The WTO’s Last Gasp

By Shamus Cooke

31/07/08 "ICH" -- - Most had already pronounced it dead, and were surprised to learn that the WTO was meeting in a frenzied attempt to conclude its “Doha Round” negotiations. The prospects for wrapping up the deal are slim though; a lapse back into coma seems imminent. If by chance Doha turns out to be successful, the result will be far less impressive than previous WTO trade agreements.

This general attitude of pessimism was awkwardly expressed by Pascal Lamy, the WTO General Director: “…"It is clear we need to move into a more intensive mode of consultations including smaller configurations”. In English, this means that the deal they want isn’t going to happen, and that a “we’ll take what we can get” attitude now prevails.

Most likely Doha will confirm what everybody already knew: the WTO is dead. And although keeping a brain dead patient on life support is sometimes comforting, the plug must be pulled eventually. The US and the EU are refusing to lower agricultural subsides (for their giant Agri-corporations), while China and other emerging economies refuse to open their markets wide enough for the leading industrialized countries.

The WTO’s death rattle has reverberated throughout the ruling class and beyond. Stark warnings are being broadcasted. The once mighty optimism in the market economy has turned sour. The Economist, in a most foreboding tone, decried: “it is possible to imagine the world economy becoming less integrated. It has happened before: the fairly free world economy of the late 19th century was riddled with protectionism by the 1930s.”

And with this we get to the heart of the matter. Like the UN (itself experiencing terminal illness) the WTO was set-up after WWII with the intention of managing and minimizing economic disasters and consequent wars. It was understood that multilateral (international), free-trade was a precondition for a healthy capitalism, preventing trade blocs from forming that could lead to military confrontation.

When the economy is growing, this is easy to do. When a serious, global recession hits, free-trade is quickly tossed aside—an everyone for themselves attitude takes over. Protectionism in the form of trade blocs develops in an attempt to push the effects of the recession onto someone else.

And while many so-called liberals are whining about the sacredness of the “democratic” institutions of the WTO and UN, we must expose the lie and show its true class nature. The UN is controlled by the elitist Security Council— the same countries that pull the strings at the WTO. It is illustrative enough to mention that only 30 countries (out of 153) were invited to the current WTO negotiations. After creating a “model” agreement, the rich nations attempt to force it down the throats of the poorer ones.

Even though every member country has a veto vote in the WTO, the poor countries know their place. After the last WTO talks collapsed, the poorer countries that rejected submissiveness were subsequently threatened by US politicians, who made it clear that they would be forbidden access to the all-powerful US market. Similar threats, though usually made behind the scenes, are the basis for this institution of democracy.

But even farcical democracies have their limits. The nations that once ruled the world with an iron first are losing their ability to intimidate and control the others. A block of recently-developed countries— China, India, Brazil, South Africa, etc— have used the WTO as a venue to flex their muscles. China in particular is using the WTO to expand its power at the expense of its rivals. The NY Times agrees: “The [WTO] discussions in Geneva have confirmed that the balance of power in global trade has shifted irrevocably with the rise of China.” The old powers—Europe, US, Japan, etc— are feeling their supremacy melt away; they are the ones who are abandoning the WTO for the calmer waters of bi-lateral and regional free-trade agreements.

These kinds of free-trade agreements now account for more than half of the world’s trade. The WTO’s demise has accelerated this process, which has the effect of making an already-slumping world economy worse; while heightening tensions between nations that were already strained.

The giant corporations — themselves owned by billionaires— are quickly driving the world towards greater and more destructive wars. The international institutions of stability that the mega-rich created for themselves— WTO, UN, IMF, World Bank, etc— have been discredited or self destructed. This is because the balance of power between countries has shifted dramatically, requiring new organizations to express the change.
Historically, the process of “re-organization” requires the nastiness of war, the winners of which create international institutions to their fitting.

Economic superpowers do not simply forfeit their power, the basis of which is rooted in the economic system of capitalism. This system has, once again, outlived its historic usefulness, and threatens to return the world to the state of barbarism that it assured us could never happen again (the WTO was a key “insurance” company). Society cannot be run for the private profit of individuals without these periodic episodes of crisis and misery. Taking the control of social wealth out of private hands is society’s crucial task, a struggle guided by the ideas of socialist internationalism.

Shamus Cooke is a social service worker, trade unionist, and writer for the Workers International League ( www.socialistappeal.org ). He can be reached at shamuscook@yahoo.com