The Cost of Living

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The collapse of the recent WTO summit is a blow against neoliberalism, but the struggle for trade justice goes beyond the issue of subsidies.

At 3.30pm on the last day of the Cancun WTO summit a Kenyan representative walked out and announced, ’The meeting is over. This is another Seattle.‘ When the Mexican chair of the meeting declared the talks formally closed there were whoops of delight from the African delegates.

An international coalition of small farmers, NGOs, trade unions and anti-capitalist activists had helped foment a rebellion of the less developed countries that has thrown the neoliberal project into confusion.

The Cancun round of international trade negotiations was supposed to be ’a development round‘. Crucially, EU and US governments had promised cuts to their huge domestic agricultural subsidies. But when it came to the crunch the US and Europe insisted on new rights of access to foreign markets in return for negotiations over subsidies at home.

Provocation

Faced with this provocation, delegates from the newly formed Group of 22 less developed countries decided no agreement was better than pursuing this one. This developing world alliance, led by Brazil, China and India, represents more than half the world‘s population, and about 80 percent of the world‘s farmers. Its creation was a key factor in the WTO breakdown. But none of this would have happened without the protests outside the hall. A delegate from Swaziland went on record to say that the African countries would not have had the courage to take this stand if it hadn‘t been for the actions, the words, the pressure from the activists - particularly as they were so widely reported in the press.

The protests in Cancun were a vital catalyst, but clearly this major blow to the neoliberal world order had wider causes. The sheer intransigence of the US and the EU is part of the story. The notorious unilateralism of the neoconservatives in Washington never boded well for the billing of Cancun as a more consensual round of talks. In Washington the protectionist lobby centred around agriculture is never far out of politicians‘ earshot, and few EU governments have shown any real inclination to challenge their own farming interests. Quite simply, corporations and government in the North want to have their cake and eat everyone else‘s.

The fallout from 11 Septempber 2001 has also played its part. The last WTO ministerial took place in Doha in the subdued atmosphere that followed the World Trade Centre attacks. Bucking the US was hard in those circumstances. War on Iraq has changed that. It has exposed the extent of US imperial ambitions, and the movement against it, centred on 15 Febuary, created the conditions in which major powers could dissent. US hegemony was publicly challenged. It‘s no coincidence that the Brazilian government started to pull together the development bloc that became the Group of 22 in the aftermath of the invasion of Iraq in May.

And then of course there is domestic resistance. There were demonstrations against the WTO in many parts of the world, from northern Italy to the Philippines and Thailand, from Japan to South Africa. But that is just the tip of the iceberg. The tragic suicide of Korean farmer Lee Kyung-Hae gives an insight into the level of desperation that neoliberal economics is creating globally, but combined with his testimony it also gives a hint of the level of politicisation that has taken place round the world in the last few years. Mass movements against the degradations of the free market have developed in every continent. And since Seattle the WTO has become the symbol of that economic order.

The Brazilian government is itself a product of these movements, but many other governments clearly felt they could not swallow this deal and face their public at home.

The Cancun collapse is a major blow to US hegemony. It should mean that threatened food and health programmes can be saved, and it will give confidence to anti-privatisation activists everywhere. The resulting economic uncertainty and the threat of protectionism will cause real alarm in corporate boardrooms and gloom on the stockmarkets. But the vultures will be back.

The big economic powers are already organising to use their leverage in unregulated bilateral deals. The chances are that less developed countries’ governments will feel they have no choice but to get back round the negotiating table. Celso Amorin, Brazil’s foreign minister, has already said, ‘Whatever happened at this meeting, the pieces will be picked up again,’ and South Africa’s trade minister Alec Erwin has echoed, ‘We must find ways to go forward.’

Their dilemma is similar to those that have faced development strategists for decades. The WTO is a tool for the big economies to press home their overall advantage. The fact that the failure of the big powers to impose their will led to breakdown at Cancun shows campaigners are right to call for WTO abolition. That feeling is reinforced by the pictures of delegates, NGO workers and activists wildly cheering as the talks collapsed.

The WTO is a menace in itself, but the problems of the world market run deeper than the financial institutions that dominant economies construct to reinforce their control. Since the end of colonialism, countries in the South have tried to break out of underdevelopment, sometimes using state-led strategies, sometimes opening up to the global market, often through a combination of the two. Very few have succeeded. Elites have prospered on a massive scale, but for most people postcolonial promises have turned to dust. Huge areas of the world have gone backwards in social and economic terms in the last few decades.

Subsidies

That’s why to call - as some parts of the movement do - for a level playing field in the world market is not enough. It implies that the free market left to its own devices will deliver for the great mass of the population. In reality developing countries’ ability to compete depends on much more than an end to subsidies - it depends on infrastructure, on investment, on economies of scale. Disadvantage is developed over time, and poverty and underdevelopment are structured into the way the world market works. Because it is based on blind competition, there will always be winners and losers.

It would be great if, as George Monbiot suggests, developing countries use their newfound confidence and the leverage of massive debt to ‘exercise a collective threat to the rich’, and go on to demand concessions from the IMF and the World Bank. But let’s not hold our breath. The logic of the market itself makes solidarity between developing nations hard to maintain. It also militates against any concessions that are won being passed on to the poor.

Developing governments can pull together to scupper a trade round, but elites in the South are tied materially and in terms of their outlook to the big powers. Whatever happens with the Cancun round, they will still be seeking foreign direct investment from western corporations and governments, they will benefit personally from these deals, and they will pass on the costs. In a highly competitive world economy the logic of accumulation is inescapable, and they will seek ways to undercut the competition. That process is under way even in Brazil, where the Workers Party government has drawn back from its radical promises on pensions and land reform in the name of national economic development.

The collapse at Cancun shows the US empire is not invincible - that it is possible to buck the logic of corporate profit. But perhaps the most important thing to remember is that the collapse was at bottom a product of grassroots struggle. Some developing governments listened to NGOs and farmer and union activists because they knew there was a movement out there, and they knew it was watching. Cancun has shown once again that we are living in a time when great struggles are shaping history. It’s the future of those struggles that is the crucial thing because, as anti-WTO activist Andreas Hernandez warns, ‘Without this movement, the possibilities of an emerging global architecture might be little more than than an opening for a few more elites from the global South’. We need to use this great victory at Cancun to strengthen the grassroots movement everywhere.


It is true that Korean agricultural reform programmes increased the productivity of individual farms. However, it is also a fact that increased productivity simply added further volume to an oversupplied market in which imported goods occupied the lowest price portion. Since then, we have never been paid our production costs.

Some farmers have given up farming and gone to live in urban slums. Most who tried to escape from the vicious cycle of accumulated debts succumbed to bankruptcy. Once I ran to a house where a farmer abandoned his life by drinking a toxic chemical because of his uncontrollable debts. I could do nothing but listen to the howling of his grieving wife. If you were me, how would you feel?

My warning to all citizens is that uncontrolled multinational corporations and a small number of big WTO officials are endangering humans. They are leading an undesirable globalisation of inhumane, environmentally degrading, farmer-killing and undemocratic policies. It should be stopped immediately, otherwise the false logic of neoliberalism will destroy diversity in global agriculture with disastrous consequences to all human beings.

Lee Kyung-Hae, April 2003