http://www.guardian.co.uk/comment/story/0,,1818974,00.htmlThe freer movement of trade and capital has been a fundamental characteristic of the past 25 years of globalisation. The Doha round, initiated in 2001, was the latest attempt to keep the process rolling. It now looks doomed. The deadlock between the US, the EU, Japan and the developing countries seems final. And with the fast-track powers of the US president - which enable trade agreements to bypass Congress - scheduled to come to an end in 2007, any agreement later than this year will be subject to the unpredictability and delay of Capitol Hill. In other words, it is now or never, and it looks more and more like never.
The implications are profound. It was the Uruguay round in the 80s and 90s that underpinned much of the process of globalisation and helped to establish the terms on which it took place. The failure to reach agreement on its successor, the Doha round, suggests the era of multilateral trade agreements is coming to an end. The US some time ago switched its attention from multilateral to bilateral deals and has, over the past decade, concluded a battery of them. The reason is not difficult to fathom. When negotiating bilaterally, the US can use its economic power to impose far more unfavourable terms on its negotiating partner, which is what it has done. In deals with Singapore and Chile, for example, it insisted on these countries renouncing the use of capital controls, which Malaysia deployed with such effect during the Asian financial crisis. In its treaty with Australia and other countries, it insisted on extending the time period for which patents are valid, thereby extending the monopoly privileges enjoyed by its companies.
The American turn from multilateralism is linked to developments at the World Trade Organisation. Over the past decade, the political character of the WTO has changed markedly. During the Uruguay round it was relatively easy for the developed countries to get their way with the developing world by a combination of bullying, cajoling, dividing, bribing and threatening. But the admission of China as a full member in 2001, the growing power of India, the election of Lula as president of Brazil, and the willingness of South Africa to join forces with them has meant that the developing countries have begun to acquire a powerful voice, substantial bargaining presence, and a self-confidence in their ability to resist western and Japanese pressures. The developing countries torpedoed the meeting in Cancun in 2003, insisting on far greater concessions from the developed world than were being offered. The emergence of the G20 - as their loose negotiating group is known - has transformed the politics of trade negotiations.
Whatever the grand principles and the pontificating, the US only favours multilateralism when that suits its interests. The previous trade regime may have embraced 123 countries but, in practice, the developed world enjoyed overwhelming power. The WTO, in contrast, has come to resemble, at least in a small way, the UN; and the US has long been inimical towards that body because it is frequently unable to get its own way. This turn from multilateralism parallels the trajectory of American foreign policy under George Bush. Many thought that trade would be an exception to this, but the growing US proclivity for bilateral deals and its unwillingness to make the necessary concessions to keep the Doha round alive suggest the contrary: Washington has become disaffected with multilateralism.
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