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Raj Patel on the Collapse of the World Trade Organization Talks

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Talks to expand the World Trade Organization have collapsed after a week of negotiations. The talks broke down in part because India and other developing nations demanded the right to protect their farming sectors against heavily subsidized imports. The US refused to accept the protections and insisted on giving US corporations greater access to markets in India, China and other nations. [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

ANJALI KAMAT: Talks to expand the World Trade Organization have collapsed after a week of negotiations. The United States and other industrial nations have been trying to expand the WTO since 2001, after a trade meeting in Doha. WTO Chair Pascal Lamy announced the talks’ failure.

    PASCAL LAMY: I think it’s no use beating around the bush. This meeting has collapsed.

ANJALI KAMAT: The talks broke down in part because India and other developing nations demanded the right to protect their farming sectors against heavily subsidized imports. The US refused to accept the protections and insisted on giving US corporations greater access to markets in India, China and other nations.

Raj Patel is a writer and activist who’s seen both sides of the corporate globalization debate firsthand. He has worked for the WTO, the World Bank and the United Nations and has also protested them on four continents. Currently, he’s a visiting scholar at the Center for the African Studies at the University of California at Berkeley. He’s also the author of the book Stuffed and Starved: The Hidden Battle for the World Food System, which came out in April. Raj Patel joins us on the line from San Francisco.

Raj, welcome to Democracy Now!

RAJ PATEL: Good morning, Anjali.

ANJALI KAMAT: Good morning. Raj Patel, tell us, why did the WTO talks collapse? And does it matter?

RAJ PATEL: The talks collapsed because India and China, but mainly India, demanded certain kinds of protections for its farmers if it was going to liberalize agricultural trade, and the United States, Europe and Australia and a group of other countries were not ready to concede any further on those kind of demands. Europe and the United States had felt that they made enough concessions to India by allowing more visas for technically qualified personnel to come and work in the US and in Europe, and they felt that those concessions showed willing in certain areas of the negotiations.

But India is in an election year right now. And traditionally, when — at the time of Indian elections, Indian politicians have to act a little bit more democratic. So, while normally they’re ready to sell down their rural population and — sell their rural population down the river and to agree to policies that imperil the food security of people in rural areas, during an election year, that all flips around. And the Indian government has made commitments to fight farmers’ debt, for example, this year, and they couldn’t very well make big concessions around agriculture at the World Trade Organization, particularly because they are on the brink of an election cycle.

So, India was emboldened to take a fairly aggressive position in the negotiations around agriculture. The US and a group of other countries were feeling fairly aggressive about the amount that they had already given. There was dissension within the ranks in Europe. And essentially, it had all the recipes, the makings of a disaster. And in fact, that’s what it turned out to be.

Now, but you asked also, does it matter? Well, bear in mind, this is the third time in three years that this has happened. And the substance of the disagreement wasn’t really around “Should there be a World Trade Organization or not?” The parties around the table seem all fairly committed to multilateralism, to this kind of neoliberal economic policy. There was — no one around the table said, “No, actually, you know what? We’re heading towards a whole new different way of developing our economies.” No one said that. And that suggests to me, rather sadly, that what will happen after the Indian election or after the United States election is that these parties will get back around the table again and carry on pushing forward their economic agenda.

And, of course, the tragedy is that in the meantime we’re stuck with the inequities of the World Trade Organization policies that have been on the books since 1995, and those policies prevent developing countries from supporting their farmers, prevent developing countries from investing in their industries and allow corporations, whether in developing or developed worlds, large corporations, access to each other’s markets, while penalizing the poorest citizens, either in agriculture in developing countries or in manufacturing in developed countries.

SHARIF ABDEL KOUDDOUS: Raj Patel, can you explain exactly what are the special safeguard mechanisms that were the crux of the disagreement between India and the United States?

RAJ PATEL: OK. So, when you have the liberalization of any commodity, the price of that commodity to domestic consumers will go down, and all of a sudden you have the danger of what are called import surges. And just to give an example of what an import surge looks like, in Ghana, for example, before recent trade liberalization, the level of domestic rice production was around 60 percent, and after the liberalization, the amount of rice produced domestically was only 20 percent. In other words, a large segment, the majority of domestic rice producers in Ghana were wiped out by a surge of rice coming, in this particular case, from — subsidized by the United States.

So, what India wanted to do was to protect its farmers from that sort of a surge, and the special safeguard mechanism was the way in which that surge would be counted. It was essentially a threshold beyond which India has the right to impose import tariffs. And India walked away from the table, because that threshold was so high it was meaningless.

ANJALI KAMAT: Raj Patel, I wanted to ask you about the aims of the developing countries in the WTO talks. Shortly before the talks collapsed, Indian trade minister Kamal Nath claimed his chief goal was to protect Indian farmers.

RAJ PATEL: Well, I mean, as I say, in an election year, he would be foolish not to say that. But if you look at the way that the Indian government has been systematically reducing the amount of expenditures that has been given to rural development over the past twenty years, you’ve got to wonder about the depth of the Indian government’s commitment to its poorest people, to the people who live and work in rural areas, and particularly, therefore, to women in rural India. But it’s — so I think this is a bit of a charade.

But it’s also important to remember that the developing countries don’t — aren’t of the same mind. India was very keen to protect its farmers in this particular round or in this particular set of talks, but Brazil, for example, was very keen and very aggressive about promoting agricultural liberalization, because the Brazilian government represents the interests of huge agricultural exporting interests, not small family farmers there, but vast agricultural conglomerations that look very much like the American agricultural conglomerations. And so, Brazil’s position was that they wanted a lot of liberalization. India, on the other hand, wanted very little in agriculture. So, I mean, there’s a certain amount of disunity within developing countries, depending on what their exporting strengths are.

ANJALI KAMAT: And the impact, Raj Patel, of China joining the WTO in 2001? When China joined, there was a certain amount of excitement about, you know, more countries from the Global South joining the WTO.

RAJ PATEL: Yes. I mean, I had friends who — committed third worldists who remember the Non-Aligned Movement and hoped that China would bring a certain measure of socialism with Chinese characteristics into the World Trade Organization. And sadly, what China brought in was capitalism with Chinese characteristics. So, while there was a lot of hope that China would bring a certain kind of solidarity with the oppressed people of the third world, that, sadly, was a political fantasy that long ago expired. And instead, what China has brought in is a hard-nosed negotiation position that is, like every developing country, is primed towards the interests of its most powerful citizens rather than its least powerful.

SHARIF ABDEL KOUDDOUS: Raj Patel, what are the prospects for a change in US trade policy with a new administration? I mean, you have — this is an election year. You’ve had Barack Obama being very critical of free trade and NAFTA, in particular, on the campaign trail and then seeming to back off that somewhat. What’s your sense of that?

RAJ PATEL: Well, I think the same as applies to India kind of applies to the United States right now. It is an election year; you’re absolutely right, Sharif. And the consequences of that are that there’s going to be a certain amount of posturing around — the sort of crocodile tears that you hear from rich people about the plight of poor people, and particularly in the United States, the understanding that trade has cost jobs for blue-collar workers here and trade has imperiled the ability of blue-collar workers to unionize, even. That is certainly sort of one of the stories that’s circulating in the political rhetoric.

But I doubt — I mean, I question the depth of the commitment of Barack Obama to addressing the deep problems that are associated with the current international trade regime. I haven’t heard him say that he’s going to tear up the World Trade Organization charter and try to negotiate something else. And far from it, he’s never gone anywhere close to saying that. All he said is that he would like NAFTA to be renegotiated with stronger environmental and labor provisions. And, of course, that was the promise that Clinton made to be able to get NAFTA through in the first place, and those environmental and labor provisions have been worse than toilet paper. So I unfortunately am very — I have my expectations set very low for the next administration.

ANJALI KAMAT: Raj Patel, you spent a little time interning at the World Trade Organization. Can you talk about that experience?

RAJ PATEL: Yeah. Well, I was curious to see how it all worked, and I volunteered, and I was accepted to be an intern in the economic research department. And I was tasked with finding out why it was — or what the link was between trade and the environment. Does more trade harm the environment or not? And I did the research as best I was able, and I reviewed a great deal of economic literature, the cutting edge of economic literature at the time, which showed that, actually, yes, increased trade does damage the environment, and not just because there’s more stuff being produced and it’s being sent backwards and forwards, but because the way that international trade works is that it offshores as much production as it can to areas with low environmental standards, and therefore the amount of pollution produced per unit of whatever it is is greater in the place where it ends up. So the conclusion was fairly straightforwardly that, yes, trade does increase environmental damage.

And my superiors at the World Trade Organization took my draft report and rewrote it to come up with the opposite conclusion. So, I am very skeptical now when the WTO purports to offer unbiased conclusions about what the — you know, the so-called benefits of its operations to the international economy, because I — you know, I guess I’ve seen firsthand how people’s perspectives rather depend on a very politicized understanding of how to represent the facts around the global economy.

SHARIF ABDEL KOUDDOUS: Raj Patel, your book is Stuffed and Starved: The Hidden Battle for the World Food System, and I’d like to go back to the global food crisis and its connection to free trade policies. What countries have been affected most by the global food crisis?

RAJ PATEL: Well, there’s — the shorthand for understanding the countries that have been hit hardest is to look both at the level of wages in those countries and to see the extent to which they are reliant on imports to be able to meet their needs. One of the most disturbing examples is Haiti, which is the poorest country in the Western Hemisphere and which has been forced by successive US governments to embrace the ideals of international trade. Even before the World Trade Organization was founded, Haiti was being forced to adopt its policies.

And Haiti actually stands for a number of other countries in the Western Hemisphere, in Sub-Saharan Africa, in Asia, that have been forced to liberalize their economies and are now hostage to the international price rises. And in Haiti, the consequences were that the government was not allowed to support its rice producers. It wasn’t allowed to invest in agriculture. So, in the 1980s, Haiti produced the majority of its own rice, and now in Haiti almost all the rice comes from the United States. And that’s the sort of singular consequence of the intersection between free trade and — or so-called free trade and development policy in developing countries.

ANJALI KAMAT: Finally, Raj Patel, do you hold out any hope for efforts at reforming the WTO from within? And also, you know, you’ve talked about the inequities in global trade policy and the structure of the WTO. What do you see as any sort of hope for the future, either within the WTO or without?

RAJ PATEL: I don’t see a whole lot of hope within the WTO. I mean, bear in mind, the WTO is basically a club of powerful states that make other states do what they’re told. In fact, that was one of the remarks of the US Trade Representative Susan Schwab, that India and China were failing to get into the spirit of the talks. And historically, the “spirit of the talks” has been for India and China and all the other developing countries to shut up and do what the United States and Europe tell them to do. Now, what has changed is just that China and India and a few other developing countries are here to stay, and Europe and the United States need to learn to change their negotiating positions in order to be able to get the agreements they want. But there’s no impetus within the WTO to be able to make serious substantive changes.

But what I do see as hopeful is the kinds of alternatives that are being proposed by international groups, such as Via Campesina, one of the world’s largest social movements, that has, by some estimates, 150 million people in it, and they’ve got a vision of exchange, of agricultural policy, of empowerment, particularly women’s empowerment, that’s known as “food sovereignty.” And this is something that Via Campesina member movements are fighting for wherever they are. In the United States, it’s the National Family Farm Coalition. But in India, there are half-a-dozen movements. In Brazil, it’s the rural — the Brazilian landless rural workers’ movement. All of these movements, with large mass-based democratic movements, are pushing their governments to adopt the policies that would invest in rural agriculture, that are not tilted towards the big corporations but are tilted toward sustainability. And as the current food crisis gets worse, I think that there’s a stronger and stronger case for the alternative that the global justice movement is offering, and I think that that’s very hopeful.

SHARIF ABDEL KOUDDOUS: Raj Patel, I want to thank you very much for being with us. Raj Patel is a writer and activist. His book is Stuffed and Starved: The Hidden Battle for the World Food System.

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