Cancun Failures

It doesn't take any great feats of clairvoyance to know what the outcome of the forthcoming trade talks in Cancun will be. The developed west will use the talks to further entrench its own position of world dominance, while make vague promises to the developing world and failing to implement earlier vague promises. What the Cancun talks could and should be is another matter entirely.

Globalisation is a fact of life now. If nothing else, the Internet has ensured that individuals will continue to form social and economic networks across mere national boundaries. At the moment of writing, I'm awaiting delivery of paper from Thailand and books from America. This kind of personal globalisation has many benefits - consumers gain greater choice and better value, producers gain new markets. The only down side (and admittedly its a big down side) is that personal globalisation automatically allows for multi-nationals. Liberalising small enterprise without similar liberalisation at the higher end of the scale is difficult, if not impossible, to achieve.

My problem isn't with globalisation per se - as I mentioned, I believe it is both inevitable, and potentially beneficial - but with the current implementation. While liberalisation for small enterprise only is potentially difficult, liberalisation for the benefit solely of large multi-nationals is frighteningly easy. The current implementation of globalisation allows multi-nationals to retreat to countries where they can pressure the governments into providing a no tax, no regulation environment, whilst still maintaining their dominance of the lucrative western markets. It allows large, developed states (notably the US and Europe) to force open new markets and dispose of their unwanted, subsidised product, whilst protecting their own native industries.

The current form of globalisation is obviously destructive to the developing world, leaving them at the mercy of developed countries and the multi-nationals. Clearly, a fairer system would benefit them. What may be less clear is that a fairer system will also, ultimately, benefit the developed west.

American and European attitudes to globalisation rely on the creation of new markets through, essentially, economic imperialism. We use our financial and political weight to force new markets open, relying on the third world as a place to dump our surplus, and to produce cheap consumables. Our way of life relies on the continued existence of poor countries that we can exploit. It is not, however, a sustainable approach. Many countries in Asia, especially in the south-east, have already moved from developing to developed, and are proving economies large enough to threaten America. The remaining poor countries have seen these examples, and in many cases are actively following their lead. The Internet and other mechanisms of small scale globalisation are facilitating the process. The current situation, where we rely on being the wealthy few able to dominate the poor majority, is already breaking down. At present, there are only two players in the game - America and Europe. In ten years, India is likely to eclipse both. When (not if) Russia and China shake off the shackles of communism and succeed in modernising and invigorating their economies, our domination will be entirely broken. The future contains a growing ring of wealthy economies fighting over a shrinking pool of poor country "resources".

The current approach to globalisation cannot, in the long run, work. Bitter trade disputes will erupt with growing frequency, and we will not win them all. The pretence of desiring a free market while protecting our own industries cannot succeed when faced with competitors of equal might.

America and Europe are faced with two options, both equally unpalatable. The currently preferred choice is to tie the most threatening of the emerging economies into so many treaties and agreements that international law can be used to control their behaviour in the future. I assume this is the preferred option because it gives the illusion that it will allow America and Europe to maintain their dominance indefinitely. The problem is that, as America and Britain have amply demonstrated in Iraq, international law only applies to the weak. It is a foolish man who believes that, for instance, India (a nuclear power with an increasingly well educated and technically competent population well in excess of one billion) will feel the need to remain bound by any unfavourable treaty. By insisting on market dominance by the strong, we can only be storing up future trouble for ourselves.

There is another option, and that is to aim for globalisation that is fair to all. Promoting a globalisation agenda that aims to protect the livelihood of workers in all economies, large and small, would not guarantee our future protection from enlarged economic blocks. However, we would be guaranteed more global support for our position, and have the moral benefit of not having our own methods turned against us.

Fair globalisation is difficult to generalise about. The Guardian, for instance, has been campaigning recently for an end to all agricultural subsidies. Now, in their current form, that makes a certain amount of sense. Subsidies allow America and Europe to sell grain at below the cost of production, destroying the market for third world farmers. But subsidies could also be used to support small farmers, encourage environmentally friendly practice, and help keep less economically viable crops and breeds available. The difference is the effect on the international market. Balancing the legitimate desire to support local production for local consumption with the need to prevent the current destructive practices is difficult, but not impossible. What is required is negotiation and arbitration, with the aim of not destabilising foreign markets. Subsidies have a place in maintaining the balance between the desire to protect the local and the desire to open new markets. But not when they supply the profits of already wealthy farmers.

In the end, this is the root problem. Trade negotiation is dominated by the multi-nationals, the wealthy countries, and their richest citizens. While reconstruction projects are handed to the friend's of the vice-president, clean water is tied to multi-national profits, and agricultural policy prevents the poor from selling their crops, globalisation cannot achieve it potential. Instead, it becomes a tool of imperialist oppression. The negotiations in Cancun could start to change this. But they won't.

Graham Robinson. 27th August 2003.

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