Collapse of WTO Talks - one piece of good news this summer

By Larry Brown
National Secretary-Treasurer
National Union of Public and General Employees

Ottawa (14 Aug. 2008) - This summer, while sensible Canadians were camping or canoeing, or complaining about the weather, there was a great flurry of activity in Geneva as World Trade Organization ((WTO) negotiators tried, one more time, to reach agreement about new and extended trade deals covering agriculture, manufacturing and services. Those talks, like several before them, ended in failure. No new deal was reached.

That is unqualified good news. There was nothing on the table in Geneva that would have helped ordinary Canadians, and much that would have harmed us.

Let’s start with the obvious disconnect between the problems the world is facing and the Geneva talks on more and better free trade.

We’ve had the WTO, and the General Agreement on Trade in Services, (GATS), and all of the sub-agreements and associated limitations on the rights of governments, for 20 years now. The result has been more inequality between countries and within countries. How could anyone argue that more of the same would have reversed that trend? One definition of insanity is to keep doing the same things over and over and expect a different result.

Race to the bottom

A major part of the whole free trade agenda is that it allows companies to move their production to wherever is cheapest for them. But you can never win the race to the bottom – there never is an end to that race. Mexico set up the low wage, non-union, low-tax Maquiladora zones, and for a while factories were set up there in great numbers. Then those factories moved on to cheaper wage areas in Africa and China, and just recently Adidas announced it was moving much of its production out of China because the wages there have become “too high."

Meanwhile the catastrophic loss of manufacturing jobs in Canada would have been worsened if the new WTO deal had gone through.

One of the most serious of the recent spate of crises has been the international jump in food prices. A new WTO agreement would have made that crisis worse.

For years we’ve had WTO rules on the freer trade of agricultural products, otherwise known as food. The result has been the commodification of food, the loss of agricultural capacity in many poorer countries, which has meant the loss of ability of many of the world’s poor to feed themselves, and a devastating spike in food prices, especially in those same poor countries losing much of their domestic agriculture to the forces of international trade. More and freer trade in agriculture would have simply made the problem worse.

Canadian farmers

For Canadian farmers, the result of the talks in Geneva would have been the end to, or at the very least, the serious weakening of systems for protecting the often precarious incomes of farmers. The Wheat Board would have been threatened, the egg and dairy and poultry marketing boards would have been threatened. Our government can claim that they are disappointed by the collapse of the WTO talks, but one suspects that they have their fingers crossed behind their backs as they say this. As a result of the failure to reach agreement, the government doesn’t have to explain to the farmers of Canada why they got sold out.

As Evo Morales, president of Bolivia, put it: “In the poorest part of the planet, millions of human beings die from hunger each year. In the richest part of the planet, millions of dollars are spent to combat obesity. We consume in excess, waste natural resources, and we produce the waste that pollutes Mother Earth.”

Would a new WTO agreement have helped the world deal with the environmental crisis? Exactly the opposite. Under the WTO, trade trumps the environment every time. Governments cannot take environmental actions which would ‘unduly’ limit the rights of international commerce. In fact under the WTO, the emphasis is on moving products around the world, which means that the ships and planes and trucks will have to keep up their frenzied pace, whatever the consequences for the environment.

We’ve been facing an international crisis from rising energy prices, especially oil and gas. Can anyone think of a single way that a new WTO agreement on more free trade would have helped to resolve this? The result would have been more movement of goods and foods and services around the world, all requiring more energy, more gas and oil. What would make much more sense with respect to the energy crisis is for more local goods to be produced and consumed, more local foods to be produced so we don’t have to import so much food from far flung corners of the world.

International financial crisis

We have an international financial crisis, still unfolding, one that started with the greed of the sub-prime mortgage fiasco in the U.S., a fiasco that was allowed to take place because economic activity was essentially deregulated. The new WTO agreement on services would have entrenched deregulation as a permanent feature of the new world order, made the regulation of financial services subject to the overwhelming dictates of the free market in services. Canada is paying heavily for the U.S. collapse. Our government should be focused on more regulation to govern our financial sector, not on giving up more of our right to regulate, in perpetuity, via a new trade deal.

The new deal being negotiated would have cost us our ability to protect our public education systems from being undermined by international private sector competition. Our public postal system would have been under threat. Our right to have our environment protection, or our garbage collection, or our waste management, delivered by public systems would have been weakened.

The new agreements that were on the table would have cemented in the worst aspects of our temporary foreign worker programs, where workers from other countries can come to Canada to work, so long as they leave behind their families for months or even years, so long as they are willing to work for lower wages, are willing to work in total subservience to an employer who can get them deported by firing them, and are willing to put up with dangerous working conditions. The ‘just in time, disposable workforce’ would have been a permanent feature of international trade.

Poor countries spared

Many governments around the world cannot provide the basic services that we take for granted because their countries are so poor. The new WTO deal would have cost these countries an estimated $63 billion in lost tariff revenue – $63 billion that would not go to education or health care or social service for the world’s poorest, all of this while innumerable manufacturing jobs in emerging economies would have gone down the drain as well.

Our corporate heads, our agribusiness companies, can whine and gripe all they want. For the rest of us, the failure to reach a new agreement at the WTO made this a good summer in at least one respect. NUPGE