Commentary

GATT, the WTO and Capital Penetration

The World Trade Organization (WTO) was created in 1995 as the successor to the General Agreement on Tariffs and Trade (GATT), which itself was established by the major capitalist economies in the wake of the Second World War. The chief aim of the GATT, and now the WTO, was to further the ability of global capital to penetrate every corner of the globe, something the organization notes openly on its Web site: "The goal is to help producers of goods and services, exporters and importers, conduct their business. …… (The WTO's) main function is to ensure that trade flows as smoothly, predictably and freely as possible."

The GATT was established and flourished during the period of national liberation struggles and decolonization. It was an essential tool to ensure the imperialist powers could continue to exploit the resources of newly independent countries and keep using them as a market for their products by regulating and controlling tariffs. The GATT was assisted in achieving its aims through the working of both the International Monetary Fund and World Bank, which made openness to foreign capital and products conditions before poorer countries could receive desperately needed loans.

"GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth," the WTO Website notes. The question, of course, is growth for whom?
In the first 50 years of the GATT/WTO, total world trade increased by 14 times, despite the fact that during most of this period, a large number of countries, including the USSR, the Eastern European socialist bloc and China were outside of this trade. Yet the living conditions of the vast majority of the world's peoples did not improve and in fact, in many cases, they further deteriorated. This has been documented in dozens of studies conducted by social scientists over the last decades. The problem, it was argued, was that trade was not being liberalized quickly enough and this was the block for achieving prosperity, especially for developing nations.

It was within this context that representatives from the GATT met in Uruguay in 1986 to negotiate a mega-agreement that was touted as a way to put an end to global inequality. At the insistence of the developing countries, now a majority of the 125-member nations of GATT, agricultural subsidies, country of origin labelling on goods and a dispute resolution mechanism for trade disagreements were put on the table. Also up for negotiation were key areas of concern to the Americans and Europeans, including intellectual property rights and liberalization of financial services. Negotiators spoke confidently of an agreement within four years, yet no deal was reached until 1994, after several separate negotiating rounds. In 1990, talks on an agricultural agreement broke down in Brussels, and it appeared that a new deal would not be possible. In 1992, the Europeans and Americans cobbled together an agreement (the 'Blair House' agreement) that committed them to reducing agricultural subsidies with the establishment of the WTO. As well, in 1996, the Singapore negotiations came to an agreement on technology products, another issue of specific interest to the developed countries.

To date, the commitments made in the Blair House agreement have not been met, while for the most part, the agreements on intellectual property rights and technology have been implemented.
Leading into the Cancun talks this September, the Americans and EU have once again cobbled together an agricultural agreement that promises subsidy reductions in the future. This time, however, there seems to be a great reluctance on the part of the developing nations to settle for promises.