For
Your Information
Contradictions
Intensify at WTO
On June 21, the latest round of negotiations aimed at salvaging the Doha round of the World Trade Organization (WTO) talks broke down, with the U.S. and European Union (EU) pitted squarely against Brazil and India. The four (known as the G4) had been meeting for close to a year in a desperate attempt to get world trade talks back on the rails, but according to media reports, talks broke down over a failure to reach a compromise on manufacturing and agriculture.
It appears that India and Brazil joined forces against the U.S. and EU. According to reports, they rejected demands to end state support for emerging industries in their countries (aerospace in Brazil, technology industries in India) and also refused to reduce tariffs on European or American goods entering their markets.
This was just the latest in a series of failed attempts to rescue the Doha round of global trade talks, which began in November 2001. Ostensibly the talks have been aimed at further opening up global markets, although, in reality, it is clear that they have been the mechanism through which various world powers have tried to dominate others. While manufacturing was an issue in the collapse of the talks, the biggest stumbling block to reaching a new WTO agreement has been agriculture. Over the past six years disagreements over agricultural subsidies have been behind the collapse of talks in Hong Kong, Mexico and India.
Both the U.S. and EU spend billions on agricultural subsidies each year, money that flows mainly to large agri-businesses throughout Europe and America. These subsidies guarantee that American and European agricultural products are dumped into world markets at well below the cost of production, thus destroying small-scale agricultural production in countries around the world. The subsidies have also made a handful of agribusinesses among the largest multinational corporation in the world. For example, Minneapolis-based Cargill, which is the largest privately held company in the U.S., controls much of the soybean production in Brazil and Argentina. The American giant Monsanto sells everything from glyphosate to seed throughout Asia, Africa and Latin America and is currently seeking patents in different countries that would enable it to charge small-scale agricultural producers for using varieties of seeds that they have been using for decades. The giant French company Louis-Dreyfus has interests in everything from cotton to sugar to mines in Africa, while Bunge has been expanding into Latin America for the past 40 years.
The Americans and Europeans have used the Doha talks as an instrument to protect those subsidies which have benefited their capitalists the most. For example, the U.S. has been willing to give up export subsidies, which depress global prices, in exchange for ensuring that billions of dollars in direct crop support and research and development money continue to flow into the coffers of their agribusiness industries. The Europeans have likewise offered up some of their subsidy programs in exchange for ensuring that the majority, which they have labelled “non trade distorting”, remain in place.
Over the last few years, when they have been unable to use Doha to further their respective agendas, both the U.S. and the EU have been busily negotiating bilateral trade agreements. Most recently, the Americans signed a bilateral agreement with Peru and Colombia which will give American wheat, sugar, beef, pork and produce preferential access in those two countries. Europe has turned its attention to the Middle East and Africa, while also trying to establish a hold in certain parts of Asia.
However, this reliance on bilateral trade agreements does not mean that the U.S. and EU have given up their desire to use the WTO to sort out their contradictions. Both have suggested that the WTO talks can be salvaged and both are reported to be working behind the scenes to jumpstart the talks. It remains to be seen if they can find a way to accommodate the interests of Brazil, India and the emerging powers they represent at the WTO or not. If they are unable to accommodate them and come to some sort of an agreement, it will be a significant blow to the world’s two largest imperialist trading blocks.