A promising new development on the international economic scene is the emergence of a collection of nations who identify themselves either as the “Group of 20-plus”, or simply, g-20+. In a nutshell, here’s what has happened: the 1989 collapse of the Communist world created disorder in international relations for a period, with the vacuum being filled by a North-South tension, sort of the developed world vs the undeveloped world. But since this conditon was widely viewed as unsatisfactory, and grossly unfair, other forces have come into play: the Group of 20-plus
bloc was conceived by Brazil and India as a way to bring together large, resource-rich and economically dynamic nations from the South — a not strictly geographical label since it includes China as well as Indonesia, Thailand, South Africa, Nigeria, Mexico and Argentina. Because together they account for more than half the world's population, and, increasingly, have substantial manufacturing centers of their own, these nations “have the clout to demand greater access to the markets of industrialized nations .”
With the collapse of the WTO meeting in Cancun is September, I have continued to watch with interest this group, especially since it is evidently lead by the charismatic president of Brazil, Luis 'Lula' da Silva. Lula has become the unelected leader of this group. (checkout this zogby poll.)
Consisting of 146 nations, the conference collapsed amid mutual accusations of bad faith. Chief among the contentious issues among the assembled nations is “what Wall Street likes to call emerging markets: the United States and other industrialized nations insist on a right to continue subsidizing their own agricultural products, a policy that in effect closes markets for emerging nations’ agricultural products.” The phrase, “free trade,” used with such abandon by nations like the US, is rendered meaningless, because the subsidies create barriers that cannot be penetrated by many nations, for whom agricultural products are their prime trading produce. (Check out this account of the results of the collapse of the recent WTO conference in Cancun. Also this nation article.)
Evidently, however, from “forces far stronger than ideology” through this competition for profits and markets, there is some fluctuation.
This week in Washington and later this month in Miami, trade ministers from across the Americas are to meet again to try to adjust the rules that would govern free trade in the hemisphere, and the exchanges promise to be caustic. The prospect of a global agreement or even a hemispheric pact like Washington's pet project — the Free Trade Area of the Americas — seems to be receding, replaced by a fragmented panorama in which resentment and bitterness set the tone….
As reported by the nyt, the group of 20-plus are a group of nations “that no longer fit the profile of either have or have-not.”
Naturally, this rebellion by mere upstarts was not greeted enthusiastically by the “haves”. But to others, especially of a more liberal persuasion politically, this movement is very encouraging, because it produces a method by which the so-called poorer nations can effectively confront the richer, but at their own terms. Example: Clinton’s United States trade representative, Charlene Barshefsky, sees the Brazilian-led coalition as a logical development — "an additional power center, much better organized and more savvy," with a stake in the world trading system.
"Years ago, the North-South divide was largely ideologically based," she said, with the poorer countries looking to shield themselves, through protectionism, from the risks of free trade. Now, she said, there are "floating combinations of countries, in which essential economic interests, and not ideology, are the guidepost."
But here’s the rub, according to the nyt article:
In that context, the Cancun talks were also notable for the gulf that arose between the Group of 20-plus and the rest of what is known as the developing world. The conference was brought to a halt — over the question of American and European agricultural subsidies — not by Brazil and its allies but by a larger, separate coalition of less developed countries, mostly African and Caribbean, that felt disenfranchised and ignored. "If it were just up to the Group of 20-plus, the meeting would have ended with a decision to keep negotiating," said Rubens Ricupero, a Brazilian who is the director of the United Nations Commission on Trade and Development.
The Group of 20-plus, nations who account for more and more of world trade, have a broad range of interests. Example: Brazil, once only seen as an agricultural exporter, “now counts airplanes and automobiles and car parts as its leading export items.”
The potential for more chaos, and suffering by the poorer nations is of course almost guaranteed, but positive results for the future are visualized, even though, as noted by
Jagdish Bhagwati, a Columbia University professor: "poor countries are singularly unequipped to cope with the chaotic regime."
The Bush administration's strategy: divide and conquer. In an op ed in September, Robert B. Zoellick, argues that "as W.T.O. members ponder the future, the U.S. will not wait: we will move towards free trade with can-do countries."
Members of the new bloc also seem to be taking a patchwork approach, seeking new trade patterns among themselves that make political sense even if at the cost of economic efficiency. India, for example, has bypassed Boeing and Airbus in favor of Brazil's Embraer as it tries to modernize its fleet of government planes.
Can the Group of 20-plus continue to hold together?
While the coalition has forced the United States, Europe and Japan to take note and rethink their plans, it does not speak with a single voice on all matters. "India and China don't have the same interests as we do in Brazil, because they are not big agricultural exporters, but rather importers," said Felipe Lampreia, a former Brazilian foreign minister. "But that doesn't mean developing countries can't come together on particular themes."
-- Michael Pugliese