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     Apr 11, 2012


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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