North South Trade Negotiations: The Relationship Between Trade Rules and the Operations of Multinational Corporations

LYNN FRIES, TRNN PRODUCER: Welcome back to The Real News. I’m Lynn Fries in Geneva.

In this report, we continue our look into the battle for a new policy framework of trade and investment rules, rules with an agenda including the needs of the world’s people and the planet’s ability to sustain those needs. We explore all this in relation to North-South trade negotiations and the operations of multinational corporations. In part one of our series, we provided context to past negotiations. In this segment, we look into current dynamics.

The Real News invited historian and author Vijay Prashad to talk to us about all this. Professor Prashad is Edward Said Chair at the American University of Beirut, Lebanon. Among the many books he’s authored are The Poorer Nations: A Possible History of the Global South and Arab Spring, Libyan Winter. He writes regularly for The Hindu, Frontline, and CounterPunch. Vijay Prashad was recently keynote speaker at the United Nations Conference on Trade and Development Public Symposium. We met Vijay here in Geneva at the UNCTAD event.

Vijay Prashad, thank you for joining us.

Prashad: My pleasure. Thank you so much.

Fries: Trade and investment rules can be agreed in the 150-plus member WTO multilateral system or outside the WTO as regional deals or deals between one or more individual countries, bilateral or plurilateral. Whatever the system, these agreements are legally enforceable. In the WTO, the enforcement mechanism is government versus government. Outside the WTO, it’s corporations versus governments. So in trade negotiations, what should or should not be on the table in the first place?

Prashad:The reason people trade with each other isn’t for the sake of trade, but it’s because they lack something and they need it from somewhere else, and so they have a surplus of something else which that other person wants, so they exchange what they have too much of for what they lack. That’s the essence of trade. That should be where discussions on trade begin. No country in the world, no person, has everything themselves. They need to exchange things with each other. The issue is that if you’re formulating rules for trade, those rules should facilitate people to be able to satisfy wants. That should be the basis on which trade rules are created.

Unfortunately, today trade rules are generally created to satisfy corporate profit-taking, so that what it easier for big companies to benefit from the carrying of one person’s excess to another person’s want, that process of corporate intervention in between two people’s on the one side want, on the other side excess, that has become the way in which trade negotiations are run—how to, on the one hand, increase the volume of trade, how to allow firms to trade more easily. You know, that is basically the framework.

And I think it is a very wrong-headed framework, because what that proposes is the idea that you need to enter countries and create wants, you know, that Walmart needs to come into India not because in India there is a lack of something, but Walmart needs to come in because Walmart needs to come in and create new needs among the population. This, as we know, is an ecological nightmare, because the last thing you need is for everybody on the planet to consume, have the kind of consumption footprint that the United States has, you know, where a very small percentage of the world’s population consumes a quarter of the world’s resources. This is simply not sustainable for others.

So trade rules should not be facilitating firms to enter countries to create wants. Trade rules should be about helping people who have wants now—and there are a great many wants that are unfulfilled in the world today. It should be about closing the gap between current wants and, you know, the ability of the planet to sustain or fulfill those wants, not to manufacture new wants and create smaller enclaves in a society, you know, which have a lot of wants, and other people’s wants are not fulfilled.

Fries: As an historian tracing the early idea of intellectual property rights to the current idea of global value chains today, our guest sees an essential similarity in that the rules are being framed with the interests of transnational corporations in mind. The rest of the world has to assume that these interests are universal interests. In the past, because of the debt crisis, a vast number of the countries of the South lacked means to challenge this position of the advanced economies of the North. Today, however, will countries in the South come together to fight rules many have come to see are not so neutral after all?

Prashad: When we think about trade or trade negotiations, we could ask the question, why doesn’t India come to a trade negotiation and make the claim that, look, we have a large population; they are not being able to satisfy their wants. That should be the framework that starts the trade negotiation. It should not be, you know, the idea that, say, retail must be freed up or services must have—. You know, that’s how trade negotiations would begin. They will say the issue of services has to be on the table. But one minute—why should it be on the table? You know, why not start with the framework that there are so many million Indian farmers that are unable to satisfy their needs for some kind of ecological fertilizer, you know, which is not hugely expensive? That’s a concrete need that’s there that has been expressed by farmers in places like India. You know. Why not start there? No. It starts with what appears an abstraction. Let’s discuss services and how to trade services without barriers. That will be the beginning.

Why doesn’t India object? Well, one reason India doesn’t object, is the Indian government, even thought it’s democratically elected, you know, has a majority in Parliament, etc., has a tendency, has a bias towards urban India. You know. And this is a normal thing that happens in advanced societies, advanced democracies. There is a bias towards to urban sector, you know, its concentration of votes, for a whole series of reasons we need not get into.

So in the Indian case, because there is an urban bias, you know, the needs and wants of the urban population drive the agenda of the government, particularly on things like trade. So, you know, if you look at the last Indian census, in the survey there was a very interesting statistic which showed that only 4.6 percent of the Indian households have a computer, a car, a telephone, and I think the fourth—not a refrigerator, but something akin to that. You know, basically white goods. Only 4.6 percent. Let’s say that there’s another 4 percent that aspires to have all four. That’s still under 10 percent of the population. But this is the urban center. This is the sector that has been able to change the landscape of the cities in their own image—malls, advertisements for fancy products, etc. You know, India appears to be their India.

Meanwhile, 80 percent of the population that lives in rural India has very large constituency of their, you know, representatives in parliament, but their parliamentarians don’t represent properly the kind of needs or wants that are unfulfilled for those people. So that’s the simple reason why when India, the government, goes to negotiate—to be fair there is a very strong section in the negotiating teams that will fight tooth and nail, you know, to protect the rights of Indian farmers. That is why the Doha development round of the WTO is in crisis, because India, Mexico, other countries refuse to allow agricultural subsidies in the North, for instance, to continue. They refuse to allow, you know, entry of corporates into Indian farming without dealing first with subsidy regimes in the North. At any rate, so it’s not the case that these countries don’t have people fighting, you know, but they fight in a defensive way. In other words, they say, you deal with your subsidy regime; why are you telling us that? What they don’t come to the table with is we have an agricultural sector which has these wants, and we need therefore to create a trade regime that facilitates their wants. You never hear that kind of language from the representatives of the South. And that’s a real pity.

Fries: In this segment, we looked into some current dynamics in trade negotiations. In the next segment, we look into the complexities of “the South”. Please join us for part three of our series with Vijay Prashad.

Our thanks to Vijay Prashad. And thank you for joining us on The Real News Network.