Date: Fri, 05 Nov 1999
 
 Independent on Sunday
 by Barry Coates of WDM e
 
 Multinationals now dictate almost every aspect of life, but a chance has
 come for reform, argues Barry Coates

 Before the end of this millennium there will be massive protests and civil
 disobedience by unruly activists who say they are trying to stop a takeover
 of the world. This is not a fanciful prediction - it will happen. The venue
 is Seattle, USA. The target is the World Trade Organisation. At stake are
 the rules that will shape the future of the world economy. Tomorrow trade
 ministers from the countries of the European Union meet in Luxemburg to
 hammer out what line they will take at the WTO meeting in two months' time.

 These protesters have been characterised as loony lefties, extreme right-
 wingers or luddites. But to others, they are the shock troops for the
 majority whose voice has been ignored for too long. They will be joined in
 Seattle by the mainstream of so-called "civil society": trade unions,
 consumer groups, farmers, indigenous people, anti-poverty campaigners, aid
 agencies, academics, churches, environmentalists, animal rights activists
 and women's groups. More than 1,200 of these organisations from 85 countries
 have agreed a joint statement on the priorities for world trade. Their
 agenda is deadly serious, well-researched and compelling.

 On the other side are the world's largest multinationals and their powerful
 lobby groups. They are paying hundreds of thousands of dollars for access to
 the politicians who will agree a future agenda for the WTO. Depending on
 whom you listen to, they are either regarded as the means to economic
 progress or the masters of the universe, seeking huge power and profits
 through exploiting people and the environment.

 Most people know little about the WTO. It was formed in 1995 to lower
 tariffs, remove trade barriers and resolve trade disputes. But there are
 real concerns that something is going terribly wrong with the rules that
 govern world trade. The heaviest losers are the powerless, especially the
 world's poor. Trade is often justified on the basis that it helps poor
 countries to develop. However, instead of exports from the poorest countries
 being boosted, their share of world trade has fallen dramatically. The
 effects have been devastating. Sub-Saharan Africa as a whole is poorer than
 it was 30 years ago.

 A major problem is the plummeting prices they face for their commodity
 exports. Multinationals have gained a stranglehold over the supply chains -
 just four companies in each industry control 90 per cent of exports of corn,
 wheat, coffee, tea and pineapples. To make matters worse, rich countries
 subsidise their farmers by twice as much as the Third World earns from its
 total agricultural exports. And WTO rules block attempts by poor countries
 to diversify their economies.

 Meanwhile rich countries have used every legal loophole to avoid fulfilling
 their obligations to free up trade in agriculture and textiles. It is little
 wonder that the chair of the developing countries group (the G77) is calling
 for Seattle to "review, repair and reform". But there is another problem.
 The WTO elevates economics over all else. So it has overturned laws to
 protect turtles and dolphins, banned the EU's support for banana farmers in
 the Caribbean, outlawed restrictions on the use of leg traps in the fur
 trade, and overruled the EU's ban on imports of beef injected with growth
 hormones. We can expect more. Canada is disputing an EU ban on asbestos,
 while the US has promised its agri-business lobby to challenge the EU's
 regulations on planting genetically modified crops and the labelling of GM
 foods.

 The fundamental philosophy of the WTO is to blame. Its notion of free trade
 relies on assumptions that are wildly unrealistic in a world where
 multinationals control 70 per cent of world trade; where environmental costs
 of production are loaded on to taxpayers instead of companies; where
 information is controlled through advertising and patent laws; and where
 corporations get away with forming secret cartels and avoiding tax. Small
 companies, especially those from poor countries, have little chance to
 compete. It is like a schoolboy climbing into a ring with Mike Tyson. The
 rules may be the same for both, but competition is short and brutal.

 It is clear that the WTO is failing. This is acknowledged by the high
 priests of free trade. At a recent seminar, Arthur Dunkel, the former head
 of WTO's predecessor, asked: "Who is driving the process in trade policy -
 governments or the business community?" He said that, whatever the answer,
 there is collusion between government and business.
 

 The overwhelming evidence is that reform is required. Yet the British
 government and the EU have proposed an ambitious agenda of further trade
 liberalisation. Despite the huge failings of the WTO, the EU wants to
 greatly expand its mandate. It is pushing an investment agreement that is
 almost identical to the notorious Multilateral Agreement on Investment
 (MAI), which was dropped after a worldwide public outcry. The new proposals
 repeat the same mistakes as the MAI, creating new rights for multinationals
 without any enforceable responsibilities towards the societies and
 communities in which they invest.

 Meanwhile the US has Europe's health and education services in its sights.
 The US Trade Representative is pressing for further privatisation there -
 and American companies are salivating over the prospect that they may be
 able to cash in on this. There are 160 service sectors potentially on the
 list for liberalisation. The British government has provided voters with
 little information on the profound impact that such moves could have.

 There are three important problems that need solving. There needs to be a
 better balance of interests in trade. That means the EU and US must stop
 using their economic and political power to further the interests of their
 multinationals. It is time to stop the rush for the liberalisation of trade
 and the plans to extend the WTO's powers. Instead, the EU should agree to
 lift all restrictions on the tiny amount of goods and services exported by
 the poorest countries - and not at the price of forcing them to accept new
 agreements that are not in their interests.

 Next, international regulation must must become a new priority. The recent
 financial crisis in Asia shows that liberalisation without strong regulation
 benefits speculators but destroys productive economies. Companies have
 globalised, but the rules have not. Instead of deregulation a strong UN
 system is needed to enforce decent rules to protect the world's poor,
 consumers, workers and the environment, and curb the powers of
 multinationals.

 Finally, trade negotiations need to be made democratic. Rule-making in the
 WTO is supposedly by consensus among its 134 member countries; but in
 practice the most powerful countries are able to dominate. National
 parliaments should, in theory, exercise control over all this, but few MPs
 have objective information on the WTO or any opportunity to influence the
 Government's position. At a time when the Conservative Party is up in arms
 over the giving away of powers to the EU, far more powers are being given to
 unaccountable international institutions. Democracy must be made to work.

 Tomorrow Richard Caborn, the UK Minister for Trade, meets his EU colleagues
 to agree a negotiating stance at the Seattle meeting on 30 November. It is
 not too late for the Government to change its position.
 

 Barry Coates is director of the World Development Movement.