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Brazil’s G20, the Poorest and the Rich Won’t Reach Accord Without New Language

The Hong Kong meeting of the WTO has amply illustrated how difficult it is to arrive at a consensus about the rules of free trade. The fact that none of the major players has been willing to budge – to offer what in negotiating parlance is known as "deliverables" – is just one of the problems.

What’s increasingly apparent, though, is that the WTO, and indeed the entire concept of free trade globalization, has a communication problem. Most of the texts being negotiated are unintelligible to the untrained ear, which is to say to any normal person.

The specialized glossary of the WTO swells on a daily basis. That may be fine for the government negotiators who view the acronyms and catch-phrases as shorthand for insider information. For citizen groups, though, it should be a cause for concern.

To make the trade debate relevant and open, it must be understandable. But gaining understanding is not just a matter of close observation or study or even interpretation; the language of globalization must first be deciphered and demystified.

For over a decade, trade liberalization has been presented as the path to development and the goal of all civilized nations. Its terminology became the accepted language of economics and its concepts formed the backbone for restructuring entire societies.

Today, that consensus has broken down in both developed and developing countries. But the terms stubbornly persist, and thereby constitute an obstacle to devising new workable models of international trade rules and laying out viable alternatives to the arcane, dysfunctional free trade system.

One obvious example is the increased discussion of supply-management mechanisms.

The downward spiral of agricultural commodity prices under globalization has ruined the lives of millions of small-scale farmers.

Not surprisingly given the magnitude of the human tragedy associated with this tendency, proposals to regulate supply to assure that prices will not fall below production prices are reemerging as viable alternatives.

But instead of casting this concept in positive terms, management of commodity price and supply is described at the WTO as "generating distortions in the right direction." The language signals a certain embarrassment at using the term "supply management" – long considered anathema to the free trade system – but also to the suggestion itself. It slips into the debate as a necessary evil, a pragmatic impurity in a theoretically pure system.

Everyone knows this is not the case. The "free trade" system is manifestly; hypocritical, inconsistent, and ineffective. The WTO talks in Hong Kong vividly highlight these contradictions.

Developed countries protect sensitive sectors, but developing countries get market access crammed down their throats. The language of globalization includes the world’s most expensive tautology: Producer prices are driven down by government subsidies to farmers to compensate for international prices that are below production costs.

The ideological imperatives of free trade are too often like the moral prescriptions of errant religious leaders – do as I say, not as I do.

In this context, the supply management mechanisms, safeguards, and special treatment demanded by developing countries should be interpreted as compensation for the distortions that underlie the misnomer of free trade. But instead they are regarded as charity by wealthy countries.

Here’s another linguistic device used by free trade promoters in the WTO and other free trade negotiations. They assert that developing countries have only two options – either meet the challenge of adapting to trade liberalization or retreat into the dark past of protectionism.

This is a false dichotomy. Again as evidenced in the debates taking place in Hong Kong, the real dichotomy is between development and the unequal model of free trade as defined by the wealthy countries.

A healthy development mix would include: a mix of protection for essential economic sectors and rational liberalization; government technical assistance and infrastructure support for national production and fomenting markets; and fostering local and regional markets – all under a transparent and democratic multilateral rules-based system.

The discussion on how to create this kind of system is young yet. For it to grow, trade language must open up to embrace what were once considered heresies and find new terms to criticize previous canons.

As is becoming clear in the latest WTO ministerials, unless all involved parties – the industrialized powers, the mid-level nations such as India and Brazil, the poor developing nations, and NGO advocates – start using new language outside the discredited rhetoric of free trade, then there will be no international cooperation, no common rules, and no global sustainable development.

What’s also clear is that, whether the dominant economic powers like it or not, the debate is broadening. What’s needed is the political will for real options to emerge to the failed language of free trade and failed model of development pushed forward by a now-debilitated WTO.

Laura Carlsen, reporting from Hong Kong, directs the Americas Program of the International Relations Center, online at www.irc-online.org.


  • Show Comments (2)

  • Guest

    The first question to be agreed and acce
    The first question to be agreed and accepted by all is the definition of subsidies.

    The G20 says that whatever they do to help their farmers and other exporters are not subsidies, when in fact they are huge subsidies.

    They are not willing to accept that a low loan rate of 6 to 8 % compared to 80/150 % that other individuals must pay is a subsidy !

    The same for agribusinesses that get loans of 6 to 10 % when others sector must borrow at 40 to 60 %.

    The same when they give export financing at low rates PLUS reduction in taxes for the producer only in exported products.

    By all definitions, by all languages, English, French, German, Japanese, Chinese or just name it, Brazilian included, IT IS SUBSIDIES !

    But Brazilian government provide these export financing and the tax reduction to ALL industries that export a large part of their production, not only in agriculture.

    So what does the rich nations do wrong, when in fact Brazil is providing at least the same support to their industries, not limited to agriculture as rich nations do, but to all industries exporting a majority of their production ???????????????????

    Something is wrong, in Brazil basic conception of subsidized or not subsidized products.

    Are rich nations governments not supposed to care about their farmers as much as the brazilian government for their farmers ?

    Even the brazilian family farmers are against the requests of the brazilian government at the WTO.

    Is this not very strange ? Especially from a leftist government ?

  • Guest

    But even the majority of small….
    brazilian family farms are against the requests of the Brazilian government at the WTO.
    And from what I know, brazilian small family farms are the majority by far of the brazilian farms
    This shows how Lula, defender of the poors, is taking care of the poor small brazilians family farms.

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