Strategies and Tactics at the World Trade Organization WTO

Published on Global, by Umberto Mazzei, November 13, 2009.

Geneva – The WTO is an important multilateral forum because it attempts to negotiate the future. The unacknowledged purpose of creating the WTO was to perpetuate, through international agreements, the pattern of trade imbalances in the international economy. The ploy is to convene a forum to negotiate an equitable amendment. The tactic is to wear down the resistance with an apparently repetitive immobility. Therefore, the Doha Round, labelled Development Round and intended to phase out farm subsidies – which have increased – is now only about market opening and the word development is totally absent.

The irony of the negotiations is that all countries claim to seek greater market opening, while all of them call for “flexibility” to keep them closed.  

Developed countries which benefit most from current imbalances, do not want to give up anything tangible, but keep demanding more market space for their industrial products (NAMA) and their subsidized agricultural exports. This process of asking without giving created an escalation of a technical imbroglio of unmanageable complexity for countries that do not have the backing of an specialized team. The wear on resistance is visible; issues sharply rejected before by developing countries are now in the negotiation texts. The rhetoric of “win-win” deals vanished and there is only left the vulgar ambition to win at the expense of others.

The objectives of the negotiation: …

… Reasons for rejecting the proposed texts.

The WTO has focused on reducing tariffs, open services and protect intellectual property, rather than decreasing economic distortions. This priority aims to maintain and worsen the existing ones. The financial crisis has shown the dangers of rapid liberalization and deregulation, when we see that the most affected countries were those more involved with global financial markets. The crisis also highlighted the vulnerability of countries dependent on the world market for basic needs, such as food.

The leaders of the G20 meeting in Washington, London and Pittsburgh, seem mired in a unreal haze, repeating the mantra that we must conclude the Doha Round by 2010. There are clear policies within their own countries that are moving in the opposite direction. The decision in Argentina, China and India to curb agricultural exports to keep food  available for domestic consumption. The lack of flexibility in the U.S. negotiating position and the urgent priority of its domestic agenda. The proliferation of measures to stimulate domestic industries and maintain employment. All these signs are not there by chance.

It seems that the WTO Director, Pascal Lamy, is not aware of it, but many governments believe that a general crisis, of uncertain duration, is not the best time to give up basic instruments of economic policy. The most recalcitrant in the negotiations have been, indeed, the big developed players. It is absurd to seek multilateral static deals while global dynamics suggest major international changes.

Developing countries in control of their national policies, have a valid growth option on regional and domestic development, while watching for the geopolitical shift that will make international trade a more equitable exchange and paid for with a more solid currency.  (full long text and Notes 1 – 6).

Comments are closed.