Globalisers retreating into little shells

  • 14/08/2006

In 20 years, the world has come full circle: in the mid-1980s the process of globalisation intensified with the rich countries taking the lead in interconnecting countries because it was in their interest. Now in 2006, the same rich countries find the process of globalisation - economic and ecological - too hot to handle. They have become a roadblock in the way of global integration. The question is where will we go from here? Can we go back in time and close the processes of globalisation? Or can we go into the future so that the rich and powerful are made to comply with the needs of the rest? If the latter is the case, how will it be done?

Just think. In 1986, the world began negotiations on the Uruguay Round, which culminated in 1994 in Marrakesh. The General Agreement on Tariff and Trade (gatt) was replaced with the World Trade Organization (wto). A number of agreements were rammed through - on agriculture, on sanitary and phytosanitary (sps) measures, on technical barriers to trade (tbts) and trade-related aspects of intellectual property rights (trips).

It is everybody's case that these agreements were negotiated by the rich industrialised countries with a clear purpose. The agriculture agreement was primarily aimed to open up markets in the developing world; the sps and tbt agreements were to ensure that the products that were exported to their countries would have to meet standards to protect health. But these were also important to use as convenient tools to protect domestic markets - to keep out products that did not meet the grade. The trips agreement protected the right of their innovators so that entrepreneurs in the developing world would not get away with cheaper versions of their monopoly products. The crumb that was thrown at the developing world was the dismantling of the multi-fibre agreement, which promised to open markets to textile manufacturing countries. And the rich nations got away with this strategy.

But this is not all that was happening in that period. In 1988, the conference on the changing atmosphere was held in Toronto, which asked for the world's first target on reducing greenhouse gas emissions - 20 per cent over 1990 levels by 2005.

In the same year, the un general assembly met and negotiations began on the framework convention on climate change. In 1992, the convention was agreed upon, which set the stage for the manner in which the world would allocate the common atmospheric space to all nations. In other words, how the world would share its right to pollute in years to come.

Climate change was viewed as an issue of environmental negotiation, but was and is a subject of intrinsically economic negotiation, as emissions remain connected to industrial development.

Therefore, by the mid-1990s, the world had stitched together the processes that would bind it together in the future. This was also the period, when the rich world was going through an extended phase of recession. Simultaneously, the collapse of the Soviet Union brought with it the ascendancy of the free-market ideology. Equity became dispensable.

The developing South, with or against whom these agreements were being negotiated, was the hapless bystander. The issues were intensely technical and somewhat distant. Their impact would be felt in the future. They were negotiated in global capitals. Engagement was difficult.

In 2006, things have come full circle in more than one way. The issues are not so distant. The impact of climate change is beginning to show. And the South is the worst impacted. The trade agreements are hitting home. The South's biggest competitive advantage - cost-efficient food and plantation crops - is being whittled away. It is being forced to open up its markets for import of cheaper and subsidised products of the industrial world, but it is not benefiting to the extent it needs to in the manufacturing and service sectors. Royalties and licence fees (an outcome of the trips agreement) have grown faster than earnings from global service exports over the 1995 to 2004 period. In other words, more money has gone back to patent holders than earned by service providers - say in the it sector.

The problem now has come full circle as well. As far as climate change goes, the us has stalled negotiations. The fact is that the us does not want to accede to emission controls because it will impact on its growth. The European Union (eu) and Japan hide behind its obduracy.

The case of global economic negotiations is similar, with the us, eu and Japan refusing to reduce the subsidies they provide to their farmers, regardless of what it means to the South. According to the 2006 World Trade Report, the eu, us and Japan together provide us $200 billion each year in just domestic support to their agricultural sector. In addition, they spend on export subsidies and other investments. This is clearly crippling farmers of the South who have to further discount their natural resources to compete in the world market. Recently, wto negotiations have broken down on the issue of subsidies.

The question now is what will the world do when the most powerful proponents of globalisation are obstructing it? The problem is that economic globalisation has not gone together with political globalisation. In other words, the world does not have any way - democratic or lega