Is the Obama Administration Working With the EU, Canada to Block Real Reform at This Week’s UN Financial Crisis Summit?

Wealthy Nations Send Only Low-Level Reps; Insist Communiqué Calls for WTO Doha Round Conclusion Even as Doha Agenda Includes More Financial Service Deregulation

Posted: 6/22/2009

This week, government representatives will meet in New York for what was to be an unprecedented, inclusive high-level global debate about the causes of and solutions to the financial crisis. The summit was called to remedy the significant shortcoming of the November and April G-20 summits, which excluded most of the 192 United Nations (UN) member nations, promoted only minimal reforms to the global economic architecture and pushed further financial deregulation by calling for completion of the World Trade Organization (WTO) Doha Round talks.

Instead of the UN summit remedying the problems of the G-20 approach, reports indicate that rich countries have worked behind the scenes to ensure the UN summit does not focus on the role of existing global economic governance structures in causing the crisis nor issue a call for reforms to these institutions and policies. In a candid speech this weekend, the elected president of the UN General Assembly, Nicaraguan priest Miguel d’Escoto noted: "...despite the growing need for major changes, many Member States, particularly those in the North, increasingly resist reforms of the IMF and the World Bank, hoping that things will return to business as usual. And they have also made it very clear that they do not want a serious global conversation to take place at the United Nations."

At the heart of the matter seems to be an increasingly strident effort by various developed countries to avoid an examination of the radical financial service deregulation that was pushed, often at these countries' behest, through international bodies such as the WTO and the International Monetary Fund (IMF). Yet to remedy the current crisis and avoid future meltdowns will require significant changes to the existing system of global financial governance, including the WTO's Financial Services Agreement (FSA), which explicitly requires radical deregulation. It is ironic and troubling that while many nations are calling for a global regulatory floor, a global ceiling limiting regulation is currently imposed on 105 nations through the WTO’s FSA. That pact legally obligates signatory nations to continue many of the very policies that governments are now working to reform – making the efforts by key wealthy nations to avoid review of this WTO financial service deregulation pact at the UN summit especially shameful.

Read the full memo at Eyes On Trade, or download the PDF (with footnotes that are not included there).