Editorial

The Crisis of the WTO

The Ministerial Conference of the World Trade Organization (WTO) in Cancun, Mexico ended yesterday with no agreement on any outstanding trade issues. This is the third WTO Ministerial Conference in a row to end in failure. As a result, there is increasing speculation that the WTO may be close to collapse.

Over the past few months, the main issue cited as a potential deal breaker has been the issue of agricultural subsidies. The United States and European Union are adamantly refusing to eliminate their massive export subsidies on agricultural products, while the developing countries are refusing to further open their markets unless those subsidies are abolished. At the end of all previous trade talks, the U.S. and EU have pledged to begin dismantling their subsidy programs in exchange for the removal of tariff barriers in the developing countries. Then, they have not only reneged on their promises, but have actually increased the levels of subsidies to their agricultural sectors.

However, this was not the only, or even the main, problem facing the WTO during this Ministerial. In fact, the talks got hung up on the "Singapore issues" - government procurement, trade facilitation, investment and competition - and it is reported that the issue of agricultural subsidies did not even reach the stage of negotiations. In addition, the issue of subsidies is itself a reflection of a much deeper contradiction, namely which group of imperialists will control international agriculture, the U.S. or the EU.

The U.S. imperialists are attempting to control international agricultural production through the patenting of seeds and the introduction of genetically modified foods (GMOs). The U.S. is the most advanced in these areas and, if successful in imposing its will on the rest of the world, will gain a monopoly over the sale and licensing of seed stocks. It will also give U.S. chemical companies, such as Monsanto, a stranglehold over the market for pesticides and herbicides. In addition, the lower costs of production associated with GMO products would enable the U.S. to push the Europeans out of the low-quality, low- price grain export markets that they now occupy.

So far, the EU has been successful in keeping the American GMOs out of its markets, largely on the basis of creating a movement against the harmful health effects of consuming GMO foods. Whether there is any scientific merit to these arguments remains to be seen, but the fact is that this movement has closed Europe to many American agricultural products. However, if the European monopolies had been the first to develop GMOs, there is little doubt that the EU would be the greatest champion of GMO foods, while the U.S. would be using health scares to keep these products out of its market.

There is also widespread opposition to GMO products in much of the developing world. However, the governments of these countries are usually more honest in the reasons for their opposition. They openly cite the fear that GMOs will result in the loss of whatever remains of their independent agricultural policies and the wholesale destruction of their agricultural sectors, which will be swamped by cheap imports.

In the months preceding the Cancun Ministerial, a loose coalition of developing countries - the so-called G-21 - emerged to challenge the U.S. and EU on their agendas for the WTO. Led by Brazil and India, this group has been demanding the elimination of agricultural subsidies and the recognition that the developing countries require some leeway on tariffs in order to protect their fragile domestic producers. However, the G-21 countries also have their own differences on what is required and how to pursue their aims. As a result, the U.S. and EU have succeeded to some extent in splitting the unity of the G-21. In the weeks preceding the Cancun Ministerial both the U.S. and EU presented "solutions" to the deadlock which would have strengthened their own position at the expense of the other and offered various concessions to G-21 countries to gain their support. As the Cancun Ministerial opened, India was supporting the European "solution", while Brazil was supporting the American "solution". Mexico and Venezuela were leading the opposition to both proposals.

In the end, in Cancun both the U.S. and EU were blocked from using the WTO Ministerial to further advance their respective interests at the expense of the rest of the world. This must be seen as a partial victory for the developing countries. At the same time, the developing countries were unable to force the U.S. and EU to dismantle their subsidy programs, which means that the destruction of the agricultural sectors in the G-21 countries, as well as in countries like Canada and Australia, will continue unabated. It is clear that if they are to make any headway the developing countries must not only strengthen their own unity, but also take full advantage of the trade contradictions between the United States and Europe.