William K. Tabb
(©Monthly Review, January
2000)
The World Trade Organization? Stop World Takeover
by William K. Tabb
On November 30, 1999, when the World Trade Organization (WTO)
opened its third round of ministerial meetings, the three thousand official
delegates, two thousand journalists, and other registered observers
were greatly outnumbered by the tens of thousands of protesters who
came from all over the world to denounce the organization. Estimates of
protester numbers ranged to forty thousand, according to the Seattle
Times, which told its readers that the demonstrations were larger than
those of 1970, when twenty to thirty thousand people (ten thousand
according to the Seattle Times) shut down Interstate 5 to protest the
Vietnam War. The parallel is appropriate. The still-growing movement
in opposition to efforts of institutions such as the WTO to take over the
management of the international economy may well be larger than any
popular protest movement of the last twenty years or more.
President Clinton, mindful that his vice president's chances of
succeeding him rested in the hands of the Democratic Party's core
constituencies, and that these constituencies were in the streets of
Seattle, played a two-faced game. And so did the city's mayor, mindful
that so much of his city supported the demonstrators and their
concerns, despite daily newspaper and TV reports drumming away at
how important "free" trade was to their prosperity. The president,
having first tried to present the issue as a choice between free trade
on
capital's preferred terms or no trade at all (the alleged choice of the
"Luddites"), instinctively moved to his (by now) threadbare "feel your
pain" rhetoric. Environmental and labor rights issues were, rhetorically,
to be piously supported, while in fact corporate freedom to pollute and
exploit were to be given still greater scope.
The mayor of Seattle, under a similar guise of "concern," failed to
explain why thousands of nonviolent protestors blocking intersections
were shot at close range with injury-producing rubber bullets,
pepper-sprayed, and teargassed. Nor could they explain why the
actions of small numbers of "anarchists" were used to criminalize
peaceful protests, and to justify arbitrary arrests of those who refused
to yield their right to protest peacefully or who were simply, according
to the police, in the "wrong place." The mayor proudly claimed to have
supported free speech while effectively preventing it, just as the
president claimed to stand for labor rights and the environment while
supporting corporate greed's full agenda, as he has done consistently
through his shameful career.
This attempt to manipulate, or "spin," the protest was a resounding
failure. There can now be no misunderstanding of the strength, or the
level of commitment and comprehension, of this emerging radical
movement against corporate globalism. In anticipation of the Seattle
meeting, some eight hundred grassroots organizations from over
seventy-five countries called for resistance to the growing power of
corporate greed. The WTO was an appropriate focus, because of its
contribution to the concentration of wealth, increasing poverty, and an
unsustainable pattern of production and consumption. The organizations
charged that the WTO's rules and procedures are undemocratic, and
serve to marginalize further the majority of the world's people,
enmeshed in the instability and social degradation of the process of
globalization without social control. In the wake of Seattle, this
movement is stronger and more committed, and likely to be even larger
and more effective, as well.
Since most citizens do not know what the WTO is, let alone how its
actions affect their lives, groups—ranging from the United Church of
Christ Network for Environmental and Economic Responsibility to Pax
Romana in Thailand, from Green Action in Tel Aviv to Green Library in
Latvia, from human rights groups in the Cameroons to the Indigenous
People's Biodiversity Network in Peru, from Pax Christi in Florence to
the United Students Against Sweatshops—have been involved in a
coordinated effort to present a view of the WTO from below. They
have been seeking to show what the WTO means to the lives of the
world's working people, the environment, and the future of all who live
on the planet. Seattle was a global lesson.
WTO officials maintain that "what we have here is a failure to
communicate," that the passion in the street was based on ignorance,
and illustrated the need for the WTO "to inform and educate" the
general public about what it "really does." What do they really do? One
official in the office of the Director General says, "If you think of the
place as a bazaar where all the world's traders get together and haggle,
you're not too far off." Pretty far, actually. Most of the world's people
are not represented. Their labor is devalued by the transnational
corporations (TNCs) who come to haggle and the major powers
(pre-eminently the United States), which impose their preferences on
the negotiations, or the haggling. Few developing countries have the
same level of expertise into the intricacies of the legalisms; some are
too
poor even to have representatives at these meetings at all. And the
developing countries are, in most cases, represented by an elite long
since sold out to the center of global capitalism. The rich and powerful
set the rules and the rules, not surprisingly, favor the rich and powerful.
The haggling is an intra-elite affair but, as a result of popular militancy,
a
challenge is emerging.
Let me review where the WTO came from, how it works, and why
protesters want revolutionary change from TNC rule of the world
system. Let's start in Havana in 1948, where most of the world's
leading trading nations met to agree to the formation of an International
Trade Organization (ITO). The idea, and the actual text for the
proposed organization, came from the United States. The ITO was to
impose order on the world trading system, in order to avoid the kind of
downward spiral which occurred in the 1930s—a collapse which had
threatened the very existence of the capitalist system. Since U.S.
corporations had come out of the war without capitalist rivals, they
were confident they could prevail in competition with a prostrate
Europe. That "free trade" favors the dominant economy was no new
discovery, and elements of corporate and financial capital that stood
most to benefit prevailed on the executive branch to put forward the
ITO. But powerful nationalistic sentiment in the Congress feared loss of
U.S. sovereignty to a world government, refused to be bound by an
international governance agency which might in the future escape U.S.
control, and declined to ratify the ITO treaty.
A preliminary agreement had been reached on the General Agreement
on Tariffs and Trade (GATT), intended as a temporary framework until
the ITO came into being. With the U.S. refusal to join the ITO, GATT
became a permanent fixture. It did not have enforcement powers, it
was not formally even an organization. Yet for nearly fifty years,
through a series of rounds, it was the forum through which negotiations
took place to lower tariffs (taxes on imports which inhibit and, if they
are high enough, prevent trade). In retrospect, some market
fundamentalist economists and others are glad the ITO did not become
functional because it was a creature of its time. In the postwar period,
all nations agreed that full employment was a central goal for any
international economic agreement, that workers' rights should be
protected, that too much market power and domination by the big
corporations should be discouraged through antitrust laws, and that
weaker, newly emerging nations were to have preferential treatment to
help them overcome the legacy of colonial domination and
underdevelopment. All of these principles were part of the ITO
framework.
None are part of the WTO, which came into being in 1995, over some
congressional opposition (again from those who feared loss of
sovereignty). At its first meeting in Singapore in 1996, after passionate
discussion about labor rights and environmental protection, it was
decided that these were not trade matters and should not be considered
by the WTO, nor should special treatment for developing countries be
established, but rather phased out to create "a level playing field for
all."
Certainly there was to be no provision to control transnational capital,
as the developing nations desired in their call for a New International
Economic Order at the UN in the 1970s, which the richer countries had
resisted. For the WTO, deregulation (and greater freedom for
transnational capital to do what it wants, where and when it wants) is
the sole agenda.
In the preamble to the WTO, all sorts of lofty ideas and positive
intentions are enumerated: that trade should contribute to a rise in living
standards, ensure full employment, respect the environment. But there is
nothing in its actual operation about any of these issues. In the WTO's
trade policy review mechanism, there is nothing about evaluating the
impact of its rules on workers, consumers, or sustainable development.
The WTO's fundamental postulate is that trade and investment
liberalization lead to more competition, greater market efficiency and
so, necessarily, to a higher standard of living. If factors of
production—labor, capital, and land (including environmental
assets)—are priced properly, they will be used in the best possible
ways courtesy of the Invisible Hand, or so the fable goes.
Other concerns—human rights, labor rights, and environmental
concerns—are not the business of the WTO, an organization with the
power to coerce national governments. Rather they are relegated to
other special-purpose international organizations, with no power over
either the TNCs or their governments. This division between the
powerful institutions (the International Monetary Fund [IMF], World
Bank, and WTO, which deal with the money), and the powerless
organizations (which address the concerns that are important to the vast
majority of the world's denizens), permits the agendas of giant
corporations to be carried out while an endless blather of "feel your
pain" rhetoric plays in the background.
The enforcement of a level playing field is supposed to be ensured
through the WTO dispute resolution mechanism, and the enforcement
of its judgments by the country that has successfully challenged
violators. There is no acknowledgement that poor countries are at a
disadvantage in such adversarial legal proceedings, and often do not
dare challenge or enforce judgments against more powerful nations
because of the leverage the rich have over the poor and less powerful.
The process is not one in which the world community uses the
collective strength of a democratic majority to enforce rules. Rather,
an
individualistic, purely formal concept of justice prevails, in which legal
equals (who, in reality, are not equals) do one-on-one combat. This
system, like the U.S. legal system, effectively eradicates any real
challenge to the rich and powerful.
Furthermore, only countries have "standing," the right to participate in
WTO proceedings. Indigenous peoples like the Ogone, who might
challenge what Shell is doing to its lands (with the willing participation
of
the repressive Nigerian government), do not. Nor do the inhabitants of
western New Guinea, since standing is only given to governments—like
the Indonesian government, which refuses to respect the rights of those
in western New Guinea, murders those who protest, and steals their
resources, leaving their environment devastated. Nor is there standing
in
the Non-Governmental Organizations (NGOs), some of which might
advance the rights of indigenous peoples or factory workers who are
repressed, jailed, and murdered by their governments in the interests of
a "good" labor climate for multinationals. The WTO is a forum for trade
rights of capital, on terms negotiated by the agencies of governments
that represent the interests of capital. No other rights count.
In the last of the GATT negotiations, the 1986 to 1994 Uruguay
Round, U.S. service industries (such as Federal Express, American
Express, and other financial and business service firms seeking to speed
up their penetration of global markets) were successful in having the
U.S. delegates insist on the forced opening of foreign markets to their
products. The U.S. Department of Commerce established formal
consultation committees; these have subcommittees for different
sectors, whose representatives tell the government negotiators what
they want out of the negotiations. The result was a precedent-setting
General Agreement on Trade in Services (GATS). The United States
Council on International Business, with a membership of over three
hundred U.S.-based TNCs, law firms, and business associations, put
pressure on for a trade related intellectual property (TRIPs) agreement,
since so much of TNC profits come from this area. They demanded
and got trade related investment measures (TRIMs), which assured that
other countries would not discriminate in favor of their home industries,
making it harder for U.S. TNCs to penetrate their markets.
Other powerful lobbying groups put pressure on European negotiators
(like the European Round Table, where their chief executives sit). The
Transatlantic Business Dialogue, a forum where chief executives from
Europe and the United States amicably attempt to work out their
differences, helps the proceedings along. Absent from these backroom
gatherings are small businesses, consumer groups, labor, and most of
the world's governments. By the time the WTO meets to consider a
topic, it has been well worked over at meetings from those held by the
Trilateral Commission to the annual power gathering in Davos,
Switzerland, where the great and not so good meet to develop
positions which formal international organizations then adopt.
Governments have deferred to transnational capital's demand that no
country be allowed to discriminate against its products and investments.
It would like the right to sue directly any government which attempts to
do so (that is part of what proposed multilateral agreements on
investment [MAIs] are about), but as of now must act through the
agency of its home government. Already such corporate rights are the
basis of suits like the one against the state of Massachusetts, about a
statute forbidding the government to purchase goods made by
companies doing business in Burma. The law convinced such
companies as Apple and Eastman Kodak to stop doing business with
this repressive military-dominated state. Japanese and European firms
preferred to sue Massachusetts for violating the WTO's
non-discrimination laws with regard to government purchases. Under
such rules, the effective local and national government boycotts against
apartheid in racist South Africa would not have been allowed.
The U.S. Trade Representative is pushing (on behalf of the U.S.'s giant
HMOs) for the right to compete with European national health systems
to provide medical care, which would lead to the destruction of the
current (and far superior) health care systems that exist in much of
Europe. Other suits include one by a U.S. parcel and letter delivery
service against European government "monopoly" postal services,
which would have a similar impact on the right of democratically elected
governments to make their own decisions about how their mail is
delivered.
In another case, U.S. environmental laws were successfully challenged,
forcing the United States to dilute protective measures. Under U.S.
law, tuna caught with nets designed in a way that caused them to kill
numerous dolphins in the process could not be sold in this country. But
this was an "unfair trade practice." The WTO does not care how the
tuna is caught, or if shrimp is caught in a way that kills giant sea turtles,
or whether a product is made using child labor, and so cannot be a
consideration for member governments.
Clinton's government has been quick to use the WTO to lower
environmental and health standards around the world on behalf of the
great corporations it serves. The United States challenged Japan's
pesticide-residue testing requirements for agricultural imports. In 1998
and again in 1999, the WTO ruled that Japan's standards are higher
than WTO standards for pesticide residues; hence, the Japanese must
now accept higher levels of pesticide. Guatemala followed
WHO/UNICEF guidelines in banning packaging that equated infant
formula with healthy babies, but Gerber Corporation got the U.S. State
Department to argue that this interfered with Gerber's intellectual
property rights, and to threaten a challenge under WTO. Consequently,
Guatemala now allows labeling in this area that goes against
WHO/UNICEF guidelines. The WTO, on behalf of the Clinton
government, tells Europeans they cannot keep out beef with artificial
hormones because they cannot prove, to the WTO's satisfaction, that it
is a health risk. In the past, it would have been producers who had to
prove that their products were safe, and up to democratically
accountable, elected representatives to decide. Under the WTO, it is
governments that must offer conclusive proof. Thus transnationals get
their way before WTO dispute settlement panels, which meet in secret
and from which NGOs and other interested parties that are not
nation-states are banned.
The rights of corporations now include what is called biopiracy: stealing
genetic materials and traditional knowledge from indigenous
communities and patenting them. Such intellectual theft has become
increasingly prevalent. Yves St. Laurent, after importing a particular
flower (Cananga odorata or, as it is known in the Philippines, where it
is grown, ilang-ilang), set up its own plantations in Africa and secured
a
patent on the perfume derived from the native Filipino species. In
another instance, India's neem tree is the source of thirty-five patents,
mainly for the pesticide properties of the plant. Local users who have
long known and benefitted from the tree's properties get nothing for the
appropriation of this knowledge by European and U.S. firms.
Under the TRIPs agreement, all knowledge is declared property and
someone must own it. There are now "inventors" of micro-organisms
(who own both the micro-organisms and the rights pertaining to them).
Plant-derived sweeteners long nurtured by Indian farmers and
painkillers developed in China have been stolen by TNCs. We are also
seeing major steps to patent seeds, reducing the biodiversity of
agriculture.
In the Philippines, MASIPAG (a farmer-led, community-managed
effort on breeding and conservation of rice and vegetables) stands
opposed to the notion that seeds are anonymous "genetic resources,"
free to transnational agribusiness corporations. They are trying to
preserve farmers' rights to freely exchange seeds and share knowledge
and resources. All over the world such Davids are standing up to TNC
Goliaths. Thanks to such organizations as GRAIN (Genetic Resources
Action International, in Barcelona, Spain), the Transnational Institute
in
Amsterdam, and other watchdog groups with Web sites, as well as the
writings of public interest lawyers, we are informed about what free
trade means for people around the world.
Not only is biodiversity, a common inheritance of humanity, in grave
danger of being stolen, but efforts to patent seeds and increase
monopoly rents charged to farmers will raise food prices and lower
farm incomes. Monsanto, an adviser-participant in the Intellectual
Property Committee during GATT and WTO negotiations, is
attempting to link the sales of its seeds and pesticides by bundling
products and forcing users to allow inspection of their fields, so that
Monsanto can see that they are conforming to company demands. The
firm is also among those fighting European efforts to keep out their
genetically engineered agricultural products, using the WTO machinery.
But now many concerned and intelligent folk have come to protest the
power of an unelected and undemocratic WTO to make decisions
about what is and is not allowed, not just in food products, but also in
basic matters of what is private or public. Such concerns have
produced a broad opposition to the WTO's power and its modus
operandi of putting corporate profits above all other considerations.
The battle continues—this David and Goliath struggle between the
WTO, the TNCs, and the most powerful governments in the world
against the grassroots consumers and producers and those
environmental and labor rights groups who help advance their demands.
U.S. organized labor has taken notice, and (as shown in Seattle) started
to move beyond narrow nationalist concerns toward notions of global
solidarity. And now the big guys are worried; squeals of rage rise from
the editorial page of The Economist.
The grassroots campaigns against Nike, the giant athletic wear
company, have been very effective. It helps that, when the press goes
to investigate claims by labor rights activists, reporters are detained
and
sometimes jailed. Reporter Mark Clifford was jailed in Indonesia, and
got a feel for what life is like for working people in TNCs'
subcontractor plants. Clifford's story in Business Week was titled, "On
the Inside, It's Hell" and detailed the wages and working conditions
activists had struggled to publicize. Similar stories have run in the New
York Times, the Washington Post, and elsewhere. Labor rights groups
are turning the spotlight on Nike, the Gap, Disney, and other exploiters.
Legal challenges by public interest lawyers to Texaco's despoiling of the
Oriente (a part of the Amazon basin in Ecuador) in U.S. courts have
begun to get prominent coverage and worry other TNCs. Texaco, of
course, says it met all Ecuadorian government regulations. But,
according to environmental activists, Texaco has polluted and then
abandoned a rainforest that has long sustained human life, leaving a
looming medical disaster for the region's residents.
Through public relations campaigns and legal challenges, as well as
large, visible demonstrations such as the one in Seattle, a protest
movement is gaining momentum, challenging the dominance of
transnational capital and the agencies that do its bidding. Free trade
is
increasingly seen as antithetical to fair exchange, basic human rights,
good working conditions, adequate levels of compensation,
environmental protection, and the equitable sharing of the common
inheritance of humanity.
The WTO believes it faces a public relations challenge. It surely does.
But much more than that, it faces an informed grassroots movement
whose numbers are growing. The more citizens find out about the
values the WTO fosters and the policies it defends, the more the
opposition will grow. One spokesperson for the WTO dismisses critics
as doing more harm than good. "To say that the WTO is harmful is
literally to say that the world would be better off without a multilateral
set of rules on trade," he said. "It's manifest nonsense. Nobody could
seriously defend that position." But of course those who opposed the
WTO in the streets of Seattle and in other venues are not against rules
governing the global economy. Indeed, they want rules—rules to
control rapacious capital. It is not a choice of their rules or no rules.
The movement is putting an alternative set of rules on the table.
What the popular movements object to, and the WTO understands this
well, is that the rulers now make the rules, and that the rest of us are
forced to obey them. The challenge is in fact to the entire framework of
trade, which the WTO portrays as maximizing self-interest through
economic exchange; it is, in fact, a trade regime which maximizes the
interests of the giant corporations. It does so by eliminating
state-imposed barriers that now, to a limited extent, restrain the TNCs.
Stronger laws are needed in the interest of values endorsed by the vast
majority of the world's citizens. Those who understand that these
trade-liberalizing practices do damage to human dignity, social justice,
and sustainable development must reject the WTO's claim that their
rules are the best rules (let alone the only possible rules). They are
not,
and there were tens of thousands of Davids and Davidas in the streets
of not only Seattle, but London, Paris, and many other places in
demonstrations, in teach-ins, and other forms of movement-building
resistance. Goliath, watch out: real people's power is powerfully stirring
and the grassroots are in determined movement.
(*) WILLIAM K. TABB is professor
of economics and political science at Queens College and the Graduate Center
of the City University of New York. He is the author of Restructuring Political
Economy (Routledge, 1999). This article is a revised version of a talk
given at a teach-in on Free Trade, Neoliberalism, and the WTO at Queens
College on October 4, 1999.