WTO

The WTO's Last Gasp?


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Most had already proclaimed it dead, and were surprised to learn that the WTO was meeting in a frenzied attempt to conclude its "Doha Round" negotiations. The prospects for wrapping up a deal were slim, and many expected the WTO to lapse quickly back into coma. With the collapse of the talks, that is precisely what happened.

Pascal LamyThis general attitude of pessimism was awkwardly expressed by Pascal Lamy, General Director of the WTO: "…It is clear we need to move into a more intensive mode of consultations including smaller configurations".. In plain English, this means that the deal everybody wants isn't going to happen, and that a "we'll take what we can get" attitude now prevails.
Most likely, Doha will confirm what everybody already knew: the WTO is dying. And although keeping a brain dead patient on life support is sometimes comforting, the plug must be pulled eventually.

The death rattle has reverberated throughout the ruling class and beyond. Stark warnings are being broadcasted. The once mighty optimism in the market economy has turned sour. The Economist, in a most foreboding tone, had this to say: "It is possible to imagine the world economy becoming less integrated. It has happened before: the fairly free world economy of the late 19th century was riddled with protectionism by the 1930s."

And with this we get to the heart of the matter. Like the UN, itself experiencing terminal illness, the WTO was set-up after WWII with the intention of managing and minimizing economic disasters and wars. Above all, these institutions exist to maintain the economic dominance of the advanced capitalist countries and the capitalist system itself.
When the economy is growing, this is easier to do. But when a serious, global recession hits, free-trade is quickly tossed aside – an "everyone for themselves" attitude takes over. Protectionism and trade blocs develop, in an attempt to push the effects of the recession onto someone else.

And while many so-called liberals will whine about the sacredness of the "democratic" institutions of the WTO and UN, we must explain the true class nature of these institutions. The UN is controlled by the Security Council – dominated by many of the same countries that pull the strings at the WTO. It is illustrative to mention that only 35 countries (out of 153) were invited to the current WTO negotiations.

Even though every member country has a veto vote in the WTO, the poor countries know their place. After the last WTO talks collapsed, the poorer countries that rejected submissiveness were subsequently threatened by U.S. politicians, who made it clear that they would be forbidden access to the all-powerful U.S. market. Similar threats, though usually made behind the scenes, are the basis for this institution of "democracy".

But even this has its limits. The nations that have traditionally ruled the world with an iron first are losing their ability to intimidate and control the others. A bloc of developing countries – China, India, Brazil, South Africa, etc – have used the WTO as a venue to flex their growing muscles. China in particular is using the WTO to expand its power at the expense of its rivals. The NY Times agrees: "The [WTO] discussions in Geneva have confirmed that the balance of power in global trade has shifted irrevocably with the rise of China." The old powers – Europe, the U.S., Japan, etc. – are seeing their supremacy slip away; they are the ones who are abandoning the WTO for what they desperately hope will be the calmer waters of bi-lateral and regional free-trade agreements.

These kinds of free-trade agreements now account for more than half of the world's trade. The crisis of the WTO has only accelerated this process, which has the effect of making an already-slumping world economy worse while heightening tensions between nations that were already strained.

IMFThe giant corporations – themselves owned by billionaires – are the ones quickly driving the world towards greater and more destructive trade wars and military confrontations. The international institutions of stability that the mega-rich created for themselves – WTO, UN, IMF, World Bank, etc. – have been discredited or are self destructing. This is because the the crisis of the world capitalist system is causing the balance of power between countries to shift dramatically. Historically, the process of "re-organization" has led to war, the winners of which create international institutions to their fitting.

Economic superpowers do not simply forfeit their power, the basis of which is rooted in the capitalist economic system. But the system has outlived its historic usefulness, and threatens to return the world to the state of barbarism that it assured us could never happen again (the WTO was a key "insurance" company). Society cannot be run for the private profit of individuals without these periodic episodes of crisis. Taking control of social wealth out of private hands is society's crucial task, a struggle guided by the ideas of socialist internationalism.


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