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The revolt of developing nations

The street protests by civil society and US-EU differences may have played a part, but the main factor that torpedoed the Seattle talks was the non-transparent and undemocratic nature of the WTO system, which many developing countries could no longer tolerate. The WTO Ministerial imploded from within.

by Martin Khor

IT was an amazing week. In Seattle, the contradictions of globalisation revved to a climactic conclusion. At the end, the WTO Ministerial Conference that was supposed to launch a new round collapsed, suddenly, in almost total chaos, like a house of cards.

There is no new round, no Seattle Declaration, not even a brief joint statement to thank the hosts or decide on the follow-up process.

In the aftermath, there will be many theories and analyses on what happened. Some will focus on the protests by civil society groups representing labour, environment, consumer, pro-poor and Third World concerns. There were also the 'direct action' activists who blocked delegates' access to the opening ceremony, which had to be cancelled.

Coming of age

The main message of the protestors was heard loud and clear, that the WTO has gone much too far in setting global rules that 'lock in' the interests of big corporations at the expense of developing countries, the poor, the environment, workers and consumers. The impact of grassroots protests against globalisation, already evident in the campaigns against the Multilateral Agreement on Investment (MAI) and against genetic engineering, had its coming of age in the street battles of Seattle. Some will also pinpoint the inability of the US and the EU to bridge their differences as the immediate cause of the collapse. This was, of course, a significant factor. The two giants of the trade system were striving for a compact in which the EU would agree to significantly reduce their agriculture subsidies, and in return the US would agree to start negotiations on new issues like investment and competition.

As a last chip, the EC also threw in its support to the US to form a WTO working group on biotechnology, but this fell foul of the European Environment Ministers who objected to the EC's move, for which they said the EC had no mandate. This open spat between the EC and the Ministers further muddied the last-ditch attempt of the EU and the US to agree to a new round.

Non-transparent and undemocratic

However, the more basic cause of the Seattle debacle was the non-transparent and undemocratic nature of the WTO system, the blatant manipulation of that system by the major powers, and the refusal of many developing countries to continue to be on the receiving end.

The seeds of the North-South battle were sown in Geneva in the weeks before Seattle. Developing countries voiced their disillusionment - that five years after the WTO's creation they had not seen any benefits. Worse, the poor countries face potentially enormous dislocation when they implement their obligations arising from the WTO's many agreements.

They put forward dozens of proposals to resolve the 'problems of implementation' of the WTO agreements, including changing some of the rules. But most of their demands were dismissed by the major powers that, instead, pushed for their own proposals to further empower the WTO through introducing new areas such as investment, competition, government procurement, and labour and environmental standards.

The developing countries, in general, opposed these new issues which they saw would open up their markets further to the rich nations' big companies, or would give these rich nations new protectionist tools to block Third World products from entering the North.

Worse yet, the WTO secretariat was used by the major powers to engage in non-transparent procedures, such as holding informal meetings on crucial issues in small groups to which most developing countries were not invited. These so-called 'green room' meetings infuriated the Third World members of the WTO. At Seattle, in contradiction to her promise to run a transparent meeting, the US Trade Representative Charlene Barshefsky presided over a totally undemocratic process. She announced on the second day her 'right' as chairman of the conference to use procedures of her own choosing to get a Declaration out of the meeting, a statement that infuriated the developing-country delegations.

Barshefsky and the WTO Director-General Mike Moore set up several 'green room' meetings, some running simultaneously, on key issues of disagreement. Only 10 or 20 countries (the major powers plus a few selected developing countries) were invited to a typical such meeting.

Shutout

The plan of the organisers was to get the major powers (mainly the US and the EU) to agree among themselves, then apply pressure in the green rooms on a few influential developing countries to go along, and then pull together a Declaration to launch a new round which all members would be coerced to accept in a special meeting on the last day.

The vast majority of developing countries were shut out of the whole green-room process. They were not even informed which meetings were going on or what was being discussed. Ministers and senior officials of most developing countries were left hanging around in the corridors or the canteen, trying to catch snippets of news or negotiating texts.

Their anger at the insult of being at the receiving end of such shabby treatment boiled over on the third day of the conference. The African Ministers issued a strong statement that there was 'no transparency' in the meeting, that African countries were generally excluded on issues vital to their future, that they were concerned over the intention to produce a Ministerial text at any cost. 'Under the present circumstances, we will not be able to join the consensus required to meet the objectives of this Ministerial Conference.' Similar statements were issued by the Caribbean Community Ministers and by some Latin American countries. Barshefsky and Moore were thus faced with the prospect that if a draft Declaration were presented at a final session, there would be an explosion of protests and a rejection by developing nations.

That would totally expose to the public and the world media the manipulative methods by which the Seattle conference, and more seriously the WTO in general, had been run. In the end, it was less embarrassing to decide to let the Seattle meeting collapse without attempting even a brief Declaration. But the breakdown took place so fast that Barshefsky at the final plenary did not even try to get the ministers to adopt a formal statement on the procedures for follow-up talks. All that was left is a transcript of Barshefsky's off-the-cuff closing remarks, in which she admitted that 'we found that the WTO has outgrown the processes appropriate to an earlier time...We needed a process which had a greater degree of internal transparency and inclusion to accommodate a larger and more diverse membership.'

Post-Seattle process

Do the Seattle debacle and Barshefsky's remarks give hope for reform to the WTO's decision-making system? That depends really on whether the developing countries can now make use of the impasse to press for a democratic system, for example, by abolishing the green-room process, which belongs to the feudal age and which ultimately sank Seattle.

The big powers will, however, try hard to cling to their privileges. Both Barshefsky and the EU Trade Commissioner Pascal Lamy announced that the WTO Director-General had now been delegated with the authority to carry forward the Seattle process. Lamy even told the media that Moore would report directly back to the ministers.

No legitimacy or credibility in Seattle process and results

Third World groups denounce undemocratic and bullying tactics at Seattle

The following is a statement issued by the Third World Network in the afternoon of 3 December, before it became clear that the Seattle WTO talks would end in collapse.

NGOs from developing countries are shocked and outraged at the way the WTO and the organisers have treated the developing-country Members of the WTO at the Seattle Ministerial.

What has been going on in Seattle is a scandal. Developing countries that form more than two-thirds of the membership of the WTO are being coerced and stampeded by the major powers, especially the host country the US, to agree to a Declaration which they were given very little opportunity to draft or to consider.

'Green room' meetings

Most of the important negotiations have taken place in 'green room' meetings where only a few countries are invited. Most of the developing-country Members of the WTO have not been able to participate. Even if a country is invited to a meeting on a particular issue, it may not be a participant in other issues. Many developing countries were not invited to any meeting on any issue at all.

As a result most Ministers have been insulted by their not being able to take part in decisions that seriously affect their countries and people. Worse, they have had little chance to even know what is being discussed, by whom or where. Nor what the results of these discussions were.

Also, the programme has been so crammed and tight that when the final draft Declaration is produced, Ministers and officials would hardly have any time at all to consider its contents.

To expect them to 'join in the consensus' through the argument that otherwise the Ministerial Conference would be deemed a failure, is to impose a kind of blackmail.

What has gone on in Seattle is a shameful way of conducting a meeting, let alone such an important Ministerial Conference.

To further attempt to produce any substantive conclusion or any Declaration now would destroy any little legitimacy or credibility that the WTO has. The public in every country will reject any Declaration or outcome arising from this manipulative process.

In this situation, we suggest that the Ministers take a procedural decision to adjourn the Conference and remit all the texts before it to the General Council in Geneva. The General Council should exercise its responsibilities and hold consultations on how to proceed further, and take appropriate decisions in accordance with its powers and responsibilities under the Marrakesh Agreement.

The implication is that the post-Seattle negotiations would be led by the Director-General, who is known to be biased in favour of the major powers, rather than the WTO's General Council, the majority of whose members are developing countries.

Are the major powers setting up one more device to control the post-Seattle process so that they can rebuild the house of cards in line with the same old global trade architecture? And will the developing countries, which never agreed to the Barshefsky-Lamy decision to put the already discredited Moore in the driving seat, refuse to 'join the consensus' and place the authority of the follow-up process with the General Council, where it appropriately belongs?

These will be some of the immediate issues that trade negotiators must face when Moore begins his 'consultations' to bridge the 'remaining gaps' using the final press conferences of Barshefsky and Lamy to assert control over the 'empire'.

Martin Khor is the Director of Third World Network.

 

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