The WTO Collapses in Cancun and New Multilateralism is Born
“My government has a duty to care for its people. Were we to accept this document [September 13 WTO negotiating text] we would deserve our people’s condemnation. For we would not only have gained no relief for them, we would have condemned them to a life of perpetual underdevelopment. And that does not enjoy the support of my government.” — Ronald Sanders, Antigua and Barbuda Minister to the WTO, Cancun News Update, Third World Network, 9/14/03.
At 2:00pm on Sunday, September 14, 2003, Dr Mukhisa Kituyi, Kenya’s Trade and Industry Minister, entered the lobby of the Cancun convention center to announce that the 5th Ministerial meeting of World Trade Organization (WTO) had collapsed. Kenya, representing several African and developing nations, walked out on the talks when the Conference Chairman declared that negotiations were at a stalemate. The ministerial was over.
The WTO proved itself to be an institution utterly incapable of (and uninterested in) balancing the competing interests of corporate power and true development policy. It literally cracked under the pressure—exposing the undemocratic and illegitimate mechanisms of corporate globalization. The critics of corporate globalization cheered in the lobby and celebrated on the streets of Cancun and around the world. The WTO would take no new lives that day.
The specific issues that led to the break-down of the talks in Cancun—particularly corporate investment versus agriculture, and the alliances on either side, will prove critical for all future trade negotiations. Rather than allow this collapse to be used to support Bush Administration calls for a rejection of multilateralism, we must use it as a growing base of support and rallying call for alternative rules and institutions.
It is thus critical to demonstrate that opposition in Cancun was against all of the policies of corporate globalization, rather than just one of the many institutions that enforce them. Organizing against the November 20-21 Free Trade Area of the Americas (FTAA) ministerial in Miami, Florida is therefore critical (www.flfairtrade.org). In Miami we can crystallize opposition to corporate globalization, while demonstrating a clear support for multilateralism—particularly the multilateral coalition between developing country governments and civil society movements worldwide which came together in Seattle in 1999 and grew even stronger in Cancun to successfully halt expansion of the WTO. This same “popular multilateralism” is evident in the organizing against the U.S. war in Iraq and its potential is just beginning to be realized.
The Talks Collapse
I had to stand on a chair to see Dr. Kituyi when he entered the convention center lobby. He stood in a corner near the cafeteria surrounded by hundreds of people—media, representatives of non-governmental organizations (NGOs) and country delegates. The room was thoroughly chaotic, yet oddly quite. I looked down into the face of a delegate walking towards me in a starched white shirt, a silk blue tie, and a crisp blue suit. “Is it true?” I asked. “Are the negotiations really over?” “I don’t know,” he said, “but I think so.” His face was dumbfounded. Mine broke out into an enormous smile. I didn’t even mind when a WTO security guard motioned for me to get off of the chair.
An African delegate turned to a friend of mine and said that the developing nations would not have been able to stand up to the U.S. and E.U. had it not been for the incredible support and actions of the NGOs and all of the thousands of activists both inside of the convention center and outside on the streets of Cancun. The two embraced.
New Issues vs. Agriculture (or, Expansion of Corporate Power vs. the Development Agenda)
Ruin seemed imminent on Saturday when a draft negotiating text was circulated which reflected none of the demands of developing countries on agriculture while including elements which they had specifically rejected—most importantly, the “New” or “Singapore” Issues. Seventy developing countries had submitted a letter on September 12 to the WTO stating their opposition to inclusion of the New Issues. They were shocked when these then appeared in the draft negotiating text while their interests were ignored.
At 1:00am Sunday morning, nine of the 148 delegates to the WTO participated in a special “Green Room session” on the New Issues. These “unofficial” meetings are where the real decisions get made at the WTO. They are only open to invited delegates, none of the deliberations are recorded and no official votes are taken. The Green Room process is a cornerstone of the antidemocratic and untransparent nature of the WTO.
The New issues—investment, government procurement, competition policy and trade facilitation—have been under discussion at the WTO since its first ministerial conference in Singapore in November-December 1996 (I have written a longer analysis of these issues available at www.ifg.org). Each issue represents an extensive expansion of the WTO’s authority into the day-to-day lives of communities around the world at a time when many nations and peoples’ movements are calling for, at minimum, a rollback of the WTO’s existing authority. The Green Room session ended without agreement.
A few hours later, a separate Green Room was called with 30 delegates to see if any agreement was possible in Cancun. In the end, Conference Chairman Luis Ernesto Derbez announced to those present that the negotiations were at an impasse and the talks were over. Kenya, representing the African, Caribbean and Pacific Group (ACP), African Union (AU) and Least Developed Countries (LDC) country groupings, led the fight against the New Issues in this session. Officially, the talks broke down because consensus could not be reached on the New Issues. Unofficially, lines had also been firmly drawn on agriculture, with the E.U. and U.S. on one side essentially rejecting any meaningful negotiation on the agreement, and the Group of 21 developing countries led by Brazil and India pushing for reform of the WTO Agreement on Agriculture (AOA) on the other.
“The WTO Kills Farmers:” The Suicide of Lee Kyung Hae
Developing countries wanted real protections from the WTO’s AOA and fairness in how its rules are applied. They wanted freedom to enact domestic policies that protect small farmers, guarantee their nations’ access to affordable and safe food supplies and reduce their dependence on the fluctuations in the global agriculture market. Such policies include price supports, tariffs, quotas and restrictions on genetically modified foods and seeds. They also wanted the U.S. and E.U. to adhere to existing commitments to open markets to foreign agriculture products and to cease the billions of dollars in support they provide to the largest multinational agribusiness corporations to export agricultural products to the detriment of small farmers everywhere.
There are reams of excellent critiques of the WTO AOA (see Food First www.foodfirst.org). But papers were not needed in Cancun. The life-and-death impacts of the agreement were made horribly real in a way few were prepared for. On Wednesday, September 10, the opening day of the ministerial, I joined approximately 10,000 other people – primarily campesinas from Mexico and Central America, in a march from Casa de Cultura in downtown Cancun to the base of an enormous metal barricade set up at Kilometer Zero to keep us from the “hotel zone” where the talks were taking place. The rows of riot police, armored personnel carriers, cement barricades and the ten-foot tall metal fence were erected under a billboard reading “bienvendoes a Cancun” – welcome to Cancun. It wasn’t long before the billboard came down.
The South Koreans were impossible to miss with their matching hats, t-shirts and vests imprinted with anti-WTO slogans, a beautiful hand-made dragon and large banners and signs. Their average age looked to be about 50, most had closely cropped hair and conservative clothing. I, like many people, was drawn to join them immediately, both due to the incongruity of their “mainstream” appearance with their radical and artistic messaging, and their contagious spirit.
So, when they went up to the barricades first, I went with them. When they shouted “no no WTO!” I shouted with them. When two of their members climbed on top of the fence, I cheered – thrilled at their bravery and defiance. Then, when one of them fell – I gasped in shock with everyone else and yelled for “los medicos!” But, as quickly as he had fallen, the rumor spread through the crowd that he was ok. He had impaled himself – either intentionally or not, we were unsure, but he was ok.
Only hours later, after the same section of the fence off of which he had fallen and been completely torn down by the protestors, did we learn that Lee Kyung Hae, a 56-year-old farmer from Taesong-Ri, South Korea, had committed suicide in protest of WTO policies that killed his farm and impoverished his family and community. He was taken to the hospital where he died a few hours later from a self-inflicted wound using a pocketknife that penetrated his lung and heart.
“Exclude Agriculture from the WTO”
In a statement in Korea AgraFood in April 2003, Lee explained his critique of the WTO AOA (translated from Korean): “I am crying out my words to you that have been boiled so long time in my body… Exclude the Agriculture from the WTO system… It is true that Korean agricultural reform programs increased the productivity of individual farms. However it is also fact that increased productivity simply added another volume to over-supplied market in which imported goods occupied the lowest price portion. Since then, we never be paid over our production costs. Sometime, price drop recorded as four-times of the normal trend in a sudden. How would be your emotional reaction if your salary drops suddenly to a half without knowing clearly the reason?”
Lee’s words describe the impact of WTO rules which allow heavily subsidized and under-priced agricultural products to flood the Korean market, while restricting the government from providing price supports or market protections for the products of their own farmers. He joins in the growing call from campisena movements for the WTO to get out of agriculture all-together.
In a press conference four days after Lee’s suicide, U.S. Trade Representative Robert Zoellick calmly explained that the talks had collapsed because developing countries were “posturing” on agriculture and they “did not know how to negotiate” because of their unwillingness to make a deal on the AOA. A man with a wife, five siblings and three daughters had committed suicide as close to Mr. Zoellick’s feet as the ten foot high fence would allow, and the U.S. government response was to ignore both the act and the meaning.
As Mr. Lee’s sign worn across his chest read: “the WTO Kills Farmers.” The developing countries could not “make a deal” on agriculture because such a deal would mean more death to their people. The U.S. government is not only aware of this, but also that WTO policies mean death to U.S. farmers and consumers as well by directing resources away from small farmers who have made their living off of the land for generations and towards the largest agribusiness exporting corporations using methods proven deadly both to farm workers and consumers.
Rather than address the AOA, the E.U. in particular was pushing for what are probably the most exclusively pro-corporate elements of the global trade agenda—the New Issues. The most contentious issue among the four is investment because an investment agreement would devastate local economies the world-over by increasing the rights of foreign investors while restricting the ability of governments to regulate them.
A WTO agreement on investment would remove some of the most basic and important tools of local, state and national economic development. For example, government regulations created to ensure that foreign investment supports domestic economic activity, such as requiring that a company hire local people, use local products or invest a certain proportion of its profits locally, would not be allowed. Nor would laws that seek to keep profits local, ensure clearer lines of accountability, and increase local productive capacity by favoring local, rather than foreign-owned companies.
East Asian Financial Crisis
Similar rules at the IMF are cited as the primary contributor to the East Asian Financial Crisis of 1998/1999. Nations that had once been characterized as the “East Asian Tigers” because of their thriving economics, suddenly crashed when the IMF set restrictions on their ability to regulate which sectors of the economy received investment, and how long or in what quantities investment had to stay in the country. When investors started playing with their currencies as if in a global casino, the governments were powerless to act. Investors shot-up the value of the currencies with their investments, pulled them out quickly to make a profit, the economies started to crumble and then all the investors pulled out at the same time – sending the economies into total collapse. Had the investment restrictions been allowed to remain in place, the financial crisis could have been avoided and lives lost to unemployment and poverty, saved.
NAFTA Chapter 11
Investment rules are also found in Chapter 11 of the NAFTA between the U.S, Mexico and Canada that gives corporations the right to sue governments directly over lost profits. For example, in 1999, the Methanex Corporation of Canada sued the U.S. government after California mandated the removal of the additive MTBE, a known human carcinogen, from gasoline sold in the state by 2002. If Methanex wins, we must either eliminate the ban or pay Methanex $970 million for the right to regulate in the public interest.
It is most likely that the Bush Administration did not lead the push for investment rules in Cancun because U.S. corporations are more interested in seeing an investment agreement signed in the FTAA. The proposed FTAA investment rules allow corporations to sue governments directly (as in the NAFTA) rather than forcing them to go through governments (as required by the WTO). Therefore, we can expect a dispute over investment to emerge potentially even more aggressively in Miami. Agriculture will also be just as high on the agenda of developing countries and peoples’ movements in Miami as in Cancun.
A New Multilateralism in support of Local Sustainability: Next Stop, Miami
The Bush Administration has responded to the collapse of the talks at the WTO with threats against all nations that do not “know how to negotiate” – translated this means, “will not meet U.S. demands in negotiations.” Continuing its turn away from multilateralism in all fora, the Administration has said that it will focus on regional and bilateral (two country) trade agreements. Such agreements allow the U.S. to exert greater control over the negotiations because of the clear power differential that emerges when smaller countries can not join together as a block. Such agreements must therefore be rejected.
Instead, support is coalescing world-wide for a multilateralism exercised in support of local sustainability with two key elements: (1) a movement away from export oriented economies that make trade and multinational corporations the basis of economic development. Government spending, taxes, subsidies, tariff structures, etc. should be reoriented to support local environmentally sustainable production that meets local needs. (2) The limited global trade that does take place should occur in a fair trade system supported by a “decorporatized” United Nations Center for Trade in Development with operations that are transparent and democratic, and where trade is viewed as just one among many tools used to help achieve poverty alleviation, economic equality, environmental sustainability and social justice (these ideas are expanded upon in the IFG publication, Alternatives to Economic Globalization, www.ifg.org).
The unity, actions and vision of millions of people in Cancun and around the world applying pressure and support to developing country delegates led to the collapse of WTO talks in Cancun. I will call this a new “popular multilateralism” that is also evident in the organizing against the U.S. war against Iraq and was demonstrated on September 13 in hundreds of actions in a Worldwide Day of Action Against Corporate Globalization and War. Our task is to continue to unify and expand the movements against corporate globalization and war in order to force the institutions of corporate globalization and Empire in to retreat, while creating the space for positive alternatives to emerge. The FTAA meeting in Miami is the next crucial step.
This article is also published on Alternet.