, Indonesia and Nigeria. The list of dissenters at the end of
the summit included Argentina, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cuba, Ecuador, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Peru,
the Philippines, South Africa, Thailand, and Venezuela. By mid-October, as the US geared up for a mid-November Miami summit on the
proposed Free Trade Area of the Americas (FTAA) and put final touches on a Central American Free Trade Agreement (CAFTA),
it had succeeded in persuading Colombia Costa Rica, Guatemala, and Peru to quit the G-21.
Although the G-21 grabbed headlines and set the tone with its aggressive challenge, it was ultimately the refusal of another group that made it clear no agreement could be reached. The G-33, which includes some of the poorest developing countries, refused to buckle on Singapore issues, named for the 1995 WTO summit at which they were first broached by the North. These include investment rules that echo the notorious Multilateral Agreement on Investment, defeated by international activism in 1997-98. G-33 countries are more concerned with the right to protect farmers and local markets from Northern competition than with G-21 priorities like Northern subsidies and access to their markets.
Whatever differences they may have had, the G-21 and G-33 were clearly cooperating strategically. As a consequence, the take-home idea from Cancun is that it won’t be easy to divide the South in future trade negotiations at the WTO, and perhaps other forums, as well. Even if all the "Gs" become obsolete in a matter of months, their specter will haunt US Trade Representative Robert Zoellick and his EU counterpart, Pascal Lamy.
Have Southern governments suddenly come to their senses, uniting in resistance to Northern imperialism? Not really. In fact, most want to make trade deals with the US, EU, and Japan, if only because the IMF and World Bank have already forced them down the export-led development path. Despite charges by Zoellick, Lamy, and the international media that the South caused the Cancun collapse, a rational reading makes it clear that the real obstructionists came from the North. The G-21 and G-33 had demanded nothing new; indeed, their positions were fully articulated in Doha, became part of the Doha declaration, and haven’t shifted since then.
The difference — the real source of US and EU complaints – was that the South didn’t follow its usual pattern: giving in to overwhelming pressure, capitulating to the North’s every demand no matter how far outside the previously-accepted terms of engagement. What Zoellick and Lamy decry as a bad omen for world trade is that their trading partners are, for once, holding them to their word.
Despite fine rhetoric since Doha about the "development round" and creating viable economies, the US, in thrall to the agribusiness cartel of Archer Daniels Midland (ADM) and Cargill, remained unwilling to make any concessions on agricultural subsidies or market openings. Meanwhile, the EU and Japan staffed the barricades on the Singapore issues. Back in Doha, India rejected any statement mentioning such issues without the proviso that further discussion would require "explicit consensus." Prior to Cancun, 70 countries were already refusing to go forward on investment rules and other Singapore issues; that number reached 90 during the meeting. Yet the EU, Japan, and South Korea – the only country to switch back and forth between the South and North camps – insisted that the rules be included in the new statement.
After quickly consulting with its African partners, Kenya was first to say there could be no compromise with Lamy. A member of that delegation was sent down the escalator from the meeting rooms to the media center to tell reporters and NGO staff, "it’s over."
For now, the Doha round is deadlocked. There will be attempts, however faint, to revive it in coming months. But the next
WTO summit, set for Hong Kong in either late 2004 or early 2005, could be its last gasp. As a result, the WTO may become essentially an administrative body, interpreting treaties and adjudicating disputes rather than hosting negotiations.
By repelling the North’s coercion, Cancun activism has won a place in the list of global justice victories. It also marks the first time that the tactics of activists and governments have effectively complemented each other. An excellent jumping-off point was provided for the crucial mass mobilization in Miami for the November FTAA summit, as well as the planned mobilization in Washington next April at the IMF/World Bank meetings during their 60th anniversary year.
In Cancun, the full dimensions of the current rallying cry, "Another world is possible," started to become visible. The next step is to make it real.