First Seattle, now Cancún: how should we understand the current crisis of the wto? According to the Economist, poor countries have been the losers in the latest breakdown of global trade-policy talks: the agenda agreed at Doha in November 2001, and due to be taken forward at Cancún, was centred on development. The us was far from unhappy to see the negotiations collapse and has been energetically pursuing its own bilateral and regional trade agenda instead. On this view, the wto’s failure to advance towards further multilateral agreements points not only to a fracturing of the global trading system but to the likelihood of increased domestic pressures for American protectionism. An alternative perspective would see the emergence of the g20 caucus at Cancún and its refusal to kowtow to the us–eu interpretation of Doha as an opportunity for a decisive shift in the balance of power in world-trade relations—though only if developing countries continue to pull together.

The fixer—if not the architect—of the Doha Declaration was the then Director-General of the wto, Michael Moore. Shoe-horned into the post in September 1999, just weeks before the debacle at Seattle, Moore’s key tasks were, firstly, to pull together a fresh consensus on global trade policies, binding on its members. And secondly, to oversee the accession of several new states; crucially, China. This account of his three-year sojourn at the wto— though blustery and often evasive—nevertheless provides some useful, if inadvertent, insights into the actual operations of power and hegemony within the world’s youngest multinational institution, and its advantages and drawbacks for global capital.

Since the 1980s, public policy in the West has been increasingly correlated around the core neoliberal agenda—deregulation, privatization, flexibilization—although not the elimination of agricultural subsidies or lifting of restrictions on the cross-border movement of labour. Not only Reagan, Thatcher and their successors in the us and uk, but Centre-Left parties and governments across Europe, Japan and Australasia have coalesced around the same programme. To a remarkable degree, any policy that might constrain the freedom of international capital has been delegitimized in the name of an imperative of global competitiveness and efficiency—a Gestalt shift from a multi-dimensional model, in which loyalty, stability and protection against systemic instability were given relative priority, to a more uni-dimensional one that celebrates exit, competition and the opportunity to profit from risk as guiding principles. Institutional, Keynesian and development economics—previously flourishing approaches—have been pushed to the margins by the new doctrine, which is presented as a universal science of human behaviour; resting upon the epistemological assumption that, in the words of Clinton’s Treasury Secretary, Larry Summers, ‘the laws of economics are like the laws of engineering. There is only one set of laws and they work everywhere’. The common good can thus best be advanced by the global implementation of these laws, and developing countries legitimately pressed into agreements that intrude deep into their domestic arrangements, confining their policy choices to free-market ones.

This normative consensus has been internationalized largely through multinational economic organizations such as the imf, World Bank and wto. These essentially political institutions are operated as a condominium by a small number of prosperous states—the us pre-eminent among them—with the aim, not of conquering other countries in order to extract tribute, but of establishing rules and procedures to reinforce their own economic, political, cultural and military predominance. Over the past decades the meos have increasingly redefined their agendas towards the deep restructuring of countries’ domestic social and economic arrangements—rather than stopping at discrete projects, in the case of the World Bank; or at macroeconomic variables, in the case of the imf; or at national borders, in the case of the gatt/wto. They justify the intrusion on the grounds that the neoliberal agenda is the only correct direction for developing as well as developed economies.

The evidence, of course, is far from convincing. The three agreements that emerged from the Uruguay Round in 1996—on intellectual property (trips), investment measures (trims) and trade in services (gats)—demonstrate how, in the name of open markets and mutual benefit, the system is being rigged even more strongly in favour of the advanced capitalist states. trips is essentially a massive protection agreement for firms and other patent- and copyright holders in developed countries, ensuring them large net flows of royalties and fees. trims and gats, between them, list virtually all the industrial and technology policies used by East Asian governments to nurture indigenous firms and industries, and then declare the vast majority of them illegal. Although the agreements are worded to suggest a balance between the rights and obligations of developed and developing countries, closer scrutiny shows that, for the advanced capitalist world, their rights are enforceable but their obligations are more open ended; while for developing countries, the opposite holds. The trips agreement specifies that the developing countries will enforce 20-year minimum patent periods over a wide range of products; if they fail to do so they can be taken to the wto’s dispute-settlement mechanism and are likely to lose. The mechanism has real teeth—punishments can include quite severe restrictions on offending states’ market access. The developed countries, meanwhile, agree in principle to ‘transfer’ their technology; but they are unlikely to be penalized through the dispute-settlement mechanism should they neglect to do so.

Established in 1947, within the framework of development economics, the gatt had legitimized a relationship of non-reciprocity that was supposed to aid a catch-up between core and periphery—the idea of ‘special and differential treatment’, in which developing countries’ increased access to markets in the advanced world were not matched by reductions in their own tariff protection. When the wto was created from the gatt in 1995, differential treatment was redefined as merely allowing developing countries longer adjustment periods in which to implement neoliberal policies. There is little scope under wto rules to permit a range of development strategies, such as state assistance to new firms and industries that are trying to establish themselves in the face of competition from mature producers elsewhere. The net effect of these policies is likely to ‘pull up the ladder’, making it more difficult for developing countries to catch up with the prosperity of the advanced world.

How is it, then, that these countries have come to sign up to such punitive agreements? Unlike the imf and the World Bank—famously run on the ‘one dollar, one vote’ principle—the wto operates on an ostensibly more democratic consensus model, in which the voices of individual member states are given equal consideration. As Moore puts it: