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GE - WTO Reform?



Why Reform of the WTO is the Wrong Agenda

By Walden Bello*


In the wake of the collapse of the Seattle Ministerial, there has 
emerged the opinion that reform of the WTO is now the program that NGOs, 
governments, and citizens must embrace.  The collapse of the WTO 
Ministerial is said to provide a unique window of opportunity for a 
reform agenda.
 
Cited by some as a positive sign is United States Trade Representative 
Charlene Barshefsky's comment, immediately after the collapse of the 
Seattle Ministerial, that "the WTO has outgrown the processes 
appropriate to an earlier time."  An increasing and necessary view, 
generally shared among the members, was that we needed a process which 
had a greater degree of internal transparency and inclusion to 
accommodate a larger and more diverse membership." (1)
 
Also seen as an encouraging gesture is UK Secretary of State for 
Trade and Industry Stephen Byers' recent statement to Commonwealth Trade 
Ministers in New Delhi that the "WTO will not be able to continue in its 
present form.  There has to be fundamental and radical change in order 
for it to meet the needs and aspirations of all 134 of its members." (2)
 
These are, in our view, damage control statements and provide little 
indication of the seriousness about reform of the two governments that 
were, pre-Seattle, the stoutest defenders of the inequalities built into 
the structure, dynamics, and objectives of the WTO.  It is unfortunate 
that they are now being cited to convince developing 
countries and NGOs to take up an agenda of reform that could lead 
precisely to the strengthening of an organization that is very 
fundamentally flawed.  

What civil society, North and South, should instead be doing at this 
point is radically cutting down the power of the institution and 
reducing it to simply another institution in a pluralistic world trading 
system with multiple systems of governance.

Does World Trade Need the World Trade Organization?
 
This is the fundamental question on which the question of reform 
hinges.  
 
World trade did not need the WTO to expand 17-fold between 1948 and 
1997, from $124 billion to $10,772 billion.(3)  This expansion took 
place under the flexible GATT trade regime.   The WTO's founding in 1995 
did not respond to a collapse or crisis of world trade such as happened 
in the 1930's.  It was not necessary for global peace, since no world 
war or trade-related war had taken place during that period.  In the 
seven major inter-state wars that took place in that period-the Korean 
War of 1950-53, the Vietnam War of 1945-75, the Suez Crisis of 1956, the 
1967 Arab-Israeli War, the 1973 Arab-Israeli War, the 1982 Falklands 
War, and the Gulf War of 1990-trade conflict did not figure even 
remotely as a cause.
 
GATT was, in fact, functioning reasonably well as a framework for 
liberalizing world trade.  Its dispute-settlement system was flexible 
and with its recognition of the "special and differential status" of 
developing countries, it provided the space in a global economy for 
Third World countries to use trade policy for development and 
industrialization. 
 
Why was the WTO established following the Uruguay Round of 1986-94?  Of 
the major trading powers, Japan was very ambivalent, concerned as it was 
to protect its agriculture as well as its particular system of 
industrial production that, through formal and informal mechanisms, gave 
its local producers primary right to exploit the domestic market.  The 
EU, well on the way of becoming a self-sufficient trading bloc, was 
likewise ambivalent, knowing that its highly subsidized system in 
agriculture would come under attack.  Though demanding greater access to 
their manufactured and agricultural products in the Northern economies, 
the developing countries did not see this as being accomplished through 
a comprehensive agreement enforced by a powerful trade bureaucracy but 
through discrete negotiations and agreements in 
the model of the Integrated Program for Commodities (IPCs) and Commodity 
Stabilization Fund agreed upon under the aegis of UNCTAD in the late 
seventies.
 
The founding of the WTO served primarily the interest of the United 
States.  Just as it was the US which blocked the founding of the 
International Trade Organization (ITO) in 1948, when it felt that this 
would not serve its position of overwhelming economic dominance in the 
post-war world, so it was the US that became the dominant lobbyist for 
the comprehensive Uruguay Round and the founding of the WTO in late 
eighties and early nineties, when it felt that more competitive global 
conditions had created a situation where its corporate interests now 
demanded an opposite stance.
 
Just as it was the US's threat in the 1950's to leave GATT if it was 
not allowed to maintain protective mechanisms for milk and other 
agricultural products that led to agricultural trade's exemption from 
GATT rules, so was it US pressure that brought agriculture into the 
GATT-WTO system in 1995.  And the reason for Washington's change of mind 
was articulated quite candidly by then US Agriculture Secretary John 
Block at the start of the Uruguay Round negotiations in 1986:  "[The] 
idea that developing countries should feed themselves is an anachronism 
from a bygone era.  They could better ensure their food security by 
relying on US agricultural products, which are available, in most cases 
at much lower cost."(4)  Washington, of course, did not just have 
developing country markets in mind, but also Japan, South Korea, and the 
European Union.
 
It was the US that mainly pushed to bring services under WTO coverage, 
with its assessment that the in the new burgeoning area of international 
services, and particularly in financial services, its 
corporations had a lead that needed to be preserved.  It was also 
the US that pushed to expand WTO jurisdiction to the so-called 
"Trade-Related Investment Measures" (TRIMs) and "Trade-Related 
Intellectual Property Rights (TRIPs)." The first sought to eliminate 
barriers to the system of internal cross-border trade of product 
components among TNC (transnational corporations) subsidiaries 
that had been imposed by developing countries in order to develop 
their industries; the second to consolidate the US advantage in the 
cutting-edge knowledge-intensive industries.

And it was the US that forced the creation of the WTO's formidable 
dispute-resolution and enforcement mechanism after being frustrated with 
what US trade officials considered weak GATT efforts to enforce rulings 
favorable to the US.  As Washington's academic point man on trade, C. 
Fred Bergsten, head of the Institute of International Economics, told 
the US Senate, the strong WTO dispute settlement mechanism serves US 
interests because "we can now use the full weight of the international 
machinery to go after those trade barriers, reduce them, get them 
eliminated."(5) 
 
In sum, it has been Washington's changing perception of the needs 
of its economic interest-groups that have shaped and reshaped the 
international trading regime.  It was not global necessity that gave 
birth to the WTO in 1995.  It was the US's assessment that the interests 
of its corporations were no longer served by a loose and 
flexible GATT but needed an all-powerful and wide-ranging WTO.   
>From the free-market  paradigm that underpins it, to the rules and 
regulations set forth in the different agreements that make up the 
Uruguay Round, to its  system of decision-making and accountability, the 
WTO is a blueprint for the global hegemony of Corporate America.  It 
seeks to institutionalize the accumulated advantages of US corporations.
 
Is the WTO necessary?  Yes, to the United States.  But not to the rest 
of the world.  The necessity of the WTO is one of the biggest lies of 
our time, and its acceptance is due to the same propaganda principle 
practised by Joseph Goebbels:  if you repeat a lie often enough, it will 
be taken as truth.

Can the WTO Serve the Interests of the Developing Countries? 

But what about the developing countries?  Is the WTO a necessary 
structure--one that, whatever its flaws, brings more benefits than 
costs, and would therefore merit efforts at reform?
 
When the Uruguay Round was being negotiated, there was considerable lack 
of enthusiasm for the process by the developing countries.  After all, 
these countries had formed the backbone of UNCTAD, which, with its 
system of one-country/one-vote and majority voting, they felt was an 
international arena more congenial to their interests.  They entered the 
Uruguay Round greatly resenting the large trading powers' policy of 
weakening and marginalizing UNCTAD in the late seventies and early 
eighties.Largely passive spectators, with a great number not even 
represented during the negotiations owing to resource constraints, the 
developing countries were dragged into unenthusiastic 
endorsement of the Marrakesh Accord of 1994 that sealed the Uruguay 
Round and established the WTO.  True, there were somedeveloping 
countries, most of them in the Cairns Group of developed and developing 
country agro-exporters, that actively promoted the WTO in the hope that 
they would gain greater market access to their exports, but they were a 
small minority.

To try to sell the WTO to the South, US propagandists evoked the 
fear that staying out of the WTO would result in a country's isolation 
from world trade ("like North Korea") and stoked the promise that a 
"rules-based system" of world trade would protect the weak countries 
from unilateral acts by the big trading powers.   

With their economies dominated by the IMF and the World Bank, 
with the structural adjustment programs pushed by these agencies 
having as a central element radical trade liberalization, much 
weaker as a bloc owing to the debt crisis compared to the 1970's, 
the height of the "New International Economic Order," most developing 
country delegations felt they had no choice but to sign on the dotted 
line.
 
Over the next few years, however, these countries realized that they had 
signed away their right to employ a variety of critical trade 
measures for development purposes.
 
In contrast to the loose GATT framework, which had allowed some  space 
for development initiatives, the comprehensive and tightened Uruguay 
Round was fundamentally anti-development in its thrust.  
This is evident in the following:

Loss of Trade Policy as Development Tool

In signing on to GATT, Third World countries were committed to 
banning all quantitative restrictions on imports, reduce tariffs on 
many industrial imports, and promise not to raise tariffs on all other 
imports.  In so doing, they have effectively given up the use of trade 
policy to pursue industrialization objectives.  The way that the 
NICs, or "newly industrializing countries," made it to industrial 
status, via the policy of import substitution, is now effectively 
removed as a route to industrialization.

The anti-industrialization thrust of the GATT-WTO Accord is made 
even more manifest in the Agreement on Trade-Related Investment 
Measures (TRIMs) and the Agreement on Trade-Related Intellectual 
Property Rights (TRIPs).  In their drive to industrialize, NICs like 
South Korea and Malaysia made use of many innovative mechanisms such as 
trade-balancing requirements that tied the value of a foreign investor's 
imports of raw materials and components to the value of his or her 
exports of the finished commodity, or "local content" regulations which 
mandated that a certain percentage of the components that went into the 
making of a product was sourced locally.

These rules indeed restricted the maneuvering space of foreign 
investors, but they were successfully employed by the NICs to 
marry foreign investment to national industrialization.  They enabled 
the NICs to raise income from capital-intensive exports, develop 
support industries, bring in technology, while still protecting local 
entrepreneurs' preferential access to the domestic market.  In 
Malaysia, for instance, the strategic use of local content policy 
enabled the Malaysians to build a "national car," in cooperation 
with Mitsubishi, that has now achieved about 80 per cent local content 
and controls 70 per cent of the Malaysian market.  Thanks to the TRIMs 
accord, these mechanisms used are now illegal.

The Restriction of Technological Diffusion

Like the TRIMs agreement, the TRIPs regime is seen as effectively 
opposed to the industrialization and development efforts of Third 
World countries.  This becomes clear from a survey of the economic 
history not only of the NICs but of almost all late-industrializing 
countries.  A key factor in their industrial take-off was their 
relatively easy access to cutting-edge technology:   The US 
industrialized, to a great extent by using but paying very little 
for British manufacturing innovations, as did the Germans.  Japan 
industrialized by liberally borrowing US technological innovations, 
but barely compensating the Americans for this.  And the Koreans 
industrialized by copying quite liberally and with little payment US 
and Japanese product and process technologies.

But what is "technological diffusion" from the perspective of the late 
industrializer is "piracy" from that of the industrial leader.  The 
TRIPs regime takes the side of the latter and makes the process of 
industrialization by imitation much more difficult from hereon.  It 
represents what UNCTAD describes as "a premature strengthening 
of the intellectual property system...that favors monopolistically 
controlled innovation over broad-based diffusion."(6)
 
The TRIPs regime provides a generalized minimum patent 
protection of 20 years; increases the duration of the protection for 
semi-conductors or computer chips; institutes draconian border 
regulations against products judged to be violating intellectual 
property rights; and places the burden of proof on the presumed 
violator of process patents.
 
The TRIPs accord is a victory for the US high-tech industry, which 
has long been lobbying for stronger controls over the diffusion of 
innovations.  Innovation in the knowledge-intensive high-tech sector-
in electronic software and hardware, biotechnology, lasers, opto-
electronics, liquid crystal technology, to name a few-has become 
the central determinant of economic power in our time.  And when 
any company in the NICs and Third World wishes to innovate, say 
in chip design, software programming, or computer assembly, it 
necessarily has to integrate several patented designs and 
processes, most of them from US electronic hardware and software 
giants like Microsoft, Intel, and Texas Instruments.(7) As the 
Koreans have bitterly learned, exorbitant multiple royalty payments 
to what has been called the American "high tech mafia" keeps 
one's profit margins very low while reducing incentives for local 
innovation.   

The likely outcome is for a Southern manufacturer simply to pay 
royalties for a technology rather than to innovate,  thus perpetuating 
the technological dependence on Northern firms.Thus, TRIPs enables the 
technological leader, in this case the United States, to greatly 
influence the pace of technological and industrial development in rival 
industrialized countries, the NICs, and the Third World.

Watering Down the "Special and Differential Treatment" 
Principle
 
The central  principle of UNCTAD (United Nations Conference on Trade and 

Development)--an organization disempowered by the establishment 
of the WTO--is that owing to the critical nexus between trade and 
development, developing countries must not be subjected to the 
same expectations, rules, and regulations that govern trade among 
the developed countries.  Owing to historical and structural 
considerations, developing countries need special consideration 
and special assistance in leveling the playing field for them to be 
able to participate equitably in world trade.  This would include both 
the use of protective tariffs for development purposes and 
preferential access of developing country exports to developed 
country markets.

While GATT was not centrally concerned with development, it did 
recognize the "special and differential status" of the developing 
countries.   Perhaps the strongest statement of this was in the 
Tokyo Round Declaration in 1973, which recognized "the 
importance of the application of differential measures in developing 
countries in ways which will provide special and more favourable 
treatment for them in areas of negotiation where this is feasible."(8)
Different sections of the evolving GATT code allowed countries to 
renegotiate tariff bindings in order to promote the establishment of 
certain industries; allowed developing countries to use tariffs for 
economic development and fiscal purposes; allowed them to use 
quantitative restrictions to promote infant industries; and conceded 
the principle of non-reciprocity by developing countries in trade 
negotiation.(9)   The 1979 Framework Agreement known at the 
Enabling Clause also provided a permanent legal basis for General 
System of Preferences (GSP) schemes that would provide 
preferential access to developing country exports.(10) 
 
A significant shift occurred in the Uruguay Round.  GSP schemes 
were not bound, meaning tariffs could be raised against developing 
country until they equaled the bound rates applied to imports for all 
sources.  Indeed, during the negotiations, the threat to remove 
GSP was used as "a form of bilateral pressure on developing 
countries."(11)  SDT was turned from a focus on a special right to 
protect and special rights of market access to "one of responding 
to special adjustment difficulties in developing countries stemming 
from the implementation of WTO decisions."(12)  Measures meant 
to address the structural inequality of the trading system gave way 
to measures, such as a lower rate of tariff reduction or a longer 
time frame for implementing decisions, which regarded the problem 
of developing countries as simply that of catching up in an 
essentially even playing field.
 
STD has been watered down in the WTO, and this is not surprising 
for the neoliberal agenda that underpins the WTO philosophy differs 
from the Keynesian assumptions of GATT: that there are no 
special rights, no special protections needed for development.  The 
only route to development is one that involves radical trade (and 
investment) liberalization. 

Fate of the Special Measures for Developing Countries
 
Perhaps the best indicators of the marginal consideration given to 
developing countries in the WTO is the fate of the measures that 
were supposed to respond to the special conditions of developing 
countries.   There were three key agreements which promoters of 
the WTO claimed were specifically designed to meet the needs of 
the South:

* The Special Ministerial Agreement approved in Marrakesh in April 1994,
which decreed that special compensatory measures would be taken to
counteract the negative effects of trade liberalization on the net 
food-importing developing countries;

* The Agreement on Textiles and Clothing, which mandated thart 
the system of quotas on developing country exports of textiles and 
garments to the North would be dismantled over ten years;

* The Agreement on Agriculture, which, while "imperfect," 
nevertheless was said to promise greater market access to 
developing country agricultural products and begin the process of 
bringing down the high levels of state support and subsidization of 
EU and US agriculture, which was resulting in the dumping of 
massive quantities of grain on Third World markets.

What happened to these measures?
 
The Special Ministerial Decision taken at Marrakesh to provide 
assistance to "Net Food Importing Countries" to offset the 
reduction of subsidies that would make food imports more 
expensive for the "Net Food Importing Countries" has never been 
implemented.  Though world crude prices more than doubled in 
1995/96, the World Bank and the IMF scotched an idea of any 
offsetting aid by arguing that "the price increase was not due to the 
Agreement on Agriculture, and besides there was never any 
agreement anyway on who would be responsible for providing the 
assistance."(13) 

The Agreement on Textiles and Clothing committed the developed 
countries to bring under WTO discipline all textile and garment 
imports over four stages, ending on January 1, 2005.  A key feature 
was supposed to be the lifting of quotas on imports restricted under 
the Multifiber Agreement (MFA) and similar schemes which had 
been used to contain penetration of developed country markets by 
cheap clothing and textile imports from the Third World.  Developed 
countries retained, however,  the right to choose which product 
lines to liberalize when, so that they first brought mainly 
unrestricted products into the WTO discipline and postponed 
dealing with restricted products till much later.   Thus, in the first 
phase, all restricted products continued to be under quota, as only 
items where imports were not considering threatening-like felt hats 
or yarn of carded fine animal hair--were included in the developed 
countries' notifications.  Indeed, the notifications for the coverage of 

products for liberalization on January 1, 1998 showed that "even at 
the second stage of implementation only a very small proportion" of 
restricted products would see their quotas lifted.(14)

Given this trend, John Whalley notes that "the belief is now widely 
held in the developing workd that in 2004, whilme the MFA may 
disappear, it may well be replaced by a series of other trade 
instruments, possibly substantial increases in anti-dumping 
duties." (15)
 
When it comes to the Agreement on Agriculture, which was sold to 
developing countries during the Uruguay Round as a major step 
toward providing market access to developing country imports and 
bringing down the high levels of domestic support for first world 
farming interests that results in dumping of commodities in third 
world markets, little gains in market access after five years into 
developed country markets have been accompanied by even higher 
levels of overall subsidization-through ingenious combinations of 
export subsidies, export credits, market support, and various kinds 
of direct income payments.  

The figures speak for themselves:  the level of overall subsidization 
of agriculture in the OECD countries rose from $182 billion in 1995 
when the WTO was born to $280 billion in 1997 to $362 billion in 
1998!   Instead of the beginning of a New Deal, the AOA, in the 
words of a former Philippine Secretary of Trade, "has perpetuated 
the unevenness of a playing field which the multilateral trading 
system has been trying to correct.  Moreover, this has placed the 
burden of adjustment on developing countries relative to countries 
who can afford to maintain high levels of domestic support and 
export subsidies."(16) 
 
The collapse of the agricultural negotiations in Seattle is the best 
example of how extremely difficult it is to reform the AOA.  The 
European Union opposed till the bitter end language in an 
agreement that would commit it to "significant reduction" of its 
subsidies.  But the US was not blameless.  It resolutely opposed 
any effort to cut back on its forms of subsidies such as export 
credits, direct income for farmers, and "emergency" farm aid, as 
well as any mention of its practice of dumping products in 
developing country markets.

Oligarchic Decision-Making as a Central, Defining Process
 
Is the system of WTO decisionmaking reformable?  
While far more flexible than the WTO, the GATT was, of course, far 
from perfect, and one of the bad traits that the WTO took over  from 
it was the system of decision-making.   GATT functioned through a 
process called "consensus."  Now consensus responded to the 
same problem that faced the IMF and the World Bank's developed 
country members:  how to assure control at a time that the 
numbers gave the edge to the new countries of the South.  In the 
Fund and the Bank, the system of decision-making evolved had the 
weight of a country's vote determined by the size of its capital 
subscriptions, which gave the US and the other rich countries 
effective control of the two organizations.

In the GATT, a one-country one-vote system was initially tried, but 
the big trading powers saw this as inimical to their interests.  Thus, 
the last time a vote was taken in GATT was in 1959.(17) The 
system that finally emerged was described by US economist 
Bergsten as one that "does not work by voting.  It works by a 
consensus arrangement which, to tell the truth, is managed by four-
the Quads:  the United States, Japan, European Union, and 
Canada."(18) He continued:  "Those countries have to agree if any 
major steps are going to be made, that is true.  But no votes.(19)
 
Indeed, so undemocratic is the WTO that decisions are arrived at 
informally, via caucuses convoked in the corridors of the 
ministerials by the big trading powers.  The formal plenary 
sessions, which in democracies are the central arena for decision-
making, are reserved for speeches.  The key agreements to come 
out of the first and second ministerials of the WTO-the decision to 
liberalize information technology trade taken at the first ministerial 
in Singapore in 1996 and the agreement to liberalize trade in 
electronic commerce arrived at in Geneva in 1998-were all decided 
in informal backroom sessions and simply presented to the full 
assembly as faits accompli.  Consensus simply functioned to 
render non-transparent a process where smaller, weaker countries 
were pressured, browbeaten, or bullied to conform to the 
"consensus" forged among major trading powers.

With surprising frankness,  at a press conference in Seattle, US 
Trade Representative Charlene Barshefsky, who played the pivotal 
role in all three ministerials, described the dynamics and 
consequences of this system of decision-making:
The process, including even at Singapore as recently as three 
years ago, was a rather exclusionary one.  All meetings were held 
between 20 and 30 keycountries...And that meant 100 countries, 
100, were never in the room...[T]his led to an extraordinarily bad 
feeling that they were left our of the process and that the results 
even at Singapore had been dictated to them by the 25 or 30 
privileged countries who were in the room.(20)

Then, after registering her frustration at the WTO delegates' failing  
to arrive at consensus via supposedly broader "working groups" set 
up for the Seattle ministerial, Barshefsky warned delegates:  "...[I] 
have made very clear and I reiterated to all ministers today that, if 
we are unable to achieve that goal, I fully reserve the right to also 
use a more exclusive process to achieve a final outcome.  There is 
no question about either my right as the chair to do it or my 
intention as the chair to do it...."(21)

And she was serious about ramming through a declaration at the 
expense of non-representativeness, with India, one of the key 
developing country members of the WTO, being "routinely excluded 
from private talks organized by the United States in last ditch 
efforts to come up with a face-saving deal."(22)

In damage-containment mode after the collapse of the Seattle 
Ministerial, Barshefsky, WTO Director General Mike Moore, and 
other rich country representatives have spoken about the need for 
WTO "reform."  But none have declared any intention of pushing for 
a one-county/one-vote majority decision-making system or a voting 
system weighted  by population size, which  would be the only fair 
and legitimate methods in a democratic international organization.  
The fact is, such mechanisms will never be adopted, for this would 
put the developing countries in a preponderant role in terms of 
decision-making.

Should One Try to Reform a Jurassic Institution?
 
Reform is a viable strategy when the system is question is 
fundamentally fair but has simply been corrupted such as the case 
with some democracies.   It is not a viable strategy when a system 
is so fundamentally unequal in purposes, principles, and processes 
as the WTO.  The WTO systematically protects and the trade and 
economic advantages of the rich countries, particularly the United 
States.  It is based on a paradigm or philosophy that denigrates 
the right to take actvist measures to achieve development on the 
part  of less developed countries, thus leading to a radical dilution 
of their right to "special and differntial treatment."  The WTO raises 
inequality into a principle of decisionmaking.
 
The WTO is often promoted as a "rules-based" trading framework 
that protects the weaker and poorer countries from unilateral 
actions by the stronger states.   The opposite is true:  the WTO, 
like many other multilateral international agreements, is meant to 
instututionalize and legtimize inequality.  Its main purpose is to 
reduce the tremendous policing costs to the stronger powers that 
would be involved in disciplining many small countries in a more 
fluid, less structured international system.
 
It is not surprising that both the WTO and the IMF are currently 
mired in a severe crisis of legitimacy.  For both are highly 
centralized, highly unaccountable, highly non-transparent global 
institutions that seek to subjugate, control, or harness vast 
swathes of global economic, social, political, and environmental 
processes to the needs and interests of a global minority of states, 
elites, and TNCs.   The dynamics of such institutions clash with 
the burgeoning democratic aspirations of peoples, countries, and 
communities in both the North and the South.  The centralizing 
dynamics of these institutions clash with the efforts of communities 
and nations to regain control of their fate and achieve a modicum of 
security by deconcentrating and decentralizing economic and 
political power.  In other words, these are Jurassic institutions in an 
age of participatory political and economic democracy. 

Building a More Pluralistic System of International Trade 
Governance
 
If there is one thing that is clear, it is that developing country 
governments and international civil society must not allow their 
energies to be hijacked into reforming these institutions.   This will 
only amount to administering a facelift to fundamentally flawed 
institutions.   Indeed, today's need is not another centralized global 
institution, reformed or unreformed, but the deconcentration and 
decentralization of institutional power and the creation of a 
pluralistic system of institutions and organizations interacting with 
one another amidst broadly defined and flexible agreements and 
understandings.
 
It was under such a more pluralistic global system, where 
hegemonic power was still far form institutionalized in a set of all 
encompassing and powerful multilateral organizations  that the 
Latin American countries and many Asian countries were able to 
achieve a modicum of industrial development in the period from 
1950-70.  It was under a more pluralistic world system, under a 
GATT that was limited in its power, flexible, and more sympathetic 
to the special status of developing countries, that the East and 
Southeast Asian countries were able to become newly 
industrializing countries through activist state trade and industrial 
policies that departed significantly from the free-market biases 
enshrined in the WTO.
 
The alternative to a powerful WTO is not a Hobbesian state of 
nature.  It is always the powerful that have stoked this fear.  The 
reality of international economic relations in a world marked by a 
multiplicity of international and regional institutions that check one 
another is a far cry from the propaganda image of  a "nasty" and 
"brutish" world.  Of course, the threat of unilateral action by the 
powerful is ever present in such a system, but it is one that even 
the powerful hesitate to take for fear of its consequences on their 
legitimacy as well as the reaction it would provoke in the form of 
opposing coalitions.
 
In other words, what developing countries and international civil 
society should aim at is not to reform the WTO but, through a 
combination of passive and active measures, to radically reduce its 
power and to make it simply another international insitution 
coexisting with and being checked by other international 
organizations, agreements, and regional groupings.  These would 
include such diverse actors and institutions as UNCTAD, 
multilateral environmental agreements, the International Labor 
Organization (ILO), evolving trde blocs such as Mercosur in Latin 
America, SAARC in South Asia, SADCC in Southern Africa, and 
ASEAN in Southeast Asia.  It is in such a more fluid, less 
structured, more pluralistic world with multiple checks and 
balances that the nations and communities of the South will be 
able to carve out the space to develop based on their values, their 
rhythms, and the strategies of their choice.


*Walden Bello, PhD, is executive director of Focus on the Global 
South and professor of sociology and public administratioon at the 
University of the Philippines.  He attended all three WTO 
Ministerials as an NGO delegate.  He is the author of several works 
on the WTO including Iron Cage:  The WTO, the Bretton Woods 
Institutions, and the Third World (Bangkok: Focus on the Global 
South, 1999).

1. Press briefing, Seattle, 2 December 1999.
2. Quoted in "Deadline Set for WTO Reforms," Guardian News 
Service, Jan. 10, 2000.
3. Figures from World Trade Organization, Annual Report 1998: 
International Trade Statistics (Geneva: WTO, 1998), p. 12.
4. Quoted in "Cakes and Caviar: The Dunkel Draft and Third World 
Agriculture," Ecologist, Vol. 23, No. 6 (Nov-Dec. 1993), p. 220.
5. C. Fred Bergsten, Director, Institute for International Economics,
Testimony before US Senate, Washington, DC, Oct. 13, 1994. 
6. UNCTAD, Trade and Development Report 1991 (New York: 
United Nations, 1991), p. 191.
7. See discussion of this in Walden Bello and Stephanie 
Rosenfeld, Dragons in Distress: Asia's Miracle Economies in Crisis 
(San Francisco: Institute for Food and Development Policy, 1990), 
p.  161.
8. Quoted in John Whaley, "Special and Differential Treatment in 
the Millenium Round," CSGR Working Paper, No. 30/99 (May 
1999), p 3.
9. Ibid., p. 4.
10. Ibid., p. 7.
11. Ibid., p. 10.
12. Ibid., p. 14.
13. "More Power to the World Trade Organization?", Panos 
Briefing, Nov. 1999, p. 14.
14. South Center, The Multilateral Trade Agenda and the South 
(Geneva: South Center, 1998), p. 32.
15. John Whalley, Building Poor Countries' Trading Capacity CSGR 
Working Paper Series (Warwick: CSGR, March 1999)
16. Secretary of Trade Cesar Bautista, Address to 2nd WTO 
Ministerial, Geneva, May 18, 1998.
17. C. Fred Bergsten, Director, Institute for International 
Economics, Terstimony before the US Senate, Washington, DC, 
Oct. 13, 1994.
18. Ibid.
19. Ibid.
20. Press briefing, Seattle, Washington, Dec. 2, 1999
21. Ibid.
22. "Deadline Set for WTO Reforms," Guardian News Service, Jan. 
10, 2000

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