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Forwarded from the New Paradigms Project [Not Necessarily Endorsed]:
From: Michael Pugliese <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED] <[EMAIL PROTECTED]>; [EMAIL PROTECTED]
<[EMAIL PROTECTED]>
Subject: World Trade Organization
Date: Friday, November 19, 1999 2:02 PM
Forum: Whose Trade?
December 6, 1999
WHOSE TRADE?
See below for background and related information.
E-mail this story to a friend.
Once, not so long ago, trade was the province of policy wonks and special
interests--and the experts and lobbyists liked it that way. No longer. Now it's a hot
political issue. One reason is the growth of trade; just 4 percent of GDP in the early
fifties, it's more than 13 percent today. Another is that international capital flows,
ranging from productive pursuits like building factories to speculative ones like
betting against national currencies, have grown even more strongly. And still another
is that the areas covered by trade agreements have widened from traditional concerns
with tariffs and quotas to cover labor, environmental and health regulations as well.
NAFTA was the first major trade fight, occurring at a time in the early nineties
when downsizings were plentiful and new jobs were scarce. To many it looked like a
scheme for greasing the departure of US manufacturing to cheaper, friendlier
climes--Ross Perot's famous "giant sucking sound." A year after NAFTA took effect, a
whole new trade regime came into being with the birth of the World Trade Organization
in January 1995, replacing the much looser set of agreements that had regulated world
trade since the late forties. The WTO has vast powers to adjudicate trade disputes and
invalidate regulations it deems impediments to trade through "expert" tribunals
meeting secretly in Geneva. In effect, it's a form of world government with almost no
popular accountability.
So far, so outrageous. But the WTO--and "globalization"--should be kept in some kind
of perspective: Much of today's economic stress is the result of national economic
policies, not global ones, and much of that stress is the effect of fairly ancient
features of capitalism, among which "globalization" is merely one important part.
Since the WTO's birth, life has gotten a lot more difficult for free-traders. In
1997 President Clinton was denied so-called fast-track authority to negotiate trade
deals; it's hard to imagine any new trade agreement getting approved in the near
future. More globally, a new international movement has grown up over the past few
years to frustrate the designs of those who'd further liberalize trade and capital
flows. Its first major victory was the defeat of the Multilateral Agreement on
Investment, a kind of bill of rights for capital that was being negotiated quietly.
The movement has creatively used the Internet to organize and inform, a fact that has
caused great distress among elites around the world.
An important milestone in this new era of trade politics will be the WTO's summit
meeting opening on November 30 in Seattle. As host, the Clinton Administration had
hoped the summit would mark the opening of a Millennial Round of trade negotiations
further expanding the liberalization agenda. But thousands of activists decided to
crash the party. There will be demonstrations, teach-ins and street theater, designed
both to spoil the summiteers' mood and to educate people about the WTO.
What follows is a sampling of progressive opinion about the WTO and "globalization"
in general. All the participants agree that the WTO, as presently constituted, has
some serious problems; the disagreements flare up over what to do about it and over
whether "globalization" is fundamentally a good or a bad thing. We hope this
encourages discussion in an area where the depth of knowledge isn't always as profound
as the depth of feeling.
Doug Henwood
How Big Is 'Globalization,' Really?
How much does "globalization" matter? Are there other factors that get ignored when
so much stress is placed on it?
Dani Rodrik: Certain aspects of globalization fall far short of the amount of
globalization that we observed at the tail end of the previous century. I think we
often exaggerate the degree to which national governments are constrained by global
forces. Often governments find it too easy to say, "We can't do this or that because
corporations will flee or we'll lose exports." National governments still have a lot
of autonomy, and political forces, NGOs and others who want improvement in local
conditions could still get those improvements by getting national governments to see
that there is considerable room for acting.
Kim Moody: Oh, I think people do focus on globalization at the expense of much else.
To conceive of globalization as an independent force that has nothing to do with the
[neoliberal] politics that conquered the world in the past two decades is completely
wrong. It's not that there isn't something to the idea that international markets have
a certain objective force, but the fact is that they can't exist without the political
will and organization that allow corporations to close plants and restructure freely.
Nomenclature
The debate is frequently cast as being between "free-traders" and "protectionists."
Is that a helpful way of framing things?
Rodrik: I think it's very misleading. Some of the most ardent supporters of free
trade are no less mercantilist than the most ardent promoters of protection. In both
instances, we're really seeing the pursuit of self-interest. Some financial-services
firms in the United States press for opening the financial-services markets abroad.
That's driven by the same mercantilist concerns as those of segments of industry that
try to stop imports. So, what might appear contradictory--promoters of free trade like
financial-services firms versus protectionists like the steel industry--is really very
much the same thing, the pursuit of self-interest.
Lori Wallach: The notion that the decision is between something called free trade
and something called protectionism is total horsefeathers. That is a construct set up
by the proponents of one set of rules for organizing the global economy. The
proponents of this current version of it call it "free trade" and say that anything
different is protectionism. The WTO is not anything that Adam Smith or David Ricardo
had in mind when they wrote about free trade. The best thing you could call its 800
pages of regulations is managed trade. Only it's corporate-managed trade, and we want
people-managed trade. They don't have free trade and we don't want no trade, so the
real issue is what the rules of the road will be.
Nostalgic Wall-Builders?
Free-traders like to condemn their critics as protectionists who are trying to build
walls around countries, prisoners of nostalgia; and some argue they're hurting workers
in poor countries whose only avenue out of poverty is exporting to rich countries like
the United States. How do you respond to that?
Thea Lee: Workers around the world need to have their basic rights protected,
whatever country they're in, rich or poor. The international trading system undermines
those rights by lowering trade barriers and increasing the rights and mobility of
capital, putting workers in competition with one another. This is something that we've
worked very closely on with labor unions in developing countries and Europe. We've
been very clear that we are trying to take control of the globalization debate, not
hide from it, and that our vision of the future is one in which rich and poor
countries trade with one another, in which workers' rights are protected, in which the
developing countries are given the right incentives to build strong democracies,
strengthen their middle classes on the basis of strong trade unions and protect the
environment. That's a vision of the global economy that is very positive and different
from one in which we build a wall around the United States.
Wallach: What clearly is the backward perspective is one that looks at a
pre-Keynesian, turn-of-the-century standard of living and labor treatment as the
sought-after global norm.
Walden Bello: Often the issues that have created discontent in the North come across
to people in the South as protectionist, in that they seem aimed at keeping goods from
the South out of Northern markets. This is one of the areas where we need civil
society organizations on both sides to sort out these issues. But if you look at the
way that countries in the South have made advances in this century, it's been through
protectionism. During the Great Depression, Latin America made tremendous advances, in
terms of development, through import-substitution strategies. More recently, the
so-called tiger economies in East Asia were able to move up the ladder with
protectionism. Free trade, deregulation--this has been mainly a US agenda. Since the
1997 Asian financial crisis, the United States has used these policies to push the
interests of US corporations in that part of the world.
Strange Alliances
In some of these trade fights, there have been strange coalitions between presumably
leftish forces and right-wing Republicans and reactionary businesspeople like the
anti-union textile magnate Roger Milliken. How do you feel about those alliances?
Wallach: What's happened has more to do with where the public is than where the
prominent figures of the left or the right are. On a handful of issues, like
globalization, campaign finance and corporate welfare, I see that people you would
think of as really right wing and people you'd think of as the left of the left are
closer to one another than to moderates or centrists. Obviously people agree a lot
more on what they're against than on what they are for, and what they are for is very
different, depending on whether you are Pat Buchanan or Ralph Nader.
Dana Frank: We have to be wary of nationalism, particularly economic nationalism, as
the alternative to global free trade because I think that sets us up with a
partnership with nation-based capital that overlooks the fact that business is still
going to follow the same logic of profit-making domestically. Some idea of a
nationalist team with domestic capital sends us right into the same problems that
we're trying to solve. It sets us up with partnerships with domestic unionbusters and
the kind of "us" versus "them" policies that Buchanan is all about--it's terrifying.
Coping With Consequences
It's argued that freeing up trade has benefited mainly the rich and has resulted in
lower incomes and less security for everyone else.
Rodrik: Through much of the postwar period we let markets expand gradually at the
same time that we made sure there were safety nets in place. Since the early eighties,
that implicit bargain has dissolved. It's problematic to follow a trade-expanding
agenda without acknowledging that the flip side of trade is economic dislocation--and
offering constructive ways of dealing with those dislocations. Too often, we hear that
"trade is a wonderful thing, everybody gains and nobody hurts." Every economist knows
that's not true.
Reich: Undoubtedly trade creates winners and losers. A good case can be made that
the winners win more than the losers lose, so the overall effects of trade are
positive. But the distributional impacts can't be ignored. The political reality is
that winners don't compensate losers. The only way those who lose from free trade can
hope to be compensated is if they actively oppose it. I think a lot of very poor
people around the world would suffer a great deal were we to put up trade barriers.
But I don't see any better way to get the winners to compensate the losers than for
the losers to threaten to block trade as a bargaining chip.
We could afford to give our people far better education, job skills, healthcare,
access to capital, public transit and the rest, and make poorer Americans--not just
poor Americans, but people in the bottom two-thirds of the distribution--far more
productive. That wouldn't make people at the top less productive, and it wouldn't make
people in other areas of the world less productive. It would enable the bottom
two-thirds of Americans to live better lives. We ought to be promoting the same
policies around the world. The gap between the richest 20 percent and the poorest 20
percent in the world has doubled over the past three decades. It is now seventy-five
to one. That's not a formula for a stable world. Protectionism won't reverse that
trend. Investments--genuine investments in people--will. The real question is how you
motivate the richest to make those investments.
A Better World
We hear lots of critiques of the WTO and globalization. Is there a positive vision
of what a better world would look like?
Walden Bello: In the critique lies a positive agenda. First, the erosion of the
capacity of governments to be able to discipline capital--that has to be stopped.
Second, the market has to be re-embedded, has to become a subordinate part of the
society again. Values like social solidarity have precedence over the free market.
Third, corporations have really become much too powerful, and a combination of
government and civil society, national and international, needs to act as a check.
Finally, a few years ago people said, "Globalization is inevitable, but what kind of
globalization? Is it a positive kind of globalization or is it a negative kind?" I
think people are beginning to realize that some aspects of globalization must be
reversed. Where commodities can be produced locally, they should be produced locally,
even if they may not be produced in the most efficient way. Of course, the big
question always is, How does one operationalize those principles?
Wallach: Trade rules need to be pruned back. They've invaded a variety of areas
where it's inappropriate to have a uniform, externally imposed global norm. There are
an enormous number of "commodification of the commons" issues. Environmental rules
have become technical barriers to trade. Things like water and other biological
resources--genes, cells, species, people--should not be commodified and traded, though
under the WTO you can patent cell lines. The WTO model sees the globe as a single
market. Human beings are either labor or consumers, and the environment is a set of
resources to be efficiently extracted. Diversity--democracy and cultural
differences--is inefficiency. There are other values than having one highly efficient
global market. Now, trade rules consist of ceilings. We need floors, not ceilings.
There'd be a lot more fragmentation in markets, and you would end up with more
regional trade than global trade, but the advantage would be in democratic accountabil!
!
ity. It's better to have several medium-sized operators dealing with a set of similar
markets than two or three global producers cornering the whole global market.
Rodrik: There is an incompatibility between a market system that is becoming
increasingly global and a governance system still tied down at the level of
nation-states. I cannot imagine economic integration going much further without
governance structures becoming much more international. But if that is going to
happen, in order for these structures to have popular legitimacy, we will have to talk
about international bureaucracies being accountable to popular forces, about electoral
arrangements at the global level, about a kind of global federalism--the European
model writ large. We will either allow our politics to go global or we'll have to find
some way of restraining our markets from going too global, because our politics remain
national.
Higher Standards?
Should labor and environmental standards be incorporated into the WTO, or is that
the wrong place for them?
Wallach: When the WTO was established, many environmentalists pushed for an
environmental working group in the WTO. They got one, and after five years, many of
its most energetic proponents are now saying that this working group has turned into a
trade-dominated entity where environmental laws are studied not to safeguard them but
rather to figure out how to get rid of them. We don't want to put the environment in
the hands of an organization whose charge and worldview is commercial. That would be
like putting the Endangered Species Act in the middle of the bankruptcy code. We need
to have an entity of equal stature, and we need the WTO to be cut out of national and
international environmental policies. Global labor movements now have all the
enthusiasm the environmentalists did five years ago about putting standards into the
WTO. I personally am very skeptical.
Lee: We've built a very strong consensus among labor unions around the world about
the importance of incorporating enforceable workers' rights into international trade
agreements. These include the freedom of association, the right to bargain
collectively and provisions on child labor, forced labor and employment
discrimination. The question is how international organizations can support the goal
of observing core labor standards. The IMF and the World Bank could include as one of
the conditions for loans the observance of these standards. By not having any rules on
workers' rights, the WTO makes it difficult for countries to implement and enforce
core labor standards. The very absence of rules undermines countries' abilities to
enforce them. But frankly we're a long way from having consensus that this is an issue
the countries want to discuss. Because the WTO is a multilateral organization, we need
to start with some more modest goals of opening a dialogue about what constr!
!
uctive role it can play in promoting core labor standards. Our ultimate goal is to
incorporate workers' rights and environmental protections into WTO rules. But we can't
start with that. In the short term we hope to force the WTO to acknowledge that its
actions have a bearing on labor standards and begin a conversation that will one day
lead to a change in the rules.
Moody: I think there are problems with standards. The whole purpose of these
multilateral agreements is to break down barriers to trade and investment. There's
also a problem of enforcement. Can you imagine the US government using the WTO to
sanction Indonesia because Indonesia is being nasty to its trade unions? I think labor
is taking this tack because it's the easy one to take. Why aren't they a little
bolder? Labor should be taking on the multinational corporations on a worldwide scale.
There are some examples of that happening recently--but we need a lot more, and not
the ceremonial approach of the past. A good example of what could be done was the
recent oil workers' strike in Indonesia. The US oil workers' union [now merged into
PACE] and the international trade union secretariat launched a pressure campaign on
the corporations. And the Indonesian strike was won. There are networks being built
between workers in the United States and Mexico and Europe. We need more cr!
!
oss-border exchanges at the rank-and-file level. There are high-level organizations
like the secretariats, which sometimes do good things, but have the problem of being
federations of federations.
Bello: People in the South have been saying that putting the determination of
whether goods are being produced in socially acceptable ways in the hands of the WTO
is putting it in the hands of the wrong organization. Instead, let's strengthen the
ILO, let's strengthen multilateral environmental agreements. Northern NGOs have been
too quick to try to use the WTO as an enforcement mechanism. Clearly, environmental
groups in the North are on the right track in examining how commodities are made or
how fish are caught. But often there's little sensitivity that jobs are at stake in
the South. There should be ways that green technologies from the North could be made
available to Southern countries at low cost to facilitate cleaner methods of
production. With labor, too, the issues are quite complex. It often seems that we're
not just talking about extreme sweatshop conditions in the South but about a demand
that labor standards overall be radically upgraded. And this does not take!
!
into account historical social conditions that exert influence beyond the desire of
multinationals for cheaper labor.
Globalization Over?
It's sometimes said that free trade is like a bicycle: If you don't keep moving
forward, you fall over. Has the forward momentum been lost?
Reich: A backlash [against globalization] is certainly coming. The challenge for
those of us who believe that free trade and global capital are essentially good things
if managed correctly is to avoid the backlash by developing progressive strategies to
overcome the widening inequalities and the environmental depredations while preserving
what's good about globalization. And what's good about globalization needs to be on
the table as well. Since the Second World War, globalization has dramatically improved
the lives of most of the world's people. It has meant that poor people even in rich
nations have access to goods and services that are much cheaper than they would be if
we were living in a world of autarky. It means that savings can flow to poorer nations
to put people to work.
Reform It or Junk It?
So would you reform the WTO or junk it entirely?
Lee: Reform it in every aspect. Reform its rules, reform its processes. We do need a
system of international trade rules, but we don't like the rules or the process that
exists now. Our primary concern is that the WTO has no provisions protecting workers'
rights. The only labor right that is written into WTO rules right now is that
countries may restrict imports of goods produced with prison labor. But the other core
labor standards are not covered by WTO rules. If a country wants to ban the import of
goods made with child labor or place trade sanctions on a country that is violently
repressing independent labor unions, the WTO could strike it down as a trade
restriction.
Bello: I would abolish the WTO. It institutionalizes the historical accumulated
advantage of the North, and specifically of the United States. Because of tightened
intellectual-property restrictions, industrialization by imitation--the traditional
way that countries have industrialized--is no longer an option. All the ways by which
trade policies like barriers and quotas have been creatively used for economic
development in the past have now been eliminated. The agreement on agriculture is
nothing but an effort to consolidate the monopoly over global agricultural trade
enjoyed by the European Union and the United States. Yes, we now have a rule-based
system and a very strong dispute-settlement system. But basically what this does is
reduce policing costs. I think less structure and more fuzziness would serve the
interests of the poorer countries. The current set of rules is skewed to the advantage
of the rich countries, particularly the United States.
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------------------------------------------------------------------------------
PARTICIPANTS IN THE FORUM
Walden Bello, author of Dark Victory: The United States and Global Poverty (Food
First), is executive director of the Bangkok-based Focus
on the Global South (focusweb.org) and a professor of Public Administration at the
University of the Philippines in Manila.
Dana Frank is the author of Buy American: The Untold Story of Economic Nationalism
(Beacon); she teaches history at the University of California, Santa Cruz.
Thea Lee, co-author of the forthcoming Field Guide to the Global Economy (New
Press), is assistant director for international economics in the public policy
department of the AFL-CIO (www.aflcio.org).
Kim Moody, author of Workers in a Lean World (Verso), is director of Labor Notes
(www.labornotes.org).
Robert Reich, Labor Secretary during Bill Clinton's first term, is a professor of
economic and social policy at Brandeis and the national editor of The American
Prospect (www.epn.org/prospect.html).
Dani Rodrik, author of Has Globalization Gone Too Far? (Institute for International
Economics), is professor of political economy at Harvard; he directs the political
economy program of the university's Center for
International Development (www.cid.harvard.edu).
Lori Wallach is director of Public Citizen's Global Trade Watch
(www.tradewatch.org).
Doug Henwood, convener of the forum, is a Nation contributing editor. He is the
editor of Left Business Observer and the author of Wall Street and the forthcoming A
New Economy? (both Verso).
------------------------------------------------------------------------------
Background and Related Information
Left Business Observer
Left Business Observer is a regular newsletter of politics and economics,
published by Nation contributing editor Doug Henwood.
http://www.panix.com/~dhenwood/LBO_home.html
International Forum on Globalization
Formed in response to the worldwide drive toward a globalized economic system
dominated by supranational corporate trade and banking institutions, the San
Francisco-based IFG advocates equitable, democratic and ecologically sustainable
economics.
http://www.ifg.org
WTO Watch News
The future homepage of WTOWATCH.org, the site currently offers subscriptions to
two e-mail news bulletins: "WTO News: The Road to Seattle," and "BRIDGES Weekly Trade
News Digest." The Institute for Agriculture and Trade Policy will provide a
twenty-four-hour feed from Seattle at this site.
http://www.wtowatch.org
World Trade Organization
The official site of the WTO.
http://www.wto.org
Tradewatch
A division of Ralph Nader's Public Citizen that deals with international trade and
investment policies.
www.tradewatch.org
Jubilee 2000
A movement in more than forty countries to cancel the debts of the world's poorest
countries.
http://www.j2000usa.org
Center for the Study of Globalization and Regionalization
Located at the University of Warwick, Britain.
http://www.warwick.ac.uk/fac/soc/csgr
50 Years Is Enough: US Network for Global Economic Justice
A coalition of 205 faith-based, policy, women's, justice, youth, labor and
development organizations
http://www.50years.org
Institute for International Economics
Devoted to the study of international economic policy.
http://www.iie.com
Third World Network
Involved in North/South, development and Third World issues.
http://www.twnside.org.sg
GATT-guide
Text of the General Agreement on Tariffs and Trade.
http://www.ciesin.org/TG/PI/TRADE/gatt.html
US Trade Representative
The official site.
http://www.ustr.gov
US Trade Organization
Pro-free trade but offers daily updates on trade news.
http://www.ustrade.org
Vanderilt U Research Guide
For GATT and the WTO.
http://www.vanderbilt.edu/law/library/research/gatt
Rainforest Action Network
An education and action organization working to save rainforests worldwide.
http://www.ran.org
Institute of Development Studies
University of Sussex, Britain.
http://www.ids.susx.ac.uk/ids
Preamble
This research organization works with academics, policy professionals and
community leaders.
http://www.preamble.org
OECD
Organization for Economic Cooperation and Development.
http://www.oecd.org
180 Movement for Democracy and Education
Dedicated to helping students build a youth movement for political empowerment.
http://www.corporations.org/democracy
Student Alliance to Reform Corporations
Seeks to make corporations more socially and environmentally responsible.
http://www.corpreform.org
Center for Campus Organizing
A national group that supports campus activism.
http://www.cco.org
United Students Against Sweatshops
An international coalition devoted to stopping sweatshop labor worldwide.
http://home.sprintmail.com/~jeffnkari/USAS
------------------------------------------------------------------------------
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