Debacle in Doha


Laursen


Sounding a bit like Ronald
Reagan after the invasion of Grenada, U.S. Trade Representative Robert Zoellick
beamed out at the delegates to the World Trade Organization ministerial meetings
last month and declared, “We have removed the stain of Seattle.”

The WTO
ministerial was its first since the collapse two years ago, when activists
disrupted meetings and delegates from developing countries resisted efforts by
the U.S. and other large economies to railroad through an agenda for a new round
of trade negotiations. Things were different this time: the nearest streets, in
fact, were about half a mile away from the conference center; and while several
hundred anti-globalization NGOs sent representatives there to buttonhole the
delegates on topics ranging from workers’ rights to genetically engineered
crops, the mainstream press ignored their presence during the meetings.
Likewise, tens of thousands of anti-WTO activists in cities from New Delhi to
New York who took to the streets the first day of the meetings barely rated a
mention in most American newspapers.

Back in
Washington three weeks later, the Bush administration capped its success in Doha
by ramming a vote through the House, 215-214, granting the president fast-track
authority to negotiate trade agreements. The vote was a bitter defeat for
organized labor, which had turned up the pressure on wavering Democrats with
lobbying and a phone-and-fax campaign from their constituents. In the end, fewer
Democrats voted for fast track than had supported any major free-trade bill in
the last 10 years—just 21, versus 70 for NAFTA in 1993, for example. But the
margin was just enough.

With fast track,
Bush can dicker for further corporate dominance of the global economy, knowing
that the few congressional gadflies who oppose globalization will be unable to
chip away at his work. A vote in the Senate, where opposition to free trade
agreements is less pronounced, is expected early in the new year.

Fast track—or
Trade Promotion Authority, as Republicans have renamed it—isn’t essential for
Bush to complete the program of economic globalization that Seattle seemed to
have derailed. But it makes his job a lot easier.

Bush wants fast
track badly enough that in the final days before the vote, the White House
directed the House Republican leadership to compromise on the economic stimulus
bill now working its way through Congress. He offered to add $20 billion in aid
for the unemployed to the package in exchange for key Democrats’ support on
trade authority. That’s a major ideological concession: House and Senate
Republicans have loaded up their versions of the stimulus bill with favors to
corporations and had thus far firmly rejected Democratic efforts to shoehorn
some money for workers into the deal.


So, in just three
weeks, Bush turned a neat double play that not only starts the economic
globalization agenda moving forward again, but also largely protects him from
congressional critics as he pursues more trade talks. These are coming up thick
and fast: serious negotiations for a Free Trade Area of the Americas, talks to
bring Russia into the WTO, free trade deals to conclude with Chile and
Singapore, and a new effort to beef up the U.S. anti-drug Andean Trade
Preference Area in South America.

How big a switch
is this? Consider that two years ago, after the WTO talks in Seattle collapsed,
some commentators said multilateral trade negotiations like those the WTO
sponsors were a thing of the past. That governments and their corporate sponsors
would now have to pursue globalization through incremental, one-on-one deals
between nations. Bush was able to turn that around for three reasons.

First, scheduling
the WTO meetings in Doha effectively kept global justice activists out of sight
of a myopic mainstream press. It also helped Zoellick sell the talks as a step
for global solidarity behind the U.S. war on terrorism in the Middle East. “Free
trade is the best answer to terrorism,” he said.

Second, Zoellick
and the Republican party leadership successfully argued to Republicans that
voting no on fast track would “undermine” the president’s authority during
wartime. That brought back in to the fold a slew of Republicans from states that
stand to lose from lower trade barriers. Third, the AFL-CIO has still not
completed its work of turning the Democrats into the party of opposition to
corporate globalization—even though its biggest supporters, Bill Clinton and Al
Gore, are gone from Washington.

In reporting on
the Doha meetings, particularly, the mainstream press has concentrated on a few
cosmetic concessions that developing nations were able to win as the ministerial
declaration was being cobbled together. “Poor Nations Win Gains In Global Trade
Deal, as U.S. Compromises,” a Wall Street Journal headline proclaimed the
day after the talks ended. But in reality, the Doha meeting, coupled with fast
track’s passage, represents a major defeat for the global justice movement. It
now faces the prospect of a new round of WTO talks built around an agenda that
almost completely ignores the concerns of working people and developing nations.

Thea Lee, the
AFL-CIO’s chief international economist who attended the WTO meetings, sums up
the result bluntly: “What happened in Doha was a disaster for American workers.”
The WTO meeting dealt a blow to labor’s efforts to have workers’ rights
addressed in the trade talks, she says—efforts that actually had some backing
from the Clinton administration two years ago. Despite a lot of empty rhetoric
by Zoellick and his allies in the mainstream press, critics say the new talks
will do nothing to help the economy pull itself out of recession—or to grow
faster in the long run.


Take U.S.
antidumping laws, which Lee calls “the only thing keeping the American steel
industry alive—protecting us from unfair competition from other countries.”
Congress, before the Doha meetings, considered a resolution ordering Zoellick
not to agree to any language in the WTO declaration on new trade talks that
would force the U.S. to change its antidumping rules.

But the week
before the meetings began, House Ways and Means Chair Bill Thomas switched the
wording of the resolution so that it only told the trade representative to try
to preserve the antidumping laws. Thomas turned the procedural trick so
deftly that some House members may not have known exactly what they were voting
for when they passed the resolution, 410-4.

That overwhelming
vote didn’t stop Zoellick from agreeing to a declaration that reopens talks on
antidumping rules. Lee blames Zoellick and the Bush administration squarely for
signaling to other countries that the U.S. would agree to anything if it would
keep the new talks on track. “Zoellick sold out his American constituents to
launch a new round of talks,” she says. “He made it clear that he was desperate
to do so when a lot of other countries weren’t.”

The only U.S.
industry that Zoellick stood firmly behind in the talks was textiles, where big
American producers were worried about demands by Pakistan for more access to the
U.S. market. American textile producers did indeed win concessions in Doha
assuring that garments assembled overseas must be finished in the U.S. to avoid
higher duties. Coincidentally, labor activists noted, textiles are a far less
unionized industry than steel, and that its production center is closer to
Bush’s political base in the South than to the traditionally Democratic Rust
Belt.

The WTO’s new
agenda leaves out one item labor organizations had wanted to see the new talks
address—workers’ rights. The U.S. had put some guarantees of workers’ rights on
its laundry list for the WTO before the Seattle meetings two years ago, and
Zoellick was supposed to pursue it in Doha. But he didn’t.

“We feel that
because the U.S. under Bush put this at the bottom of its priority list, it
meant it didn’t have a prayer,” Lee says. Every nation at the WTO meetings was
allowed to give a five-minute opening statement. In his statement, Zoellick did
not even mention labor rights.

Pro-globalization
pundits argue that labor and environmental standards, for example, have no place
in trade agreements. But, as the New York Times’ David Sanger astutely
pointed out following the fast track vote, “The reality of the post-Cold War era
is that trade negotiations have become the basic treaties negotiated among
nations…. When individual agreements come up for a vote, they almost always
pass because the strategic cost of defeating them is simply too high.”

When
globalization’s critics can’t get any part of their agenda accepted in the WTO’s
meetings, and can’t muster the votes to defeat anti-labor treaties on Capitol
Hill, their issues are effectively swept off the table. The WTO’s new
negotiating agenda does nothing to solve this problem—and fast track will
compound it.

Labor wasn’t the
only constituency to lose out. Developing countries facing massive public health
emergencies also saw their demands frustrated. Trade-related intellectual
property rights (TRIPs), the one area of the WTO agenda where the mainstream
press has been declaring victory for activists, also looks less bright the
closer one peers at it.


The
pharmaceutical industry “was outmaneuvered by activists,” declared the Wall
Street Journal
the day the meetings broke up, as the deal negotiators
approved for new talks “declares that poor countries can ignore drug-company
patents and buy cheap generic drugs to meet public-health needs.” The new
language on the declaration does not limit poor countries’ latitude to pandemics
like AIDS and tuberculosis, either.

Pharmaceutical
companies were “scrambling to limit the damage,” the Journal said. But
limit it they did. Activists wanted the WTO to explicitly state that countries
like Brazil and India that manufacture cheap generics can sell them in other
countries. The matter was referred to a committee.

“There’s going to
be discussion in the WTO about compulsory licensing for export, but my reading
of the room at Doha is that no one is seriously interested in this,” Alan
Larson, Undersecretary of State for Economic Affairs said two weeks after the
meetings ended.

A close look at
the WTO’s actual language on TRIPs reveals that even the general principle the
Journal claims that developing countries had won is less than certain.
“We affirm that the Agreement can and should be interpreted and implemented in a
manner supportive of WTO Members’ right to protect public health,” it says—not
shall.

As a result,
activists Walden Bello of Global South and Anuradha Mittal of Food First
concluded in their evaluation of the WTO meetings, “there is no commitment to
change the wording of the TRIPs agreement to accommodate developing countries’
overriding of patents for public health purposes.” Without an explicit
commitment, the upcoming new round of talks could result in no progress at all
for developing counties struggling with AIDS.

The news out of
Doha on other matters crucial for the developing world was no better. The final
ministerial declaration contains no commitment that the WTO will exempt
countries’ efforts to promote food security and development from its trade
rules. This is an especially important matter for African countries that are
being pressured to open their markets while they are struggling to restore
agricultural production that’s been destroyed by years of famine and civil war.

Both
environmentalists and developing nations—frequently portrayed as enemies in the
mainstream press—had been demanding that the WTO agenda condemn biopiracy and
patents on life. This also was a nonstarter in Doha.

One of the most
critical areas of dickering over the new WTO agenda—although almost completely
ignored in the mainstream press’s coverage—was GATS, the General Agreement on
Trade in Services. This is the section that addresses barriers to trade—such as,
for example, any highly regulated or government-owned industry or public service
such as education, health care, water, and energy as well as labor and
environmental laws.

Under GATS
language being pursued by European Union negotiators, national laws and
regulations would be deemed unacceptable if they are “more burdensome than
necessary” to companies. Instead, governments would have to modify their laws to
make them more “efficient”—that is, ease barriers to entry into those
businesses. This could also provide cover for governments that want to relax
labor and environmental laws by allowing them to argue that these laws do not
meet the WTO’s efficiency tests, writes Greg Palast of Britain’s CorpWatch.

Before Doha,
developing countries were countering this program by calling for the WTO to
assess the impact of GATS before implementing any rules changes. Some NGOs
wanted vital public services explicitly exempted from GATS. None of this made
its way into the final ministerial declaration coming out of Doha. Instead, it
calls for negotiations on all products—without exclusions. It commits WTO
members to an extremely fast timetable under which requests to open up their
services sectors will appear this June and countries must submit their initial
offers to liberalize by March of next year. That won’t leave any time for the
impact studies the developing nations want.

One of the global
justice movement’s biggest victories in recent years was the defeat of the
Multilateral Agreement on Investment. The MAI would have committed every country
that signed it to opening their corporate sector to foreign ownership and then
assuring foreign owners that they would not be “discriminated” against. If the
deal had acquired any momentum, developing countries faced loss of control of
their economies to powerful multinationals. Thanks to a strong grassroots
anti-globalization campaign around the world, it didn’t.

But at Doha, MAI
came back to life. Objections from developing countries were waved aside as the
negotiators include in the declaration a complicated commitment to restart talks
on investment at the next ministerial meeting in two years.

Finally,
developing nations’ efforts to open up the WTO process and dampen the
overwhelming negotiating superiority of big economies like the U.S., got nowhere
near liftoff.

Perhaps the most
fundamental criticism of the WTO concerns its deeply undemocratic character. The
richest delegations—from the U.S. and the European Union—get 553 delegates,
versus 92 from China and India, which together compose 40 percent of the world’s
population. Traditionally, representatives of the big economies met in a “Green
Room” to hammer out their position before emerging to give it to the developing
nations as a fait accompli—one of the principal reasons developing nations
revolted in Seattle.


At the same time,
large multinational corporations appear to have privileged access to key WTO
negotiators who often won’t receive representatives of NGOs with global justice
agendas. When the Clinton administration negotiated the pact that led to China’s
entry into the WTO two years ago, for example, it made sure the deal allowed one
extremely pushy insurance company, American International Group, to expand in
China without taking a Chinese partner, as that country was requiring of all
other insurers.

Then U.S. trade
representative Christine Barshef- sky personally discussed AIG’s case with the
Chinese ambassador, the Wall Street Journal reported recently. European
Union insurers, meanwhile, are being told they have to enter into 50-50
partnerships with Chinese companies if they want to compete in the huge market.
The WTO’s “level playing field” for multinational companies turns out to be more
level for some.

Weeks before the
Doha meetings, CorpWatch reported that the Netherlands think tank
Corporate Europe Observatory had obtained minutes of 14 secret meetings that the
UK’s chief negotiators on trade in services had held between April 1999 and
February 2001. In on the meetings were representatives of such financial
services giants as Morgan Stanley Dean Witter, UBS Warburg Dillon Read,
Prudential, and accountant/consultant PriceWaterhouseCoopers.

“The minutes
indicate that the government officials shared confidential negotiating documents
with the corporate leaders as well as inside information on the negotiating
position of the European community, the U.S. and developing nations,”
CorpWatch’
s Palast writes. One subject they discussed was ways to make GATS
less vulnerable to criticism from global justice activists.

After Seattle,
the WTO leadership gave lip service to the idea of making the WTO more
“transparent”—but lip service was all it was. The agenda for new talks is
completely silent on reforming the WTO process.

While the WTO’s
negotiating agenda may not be perfect, one Administration source who attended
the Doha talks argued that launching a new round was necessary for one reason:
to get the global economy back on its feet.

“The global
economic slowdown has only heightened anxieties,” Zoellick said in a speech in
September. “So will the ripple effects from terrorism. Financial markets are
skittish and fearful of protectionism. Movement on trade liberalization is now
vital for our economic recovery—and for sustaining economic reforms globally.”

In the mainstream
press, the trade representative’s allies parroted this line clear through the
Doha meetings. “The negotiations are widely seen as crucial to stimulating the
global economy and restoring confidence in the trading system, which suffered a
severe blow two years ago when similar talks collapsed in Seattle,” the New
York Times’
Joseph Kahn wrote on the last day of the meetings. “One
incentive to continue discussions is a common feeling that a setback could
damage prospects for economic recovery and potentially reduce the rate of growth
in trade that powered the world economy in the 1990s.”

Next day, Kahn’s
article on the close of the talks ran under the headline, “Nations Back Freer
Trade, Hoping to Aid Global Growth.” Explaining the compromises some countries’
delegations had made, he wrote, “negotiators were under intense pressure to act
together to stimulate growth.”

But one
administration source acknowledges privately that there’s no immediate effect.
The new round of negotiations will not begin for another year and probably
couldn’t result in a new set of rules until 2005 at the earliest—and more likely
until 2008. But, he says, the start of a new round has a profound “psychological
effect” on “the economic mindset of investors.”

Companies that
stand to benefit from globalization wouldn’t be so eager to invest in new growth
if they didn’t think the WTO’s agenda was moving forward. That’s why, the source
says, delegates in Doha were “constantly asking if [fast track] was going
through”—without it, they wouldn’t believe the U.S. was serious about supporting
free trade.

“Idiotic,” Lee
says of the argument for the trade talks’ psychological effect. “Ridiculous,”
adds Mark Weisbrot, co-director of the Center for Economic and Policy Research
(CEPR) in Washington, DC.

International
trade is indeed a larger component of global economic activity today than it
used to be—equal to about 26 percent of the total, versus about 17 percent 20
years ago, according to the Paris-based Organization for Economic Cooperation
and Development. But Lee and Weisbrot don’t believe negotiations that will take
years to bear fruit will have any effect on investors’ decisions over the next
12 months.

Nor have they
ever. The AFL-CIO undertook a brief study during its anti-fast track campaign
that looked at the stock market’s reaction to a decade of trade-related bills
coming before Congress. When lawmakers voted not to renew fast track authority
for Bill Clinton in 1997 and 1998, the Dow went up, not down. When WTO talks
collapsed in 1999, the Dow continued to rise. Yet, when NAFTA—the biggest free
trade deal on record—passed in 1993, the market went down. All these votes took
place during a period of unprecedented stock market growth. Clearly, Lee says,
there is no evidence that free trade talks directly help the stock market.


The evidence that
denying Bush fast track authority would set back the cause of free trade isn’t
very convincing either. The U.S. has signed hundreds of free trade agreements in
the last quarter-century—the Clinton administration alone took credit for nearly
300, notes Mike Dolan of Global Trade Watch. The six presidents who have served
during that period have only invoked fast track a total of five times.

More important,
of course, is economic globalization’s long-term effect on workers—the CEPR, in
a study released just before the Doha meetings, concluded that trade
liberalization has had a negative effect on American workers over the last two
decades. Using a low estimate of trade impact, the CEPR found that workers saw
their net hourly wages go down between 1.6 percent and 2.4 percent; using a
higher estimate, the drop was even more dramatic—between 9.4 percent and 10.1
percent.

The meetings
opened with the formal admission of China to the WTO, after years of
negotiations. China’s exports are already putting pressure on prices elsewhere
in Asia, and this effect will spread around the world if its share of the world
export market doubles to 6.8 percent, as the World Bank predicts it will.
Especially hard-hit will be huge Asian textile exporters like India, Bangladesh,
and Indonesia, predicts Lee.

When WTO rules
breaking down import barriers to apparel kick in, she says, “a lot of countries’
products will be wiped off the face of the earth.” While these developing
countries are anxious to kick down barriers to their own products today—a fact
with which pro-globalization pundits love to skewer their critics—“they’ll all
come running to us when they’re having their butts kicked by China,” Lee argues.

Chinese workers
may find they have their own problems with the new world of the WTO. Membership
in the organization means that Chinese companies will have to compete with an
army of foreign multinationals eager to pick up profits in a market of 1.2
billion souls. The government will be rewriting dozens of laws and regulations
to comply with WTO rules and in meetings with provincial officials, acknowledges
that millions could lose their jobs as whole industries restructure.

The government is
nervous enough that by early December, according to the Wall Street Journal,
it had still not published the text of the new WTO trade talks agenda in Chinese
for its people to peruse. The result has been confusion and concern among
provincial officials, the Journal reported.

But if Lee is
right, the best hope for halting the march of corporate globalization lies in
letting it run its course and pull the world’s economies down in a heap. This is
a sufficiently real possibility that even a globalization fan like the Times’
Joseph Kahn implicitly acknowledges it. The current recession represents the
first time the economies of the U.S., Europe, and Japan have collectively
contracted since the mid-1970s oil shocks, he noted on November 25. “Nations
that enthusiastically courted foreign multinational investment and followed
American advice to keep their markets open and their currencies freely
convertible have suffered most,” Kahn wrote.

Certainly, the
answer to how the march towards corporate globalization can be halted is not
somewhere on Capitol Hill. Bush’s victory on fast track demonstrated that labor
still hasn’t discovered a way to counter the Washington consensus that trade
treaties are too “strategically important” for such matters as working
conditions, the AIDS crisis or basic public services to get in the way. The
answer, most likely, is in the streets.

Some NGOs are
getting the idea. In an email communiqué it issued after the fast track vote,
Public Citizen
called for “a blow out Battle of Seattle II at ‘Davos on the
Hudson’ in NYC this January,” during the World Economic Forum annual meeting—the
corporate-government elite’s private smoking club. Activists in New York and
around the country didn’t have to be reminded—coalitions are already forming to
extend a warm welcome on January 31 to the WEF, many of whose members were in
Doha and which claims intellectual authorship of the WTO. Representative
government having failed, activists will be bringing their message directly to
the elite.                                                   Z


 

Eric
Laursen is a freelance journalist and member of the New York City Direct Action
Network.