Learning from the World Trade Organisation

by Mike Brady, Simpol-UK Local Group Network Coordinator

(You can see this on-line at  http://mikebradybrazil.blogspot.com/2005/12/wto-and-simultaneous-policy.html)

Global justice campaigners have mobilized to lobby, expose and even to try to derail or destroy the latest World Trade Organisation (WTO) ministerial meeting, taking place in Hong Kong. This is a good time to reflect on what we can learn from the way the organization operates, particularly if we are supporters of the Simultaneous Policy (SP) campaign. SP Adopters around the world are discussing, developing and will ultimately approve the Simultaneous Policy package to address global problems, such as unfair trade, climate change and unsustainability. SP is to be introduced simultaneously by governments and could be described as the people’s globablisation policy. So what can we learn from WTO, the engine of neo-liberal, corporate globalisation?

Firstly, the positive. WTO is a multilateral organization, with a membership of 149 countries, representing 90% of world trade. Most of the countries not yet in membership are clamouring to get in. In theory, all countries have an equal voice and the organization is democratic in a way that the International Monetary Fund and World Bank are not. And there are no in-built special powers given to an elite group of countries as in the United Nations Security Council.

Governments established WTO in 1995 under a set of agreements arising from the so-called Uruguay Round of the GATT (General Agreement on Tariffs and Trade). According to WTO : “At the heart of the system — known as the multilateral trading system — are the WTO’s agreements, negotiated and signed by a large majority of the world’s trading nations, and ratified in their parliaments. These agreements are the legal ground-rules for international commerce. Essentially, they are contracts, guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits to everybody’s benefit. The agreements were negotiated and signed by governments. But their purpose is to help producers of goods and services, exporters, and importers conduct their business. The goal is to improve the welfare of the peoples of the member countries.”

Agreements on trade, agreed multilaterally with the goal of improving the welfare of people? At first sight WTO could be the embodiment of one possible part of the Simultaneous Policy. Certainly, SP’s aim of introducing simultaneous global policies is nothing outlandish. WTO is already doing it.

WTO has a dispute resolutions process and an effective enforcement mechanism. If a government breaks the rules other countries can fine it by placing tariffs on its exports. Such tariffs not only cost a country business by making it harder to sell its products, they become political weapons. In 2002 the European Union won a case against the US’s import duties on steel, which President George W Bush had introduced to protect the inefficient American industry following promises made during his election campaign. The EU was allowed to impose punitative tariffs and decided to apply these to orange juice to hit the industry and Bush’s support in the key state of Florida. The US quickly backed down, removing the duties on steel. Not only the EU benefited, but Brazil which had heavily invested to develop the world’s most efficient steel industry. Having done what the economists at the IMF and World Bank had instructed, it was particularly galling for Brazil to find the US practicing protectionism instead of free trade.

If WTO can hold even the US to account, why is it blamed for promoting injustice, entrenching the power of the already powerful and exacerbating poverty? The answers can inform the way the SP policy development process should develop.

Although most of the world’s countries are members of WTO and take part in negotiations, in practice some countries wield more power than others and trade rules are skewed. WTO purports to promote free trade, but enables rich countries to get away with protectionism, subsidies and dumping while forcing poor countries to open their markets. The incline of the playing field means the net flow of wealth is from poor countries to the rich.

The World Development Movement (WDM) is one of the campaigning organizations working hard to expose the injustices. WDM explains why poorer countries are disadvantaged in the WTO negotiations. The following is drawn from their briefings (see  http://www.wdm.org.uk/wto/):

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· Unbalanced. The European Union has sent a team of 688 negotiators to Hong Kong. The USA has 356 on its team. Japan has 229. At the other end of the scale 46 countries have less than 10 delegtes (including Bolivia, 7; Rwanda, 7; Honudras, 6; Nicaragua, 6; The Gambia, 2).

· Starved & Exhausted. Negotiations go on long into the night, sometimes lasting as long as 48 hours. With no meal breaks or toilet breaks, negotiators are tired and hungry and ready to accept anything.

· Secrets. 'Green Room' negotiations are held in secret with only the big players invited. Poor country delegates are not informed and not invited to take part, often they only find out by accident that meetings are taking place.

· Blackmail. It has been reported that EU and US negotiators have threatened to withdraw aid and loans to poor countries that did not sign deals in favour of the rich countries.

· Bribery. By negotiating deals to reduce agricultural subsidies, the bullies want to create a good image for themselves. What they don’t want us to know is the price poor countries have to pay for these long promised reforms – opening up their markets and handing over control of their economic development.

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Past meetings have collapsed without agreements as developing countries have decided no deal is better than a bad deal. It looks likely that Hong Kong will go the same way. When the last WTO meeting in Cancun, Mexico, collapsed, the US and European Union embarked on a round of bilateral agreements with developing countries, attempting to lever advantage using similar arm-twisting tactics used to pressure governments at WTO.

If WTO worked, if developing country governments had the power to force a fair agreement, if people within each country had the information to know what was being decided in their name and a chance to have their say, it could deliver trade justice.

If trade agreements were developed in a joined-up way with solutions to other global problems they could deliver far more. For example, trade impacts on climate change and sustainability, but these are dealt with separately. A coherent approach could address more than one problem and force us to face the conflict between ever greater trade and the world’s limited resources and capacity to absorb pollution.

A coherent vision is exactly what SP aims to achieve by enabling SP Adopters to discuss, develop and approve the policies they wish to see implemented to address global problems. The International SP Organisation (ISPO) and National SP Organizations (NSPOs) exist, or are in the process of formation, to manage the process. ISPO links Adopters internationally at all levels, from helping local groups to twin to bringing NSPOs together. NSPOs accept suggestions from Adopters in their country, communicate these to other Adopters and enable Adopters to prioritise and approve the policies they wish to see implemented, while continually sharing ideas arising in other countries. Prior to implementation the policy package will be finalized and put to all citizens, not just Adopters, for approval.

Throughout this process it is essential the failings of WTO are not repeated. Fortunately many of the pressures that lead to the problems with WTO do not exist with SP. Implementation of the complete policy package is to take place simultaneously when all, or sufficient, governments have pledged to do so alongside other governments. Hence the fear of losing competitive advantage is removed. The threat from business leaders that action will cause disinvestment and loss of jobs is neutralized when countries act together. There is nowhere else to go. ISPO and NSPOs maintain their independence by accepting no funding from commercial organizations. Of course, business leaders have as much right to be involved in policy development as any other Adopter. But they have no greater right or influence than any other Adopter.

Many people can visualize the world they would like to live in, but, as the old joke about asking for directions says: “If you want to get there, I wouldn’t start from here”. An advantage of SP is we are not looking to win concessions from existing institutions. Perhaps SP's greatest strength is it will achieve revolutionary change, not incremental change. We start with a blank sheet of paper and the question ‘How do you want the world to be?’

SP Adopters are developing the rules for a world where countries cooperate to effectively address global problems. Adopters give an ultimatum to our leaders: pledge to implement our policies or lose our support and lose power. Politicians from across the political spectrum are already signing the pledge. Some are perhaps motivated by slim majorities and the chance to pick up votes from Adopters, or the fear of losing votes to rival candidates who have signed. But most seem to be signing because they see the merits of the SP strategy. Politically, signing involves no risk because until implementation is triggered it is business as usual and politicians continue pursuing party policy. By signing, however, they are hastening the day when implementation is achieved and effective action is taken to deal with global problems (and SP only addresses global problems – the bulk of the political agenda is outside the scope of SP).

SP is not only about a better world at some far off date. In campaigning for SP, Adopters are helping to raise awareness of global problems and possible solutions, so acting as a catalyst for more immediate action. We still need to wrest concessions from our leaders in the shorter term and encourage people so support conventional campaigns.

The policy content of SP is a work in progress. Suggested policies are being collated by ISPO and NSPOs and communicated to Adopters. Periodically Adopters will rank policies in the process of building consensus nationally and internationally. You can find discussion papers and policy suggestions in the ‘policy zone’ of the Simpol-UK website ( http://www.simpol.org.uk/) where you can also sign up as an Adopter.

Policies will have to be finalized when sufficient governments have signed the SP pledge for implementation to proceed and the policy package will be put out for approval by all people, not just Adopters. Implementation ushers in a world where nations co-operate to promote global justice and sustainability under the control of the new systems developed and accountable to we, the people.

WTO itself provides an example of the power of the SP approach. George Monbiot has proposed in his book ‘The Age of Consent’ replacing WTO with an International Fair Trade Organisation to promote trade justice, not free trade. The provisions for this, with necessary safeguards (such as funding for all countries to have equal number of delegates) could be included in SP. When implementation is triggered the Organisation could be established to take over from WTO to a timetable established by SP.

Developing the detail of the Simultaneous Policy is complex, but implementation is not imminent and we have time to involve as many people as possible in the discussion. As policy development proceeds we must take great care not to repeat the failings of WTO. Adopters in rich countries should not have greater influence over the process than those in poor countries. Within each country efforts must be taken to ensure involvement of both sexes and all sectors of society.

Simpol-UK has decided to introduce Equal Opportunities type monitoring as the number of Adopters grows so it can adapt its campaign to involve any group that is being excluded.

When the dust settles after the Hong Kong WTO summit it is unlikely that the cause of global justice will have progressed. Perhaps the most we may hope for is injustice will not be exacerbated. We must continue the fight. At the same time encouraging people to sign up as SP Adopters and to join in the campaign will help us to deliver the global policies we need, not just those that will be tolerated.