- Created: Thursday, 14 May 2009 21:35
- Written by Ed Scrivens
FRFI 175 October / November 2003
In September Mexico’s Caribbean Cancun resort became a microcosm of the world as representatives of the 146 member nations of the World Trade Organisation (WTO) sipped champagne in air-conditioned luxury separated from the surrounding protesters and shantytowns by the usual police and high fences. This is a world in which the wealthiest 5% of the population ‘earns’ 114 times as much as the poorest 5% while the 500 richest people have amassed $1.54 trillion. This is more than the combined income of the poorest 3 billion people.
Despite all the security and diplomacy and much wrangling Cancun ended as Seattle did in an embarrassing debacle. Negotiations on tariffs and trade collapsed without any agreement as the imperialist powers demanded concessions that even their neo-colonies could not accept.
Previous WTO summits had been dominated by the European Union and United States. At Cancun a third bloc of 21 underdeveloped countries led by Brazil, China and India emerged, preventing a simple EU-US deal. These nations had three main demands. Firstly they wanted the imperialist countries to cut the tariffs that discourage the import of products from the underdeveloped world.
Secondly they wanted the EU, USA and Japan to reduce the agricultural subsidies that allow their farmers to sell their food more cheaply than imports from the oppressed nations.
Thirdly they demanded an end to export subsidies that have led to cheap western foodstuffs flooding world markets at prices far below the cost of production, bankrupting growers in the oppressed nations. The EU and USA for their parts wanted oppressed nations to cut their tariffs and to further open public services to the private sector and invite foreign companies to bid for them on the same terms as local companies. This would inevitably mean their economies being further bought up by imperialism given the size and productivity of the big multinationals. Together the US, EU and Canada had proposed that Kenya reduce its tariffs by 80% while the EU would cut its by 28% and the US by just 24%. Kenya said ‘no’ and since WTO decisions have to be reached by a unanimous agreement, the summit failed. Some now doubt that the WTO can continue to operate as a serious system. The EU and US have already indicated that they will proceed with bilateral deals in which they can exert greater pressure on individual oppressed nations outside the multilateral framework of the WTO.
A new Oxfam report shows that the poorer a country is the higher the rate of tax it must pay to export its products to the imperialist nations. For example Bangladesh paid a tariff of 14% to the US for its exports while Britain paid no more than 1%. Britain taxed imports from Uruguay and Sri Lanka at eight times the rate of those from the US. In addition escalating tariffs are imposed on products at each stage of processing. The EU and US do not tax cocoa bean imports but have a tariff of up to 14% by the time these beans have been processed into chocolate. As a result underdeveloped countries manufacture just 5% of the world’s chocolate though they grow more than 90% of its cocoa – yet another ingenious means the imperialists have devised for under-developing the oppressed nations and squeezing their populations.