The WTO and You... What Londoners Should Know
October 4, 2012
What do job loss, agricultural subsidies and seals all have in common?
After eleven years of negotiations, the Doha Round of World Trade Organization (WTO) expansion is at a crossroads with questions of legitimacy and relevance at the centre of the trade regime itself. Since 1995, the WTO has been “opening trade for the benefit of all,” hosting negotiations to spur global implementation of free trade. The current round, the Doha Development Agenda, was launched in 2001 to lower trade barriers while bringing developing countries into the fold.
On September 23-26, five hundred-ish (a far cry from the generous 1500 their website touts) members of civil society convened under the banner of multilateralism at the annual WTO Public Forum. I arrived in Geneva with eager intentions of collecting research on the role of NGOs in trade, and a relatively open-mind. Little did I realize how open it would have to be to wrap around the forecast for the future direction of global trade.
Two examples illustrate the point. The Doha Round of negotiations is stalled (openly discussed for the first time by the WTO Secretariat) and with it, all hopes of a single undertaking on agriculture. This would have required a commitment to sustainable development from countries that are heavily propped up by agricultural subsidies. Canada missed that bullet, escaping its commitment to developing countries to make an effort to balance the playing field along with everyone else. Given the lack of political will and the increasing number of issue areas vying for agenda attention, nothing will be done in terms of agriculture unless fairy dust is sprinkled on the fields of goodwill (cough, China and US), spreading hopes of equitable trade throughout the lands.
However, it was encouraging to see that the majority of delegates to the Canadian Mission were farmers, or at least representatives of agri-business. Yet, there was little clarity on why they were there and the few that I talked to didn’t seem to know. Our breakfast meeting with the Mission was rather bleak, with Mr. Bruce Christie suggesting that little movement in multilateral trade negotiations would occur before the Bali Ministerial in December 2013. This begs the question, what do we do until then? The answer isn’t pretty. All of that nasty talk about protectionism as-the-root-of-all-evil and the-threat-to-free-traders-everywhere has been dwarfed by something a lot bigger – preferential trade agreements (PTAs).
PTAs that circumvent the traditional fora of the WTO may become the future of trade unless the major players come down to the bargaining table (the prospects for which remain quite dim). For Canadians, the two that come to mind are CETA, the Comprehensive Economic and Trade Agreement (largely shrouded from the public eye), and the lesser-known Trans Pacific Partnership Agreement (TPPA). CETA promises to increase market access for the Canadian financial services sector at great cost to municipal governments and the current trade deficit with Europe. Yet, Prime Minister Harper is adamant about pushing a deal by December (ironic given that we are now challenging of the EU’s ban on seal products which will most likely cost more than the annual value of the seal hunt and will likely not make the EU any happier with us). Canadians have little to gain and a lot to lose from the agreement. Just a couple highlights: the investor-to-state dispute settlement process potentially undermines health and environmental regulation, protects investors in way that could cost the government tens of millions in fines and will transfer ever more power to corporate interests with fewer rules about transparency and accountability.
This is the frightening direction of trade, but it has been packaged in shiny new wrapping to be swallowed once more by developed and developing countries alike. When it didn’t go down so well the first time, evidenced by countries clinging to those dreaded protectionist measures, it was time to rewrite the trade vocabulary. Nonsensical words such as ‘insourcing’, and ‘reindustrialization’ splash their way across policy papers to suggest a new dimension of trade that will benefit everyone, everywhere all of the time. Sounds too good to be true? That’s because it is.
The story goes that that trade can lessen the effects of the economic crisis by generating growth, which, in turn, leads to job creation. This makes sense except for one small problem. How do you integrate domestic and labour policies with trade policy so that more trade effectively leads to more jobs? It is the role of governments to put in place the right domestic measures for job creation and income distribution. Given that London has one of the highest unemployment rates in the country and the memory of Caterpillar is still fresh, I would suggest that more attention should be given to this question before leaping into bed with aficionados of the global value chain (GVC).
A superior way to recalculate trade flows, through a phenomena called GVCs, was perhaps the most concerning aspect of the new fangled lingo used at the WTO Public Forum. Who is the target audience for this sexy moneymaking measure? Canada's small and medium sized enterprises (SMEs). Although they comprise a small percentage of overall trade, the government has chosen to direct their pitch to SMEs, “as a means for boosting firms' global competitiveness, profitability and long term sustainability”. It sounds well and good until you read the fine print.
The limited resources of SMEs and the operational requirements necessary to take advantage of the ‘added value’ could leave them lagging, uncompetitive and more vulnerable to stormy markets. It takes little brainpower to understand that the beneficiaries are big industry, multilateral corporations that are already deeply embedded into the supply chain and have the necessary transnational mobility and capital flows. This leaves the question, where do Canadians fit into the global value chain?
In sum, Canadians should be deeply troubled, or at least very confused. If you can sort through the rhetoric and muddled statistics you are left with more questions than answers, halves that do not add up to a whole, and a whole lot of drivel. At the end of the day, Canadians need to think critically about the future of trade, what it means for citizens, and who will be left behind.
To view photos from Wood's trip, please visit http://www.flickr.com/photos/erinhannah/sets/72157631684947579/