world trade talks collapse
WORKERS, OCTOBER 2003 ISSUE
The collapse of the international trade negotiations has been seen as a massive defeat for the European Union - and has left many wondering if the World Trade Organisation (WTO) has any real future. The negotiating strategy of Pascal Lamy, the European commissar for trade, was to try to divide the Southern countries, who in fact stayed united on key issues, despite differences between larger and smaller states. The Southern countries regard the WTO as dominated by Europe and the US and even more so by their corporations.
The EU had in fact made some small shifts on the Common Agricultural Policy to try to win concessions on matters like investment and competition policy, but the US would not budge, and the American Farm Bill remains firmly intact. This bill will substantially increase price guarantees for American crops such as corn and wheat and will increase new subsidies for others such as soybeans. American agriculture is dependent on exports and effectively forces its goods onto other countries.
The damage done to countries the USA trades with is enormous. For example, as a condition of entry to the WTO, China has to open its markets and is now facing a flood of American imports at the expense of its own farmers. Not surprisingly, the Chinese are growing increasingly anxious, as the knock-on effects could have implications for internal stability.