The butterfly whose effects trigger the twists and turns of globalisation has been flapping vigorously of late. Take Suez, the French utilities giant that Paris could not bear to see pass into Italian hands. Panicked by the announcement in February 2006 from Enel, Italy's largest power company, that it intended to snaffle Suez in an aggressive takeover, the French prime minister hastily withdrew his objection to Suez's planned merger with Gaz de France. Sounding rather like some feudal chieftain unveiling a sinewy thug to send into battle, Dominique de Villepin hailed the begetting of a Gallic "energy champion". His hand had been forced, he explained, by "the strategic importance of energy to France".
There followed much gnashing of teeth. Italy's economy minister said such mingled protectionism and nationalism risked "an August 1914 effect". French unions reeled at the "dagger strike" of the wholesale flogging of Gaz de France. And de Villepin's decision dripped with hypocrisy. France had been all too keen to reap the benefits of Suez's sorties in the poor south, regardless of the tens of thousands of Bolivians in the slums of El Alto left without clean water when a consortium led by Suez hiked prices in 2005. There was much huffing (and litigiousness) in Paris when the great Bolivian unwashed booted Suez from the country (with a fervour, incidentally, that fed directly into Evo Morales's successful election campaign).
The rich world is increasingly reluctant to take the dose of the medicine it has long prescribed developing countries market liberalisation or "free trade". In the United States, a hysterical aversion to Arabs in the boardroom has stymied a bid by DP World, a company from Dubai, to take over the administration of six American ports. Even Brussels, bastion of free trade, is threatening a hefty tariff on imported Chinese shoes. August 2005's "bra wars" may have been just the first skirmish in a conflict that strikes at the very bosom of neo-liberal orthodoxy.
Also by Tom Burgis on the politics of the WTO:
"The siege of Hong Kong" (December 2005)
"The WTO's raw deal" (December 2005)
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Doha endgame
It may be this bellicosity that ratcheted up the rhetoric ahead of the London meeting on 10-12 March 2006 of the Group of Six (G6) half a dozen of the planet's most potent trading powers (the European Union, United States, Australia, Brazil, India, and Japan) in London. The World Trade Organisation's Doha round, the package of trade rules that was, lest we forget, meant to redress the glaring imbalances in global trading rules, is due to be completed by the end of the year. Rob Portman, the US trade representative, has described 30 April 2006, the deadline for the WTO's 149 members to sign off on the deal's basic numbers ("modalities" in the organisation's impenetrable lexicon), as the talks' "drop-dead date".
With the exception of an end date for European farm subsidies and a measly sweetener of a "development package" for poor countries, nothing of note was agreed at the fractious ministerial in Hong Kong on 13-18 December 2005. Since then, European Union trade commissioner Peter Mandelson has been putting in the miles, courting the countries that stand to take a serious buffeting if they open their markets to the butterfly of global capital.
On 9 February, he appealed to the Mauritian chamber of commerce "to join with the European Union and others in working together for a win-win outcome to the Doha trade round." Doubtless, many in the audience were reassured to hear that Mauritius, a country almost wholly dependent on exporting sugar and textiles two hotly-contested commodities in the Doha negotiations would have its integration to the global economy eased by no lesser person than Mandelson himself. Praising the island's "willingness to embrace this world of change even when it hurts", he said: "The European Commission is fully committed to help ease the necessary restructuring. I give you a personal undertaking because I can do no more to fight as hard as I can to ensure we live up properly to that commitment."
Along with his predecessor and current WTO director-general Pascal Lamy, Mandelson has been at pains to emphasise the organisation's wondrous system of consensus democracy. Unlike the IMF or the World Bank, where cash equals votes, the WTO only reaches top-level decisions by consensus. Of course, the system has backfired, notably in the Qatari capital in 2001 when, as talks overran, poorer delegates who could not afford to alter their flights were forced to depart. Their absence was taken as consent and so the Doha round begun.
All the same, Portman and Mandelson have chirruped incessantly on the importance of the membership acting "in concert" to break the deadlock. "Nobody is excluded", Mandelson said on 11 March. "The WTO is a remarkably democratic organisation. No one member is more equal than any other." Moreover, unlike the United Nations, the WTO has no Security Council; poorer countries are represented at the centre of negotiations through various groupings based on mutual interest (see Ehsan Masood, "Why the poorest countries need a WTO", December 2005).
None was represented, however, at the secret meeting held at the official residence of the British foreign secretary over the weekend. The trade representatives of Japan, Australia, the EU and the US were joined by the appointed emissaries of the entire developing world, Brazil's foreign minister Celso Amorim and India's commerce minister Kamal Nath. If this was indeed a concert, it was invitation only. Most of the world's population will just have to read the press release. Or they can wait for the film. Before entering the final night's huddle on 11 March, Mandelson likened the Doha endgame to "a moving picture moving towards its final editing".
India, Brazil, and the global south
Along the Mall, the avenue that leads up to Buckingham Palace, Brazilian flags were flying on Saturday night, a traditional honour for a visiting head of state. Luiz Inácio Lula da Silva, the president of Brazil, was in town. While the luminaries of the G6 convened a hasty press conference around the corner at the Foreign Press Association, a rather different film to that envisaged by Mandelson and his fellow trade cinematographers was premiering at the Institute of Contemporary Arts.
Favela Rising charts the rise of Afro-Reggae, the Brazilian dance-collective-plus-social-movement that has emerged from Rio de Janeiro's Vigario Geral slum. In a place where police brutality is matched by that of drug lords and augments the pain of acute poverty, a political voice has risen from the roots of local culture to find its rhythmic expression. It joins the growing wail of discontent emanating from Brazil's slums, squats and landless movements that the reforming government they cheered into office has yet to deliver on its promises to them.
The pressure on Lula is enormous. In an election year, he is being squeezed by the tentacles of Brazil's agribusiness lobby and heckled by tens of thousands of farmers driven to deprivation by deforestation. Sources inside Brazil's trade delegation say he is desperate for a Doha deal to take to the hustings. As the chair of the Group of 20 (G20) developing nations at the WTO, Brazil (and especially Amorim) have still greater weight on their shoulders. Amorim, a man who has been a regular in the WTO's green room since the organisation was formed, sought to lower expectations in saying "the click is not yet there to have the deal."
That mood was echoed by India's Nath: "This round cannot be a perpetuation or an endorsement of the inequalities of global trade. Developed countries cannot expect something in return to stop doing what they shouldn't be doing anyway. What's the progress? If you ask me for a word, I say 'good'. If you ask me for two words, I say 'not good'."
There are two ways to look at the dual role of Brazil and India as the mouthpieces of the global south at the top level of trade negotiations. One is that they have forced the industrialised nations to recall their commitment to use the Doha round to make amends for the economic imperialism of earlier pacts and to abide (if only occasionally) by WTO rulings. The other is that Brasilia and Delhi have used their tenuous mandate merely to push their own priorities access to Europe's lucrative agricultural markets and freer movement of qualified workers, respectively.
The truth is somewhere between the two. Both countries will be key players at the leaders' summit on trade, announced by Lula and Tony Blair last week. Though no date was set, those in the know predict a meeting of the Group of Eight (G8) "masters of the universe", as they are known and roughly twenty special guests during April or May. George W Bush will attend, desperate to see free trade, a concept on which he seems to believe the future of humanity as we know it depends, further enshrined.
The guest-list will hardly assuage fears in Lilongwe or Cotonou that the crunch decisions in the Doha Round will be taken behind closed doors and presented to the membership as faits accomplis.
The baited spring of the original Doha mandate was "less than full reciprocity" for developing countries, whereby they would be allowed to open their markets more slowly than industrialised nations, affording them the policy space to protect sectors of their economy not yet prepared to face global competition.
That now appears to have been junked in practice. As Mandelson told the British National Farmers' Union on 27 February: "If people think they are going to get something for nothing out of the EU, they can forget it." It seems he was right. The World Bank's latest projection of the impact of liberalisation under the Doha round found it would benefit the developing world only by one penny per person per day. The UN forecasts that reduced revenue from import taxes alone could cost poor countries $63 billion; industrialised nations would pocket $96 billion, 83% of the lucre generated by increased trade.
Small wonder then that global-south analysts are urging their governments to reject a deal. It is becoming starkly apparent that the advocates of "free trade" want to have their cake and eat it, to harness globalisation's butterfly when it carries them on the wings of boosted profit but clip its wings when their own interests are threatened.
