From Le Monde Diplomatique, Nov 1999
Seattle prepares for battle
-- Trade before freedom
by Susan George:
President of the Observatoire de la mondialisation (Globalisation
Observatory), Paris; associate director of the Transnational Institute
(Amsterdam).
Translated by Malcolm GreenwoodIntroduction by le Monde Diplomatique
The European Union has agreed on Commissioner Pascal Lamy's negotiating
mandate for the ministerial conference of the World Trade Organisation
(WTO). The mandate may be summed up as agreement to an all-round
liberalisation of trade, but with some restrictive clauses concerning
respect for cultural diversity, the precautionary principle and dialogue
with the International Labour Organisation (ILO) on minimum social
standards. In other words, free trade remains the rule and derogations the
exception. The dismal legacy of five years of trade deregulation since the
1994 Marrakesh accords should be enough to call the principles of the WTO
into question. Europe refuses to do so, even though millions are
mobilising in Seattle and around the world.
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THE ministerial conference of the World Trade Organisation (WTO), which
opens on 30 November in Seattle, is being blandly presented as a
straightforward negotiation on international trade in goods and services
where everyone will obviously have to make a few concessions. Just as, not
so long ago, they told us the Multilateral Agreement on Investment (MAI)
was just a legal and technical device of no real consequence. But the WTO
message is not getting through and demonstrations are planned to greet the
delegates from 134 countries and the lobbyists from the multinationals.
Europe has already had to contend with bananas, hormone-fed beef and
genetically modified organisms (GMOs), all of which have helped mobilise
opinion against the tyranny of an international organisation that thinks
it is a cut above everyone else. How have things come to such a pass?
Since 1947 the General Agreement on Tariffs and Trade (GATT) (and the
ambassadors of its "contracting parties") had been working discreetly to
get customs duties on all kinds of goods reduced. Following the eighth
round of talks, the Uruguay Round (1986-93), that work at last came to
fruition. In March 1994 ministers gathered in Marrakesh to sign the
document that created the WTO. Its 800 pages (several thousand with the
annexes) gave world trade a framework far more constraining than the
feeble GATT.
In the background the lobbyists of the transnational corporations, who had
long had the ear of the official negotiators, rubbed their hands with
glee: the WTO now gave them the ideal tool to complete their globalisation
and impose new rules - their own rules - on all human activities now
defined as objects of "trade".
The WTO, which unlike GATT has the status of an international
organisation, has 134 member states and some 30 observers. Compared with
the World Bank or International Monetary Fund its 650 strong secretariat
is small. Its new director-general, appointed after bitter and unseemly
confrontations, is Mike Moore from New Zealand. In three years' time he
will be replaced by Thailand's Supachai Panitchpakdi who will complete the
remainder of the six-year term.
The WTO's headquarters on the shores of Lake Geneva are now home not only
to GATT, which is still responsible for liberalising trade in goods, and
also a dozen other agreements. Among the most important of these are one
on agriculture and the General Agreement on Trade in Services (GATS),
which alone covers more than 160 sectors and sub-sectors, including
education, health and the environment (1). The agreement known as TRIPS
governs intellectual property, including bio-technology and the patenting
of micro-organisms and microbiological processes, while that known as
TRIMS is concerned with "trade-related" investments.
One of the WTO's main tasks, the elimination of non-tariff barriers to
trade, is performed in part through two other agreements that have only
the semblance of being technical. The agreement on technical barriers to
trade (TBT) and the one on sanitary and phytosanitary measures (SPS) each
claim to "harmonise" standards and rules for the protection of the
environment, public health and consumers. In practice, this
"harmonisation" imposes ceilings that have the ultimate effect of reducing
all national laws, especially the most effective ones, to the lowest
common denominator and of dispensing with the precautionary principle.
Anyone who refuses to import a particular product on the grounds that it
may be hazardous to health or destructive to the environment must provide
scientific proof. The producer has no need to demonstrate that what he
sells is harmless. One of the key battles between the WTO countries will
be over the principle: on whom does the burden of proof lie? What is the
status and what are the limits of science when doubts remain?
The formidable Dispute Settlement Body (DSB) that crowns the WTO structure
is the fount of both its executive and legal power. Formerly, when GATT
wanted to penalise a country that was not playing by the rules, every
member had to agree, even the one that was to suffer the penalties. As a
result it carried very little authority. The WTO with its implacable
discipline is quite the opposite. If its DSB orders sanctions, the
members, including the plaintiff, must be unanimous if they are not to
apply. Hence the United States' undeniable right to penalise roquefort,
foie gras and other Dijon mustards by imposing prohibitive customs duties.
If the Europeans refuse to import hormone-fed beef despite the WTO's
ruling, no matter. They must then compensate the US and Canada every year
for their lost earnings. In a game of mutual reprisals, these countries
choose the products they will impose a heavy duty on so as to make a
recalcitrant adversary think.
An end to "protection"
The conditions under which the WTO's panels, which have settled more than
170 disputes so far, are appointed are obscure. The names of the "experts"
who sit on them and who meet behind closed doors and hear no outside
witnesses are not made public. This impenetrable procedure is
astonishingly quick: disputes are generally settled in 12 months, 18 at
the most. Canada, the world's biggest asbestos producer, hoped to take
advantage of this to force Europe to import the carcinogen again: the
panel's decision was to have been announced at the start of December, just
as the Seattle ministerial conference opens. Strangely enough, it has been
put back until March 2000.
Without warning, the WTO has in this way created an international court of
"justice" that is making law and establishing case law in which existing
national laws are all "barriers" to trade and is sweeping aside all
environmental, social or public health considerations.
In so doing, it is merely following the broad principles that govern all
its activities. For example, the most favoured nation clause demands
equality of treatment for similar products from different member
countries. On that basis, with the banana decision, the WTO was able to
deny the European Union the right to have a foreign policy. In the WTO's
eyes, a banana is only a banana, be it from Ecuador or the former European
colonies, the so-called ACP countries (Africa, Caribbean, Pacific). So
much for the Lomé Convention and Europe's favourable treatment of former
colonies.
The national treatment clause prohibits any discrimination affecting
products of foreign origin, especially on the basis of the human or
ecological conditions under which they were produced. In other words, no
account may be taken of the "processes and methods of production" (PMP).
The only exception to this rule is goods manufactured by prisoners. But no
reference may be made either to sustainable development or to human
rights, and trading partners may not be rewarded or punished on the basis
of their respect for those ideas. The article on "eliminating quantitative
restrictions" penalises quotas and the refusal to import or export. This
provision could invalidate many multilateral environmental agreements
(MEA) and a number of social conventions.
How, indeed, are we to prevent trade in endangered species or toxic waste?
How can we limit exports of cereals when there is a national food
shortage, or of tree trunks when the forests are laid waste? The
agreements on technical barriers and sanitary and phytosanitary measures
reinforce this legal arsenal. In this light, an incalculable number of national
standards, rules or laws could easily be classed as "barriers to trade".
These are just a few of the pitfalls along the road to the meeting of the
WTO's supreme body, the ministerial conference in Seattle. The previous
conferences (Marrakesh in 1994, Singapore in 1996, Geneva in 1998) have
set the agenda: to review the agreements on agriculture, services and, in
theory, intellectual property. Seattle will decide the precise content of
what Sir Leon Brittan has pompously termed the Millennium Round.
It is planned to conclude the round with a global agreement in three
years' time. The talks will move liberalisation forward and prevent any
backtracking; that is how the WTO does things. And the US is reluctant to
see the TRIPS agreement and the GMO controversy reopened, especially as
the African countries have declared their opposition to the patenting of
life in an unprecedented approach to the WTO secretariat.
A battle to the death is looming between the Cairns Group of major
agricultural exporting countries (including Argentina, Australia and
Brazil) and the US, on one hand, and Europe and Japan, which are
considered too protective of their farmers, on the other. For the Cairns
Group there are only agricultural products that must be allowed to compete
like any other merchandise. Under pressure from France, the EU stresses
the "multifunctionality" of agriculture as protecting diversity, the
environment and rural life. US producers, on the other hand, are urging
their government "to resist efforts to introduce the concept of
multifunctionality" (2).
We do not yet know the order in which the many fields covered by the
agreement on services will be tackled. If the word "horizontal" is heard,
however, it is time to show one's claws: in WTO parlance it means that a
liberalisation measure accepted in one field must be extended to all. A
liberalisation applied to banks or insurance companies, for example, would
also have to be applied to education and health.
If governments have their priorities, business has its own. The US
Coalition of Service Industries (USCSI) stresses distribution, finance,
information technologies, telecommunications, tourism and health.
Opposite, presided over by the chairman of Barclays Bank, the European
Service Leaders' Group (ESLG) is concerned with 21 sectors. As a service
to the ESLG the Brussels commission has set up an electronic system
enabling European negotiators to consult the business community quickly (3).
The US Coalition of Energy Services is calling on the US special trade
representative and chief negotiator, Charlene Barshevsky, to get their
activities added to the agreement on services, where they do not yet
appear. With its 27 members representing hundreds of billions of dollars,
not to mention kilowatts and therms, the coalition looks like getting its
way. Brazil, France and Norway, which still regard these areas as public
services, have been identified as "possible opponents" (4).
On the eve of the Seattle talks nobody knew what other sectors might be
added to this supposedly "built in" agenda (agriculture, services,
intellectual property). The Europeans want the list to be as long as
possible: investment, public contracts, "facilitation" of trade,
competition policy, environment, labour law, special treatment for the
countries of the South. For the Europeans, anything is useful in
establishing a better balance of power with Washington and reducing the
pressure they fear on agriculture.
Cautiously, the US negotiators prefer not to include investment for the
time being, lest they reawaken the citizens' movement that scuppered the
Multilateral Agreement on Investment (MAI) in October 1998. In any case, a
good agreement on services - with the right to a commercial presence -
would itself open up many advantages for investors. Neither do the
Americans want electronic commerce: they want this virgin sector, still
free of regulation, to remain a green pasture of zero customs tariffs.
Public contracts, which account for around 15% of most countries' gross
national product (GNP), are clearly a juicy target that the US would like
to see included in the talks, but it may have to make do with a working
party, with liberalisation coming later.
On the other hand, the US will be adamant that the so-called accelerated
tariff liberalisation (ATL) initiative should be placed on the agenda,
defining as it does eight disparate fields where zero tariffs should
quickly become the norm. Alongside jewellery, toys or medical equipment we
find - much more worryingly - forestry and fishery products, fields where
zero tariffs would accelerate the destruction of these non-renewable
resources. In this, Washington has the support of all the member countries
of the Asia-Pacific Economic Cooperation (Apec), which together account
for 60% of world trade. And no-one will be surprised to find that this ATL
initiative has given rise to another business coalition including Dow,
Dupont, Kodak, General Electric and the American Forest and Paper
Association (5).
Millions of opponents
Where are the countries of the South in all this? The EU is constantly
saying that they deserve special care. While waiting to see whether
anything will come from these fine words, many of them still have no
ambassador to the WTO and they complain that they have often made
concessions without getting anything in return, especially in the field of
textiles and clothing. Their priority is to see the commitments already
given to them in the Uruguay Round enacted. There will be time for other
subjects later. They are also suspicious of the European and North
American desire to discuss, directly or indirectly, ecological or social
clauses (such as compliance with the basic conventions of the
International Labour Organisation). They see this as protectionism in
disguise, possibly wiping out the only real advantages the poor countries
enjoy.
The international movement that brought down the MAI has very quickly
mobilised again against a WTO that is fundamentally antidemocratic and
destroys both freedoms and the environment. Often accused by the partisans
of free trade of wanting to take the world back to the 1930s and the trade
wars - if not to war pure and simple - the movement replies that
international trade needs rules, but not those of the WTO. There is
another international law, that of human rights, multilateral
environmental agreements and labour law, to which trade should be
subordinate. The economy should serve the people and their natural
environment, not the other way round. Too much liberalisation spells death
to freedom.
More than 1,200 organisations in 85 countries are demanding that no new
area be brought under WTO jurisdiction and that there be a moratorium on
talks until the organisation's operation and achievements have been
unpicked and fully evaluated - with the full and total participation of
the people. A historic change is under way at the very heart of the
globalisation process: millions of people are mobilising, nationally and
internationally, around a subject that is apparently technical, complex
and remote. Several tens of thousands of them will be in Seattle, for the
biggest demonstration seen in the US since the Chicago Democratic Party
convention in 1968.
The organisers' instructions to the demonstrators are very strict: no
violence towards people or damage to property; no drugs or alcohol; always
stay in an "affinity group" of five to 20 people with clearly defined
responsibilities in the event of arrest or provocation. A lawyers'
collective will assist any who might be taken in for questioning by the
various forces of order who are literally on a war footing: the secret
services, FBI, Bureau of Alcohol, Tobacco and Firearms, Federal Emergency
Management Agency, the county sheriff and the Seattle police have all put
tight defences in place against this giant street procession whose weapons
will be scaling buildings, banners, teach-ins and street theatre.
The protesters are united around one certainty: the need to fight for each
other, failing which all will be defeated. Farmers will not be concerned
just about agriculture, film-directors about films or consumers about
health. The problem isn't beef, bananas, cultural diversity or the
patenting of life: the problem is the WTO.
Susan George has just published The Lugano Report. On
Preserving Capitalism in the Twenty-First Century, (Pluto Press, London,
211 pages, £9.99).
TEXT REFERENCES
(1) See list of services in Susan George, "Globalising designs of the
WTO", Le Monde diplomatique English edition, July 1999.
(2) Letter from US Wheat Associates to Charlene Barshevsky, 23 July 1999.
(3) Gats 2000: "Opening Markets for Services", undated European
Commission document (DG 1).
(4) Letter from the US Energy Services Coalition to Ambassador
Barshevsky, 11 June 1999; "US to press for new energy agenda in services
negotiations", Inside US Trade, Washington, DC, 11 June 1999.
(5) Letter from the ATL Coalition to Barshevsky, 6 August 1999.
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