Globe and Mail | August 27, 2003 For all the hullabaloo about globalized trade, you'd think its promoters would be trying harder to make it look good.In itself, it shouldn't be such a hard sell. There's no reason in principle why greater access to markets, investment and technology shouldn't be beneficial to the human race. But if globalization is a win-win no-brainer, why are international trade negotiations in such a mess?
There's continued pessimism about the chances of a comprehensive free-trade-area-of-the-Americas deal clicking into place on schedule at the beginning of 2005. That's also the deadline for finishing the Doha Round of negotiations under the World Trade Organization, and Doha isn't shaping up as a slam dunk either. Sharp splits among rich and poor countries, and those in between, will be exposed next month at a key meeting of WTO ministers in Cancun, Mexico.
The last series of international trade talks, completed in 1993, was dubbed the Uruguay round after the country where it was launched in 1986. The Uruguay round established the WTO and overhauled global trading and investment rules. Rich countries and the major multinational companies based in them achieved several important goals. They pushed open the door to worldwide markets for financial and other services. They established respect for intellectual property rights as a pillar of the global regime.
The Doha round, launched in 2001, is also known as the development round. It was supposed to be the poor countries' turn. As a rule, these nations don't export sophisticated stuff like revolutionary anticancer drugs, credit-card services or high-tech oil-drilling equipment. The merchandise they have to sell is pretty basic. For the richer among them, such as India or Brazil, it may be manufactured goods such as steel. For the lucky ones, with rich underground resources, it means raw or semi-processed minerals. For most, it means farm products: grains, cotton, soybeans, coffee and the like, or fruit and vegetables if the climate and geography are right. Hundreds of millions of people around the world make their living producing these goods.
To sell these products to rich countries, they need access and a fair system. Too often, as things stand, they get neither. Tariff and non-tariff barriers shut them out of certain markets. Elsewhere, subsidies paid to producers or exporters in North America and Europe make the poorer farmers unable to compete.
A Washington think tank, the International Food Policy Research Institute, estimates the annual value of these subsidies at $24-billion (U.S.) -- more than the gross national product of many a poor nation. The Doha round began with a ringing declaration about addressing these issues. Halfway through, it seems little progress has been made.
The latest proposal for reconciling the deep divisions between rich and poor, unveiled by WTO negotiators on Monday, fails to establish a timetable for phasing out subsidies. It continues to link progress on levelling the playing field for farm products to yet more demands for the lowering of tariff barriers on manufactured goods. This in spite of the fact that a hallmark of the past 15 years has been the substantial lowering of import tariffs in much of the developing world.
Some are arguing that new proposals on market access from rich countries would actually penalize some of the world's poorest countries by forcing them to liberalize at a pace roughly similar to more robust economies, such as Brazil. "The world's rich countries are signalling that they expect their poorest counterparts to make deep tariff cuts without expecting reciprocal measures," the international aid agency Oxfam says. (Wondering about Canada's stance? We have had our share of bitter bilateral trade disputes with the United States, but on market access in the WTO talks we're like peas in a pod -- together with equally prosperous Europe.) Protectionism in less developed economies usually translates into lousy merchandise produced by underpaid, undertrained workers using outdated technology, sold at inflated prices to captive consumers. Over time, it widens the gap between rich and poor. It is not a good thing. But the protectionist impulse won't be defeated by pandering to powerful agribusiness lobbies in the United States and Europe. The global spread of trade is a given; the question is, on whose terms?
Social activists have worked hard the past few years to challenge the notion that globally integrated markets will necessarily bring prosperity to the poor. Maybe they should relax. No one is working harder to discredit globalization than the representatives of rich countries at the WTO.
When you cut through the verbiage, the message from the First World is this: globalization when it works for us; self-interest when it doesn't.Globe and Mail:
