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Correcting Inequalities is Most Important

"The correction of the inequalities produced by the liberalization agreements of the Uruguay round is much more important than the start of a new round of worlde trade." Joseph Stiglitz is a former economist at the World Bank and the 2001 winner of the Nobel prize for economics. This interview is translated from the German in: die tageszeitung, www.taz.de.
Correcting Inequality is Most Important

Joseph E. Stiglitz, the 2001 Nobel prize winner for economics on the consequences of past liberalization agreements

[This interview originally published in: die tageszeitung, November 9, 2001 is translated from the German on the World Wide Web, www.taz.de.]

taz: Nothing will remain the same after September 11, it is said. Is this also true for globalization and the trifling prospect that a new round of world trade will begin in Doha?

Joseph E. Stiglitz: September 11 reinforced the sense of mutual dependence in the US, the most powerful actor of the world economy. A critical debate on unilateral policy was triggered that the Bush administration has joined since September 11. At the beginning of the Bush administration, China was economically and increasingly militarily an enemy of the US. Enormous transformations occurred in China. Now we realize that China is an ally. Tomorrow China will be admitted as a full member in the WTO. This represents a great change of the geo-political situation.

Taz: Has the chance increased for corrections of the "neoliberal globalization" that you criticize?

Stiglitz: Since September 11, many people have become more aware of the enormous economic and social inequality in the world. This inequality was also expressed in the 1994 agreement, the conclusion of the "Uruguay world trade round" and administered by the WTO founded at that time. The US, Canada, Japan and the EU profited disproportionately from this free trade round. In many developing countries, liberalization led to a deterioration of the economies because it handed over these countries to the uncertainty of the international markets.

Taz: WTO General secretary Moore and his predecessors claimed that "all WTO members profited" from the agreement of the Uruguay round.

Stiglitz: That is nonsense and pure propaganda which the experts in the Geneva WTO central office do not believe themselves. Africa's share in the world economy has fallen considerably since the middle of the nineties. Consider the agricultural agreement that did not lead to an opening of the markets of Europe, Japan and North America. Consider the agreement on trade-related patent rights, "Trips". South Africa's lawsuit against the mammoth pharmaceutical companies for access to very reasonable Aids-medicines showed that the Trips-agreement is a complete failure. This does not mean that these problems will now be corrected in Doha. The trade policies of the US and the other great economic powers are dictated by selfish special interests. However counteracting forces are gradually arising from the populations of the industrial states. The civil society meddles more strongly today and says: What our governments justify and defend in the framework of the WTO does not correspond to our interests. For example, low income persons in the US want access to affordable medicines.

Taz: Among the 142 WTO-members, over 100 states of the South are striving in Doha for relaxed conditions for the implementation of previous WTO-agreements. Is that a legitimate desire?

Stiglitz: Absolutely! The correction of the inequalities produced by the liberalization agreements of the Uruguay round is much more important than the start of a new round of world trade. For example, the 1994 textile agreement is implemented very unfairly. If the industrial nations as planned lower their import quotas and at the same time raise their tariffs effectively preventing textile imports from developing countries, that is terrible. The manner and way that the industrial nations - first of all the US - convert the 1994 anti-dumping measures is very often to the disadvantage of the developing countries.

Taz: WTO-General director Moore says that the problems of the countries of the South can only be solved in the scope of a new world trade round.

Stiglitz: I disagree. The central fear of developing countries justified on the background of past experiences is that they will agree to a new round of negotiations in Doha in which the industrial nations again dictate the conditions. The legitimate concern of the developing countries is that they will be forced at the end to sign agreements that are not really in their interest.

Taz: Can this be prevented?

Stiglitz: My hope is that enough people will see this time how the future agreements are developed and say if worst comes to the worse: this is not acceptable. The past WTO-agreements were all reached in secret proceedings.

Taz: The developing countries resist the introduction of social standards or environmental standards in international trade agreements because of suspicion of protectionism.

Stiglitz: There are ways of introducing social- and environmental standards without protectionism. For example, it could be agreed that violations against the Montreal protocol on protection of the ozone layer or offenses against the Kyoto treaty on protection of the atmosphere will be punished with trade sanctions. These sanctions should be part of an internationally agreed mechanism that is equally valid for all WTO-members, not selectively and unilaterally seized by individual states against others.

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