Globalisation after 9/11


That’s what I wrote after my return from Seattle. As we all know amidst massive public protests, Seattle WTO Ministerial failed. Two years later, the tragic events of 9/11 changed the world in such a dramatic way that globalisation – that links trade with corporate interests — became much easy. With democratically elected governments bending backwards to side with the United States, security forces are being conveniently used to make it safe for the global capital and investment. From Iraq to Pakistan, and from Korea to Colombia, the ‘security concerns’ are essentially aimed at stifling public dissent and furthering the commercial interests of the multinationals.

I’d never been in doubt about the links between globalisation, trade and corporate interests. But the blatant usurping of human rights and national sovereignty that began some five years back through an unprecedented explosion of discriminatory bilateral and regional trade agreements is something that shocks me. Close to 200 Free Trade Agreements (FTAs) are being negotiated or have already been signed. A majority of these involves the US, which has either struck a deal or is in a negotiating process in every part of the hemisphere. Many of these are in the name of ‘security issue’ like the Central American Free Trade Agreement (Cafta 2004). Some others come as a ‘reward’ to its allies in the Iraq war, like Thailand and Australia.

With the World Trade talks in limbo, the focus remains on aggressively pushing on the bilateral front. What could not be achieved through a multilateral trade regime, and that was peanut compared to what is now being pursued through bilateral and regional deals.  Developing countries have been made to believe, and there seems to be no plausible basis for such a flawed thinking, that getting market access to America is the only way to economic nirvana. In return, developing countries (and also some of the economic giants) have buckled under pressure putting their own economies under a perpetual risk.

Country after country has agreed to eliminate tariffs barriers over the next ten years or so, and have already removed technical barriers to imports. Explicit guarantees have been provided on the treatment to American investors and services. Specific commitments pertaining to national laws and commitments to strong and transparent disciplines on government procurement procedures, rules of origin and effective enforcement of domestic labour and environmental laws have been sought. In short, all impediments in the march of the multinational companies have been cleared.

And yet, the American and European markets remain impregnable.

The common thread that flows through all the FTA is the demand for a stronger Intellectual Property (IP) Protection. No IP means no market access, is the usual American refrain. In addition, generic companies will have to wait until the patent expires before obtaining the marketing approval, which means effectively extending the patent monopoly (Chile 2003, Singapore 2003); rendering ‘compulsory licensing’ provisions useless if generic companies use the ‘test data’ of pharmaceutical companies (Cafta 2004); and extending the term for patent protection and restriction on parallel imports.

The US has already managed to coerce a number of countries to offer stronger IP protection. Among these are Peru 2005, Morocco 2004, Jordan 2004, Cafta 2004, Bahrain 2004, Australia 2004, Singapore 2003 and Chile 2003. All these countries have been made to agree on TRIPs-plus agreement, aimed at blocking generic competition and removing laws and regulations coming in the way of pharmaceutical trade. This obviously comes with a heavy price for the developing countries that are finding it difficult to make available medicines at affordable prices.

Although India has still to sign a bilateral trade agreement with the US, the drug companies are exerting considerable pressure in this direction to seek data protection and block generic competition. Consequently, the medicine prices are on the rise. As per reports, the government is planning to ask 11 pharma companies to roll back prices of key brands of medicines. The prices rise in these medicines had exceeded 20 per cent in a year, with some going as high as 59 per cent. On the same lines, public protests in the past few weeks against the US-Thailand FTA that seeks strong IP protection have been too loud.

In almost all these negotiations, the US is unwilling to talk about the massive agricultural subsidies, which make it difficult for the developing countries to find an export niche. Instead of sitting down and talking of a phase out in farm subsidies, the US argument is that agriculture policy is something that cannot be discussed bilaterally and will only be open for negotiation in the WTO. And when it comes to WTO, the US has refused to reduce even a single dollar from its monumental farm subsidies in the past ten years. The WTO talks are in a deadlock because the US is unwilling to cut domestic support in agriculture.

The result is that while the US agriculture exports are on an upswing, the developing countries are turning into food importers. In India, agricultural imports have gone up by 300 per cent in volume since the WTO came into effect. In China, farm imports are increasing at 27 per cent a year. The scenario in the rest of the developing world is no better. On the contrary, US agriculture exports post 9/11have increased by $ 10 billion. EU farm exports have gone up annually by 26 per cent.

From agriculture, pharmaceuticals, and services, the US interests is now moving towards energy. Riding on the same bandwagon is the European Union. Aggressive trade interests have topped the EU economic and political agenda. With the developing world increasingly seeing through the mischief of world trade, the focus now is to seal as many bilateral and regional trade agreements before the civil society wakes up to the impending destruction.  By then, it will be too late #

(Devinder Sharma is a New Delhi-based food and trade policy analyst)

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