From the WTO to the FTAA
By Steven Staples, Chair, International Network on Disarmament and Globalization
and Issue Campaigns Coordinator, Council of Canadians.
Amajor victory for economic globalization came in 1989 when the Soviet Union
collapsed and the Berlin Wall came down. There were now no other economic
models to challenge the free-market ideology, and the collapse of the Soviet
economic sphere of influence opened vast new markets for the West to integrate.
Finally, there was the possibility of a single global economy.
During this period, the central body of global diplomacy, the United Nations,
needed to be dealt with. So the major powers decided in the early 1990s to
reform and reshape the UN, and transferred its authority on economic and social
issues over to tHe IMF, the World Bank, and later the World Trade Organization.
As Martin Khor of the Malaysia-based Third World Network pointed out in his
speech to the Millennium Forum in May of this year, The United Nations was
disempowered because it was too democratic, too transparent, and gave too much
power to the developing countries.
The creation of a single global economy is the corporate dream come true.
Corporate globalization has been a tremendous success for big business.
Today, the global economy creates more wealth than at any other time in history.
Of the top 100 economies of the world, 52 are not countries at all, but
transnational corporations. Wal-Mart's economic output is greater than
that of 161 of the world's countries combined, General Motors' is greater than
Denmark's, Ford's is greater than South Africa's, and Toyota's is greater than
Norway's. Of the world's top 200 corporations, all but 14 are based in the
U.S., Japan, Germany, France, the U.K. and the Netherlands.
If you ask the WTO, they'll tell you that they are making the world better,
helping the poor and creating a rules-based system which works for
industrialized and developing countries alike. But what they are doing is
not making rules for trade, but making rules for governments. These rules
limit the range of choices of policies and programs that governments can
undertake to shape the economy for the betterment of their citizens.
Successive decisions by the WTO's trade panels have ruled against governments
whose laws protect the environment, protect endangered species like sea turtles
and dolphins, promote local culture, provide special terms for former colonies
and set high standards for food safety. And if governments refuse to abide
by these decisions, then they face potentially billions of dollars in trade
sanctions as authorized by the WTO.
As members of a global civil society, we depend on democratic governments that
have the power to promote peace, human rights, economic development and protect
the environment. But we have seen how corporate globalization is limiting
governments from enacting economic policies that promote these goals. If
the WTO says it is illegitimate for governments to govern the economy in these
areas, then what is left for governments to do?
In the eyes of the WTO, it seems that the only undisputed role for governments
is national security. As defined by trade agreements, national security
means the development, production and trade in arms required for the provision
of a military establishment. Special clauses called "security
exceptions" in trade agreements allow governments free reign to prepare
for, and wage, wars.
While many government responsibilities are threatened by corporate
globalization, the special protection for military industries and military
policies is unmatched anywhere in trade agreements in the WTO. This leaves
corporate globalization as one of the greatest threats to peace and disarmament.
Military spending will play an increasingly important role in industrialized
economies, and there will be little motivation to convert weapons corporations
to civilian production. Governments are free to use military spending to
subsidize corporations, promote regional development through military contracts,
and maintain an industrial knowledge base through weapons research and
development.
Military spending will continue at its currently high levels since weapons
corporations such as Lockheed Martin, Boeing, British Aerospace, will continue
to be able to receive billions of dollars in selective contracts and governments
subsidies without restrictions. There are clear advantages to governments
to increase military spending to achieve non-defence goals in the economy, since
these programs cannot be challenged by the WTO.
In a recent report, the Canadian government made the frank admission that,
"Despite GATT rules that eliminated tariff barriers between signatories of
civil aircraft products...many countries use national security exceptions to
provide direct financial assistance to their domestic industry." That
is, through military spending.
This fact could in part explain why military spending is actually increasing in
so many countries, given that the Cold War ended over a decade ago.
In a recent dispute between aircraft manufacturers in Canada and Brazil, the WTO
ruled that subsidies for civil aircraft were illegal. The Canadian
government changed its industrial program, and created a new military spending
program that will support the military division of the same aircraft
manufacturer. Less than a year later, military spending for equipment was
increased by nearly $2 billion over the next four years. For Brazil, the
WTO ruled that subsides for its aircraft manufacturer Embraer, were also
illegal. However, Embraer was primarily a producer of military goods, and
the government has been successfully converted it to the fourth largest
manufacturer of civilian aircraft in the world. But all of these gains
could be rolled back by the WTO.
Governments are being given a free hand to subsidize military industries because
they will need their security forces to suppress dissent against globalization,
enforce trade agreements internally and put down secessionist regions where
weakened national governments have lost their legitimacy to govern.
Nearly all of the more than thirty wars being fought today are civil wars.
While the media characterizes these wars as ethnically or religiously based, the
true root cause can usually be traced back to economic factors. These
economic factors are often promoted by globalization.
Author Susan George has highlighted patterns that researchers have identified in
these conflicts. She says that these wars take place in poor countries
where agriculture is still the main contributor to GDP. Environmental
factors, such as land degradation, low fresh water availability and high
population density are also common factors. Economically, there is a
strong correlation between war and high external debt, falling export income
from primary commodities, and finally, a history of vigorous IMF intervention is
also positively linked with all forms of political and armed conflict. All
of these factors, as she points out, are reinforced by globalization.
Finally, we cannot rule out even more sinister motives for special protections
for the military. New York Times columnist, Thomas Friedman, has written
that: "Behind the hidden hand of the market is a hidden fist.
McDonalds needs McDonnell Douglas, the maker of the F-15 warplane. And the
hidden fist that keeps the world safe for corporations is the U.S. Air Force,
Navy, Army and Marines."
This observation rings true when compared with recent statements from the U.S.
military. The U.S. Space Command wrote in its Vision 20/20 planning
document: "U.S. Space Command - dominating the space dimensions of military
operations to protect U.S. interests and investment."
These sentiments are shared by U.S. Secretary of Defense William Cohen. In
February last year, Cohen met with two hundred Microsoft workers and delivered a
simple message: "For all of the domestic prosperity produced by the
Information Age - U.S. economic power is still dependent on its military
strength. Some soldiers in the high-tech revolution do not fully
understand or appreciate the soldiers in camouflage."
And now we have the FTAA - a culmination of the worst aspects of NAFTA and the
WTO. In many ways, the FTAA is the logical outcome of the Monroe Doctrine.
This policy, set out by U.S. President Monroe in the 1830, made it clear to the
world that South America would become part of the U.S. economic sphere of
influence. A ready resource and labour base for U.S. economic interests.
This policy has never changed, and the successive military intervention in Latin
America have borne out the United States' willingness to use military force to
protect its economic interests in the region.
With the demise of the Soviet Union, the FTAA, backed by military force in bases
across the region and U.S. trained and armed local militaries, will ensure that
popular movements like the Sandinistas or leaders like Salvadore Allende will
never again challenge the interests of U.S. corporations.
Source: From a talk in Ottawa on March 27, 2001, organized by the Coalition to
Oppose the Arms Trade.
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GATT Security Exceptions:
"Nothing in this agreement shall be construed to prevent any contracting
party from taking any action which it considers necessary for the protection of
its essential security interests relating to the traffic in arms, ammunition and
implements of war and to such traffic in other goods and materials as is carried
on directly or indirectly for the purpose of supplying a military
establishment."
[GATT 47 Article XXI (b) (ii)]
Source: <www.indg.org/Barcelon.htm>