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HUMAN FACE TO GLOBALIZATION - A PIPEDREAM WITHOUT WTO REFORM

by Someshwar Singh


Geneva, 16 Dec 99 -- As a chorus of leading voices from around the world calls for globalization with a human face, there appears to be a deafening silence on the part of those who currently benefit the most to more equitably distribute the spoils of the globalization process.

In fact, many shades of diplomatic language are used to describe just how de-humanizing the trend of current globalization is. In essence, it is agreed that economic disparities between nations and within them have deepened and poverty has increased while the rich have become richer.

In short, the current world economic order is simply unfair and unjust.

Voices calling for reform of the current world economic order have been heard many times over in the United Nations system. But what made the UN General Assembly debates this year in the Second Committee (economic and financial) more interesting is that it was calling for a reform of the multilateral trading system even as the World Trade Organization was rushing with its half-baked agenda for 'more free trade' to Seattle.

In a sense, the UN General Assembly debates, at the close of the 20th century, provide an independent assessment (as distinct from the imbalances pointed out by the trade diplomats) of just how lop-sided the management of the globalization process has been. More importantly, they show clearly that the faith of the developing countries in the multilateral trading system has been badly shaken. Perhaps, it was the despondency of the ministerial delegations from developing countries, reportedly sick and tired of smart maneuvers by the rich club, that even led to open collective rebuke against the chair in some official meetings at the Seattle Ministerial conference.

It appears fairly clear from the Second Committee debates that if developing countries must constantly be on the defensive in future trade talks at the WTO, that would be no good - neither for multilateralism nor for the further expansion of 'free trade'.

Key issues of concern, voiced not just by the developing countries, are "equity" and "balance" in the way the world trade is organized and the manner in which the world trading system is functioning. Such concerns are not really disputed by the developed world. In fact, a few months prior to the Seattle meeting, it was Clare Short, the Development Minister of UK, who had actually suggested that the new round of trade negotiations should be a development round, though she used it to argue in favour of new rules on investment.

At the recent UN General Assembly, speaking on behalf of the Group of 77 developing countries and China, S.R. Insanally of Guyana said that development and the concerns of developing countries must be a central focus of any new round of trade negotiations.

"Such a focus was essential to building an open international trading system, whose benefits were equitably distributed," he said. "Given the imbalanced impact of globalization, and specific aspects of a number of the agreements that had been concluded in the context of the Uruguay Round, many developing countries continued to have a vital stake in a revision of the impact of those agreements."

Insanally noted that "the concentration of trade negotiations within the WTO had also tended to introduce a preoccupation with international trade rules and their enforcement -- instead of a concern about their development impact and the equitable distribution of the economic benefits deriving from the process of trade liberalization."

He added that there was a growing consensus that some of the current approaches to trade liberalization had had a negative impact on a number of developing countries. That situation would need to be corrected through the adoption of a more balanced policy framework, he said.

Speaking on behalf of the European Union and a number of other neighbouring countries, Richard Wyatt, observer for the European Community, agreed that "there was a need to ensure that an appropriate balance between further liberalization of trade and the strengthening of multilateral rules contributed to the reduction of poverty, environmental protection, social progress and consumer health."

"In taking those concerns into account, the WTO would be better able to respond to the challenges resulting from rapid and fundamental economic and technological change," said Wyatt.

It was important to ensure that the new round of trade negotiations responded to the particular interests and concerns of developing countries, he said, and that a development agenda was reflected in all areas of negotiation. "The developed countries should be open to consider constructively, as part of a comprehensive package, proposals from developing countries aimed at their fuller integration into the multilateral trading system. That would include proposals to make special and differential treatment more operational and to improve market access in areas of interest to developing countries."

Michael Gallagher of the United States observed that "for the world trading system to have legitimacy, the family of nations that benefitted from trade must be expanded."

Increased trade opportunities would stimulate economic growth in developing countries, he said. "However, that alone would not be enough to ensure that all countries achieved environmentally sustainable development, or that the benefits of the global economy would be internally realized. Governments must play their part in creating the necessary conditions through their domestic policies to promote competition, encourage foreign direct investment and stimulate the private sector."

Speaking on behalf of the Association of South-East Asian Nations (ASEAN), Asda Jayanama of Thailand said there was a need to work vigorously to restore the faith and confidence of the developing countries in the multilateral trading system. Existing imbalances in the multilateral trading and financial system, which created asymmetries and biases against developing countries, needed to be addressed, he said.. He said that the new round of trade negotiations should adequately address the concerns of developing countries for effective implementation of the special and differential treatment provisions of the WTO Agreements.

Mauricio Escanero of Mexico, speaking on behalf of the Rio Group of Latin American countries, said that improved market access was essential if a multilateral fair trade system was to be established. Only then would the new round truly merit the name "development round." It was essential, he continued, that every effort be made to comply with the Ministerial Communiqu‚ issued by the Economic and Social Council to improve the market access of developing countries.

"The use of peak tariffs and tariff escalation, which impeded access in the agriculture sector in particular, must be stopped," the Mexican representative said. "In addition, to improve the access of developing countries to the international market, anti-dumping laws, which were being increasingly used as disguised protectionist measures, must be stopped. Especially detrimental was the resort to subsidies on the part of industrialized countries, which severely distorted free trade."

Similar sentiments were expressed by Kwabena Ocei-Danquah of Ghana. He said it seemed that the prescriptions for free trade and the market applied only to developing countries. Certainly, they had been wielded with conviction only by developed countries in areas where they dominated world production and distribution.

"The exploitation of ambiguities and loopholes in the use of anti-dumping procedures, as well as unilateral imposition of health and safety standards which targeted developing countries and countries with economies in transition, had added to the lack of balance in the assumption of trade obligations under the Uruguay Round," he added. "It was the same with the application of quotas and voluntary export restraints. The special and differential provisions of the Multilateral Trade Agreements remained a best endeavour commitment, and unless they were operationalized, their benefits would remain largely on paper."

Chandresh Kumari of India said that many developing countries were today more committed, in letter and in spirit, to a rule-based multilateral trading system than major developed trading partners, for whom unilateralism had always been an alternative and a temptation.

The WTOs rules and regimes in new disciplines, such as the protection of Intellectual Property Rights, had been unbalanced, she pointed out. "A high premium had been placed on industrial innovations and patenting; little had been done to afford the same protection to biodiversity and traditional and indigenous knowledge that constituted the base of the biotechnological revolution in agriculture and pharmaceuticals. Much of that technology was often derived from biogenetic resources and indigenous traditional knowledge in developing countries."

Jean Maxime Murat of Haiti observed that the sense of living in one big village had permeated the human conscience -- but the inequalities were becoming shocking. The planet was like a ship with first-class passengers, second-class passengers and those in the hold. To prevent that ship going down with all its passengers, collective action was necessary, he said.

Sonia Leonce-Carryl of Saint Lucia said there should be fairness in the World Trade Organization (WTO). "If globalization continued to go unchecked, the results would be the increased undermining of the sovereignty of states and of the rights and liberties of peoples followed by global instability and chaos. The present unbalanced system was inherently self- destructive. It could only end in devastation unless there was global participation and benefits to all, based on equity, ethics, inclusion and the development of all the people of the world."

The representative from Saint lucia added that there was an increasing concentration of income, resources and wealth among a handful of people, corporations and countries -- while more than 80 countries still had per capita incomes lower than they were a decade ago.

Nuno Tomas of Mozambique said that far from leading to increased interdependence, globalization had resulted in overdependence of developing countries on developed countries aid, markets and finance. "For developing countries to play a meaningful role in the globalization process, their development concerns and access to the world market should be properly addressed. The scourge of underdevelopment could shake the very foundations of the current system"

Globalization should be a multilane highway, benefiting all parties and stakeholders, observed the delegate from Bhutan, while the Oman delegate said that while markets needed to be liberalized, but liberalization should not be a tool for ruining the economies of developing countries.

The first reaction to the Seattle debacle from the WTO secretariat itself came from its Director General Mike Moore. He said he was disappointed but not dismayed. So, he kind of feared it may happen but hoped it would not happen that way? But the world was surprised. That was evident from the thousands of news dispatches which tried to unravel what exactly went wrong with writing more rules for the international trading system.

It remains to be seen whether the WTO will undertake any fundamental reforms not just to close the fissures within the organization but to heed to calls being made on it from other international fora which are charged with the responsibility of guiding human development - as opposed to looking at the rather restrictive, narrow spectrum of trade benefits .

For the sake of healing and repair, WTO's next steps will, indeed, need to be cautious as the images from Seattle have suddenly turned many more millions of inquisitive eyes on to the Geneva-based organization. (SUNS4575)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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