As you read this, the world's trade ministers meet in Cancun, Mexico, supposedly to hammer out a better deal for the world's poor. Ignore the bromides that will undoubtedly emerge. Ignore any claims of breakthroughs and promises of a new era. The history of world trade negotiations over the past 20 years is one of broken promises. Despite the deadlines set in Doha two years ago, the poor still cannot get cheap medicines and the governments of rich countries still strain every sinew to protect their corporate paymasters from genuine trade competition. Since Doha, the US has raised its farm subsidies by 80 per cent.
The world is thus run by the rich in the interests of the rich. It is apparently unfair on pharmaceutical companies for manufacturers in developing nations to make cheap copies of the life-saving drugs they have developed. But it is fair for western corporations to market versions of everything from Basmati rice to Darjeeling tea, and to take out patents on seeds that third world farmers have used for generations. It is apparently necessary for poor countries to accept every detail of the neoliberal creed, cutting tariffs, ending subsidies and privatising services. But it is equally necessary, it seems, for rich countries to do things to retain subsidies and keep tariffs high when there is a threat to a domestic industry, whether it be steel, textiles or agriculture.
We are often led to believe that western governments behave in this fashion to protect jobs or environmental quality or traditional ways of life - for example, the small farmer who rises with the lark to milk his cows. In reality, the main beneficiaries are nearly always big corporations, notably agribusinesses. The smallest 60 per cent of US farms get no money at all from Washington, while half the government support goes to the richest 7 per cent. The picture is similar in Europe. As Andrew Simms writes (page 18), most of the arguments at the trade summit are over attempts by the rich to extend and protect their property rights - over ideas, genes and plants as well as over land and natural resources. Patents - 97 per cent of which are owned by corporations in the rich world - are just another form of protectionism.
Nobody should be surprised that the world's poor lose out so badly and that politicians, no matter how sincere and well-intentioned as individuals, have to accommodate their ideas to what big corporations will tolerate. Social democratic controls on capitalism have become weak enough at the level of the nation state, their usual locus; at the global level, they are non-existent. As a new Fabian Society pamphlet, Progressive Globalisation, points out, giant transnational corporations - two-thirds of global trade is controlled by just 500 firms - can easily escape the regulatory powers of individual states. "The mere threat of relocation or non-investment," the pamphlet says, "is often sufficient to limit government action . . . governments are often pushed into offering inducements - including in many developing countries . . . the suppression of trade unions and lax environmental protection - to attract and retain global companies."
This is why so much of the protest against the world's inequalities takes an "anti-globalisation" position. If the poor don't get a fair deal from world trade, runs the argument, let them return to a simpler life, growing their own food and applauding barefoot banjo-players rather than Hollywood megastars. After all, the global transport of goods only adds to pollution costs, and even if something like a western level of prosperity is achieved, it is usually at the cost of enormously greater domestic inequalities.
This will not do. For one thing, it is unrealistic; air travel and satellite communications cannot be uninvented. For another, it is undesirable; the history of most communist countries, from the Soviet Union to North Korea, shows that isolation leads to authoritarianism, militaristic paranoia and levels of pollution that even the most heartless capitalists rarely achieve. Moreover, the 1930s showed what can happen to the world when countries turn in upon themselves.
The proper response to globalisation is to demand regulation. The World Trade Organisation needs not abolition, but reform, with an explicit social democratic agenda of redistribution. The aim should not be a level playing field - still less one that favours the rich as it does now - but one that is decisively tilted towards the world's poor. Rather than being the the conduit of neoliberal dogma - trying to get rid of as many tariffs as possible - it should actively encourage them where they are needed to protect infant industries and vulner- able primary producers. It should also, as George Monbiot proposes in his new book The Age of Consent, become a licensing authority that bars corporations from international trade if they fail to observe agreed rules on environmental protection, trade union rights and labour conditions.
All this now seems an impossible aspiration because social democracy lacks the self-confidence to articulate it. It has no coherent agenda (though the Fabian pamphlet offers one) for how the world should be run, as J M Keynes and other architects of the post-1945 international order did. This is the great failure of the Third Way triangulators: Bill Clinton, Tony Blair and their various imitators. To achieve and hold power, they argued, they had to adapt to the realities of a competitive world. Social democratic regulators, they insisted, needed to recognise that, if the rich were too restrained, they would take their business and their skills elsewhere. They thus allowed the corporations to become the sole arbiters of international trade, challengeable only by the near-nihilistic protests of the anti-globalisers.
