Birthday party that hosts didn't plan

The attempt by the WTO to use the occasion of its 2nd Ministerial Conference to celebrate the 50th anniversary of the GATT and of the multilateral trading system turned out to be a fiasco. Apart from protests by grassroots, environment and development movements, the UNCTAD Secretary- General also reminded the gathering that the grim reality of global mass unemployment, job insecurity and acute inequality can no longer be ignored.

by Chakravarthi Raghavan

GENEVA: It was a birthday party where things did not exactly work out as planned. And it was a party where the star performers were those who had been sought to be ignored or sidelined.

The star performer among the Heads of State/Government participating was not that of the founding member, the world's "most powerful" President, who came waving the free-trade and democracy banner to push his neo-mercantilism, but another who does not claim to practise free trade.

It was Cuban President Fidel Castro who stole the show and received the most applause inside and outside - not US President Bill Clinton, who had even tried to avoid mingling with other Heads for the celebration, by coming a day early. But Castro was in the audience.

Castro got more applause and cheers from the entire hall than Clinton, one Third World Trade Minister, India's Ramakrishna Hegde, told newsmen, in trying to duck some more difficult questions on the two.

But the Hegde view was one that was even more striking for those who watched the proceedings on TV screens.

Seeking legitimacy

The party had been planned by the three-year-old World Trade Organization (whose treaty was signed at Marrakesh in 1994, and came into being on 1 January 1995) to grab a 50- year-old lineage and establish "legitimacy" by hiding its own parentage.

And for this, the WTO produced a history ("The Multilateral Trading System: 50 Years of Achievement") in three languages - a piece of selective writing and re-writing of the past, almost like the constant revisions of history so blatant in the Stalinist era of the Soviet State, when the roles of Marx, Lenin and Stalin himself had to be constantly changed - a trading system's history which one has to read carefully between the lines to realize what was left out and what was presented differently.

And the institution that provided some lineage and any legitimacy to the "birthday child" within the international system, a last- minute addition to the speakers' list, came to remind the governments and institutions inside that there was a world outside (a noisy protesting world of the jobless and the marginalized, which had to be barricaded out for the duration of the three-day meet of the WTO) which was the reality that had to be faced and catered to.

The "celebrations" had been planned by the WTO, which is trying to strut about, with two other institutions that have currently no legitimacy, to establish a new order, the neo- liberal order which has never been specifically put up for a vote to the people, but the opposition to which is described variously as undemocratic and comprised of a minuscule minority of communists, Marxists and leftists.

The WTO, whose treaty was so drafted that there was no "continuity", in terms of international law, with its predecessor, the General Agreement on Tariffs and Trade (GATT 1947), and which (with support from several developing nations too) refused to be part of the UN system (as mandated on its members by the UN Charter which binds them all), is still trying to pretend it is part of a continuum and part of the post-war order, and that it is somehow more legitimate than the United Nations.

Though the WTO-organized 50th anniversary celebrations of the multilateral system were held in the Palais-des-Nations complex of the United Nations, the UN Secretary-General, Kofi Annan, had not been invited; and though a legitimate "observer" at the Ministerial Conference, the Secretary- General of UNCTAD, Mr. Rubens Ricupero, was invited to speak only at the last minute - when the powers that be at the WTO began hearing the "murmurings" among the developing nations and their loud thinking on "disrupting" the party in some way, but in a more diplomatic and staid manner than practiced by the "rude" young and not- so-young outside, who came demanding to be heard and had to be barricaded outside.

"The United Nations," Ricupero reminded the WTO's "celebrative" meeting, in a speech on behalf of Annan, "is not just one among many observers: it is the major source of legitimacy in the international system, and the cornerstone of the system of international organizations."

The UN was the political and legal framework within which the event being commemorated took place, he said. The GATT agreement was drafted and negotiated within a UN Committee, and concluded as an annexe to the International Trade Organization approved at the Havana Conference in 1947, the UN Conference on Trade and Employment. And though the ITO never came into being, it was the UN which convened that conference, provided it with preparatory support, and later supplied the staff to form the first GATT secretariat, (and) the GATT became the cornerstone around which the multilateral trading system was built.

"Festive atmosphere"

After providing a brief history of that period, encompassing the founding of UNCTAD, the Havana Conference and its goals of trade and employment, and the belief of statesmen and economists that full employment could be achieved, a goal that has now been virtually abandoned - with 25 million jobless in the OECD countries and hundreds of millions in the developing world, and inequality not reduced within and among nations - Ricupero had some hard truths for the Trade Ministers and the few Heads of Government there, and the WTO officials and promoters:

"Trade," he said, "is certainly not to blame for the failure of the 20th century to solve this burning problem. But, at a time of global trade liberalization, the existence of mass unemployment, job insecurity and acute inequality undoubtedly has had something to do with the malaise - even backlash in places - against trade and investment liberalization that we have noted in various quarters. Such preoccupations have shown their face in such diverse fora as the US Congress' debate on 'fast track', the OECD negotiations on a plurilateral investment agreement, and the protests and demonstrations of recent days here in Geneva."

"No one should be fooled by the festive atmosphere of these celebrations," Ricupero said in a last-minute addition to the prepared speech - words perhaps that Heads of Government and Trade Ministers and officials should put up on their walls or desks to remind themselves every day. "Outside there is anguish and fear, insecurity about jobs and what Thoreau described as a 'life of quiet desperation'. That is also part of the reality as much as the impressive achievements of global liberalization.

"It is the sacred duty of the United Nations system, the WTO and the Bretton Woods institutions, to create reasons to believe in the future and to give people back sound reasons to hope."

Skewed history

The "official" history of the MTS produced by the WTO, in its introductory observations, cited two ideas as underpinning the "success" of the system over the years:

First, a belief in an open international trading system and economic order as the foundation of a new political and security framework; and

Second, stability and predictability in international trade relations through a mutually agreed system of rules binding on all member-governments and enforceable through dispute settlement. The goals and objectives enshrined in the Havana Charter after long deliberations, were not worth mentioning in this context for the official historians.

The centrepiece and guiding idea of the system is mentioned as "non-discrimination", and the history goes on to mention the growth of world output and trade, and modestly attributes only part of income growth, job creation and prosperity to the success of the MTS in lowering trade barriers in successive trade rounds and increasing developing-country participation in world trade and the system.

And the official history would have it that while the reasons for the rejection of the Havana Charter by the US Congress were complex, one of them was that its "comprehensiveness" was before its time, and there was disquiet about the role implied for governments and the "challenges" that state activism would impose on efforts to secure constructive international cooperation at a time when rapid results were of the essence.

With these words, the official historian has swept under the carpet not only the Keynesian economic theories that underlay Bretton Woods and Havana, but also the activist, interventionist state roles in the US under Presidents Truman, Eisenhower, Kennedy, Johnson and Nixon - or the European welfare states and the Japanese varieties.

As an official history, it fails to record, even as a footnote, that from the time the developing countries tried to come on the scene, the system's "centrepiece" of non- discrimination was given up for "authorized departures" of discrimination against the developing world - starting from the short-term textiles agreement in the Dillon Round, through the long-term one and then the Multifibre Agreement (MFA) of the Kennedy, Tokyo and Uruguay Rounds, and legitimized and extended till 2005 through the WTO.

But legitimacy (and lineage) is sought (in the official history) for discriminatory and enterprise-level protection through anti-dumping and other laws, by references to earlier efforts to negotiate such rules.

In the new order, after the tearing-down of the Berlin Wall and the implosion of the Soviet system, economists elsewhere used to say that the only place where a monolithic public view is required is in the IMF. They can now add that rewriting of history has not been abandoned either. (Third World Economics No. 184/185, 1-31 May 1998)

Chakravarthi Raghavan is the Chief Editor of the South-North Development Monitor (SUNS).