It was hailed by the economists as the organisation that would bring about global prosperity (where have we heard that before). Where the weakest nations of the world would be put on the same footing as the most powerful. But the WTO’s rulings have produced a ‘race to the bottom’ with every environmental, health or safety policy it has had to rule on deemed an illegal barrier to trade. Now with its fifth Ministerial meeting approaching next month in Cancun, Mexico, the World Trade Organization is in crisis and heading for deadlock.
America continues to block an agreement for access to cheap medicines for developing countries, while a new agreement on agriculture is nowhere in sight as the US and the European Union defend their multibillion dollar subsidies. Brussels is on the verge of imposing sanctions on Washington for giving tax breaks to exporters, while Washington is threatening Europe with a trade war over their plans to label genetically modified foods.
Yet despite this the European Commission and Japan, egged on by massive corporate lobby groups such as the International Chamber of Commerce, the Transatlantic Business Dialogue and the European Services Forum, are pushing for a new Multilateral Agreement on Investment (or MAI – see SchNEWS 141). With backing from such big business free market fundamentalists alarm bells should start ringing, and most developing countries and NGOs are either opposed to, or remain highly suspicious of a new MAI.
The first MAI proposal was defeated in 1998 in what some have hailed as the first bloody nose dished out by the emerging new global protest movement. A year later massive protests led the WTO talks in Seattle to collapse (see SchNEWS 240). But, once the MAI had been rejected, Western governments simply went on to negotiate mini versions on a nation by nation basis - with a staggering 450 being signed. When the protestors get a victory, big business and governments simply shift the goalposts and carry on regardless. Some argue that it is better to have a WTO type body to keep an eye on than a corporate free-for-all, but that is no better than asking people around the world if they would prefer to have their legs cut off or their arms.
Together Walt Disney, Nike and McDonalds spend more on advertising each year than the poorest 18 countries spend on health and education. The top ten companies worldwide already make over £1000 billion a year - far more than the combined wealth of all the countries in Africa and South Asia. But that’s not enough for the corporate fat cats. Behind the scenes multinationals are busy working together in their corporate clubs, lobbying and twisting the arms of governments to agree new trade rules that will give them even greater wealth and influence.
From the corporate perspective, the ‘ideal’ MAI would be one loaded with rights for the companies without any responsibilities. For example it would become an offence under WTO ‘barrier to trade’ rules for a country to protect local companies or show favour to those involved in ethical or sustainable practices. In any case the power of multinationals makes a mockery of any so-called level playing field. Business conditions are loaded in their favour, technical development monopolised and when recession bites – they simply pull out.
Worse still, an MAI would make ‘liberalisation’ permanent – that is, once a public service has been sold to the lowest bidder, there’ll be no turning back without breaking WTO rules. Public protest, change of government – tough – under the MAI privatisation is forever.
But what’s the problem with foreign investment? A new report ‘Unlimited Companies’ by ActionAid shows how often big business is allowed to trample through the developing world, pissing on peoples’ rights; evicting them from their homes, squeezing them out of business and refusing to allow workers to join unions or get a decent wage.
In India, hundreds of ‘untouchable’ Dalit have been protesting outside a new Coca Cola bottling plant since April last year. The protestors say the factory is in breach of India’s laws, has offered few local jobs and has contaminated water supplies. “Ever since the Coke factory came up, I cannot run the pump even for one hour due to depletion of water in the well. As a result, there was total crop failure during the past two to three years,” says Shahul Hameed, a local farmer who used to grow rice, coconut, mango, and groundnut on land adjacent to the bottling plant.
In Brazil, thousands of local dairy farmers have gone bust or been squeezed out of the market after multinationals Nestles and Parmalat gained control of over 50% of the Brazilian dairy sector in the late 1990s. Prices fell by 50% for farmers in Minas Gerais state and 70,000 poor producers had to stop supplying the largest companies “Parmalat punished us for two years, paying lower and lower prices for our milk, so we had less and less to pay our bills,” says Renat Hildt, a family farmer from Rio Grande do Sul.
The report concludes that a WTO investment agreement would make things even worse. As Luke Eric Peterson, a Canadian researcher, explains “The only MAI that these countries really need is a Massive Aid Influx - serious new flows of public monies from the West to support basic public goods in the developing world.” But then that’s the sort of do-good nonsense that’s not gonna make anyone rich and powerful.
* Join the protests to derail the talks http://www.nadir.org/nadir/initiativ/agp/free/cancun
* Check out Corporate Europe Observatory’s essential http://www.investmentwatch.org for up to date news and analysis on the MAI and WTO.
* For copies of the ActionAid report - 020 7561 7561 http://www.actionaid.org
“I expect developing countries are pretty tired of coming along to World Trade Organisation meetings, only to watch the trade cake be cut up by richer world, with the poorer world being left crumbs.” - Tony Baldry MP
In July the United Nations Development Program released its annual Human Development Report. During the economically prosperous 1990s 54 countries ended the decade poorer than when they started.
From SchNEWS - this and more in latest edition: