Is a neoliberal dream being reborn in Latin America? It’s not got off to the best of starts…
Nick Dearden is director of Global Justice Now.
Cross-posted from openDemocracyUK
‘Latin America returns to the global economy’. That’s the message that Argentina’s right-wing President Macri wants world leaders to take away from the World Trade Organisation’s 11th Ministerial Summit in Buenos Aires, which starts tomorrow (Sunday).
Macri dreams of becoming the neoliberal star of Liberal America. Along with interim President Temer of Brazil, who came to power in a legislative coup, Macri wants to erase the work of the ‘Pink Tide’ governments who undertook strongly redistributive policies to control corporations, increase welfare and reduce poverty. Hosting both the WTO and the G20 next year, Macri hopes to get international publicity and make friends among the leaders of the rich world.
He’s not got off to the best start. For the last week Argentina’s press – as well as the Financial Times, Reuters and more around the world – has been filled with stories about Macri’s draconian action to deny dozens of civil society campaigners and trade experts access to the country for the WTO. I am among those blacklisted on the ludicrous basis that we want to spread violence and chaos. Civil society campaigners are already being sent back home from the airport, and we expect heavy policing over the next few days. The sort of extreme free market policies Macri is pursuing have always been accompanied by a crackdown on civil liberties, somewhat at odds with the ‘freedom’ such policies supposedly promote.
Inside the summit, meanwhile, tense discussions, arm-twisting and outright bullying will prevail as delegates try to hammer out that most elusive of endpoints: a WTO deal.
The WTO has been written off as a ‘dead man walking’ for the last 10 years. But it’s still an incredibly powerful body which polices global trade rules for nearly every country on earth. Too often these rules have been written in the interests of the most powerful corporations, based in the richest countries in the world. So the WTO matters, more so in the wake of the collapse of the gigantic trade deals that were supposed to eclipse its importance: TTIP, TPP, CETA and TISA.
What’s on the agenda?
Will the WTO reach a deal? Here are the top 5 issues that delegates need to agree on:
1. Food – This is a WTO perennial because global rules on agriculture are pretty much the definition of double standards. In one corner is India, whose 2013 National Food Security Act guarantees cheap rice and wheat to two-thirds of its population by buying from farmers at a guaranteed price. While the scheme has its problems, studies suggest tens of millions of people have been brought out of poverty by the law. In the other corner, the US and EU believe the scheme is ‘trade distorting’ and must be scrapped.
It’s bad enough to demand the end of a life-saving food policy, but it’s even worse when you bear in mind that the US and EU protect their own agricultural sectors to the tune of billions of dollars a year. This protection doesn’t count as ‘trade distorting’ however because… well, because those countries wrote the rules which say it isn’t. India will be portrayed as the villain at the WTO. Don’t believe a word of it.
2. E-commerce – the latest thing in trade talks is rules to protect the power of the giant tech companies like Amazon and Google. These companies profit from data, the ‘new oil’ of the global economy, and they want rules to ensure they can use and abuse this data as they wish. The corporations argue that they should be allowed to move your data around the world to benefit from lower regulations elsewhere. Corporations should not be required to have a presence in the countries they operate in (making it hard to tax and regulate them), nor should they have to benefit those countries by recruiting local people, using local products or helping skill up the local economies. So the e-commerce agenda is bad for us as citizens and bad for developing counties who want to build up a competitive tech sector. Developing countries will put up a powerful fight against this agenda.
3. Fisheries – Overfishing is a massive, global problem, and the WTO is promising to solve the problem by reducing subsidies and introducing new rules on fishing. The problem is that this is likely to reduce support for small, artisanal fisherfolk, who are not the problem at all, while continuing to allow industrial scale scouring of the ocean floors. Just as with food subsidies, it could result in one rule for the rich, and another for the poor.
4. Development – Agreement at the WTO broke down over 15 years ago because rich countries and their big business friends passed everything they wanted and ignored the demands and needs of developing countries. Many developing countries are still waiting for rules which would help them, often rules which allow them to protect parts of their economy in the same way as all rich countries used to when they were poorer. Expect a fight over whether the phrase ‘development round’ is still mentioned in the final deal. Developing countries broadly want to keep the agenda open. Rich countries want to end it and get on with new issues.
5. New issues – Instead of the development agenda, rich countries have been trying for years to put a whole host of new issues on the WTO agenda. These issues, like investment and competition rules, and restrictions on how countries can use regulation, are all attempts to broaden what is meant by ‘trade’. Trade policy, through the WTO, is very enforceable – it has ‘teeth’ – because countries can be punished for not following the rules if another country complains. So if you want enforceable rules, try to claim it’s all about trade. That’s how trade rules today increasingly affect ‘non-trade’ things like public services, food standards, and government procurement. There’s not necessarily a problem with international cooperation on these issues, but when that ‘cooperation’ is based on rules set by the richest and most powerful in the world at the expense of everyone else, you end up with a global economy which fuels inequality, climate change and corporate rule. Often, these ‘trade rules’ simply give big businesses more power to do whatever they want in order to make profits.
The joker in the pack
The big unknown at this WTO Summit is Donald Trump. While the US has traditionally led the rich country bloc in its push for rules demanding liberalisation and deregulation, Trump is different. He is a bully and doesn’t like multilateral rules at all, believing the US could get its own way more often by ripping them up, and signing more bilateral deals where US power is truly invincible.
That’s why Trump is currently blocking a new arbitrator to the WTO’s disputes panel, rendering the whole dispute system increasingly inoperable. That threatens the WTO’s enforcement power in a big way.
The question is whether the uncertainty which Trump creates might force other countries to begin thinking about a fairer system of global rules which, rather than benefitting big business, places the right to protect citizens and the environment at the heart of the global economy.
Such a fundamental reform of global rules is vital and the stakes couldn’t be higher. If we want a more peaceful, climate-friendly and fair world for everyone, we have to find a different way forward than either Trump’s ultra-nationalist bullying, or the hard core corporate power agenda of the WTO which gave rise to him.