Another World is Possible: Un autre monde est possible
Symposium Transactions 2001 of the Royal Society of Canada, Ottawa, 17 November 2001
Susan George presented some principles of an alternative set of rules for international trade. Her vision is that of a set of rules that make it absolutely clear that trade is less important than a livable environment, decent working conditions and adequate health care, education and housing for all people. It is a vision that is being crafted by individuals and NGOs around the world, in developed and developing countries. It is captured in slogans like "Our world is not for sale", but in much greater detail in, for example, proposals for the taxation of international foreign currency transactions and declarations coming out of groups like Focus on the Global South, Oxfam, the North-South Institute, War on Want, Manitese, and the Halifax Initiative.
Dear Friends and colleagues,
Many thanks to the Royal Society for hosting this important symposium and to Alex Michalos for putting together such a thoroughly interesting group of people.
I write this contribution before the Ministerial meeting in Doha and will deliver it when we meet in Canada immediately after its conclusion. This conclusion is now deeply in doubt. For those who follow such matters closely-let us dare to call ourselves at the end of a long day "WTO Junkies"-these are suspenseful times. Here at my desk, I'm having trouble with my tenses, too: should I write in the past or more naturally, as I am now imagining our meeting, in the future? In any case, I will do my best next week to tack on at least a flawed analysis of what actually took place in Doha.
Let me also immediately declare an interest. I have spent the past weeks and months campaigning against a new Round and for deep changes in present trade rules. I'll be marching with thousands of others in the streets of Paris on the 10th, to proclaim that "Our world is not for sale". I'm also the author of a small book published last June in the Association ATTAC series called "Remettre 1'OMC à sa Place", which can mean either "set the record straight about the WTO" or "put the WTO in its place". In any case, the reader understands that it needs a good overhaul. So I'm not here as a neutral observer, but then I don't believe any of us are. We wouldn't be proper WTO Junkies if we didn't have strong views.
Surely we all agree that the world trading system, like any other system, needs rules. No one wants the law of the jungle or to stand by watching as the strong crush the weak. No one wants to retreat behind closely guarded frontiers. No one wants the kind of protectionism that did such enormous damage in the 1930s. It's best to get these false premises out of the way. We in the opposition are frequently accused of just such sins, and worse. Mike Moore claims that those who oppose the WTO as it now stands are the principle enemies of the poor and says "the protesters make me want to throw up". More recently US Ambassador Zoellick came dangerously close to announcing that we are the objective allies of terrorists. Name-calling is unpleasant and counterproductive but at least it has the virtue of proclaiming that a lot is at stake. People don't use such language when nobody's interests are threatened.
So my view, and that of thousands like me is that we need a set of rules, but not these rules. Personally I would like them to be international, world-wide rules, a point on which my colleague Walden Bello would perhaps not agree. But assuming we are speaking here about international rules, what would they need to be if the goal is to reconcile the protesters and the dissidents with the true believers? How could we build a truly fair organisation to oversee international commerce? I intend to divide my remarks into the categories of what we all want, then what we want for the North and what we want for the South. Often, but not always, the demands overlap. Some of my suggestions would be approved by the hundreds of organisations that make up the citizens movement; others are my own and haven't been vetted by anyone. The first point that all of us share is that the market should not be the supreme value and many human activities should not be in the market at all. This is perhaps our most basic point of conflict with our opponents in the neoliberal camp. They refer routinely to the potential of the "health care market" or the "education market"; they see nothing contradictory in pricing vital medicines out of the reach of poor people or in patenting life forms. There are many other contradictions of this kind both ideological and practical.
So all of us on the protesters' side are united around the idea that it's urgent to wait. We want a moratorium. We don't subscribe to the so-called "bicycle theory"-either you pedal forward or you topple over. There's another option: put your feet on the ground and stop to look at your surroundings. An assessment of the WTO's impact was promised in Marrakech and has never happened. This huge, revolutionary agreement was pushed through with unseemly speed. Parliamentarians had on the whole no idea what they were voting when they ratified the text. The French National Assembly got this 600-plus page document, with thousands of pages of annexes, on a Thursday evening and voted it the following Tuesday. Public Citizen's experience in the US is even more graphic. They proposed a $10,000 contribution to the charity of choice for any Congress-person who could swear they had read the text and answer ten simple questions about it. No one came forward, until the vote was delayed and a Republican Senator took up the challenge. He passed the test, then called a press conference to say he had always voted for free trade agreements but now that he knew what was in the text, he would certainly vote against this one. If the process was so deficient for two of the world's most advanced countries, the first and fourth largest world economies and major traders, what can be said for the poorer, weaker ones? Let's recognise that virtually everyone bought a pig-in-a-poke and let's have the public and parliamentary debate we should have had six or seven years ago. The WTO is based on foundations of extremely doubtful democratic or popular legitimacy even if its formal legitimacy cannot be faulted: it does have member governments.
The demand of the entire movement is therefore: "No New Round, Turn Around". We will see if we were heard in Doha.
Now let me move to some specific demands for the North. One of our greatest fears concerns public services. We don't say the GATS will destroy public services like health, education, transport, culture or water tomorrow morning; we do say that this possibility is programmed in the texts and it's much more than just a virtual threat. Countries that have the good luck to have well-developed public service sectors already are in danger of seeing them attacked whereas countries that have only embryonic public services will find themselves locked in at the level they now occupy.
A reading of the GATS texts makes this clear and, contrary to what is often asserted, the individual country schedules do not offer permanent protection. First of all, the GATS isn't a finished, once-and-for-all treaty but a framework agreement committing signatories to permanent liberalisation. Theoretically, at least, negotiations are mandated to go on ad infinitum until all countries have liberalised all services for all other members in all four modes of service provision. Next, the definition of public services exempted from GATS disciplines leaves them wide open to possible attack from a determined adversary. Article I, 3, c is the proverbial boulevard, restricting the definition to services supplied in the exercise of governmental authority neither on a commercial basis nor in competition with one or more other service suppliers. Scrap that paragraph, make clear that any government has the right to define what constitutes a public service on its territory and we, the protesters, would be to some degree mollified.
Please don't tell us, for example, that transnational corporations can't sue governments as they can under NAFTA and therefore we would be safe from, say, US commercial health-care providers. Not so. We know that governments readily take up the banner for their own transnationals, as in the famous banana case in which the United States-not many bananas grown there-brought suit against the European Union on behalf of Chiquita Brands, also a large political campaign contributor. One case about photographic film was fought between the US and Japan but everyone refers to it as the "Kodak-Fuji case".
GATS Article VI concerning Domestic Regulation poses problems as well. Governments are allowed to aim for certain standards and to this end establish "qualification requirements and procedures, technical standards and licensing requirements". These, however, must not be "more burdensome than necessary to ensure the quality of the service". Needless to say, -it is not the government in question which determines what measures are "necessary" but the Council for Trade in Services and, if push comes to shove, the WTO Supreme Court, the Dispute Regulation Body. International rather than already established national standards are to apply and many fear that these will be lowest common denominator standards.
Furthermore, Canadian researcher and jurist Michelle Swenarchuk has established that in virtually all the cases brought before the GATT or after 1995 before the WTO, the necessity defence crumbled. Ten times out of eleven cases, the ruling stated that the governmental measure was "more burdensome than necessary". The eleventh case concerned asbestos and pitted Canada against France. Here, finally, the DRB relented and allowed France to refuse to import asbestos. Although this was still considered a "violation", France could justify it. How? With statistics on the thousands of cancers indisputably caused by asbestos. But without such dramatic and clear evidence, governments will be sooner or later under pressure to reduce or eliminate standards.
Other dangerous ambiguities in the GATS concern government procurement [Article XIII, 1] which, without going into the technical detail here raise some of the same problems as the definition of public services. Article XV concerning subsidies is not very encouraging either, starting as it does with "Members recognize that... subsidies may have distortive effects on trade in services". The members commit themselves to establishing disciplines in this area as well and they can have recourse to the DRB if they believe they are "adversely affected" by another member's subsidy to the provision of a service.
We are also worried about the so-called "horizontal approach" to services which would be a back-door liberalisation and is much touted by the European Union in particular. Here the danger is that a discipline or measure agreed on for one service, say accounting, will then be automatically deemed to apply to all the others. So if you as a foreigner could supply accounting services electronically to another member, or purchase a majority share in a national accounting firm, then you could do so in health or education as well. Since there are 12 broad categories and over 160 sub-categories of services, such an approach seems pernicious in the extreme. In our view, the same rules should not apply to all sectors but the chief European services negotiator says that "horizontal formulas ... will be a crucial tool to optimise the efficiency of liberalisation discussions." An objection which goes beyond the nature of the texts themselves is the extreme difficulty ordinary citizens encounter in obtaining recent information and in making sense of a huge array of official, semi-official and sometimes secret negotiations on a broad variety of subjects. The least one can say is that we are not given much help by the official bodies. In Europe, the negotiator for all fifteen member countries is European Trade Commissioner Pascal Lamy, whose mandate is fixed by the shadowy 133 Committee, thus named because of the article in the Amsterdam Treaty that gives this responsibility to the Commission. Although top executives of transnational corporations have frequently participated in 133 Committee meetings, citizens are barred and minutes are not published. We feel that it should not be up to us as members of NGOs and movements to inform our fellow citizens what is being perpetrated in their name. Most of us are volunteers, we generally have other responsibilities and we aren't paid to make sense of complex texts and obscure meetings of technical committees in Geneva. We would much prefer that governments take it upon themselves to organise democratic debates about the vital issues that concern us all and which are affected by the WTO, but, so far, and with rare exceptions, this is a utopian wish.
One guarantee which would make us less suspicious of the Organisation and its most powerful members would be a new set of rules for the Dispute Resolution Body. As now conceived, the WTO is at once the executive, the legislative and the judicial branch without checks and balances. The DRB is charged with applying the different agreements under the WTO umbrella; so one should not be surprised that only the law of the WTO applies.
The WTO isn't even a member of the United Nations, not even with a tenuous connection like that of the World Bank or the IMF. Thus it escapes international law established elsewhere such as the Universal Declaration of Human Rights or the subsequent protocols. Nor is it even remotely governed by Multilateral Environmental Agreements or the core labour standards of the ILO. The WTO is establishing its own jurisprudence without reference to any texts but its own. Since it can enforce its decisions by authorising one member to levy pecuniary sanctions against another, it has real teeth which UN law does not.
We would like to see the same determination applied to enforcing human rights as to prying open commercial markets. The DRB should be made specifically subject to international law developed elsewhere and it should apply the precautionary principle. In particular, the burden of proof should be on the exporter to show that his product is harmless, not on the importer to prove that it is harmful.
In a general way, participants in the citizens movement are opposed to granting any further powers to the WTO which has, in their view, far too many powers already. Thus, contrary to what is often affirmed, most of us do not argue for the inclusion of labour or environmental standards inside the WTO but rather for the reinforcement of the ILO and for the creation of an international environmental organisation with real power.
A broader and more thorny problem is how to make it worth a poor country's time and effort to treat its workers and its environment properly. In the present WTO context, everything is organised to encourage "the race to the bottom". On the whole, whoever can produce most cheaply-i.e. repress its workers most-and in the most environmentally destructive way wins, at least in the shorter term. One would need to organise material incentives to encourage everyone to raise standards, not push them ever further down.
In this connection, although it's at the individual country level, we could look at the example of some states in Brazil which are trying to eliminate child labour by using a very simple system. If the school-age kid misses no more than two days a month of school, the mother [n.b. not the father] receives a voucher for approximately $20 which she can cash in at the local lottery office. No fuss no mess, but money in her pocket which makes child labour less necessary. School enrollment rates in these states have soared.
Why can't we help countries to do the same internationally? Why can't we reward them when they apply environmental standards? The present system brings out the worst in every country because it enshrines the competitive, dog-eat-dog model at the level of general principles and turns it into hard law. Yet it is in the interests of everyone to have an educated, healthy world population and an enhanced environment. The present system breeds despair, unemployment and consequent mayhem.
Now let me turn to the South, which others in this Symposium will deal with better than I. I do not intend to dwell on the question of generic drugs which is now well known. Even the 39 pharmaceutical firms in the South African case eventually recognised that their lawsuit against a poor country trying to cope with an AIDS pandemic was obscene and very bad public relations. Hopefully Doha will at least deal with this issue. Aside from the generic drugs issue, the questions most important for the South are, as we know, those of "implementation," a jargon word for "keep your promises".
Certainly when the WTO was initiated, the South was disunited and, through no fault of its own, unable to negotiate at full strength in its own interests. The Marrakech text was ratified without sufficient Southern input and with huge loopholes allowing the North to escape responsibility for commitments made with fingers crossed behind its back.
Although one cannot prove it, the existence of a huge Southern debt gives the North a way to put irresistible pressure on individual countries whose capacity to act together in groups like the G77 scarcely exists now. Arm-twisting is rife. The first order of business should be the revision or the annulment of certain provisions in some of the more egregious agreements under the WTO umbrella. Any contract signed under pressure or in ignorance is invalid.
In these circumstances it would be particularly unwise to add new subjects to an already overweight agenda. Government procurement should remain in the province of national governments although one understands that international firms slaver like Pavlovian dogs whenever the topic is mentioned. In the EU alone, government spending is 14% of GNP-a huge market worth a trillion dollars a year. Investment rules should also remain outside the WTO whose appetite for new subjects seems unlimited. The South is resisting on these issues but it is hard to say how long it can hold out. Let us recall too that all the now-industrialised countries were able to protect their infant industries behind protectionist measures. Japan and Korea are the most recent examples but the United States practiced this method in the 19th century. Under present WTO rules it will be difficult, not to say impossible for the latecomers to develop industries which are, at the beginning, necessarily less efficient than those of the highly capital-intensive areas which have had in addition decades of practice and monopolise the technology. This remains true even if the less developed have the small advantage of employing cheap labour.
The problem is similar for agriculture. Already with the interim agreement which obliges countries to import 5% of their consumption in all food products, even if they are self-sufficient in those products, small farmers are feeling the deleterious effects. Under NAFTA, small Mexican corn farmers are failing by the thousands as their markets are inundated with US corn products. Filipinos are also threatened by large-scale rice production from Louisiana. If frontiers are opened world-wide and the world market price equals the price of the supposedly "most efficient" producer, then we have a recipe for the elimination of small farmers everywhere.
Is it logical or ethical that the world price for milk should be the New Zealand price, even though New Zealand produces only 2% of total world milk production? Only about 10% of the cereals produced in the world ever reach the world market, yet here again, everyone will be forced to align with the most highly capitalised, highly mechanised exporters. Let us be clear that there is no way a grain farmer from Senegal or Zimbabwe can compete even on the Senegalese or Zimbabwean markets with the imported produce from countries where average farm size runs into the thousands of hectares.
Have we reflected at all on what we will do with all these failed farmers? They will try to survive, first by moving into the already over-crowded urban areas of their own countries, then the brightest and best among them will try to make their way north, legally or illegally. And although world prices may be low at present for basic staple grains, there are no guarantees they will remain at present levels. It is folly to become dependent on world markets for one's lifeblood but this is precisely what the United States and the Cairns Group of 18 agricultural exporters hopes will happen. Opinion is divided even in the Cairns Group countries whose WTO negotiators represent mainly the largest and most highly capitalised farmers.
WTO rules in both the industrial and agricultural sectors will encourage and intensify social dislocation. Now that China is a full-fledged WTO member, one shudders to think what will happen to the millions of "excess" workers in the inefficient state industries; to the hundreds of millions of "inefficient" small farmers. China's population is still 60% rural-more than 700 million people. Even assuming they are absorbed into industry, the ecological and greenhouse effect of those industries alone would be enough to send the world over the environmental brink.
At this point in the argument, one can always count on the resident Schumpeterian to evoke "creative destruction". Fair enough-once more, no one wants a world without rules, without trade and without change. We are not making a case for stagnation nor asking for a world wide freeze-frame where everyone stays in the same job and the same sector for generations on end. In the 21st century this would be pointless. However, the WTO accelerates the forces of globalisation and insists on change at breakneck speed. Population movements and economic shifts that took decades in the now-developed countries are supposed to happen in years if not months in the less developed countries.
People from the South live and are expected to change in the 21st century; not as we did in the 19th and 20th. Unlike us, they have no vast new continents they can migrate to, at least not legally. Their infrastructures are already completely overloaded and they cannot cope with the rapid rural to urban influx. The debt we insist they pay back leaves them no slack at all. Another historical reminder: After the Second World War, Germany was paying back its war debt at the rate of about 2% of export earnings: this was considered intolerable and in 1954 payments stopped altogether. Today, payments of 25% or more of export earnings for the South are commonplace. In this way, even their present meagre trade revenues are largely diverted back to Northern creditors. In sum, when ordinary, but nonetheless informed citizens look at the WTO and at its present rules, whether those citizens come from the North or the South, they see an institution which is morally if not legally illegitimate. Its ideology is false: trade does not necessarily benefit everyone and a world based on these rules cannot include everyone, nor is it meant to. They see an institution which is bent on helping large players like transnational corporations to carve out new markets to the detriment of human needs and environmental sustainability. They see an onslaught against the gains of the past, such as public services, and a disregard for the hopes of the future. They see a secretive organisation unwilling to open itself to public scrutiny or debate.
Please do not mistake my meaning when I ask the following question, a very grave one: Were the crimes of September 11th horrible enough to awaken our leaders from their dogmatic slumber, as Kant might have said? Again, do not misunderstand: I don't believe we can act directly on terrorists by building a more just and equal world, if only because the terrorists care nothing for the poor people in their own societies. But it is contemptible to see officials cynically using these atrocities to push their own agendas. Their arguments are crude: "What's needed is not less globalisation but more"; "the protesters are the enemies of the poor"; "trade equals prosperity for all and market liberalisation equals justice". These officials do not even begin to address the real issues of global inequality and injustice upon which terrorism thrives.
Yes, the North should open up to exports from the South, particularly in textiles and other low-skill industries, but all countries North and South should be able to protect their food security and their small farmers. The best way to do that is to put a stop to agricultural export subsidies, overt ones as in the EU or disguised as in the US. This is the goal of Via Campesina which brings together some 80 small farmers' organisations from around the world.
All countries have a right to protect their public services and the health of their citizens through whatever means are necessary-not whatever means are the least trade-restrictive. Life should not be for sale. But above all, it's time for the North to be shaken out of its avarice. There has never been so much wealth in the world and if we fear recession, the best way to counter it is through a planetary Marshall Plan. It was the Marshall Plan that re-established Europe as a viable trading partner for the United States after World War II. If we want trade, let's make strong partners, not victims. If the North can't be generous, it could at least look seriously at its own self-interest. Think of the children in school now in Brazil who before were working. Children in Pakistan are either going blind making carpets or if their parents are a bit more caring, they're in religious schools learning the Koran and the Jihad inside-out, because the public schools are now fee-paying and most parents can't afford them. The UNDP affirms we could provide all the elements of a decent and dignified life to all the planet's inhabitants for the relatively puny sum of about $90 billion a year. Don't, please, tell me "Trade not Aid". The point is we need both trade and aid, and we need to involve civil society everywhere in determining the priorities of that aid. This is what I call "democratic conditionality," a subject a bit beyond the scope of today's symposium.
Thousands of us were in the streets in Europe and on other continents the 9th and 10th of November to protest against present undemocratic trade rules and against the attempted takeover of all human activity by transnational corporations, aided and abetted by the WTO. From North or South, we have a common rallying cry:
Our world is not for sale: Le monde n’est pas une marchandise.
and we have a common hope:
Another world is possible: Un autre monde est possible.