BY EVA CHENG
Although the World Trade Organisation (WTO) was formed in 1995, its predecessor the General Agreement on Tariffs and Trade came into existence in 1948. GATT was part of a three-pronged mechanism created by the United States government to dominate the world in the wake of its victory in World War II.
The World Bank and International Monetary Fund were the other prongs, formed slightly earlier. The World Bank implements control by loaning, or refusing to loan, funds to poor countries. The IMF plays the "white knight" by assisting countries experiencing international balance of payment troubles.
GATT sought to control by "managing" and policing world trade. Until the 1980s, GATT was the least developed of the three imperialist bodies, with only 23 contracting parties (countries that had agreed to submit to its rules) in 1948, and 96 in 1988.
The WTO now has close to 150 members. The revival and strengthening of German and Japanese capitalists in the 1950s and 1960s, at the expense of their US counterparts, prompted Washington to improve the functions of GATT to serve its interests. Since the 1970s, when corporate profitability in the imperialist centres began a long decline, Western Europe and Japan also saw the increasing value of GATT.
Since then, there have been partial and short-term recoveries in profitability for one or other of the three imperialist centres at one another's expense. But the "golden age" of high rates of profit growth in the core capitalist countries has never recovered.
The swift advances in the productive forces, propelled by the need to outbid competitors, compounded capitalism's structural problem of overcapacity. All these greatly increased the importance of overseas sales and capital exports to prop up profitability. Hence, the increasing pressure to expand GATT and make it a more effective tool for imperialist capital to pry open overseas markets.
All countries sought to defend their own capitalists and put up trade barriers. But only a few, the imperialist powers, succeeded. Others tried, with partial success at best, but were bullied by the governments of the richest countries into submission. Most Third World countries fell into this last category.
However, these countries didn't give up without a fight; this was the reason behind the long negotiations of the Uruguay round of trade negotiations (1986-94), which took twice the scheduled time to complete. There were six similar "rounds" of negotiations before that.
Even under GATT, the official line was that "free trade" (the reduction and eventual elimination of trade barriers between countries) would benefit all countries involved. All member countries were said to be equal and have as much say in shaping the outcome of the trade negotiations as the next member.
According to South-North Development Monitor #1659, in a rare candid moment, the European Economic Community chief spokesperson Tran Van-Thinh made clear to reporters in February 1987 that the main agenda items of the new trade round would not be "technical issues" such as tariffs, but wider economic issues and trade policy. He commented that the main negotiations would be a trilateral affair between the US, EEC and Japan. The EEC later became the European Union (EU).
GATT remained a provisional treaty for 40 years because of Washington's refusal to ratify it the US did not want to cede any degree of sovereignty on trade matters. Washington finally found a way to get round that: it simply applied double standards, using behind-the-scene manoeuvring and bullying to impose "free trade" on other governments while refusing to abide by the same measures itself. The EU and Japan were also in a strong position to use the same tricks.
The bulk of GATT/WTO members overwhelmingly from the Third World had no such mechanisms to ease the loss of control over trade policy. GATT primarily covered physical goods up until the 1970s. Since the early 1980s, Washington pushed to extend GATT's coverage to the trade in services (such as capital investment and capital movement, banking, insurance, shipping, consultancy and data systems), agriculture, high-technology, investment measures and trade in counterfeit goods.
There was strong resistance from Third World countries to this expanded agenda. Many were still struggling under the weight of the debt crisis which hit in early 1980s. In the end, most of the new items were included in the Uruguay Round.
Only with great reluctance, and after a long delay, was the Uruguay Round "agreed" upon. The understanding was that, in exchange for opening their markets to imperialist capital and goods, Third World countries would benefit from a corresponding reduction in the First World's trade barriers.
However, by the time of the WTO's first ministerial meeting in Singapore in December 1996, many Third World members had begun to realise that this reciprocal exchange was not taking place. First World members resorted to all sorts of measures (such as unilateral national laws and "emergency" protective measures) to prevent poor countries' exports reaching rich-country markets. Third World members complained, but their concerns were ignored.
Meanwhile, mounting social devastation resulted from the opening of Third World markets to First World goods and services. Resentment reached an explosive point by the time of the WTO ministerial meeting in Seattle in late 1999.
At the 2001 Doha ministerial meeting, First World members succeeded in forcing many "new areas" onto the negotiations agenda for the next few years, including investment, competition policy and government procurement. These headings don't seem harmful, but in fact are part of a new attack on the sovereignty and survival of the Third World.
Months after Doha, Third World complaints about the First World's failure to honour its commitments continued to be pushed aside. Meanwhile, Washington, while continuing to spew out "free trade" rhetoric, has had the gall to impose new tariffs on steel imports and raise the subsidies the US government pays its farmers.
From Green Left Weekly, August 28, 2002.
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