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.