North battles for 'market'
supremacy By Vijay Prashad
Three important meetings are poised to
take place within the next few months. Between
April 21 and 26, the UN Conference on Trade and
Development (UNCTAD) will meet in Doha, Qatar for
its 13th meeting. Then, back-to-back, the Group of
20 meeting on the world economy will take place in
Los Cabos (Mexico) on June 18-19 and the Rio+20
meeting on sustainable development will take place
in Rio de Janeiro on June 20-22.
Preparatory meetings for all three of
these gatherings reveal a distinct pattern: the
countries of the North have been aggressive with
their single-minded agenda to prevent any
discussion of the exaggerations of finance in our
world, and they do not wish to allow anyone to
question the role of the "market" in economic
affairs.
On the surface, it appears as if
the "locomotives of the
South" (the BRICS bloc,
with its members Brazil, Russia, India, China and
South Africa) are willing to put some muscle to
defend the South against this assault by the
North. At its recently concluded 4th BRICS Summit,
the Delhi Declaration called for "a more
representative international financial
architecture, with an increase in the voice and
representation of developing countries and the
establishment and improvement of a just
international monetary system."
A direct
dig at the International Monetary Fund (IMF), and
a promise to push a BRICS agenda in UNCTAD, the
G-20 and Rio+20 suggested that the South would
join the fight against an obstructionist North.
But things have not been so simple.
For
one, the North has been virulent in its refusal to
allow UNCTAD to deal with the toxic role of
international finance, it has put out a draft
agenda for the G-20 meeting entirely cheerleading
for policies that benefit the North and it has
beaten back the draft from the G-77 (the
negotiating body of the South) in the
conversations around the Rio+20 meeting.
On March 19, the US negotiators in Geneva
told their colleagues in UNCTAD, "The [UNCTAD]
Secretariat should not pursue issues outside
UNCTAD's mandate - such as the reform of global
financial systems. Not only does this particular
issue stray far beyond UNCTAD's mandate and its
expertise, it also faces strong opposition by many
members," namely the United States.
The
confidential G-20 draft agenda proposes that the
head of the World Trade Organization (WTO - Pascal
Lamy - and the head of the Organization for
Economic Co-operation and Development (OECD) -
Angel Gurria - will provide a "new trade
narrative".
The WTO and the OECD will
further egg on the discussions toward the links
"between trade and job creation and in improving
trade statistics that consider global supply
chains and value addition, moving away from the
'give and take' setting in which trade discussions
happen."
In other words, no negotiation
between parties, whose separate interests should
be resolved in favor of a commitment to improving
the global value chains. Divergences on
agriculture and on commodity prices would fit in
with the "give and take" model that the WTO and
the OECD want to cashier. The new way would have
the countries of the South try to improve further
the climate for multinational corporations, who
most benefit from smooth global value chains.
The debates around Rio+20 have been
equally stark. The G-77 wanted the draft
document's opening section to reassert a principle
long recognized in the Rio negotiations,
That market-based growth strategies
are insufficient in themselves to ensure
equitable economic growth and to solve the
problem of widespread poverty, to provide
adequate health care, education, full employment
and decent work for all and to reduce inequality
and promote social development and
inclusion.
This is poison to the
North. Its negotiators had this removed. They
wanted a "more positive" start to the document,
according to Meena Raman of the Third World
Network.
When the G-77 wanted to add a
discussion of global economic governance and the
toxic international financial order, the US noted
that this was "off topic" and that the Rio+20 must
"maintain focus on sustainable development."
Joining the US to block the G-77 from broadening a
discussion of environment and climate to finance
were Canada, the European Union, Japan and New
Zealand.
The BRICS declaration from Delhi
promised that these five countries would put their
considerable heft behind the will of the South
against the North. At the height of the global
credit crunch (2007-9), the BRICS states seemed to
be able to insinuate themselves into
decision-making. The G20 was given more serious
attention, and at its London summit (2009), Robert
Hormats of Goldman Sachs International even said,
"The US is becoming less dominant while other
nations are gaining influence."
Even if
this were so, the communique from the London
summit could have been written 10 years earlier,
"We believe that the only sure
foundation for sustainable globalization and
rising prosperity for all is an open world
economy based on market principles, effective
regulation, and strong global
institutions."
The BRICS states had
neither the ideological nor institutional
alternative to neo-liberalism, and to the power of
global finance.
In an important letter to
the Financial Times (April 3), Robert Wade from
the London School of Economics noted, "With the
exception of South Africa, the BRICS have remained
largely passive in the face of this roll-back."
It is the case that South Africa's
Minister of Trade, Rob Davies, has been outspoken
about the malicious negotiating tactics used by
the North. But it is also the case that the BRICS
have made some commitments through their Delhi
Declaration. The Declaration further offers some
serious advice to the North,
We believe that it is critical for
advanced economies to adopt responsible
macroeconomic and financial policies, avoid
creating excessive global liquidity and
undertake structural reforms to lift growth that
create jobs.
The BRICS have not pushed
these positions in UNCTAD, the G-20 or Rio+20. It
would be a good counterweight to the merciless
negotiating power of the North. The credibility of
the BRICS is on the line.
Vijay Prashad
is Professor and Director of International Studies
at Trinity College, Hartford, United States. This
spring he will publish two books: Arab Spring,
Libyan Winter (AK Press) and Uncle Swami:
South Asians in America Today (New Press). He
is the author of Darker Nations: A People's
History of the Third World (New Press), which
won the 2009 Muzaffar Ahmed Book Prize.
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