SECTION TWO: INSTITUTIONS AND GLOBALIZATION
Institutions that force neoliberalism and crush democracy
What is the World Trade Organisation (WTO)?
The WTO was set up in 1995, to replace the General Agreement on Tariffs and
Trade (GATT), which reduced tariffs (taxes on imports) and quotas (limits on the
amount of imports).
Uruguay Round of negotiations (1986-93) gave the WTO enough power to overrule
any law, as long as it could be linked to trade.
Officially, decisions in the WTO are made by voting or consensus. However,
rich countries, especially the so-called QUAD countries (U.S., Canada, Japan and
the European Union), repeatedlyhave made the most important decisions in
meetings without the other, poorer WTO nations.
In the end, cases are decided by a panel of three trade bureaucrats.
There are no conflict of interest rules, so it is not surprising that every
single environmental or public health law challenged at WTO has been ruled
illegal.
WTO tribunals, documents, hearings and briefs are secret. Only national
governments are allowed to participate, even if a state law is being challenged.
Losing countries have only three choices: change their law as the WTO
demands, pay "compensation" to the winning country, or face sanctions.
If a democractic government decides to do something, the WTO can force it not
to, no matter what voters decide.
Lori Wallach and Michelle Sforza, in their new book The WTO: Five Years of
Reasons to Resist Corporate Globalization, point out that large corporations are
essentially "renting" governments to bring cases before the WTO, and in this
way, to win battles they have lost in public opinion at home.
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Examples:
Truth outlawed
The WTO considers supermarket labels, like ones pointing out products that
are not genetically modified, are a "trade barrier". In short, they believe that
ignorence is good and the truth is a "trade barrier".
Health a trade barrier
The daddy of the WTO, GATT, co-operated with Reagan when he threatened
sanctions against Asian nations that opposed smoking. When the Bush
Administration declared the War on Drugs, they took the time to threaten
sanctions on Thialand for rejecting US tobacco pushers. In China alone, Phillip
Morris alone, in 1992 alone spent $9,000,000,000 on propaganda. One must wonder
if their cigarettes are advertised as a "great leap forward".
After scientific reports of health risk from hormone injected beef, the
European Union followed the will of the people and banned it. The WTO tried to
overturn this democratic decision.
Japan tried to prohibit pesticide-laden apples. The WTO wanted them to eat
more poison.
Environmental protection outlawed
Oil: The US tried to pass laws forcing petrol to be cleaner - until the WTO
decided that the law was a "trade barrier" to producers of filthy oil. Instead
of finding better ways to produce cleaner oil, industries simply have the WTO
over-rule democracy.
When the US tried to save sea turtles and force cleaner, better ways of
catching shrimp, the WTO decided that turtles were a trade barrier.
Attempts to help the poor "unfair"
When the EU decided to help impoverished Caribbean banana farmers, US
multinational corporations, with massive plantations in Latin America, whined
that doing business with the poor was "unfair". The WTO agreed.
Democratic government policy undermined
When the democraticly-elected Government of India tried to restrict imports -
just like America and others did so that they could develop - the WTO over-ruled
the voters.
But then, democracy is not worth much to neos. Philippe Legrain, a former
World Trade Organisation official, says that "Sixty million Britons would not
accept 1,300m Chinese outvoting them."
Dictatorships supported
When the voters of Massachusetts' tried to penalise companies doing business
with the brutal dictators of Burma, the WTO sided with the dictators - or would
have, except that a corporate lobby group sued Massechusetts first. "If we
had rulings like this in the 70s and 80s, the United States would not have been
able to participate in the anti-Apartied movement" said Massachusetts State
Representative Byron Rushing "I am glad these judges werent around then or
(Nelson) Mandela might still be in jail."
Exceptions for violence
GATT article 21 allows protection of "traffic in arms, ammunition and
impliments of war". In 1999, the WTO ruled against Canadian subsidies on
civilian passenger jets. The program was changed to a subsidy for building
weapons.
When the USA decided that healthy Cubans were "detrimental to U.S. foreign
policy interests," the Clinton Administration passed the "Cuban Democracy Act"
(Even though Neos claim that democracy
is impossible without development), cutting off affordable medicines. The
American Association of World Health pointed out "a devastating outbreak of
neuropathy" and "excruciating pain" for children, which only got worse as more
sanctions were put in place by the free traders.
When the European Union challenged the Helms-Burton Act, the most obvious
case of a "trade barrier" if there ever was one, at the WTO, Clinton suddenly
sided against the WTO. He then blamed Cubans for being ungrateful for all of the
children he had tortured for them. (Noam Chonksy http://www.zmag.org/ZMag/articles/chomud.htm)
And as for actual trade...
American Textile Manufacturers Institute says that the WTO is a "costly
failure" and that export markets for US textile and apparel products remain as
closed or, in some cases, more tightly shut than they were in 1994. In short,
the WTO has been so busy hunting turtles it forgot about trade.
The alternative is obvious:
When the EU halted sales of frozen fish from Uganda, instead whining to the
WTO, the Ugandans simply built better, more modern cleaning facilities. The ban
was lifted.
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How else is the WTO for the already rich?
The WTO is based in Geneva, one of the world's most expensive cities.
The US has over 250 negotiators while 30 poor nations have 0 - they cannot
afford it! Interestingly, rich neos do not consider wining and dining rich neos
as much of a waste of tax money as, say, education.
"The scope of the WTO multilateral obligations, the technical complexity, the
volume of issues covered and the administrative burden have placed most
developing countries in a situation where their participation in the system is
almost beyond their means," Kenya's trade minister Nicholas Biwott told
Nairobi's The Nation.
In the end, WTO rules are enforced with sanctions. The US has little to fear
if a small Third World country threatens sanctions, but the US could destroy the
same third world country if the situation is reversed.
Developing countries are three-quarters of the WTO membership but have made
only one-fifth of the complaints to the dispute panel. The US has filed nearly
30% of all cases, and won 90% of them.
WTO decisions are made by unelected, unaccountable committees heavily bribed
by corporations.
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What was the Multilateral Agreement on Investment (MAI)?
Ministers of the richest countries met secretly at the Organization for
Economic Cooperation and Development (OECD) in Paris in 1997 and tried to hammer
out a bill of rights for international investors, the Multilateral Agreement on
Investment (MAI).
After two years of secretive conspiring, NGOs found out, protests began, and
the aggreement was cancelled. The makers of the MIA then turned to the World
Trade Organization to replace the MIA with Trade Related Investment Measures
(TRIMs).
Both the MAI and TRIMs would force taxpayers to pay corporations that see
lower profits as a result of democracy. (Chapter 11 of NAFTA does the same thing).
Also, governments would be forced to tax, regulate, and subsidize foreign
businesses exactly as they do local businesses. This means that the industrial
development strategies done by the United States and Germany in the 19th century
to Japan and Korea in the 20th would be ruled out. In short, development would
be outlawed. Another goal is the end of capital controls.
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What is the International Standards Organization (ISO)?
The ISO is completely industry-run and does not even pretend to have public
involvement. This is fine, because the ISO only deals with standardizing odds
and ends like the size of screws or credit cards worldwide.
However, the ISO is creating "a strategic partnership" with the WTO and has
begun setting environmental standards, including the process used for producing
organic agricultural products. In the future the ISO might grow and gain more
power.
"From an environmental perspective, the ISO isn’t ideal because it’s
captured by industry," says trade lawyer Stephen Porter of the Washington,
D.C. Center for International and Environmental law. "The part that’s most
troublesome is when an ISO standard becomes a default standard under the WTO
rules," says Porter. "Does it become impossible to go beyond that in a
practical matter if Austria wants to set an environmental standard that is 130%
of the ISO standard?" And once ISO standards become part of the WTO, what
was a voluntary system receives the force of law, without public involvement.
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