Trade piracy unmasked

Poor countries are still being cheated by the rich world

By George Monbiot. Published in the Guardian 6th November 2001

Just as woodworkers used to drink in the Carpenter’s Arms, or farmhands in the Jolly Ploughman, the trade negotiators from the world’s richest nations have found their way to their own hallowed ground. When they gather in Switzerland, they dine together in an exclusive restaurant on the shores of Lake Geneva called The Pirate. It’s here that the members of “the quad” — the US, EU, Canada and Japan — study their maps and count their doubloons.

In Seattle in 1999, the world trade talks failed because the weaker countries, excluded from the key negotiations, walked out. Now, we have been promised, the rich world has learnt from its mistakes. At the new talks in Qatar on Friday, the nations of “the quad” will, they insist, rescue the castaways of the new world order. But the progress so far suggests that, instead of being allowed a share in the spoils of free trade, the world’s poor will be walking the plank.

The draft declaration due to be discussed this weekend was mostly written during two exclusive meetings: in Mexico in August and in Singapore last month. Though the World Trade Organisation has 142 members, only 21 nations, among them the world’s richest and most powerful, were permitted to attend. The documents the meeting produced were then submitted to the other members for approval. They were not permitted to make substantial changes.

As a result, the draft declaration contains almost none of the concessions that developing countries, representing most of the world’s people, have requested. Powerful nations have refused to stop subsidising their exports of meat, grain and sugar: by dumping them in weak countries at artificially low prices, they destroy the livelihoods of local farmers. Britain and Germany have insisted that they will not relax the laws governing the patenting of drugs: poor countries facing public health disasters will continue to be denied cheap medicine.

The poor world wants the rich world to honour the promises it made under the last world trade agreement, before starting any new negotitions. Instead “the quad” is loading the agenda with new and fiendishly complex issues, such as investment, services and government procurement.

At first sight this approach makes no sense. Just as Presidents Bush and Blair insist that the world’s future prosperity, democracy and even freedom from terror will depend on a successful new trade round, their negotiators appear to be doing everything in their power to undermine it. But all that has happened is that the powerful nations have abandoned the pretence of seeking consent. Now they will simply bludgeon the developing world into submission.

Last month in Geneva an African delegate to the World Trade Organisation complained that, “If I speak out too strongly, the US will phone my minister. They will twist the story and say that I am embarrassing the United States. My government will not even ask, ‘What did he say?’ They will just send me a ticket tomorrow. … I fear that bilateral pressure will get me, so I don’t speak, for fear of upsetting the master. To me, that threat is real. Because I am from a poor country, I can’t say what I want.” If the poor nations complain, the rich nations simply withdraw aid or freeze their exports.

Now, as Christian Aid has revealed, some governments are dispensing with negotiations altogether. Britain’s Department for International Development, run by Clare Short, has decided to bypass the World Trade Organisation and apply direct pressure on poor nations to open up their markets to foreign companies. The department has told Ghana that aid money for a water project will be conditional on the country’s privatisation of its water industry. Without consulting its own people, the government of Ghana has been forced to start raising the price of water by between two and three times, to prepare the industry for sale to British, French or US companies. The corporations will make millions, but already Ghanaians are being forced to draw their water from polluted rivers and ditches, infested with cholera and guinea worm, as they can’t pay the new rates.

But while quietly plundering the poorer nations, our pirate states like to pretend that they are compassionate and even-handed. Britain’s Department of Trade and Industry, as it website boasts, holds regular meetings with campaign groups such as the World Development Movement, in order to “share information” and “gather views”. But, as a series of leaked documents shows, behind the scenes the British government is doing all it can to undermine them.

The papers were discovered by members of the research group Corporate Europe Observatory, who were investigating a powerful trade association called International Financial Services, London. The researchers stumbled upon an unlinked page, accidentally appended to the lobbyists’ website.

International Financial Services, London is one of several British groups hoping that the trade talks can be expanded to cover a wide range of service industries. The proposed new General Agreement on Trade in Services, due to be discussed alongside the other treaties in Qatar, could oblige countries to privatise key public services such as health, education and water. The leaked page contained the minutes of meetings held by the “Liberalisation of Trade in Services” committee set up to liaise between IFSL and the British government.

British civil servants, the researchers discovered, were worried that campaign groups opposed to the General Agreement on Trade in Services were becoming too effective. The minutes recorded that Matthew Lownds, from the Foreign Office, “noted that the campaign by the World Development Movement in particular was leading to a broadening of concerns. … He also pointed to the need to coordinate business responses to the NGO’s allegations.” Malcolm McKinnon, a civil servant from the Department of Trade and Industry, complained that the case for the general agreement was “vulnerable” when campaigners asked for “proof of where the economic benefits lay” for poor nations. The committee decided to spend £50-70,000 to “counter the NGOs”.

More damagingly, the civil servants appear to have been passing critical European Union papers to the business people on the committee, including negotiating documents from other countries, which could be enormously valuable to companies hoping to anticipate hostile positions. These papers, the Corporate Europe Observatory points out, are unavailable even to members of the European Parliament.

So the government, while secretly colluding with corporate lobbyists, has been double-crossing the public and undermining some of the poorest countries on earth. Tony Blair and Clare Short call this process “development”. It is not development. It’s piracy.