John Roughan: It gives weaker nations a chance against the strong

COMMENT

It must have been about a year after the 1981 Springbok Tour, when I was covering the High Court, that I first met a tiny, fresh-faced, immensely personable woman whose eyes glinted behind her glasses.

I don't recall the conversation but I vividly remember that immediately after it a plainclothes policeman sidled up to me and said: "Do you know who you were talking too? She's dangerous."

I looked at him in amazement. She was at court to support some companions who were still defending minor charges arising from the previous year's demonstrations. She didn't look at all dangerous. She looked like a very young, very wide-eyed university student.

Her name, the detective told me, was Jane Kelsey. He would say no more.

These days Jane Kelsey, a law professor at Auckland University, is an occasional contributor to the Herald and other media on the evils, as she sees them, of free trade. I always read her. "Dangerous" is an irresistible recommendation.

She provides our best insight to the anti-globalisation phenomenon that has arisen in defiance of capitalism's triumph in the Cold War. She manages to get to most of the major international negotiating soirees, which now attract all sorts of antagonists who appoint themselves "non-government organisations".

She was beside herself this week when the World Trade Organisation's ministerial meeting collapsed in Cancun, Mexico.

She quickly dispatched a piece to the Herald proclaiming the end, almost, of capitalism as we know it.

"This is a historic moment," she wrote. "The poorest countries of the world ... have refused to give way to bullying and threats."

It was "a turning point in the geopolitics of the developed and developing world and in the perception that economic globalisation is inevitable and irresistible".

The walkout by Third World countries was a response to "the undemocratic processes of the WTO and the imposition of a global free trade model that is inappropriate to the majority of the world's people".

But the most interesting part of her dispatch was what she didn't say. She saw no reason to note that the walkout happened after the newly organised bloc of developing countries had won a considerable concession from the European Union.

The truth is always more tedious. According to everything else I have read, the world's big economies - the EU, the United States and Japan - were grudgingly agreeing to discuss reductions in agricultural protection and subsidies, which penalise Third World products.

In return, those countries wanted some agreed international rules safeguarding corporate investments, business competition, even-handed government purchasing policies and measures against official corruption.

The Third World bloc would not have a bar of those. Eventually the EU offered to take the investment and competition issues off the table. But the 90 mainly African countries walked out anyway.

Pretty obviously they had decided to do something like that before they ever went to Cancun. Two weeks before they organised the G20 group of developing nations and dismissed, quite rightly, a token proposal from the US and EU on agricultural liberalisation.

They obviously decided they would get little more at Cancun and that their interests would be better served by a little tactical tantrum.

Let's hope that is all it is, because the plain fact is that poor countries need the WTO much more than the rich do. Let's hope they are not listening to Western antagonists who are using poor people for a quite different agenda.

On Wednesday, Jane Kelsey was interviewed by the Maori radio programme Mana News. She told it that Cancun was a failure of the "global free market model" and a chance to produce alternative "models", whatever they might be.

Interviewer Carol Archie gently suggested that Maori interests in fishing and forests could be hurt by the failure of the talks. That, Kelsey replied, was a result of the "commodification" of food, forests and the like. What on earth is she on about?

People make things and provide services to trade. It makes them better off than they would be if they tried to do everything for themselves. The greater the division of labour, the more everyone tends to benefit. The larger the market, the better off everyone can be.

Most "developing" countries have joined the World Trade Organisation in the eight years since the last round of global negotiations. The round launched at Doha two years ago was going to put the interests of the poor to the fore.

Not much progress had been made until a few weeks before Cancun, mainly because the US and the EU are poorly led these days. Under a weak President the United States has vastly increased subsidies for its farmers to US$52 billion ($88 billion) a year, while France and Germany have conspired to prevent a reduction of the $88 billion ($150 billion) in farm supports paid through the European Union.

If the Doha round fails, who do Jane Kelsey and her friends imagine will suffer? Not their own wealthy countries, not the multinationals they despise. These countries and their companies don't need Third World markets much.

Since the failure at Cancun, the Bush Government has said it will continue doing exclusive deals with countries it values, usually for strategic purposes. Those deals are one-sided, as Mexico has discovered and Australia may do. They are done on US terms and they expose the partner to subsidised US agriculture.

It is the WTO - collective bargaining in effect - that gives the weak a chance to get concessions from the strong and sets consistent rules for all.