Collapse in Cancún
The mid-September failure of the World Trade Organization's ministerial conference in Cancún was widely cheered on the left. A Global Exchange (GX) press release described it as a "failure...for the giant transnational corporations that are manipulating the trade agenda to engineer a power grab that will dramatically reduce the strength of democratically elected government." GX's Kevin Danaher celebrated a new alliance between NGOs and Third World governments, spurred on by protesters snipping open the fences insulating the delegates.
I love the movement behind those protests and consider myself part of it. I was in Seattle in December 1999 and contributed to this magazine's coverage. It was one of the most exhilarating weeks of my life. Finally, the abstractions of global capitalism had a home address where protests could be sent. But after the wreckage at Cancún, we need to think about a few things.
As the results of the ministerial show, the WTO was never really the institution its critics said it was. From the outset, it wasn't really dominated by big capital in the rich countries. It's a one-country, one-vote system, like the UN's General Assembly. The rich countries, especially the United States, don't like this arrangement. They prefer the Security Council, with its big power vetoes. The United States is especially fond of the structure of the International Monetary Fund and World Bank, where votes are weighted roughly by GDP, giving the United States a 17 percent share of the vote and an effective veto. The rich countries finance the various institutions in revealing ways. At the Bank and Fund, both salaries and headcounts are high. The WTO has a small staff that's engaged in industrial action over pay and working conditions. As Columbia University economist Jagdish Bhagwati points out, the WTO's entire budget is smaller than the IMF's travel budget.
What might a weaker WTO mean? There was no sign of disappointment coming from the Bush Administration: US Trade Representative Robert Zoellick was quite optimistic after the talks collapsed. Zoellick hopes to induce a regime of what he calls "competitive liberalization," with countries eager for access to US markets fighting among themselves to please Washington. The US government is happy to negotiate separate deals with individual countries; it's always going to be the stronger party in any bilateral conversation. A weaker WTO will only stimulate the Bush Administration's unilateralist lusts. One of the organizers of the Cancún demonstrations told me people in the streets knew that what they were doing would strengthen the United States, but they wanted to damage the WTO regardless.
There are some contradictions within the coalition listed in the GX release. Big capital may want to grab power from elected governments, but it's a little odd to set governments (good) against the WTO (bad). After all, the trade ministers themselves are representatives of those elected governments. If those governments can't be trusted to do good things through the WTO, why should they be trusted to do good things on their own? Surely the records of most national governments are less than inspiring.
Not all governments are thoroughly awful; there are even a few good ones, like--one still hopes despite IMF- and market-friendly policies--Lula's in Brazil. Along with China and India, Brazil was one of the leaders of the Group of 21 (which has since expanded to twenty-two), the alliance that challenged the rich countries and brought the talks to deadlock. The G22 (or, as some are now saying, the G20+) objected to US and European Union insistence on liberalizing investment and government procurement rules and to the rich countries' refusal to reduce their agricultural subsidy programs.
In two appearances in New York--before a labor-friendly audience at the Cornell Club and before the ruling class at the Council on Foreign Relations (CFR)--Lula emphasized his efforts to build links among the "developing countries," starting with his South American neighbors and moving on to Africa, the Middle East and Asia. The potential members of Lula's alliance have different interests and inhabit different roles in the world economy, but it's a move that could upset a few apple carts.
Lula spoke not only of trade deals but of deeper technological, political and cultural links among the Southern countries as well. Before the labor audience, he likened international politics to labor negotiations: One worker alone is nothing, but with a union, workers can challenge the boss. And he emphasized how it was important in those fights with the boss not to hang your head but to act strong and proud. (The next morning, Lula kept the CFR audience waiting for more than half an hour; an annoyed Mort Zuckerman was overheard complaining to Paul Volcker, "But I have an 11 o'clock meeting!") No doubt Zoellick would not be pleased to see Brazil and its twenty-one colleagues pressing their case within the WTO; better that it be marginalized by the game of competitive liberalization.
One of the 22's demands was that richer countries reduce their domestic farm subsidies and open up to G22 agricultural exports. At the same time, farmers in South Korea, a relatively rich country, were among the most vigorous of the protesters, with some activists praising the suicide of Lee Kyung-hae, who raised cattle on a small, snowy mountain plot. The only thing that kept the farm going was trade barriers; once Seoul opened up to Australian beef imports, the enterprise was doomed. Rice and other crops are grown on similarly difficult land; crops are expensive and often of low quality. Only vigorous protection makes such agriculture viable. But those are exactly the kinds of barriers the G22 want dismantled. Yet in protest discourse, the Korean farmers and the G22 were treated as part of the same struggle.
Which raises a question: What is progressive about using public resources to support farming on cold, snowy, mountainous land? Isn't the benefit of trade exactly to address something like this? South Korea isn't an impoverished country whose population is dominated by a peasantry that would be ruined by opening up to food imports--it makes cars and cell phones. Why shouldn't South Korea import food?
When you say things like that, it's often assumed that you want to turn over world agriculture to Monsanto and Cargill. It's as if the only two choices in the world were an embattled tradition and big agribusiness, as if it were impossible to reimagine technology and trade in more humane, progressive ways. Korean farmers and NGOs also complain about subsidies paid to US and EU farmers, which provide cheap food that can be dumped on high-cost producers. They have a point; it's perverse that rich-country subsidies--which heavily benefit big agribusiness by cheapening raw inputs--drive Korean farmers to suicide rather than feed the world's hungry. But are "progressives" against rich-country farm subsidies? It's not something activists like to talk about, and they have no clear answer to the question.
The movement that had its coming-out party in Seattle rarely speaks about the economic arrangements it would like to see. It's quick to say "No!" (a reflex I'm pretty accomplished at myself). It's often quick to invoke language defending national sovereignty and self-reliance when we should really be looking for a more egalitarian and cooperative world, of which trade can be an important part. It's too quick to read international economic relations as part of a general "race to the bottom" that doesn't really exist. Wages in the United States are higher than when NAFTA took effect, and incomes have also been rising in Western Europe and much of Asia, regions that are deeply involved in world trade. The most troubled part of the world is Africa, a continent that is substantially underrepresented in global trade and capital flows. That's not at all to say that freer trade is always better; it is to say that we need to think and talk more carefully about these things.
Of course, the political and emotional urge behind the "No!" is the desire to protect people and nature from the traumas that typically come with capitalist development. But erecting barriers to trade may be the wrong strategy. Instead of tariffs and import restrictions, which can pit workers in rich countries against those in poorer ones (is it OK to put a Brazilian steelworker out of work to preserve an American job?), why not generous income support and retraining? Why not shift the focus from protecting the job to protecting the worker?