Volume 2, No. 10, October 2001

After the fiasco at Seattle, this is a renewed attempt to utilize the WTO for launching yet another concerted attack on the backward countries of the world. The WTO sledgehammer is to be used to smash all trade barriers even further to make the world free for big capital. The WTO’s Fourth Ministerial Conference, scheduled to be held at Doha from Nov. 9th to 12th, is to once again try and unleash another round of negotiations (i.e. after the Uruguay round), to grab whatever is left from the third world countries.

Fearing mass anger, as was reflected at Seattle and at all international meets after that, this gathering has been organized in the tiny feudal Arab monarchy of Qatar, to which few will be able to come. The WTO has now become the symbol of people’s anger against globalisation and imperialism. There is a mass outrage against it throughout the world, so the imperialist vultures fear meeting at a place where people are able to gather. This, coupled with bitter contradictions amongst the imperialists, forced a retreat at Seattle, threatening the very existence of this body. But, today with the world economy going into a severe slowdown, the imperialists, particularly the US, are desperate to seek some compromise amongst themselves, and launch a concerted attack on the backward countries at the Doha meet. By smashing trade barriers further, they seek to dump their goods throughout the world, in order to get over the problem of burgeoning stocks. After the failure to reach a consensus at the Geneva preparatory meeting in end July this year, the US has been playing an aggressive role browbeating backward countries to accept the new round. The US Trade Representative (USTR), Zoellick’s, three day visit to India in early August, is just one example of how the US seeks to wield the carrot and the stick to beat countries into agreement. To further this it has also sought some form of compromise with the other imperialists, particularly the EU.

In the run-up to the Doha meet, let us analyse, first, as to who till now have benefited the most from the WTO; what has been the attitude of the various countries and groupings towards the new round; India’s high profile role in blowing hot and cold; and the attitude of the people throughout the world towards the WTO and this new round.

The Uruguay Round itself began under threats from the US. When the US suggested new issues, such as services, Intellectual Property Rights (IPRs) and trade-related investment measures (TRIMs) to be included in the agenda of negotiations under the Eight Multilateral Trade Negotiations, the backward countries opposed their inclusion as it fell outside the mandate of GATT (which, till then, was only confined to trade in goods). Finally, these subjects were brought under negotiations of the Eighth MTN due to the US threat of withdrawing from GATT.

GATT suited the needs of post-war imperialism. With a powerful communist camp, strong national liberation movements and Keynesian economics dominating the capitalist countries, the maximum that could be then expected from such an international body was trade liberalization in goods, of at least those countries under imperialist sway. But after the crisis of the 1970s, Keynesianism gave way to monetarism as a way out of the crisis. This called for a more aggressive role to be played by big capital at home and in the international arena. This was facilitated by the crushing of the vast peoples movements throughout the world through massacres, butcheries and coups in the 1960s & 1970s, the defeat of the national liberation movements, and reversals in the socialist camp.

Reagonomics and Thatcherism in the West together with Friedman’s experiment in Chile after the Allende coup, were the initial steps towards what came to be known as globalisation. ‘Gobalisation’ is nothing but a prettily dressed up term for the naked and ruthless aggression of international finance capital. Globalisation demanded not only further liberalization of trade but also of the services, and, more particularly, of capital flows. It sought to do away with the welfare economy and turn everything — water, air, knowledge, leisure, etc. — into objects for profit making. Speculative capital saw a quantum leap. So to suit the changing demands of finance capital, the scope of GATT was expanded to the WTO. Privatization, liberalization and ‘economic reforms’ became the new mantra of reactionaries throughout the world. With the leaps in IT in the 1990s, this mantra was carried deep into every middle-class home. Compradors throughout the world, including India, meekly fell in line and signed on the dotted line of the Dunkel Draft in 1994. They thereby further bound their countries to the imperialist set rules/laws of the WTO mortgaging away even their nominal independence.

In these six years since the WTO has come into being on Jan.1, 1995, the third world countries have been devastated, while the gains having gone to the imperialist countries, particularly the US. America’s much-hyped decade-long boom is nothing but the result of an enormous leap in the extent of the loot from the backward countries, extracted on the funeral pyre of millions of people. But, having tasted blood, this insatiable vampire, is never satisfied. It demands more and more, unconcerned that, as a result, half of humanity is being pushed to an excruciating death. The new round that it is demanding at the WTO is precisely to enhance this loot.

The desperation is all the more so, as the US is facing the worst industrial slump in two decades, with the rest of the world sliding with it. With a slump in sales of the TNCs and their burgeoning stocks, they are desperate for markets. Their vast sums of capital too must find outlets. Today, they are like a wounded man-eating tiger hunting for their prey. It is under such conditions that they are demanding a new round of negotiations, in order to facilitate their seizure of markets not yet under their full control.

But, first let us take stock of the impact of the earlier round of negotiations, whose effect can be clearly seen six years after it was signed. Ever since the coming into the existence of WTO the share of the developed countries in world trade has gone up by 1% every year — from a 51% share in international trade in 1995 to a 57.4% of world trade today. In the past one decade the US alone has gained a gigantic $4 trillion (one trillion is one lakh crores).

Now let us take a look at some of the results of some of the agreements signed by the countries at the WTO.

By means of the TRIPS agreement billions of dollars have been passed on to the giant pharmaceutical TNCs, while essential drugs have passed out of the reach of masses throughout the world. It is well known that the world’s largest pharmaceutical company, Pfizer, has been one of the main sponsors of the WTO’s TRIPS rulings. Through the new patent regulations, it can have captive markets and charge monopoly prices. Also it has been pressurizing the US government to utilize the Super 301 to penalize countries that have not brought their patent laws in line with WTO stipulations. At present it is seeking action against S. Africa and Brazil. The monopoly profits of these companies amount to extortion. There is little to choose between the pharmaceutical mafia and the high profile smuggler. Take for example, Pfizer’s sale of AIDS drugs. An AIDS related drug, flucanazole, is sold by Cipla in India for $0.64, by Biolab in Thailand for $0.29, while Pfizer charges for the same drug $8.25 in South Africa and $20.24 in Brazil. Also, the main anti-AIDS AVR drug, which costs less than $500 per year for one patient, was being sold by Pfizer at the rate of $10,000 per year in S. Africa. And that country has roughly 5 million AIDS patients. After a worldwide outcry, Pfizer reduced its price of this drug to $600 in S. Africa, but has maintained the original price in Brazil. Utilising the WTO patent stipulations many life-saving drugs have passed out of the reach of the masses, yet the giant pharmaceutical bloodsuckers continue to raise its prices.

If we turn towards the Agreement on Agriculture (AoA) the bias towards the developed countries is even more blatant. Here not only have the backward countries been forced to remove Quantitative Restrictions (QRs), (India has faithfully complied), but they face regular arm-twisting to also reduce their import tariffs. On the other hand the developed countries continue to give gigantic subsidies to their agriculture. During these six years of the WTO these subsidies have, if anything, increased. This is because the AoA has been so cunningly drafted that even the miniscule reductions stipulated for developed countries, could be bypassed through various loopholes incorporated in the very agreement. The AoA says that these countries have to reduce their tariffs by a mere 6% every year for six years. But even this limited reduction can be bypassed by the clever creation of a number of coloured boxes (amber box, green box, and blue box) for exemptions. In addition, the US & EU insisted on a benchmark date (the date against which the subsidy reduction is to be calculated) as early as the 1986-88 period, as in these years the subsidy was the highest. In other words a 6% reduction today from the 1986-88 period would amount to insignificant reduction, as the figures are already lower than that peak period. Not surprisingly, total support rendered to the agricultural sector by countries comprising the OECD (i.e. the main developed countries of the world) increased from $308 billion yearly in the 1986-88 period to $347 billion in the 1997-99 period. In addition the AoA agreement says that while countries that had no export subsidy in operation are prohibited from including them, heavily subsidizing exporters, such as the EU & US, were obliged to reduce subsidies by a modest 36% over a six -year period.

Not surprisingly, statistics of the FAO (Food & Agricultural Organisation) show that agricultural exports by developed countries increased by more than 3% between 1990 and 1997; while such exports by backward countries grew by just 0.63% during the same period. Also, agricultural imports into backward countries increased by nearly 4% during this period, compared to less than 2% for the developed countries.

But, this is not all, agriculture in backward countries is to be held ransom to TNC agribusiness in many other ways. Particularly dangerous are the various legislations that give TNC’s control over the bio-diversity of these countries. In fact, the Indian parliament has just passed the Plant Variety Protection Act.

Such blatant biases in the WTO agreement in agriculture, have had a devastating impact on agriculture in the backward countries, as can be seen in India (See series of articles on agriculture in earlier issues - editor).

The imperialists have been arguing that knowledge patents are necessary due to the large sums they pay on R&D (Research & Development). But in this sphere too the WTO favours the developed countries. While all other measures of subsidization and protection come under the scrutiny of the WTO discipline, the R&D subsidies, extensively used by the developed countries are treated as "non-actionable" in the WTO framework. In the US the government expenditure/subsidy on R&D is as much as 47% of the total, while in the EU it is 49%!!

In addition to all the above the WTO regulations have a complicated structure of exemptions, going under various names, which de facto allows the developed countries to charge high tariffs on any imports that they seek to keep out, in the name of anti-dumping. Going under various weird titles, such as TBT (Technical Barriers to Trade), SPS (Sanitary & Phyto-sanitary), VERs (Voluntary Export Restraints), OMAs (Orderly Marketing Arrangements) and numerous other names, these, in effect, allow imperialist countries all sorts of protectionist measures. The US & EU have used these extensively against imports from backward countries. So, for example, while India has to continuously hammer down its import tariffs under the West’s pressure, it is unable to lift a finger against the numerous anti-dumping measures resorted to against Indian exports. So, as trade in textiles is important for the backward countries, very little has been done to remove barriers to trade in this sector.

If we turn to the TRIMS, this is a blatant imperialist weapon with which to allow the unhindered flow of foreign capital into backward countries. In the TRIMS agreement signed at the Uruguay Round, backward countries have to phase out all performance requirements (say like insisting on a certain percentage of sales to be exported, or a certain amount to be spent on social needs, etc.) by Jan.1, 2000. Not satisfied with this, in the new round they are demanding full protection to all foreign capital and compensation in case of disruption, and also equal treatment to local and foreign capital. The implications of this provision would be that the host country would not be able to accord a more favourable treatment to the local enterprises over foreign enterprises, although a favourable treatment to the latter was not excluded. Though such a regulation is yet to be introduced, countries like India are already giving massive concessions to foreign companies, all in the name of attracting foreign exchange. With such a regulation in place, an Enron like dispute would immediately be settled in favour of the foreign company.

Besides all these regulations aimed at the backward counties, the US continues to utilize its Super 301 against backward countries, and has even introduced a new Byrd Amendment to protect its own business and trade interests. The WTO looks the other way.

The major reason for the new round not taking off are the serious contradictions between the US and the EU. Others also exist, like those with the third world countries, but their comprador rulers are more easily brought in line by wielding the carrot and the stick.

Except for Britain, and to some extent Spain, the European countries are no longer willing to play second fiddle to the US as in the post-war years. Today the EU and European big business have become a growing challenge to the US. Europe now seeks to assert its own independent imperialist authority throughout the world. For this it is even building its own defense force, independent of the US and NATO. The Euro has been floated as a common currency as a challenge to the dollar. In the process of this contention, during the last few years, the main area of conflict between the two has been in the realm of trade, particularly in agricultural commodities. Both sought to utilize the WTO to protect their own agricultural goods. This resulted in increasing clashes. This was the major reason for the collapse at Seattle in Nov.99. Till the recently held Geneva meeting in end July 2001 no agreement could be reached.

Next, there is the growing anti-WTO sentiments within the backward countries. The comprador rulers of these countries, are increasingly facing the wrath of the masses for having implemented WTO orders, resulting in the devastation of their lives. Since the signing of the WTO agreement in 1995 not only has it led to the ruination of the lives of the poor and middle classes, but also a section of the small bourgeoisie. The anger against the WTO like institutions have reached boiling point in many backward countries, forcing the rulers to make a show of opposition to the WTO, lest they lose their vote base.

Third the growing worldwide slowdown is aggravating all the above contradictions. The US economy, which accounts for 25% of world trade, is facing its worst crisis since the oil shock of the 1970s. With recessionary conditions growing the ruthless scramble for markets becomes more acute amongst the imperialist powers. This too will get reflected at the WTO. In addition, the imperialists always seek to push the burden of their crisis on to the backs of the backward countries of the world. This is reflected in the more aggressive policies of the Bush administration, and to be seen in its recent aggressive attitude for a new round.

In the run-up to the Doha meet, the US seeks to work out a temporary compromise with the EU, and gang up with the imperialists for a joint attack on the backward countries. Like the earlier Uruguay Round the proposed new round is aimed at tightening the noose around the neck of the third world countries. Let us look at the nature of the present conflicts within the WTO:

Ever since Seattle (and even before) the EU has been arguing for a comprehensive round of trade negotiations. It wants to expand its domain to newer areas such as foreign investments, national competition policies and rules for linking environmental questions to trade. The EU also wants to draw up new WTO rules that would monitor food with genetically modified organisms (GMOs). In most of these issues the EU is supported, hesitantly, by Japan. The EU vehemently opposes agricultural trade liberalization unless linked with their comprehensive agenda. As a rising imperialist power the EU requires a more comprehensive agenda that are not only targeted at the third world, but also items that help reduce the US’s tight control over world markets.

On the other hand, the US is not keen to take up issues like competition policy and environment protection. As far as the latter goes the US is the main promoter of GMOs throughout the world. Regarding the former, they do not want to see their existing world domination questioned. Giant American corporations that control world markets and zealously guard their interests, through means fair and foul, as Microsoft has done, would not like to see regulations that limit their spread. So, they quite naturally oppose the EU’s attempts at a comprehensive agenda, and seek to confine it to forcing open the markets of third world countries. The US therefore seeks to restrict it to a further reduction in industrial tariffs, further liberalization in the field of agriculture and services (including e-commerce) and transparency in government procurement (to facilitate the TNCs grab the public sector in backward countries).

So, in essence, while both the EU & US have a common agenda against the backward countries, the EU has the added agenda of seeking to dislodge the US from some of the world markets at its command. This is its ‘comprehensive agenda’.

A related point of serious contradiction is the intense conflict over liberalization of agriculture, steadfastly opposed by the EU. Liberalization of agriculture is being demanded by the US, the Cairns Group of agricultural exporting countries (who include Australia, Canada and Argentina) and supported by most Latin American countries as also India. This has been the most volatile issue at the WTO and has been one of the major factors for the crisis within it. With the crash in world agricultural commodity prices, tensions have been at flash point.

Finally there is the so-called ‘Like Minded Group’, which includes India, Pakistan, Malaysia, Indonesia, Egypt and Zimbabwe. This Group is opposed to a new round until the "implementation issues" are first settled. There have been 97 such specific proposals tabled since mid-1999, and till date a decision has been reached only on five relatively minor issues. The US and the EU now seek to block progress on the implementation issues by demanding that these issues be taken up as part of the new round of negotiations. This Group is particularly vehement against the EU agenda and much closer to the US position on most other issues.

Though the severity of the contradictions can once again wreck the WTO meet, the US, faced with a severe economic slowdown, is determined to push through a new agenda. The Bush administration has adopted a two-pronged approach — work out a compromise with the EU, and then jointly with them bully the third world into compliance. Their chief hatchet-man for this job is the notorious US Trade Representative, Robert Zoellick, who has been sweet-talking the EU and browbeating countries like India. This imperialist gangster has been the chief government official to push through the NAFTA accord, the Uruguay Round agreement, and for the creation of the APEC Group. Besides, during the Clinton years, he was the senior international advisor to the merchant bank, Goldman Sachs, and a vice-president of the TNC, Fannie Mae. He has all the right qualifications to be US imperialism’s Rambo at the WTO.

In furtherance of this goal, this man organized a joint article in the July 17 issue of the Washington Post, with his EU counterpart, Commissioner of Trade, Pascal Lamy. This article stated that trade disputes between economic giants are "inevitable", but added that the EU & US "can and must work together to launch a new global trade round in November". The US has since stated its willingness to consider limited negotiations on foreign investments and competition policies, which are a part of the EU agenda. The US’s desperation for a new round can be seen from a statement made by Zoellick, when he said "it wont be healthy if we failed to launch a new round at the time of a global slowdown".

A similar flexibility is not seen in the US’s attitude towards India and other backward countries. Though implementation issues have been consistently raised in the two years since Seattle, they have been basically ignored. During this year itself, the US hiked anti-dumping duties on steel, to such an extent, that India’s export of steel to it, has come to a standstill. When a high level delegation from India recently went to the US to discuss this issue they were even refused bilateral discussions. Such is the arrogance of this global super-cop.

It is in this background that the Doha meet is to take place. But, prior to that, the US called a meeting of 15 countries at Mexico, including India, to work out the framework of the new agenda for the WTO. At this meeting, there was a noticeable change in India’s stand, changing from "firm opposition" to "ambiguity" regards the new round.

The Indian government’s bombast of opposing the new round of WTO negotiations sounds like much hot air, given its past track record. Not only has it implemented with great enthusiasm every single instruction of the WTO, it has even reduced import tariffs well below the maximum allowed by the WTO. Six years of WTO dictated policies has ruined agriculture, destroyed much of small-scale industry, pushed millions into unemployment, and drastically cut welfare measures for the poor. Life-saving drugs have gone out of the reach of the ordinary people because of TRIPS/patent regulations. The already miserable conditions of the people have become intolerable. People’s anger at the WTO is understandable.

While all governments, at both the Centre and State level, cringe before the WTO/IMF/World Bank combine, the BJP-led government has proved particularly servile. In fact, even as brave statements were being made against the new round, the parliament passed the Plant Variety Protection Bill in order to adhere to TRIPS specifications. When it removed the last batch of QRs in April this year, of which half the items belonged to the category of food and textiles, it did so under US pressure well before the date demanded by the WTO. Both sectors now face severe problems due to cheap imports. Together they account for a huge rupees one lakh crores (or 5% of the GDP)of the domestic market. Of this, roughly Rs.48,000 crores ($12 billion) will be swamped by cheap foreign goods. This is a bonanza for the TNCs, and a cruel blow for the small producer.

To ward off the people’s anger against them all the political parties have, of late, been making noises against the WTO, but doing very little in the States where they run the government. So we see that the Punjab Assembly passed a resolution on the negative impact on agriculture of the WTO regime; the chief minister of Karnataka called for a radical review of the international trade arrangements; the CM’s of Haryana , Bihar and M.P. have raised their voice; and even that outright puppet, the CM of A.P. said that some corrective measures are necessary. But, all these CMs have been the most faithful lackeys of the imperialists in their respective states. The BJP too with its own diversionary tricks set up a so-called ‘Task Force on Agriculture’ to "asses the impact of WTO commitments".This high sounding Task Force, with that arch imperialist stooge,Sharad Joshi,as its head, has openly supported the WTO’s conditions for agriculture.But the most ‘radical’ of all are the statements come from the fascist RSS and their front outfits like the Swadeshi Jagran Manch (SJM). It has been demanding the withdrawal from the WTO. This is yet another subterfuge to cater to its so-called nationalist image. With its gigantic network throughout the country, it confines itself to mock actions and ‘radical’ sounding statements. Even if it did 1% of the number of actions it does against Muslims, one may have given its statements some seriousness. Besides, when it comes to concrete policy changes introduced by the government, it does little — all are allowed to pass without a whimper.

So we find that throughout the country there is growing anti-imperialist/anti-WTO anger and all the political parties are seeking to divert it with hollow rhetoric in order to prevent loss of credibility. The present ruler’s Hanuman-style chest thumping against the new round has to be seen in the above light. Much of the ‘implementation issues’ they are raising constitute the mere tip of the iceberg, where the imperialists have not even implemented their commitments to the WTO. This, though true, is to miss the basic question for the superficial. It is precisely the strict implementation of WTO stipulations, with its in-built biases, that are the chief cause of the problems of countries like India. In fact, it is the very implementation of the WTO regime by the developed countries that allows them full freedom to avoid any controls. The essence of the WTO regime is free trade for the third world, and protectionism for the imperialists! It is these double standards that need to be addressed, particularly by those who continue to mouth the mantra of free-trade day-in and day-out.

Besides, our chest-thumping Hanumans turn into squeaky mice in front of the imperialist overlord. Enter Robert Zoellick, and the entire political clan goes scurrying around, begging for attention. In the mere course of three days, the entire ministerial pack, from the PM downwards, paid their respects to this Western gangster. He speaks as from the pulpit, issuing threats and handing out bribes to achieve his goals. He threatens, that to harp on opposing a new round will lead to isolation in the international arena. Panic-stricken, for one month after his departure our ministers try to prove how they are not isolated. Except on the implementation issue, they suddenly find that they are in full agreement with the US. The PM now shamelessly declares, "I would like to emphasise that India is prepared to engage constructively and with an open mind on all issues relating to global trade". Happy with this response, Zoellick offered the bribe by announcing restoration of the duty free benefits to 42 Indian good — the benefit was removed on 100 items some time back, but the present waiver does not include any of the contentious issues like garments and steel. But, simultaneously he gently reminded that the US is India’s largest trading partner, and any displeasure to the boss can seriously affect Indian exports.

And before Zoellick left, he got the Commerce Minister to sign a deal to set up a trading policy group jointly chaired by the USTR and the Indian Commerce Minister. It was decided that this group will meet frequently in the next 12 weeks — i.e. in the weeks leading up to the Doha meet.

The Indian rulers raised the issue of a new round as merely a bargaining point, to extract some concessions for India’s comprador bourgeoisie. But in this game of unequals, each concession granted is made up ten-fold by greater and greater demands. The decade of globalisation has shown this. The imperialists give an inch only to extract a foot.

Till now the US & EU have agreed for a new round, but they have not as yet agreed on the agenda of that new round. Given their desperation for extending their markets, caused by the severe economic slowdown, they may even work out a temporary compromise. In that case the new round will come into being no matter what the reservations of the backward countries, including India. But even if a compromise formula is worked out it is bound to be temporary, for as the contention between the imperialists grow, multilateral agreements will give way to bilateral agreements, slowly coalescing into imperialist blocks.

The present recession, though it may force an immediate compromise between the major imperialist powers, if dragged on, will result in intensified contention for markets between them, leading to the collapse of the WTO. Already regional trading blocks have come into being with the NAFTA, APEC & EU; and a number of forums like the Shanghai 5 are propping up. In addition, with growing contention, bilateral trading agreements between the major imperialist powers and various countries will get precedence, diminishing the role of a WTO type body.

Today it is the US superpower that dominates the markets of the world. But this is on the decline with the EU, and to a lesser extent Japan, already posing a challenge. Russia too has its small remaining enclaves, which it protects as far as it is able. At present though, the major threat to US dominance comes from the EU, which if able to maintain its unity, has the ability to challenge US markets (economically, not militarily). Minor trade differences between the two, may be settled by the disputes settlement board of the WTO, but anything major will prove difficult. Already the banana wars and clash over beef between the two proved almost impossible to settle. This is an indication of what is in store for the WTO, in the future.

Meanwhile, the WTO will be jointly wielded by the imperialists against the backward countries of the world. With servile comprador governments ruling in all these countries, they will be able to extract concession after concession through a combination of bribes and threats. But as the inter-imperialist contradictions enhance these rulers will align more and more with one or the other major power whence bilateral agreements will supersede the WTO charter. This too will further its demise.

Finally, the major victims of all the WTO agreements will be the masses of the world, particularly those of the backward countries. Seattle has shown that it was the people who have been in the forefront fighting the WTO. In India too it is the masses, particularly the peasants and the workers who have been fighting against the impact of the WTO policies by successive Indian governments. As the revolutionaries have limited strength, the leadership of these struggles invariably fell into the hands of the revisionist and other reactionary leaders, and the movements were thus betrayed. But it is not sufficient to merely fight against the impact of these policies, it is necessary to fight direct against the very cause — i.e. against imperialism, and particularly their comprador agents within the country. It must not be merely a struggle limited to the economic and social impact against these policies, but a political anti-imperialist struggle for genuine independence and freedom. It is only then that the struggle will gain momentum and grip the masses as a liberating force.

Let the masses arise to kick out not only the WTO, but all the imperialist vultures, and smash to pieces all their local agents within the country.

September 10, 2001

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