The Poor Speak Up
Foroohar, Rana. Newsweek, February 11, 2002: 32.
They drew blanket press coverage and a watchful
audience of New York police, but mainly on the strength of past protest performances. From
Seattle to Davos, the riotous anti-globalization road show had pressed its case that
rising trade and capital flows are bringing nothing but oppression and instability to the
developing world. Their ranks boomed with the global economy, but faded with it as well.
The thousands who descended on the World Economic Forum last year in Davos dwindled to a
few hundred by the time the fete reconvened last week in New York.
Inside the party at the Waldorf-Astoria, the protesters still inspired a degree of
soul-searching among the gathered stars of the global age--CEOs, prime ministers, princes
and celebs--as if they had noticed that the era and the opposition have changed. But
leadership of the effort to alter the course of globalization has shifted away from
Western street rebels--and toward those they have long claimed to represent. The main
actors now are leaders of the poor nations, who have united against the global trade elite
and are demanding radical changes in the rules of international commerce.
This is now a far more powerful movement, particularly in the grim wake of an age of
plenty. Unlike anarchists, greens and reds, the presidents and ministers of the developing
world cannot be humored and dismissed as a bag of mixed nuts. They have a seat at the
table, real influence. At the November trade summit in Doha, Qatar, they stepped forward
in a show of unity and strength that, arguably, had not been seen from poor nations since
the days of Tito, Nehru and Nasser. Led by India, Brazil and South Africa, this emerging
front is opposed to globalization as defined by Western governments and Western activists.
In short, they are for free trade (unlike the activists) but on their own terms (not those
of the West). Born of long frustration with the postwar commercial order, the mystery is
why this movement is erupting so publicly only now. "There was a clear improvement in
the awareness of developing countries at Doha, and in their capacity to deal," says
EU Trade Commissioner Pascal Lamy, who now expects this front to "go on pushing
us."
In Doha, a bloc of developing nations won unprecedented victories. They helped force
Europe to consider phasing out subsidies for its farms, which elbow out produce from poor,
farm-based economies. They compelled the United States to consider limits on anti-dumping
laws, which are often used against cheap exports from emerging manufacturing powers. They
won the right to ignore Western drug patents when necessary to fight developing world
scourges like AIDS, and then kept right on fighting. They recently pushed for new rules
that would give their own ambassadors the lead role in the new trade round launched at
Doha, and lost. But they'll be back. Many want no less than major reform of global
financial institutions that date to the Bretton Woods agreement of 1944, which they
believe has failed crisis-torn emerging nations like Argentina. "Financial capital is
globalized, but not policy decisions," Brazilian President Fernando Henrique Cardoso
said recently. "The Bretton Woods system is obsolete."
The new alliance has distant roots in the Third World solidarity of the early postwar
years. The Group of 77 was founded in 1955 as a united front against the injustices of the
colonial era. Many of its members were still colonies, barred by their rulers from working
as full partners in the emerging international trading regime. Once they won independence,
the emerging nations set out to develop in solidarity with one another, as a union of the
poor against the empires they had just thrown off. They shut out imports in the hope of
developing local industry, sealing themselves off in a socialist Third World.
Many of the poor were still living in this state of partial isolation at the start of the
1980s, when Reaganism and Thatcherism set off a boom in trade and in the complexity of
trade agreements. In 1986 the Uruguay Round expanded the talks beyond simple tariffs to
subjects like financial services and intellectual property. By this time, many poor
nations had begun to drop state capitalism and to prosper as export powers in the global
markets--but few had the sophistication to analyze issues like the trade-related aspects
of intellectual property rights, or TRIPS. "Many countries didn't understand what
they were signing up for," says Leif Pagrotsky, Sweden's trade minister.
The poor would soon suffer the consequences of obliviousness. By 1995 the United States
was demanding that poor nations live up to the detailed letter of Uruguay. Even those
prospering as export powers couldn't always enforce new rules around issues like
intellectual property. The United States wound up suing India and Pakistan for patent-law
violations. "It became clear that no matter what we had thought, the other side would
take all this quite seriously," says Rashid S. Kaukab, a former Pakistani diplomat
now at the South Centre in Geneva. "We couldn't afford not to look at these issues
very carefully."
The more they studied, the angrier they became. Even booming nations like India and Brazil
came to believe that, while they benefit from global trade, the West was benefiting more.
In fact, a growing body of research showed that the global tariff system favored the rich.
According to the World Bank, the poor countries pay average Uruguay Round tariffs of more
than 14 percent, a rate more than twice as high as everyone else. Worse,
developing-country exports tend to be farm goods or simple manufactures, two of the
markets most heavily protected in the West by nontariff barriers. For example, African
sugar and Brazilian steel both face stiff quotas and heavy subsidies in the developed
world. "Developing countries are encouraged to diversify their exports," says
Brazilian Trade Minister Sergio Amaral. "But precisely when they do so, and become
competitive, they hit barriers in the developed world."
By the mid- to late 1990s there was a growing perception among emerging countries that
they had been bamboozled in Uruguay and that the West was still pressing its advantage in
trade expertise and clout. "Throughout the 1980s and 1990s, it was easier for the
U.S. and the EU to intimidate the developing countries," says Alan Winters, a fellow
at the Centre for Economic Policy Research in London. "They'd pick a few at a time
and work on them individually, getting them to agree to enforcement of trade issues, like
patent laws." To a growing number of developing-world trade ministers, it looked like
a Western strategy of divide and conquer.
The obvious response was a more united front, even if the interests of poor nations didn't
always mesh. As early as a 1996 WTO meeting in Singapore, developing countries were
beginning to unite behind a rough agenda: just say no to whatever the rich nations ask. By
the time of the 1999 WTO summit in Seattle, trade alliances were emerging among the states
of Africa, Asia and Latin America, with increasingly sophisticated demands for greater
access to rich-country markets, and a greater say in trade talks. When several small
nations were locked out of the "green room" negotiations of the big trade powers
in Seattle, several coalitions of lesser powers threatened to walk out. Their backroom
revolt had at least as much to do with the collapse of the Seattle talks as protests in
the streets, and many were left more alienated than ever. After Seattle, says trade expert
Kent Hughes, many developing nations were left wondering, "What were these meetings
doing for them?"
In mounting frustration, various alliances of poor nations began plotting for the next big
trade summit. Jolted by South African President Thabo Mbeki's critique of its economic
failures, Africa began uniting. In July 2001 the ineffectual Organization for African
Unity was replaced by the African Union, boasting a clear agenda for trade liberalization.
Led by Tanzania, the least-developed countries met in Zanzibar to hash out a plan for
Doha. Geneva ambassadors of the Like Minded Group, a coalition of 13 countries from Asia,
Latin America and Africa, began dropping by each other's offices more frequently for tea,
and targeted issues to press at the upcoming summit. China's Zhu Rongji led a pre-Doha
relationship-building delegation to India. Leaders of five developing countries--India,
Brazil, South Africa, Malaysia and Egypt--held informal talks to set common goals. And a
bloc of 50 nations began lobbying on an old grievance: TRIPS. "There was constant,
coordinated pressure by the various developing countries and missions in Geneva,"
says Egyptian trade negotiator Magdi Farahat. "Everyone kept everyone else in the
loop."
The sweep of their victory changed the rules of the game. They pushed the envelope not
only on intellectual property, farms and dumping, but also on their complaint that Uruguay
left them with trade commitments they could not afford to enforce. The northern countries
made concessions on 50 of these "implementation" issues and agreed to help poor
nations build up the capacity to carry out their trade-related responsibilities. That
could include everything from helping nations pay for technology to carry out stricter
customs checks, to boosting their ability to carry out policy research and analysis. At
the center of it was Murasoli Maran, who had worked as a screenwriter before becoming
trade minister of India, and had scripted an eleventh-hour drama in Doha. Pressured by
European and American negotiators to either sign a deal or bump the final agreement up to
the presidential level for approval, Maran held out until he got his way. Asked whether
he'd been intimidated by the West, Maran shot back, "No. I intimi-dated them."
It was a public declaration of victory for the new southern front, heralding a new era in
the battle over globalization. The elite trade powers know it. Europe's lead negotiator,
Lamy, says that trade has not only "risen on the agenda of these governments,"
but trade ministers are increasingly powerful figures in the developing world. Trade
ministers like Maran and South Africa's Alec Erwin are "punching above their
weight," says Lamy. This new strength will force Europe and America to spend more
time courting opinion in the developing world. At the World Economic Forum in New York
last week, U.S. Trade Representative Robert Zoellick stressed the importance of the new
developing-nation alliances in the post-Doha world. "It is critical to look at the
role that developing nations play and the networks they are creating," he said. In
order to make the next round successful, Zoellick noted, "We need
consensus-building."
But this is not the '50s, when one leader like Tito could claim to speak for the Third
World. The movement was simpler then, united by animus against colonial rule, and asking
only for a broad redistribution of wealth. It is no longer a unit bound by ideology, but a
front of shifting alliances that change from issue to issue. "As long as you're
opposed to something, you can hold together," says Columbia University economist
Jagdish Bhagwati. "Once you move forward, interests are bound to diverge."
The splits are already appearing. While developing nations agree broadly on opening up
richer markets, they differ on the details. India, Malaysia and Egypt want Europeans to
cut agricultural subsidies while they keep on protecting their own farmers. Brazil and
South Africa are opposed to protection for anyone. The recent European decision to grant
preferred trade status to its former colonies pleased the former colonies, but no one
else. "It's all a matter of what's convenient," says Tattamangalam Vishwanath,
international trade adviser to the Confederation of Indian Industry. "In trade talks,
there are no permanent friends and no permanent enemies."
The new battlelines don't necessarily pit rich versus poor anymore, either. In Doha, the
United States backed the developing nations that protested against European farm
subsidies. And the EU backed the stand against U.S. anti-dumping rules. WTO
director-general Michael Moore welcomes this new movement of pragmatic, nonideological
developing nations as "healthy." It's no longer so much a revolt against
colonial masters as a spat about stuff like steel quotas and banana tariffs. "There
is no Third World anymore," says Brazil's chief trade negotiator, Sergio Amaral.
"But there is a unanimity among the developing countries that protectionism is the
common enemy."
This is a sharp departure from anti-globalization as championed by activists, whether from
rich or poor nations. The activists aim to temper the destabilizing effects of rising
trade and capital flows by protection, if necessary, and by requiring multinationals to
raise wages and improve labor conditions in the developing world. This vision of managed
trade would slow the pace of globalization, and was ridiculed at Davos 2000 by former
Mexican president Ernesto Zedillo as a plan "to save the people of developing
countries from developing." So the game is on. It pits the emerging front of poor
nations against rich governments, who once made the rules, but also against Western
activists, who once claimed to speak for them. The victors will shape the changing global
order.