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Martin Khor – a life spent fighting for a just global economy

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Martin Khor – a life spent fighting for a just global economy

By Arndt Hopfmann*

Economist and journalist Martin Khor, whose life was cut short by cancer on 1 April 2020, was a standout figure in the struggle for a radical transformation of global economic relations. Born into a middle-class family in Penang (Malaysia), he initially carved out a career in public administration and in academia before taking up his life’s mission, the fight for a just new world economic order, as the Research Director of the Consumers’ Association of Penang and from 1990 onwards as the Director of the Third World Network (TWN). From 2009 until his retirement for health reasons in 2018, he was Executive Director of the South Centre in Geneva (Switzerland), the most important think tank analysing and advising on global economic issues in developing countries.

Martin Khor was a staunch internationalist who always believed that close global economic ties were vital to improving living conditions, especially for the most disadvantaged in the Third World. However, he was not an advocate of the neoliberal form of globalisation driven by major economic powers and multinationals in their own self-interest, which produces many losers and only a few winners. He firmly believed that a new world economic order was needed to make human development a reality for everyone around the globe.

To this end, he focused his efforts on bringing about radical change in three main areas. The first was his rejection of the Washington Consensus and accompanying strong criticism of development finance and the associated over-indebtedness. A second area, which became an increasing concern for him, was his call for globally equitable environmental policies and truly sustainable development. But much – maybe even most – of his energy was channelled into analysing and criticising the prevailing world trade order and the World Trade Organization (WTO).

In his book Battles in the WTO, published posthumously in June 2020, Khor sums up his decades of grappling with the often unsatisfactory outcomes of WTO Ministerial Conferences. The work consists largely of articles he wrote over the course of more than 20 years, mostly in the wake of the WTO Ministerial Conferences – from Singapore in 1996 to Buenos Aires in 2017 – and published in TWN reports or journals such as Third World Economics and the South-North Development Monitor (SUNS). However, it also contains an introduction dated January 2020, which was in fact the last thing he wrote. He starts by mentioning a factor that is at the heart of a decades-long controversy in the WTO and that has made the organisation increasingly dysfunctional. It relates to the establishment of the WTO itself, which arose from the euphoria at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in Marrakesh and in which the participating representatives from developing countries were apparently not clear about the scope of their approval. He writes that many of them "did not fully understand what they had signed on to or the implications". For they had accepted international trade system principles which, through the rapid advance of trade liberalisation, not only tended to exacerbate global economic imbalances but would also increasingly undermine national development strategies. Since the WTO, with its sanctions regime, came into being, developing countries have been under serious threat of deindustrialisation as a result of their premature binding agreement to open up their internal market and curbs on their economic policy freedom.

Although after 1995 many countries on the fringes of the world economy strove to avert the worst (potential) effects of the new trade agreements by trying to renegotiate the arrangements for implementation of the Marrakesh Accords, industrialised countries made vigorous attempts to drive the move towards liberalisation from the end of the Uruguay Round in and through the WTO and to achieve further rapid liberalisation in more and more new areas with a view to expanding trade flows to an ever greater extent. To secure the unanimity officially required in an organisation with more than 150 member states, exclusive negotiation methods were introduced in the form of the notorious ’Green Room meetings’ that sideline most WTO member states from the actual negotiation process. After a hand-picked group of influential, financially powerful countries has agreed deals in this illustrious circle, they seek to force them onto the remaining WTO members, who are put under extreme political and time pressure with a view to ensuring their final approval.

The two conflicts that marked the WTO’s infancy – the controversy surrounding the continual emergence of new negotiating topics (in particular the ’Singapore issues’, i.e. investment and competition policy, public procurement and trade facilitation), which was inimical to the renegotiation of the implementation arrangements in the interests of developing countries, and the extremely opaque and exclusive negotiation process – have, according to Khor, resulted in five out of 11 WTO Ministerial Conferences being de facto failures and three that must be viewed as expensive and time-consuming but ultimately inconclusive ’non-events’. The apparently insurmountable fault lines that have existed since the start of WTO negotiations have brought the organisation to its current position, where it is on the verge of becoming devoid of any useful function and therefore insignificant. The WTO has failed both as a development agency and as a general agent of trade liberalisation that goes well beyond actual trade issues by making far-reaching interventions into national political strategies.

In his articles, Martin Khor tracked this painful process, which has now dragged on for over 25 years, with knowledge, commitment and critical insight, while taking the side of the countries of the Global South. In the process, he has given a voice to a range of different protagonists (not least by allowing them to have a full say, and often even quoting their words).

Khor believes that the destructive role of successive US administrations (not just that of President Trump) is responsible for the current deep crisis in the world trade system and therefore also in the WTO. However, the United States has now unleashed an actual trade war with China and has also deliberately paralysed the WTO’s dispute settlement mechanism, thereby significantly weakening the organisation. Finally, the United States, the European Union and Japan are trying to remove ’developing country’ status from China, India and other emerging economies as part of a ’WTO reform’. "At the moment, the future of the WTO is uncertain" – these are the last words of a man who spent much of his life engaging with the North-South conflict within the WTO. They show that while he was always an astute observer, he was no visionary.

* Arndt Hopfmann holds a doctorate in development economics. His particular areas of interest are development, world trade and monetary and international currency relations.
Martin Khor (2020). Battles in the WTO. Negotiations and Outcomes of the WTO Ministerial Conferences. Penang: Third World Network, 360 pages.
(A version of this text will appear soon in the Informationsbrief Weltwirtschaft & Entwicklung/World Economy & Development newsletter.)