MORE

Hitting the Streets

For more than two decades, the inhumane, neocolonial practices of the World Bank and the International Monetary Fund provoked angry protests in Third World countries, but few in the Western world took notice. Now, the anti-globalization movement is alive and well in the United States and is expected to have a thing or two to say when world business leaders, heads of state and leading economists meet this weekend in New York City. What follows is a six-point manifesto of what many of the demonstrators want. The list is based on the writings and statements of anti-globalists and contains the demands sought by the Mobilization for Global Justice, a coalition that promised to have 100,000 demonstrators outside the IMF meeting in Washington, D.C., last fall; the meeting was canceled in the aftermath of September 11.

Open the meetings to the public

It‘s no surprise that most people have no idea what really goes on at meetings of the World Trade Organization. Business is conducted in private. All 144 member states have a representative, and this select group decides 97 percent of world-trade matters, according to the WTO. Our guy is U.S. Trade Representative Robert Zoellick, who was appointed by President Bush. What exactly Zoellick does is a bit of a mystery because individual votes go unrecorded.

Though the WTO creates binding international treaties, U.S. citizens have no control over their representative. In fact, WTO members routinely make decisions without voting at all. At the 1999 WTO meeting in Seattle, developing nations criticized Clinton-appointed U.S. Trade Representative Charlene Barshefsky for making major decisions in side-room deals among only the most powerful economies, cutting most nations out of the loop.

Njoki Njehu, the Kenya-born director of the U.S. Network for Global Economic Justice, which campaigns for reform of the IMF and World Bank, says the annual meetings of those organizations are just as bad. ”In 1998,“ she says, ”at the time of the debate on the Asian financial crisis, the U.S. Congress asked the U.S. executive director of the IMF to testify. She was asked how she made decisions using voice and vote. She said they make decisions by consensus. They asked her how many votes she had had since 1993, when she was appointed, and she said about a dozen! They had made hundreds, if not thousands, of decisions, but they never voted except for 12 times or so.“

Instead, it comes down to power politics behind closed doors. Strong economies muscling the weak. Deals. Few recorded votes. No transcripts are available, even to Congress. The minutes of the IMF meetings aren’t released for five years.

The latest lightning rod for protests is the World Economic Forum, which starts its five-day meeting in New York City on Thursday. The Forum isn‘t a quasi-government agency, and it makes no decisions affecting blocks of countries. But the 2,500 corporate, political, religious and academic leaders who will attend the sessions represent, to the anti-globalization crowd, everything that is wrong with mainstream thinking on almost any topic.

Forgive IMF and World Bank loans

During the global debt crisis of the early ’80s, developing nations turned to the World Bank and the IMF for help on a massive scale. It‘s impossible for these countries to ever repay their loans, but they are forced to try, often at the expense of their citizens. These agencies have the authority to order countries to make loan payments their top budget priority, above more immediate worries such as health care, education, even food payments. In the years 1998 and 1999, for instance, Cameroon’s government spent $401 million on its debt and just $88 million on health-care programs. In 2000, the G7 countries agreed to forgive $100 billion in debt around the world. Cameroon‘s payments dropped by $114 million. This allowed the central African nation to initiate an expensive new HIVAIDS plan.

The World Bank’s own studies of the 22 most heavily indebted poor countries shows that the limited debt cancellation in 2000 boosted health care, education, public hygiene and water projects. But it‘s not enough. Jubilee 2000, an international debt-relief program, sponsored an independent study of the IMF and World Bank finances and found that the joint institutions could forgive the poorest nations’ loans altogether and still survive. Recognizing this, President Bush announced plans last year to allow the two agencies to make a few grants rather than loans. But it‘s only a start.

Stop messing with the inner workings of other governments

The IMF and World Bank were set up to look like the good guys. They’ve been doling out money to impoverished nations since the 1950s, funding huge development projects like oil pipelines, dams, cattle ranges and nuclear reactors. But this is a feeding trough for corporations, which make huge profits and routinely place their projects in environmentally sensitive rain forests or on indigenous a reserves against the wishes of residents.

 

Plus, the checks came with strings attached.

To get the money, more than 100 countries have agreed to cut spending on government programs, including social welfare and medicine; privatize various public services; and be receptive to foreign investment. What‘s wrong with being receptive to foreign investment? Too often the companies are simply looking for cheap labor to exploit. All of these measures ended up hindering people’s access to everything from clean water to a decent doctor.

These agreements had an oddly appropriate name: Structural Adjustment Programs.

New foreign operators want their profits. In 2000, Bechtel Corp. took over the Bolivian water system, bringing on a minirevolution that sent the San Francisco firm packing. Usually, the agreements require busting unions, reducing the workforce, trimming wages and eliminating benefits. For instance, the IMF recently told Bulgaria that, in a climate of globalizing labor, it should work to reduce average wages, already at about $125 per month, in order to be more competitive. This is mainstream neoliberal advice: better a sweatshop than no shop at all.

The WTO has similar practices. It sanctions countries for refusing to halt tariffs on foreign products or passing laws to protect workers from exploitation.

Be kind to the environment

The WTO has a perfect anti-environmental record. In the trade organization‘s first six years, every environmental law challenged at the WTO (including several in the United States) was declared illegal and an ”unfair trade barrier.“ This, critics say, is its basic nature: The WTO exists to liberalize trade, and these and other protections are simply in the way.

For instance, the WTO ruled that the European Union’s (E.U.) ban on imports of hormone-laden beef from the U.S. was illegal. Under the new world order, then, it‘s illegal for Europe to protect its food supply. The E.U. refused to budge, so the WTO authorized the United States to smack it with $120 million in trade sanctions. The United States is thereby charging the E.U. for the meat even though people won’t eat it, allowing U.S. farmers to ignore the demands of the sacred ”market“ and carry on as though nothing‘s wrong.

Venezuela challenged the U.S. Clean Air Act rules on reformulated gasoline, saying they were too tough. The WTO agreed, forcing the U.S. Environmental Protection Agency (EPA) to change the law and allow imports of gasoline with high concentrations of known pollutants. These pollutants are now in our gasoline. Unlike the E.U.’s decision on beef, however, the pro-industry EPA gladly capitulated, creating a new nightmare scenario: A reactionary administration like, say, the current one, can strip any inconvenient law from the books just by inviting another country to challenge it as a trade barrier.

Respect the sovereignty of nations

Some would have us all living in a global village, but we‘re not quite there yet. In the race to global markets, labor and environmental standards are the two biggest losers. The best way to stop this is to let nations adopt and enforce their own laws.

The IMF and World Bank sponsor this contest by making loans conditional on cuts in regulations. Sovereignty is leaking away the fastest through two new global devices that Juliette Beck, trade campaigner at Global Exchange, a trade monitoring group in San Francisco, calls ”corporate courts.“

For example, the U.S. bans the export of raw logs to protect jobs at local sawmills and to reduce the spread of insects and diseases. Japan wants to challenge this law. If it does, a WTO dispute-settlement panel of three to five experts would have the power to force the U.S. to change the law or pay a fine. No dispute panel has ever found an environmental or labor law not to be a trade barrier, and only a couple of the rulings have ever been overturned in the WTO’s appeals process. So, odds are that the U.S. will lose sovereign control over what it does with its trees. The biggest loser, however, will be U.S. and Japanese native forests and forest workers.

Similarly, NAFTA‘s ”Foreign Investor“ clause allows the U.S., Mexico and Canada to sue one another if any regulation results in a loss of profits.

”This is a classic Newt Gingrich--era Republican-revolution pro-business ’takings‘ issue,“ says Steve Porter, a policy analyst at the Center for International Environmental Law. ”It turns the ’polluter pays‘ principle on its head.“

Limit intellectual property rights

For many transnational corporations, a new WTO agreement called TRIPS -- Trade-Related Aspects of Intellectual Property Rights -- is the key to untold billions in profits.

 

TRIPS, and the issue of global patents, is not just a matter of pirated DVDs. Activists say that patents on living organisms could put the whole world’s food supply, biodiversity and access to medicines at risk. Many firms, on the other hand, would like their patents protected by one worldwide process.

Biotechnology firms are now in a mad gold rush for patentable genes. Labs are creating genetically modified organisms (GMO), such as new varieties of corn and bacteria and even pigs, or they ”bio-prospect“ from organisms already in use but not ”owned“ by anyone. They patent strands of human DNA, laboratory processes and proprietary research in order to protect marketable products. Some of those products are cancer and AIDS drugs.

This year, for instance, Brazil started making generic versions of an expensive AIDS drug, because the country‘s people are dying and cannot afford the name-brand drugs. As the whole world saw, during the bitter fight over AIDS drugs in South Africa, drug companies want this stopped.

In the case of living genes, however, the whole problem is stopping the cycle once it’s started. Patented genes, once they are released into the environment, cannot be controlled. StarLink corn, for example, a strain created by the biotech firm Aventis Crop Science, became a big problem for the U.S. corn industry in 2000. Approved in the United States only for animal feed, StarLink was later found in Taco Bell taco shells and nearly 300 other products. The patented gene seems to be spreading through cross-pollination.

”If there‘s one overriding concern, it’s that corporations . . . are making decisions that affect the future of all of life on Earth,“ says Brian Tokar, who teaches at Goddard College. ”Those decisions need to be made in the public sphere, not behind closed doors, in corporate boardrooms and at high-priced business conventions.“

A better, new world

What should become of the IMF, World Bank and World Trade Organization? In 1994, a San Francisco--based group called the International Forum on Globalization began studying such issues. ”There‘s not going to be one glorious day when their system comes crashing down and we’re going to be called in to put ours in place,“ says the task force‘s chair, John Cavanagh, co-author of the group’s master document Alternatives to Economic Globalization. Instead, we are in the process of slowly delegitimizing and weakening the power of the WTO, IMF and World Bank. And we are slowly making our arguments that there ought to be things like debt cancellation. There is increased space for alternatives.”

The group buys into the six-point manifesto of the anti-globalization crowd and isn‘t pushing for destroying the three global agencies. In fact, some of their functions are essential. But which global functions must stay, and how would these three organizations be rejiggered?

“That’s the hardest question,” says Cavanagh. “We fear that each of those three institutions is dominated by economists and a mindset that places free market values over other values. At the World Bank, they still call labor unions ‘Labor Market Inflexibility.’ So the notion of trying to have that institution have a labor-rights clause is very scary. We have concluded that it‘s better to try to clip them all down to size and, instead, increase the power and the teeth of international environmental treaties, the U.N. International Labor Organization, and so on.”

In fact, as unfashionable as it would seem, the Forum proposes turning over a lot of the current regime’s necessary functions to the United Nations. It may be prone to corruption and waste, but in a push to now integrate social values into the pure trade formula, the U.N., the original globalizer, is set up to handle limited functions and return many rights and standards to nation-states.

The U.N. was effectively gutted in the 1980s, stripped of funding and powers that were then expanded under the WTO, IMF and World Bank to reflect corporate, rather than social, priorities. Under the Forum‘s proposal, a remade U.N. World would flip a lot of that back. For instance, the U.N. World Health Organization has been central to the global battle against HIVAIDS. The U.N. World International Labora Organization has already done the heavy lifting of working out more than 100 conventions that define international worker’s rights. Giving that agency or the U.N. itself sanction power -- or tying it to the sanction power of the WTO -- would immediately create an answer to the kind of neoliberal policies that result in sweatshops. Similarly, the U.N. Development Programme and Economic and Social Council have already created innovative standards for measuring and monitoring human welfare. Creating a new U.N. Environmental Council to enforce the more than 200 international eco-agreements that already exist could bring about the “green court” environmentalists have wanted for decades.

 

None of these proposals, the Forum stresses, are meant to kill global trade. Nobody wants that. These alternatives are meant to bring social and environmental values up to at least the same level as those of trade.

And what of the WTO, IMF and World Bank? Well, in a perfect “alternative” universe, the World Bank would be quietly retired, replaced by smaller, national micro-credit agencies.

The IMF would be forced to respect its own mandate and end those aptly named structural adjustments, replacing those mechanisms with a kind of world bankruptcy court with an emphasis on maintaining social services.

The WTO would have its teeth pulled. Its much-abused sanction powers would be trimmed. Decision making would be democratized, and global rules on trade and investment would be subordinate to national rules where they conflicted. Many sectors, like agriculture or the patenting of life forms, would be eliminated from global trade rulings altogether.


Sponsor Content