"We need a revolution in global trade"

Walden Bello is professor of Sociology and Public Administration at the University of the Philippines, and executive director of the Bangkok-based research and advocacy organisation Focus on the Global South. At the Fifth World Trade Organization (wto) Ministerial Conference at Cancun, Mexico, Clifford Polycarp caught up with him

Published: Saturday 04 July 2015

Everybody keeps cribbing about the wto. What exactly is the problem with the institution?

From the perspective of the South, the wto has three main problems. One, it is undemocratic and unpredictable. There are no formal processes of democratic decision-making, such as the majority rule. Decisions do not take place in formal parliamentary sessions, but in halls, where people don't know where and how decisions are made because only a few countries control the process.

Secondly, the wto is anti-development. All the key agreements in the wto massively impact the capacity of developing countries to develop their different sectors. For instance, the Trade-Related Aspects Intellectual Property Rights agreement, the Trade-Related Investment Measures agreement, the elimination of quotas and the lowering of tariffs only in one direction -- they all make it extremely difficult for countries to follow the development path.

Third, the wto is obsolete. You have an organisation caught up in neo-liberalism, basically regulating or deregulating markets, ensuring they are made as "free" as possible. This sort of deregulated market for profitability and competition has, over the last two decades, been extremely destabilising for people, whether you look at poverty figures, quality figures, or at environment. Neo-liberalism has been a massive failure.

Why these asymmetries?

The wto with its rules and regulations is an effort to instutionalise the hegemony of the North over the South. Then there is the dynamic of the global capitalist system; the wto gets affected by the phases of capitalist development. In a period of recession, like we have now, the us prefers not to use too much of the multilateral mechanism and relies more on bilateral mechanisms. So, why is there this problem? Because the wto is a reflection of the power structure of the world today.

Any way to correct these imbalances?

No. There is a difference between reforming a fundamentally sound institution and reforming an institution that is fundamentally unsound in its basics.

But, we have to live with it. Don't we need to change it in some way?

Maybe the thing to do is to oppose the further accumulation of its powers. Or to reduce its powers. Or to ignore it. When paradigms are in crisis, they become more complex in terms of trying to explain reality, or so heavy that they no longer make sense. So, you're better off choosing a new paradigm. Because, the costs of reform are higher than the costs of dismantling that institution. This is where we are right now. So, we need a paradigm revolution in global trade. And the wto is a cage that can no longer contain the different dynamics of the global economy. So yes, we have to live with it. But, probably it is best that we do phase it out.

What, in practical terms, is required?

I think we need to create regional blocs that are based not on free trade but on actual economic cooperation with major criteria. I think we need to democratise asean for instance, and make the decision-making in the Mercosur be more driven by politics. So, what we need to do at the national level is to think about bringing about mechanisms of sustainable development. And at the international or regional level, we ought to think about greater economic coordination amongst neighbours, not in a technocratic sense but in a way that is both progressive politically and economically. Which means you have to bring in your people into the integration process. You cannot leave people out of the process.

This is precisely the problem with the eu now. Because the European common market was technocratically decided upon and never democratically approved, it faced a lot of problems in terms of becoming a more representative institution. And right now, you also find how there is so much resistance from many countries within the eu to the institutions of the eu. This is because the people were not democratically brought into the process of European integration.

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