September 9th 2000

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Articles from this issue:

EDITORIAL: A way out of the debt trap

COVER STORY: Inside the World Economic Forum

CANBERRA OBSERVED: Petrol prices puncture GST optimism

NATIONAL AFFAIRS: Radical groups organised for Forum protests

Straws in the Wind

LABOR PARTY: New book, old view of ALP



DOCUMENTATION: “I’ve always felt like an IVF guinea pig”

MODERN ART: “Anything goes”: gallery

Milk: will wheat be next?

EAST TIMOR: Rebuilding East Timor

'Kursk' disaster timely reminder to next US President

As the World Turns

LITERATURE: The magic of Harry Potter

BOOKS: The triumph of spin over substance

Books promotion page

Inside the World Economic Forum

by Colin Teese

News Weekly, September 9, 2000
Colin Teese, former Deputy Secretary of the Department of Trade, examines the agenda of the World Economic Forum which will meet this month in Melbourne and discovers that, even for conclaves such as the WEF, reality is beginning to bite.

T he World Economic Forum begins its meeting in Australia on September 11 wrapped in a cloak of controversy and facing the prospect of concerted efforts to disrupt its proceedings (see page 5).

There is a certain irony attached to the disruption of its work by a combination of professional and amateur protesters (calling itself S11) and which includes a group of anarchists. The WEF is widely regarded by S11 to be among those promoting a form of economic liberalism which amounts to anarchism.

There is also a certain illogicality to the organised opposition of those standing ready to condemn the World Economic Forum.

Do the protesters know exactly what it is about the WEF that they must oppose?

Probably not. They see themselves as logical successors of those who helped undermine the meeting of the World Trade Organisation in Seattle at the end of 1999.

For a variety of reasons, the WTO was then unsuccessful in launching a new round of trade liberalisation negotiations. Those efforts remain stalled, despite the optimistic predictions of some (including Australia’s Trade Minister) that the talks would be successfully re-launched early in the New Year that is in the early months of 2000.

Trade Minister Vaille was wrong. But protesters can’t claim all the credit. The fact is the movers and shakers of the WTO seem to be in no hurry to re-start the talks.

The US Presidential and Congressional elections are upon us. Europeans have always believed that, in election years, the US representatives negotiate without a mandate.

And any delay is welcome news to the EU. The last thing it wants is to be held to the existing loose commitment to engage in further negotiations on agricultural trade barriers “by the year 2000”.

As for the United States, there is a hostile Congress sitting behind the Administration on matters relating to the WTO — more so than ever since the Seattle meeting. And none of that will change following the elections.

These tactical considerations aside, there is genuine concern on the part of some important participants — especially the US and the EU — about how to handle the concerns exposed at Seattle.

The outside protests have behind them the weight of powerful US trade union influences. And when these influences dwell upon the unfairness of competition from low wage countries in general, and, in particular, those exploiting child labor in ways no longer possible in Western countries since the early part of the 20th Century, they touch a sensitive public nerve.

Whatever ideologically committed Australian commentators may think, there is a political dimension to this issue which affects American politics up to and including the Presidential level. On the right issues, big union opinion still counts in the US, even if it has been emasculated in Australia.

Even more important is the question of what the big players want out of the next WTO negotiating round. Certainly it is not agricultural trade liberalisation. That will be paid no more than lip service in any new round.


For the US and the EU the first objective is an all-embracing agreement on the trade in services. Here developing countries are being asked to give up most. They made it clear in Seattle that they are in no mood to give away anything without off-setting gains of equal benefit to them.

The US and the EU have nothing to give except real control over the WTO. They are not about to give that up and, in any case, it’s doubtful if, alone, that would be enough to satisfy developing countries.

So where is the pressure to revive negotiations to come from? Only from small players, like Australia, still valiantly pursuing the impossible dream of better agricultural access to the US and EU markets.

Now while it is true that the motley group of protesters who gathered in Seattle believe that they almost alone, derailed the WTO negotiations on a new trade round, the reality, as can be seen from the above, was rather different.

Nevertheless, they had their impact. The forces behind globalisation were dealt a shock. Hostility to the idea of globalisation was demonstrated to be gathering support.

Can the S11 — which considers itself a home grown copy of the Seattle forces — make the same point here? Probably. But will it have the same impact? Perhaps not, because they are mistaken as to the purpose.

Disrupting the Seattle meeting helped focus attention on an important idea and it also helped derail a meeting at which government officials were gathering to discuss and decide upon important issues, which could effect the daily lives of millions.

The World Economic Forum is no international agency seeking — under US and European domination — to reshape the world trading rules to serve those interests.

At most the WEF is a talkfest for the biggest of big business and heads of important governmental positions. No doubt it’s business interests favour what is done in the WTO. At least up to a point.

But importantly, and unlike the WTO, the WEF has not been captured by ideologues. True, it advances the interests of big business, and in that respect certainly advocates globalisation — and free movement of goods and capital around the world.

But its participants, at least the business element of them, are pragmatists. They want the benefits of globalisation. And they will resist anything that puts those benefits at risk.

They are part of what the American economist and former high level US Treasury official, Fred Bergsten, calls the “Washington Consensus”. He defines this concept as a “widespread acceptance of market orientated philosophy”. He believes it is under threat because of legitimate criticisms of its shortcomings (notably in the area of the unequal distribution of its benefits) were being ignored.

Apparently the World Economic Forum agrees with him. In recent remarks to the National Press Club in Australia, none other than its Managing Director specifically rejected the idea of weak government; strong governments, he insisted, were needed to ensure that the benefits of globalisation were properly distributed. Clearly the WEF does not want “baby globalisation” thrown out with the “shortcomings bath water.”

In reality, the protestors know that their actions are symbolic and will do nothing to change the globalisation of corporate capitalism. The problems of globalism cannot be solved by Marxism which proved such a catastrophic social and economic experiment.

Capitalism is not the foe. It always was, and remains, the most effective means of generating wealth. Where it needs help is in wealth distribution.

Perhaps the WEF understands this better than either the protesters, the WTO, or, for that matter, the Australian Government.

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