8:30 PM Oct 1, 1996
UNITED NATIONS: WTO BEING USED TO BULLY SOUTH, SAYS MAHATHIR
New York, 30 Sept (Martin Khor) -- Malaysian Prime Minister Dr Mahathir Mohamad has criticised the developed countries for using the World Trade Organisation to "bully" developing countries to adjust their economic policies so that Northern corporations can capture their markets. He also attacked the efforts of Northern countries to link trade with the environment and labour standards as an attempt to deny developing countries of their already meagre comparative advantage. In a comprehensive and often hard-hitting speech at the UN General Assembly last Friday, the Prime Minister also warned that globalisation as defined by the powerful countries simply meant the breaking down of borders so that those with capital and goods would be free to dominate the markets. Dr Mahathir said that now that the concept of globalism is so intimately linked with international trade, it was important to critically examine the realities of this so-called free trade. In one of the strongest critiques ever made by a developing country leader on the impact of the Uruguay Round and the WTO trade regime, the Malaysian Prime Minister said: "The painfully long history of the Uruguay Round negotiations should have forewarned us that the WTO, although established as a rules-based multilateral organisation to regulate international trade, will become answerable only to the world's wealthiest economic powers. "Like the Bretton Woods institutions, the WTO remains outside any relationship of accountability to the far more democratic United Nations General Assembly." Dr Mahathir added that during the Uruguay Round, the developing countries discovered that instead of negotiating international rules on trade in manufactured goods, the rich countries of the North had widened the agenda and pushed for liberalisation in economic areas where they clearly have an advantage, in particular the financial services and investments. The Prime Minister said even though some South countries, including Malaysia, had benefitted from trade liberalisation, the GATT agreement nevertheless harbours new threats to developing and newly emerging economies. "Not only have the poor countries of the South to struggle uphill merely to meet the basic needs of their peoples, but they are now bullied into adjusting their economic policies to meet their new obligations under GATT so that Northern-based corporations can penetrate and capture their markets. "The poor may not reserve their markets for themselves even when they have no capacity to penetrate the markets of the rich." Dr Mahathir said that "fair competition and level playing fields are only for the rich." For example, he added, their attempts to link the environment and labour standards to trade in manufactured goods was a clear attempt to deny developing countries their meagre comparative advantage. The relationship between trade and labour standards emerged not because of a concern for the well-being of workers in poor countries, but as protectionist moves aimed against growing and competitively-priced imports from the South, said Dr Mahathir. He added that to compound this unfair interpretation of the multilateral trade rules, when it came to technology transfer, Northern countries take a fiercely anti-liberal stand, insisting that all WTO member states compulsorily introduce a set of national laws to protect intellectual property rights. "Since most patents are owned by the North, this in effect means legal protection of their technological monopoly and a drastic curtailment of the right of developing countries to have access to new technology. "It appears therefore that the Northern interpretation of 'free trade' and 'liberalisation' are slogans that in reality mean liberalisation when it benefits the North but protectionism if it can block the South. "Thus while goods and capital are permitted and encouraged to move around the globe, labour and technology may not." Dr Mahathir also attacked unilateralism, stating that "even as we are asked to submit to GATT rules and the WTO, we find one country blatantly undermining the WTO by enacting extra-territorial laws which must be submitted to by all nations and their companies on pains of ex-communication." The Prime Minister criticised the inadequacy of the intellectual property rights regime in the WTO, saying that: "The GATT agreement also fails to protect the genetic resources of the South whilst allowing genetically modified materials to be patented. "We now have a situation where theft of genetic resources by Western biotech TNCs enables them to make huge profits by producing patented genetic mutations of these same materials. What depths have we sunk to in the global market place when nature's gifts to the poor may not be protected but their modifications by the rich become exclusive property." Dr Mahathir said there are many gainers and losers in the world of the WTO, "but we are concerned that the major losers will once again be the poorest and most marginalised countries." A few countries like Malaysia had benefitted from the Round, he said, but pointed out that these gains had been through thrift, productivity and ingenuity of the people, and that Malaysia's new found prosperity had also benefitted rich countries. Noting that 'globalisation' had become a buzzword, with the G7 communique touting it as the source of hope for the future, Dr Mahathir said that some would however argue that globalisation (with its aim of breaking down borders and sucking countries into a single economic entity) had eclipsed multilateralism. "If the current behaviour of the rich countries is anything to go by, globalisation simply means the breaking down of the borders of countries so that those with the capital and the goods will be free to dominate the markets," he said. "Colonies in the former British Empire will remember 'imperial preference' when they were made the exclusive markets of the metropolitan power. Globalisation can mean just that, except that the world market will belong to the rich nations. "Linkages to non-trade issues will prevent the poor from ever challenging the rich, in the same way the colonies were not allowed to industrialise." Dr Mahathir added that the pre-eminence of transnational forces had blurred the definition of national sovereignty. "We must seriously question why a powerful minority are still allowed to bankrupt and coerce the majority to meet their narrow economic and political ends. "The poor are no longer independent. They have already lost control over their own currency. And now they have lost their borders too." Dr Mahathir said every year, many statements were made at the UN lamenting the crises of poverty, debt, human rights abuse, conflicts and wars. Yet nothing much had been done. "Perhaps it is the mismanagement by Governments of so many poor countries which afford many excuses for the rich not to help." The Prime Minister concluded that it was easy to use the UN as a forum to unmask the hypocrisies of both the North and the South, but it was more difficult to work collectively to implement change and solve problems. Still, Malaysia believed this repetitive criticism is valid and necessary, and also strongly believed in the multilateralism of the UN and was prepared to invest in it.