Deathbed of the WTO

Deathbed of the WTO Uhuru Kenyatta
Uhuru Kenyatta

Uhuru Kenyatta

Horace G. Campbell Correspondent

The 10th WTO Ministerial Conference was supposed to showcase Kenya’s place as a diplomatic and commercial leader in Africa, but instead made Kenya appear naïve and weak.

When the World Trade Organisation (WTO) met in Seattle, Washington in 1999, the Africa paper carefully prepared by the Kenya representatives to the WTO in Geneva, had set the stage for the rejection of the strict intellectual property rights which the Western countries’ pharmaceutical companies desired. Sixteen years later at the 10th WTO Ministerial Conference that was held in Nairobi, Kenya in December 2015, the United States trade representatives had pressured the Kenyan leadership to exclude “African issues” from the agenda while simultaneously pushing through the Expansion of the Information Technology Agreement (ITA), which benefits US corporations.

That Kenya could be caught in a position where it had to please the United Stated and thus turn its back on India, Indonesia, China and Brazil was an expression of the country’s lack of consultation with Africa and the other countries of the Global South that had been pushing for the Doha Development Agenda.

At the end of the meeting, most international media outlets proclaimed the death of the Doha Development Agenda.

Both leaders of the ruling Jubilee party – President Uhuru Kenyatta and Vice President William Ruto – had embarked on a robust diplomatic offensive to escape the status of Kenya as a pariah state after both were indicted by the International Criminal Court (ICC).

First, there was the seeming rehabilitation of the leadership generated by the visit of President Barack Obama in August 2015, followed by Pope Francis’s visit in November. The 10th WTO Ministerial Conference was supposed to showcase Kenya’s place as a diplomatic and commercial leader in Africa, but instead made Kenya appear naïve and weak.

Since the era of plantation economies and trade in human beings when the Spanish Crown established the “Asiento” to the French “Exclusive”, the era of Rule Britannia up the military management of international commerce by the United States, the Western countries have always had their way when it came to trade.

When the WTO was formed there was a lot of buzz about trade liberalisation and how the policies of ‘globalisation’ would (a) lift the quality of life of the impoverished billions in the world, (b) lead to full employment, (c) lead to the growth of real income and effective demand and (d) lead to the expansion of production, of trade in, goods and services.

The opposite has been true, and Thomas Piketty, in his book Capital in the Twenty-first Century, brought the figures to show how the world had become even more unequal since the era of economic globalisation.

However, since the formation of the WTO, the political and economic balance in the world has changed.

The role of the Global South in global trade and increased South-South trade led by nations such as China, India, Indonesia, and Brazil reflects the more prominent role of developing nations in the world economy.

In Asia, the emerging nations created the Regional Comprehensive Economic Partnership (RCEP) – involving the 10 ASEAN plus 6 nations (China, Japan, Korea, India, Australia and New Zealand). In Latin America the cooperation was being routed through Mercosur (the Common Market of the South) while in Africa, the African Union had designated 2017 as the date to realise the Africa Free Trade Area, 2019 for the African Customs Union, 2025 for the African Common Market and 2030 for the African Monetary Union, with the latter finalising the basis for the establishment of a common African currency. The Kenyan political leadership had paid lip service to the idea of integrating Africa and had pushed ahead with its limited Vision 2030 while rolling out infrastructure projects to reinforce the centralisation and concentration of wealth into the hands of a few in Nairobi.

Significantly, this was the first WTO Ministerial Conference to be held in Africa, and in many ways, it was one of those meetings where there could be no agreement on the communique before the meeting because of the intense differences over the refusal of the USA and the EU to agree to former commitments on matters of agriculture and for food security for countries such as India.

This meeting followed the more than 15 efforts to restore multilateral trade cooperation.

Since 2001, there had been negotiations with the former colonised peoples over the future rules in a round of negotiations that had been named after the city of Doha, Qatar.

From the moment of those negotiations in November 2001 until today there had been nothing but duplicitous back and forth exchanges between the North and the peoples of the South.

The designation of these negotiations as the Doha Development Agenda (DDA) has never seriously considered addressing the obstacles placed in the global trading system to foster real trading cooperation which support socioeconomic development in the South.

Even while these Doha negotiations were continuing, the United States was involved in new trading arrangements in what was called the Trans Pacific Partnership (TPP).

At the same time, the United States was involved in a collaboration with the European Union to create the TransAtlantic Trade and Investment Partnership (TTIP).

The United States had embarked on the forging of plurilateral agreements.

Taken together, these two mega-regionals have changed the multilateral trading system that had been established in 1995 in the form of the World Trade Organisation.

Before the meeting, the representatives of the EU and the US called for the end of the DOHA Round negotiations, saying that because a decade of negotiations between developed and development nations could not produce an agreement on issue areas defined by developing nations as critical for “development”, the international trade world had moved on and the WTO was becoming irrelevant.

If the WTO is not the place for negotiating new rules for global trade which support the economic priorities of developing nations, as was agreed to in Doha when the “development” round was launched, what was the purpose of the 10th Ministerial meeting?

Why was Kenya so quick to agree to an agenda leading up to the Ministerial which continued to exclude the “African Issues” before the WTO?

The outcome of the meeting and the declaration that was called the Nairobi Package was a slap in the face for the peoples of the South.

It was especially egregious that the US used the 10th Ministerial Meeting to seek to undermine the future of Pan African trading relations and to drive a wedge between the BRICS societies and those that the US want to manipulate in the Least Developed Countries. Before the meeting the WTO was in a comatose state and this commentary will argue that the 10th Ministerial meeting further hastened the demise of the WTO.

The WTO was the successor organisation to the international platform that had been called the General Agreement on Tariffs and Trade (GATT). GATT had acted as a sister organisation to the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) to provide a framework for the continued lopsided basis of international economic arrangements. For a brief period after 1973, the energetic forces from the Global South had pushed hard for the implementation of a New International Economic Order (NIEO).

Members of the non-aligned movement had pushed hard in the Uruguay Round 1986-1994 for the poorer nations to play more central role in international negotiations. This push was sufficiently vigorous to see the technical papers being developed by the United Nations Conference on Trade and Development (UNCTAD) and the establishment of the UN Centre for Transnational Corporations.

The period of rabid neo-liberalism and the scuttling of all discussions of UN reforms limped along with the so called Uruguay Round of the GATT until the United States, Western Europe and Japan recovered their nerve and pushed through the formation of the World Trade Organisation.

The six core areas for the WTO were:

1. An umbrella agreement (the Agreement Establishing the WTO).

2. Goods and investment (the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures, TRIMS);

3. Services (General Agreement on Trade in Services, GATS);

4. Intellectual property (Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS);

5. Dispute settlement (the Dispute Settlement Understanding, DSU); and

6. Review of governments’ trade policies (the Trade Policy Review Mechanism, TPRM).

But from the start of the WTO, the questions of Trade Related Intellectual Property Rights and Public Health became burning issues, especially in the face of the massive deaths from HIV/ AIDS.

The staid language that was presented on the goals of the WTO was an effort to neutralise the burning issues of bio-piracy that had emerged in the era of bio-technology and information technology. Representatives from the Global South objected to the push by the Northern corporates to isolate, identify, and recombine genes and in the process making the gene pool available as a raw source for future economic activity by the big pharmaceutical companies. The Western corporations had argued that life can be made, life could be owned and the book The Biotech Century by Jeremy Rifkin had outlined how the awarding of patents on genes, cell lines, genetically-engineered tissue, organs, and organisms, was giving the marketplace the commercial incentive to exploit the new resources. It was in this period of what Vandana Shiva called Biopiracy when the term “Globalisation” was deployed to diminish the calls for economic sovereignty in the Third World. Under the rules of the WTO, the globalisation of commerce and trade enabled the wholesale reseeding of the Earth’s biosphere with an artificially produced bio-industrial nature designed to replace nature’s own evolutionary scheme.

Using the platforms of the United Nations and the battles over the Convention on Biological Diversity (CBD), a common position was developed in Africa with respect to TRIPS and the patenting of life forms.

At the Seattle meeting in 1999, the common African position written by the Kenyan delegation had fought to oppose the establishment of property rights over community held resources, traditions, practices and information. Prior to the meetings in Seattle in 1999, the Africa group had produced very detailed and clear position on why the direction of the WTO was undermining food security in Africa and posed a threat to the future of agriculture in Africa. From the start of the WTO to this day it was the position of the Africa group that at the core of the TRIPS legal framework was a threat to the societal values and interests of the peoples of the South.

The energetic work of these progressive forces had informed the Organisation of African Unity (OAU) in crafting Model Legislation for the protection of the Rights of Local Communities, Farmers and Breeders, and for the regulation of access to biological resources.

The technical language of this legislation was adopted by the OAU in Algiers in 2000 and later reaffirmed as a founding document of the African Union. For the meeting in Doha in 2001, this African position was reaffirmed in the document, AFRICA GROUP PROPOSALS ON TRIPS FOR WTO MINISTERIAL. Inter alia, this document restated the position that,

“With regard to the protection of plant varieties, the TRIPS Council shall clarify that Members have the right to determine the appropriate sui generis system for the protection of plant varieties that is best suited to their interests. The implementation of this provision shall not prevent developing country Members from implementing sui generis systems that accord due recognition to farmers and local communities for their traditional knowledge, ensure food security and safeguard farmers’ livelihoods. Such sui generis systems shall also not undermine traditional farming practices, including the right of farmers to save, use, exchange and sell seeds, as well as, to sell their harvest. We further agree that the transition period for the implementation of Article 27.3(b) shall be extended for a further five years from the date its review is satisfactorily completed.”

When the African Union was formed in 2002, the basic position on TRIPS and the efforts to protect African farmers were retained with the AU reaffirming the sovereign rights of states over natural resources. The Africa position had been very influential in the mobilization of the countries of the Global South for the Doha negotiations.

The Africa position on TRIPS turned out to be one of the troublesome issues of the Doha Development round.

The AU also reaffirmed the “African Convention on the Conservation of Nature and Natural Resource.”

In order to push ahead with its attempt to empower the pharmaceuticals and the seed companies, the EU and the USA offered trading agreements with Africans and in the WTO set aside the discussions under the umbrella of special safeguard mechanism (SSM) while pushing ahead with efforts to “invade” the most rural areas of the planet with bioprospectors and bioanthropologists. By the time the US had established the Human Cognome Project to advance the study of artificial intelligence, the trade representatives of the OECD were no longer interested in the Convention on Biological Diversity or treaties to preserve indigenous knowledge.

WTO and pseudo democratic decision making

When the WTO was formed in 1995, it was supposed to be an international body embracing all of the countries of the world that subscribed to the ideas of free and unhindered trade. Unlike the IMF, where the OECD countries dominated, the WTO was supposed to be the final arbiter in trade disputes where all decisions were in principle to be made by consensus. This decision by consensus belied the strategy of decision making in the ‘green room’ or the closed door meetings that were called by the Director-General.

From its inception, the Director-General of the WTO has been a supporter of neo-liberalism.

As the WTO says of itself, “the World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations.

Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.”

This language had been agreed to in public but from 1995 until this point of the 10th Ministerial Meetings, the leaders of the United States and the European Union sought to bully, cajole and sabotage efforts to develop equitable international trade.

Intellectuals (such as the late Norman Girvan, Martin Khor, Samir Amin and Yash Tandon) working through institutions such as the South Centre (in Geneva) and from the Third World Network (TWN) had been active in the negotiations and rightly argued that there can be no equitable trade without reforming the international financial architecture of the Bretton Woods system.

Scholars such as Samir Amin had opposed the neo liberal position of the USA and the role of the dollar in international trade and finance. The exorbitant privilege of the US dollar came under even greater scrutiny after the 2008 financial crisis when the USA proceeded to print dollars under the policy of quantitative easing, adding about US$4 trillion to the balance sheet of the Federal Reserve. The distortions of trade were reinforced by the distortions of financialization in so far as trade follows finance and the USA and the EU as creditors and holders of the dominant reserve currency status could always call the shots.

The combined powers of the European Union, the United States along with their domination of trade and finance via the dollar and the Euro had inspired greater cooperation among the Poorer Nations, with countries in Latin America seeking ways to trade outside of the dollar.

The countries of the ASEAN nations had also embarked on new trading practices to elude the possibility of strengthening the US dollar.

It was not by accident that at the UNCTAD meeting in Accra, Ghana in 2008 it was reaffirmed that the structural adjustment policies of the IMF hindered real transformation of the economies of the Global South. Scholars of the non-aligned world had been active in opposing the structural adjustment packages of the neoliberal policies that maintained the status quo of the Bretton Woods financial architecture, which extols privatization alongside liberalization and stabilization. The Accra Accord of UNCTAD in April 2008 comprised of text on four sub-themes: (1) enhancing coherence in global policy making, (2) trade and development issues, (3) enhancing the enabling environment to strengthen productive capacity; and (4) strengthening UNCTAD.

The US and Europe was always against the strengthening of UNCTAD. The OECD states were jealous of the fact that UNCTAD had provided the kind of technical assistance necessary for the countries of the South to challenge the high flying intellectual property rights lawyers of London, Paris, and New York.

In the book, The Poorer Nations: A Possible History of the Global South, Vijay Prashad outlined the delicate negotiations that had taken place between 2001 – 2012 over the question of what was eventually called the Doha Mandate. This was the position of the Global South that trade must support inclusive and inclusive economic change, that trade could not be divorced from finance and that the state had to play a central role. The Doha Mandate stated clearly that,

“The State has the primary responsibility for its own economic and social development and national development efforts need to be supported by an enabling international economic environment. The state, having an important role to play, working with private non –profit and other stakeholders, can help forge a coherent development strategy and provide an enabling environment for productive economic activity.” (Paragraph 12, Doha Mandate)

The important aspect about the Doha negotiations since 2001 was that the Global South had been able to maintain a firm and united position in the face of the multiple plans that had been unleashed by the Global North to divide the peoples of the Global South. Throughout the period since Seattle, it was the working understanding of the peoples of the South that the international framework for economic policy had to be people-centered. From the perspective of the North, the framework for international economic policies should be centered on international finance and the profitability of the financial moguls and multinational corporations.

Faced with the levels of organizing by the progressive members of the Group of 77, from the outset, the Northern corporations had sought to weaken the solidarity among the poorer nations by creating a division between the ’emerging nations’ (such as Malaysia, Mexico, India, China, Brazil) and the Least Developed Nations. This divide and rule strategy had been first orchestrated after the 1973 oil crisis when Henry Kissinger sought to divide countries such as Algeria, Venezuela and Brazil on one side from Tanzania, Mozambique, Angola, Ethiopia and Zambia. In 2015, to be a member of the LDC is to be judged to be a state where the per capita income was below US $1,035. In 1997, the WTO had established a high-level meeting on trade initiatives and technical assistance for the LDC’s to create for them an ‘integrated framework’ involving six intergovernmental agencies to ‘help least-developed countries increase their ability to trade, and some additional preferential market access agreements.’

However, in 1999, opposition from the labor organizations in the US that opposed NAFTA had aligned with the NGOs from the South and firm leaders of the LDC that opposed Bio-piracy. The environmental lobby had also emerged as a major political force, especially after the Climate talks in Copenhagen in 2009 where there was the insistence that trade must consider the impact of global warming.

The Alliance of Progressives, North and South

The South Centre in Geneva and the Third World Network had created a strong platform to expose the duplicitous positions that were being pushed by the transnational corporations from the North. The most egregious example was over the question of the manufacturing and trade of generic drugs in the midst of the HIV-/ AIDS pandemic. Kenya had been the playground of the pharmaceutical companies, and the fictional novel The Constant Gardener revealed the complicity of the Kenyan leadership in allowing western pharmaceutical companies to use the Kenyan poor as guinea pigs. Since that novel, the author John Le Carré has said that the truth (about using pregnant African women as guinea pigs for drugs testing) was even scarier than his fictive rendition. Since that time there has been studies that highlighted the fact that clinical trials was now an industry in Kenya. (See The Clinical Trials Industry in Kenya). While Kenya was violating its own undertakings about public health before the WTO, India, South Africa and Brazil formed a bloc of countries that worked hard to provide generic therapies for the poor. The role of Al Gore and Bill Clinton in fronting for US corporations in the case against Treatment Action Campaign (TAC) in South Africa now ranks high in the hall of infamy.

Agriculture as the Achilles Heel of the WTO

Many younger readers will not remember that while the IMF and the World Bank were urging African countries to remove all agricultural subsidies, the subsidies paid to farmers in the state of Iowa (in the USA) was more than the entire subsidies provided by all of the African governments for their farmers.

It has been estimated that the USA subsidized farmers to the tune of US $41 billion every year. Secondly, through the Common Agricultural Policies (CAP), the EU provides massive subsidies to the farmers of Europe. That subsidy is estimated to be about $86 billion per year. If the WTO is to be democratic, the removal of agricultural subsidies across the board must be a major issue.

The key question about international trade that has been on the negotiating table for decades was whether the agricultural subsidies provided to European farmers (CAP) comprised unfair competition. Samir Amin in the book The Liberal Virus: Permanent War and the Americanization of the World argued that the property rights regime and forms of agricultural production in the EU and North America threatened the very existence of the oppressed of the Third World.

“We are thus at the point where in order to open up a new field for the expansion of capital (modernization of agricultural production) it would be necessary to destroy – in human terms – entire societies. Twenty million efficient producers (50 million human beings including their families) on one side and five billion excluded on the other. The constructive dimension of this operation represents no more than one drop of water in the ocean of destruction that it requires. I can only conclude that capitalism has entered its declining senile phase; the logic which governs the system is no longer able to assure the simple survival of half of humanity.

Capitalism has become barbaric, directly calling for genocide. It is now more necessary than ever to substitute for it other logics of development with a superior rationality.”

For two decades the question of agricultural subsidies were front and center of the negotiations of the WTO where the countries from the South argued that it was the obligation of governments to provide cheap food to the most vulnerable sections of the population at very low prices.

The previous two Ministerial meetings of the WTO had been debating the position of India where the Indian government was stockpiling food and providing subsidies to the consumers through the public distribution system.

Apart from providing subsidies to the consumers, through the public distribution system, the government of India also provided subsidies to the producers of food grains. The Indian government buys food grains from farmers at a minimum support price and subsidizes inputs like electricity and fertilizer.

The 9th Ministerial meeting in Bali, Indonesia (2013) had ended without agreement because India wanted a permanent solution to the issue of public stock holding of food grains. The G-33 members including China have supported India’s stand on the ability to subsidize agricultural production and distribute it to the poor at low cost. The OECD countries wanted India to open up its own stockpile to international monitoring. Indian diplomatic overtures within the corridors of BRICS and in the India-Africa summit have been to maintain that the question of food security for the poor remain a central pillar of the Doha Development Agenda.

At the Third India-Africa summit in Delhi in India, in October 2015 prior to the 10th Ministerial meeting the Prime Minister of India had said,

“We should also achieve a permanent solution on public stock-holding for food security and special safeguard mechanism in agriculture for the developing countries.”

The US and the Europeans have worked diligently to come out with backroom deals and agreements such as the US Africa Growth and Opportunity Act (AGOA) or the Economic Partnership Agreements (EPA) that were meant to hinder real cooperation among Africans. Backroom and back door deals, undermining the technical capabilities of African negotiating teams and outright bribery were the preferred tools of the West. More importantly, the most profitable aspect of the trade between the United Sates and Africa was in armaments. According to the Stockholm International Peace Research Institute (SIPRI), arms sales from the USA to Africa grew faster than any other region of the world 2005-2014. AGOA and the US Africa Command were two sides of the US engagement with Africa.

This is not the place to offer a detailed critique of the AGOA policies that allowed certain goods from Africa to enter the US market duty free. Suffice to say that after fifteen years, this trading agreement between the USA and African countries did not change the status quo where the bulk of African trade with the USA comprised of petroleum products, minerals, and commodities such as tea, coffee and cocoa. A few states were able to produce textiles and export to the US market but the most important engagement of the USA with Africa was via the military. This military relationship, which has deepened under the guise of the global war on terror, ensured that the trade negotiators always had a route to bully leaders of Africa. There has been more than one occasion where African Trade representatives were holding the line of the Global South at meetings only to be told that they must change their position or the US Trade Administrator would ensure that there was a call from Washington to the Head of State.

After several rounds of talks, the language that was worked out was that instead of writing into the WTO that there should be total elimination of export subsidies, the US would agree to language where forms of subsidization to be defined as “legal-non trade distorting” or “illegal-trade distorting” and the former were to be gradually eliminated over time. This compromise was worked out so that the US could get the support of the EU on creating a WTO working group on bio-technology and genetically-engineered foods. Genetic-engineering companies such as Monsanto are at the forefront of pursuing an agenda of globalization to be able to promote the interests of American agribusiness. Twenty years after the formation of the WTO, the leaders of the EU and the US have not only refused to budge on the question of the billions they spend annually on agricultural subsidies, but they have also sought to dictate and define as “illegal” what ways poorer countries such as India could provide support for their farmers in order guarantee a level of food security for their peoples.- Counterpunch

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