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In Trade, Business as Usual Won't Do
Published on Friday, October 5, 2001 in the International Herald Tribune
In Trade, Business as Usual Won't Do
by Chakravarthi Raghavan
 
Economic misery and political fanaticism make a combination that can produce horrific consequences.

So it is troubling that some analysts have sought to implicate anti-globalization activists and opponents of a new round of trade negotiations in the horrific events of Sept. 11.

The case for launching another round of negotiations in Doha, Qatar, next month does not rest on promotion of democratic values or the fight against global terrorism. The case against has nothing to do with opposing those goals.

Governments across the developing world, with many religions and poverty-stricken people, have problems enough in building strong economies and civil societies and fighting terrorism. These should not be compounded by attempts to use general revulsion at the carnage in the United States to launch a new trade round. Opposition to a new round, my own included, stems from long and close scrutiny in Geneva during 20 years of the general workings of the World Trade Organization and its predecessor, the General Agreement on Tariffs and Trade, and a careful assessment of the impact of the trade liberalization in the Uruguay Round on developing countries in particular.

Implementation of the WTO rules has failed to deliver the promised economic benefits to much of the developing world and has heightened economic tensions within and across countries. In part this is because of the unwillingness of the rich countries to open markets to goods from the developing countries and remove the massive subsidies to many of their own producers, particularly in agriculture.

In part it has to do with the damaging policy burdens placed on economies of developing countries through non-trade issues, such as intellectual property, which crept into the Uruguay Round largely under corporate pressure.

Correcting these deep-seated biases in the system, so that developing countries can have their fair share of benefits while the burdens on them are reduced, should be the priority for trade negotiators, and this is what many developing countries are calling for.

The major developed countries, however, are advocating the injection of more new issues, such as investment, competition and government procurement, into the WTO through a new round, which would put even heavier burdens on developing countries because rules in these areas would severely restrict their development options and strategies.

Thus a new round of the type envisaged by the United States, the European Union and other proponents would not be beneficial for most members of the WTO. On the contrary, it would be likely to result in an even more unbalanced and inequitable outcome.

Since the Sept. 11 attacks there have been some positive developments, which need to be quickly built upon. The link between unregulated global financial markets and the funding of terror, including stock market profiteering from the attacks themselves, is now coming under close scrutiny.

More encouraging still has been the support for expansionary economic policies to combat recession. Only a few years ago the IMF ruled out such policies in East Asian and Latin American economies that were suffering deep recessions as a result of financial shocks.

Fundamentalism, in economics as in religion, was the scourge of the late 20th century. Building a new spirit of economic multilateralism is surely the best riposte to agents of global terror. Business as usual in the international economic sphere will no longer do.

The writer is chief editor of the South-North Development Monitor, a daily bulletin published in Geneva, which specializes in trade and development issues. He contributed this comment to the International Herald Tribune.

Copyright © 2001 the International Herald Tribune

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