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Al-Ahram Weekly 17 - 23 February 2000 Issue No. 469 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 17 - 23 February 2000 Issue No. 469
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Focus Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Upping the ante
By Ibrahim El-Issawy*
The now-infamous third ministerial conference of the WTO, which met in Seattle from 11 November to 3 December 1999, failed in its objectives -- that much is certain. The meeting resolved none of the outstanding problems on the agenda and failed to set a date for a new round of trade negotiations along the lines of the Uruguay round that ended in December 1993.
In general, anti-globalisation forces -- particularly those opposed to further trade deregulation -- succeeded in checking the push for faster and more comprehensive expansion in the scope of globalisation. The credibility of the WTO was dealt a powerful blow as the spuriousness of many claims regarding the effectiveness, fairness and openness of the global trade system was exposed. Finally, developing nations gained some breathing space to study the issues at hand and to coordinate strategies for future action.
It is difficult to speak of success in more specific terms. The groups that thwarted the Seattle conference voiced a hodgepodge of diverse and often conflicting interests. Certain groups, representing or sympathising with developing nations, pushed for freer access of Third World products to the markets of industrialised nations. Other groups argued for stricter barriers against these same products. Some groups opposed environmental restrictions on the exports of developing nations, while environmentalists came out in force to urge tougher controls on these exports.
The EU and Japan held their ground against further reductions in their agricultural subsidies, and fought against higher levels of American agricultural imports and American genetically-engineered produce in their markets. The US, in turn, remained adamant in its rejection of the EU demand to place issues such as investment and competition policies on the conference agenda. Meanwhile, a variety of NGOs and intellectual and political figures demonstrated vociferously on behalf of labour rights, child rights, consumer rights and human rights in general.
The preponderant opinion maintains it was the broad conglomeration of grassroots forces -- mobilised around the world by the Internet -- that precipitated the failure of the Seattle conference; but an alternate view suggests that the breakdown was in fact caused by a face-down between the major industrialised nations themselves. Proponents of this latter view argue that although developing nations had plenty of grounds for grievance, their objections would have had little audience had the "big boys" settled their scores before coming to Seattle. Proponents of the former view counter that while developing nations are no longer the homogenous entity they formed in the 50s and 60s, they nonetheless had an undeniable impact on events in Seattle.
For those seeking to redress the imbalance in the international trade system, euphoria is premature. While the events in Seattle constituted an effective cry of defiance, developing nations should not overestimate whatever appreciation or recognition they may have won. So-called grassroots forces in these countries are still weak, or, at best, latent. Even if we submit that these countries had prepared themselves adequately, such preparations took place behind closed doors; little attempt was made to apprise the public as to the substance of the issues at hand. As a result, it was impossible to rally public opinion in developing nations behind their negotiating delegations in Seattle.
This assessment certainly applies in the case of Egypt and other countries of the Arab world, where no effort was made to sufficiently enlighten the public in a manner that would stir up a movement in defence of Egyptian and Arab interests. Governmental and non-governmental organisations, academic research centres, and even the media remained largely dormant in this regard. In short, the Arabs were taken as much by surprise by the events in Seattle as they were six years ago with the conclusion of the Uruguay negotiations -- the consequences of which they were not equipped to handle.
Whatever successes were scored in Seattle, it marks but one battle in a protracted war. The message heavily underscores previous warning tolls, the most significant being the financial crisis in Southeast Asia in the summer of 1997. Preparations for future engagements will require creating a powerful negotiating position, and the opportunities for this are now more propitious than ever before.
Agreements signed by developing nations within the WTO framework reflect the circumstances, and specifically the lack of parity, under which they were made. At the time of the Uruguay negotiations, the nebulous "developing world" was fragmented and incapable of organising a united front. Most Third World countries were crippled by foreign debt and internal structural deficiencies. Many countries were forced to accept the harsh terms set by the IMF and World Bank in order to alleviate, if only temporarily, their heavy burden of debt and buy a brief respite. Needless to say, the interests of the North constituted the primary terms of reference in formulating the agreements.
Now, however, the tables have turned somewhat. Developing nations are in a position to demand that their obligations under the WTO framework be subject to review. They can hold out for extended grace periods, the abrogation of certain terms, preferential treatment, and perhaps the indefinite postponement of the application of environment and labour provisions. This is not because the circumstances of developing nations have radically improved. When developing nations capitulated to the pressures of the major capitalist countries and signed the Uruguay round agreements, they hoped that the industrialised nations would open their markets to third world exports, thereby stimulating domestic production and growth. The opposite occurred.
Developing nations lifted trade barriers and found their markets flooded with imports from the North. Having fulfilled their side of the bargain, the developing nations began to realise that the North was reneging on many of its pledges, such as lifting barriers against Third World exports, furnishing assistance to those developing nations that are net importers of food, and facilitating the transfer of technology.
The record of the industrialised nations under the General Agreement on Tariffs and Trade (GATT) is a lengthy list of unfulfilled obligations, retracted promises, breaches and evasions of agreement terms and excessive and arbitrary recourse to exemptions. If the US still reserves for itself, under section 301 of the US Trade Law, the sole right to deter and punish those who threaten its commercial interests, it seems only fair that less powerful nations claim the right to seek revision of those provisions that impede building market competitiveness.
The underlying cause of dispute between the developed and developing worlds in the WTO rests in the former's drive to impose a unified system of rules for regulating international trade on all WTO members. This approach ignores the great disparities in levels of development. It is hardly fair that the least developed countries should be expected to enter a race with economic powers when the results of that race are a foregone conclusion. Why should developing nations be deprived of the tools industrialised nations used to build their own economies?
Developing countries should demand some form of preferential treatment within the WTO framework granting the opportunity to implement measures that support the growth of production and export trade. Such preferential treatment cannot merely be an exception, but rather it should be the general rule applied to compensate for disparities in the phases of social and economic development. In practical terms, this linkage between obligations, on the one hand, and the level of development and competitive capacity, on the other, could be indexed to the per capita income, the poverty ratio, and the levels of industrial structural development and technological advancement.
Naturally, preferential treatment and protectionist measures alone do not guarantee development; they serve to furnish policy-makers with the opportunity to develop a country's economic structure, its technological bases and its human resource capacities. For progress as such, freedom from the anxieties of an unevenly matched competition with the world's economic powerhouses is vital, but it is also a crutch; protective arrangements should be temporary, and gradually phased out with a clearly delineated timetable.
In the Arab world, cooperation and regional integration constitute an important avenue towards the collective development of Arab competitiveness as a whole. Article 24 of GATT offers the opportunity to create an Arab regional grouping that would guarantee Arab products a certain measure of protection against unfair competition. Not only would the establishment of such a grouping improve the Arabs' negotiating position, but by coordinating effectively with other developing nations, the prospects of securing preferential treatment are greatly enhanced.
* The writer is professor of economics at the National Institute for Planning and principal investigator of Project 2020 at the Third World Forum's Middle East Office in Cairo.
