Ten years ago today, tens of thousands of protesters descended on Seattle, Washington, in an attempt to disrupt the World Trade Organisation’s Millennium conference.
The protesters had no cohesive agenda, but the overriding sentiment was one of anti-globalisation. It was the beginning of a movement that has continued to express vociferous opposition to the practices of multinational corporations and international trade agreements that provide financial benefit at the expense of the environment, fair trade and employment rights.
David Solnit, a protester at Seattle in 1999, now works with the Direct Action Network, a coalition of anti-globalisation groups. “The WTO is deeply anti-democratic,” he says. “We view it as an illegitimate institution, and what happened at Seattle was opposition to trade negotiations that said, ‘Do as I say, not as I do.’ We were opposed to corporations being allowed to dictate economic policy. In many ways, we succeeded; the WTO has been on the verge of death for five years.”
If the goal of the protests was to delay WTO talks, the events at Seattle might be considered successful. Discussions did not resume again until 2001 in Doha, and no tangible agreements were reached. Since then the WTO has had difficulty organising its annual meetings.
However, as Chris Milner, a professor at the University of Nottingham’s School of Economics, points out: “To say that the WTO is dying seems a bit extreme.” One would also be hard pressed to find a direct link between the WTO’s current woes and those protests in Seattle. Nevertheless, the WTO is a deeply troubled organisation. Its problems result primarily from the differences between developed and developing countries.
The number of WTO member countries has increased by 19 to 153 since 1999, representing 95 per cent of global trade, and 30 other non-member observer countries have limited participation in discussions. Where negotiations were once between the US and EU, other big players have emerged, particularly China, India and Brazil. Fragmentation of international production, mainly through outsourcing, means that although global trade has become more integrated in the past decade, the US’s relative share of that trade has decreased.
On the one hand, the deeply integrated nature of global trade has meant that during the most recent recession countries were reluctant to impose protectionist measures because of that interdependence. On the other hand, the relevance of the WTO has diminished as countries, responding to their individual economic and political needs, have chosen to pursue bilateral trade agreements. In 1990 there were around 90 of those; today there are more than 300.
This has changed the dynamics of global trade, but problems remain. One of the chief complaints is the ability of multinational corporations to exploit cheap labour in developing countries, opening factories in which working conditions are often unacceptable. With agreements such as the North American Free Trade Agreement (Nafta) and the Free Trade Area of the Americas (FTAA), multinational companies are effectively allowed to set the terms within which they operate in member countries. Under Chapter 11 of Nafta – which applies to Canada, Mexico and the US – companies can (and do) sue host countries if they consider that their profits are being affected.
But foreign direct investment drives global trade. For it to be most effective and its benefits most widely distributed, it needs to go hand in hand with domestic policies designed to ensure that it benefits the local economy, not just the corporation’s bottom line. Of course, this can have consequences at home; Americans have complained of lost jobs because of American companies moving overseas to cheaper locations. While that is true, foreign direct investment does catalyse a necessary adjustment period in the home country; though the adjustment period is painful, companies that expand overseas generally expand at home as well.
If foreign direct investment led to more symbiotic relationships between countries, rather than being colonial in nature, each would benefit. China, Brazil and India have gained tremendously from globalisation, and bilateral trade agreements have played no small part.
Though the appeal of the WTO may have paled over the past decade, its role as a positive tool in the growth of global trade could be renewed if it were to play a more regulatory role, exerting supervisory powers and ensuring pro-social policies accompany foreign direct investment. Globalisation in itself is neither harmful nor antisocial. What is needed is for it to become more managed.
Investors should be required to do business with local tradespeople. Investment should be accompanied by technology and information transfer, improved infrastructure, and training local people for higher level positions.
International trade is of most benefit when it isn’t carried at the expense of human or environmental health. As trade becomes more integrated, this is more important than ever, and also more likely to become a priority in trade negotiations and agreements. If the WTO wants to revive its reputation and catalyse positive change while ensuring the growth of global trade, it must work to ensure that social benefit is never trumped by corporate greed.
Source:http://www.thenational.ae/apps/pbcs.dll/article?AID=/20091130/OPINION/711299874/1080/NEWS
