DOCUMENTS ON GLOBALISATION.

                                                                 29.10.11       

Contents.

NATURE AND EFFECTS OF GLOBALISATION; General notes showing extensive commentary on the damaging effects of globalisation.  (38 pages.)

EFFECTS ON LABOUR

EFFECTS ON WELFARE

SOCIAL DAMAGE

            EFFECTS ON AUSTRALIA

ASSISTANCE TO BUSINESS

DRUG COMPANIES' BEHAVIOUR

EMPLOYMENT GENERATED BY CORPORATIONS

EVIDENCE ON THE SUCCESS/FAILURE OF NEO-LIBERAL POLICY

EXPANSION INTO EDUCATION, HEALTH AND WELFARE AREAS

FORCE IS NO LONGER NEEDED TO DOMINATE THE EMPIRE

GATS; GENERAL AGREEMENT ON TRADE IN SERVICES.

GLOBALISATION AS TAKEOVER

HOW DO THEY GET THE NEW RULES ESTABLISHED.

INCENTIVES FROM THE STATE TO GET CORPORATIONS TO INVEST.

MERGERS AND ACQUISITIONS; ACCELERATING.

PRIVATISATION.

RURAL DECLINE

STATE SPENDING BEING CUT.

TAKEOVER OF YOUR RESOURCES.

TAX; CORPORATIONS PAY LITTLE TAX.

THE MAI PROPOSALS.

THE ROLE OF THE STATE IN GLOBALISATION.

THE TAKEOVER OF PUBLIC SERVICES.

THE WORLD BANK AND INTERNATIONAL MONETARY FUND.

TRIPS AND TRIMS.

THE WORLD TRADE ORGANISATION; General comments.

THE WORLD TRADE ORGANISATION; Actual cases decided.

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NATURE AND EFFECTS OF GLOBALISATION; General extracts.

“… a study commissioned by the superstores themselves showed that every time a large supermarket opened, a net 276 retailing jobs are lost.”   33

Ecologist,, 30, 9, Dec.Jan 200-2001, p.  9.

Today capital is deploying a new strategy to assert its power and neutralise people’ resistance.  Its name is economic globalisation, and it consists in the dismantling of national limitations to trade and to the free movement of capital.”

Peoples’ Global Action Network  protests against WTO, Third World  Resurgence, 95. P. 32.

How can the following be explained?   Downer, Australian Minister of Foreign Affairs, said in 1997:  ”Lets be clear: globalisation is an irreversible trend.  Its under way.  And it’s fine for all Australians, for the region and for the world.”

E. Fayner, Globalisation and the Australian economy”, ERA Newsletter, 12, 17, March-April, 2001, p. 4

“IN NO NATIONAL SOCIETY IN THE WORLD HAVE MARKET REFORMS AND RESTRUCTURINGS REDUCED RATES OF POVERTY OF CHILD MALNUTRITION AND STARVATION.”   147

Note, farmers are only allowed to plant registered varieties.  (90) One might have wondered why peasants should be concerned by conditions seed supply corporations put on their products,…why don’t they just plant old traditional varieties.

                        V. Shiva, Stolen Harvest, South End Press,

J.McMurtry, The Cancer Stage of Capitalism,  London, Pluto, 1999.

With the commencement of the NAFTA Mexican food imports increased from 20% of consumption to 43%, between 1992 and 19965.  Half the peasants now do not get enough to eat.”

                        V. Shiva, Stolen Harvest, South End Press,

"The world is experiencing a new age of conquest, reminiscent of the days of colonialism.  But whereas the protagonists of previous phases of conquest and expansion were national states, this time the drive for global domination is coming from big companies and conglomerates, major industrial groupings and the private finance sector.  Never before have the world's masters been so few in number and so powerful...This conquest goes hand in  hand with considerable destruction." 

I. Ramonet, "The year 2000", email newsletter from    BDyer@PROUT.lorg.nz, 15th DEc., 1999.

"The world economic and political system is experiencing its most profound transformation since emergence of the international economy in the 17th and 18th centuries."

Future Survey, 22.4, p. 12, April 2000, review of R. Gilpin, The Challenge of Global Capitalism, Princeton UP, 2000.

"The process of globalisation under capitalism is generating enormous misery, deprivation, and violence.'

R. Burbach, "For a Z:apatista Style Postmoderni Monthly Review, March 1946, p. p. 36.

“IN NO NATIONAL SOCIETY IN THE WORLD HAVE MARKET REFORMS AND RESTRUCTURINGS REDUCED RATES OF POVERTY OF CHILD MALNUTRITION AND STARVATION.”   147

J.McMurtry, The Cancer Stage of Capitalism,  London, Pluto, 1999.

“A colossal concentration of economic power and control over the world means of production, resources and labour force, unprecedented in the history of capitalism, is taking place.”

S. Antonopoulou, “The process of globalisation and class transformation in the West”, Democracy and Nature, 6, 1, 2000, p. 37.

A case in point is the FAO study on the impact of agriculture liberalisation on 16 developing countries, which concluded that liberalisation under structural adjustment programmes had clear negative impacts, and similar measures required under the WTO [World Trade Organisation] Agriculture Agreement would thus have negative impacts as well.'

For the vast majority of developing countries, the lowering of tariffs and removal of import control and domestic support have undermined local food production and farmers' livelihoods in the onslaught of cheap subsidised imports.

L. Lin, “What is sustainable agriculture?”, Resurgence, 118/119. 2000. P 10

Globalization has been fortunate for some. For the vast majority,

however—especially for the peoples of the South subjected to unilateral structural adjustment policies, and those of the East locked into a dramatic social demolition—it has been a disaster.   Henry Kissinger summed it up in a memorably arrogant phrase: ''Globalisation is only another word for US domination”

S., Amin, “Political economy of the 21st Century”, Monthly Review, 52, 2, June, 2000, p. 15.

WIDESPREAD uncertainty about work and incomes and old age, among not only workers but the middle classes too, with one-third of the world labour force unemployed or underemployed; rising levels of child poverty, not only in the poor countries but also in some of the rich - this is the picture of the effects of globalisation in the 1990s  brought out in the International Labour Organisation's (ILO)World Employment Report 2000.

“Globalisation has unleashed extraordinary inequality and insecurity”, Third World Resurgence, 118/119, 2000, p. 36.

It (globalisation) has effected a massive transfer of power, wealth and income from the poor to the rich, both within and between countries, and is contributing nothing to human welfare. On the contrary, it is rapidly destroying the environmental conditions essential for the continued existence of humanity.

E. L. Wheelwright, G. Argyrous and F. Stilwell, Economics as a Social Science, Pluto, 1996, p., 6.

A study of trade liberalisation in many countries that was conducted at        

the World Bank by two economists, Lars Lundberg and Lynn Squire, was

cited then in support of the troubling observation that 'The costs of adjusting to trade reform are ... borne exclusively by the poor' (para 8.9, draft). 

C. Reddy, “Hamlet with the pricne”, Third World Resurgence, 122, 2000, p. 8

So at the end of the century, an unopposed corporate agenda had “structurally adjusted” the world into a condition where social sectors and independent powers of elected governments had been more or less effectively reduced to impotence across the world.  This was a “triumph of capitalism” that was more important than the victory over the alien Soviet system, for it broke the financial capacities of societies to further develop or even maintain their social programs and, through new “free trade” treaties, removed the rights of public authority to negotiate terms for access to their markets and resources.

J. McMurtry, "Civil commons", Economic Reform,Oct., (1999?), p. 10.

The new world order has been designed to protect the rights and freedoms of transnational corporations, not the basic human and democratic rights of people..."

D. Kennedy, "Discovering corporate rule", Essence, A Seed, 1, 3, Spring, 1995, p. 26.29

...international capital is out of control by virtually any national government...the power of the nation state to control its own economic destiny has been gravely weakened."

E. L. Wheelwright and G. Crough, Australia; A Client State, 1982, p. 2.

Power is moving from  national governments to the supra-national agencies such as the World Bank.

National and local governments are increasingly powerless in a growing

number of spheres; national sovereignty is being reduced, in effect, in almost every arena of national jurisdiction. More and more national policies become subordinate to the demands of the global market and to the regulations, laws, standards, and enforceable deregulatory powers of

these international organizations.'

G. Temple, Globalisation and the Decline of Social Reform Toronto, Garabond, 1995~ E~_123.

...any state that deviates from 'responsible' economic policies will be punished by currency markets and bondholders."

S. Kapstein, "The new crisis of capitalism", Weekend Australian, 8-9 June, 1996.

The economies of the South are now being reopened to mining TNCs through structural adjustment and the liberalization of the global economy. Under pressure from the IMF and World Bank, more than 70 countries have changed their mining laws to make themselves more attractive to foreign investment; foreign ownership restrictions have been watered down or abolished; and mining TNCs are being invited to bid for state owned mining assets, as huge sections of the industry – from Brazil’s national flagship CVRD, the world’s biggest iron ore producer, to Zambia’s copper industry – are being offered for sale under ”free market” privatization programmes.

R. Moody, “Mining the world”, The Ecologist, 26,2, march-April, 1996, p 46.

In Norberg-Hodge's opinion, globalisation has done the same thing everywhere.  It has triggered an international “race to the bottom” which threatens to impoverish people and ransack environments in every corner of the world.

         D. Lester, Global Warning…

Transnational Corporations and Banks of the Five big powers are Colonising the World to an extent previously considered impossible.

Corporations are usurping the power of nation states... power is shifting to the World Trade Organisation, which is little more than a surrogate for TNCs and the banks that finance them.

Paul Hellyer, (Canadian Action Party) in E.R.A. Newsletter, Jan-Feb.2000]

Other indicators of poverty have also worsened under economic globalisation. According to the UNDP, financial volatility, job and income insecurity, crime, threats to health, food insecurity, loss of cultural diversity, community disintegration and environmental degradation have all increased. The greatest losers from all these trends are the poor.        ..

 The Ecologist Report, Globalising Poverty, Sept., 2000, p. 4.

Korten says transnational corporations are “…instruments of a market tyranny that is extending its reach across the planet like a cancer, colonising ever more of the planet’s living spaces, destroying livelihoods, displacing people, rendering democratic institutions impotent, and feeding on live in an insatiable quest for money.”  This tyranny hits hardest at the poor.  Viii

J. Madeley, Big Business, Poor People, Zed Books, 1999.

Note that the aim of GATS, the transfer of service provision by public institutions to private corporations, has been achieved in the Third World by Structural Adjustment Packages.  These include the demand that public services be privatised.

M. Barlow,  ,A GATS Primer, 20th March, 2001, Era Email Newsletter, 22/3/2001-03-30

“…financial speculation has attained unprecedented dimensions in the advanced capitalist countries…casino capitalism.” 41.

The volume grew by 254% between 1989 and 1998, to  $1.5 trillion, every day.  40.

S. Antonopoulou, “The process of globalisation and class transformation in the West”, Democracy and Nature, 6, 1, 2000.

“Approval of World Trade Organisation etc… agreements has institutionalized a global economic and political situation that places every government in a virtual hostage situation, at the mercy of a global financial and commercial system run by empowered corporations. This new system is not designed to promote the health and well-being of human beings but to enhance the power of the world's largest corporations and financial institutions.

Under the new system, many decisions that affect billions of people are no longer to be made by local and national governments but instead, if challenged by any WTO Member nation, would be deferred to a group of

unelected bureaucrats sitting behind closed doors in Geneva. The bureaucrats can decide whether or not people in California can prevent the destruction of their last virgin forests or determine if carcinogenic pesticides can be banned from their food; or whether European countries have the right to ban the use of dangerous biotech hormones in meat. Moreover, once these secret tribunals issue their edicts, no external appeals are possible; worldwide conformity is required. A country must make its laws conform or else face perpetual trade sanctions.

At risk is the very basis of democracy and accountable decision making

that is the necessary undergirding of any citizen struggle for sustainable, adequate living standards and health, safety, and environmental protections. The decline of democratic institutions in favour of deepening multinational corporate power has taken place in Western nations over the past several decades; but the establishment of the World Trade Organization (WTO) marks a landmark formalization, strengthening, and politicalization of this formerly ad hoc system.

Best described as corporate globalizatlon, the new economic model establishes supranational limitations on any nation's legal and practical ability to subordinate commercial activity to the nation's goals. The objective is to overrule democratic decision making on matters as intimate as food safety or conservation of land, water, and other resources…

From the corporate perspective, a good new system eliminates barriers to trade on a global scale, whereas from any other perspective, such barriers —that is, any nation's laws that foster economic well-being, democratic processes, worker and citizen health and safety, and sustainable use of resources—are seen as valued safeguards on unfettered, harmful business activity. From a corporate perspective, the diversity that is a blessing of democracy is itself the major barrier.

The Wall Street Journal was more direct. After the agreement was signed, the Journal editorialized that GATT "represents another stake in the heart of the idea that governments can direct economies. The main purpose of GATT is to get governments out of the way so that companies can cross jurisdictions (i.e., national boundaries) with relative ease. It seems to be dawning on people . . . that government is simply too slow and clumsy to manage trade." Should it be corporations, then?

What makes such statements especially alarming is that what is being characterized as "trade" these days includes the workings of a large portion of each nation's economic and political structures. GATT and other trade agreements have moved beyond the traditional roles of setting quotas and tariffs and are instituting new and unprecedented controls over investment flows, innovations, public assets, and democratic governance. Undermining national and local laws and erasing economic boundaries via capital mobility and "free trade" have caused the likes of Monsanto, Pfizer, Citicorp, General Motors, Cargill, Shell, and other corporations to rejoice. But the prospect of global commerce without democratic controls suggests impending disaster for everyone else in the world.

R. Nader and L Wallach, “GATT, NAFTA and the subversion of democratic process”, In J. Mander and E. Goldsmith, The Case Against the Global Economy, 1996, 93-95.

The world is experiencing a social and economic watershed transformation as great as the agricultural and industrial revolutions.  Nation-state authority is being replaced by transnational corporations operating outside national law and protected by global trade agreements….

These companies seek what they call a global level playing field; they want to be free to move across borders with little interference; be governed by the lowest common standards and regulations regarding food safety, the environment, or social security; and they want governments to get out of the way.

And governments are complying.  Because they can no longer tax the huge profits from big business they are left implementing the kinds of economic reforms” that will attract corporate investment.  They are divesting themselves of the responsibility to set standards, laws and regulations, turning social and economic decisions over to the free market.

            M. Barlow, “Class warfare”, Frontline, 36, July, 1996, p. 13.

In the name of global competition, our  governments are massively handing over power to the private sector…  The results of these policies have been devastating for most Canadians.  Several hundred thousand jobs and many hundreds of manufacturing companies have been lost to low wage American states.  Record levels of unemployment…are accepted as normal.  We are creating a contingency workforce of part-time, low-wage jobs with no security and few benefits.  Income disparities are growing among us…

Canadian business pays only 7.5% of tax.

To put it simply, we are now living in a new political era – the age of corporate rule.

M. Barlow and T. Clarke, “Global competitiveness and corporate rule; the Canadian experience”, Frontline, Aug., 1997, p. 8.

"The global economy is leaving millions of disaffected workers in its train. Inequality, unemployment and endemic poverty have become its handmaidens."..."Just when working people most need the nation state as a buffer from the economy, it is  abandoning them."

"Growing income inequality, job insecurity and unemployment are widely seen as the flip side of globalisation."

"...any state that deviates from 'responsible' economic policies will be punished by currency markets and bondholders.”

E. Kapstein, "The new crisis of capitalism"The Weekend Australian, 8-9 June, 1996.

(Globalisation  marks the coming of an era in which governments are giving  up the responsibility for controlling society… All is to be left to the market to settle…Decisions by corporations increasingly determine economic affairs.  Politics does not determine our fate now, economics does.  It is not the result of public discussion and decision about what is preferable.)

"The general trends of capitalist development in the industrial nations hindered less and less by national social and economic reform. As a result, there is a progressive increase in economic inequality, with structural unemployment and poverty growing continuously; the trends in planetary pollution and environmental destruction continue to deepen.  There is a decline in national sovereignty, with autocratic rule and coercive social control gradually becoming more common and alternations of the party in power increasingly meaningless; and there are widespread legislative assaults on wages, trade union rights, and labour standards."

We have arrived at the end of the era of the nation state.  P. 56.

The tax burden is falling increasingly on the working class.  There is…

rapid increase in prisons; the state is cutting s , on everything, except prisons. By 2000 there will  probably  be 4 million people in US prisons. 117.

"In the industrialised nations...the standard of living of the working class has been in slow decline for years."

Power is moving to supra-national agencies, such World Bank. National governments are increasingly powerless.

With all this goes a loss of legitimacy;  discontent, apathy  and willingness to resort to unofficial means, including  terrorism. So the state will have to become more repressive.

Capitalism was limited by the unions, the state and its large bureaucracy and by democracy; all are now fading.  Democracy in the sense of participation and stress on rights is in decline.

"Transnational corporations, the international markets, and supranational structures (e.g., the World Bank and World Trade Organisation) are increasingly taking over state planning and administration of the economy.  145.

There is no alternative agenda.  The Left is of no significance now.

G. Temple, Globalisation and the Decline of Social Reform, Toronto, Garabond, 1995.

The death toll resulting from restructuring along  market lines:

The UNESCO study tries to estimate them. For example, in Russia they estimate about a half-a-million deaths a year as a direct result of the reforms, meaning the effect of the collapse of health services, the increase in disease, the increase in malnutrition, and so on. Killing half-a-milllon people a year, that's a fairly substantial achievement for reformist economists. You can find similar numbers, though not quite that bad, in the rest of Eastern Europe, if you look at death rates from malnutrition, polarlzation, suffering. It's a great achievement.

If you go to the Third World, the numbers are fantastic. So for example, another UNESCO report estimated that in Africa about half-a-million children die every year simply from debt service. Not from the whole array of "reforms,. just debt service. About eleven million children are estimated to die every year from easily treatable diseases. Most of them could be overcome by a couple of cents' worth of materials. But the economists tell us that to do this would be interference with the market system. It's _ _ not new. It's very reminiscent of British economists during the Irish famine in the mid-nineteenth century, when economic theory dictated that famine struck Ireland must export food to Britain, which it did, right through the Irish famine, and should not be given food aid because that would violate the sacred principles of political economy. These principles typically have this curious property of benefiting the wealthy and harming the poor.

N. Chomsky, Keeping the Rabble in Line, 1994, p.

Just one example of how global corporations benefit from  this is the Nike corporation. Its shoes, selling at around $200 || in Australia and other parts of the world, are produced by 75,000 independent contractors in low income countries many of the workers are women in Indonesia. They earn less than 20 cents an hour, unions are forbidden, and strikes are broken up by the military. In 1992, it was reported that Michael Jordan received US$20 million for promoting these shoes - this is more than all the women who made them were paid.

Development Bulletin, 40.

Extending free trade is supposed to benefit all, yet the emergence of a global economy, rather than eliminating poverty, has significantly widened the gap between ricand poor nations. Instead of affluence spilling over from the wealthy nations into the poorer ones, the exact opposite is

occurring. Cities around the world are filled with those who

came seeking opportunity and have instead joined the vast

army of homeless, unemployed, illiterate, drug-ridden, derelict,

and effectively disfranchised.

R. Terry, Economic Insanity, p. 15.

The transnational corporations are "...job liquidators on a  grand scale, unparalleled in the history of industrial ism. Over the last decade the world's largest 500 have shed over 400,000 workers each year. Further, fixed term employment is being swiftly replaced by part-time non-unionised labour....In two decades a full month of labour  time has been added per year in the USA. In all OECD countries there has been in recent years a sharp fall in labour’s share of the gross domestic product, and a parallel rise in the share of profits.

F. Clairmont,  The Rise and Fall of Economic Liberalism, Third World Network, Penang, 1966, p. 48.

They argue that free trade will enable economies in the South to develop,

thereby creating new jobs. However, the reality is that millions of people now involved in rurally-based local production will be forced into unfair competition with large-scale, capital-intensive production across the world. This is especially true of small-scale, 'inefficient' family farmers, many of whom will be driven or lured off the land towards urban employment. Corporate agribusinesses will increasingly dominate food production, making it more 'efficient' by eliminating farmers and relying instead on heavy inputs of chemicals and energy. Of the displaced farmers, a few will find work at subsistence wages in a transnational corporation's factory. The majority will join the dispossessed in rural slums.

Globalization is levelling diverse cultures into a single, Western monoculture. A fully global economy would leave no place free from corporate market forces.  There would be no resource that could not be commodified, no one who is not a consumer. It would be a world in which virtually everyone eats the same food, wears the same clothes, uses the same materials to build their homes, and responds to the same televised media images. This would be ideal for huge, corporate enterprises, which would: benefit from vastly expanded markets and economies of scale. But for the earth's many hundreds of diverse cultures and their countless traditions of location specific knowledge, it would mean extinction. The global village has room for only one culture: Western, corporate-led, industrial.

         Ladakh Project Newsletter, 14, 1994.

In the name of the public good the technologies of globalisation (…proceed…) at the expense of more diversified and sustainable local and regional economies. Today, despite proclaimed shortages of cash for other purposes, one

national government after another around the world is investing billions of dollars to scale-up and speed-up the transport and communications infrastructures, creating a tight grid around the entire world to accommodate the needs of expanded trade and a unified global economy.

The scale and reach of these infrastructures is now such that further expansion benefits large-scale producers and long-distance marketers at the expense of local and regional enterprises  In Europe for example it has  been estimated that 37,000 small shops will soon disappear, replaced by must 300 supermarkets.  All across America, thousands of locally owned businesses have been driven under by huge corporately-owned businesses.

H. Norberg-Hodge, “Global techno-economic treadmill”, Real World, 6 Winter, 1994, p. 8.

“The process of globalisation under capitalism is generating enormous misery, deprivation and violence.”

R. Burbach, “For a Zapatista Style Postmodernist Perspective”, Monthly Review, March, 1996, p. 36.

The 1980s marked the end of the effort to reform capitalism, to make it more just.  2

In the late 1970s there “…was a decline of social reform everywhere in the industrialised nations.”  71

Chile was the first market society; i.e., not just an economy but a whole society operating on market principles.

“The idea that politics determines national policies has gradually dissipated, and in its place has come the open assertion that economics is the deciding factor in more and more aspects of society.”  3.

G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.

“Deregulation of financial markets, the elimination of tariffs and barriers to free trade, privatisation, a widening gap between the rich and the poor, declining living standards, high unemployment and the cutting back of public services and the dismantling of the welfare state have become conventional economic wisdom in the countries of the English-speaking world…”

            J.Ife, Community Development,  1995, p;. 94.

            Globalisation has failed:   “The impression has been engineered that globalisation is highly successful.  "This is fallacious. ...globalisation has been marked by substantial declines in rates of output, productivity and investment growth...greater volatility of financial markets and increased risk, real interest rates have risen substantially...”

“...globalisation so far has been a productivity failure, a social disaster and a threat to stability.”

E. S Herman, "The Threat of Globalisation", Economic Reform Australia      Newsletter, 2nd Dec., 1999.

"We are now pretty obviously facing the possibility of a world that the supranational corporations, and the governments and educational systems that serve them, will control entirely for their own enrichment -- and incidentally and inescapably, for the impoverishment of all the rest of us.  Th is will be a world in which the cultures that preserve nature and rural life will simple be disallowed."

W. Berry, "The death of the rural community", The Ecologist, 29, 3, March/April, 1999, p. 183.

"...even the worshippers of free trade have produced little evidence that it is of any great value to humanity as a whole.  World trade has increased by eleven times since 1950 and economic growth by five times, yet during this same period there has been an unprecedented increase in poverty, unemployment, social disintegration and environmental destruction."

E. Goldsmith, "Increasing trade - Increasing pollution", The Ecologist,          29. 2. May/June, 1999, p. 179.

"Those who gain from internationalism are the strongest and most competitive; those who lose are the weakest and least competitive."  Globalisation "...is seen as a model that may produce a higher level of total production, but only at the cost of insecurity, social imbalance and instability."

            J. Moller, The Growing Challenge to Internationalism", The Futurist,             33.3. March, 1999, 22-27.

The period from the 1960s to the 1990s has been "...marked by seriously deteriorating social conditions in most of the industrialised world."

            From a summary of F. Fukuyama, "The Great Disruption", The Atlantic       Monthly, May 1999, 55-80.

"If you are, roughly, in the top 20 per cent of the income scale, you are likely to gain something from neo-liberlaism and the higher you are up the ladder, the more you gain.  Conversely, the bottom 80 percent all lose and the lower they are to begin with, the more they lose, proportionally."

            S. George, "A short history of neo-liberalism", The Global Policy Forum,     reported in, ERA Email Network, 17th July, 1999.

"...poverty is increasing around the world...this is not just by accident but by the design of a small, powerful banking and business elite at whose behest the World Bank and the International Monetary Fund have provoked "economic and social collapse" in many countries."  (p. 11.)

"...the big  banking and financial organizations orchestrate collapses...by demanding payment of debt service charges and then lending money to cover the charges but only on condition the recipient country impose such measures as austerity, privatisation and currency devaluation.  The impact is usually destructive..."

            J. O'Neill, "Swimming against the mainstream economic currents",    (interview with Chossudovsky), Monetary Reform, Fall/Winter          1998/1999, p. 11.

"The  speed at which people are being impoverished all over the world...is something that is unprecedented in modern history.  It far exceeds the impacts of the Great Depression of the 1930s...in Indonesia, Thailand...from one day to the next the standard of living collapsed by 70 or 80 per cent..."

In the restructuring organised by the World Bank bankruptcy is "programmed"; i.e., "The World Bank will identify a set of companies and state enterprises sector by sector and they will put crosses on the ones that they think should be liquidated...the assets of state enterprises or private sector companies are put on the auction block and then sold at bargain prices to foreign investors.  Those which are not put on the auction block are liquidated."

In Yugoslavia between 1989 and 1990 such programs made over one million workers unemployed.  The IMF  "...demanded the freeze of transfer payments to the republics while diverting state revenues to creditors, which of course led to the fracture of the  Yugoslav Federation." ... (and therefore was a major contributor to the civil war that followed.)

In Russia the level of spending or real income collapsed by 86% in one year.

In Rwanda an IMF organised devaluation or 50% disrupted a self-sufficient grain economy.  The World Bank enforced open door policy to grain imports and foreign suppliers began dumping grain on the market, which destroyed the fabric of the local economy. "...the Rwandan peasantry was totally destroyed..."

The banks contribute to the attack on national economies in a number of ways, and benefit from each.  For instance the speculators who begin a raid on a national currency borrow the funds for this from the banks.  When the country ends up with huge debts it borrows the money for repayments...from the banks.  When rich countries assist heavily indebted poor countries, it is again the banks who lend the money...and earn interest on all these deals.   The banks "...are also the underwriters of public debt in the western countries which are financing these multibillion dollar bail-out operations.

"...the financiers have now gone on a shopping spree buying up high tech companies ...General Electric purchased...the largest aircraft engine production facility in the former Soviet union...for a mere $300,000...The US has bought up the Russian space program for probably a few million dollars.  The assets are bought up at rock bottom  prices."

"...we are dealing with an economic program which  ultimately destroys the fabric of civil society.   "...the 'Washington consensus" (i.e., this savage neo-liberal strategy) is shared by politicians from one end of the spectrum to the other..."

The magnitude and power of the speculative operations is indicated by the  fact that the amount "spent" on financial speculation in Canada is more than  32 times the amount paid in wages and salaries

            M. Chossudovsky, "The curse of economic globalisation", Monetary            Reform, Fall/Winter, 1998/1999, pp. 13-20.

McMurtry says globaliation is destroying "...the world's civil fabrics" .  He refers to   "...a furiously acquisitive mind-set".

            J. McMurtry, "At the edge of a new dark age", Committee on Monetary         and Economic Reform,, 12, 1, Jan, 2000.

"Two decades of so-called neo-liberal structural adjustment have left behind economic failure and social disaster."

"There are more poor, unemployed and hungry people in Latin America now than at any other hard time in its history."

"Trade liberalisation has essentially consisted in the unilateral removal of protection instruments by the south.  Meanwhile , the developed nations have failed to do the same to allow the Third World exports to enter their markets.

The rich nations have pushed for freedom of trade in sectors where they have enormous advantages, such as information technology.  "On the other hand, agriculture textiles...have not even been able to remove the restrictions agreed upon...because they are not of interest to developed countries."

"The world economic order works for 20% of the population but it leaves out, demeans and degrades the remaining 80%"

            Fidel Castro, Speech to the South Summit, 2000, Third World         Resurgence, 117. 2000, p. 27.

            How liberalisation of the economy means loss of control over one's own             national assets.

In 1989 the rime Minister signed away Canadian control over its energy resources, as part of the free trade arrangements.  

"A1985 US congressional report called Can ada's regulatory control over its natural gas as a 'direct restriction of American rights to Canadian gas" and called for the American governent to make gunaranteed accss to Canadian supplies a point of national security."

Canadian Prime Minister Mulrooney  called the practice of maintaining emergency reserves "odious" 

"The Mulrooney government deregulated oil and gas exports And dismantled most restrictions on American  foreign investment in the energy industry, one again opening up Canada's resources to domination by an  ever-smaller, ever-more powerful group of transnational corporations with no interest in Canada.""...and promised American  business full access to Canada's energy supplies."

The provision that Canada should maintain a  25 year surplus ofr natural gas was abandoned.

Applicants for export licences were no longer required to file an impact assessment.

Export taxes on energy were banned, meaning that the government lost an  important source of tax revenue.

Most important the trade agreements imposed the requirement that Canadian energy supplies to the United States are guaranteed in perpetuity.  In an astonishing surrendered of sovereignty, the government of Canada agreed that it no longer has the right to refuse to issue a licence or revoke or change a licence for the exportation to the United States of energy goods..."

Maude Barlow, "Good news for us (too bad for Canada...) 26th Sept, 2000.

For the mass of humankind outside the core areas of the world economy, the overall pattern has been one of retrogression; declining living standards, dramatic increase in social inequality, pauperisation of large sections of the population.  We are dealing, in short with systemic problems that plague global capitalism as a whole..."

D. McNally, "The present as history; Thoughts on capitalism at the millennium", Monthly Review, July-Aug., 1999, 136-137.

"It is the elites who are in favour of global free trade.  It is they who will be enriched."  James Goldsmith quoted in,

            M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

"All the evidence is that free trade brings not progress, but decline to the poorer nations." (175)

"The lesson is, if you want to develop your nation, don't embrace free trade.  Protect  your domestic economy..."  (176)

            M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

Governments compete against each other to set lower standards,       

more favourable to corporations, in order to entice them to invest.

National governments—both North and South—are engaged in the same "race to the bottom". In the UK, it is national economic policy to offer the country as a low wage, deregulated "enterprise zone" with relatively pliant workforces. In a brochure aimed at attracting foreign investment, the government's Invest in Britain Bureau (IBB) highlights Britain's "pro-business environment" and its "liberal and undemanding labour regulations". 

In addition, the IBB advertises "labour costs significantly below other European countries", a "commitment to reduce the burdens on business", "no exchange on repatriated profits". The brochure continues: "The UK has the least onerous labour regulations in Europe, with few restrictions on working hours, overtime and holidays . . . There is no legal requirement to recognize a trade union. Many industries operate shift work, and 24-hour, seven days-a-week production for both men and women."

The IBB assures potential investors that "no new laws or regulations may be introduced without ascertaining and minimizing the costs to business." The UK government is also committed to cutting back regulations that it deems to restrict enterprise. Since 1993, 605 regulations have been identified for the axe; these include measures covering health and safety, biotechnology, advertising in sensitive areas, hedgerow preservation, food standards and energy efficiency. This world of work has long been familiar to workers in the South, where governments (under the tutelage of the IMF) have been deregulating industry and setting up "free trade zones" since the early 1970s in an attempt to provide "a favourable climate" for private sector investment. The rights of workers to organize and strike have been restricted; environmental regulations weakened; foreign ownership restrictions watered down or abolished; and TNCs granted freedom from planning and environmental controls and permission to repatriate profits without restriction.

N, Hildyard, C. Hines, and T. Lang, “Who competes?", The Ecologist, 26, July/Aug., 1999, 132.

“… a new class structure has emerged in advanced market economies.  The social groups constituting the new privileged minority are basically, hostile to any expansion of statism and the welfare state and are increasingly attracted by the ideology of the private provision of services like health, education and pensions—although a significant part of this attraction is forced by the neo-liberal undermining of the state provision of these services. Their attitude towards statism and the welfare state is determined by the fact that public services and their financing by taxation have a disparate effect on the privileged minority and the underclass. In other words, it is the privileged minority that has to finance, through taxation, public services in which they are not interested anymore (because of the deterioration in their quality as a result of neo-liberal policies). As the privileged minority is also the electoral majority (because they take an active part in the electoral process, whereas the underclass do not bother to vote”…

“So in the last 15 years or so, all major social-democratic parties, (Britain, Gerrnany, France, Sweden, Spain, Greece) have abandoned traditional social-democratic policies like the commitment to full employment and the welfare state, and adopted, with minor variations, the essence of the neoliberal programme (privatisations, liberation of markets …

 A neoliberal consensus has swept over the advanced capitalist world and has replaced the democratic consensus of the early post-war period. ..

“The main economic policies proposed by neoliberals and subsequently implemented first by the Thatcher/Reagan administrations and later by governments all over the world have been the liberalisation of markets (particularly the labour market), the privatisation of state enterprises, the redistribution of taxes in favour of high income groups and, last but not least, the reduction of the welfare state into a safety net and the parallel encouragement of the private sector 's expansion into social services (health, education, pension schemes and so on). The effect of the latter has been not only the marketisation of sectors of the economy that used to be under state control, but also a further reduction of the social wage'—a fact, which makes labour even more 'flexible' to market conditions. No wonder that as a result of these policies, profitabilitv, which had slumped at the end of the statist period, has been almost restored to the levels achieved at the peak of the post-war boom.

With hindsight, it is therefore obvious that Polanyi was right in thinking that the rise of statism in the 1930s was evidence of the utopian character of the self-regulating market and of the existence of an 'underlying social process' which leads societies to take control of their market economies. In fact, statism proved to be a relatively brief interlude in the marketisation process.   In this

T. Fotopoulos, “Welfare state or economic democracy”, Democracy and Nature, 5. 3. 1999, 433-468.

Extracts from an interview  with  Michael Chossudovsky,

Professor of Economics, University of Ottawa.

(For full text see  http://www.tenc.net)

When an IMF mission goes into a country and requires the

destruction of social and economic institutions as a condition for lending

money - this is very similar to the physical destruction caused by NATO

bombing. The IMF will order the closing down of hospitals, schools and

factories. That's of course more cost effective than bombing those

hospitals, schools and factories, as they did in Yugoslavia, but the

ultimate result is very similar: the destruction of the country.

Some think the IMF and World Bank are playing contradictory roles, which is not so. And also there's a tendency to see these institutions in isolation. In fact they are simply

two tools used by the Western elite to destroy nations, to turn them into

territories.

… The simple fact is: Wall Street is behind both these institutions. They are run by bankers not sociologists

The countries that accept the IMF, like Bulgaria and Romania, they may not get bombed but they are destroyed with the pen. InBulgaria the IMF implemented the most drastic reforms, IMF medicine, which

decimated social conditions - pensions slashed, factories closed, dumping

of cheap finished goods, elimination of free medical care and

transportation services and so on…

Sometimes war creates the conditions, and then the economic institutions

come in and pick up the pieces. Or conversely the IMF itself does the

destabilizing, as they did in Indonesia. They insisted on cutting off

transfer payments to the various states in the federation. Now that

fractures a country like Indonesia which has 2,000 islands with a system

of local governments. It is the geography of the bloody place. So they

leave these islands to their own devices.

Do you see what that accomplishes?

Israel (Interviewer): In other words, they insisted on cutting money that was suppose to

subsidize the local governments?

Chossudovsky: Yes, for example for education and so on. By doing this -

and incidentally they did it in Brazil as well - they destabilize the

country because in order to have a country there must be fiscal coherence,

a system of fiscal transfers. So in a place like Indonesia, each of these

islands becomes a small state. And of course now the idea of going it

alone becomes far more attractive to the many different ethnic groups. Of

course they [that is, the planners] are fully aware of this - they have

made it happen time and again. It took place in Yugoslavia; it took place

in Brazil; it took place in the former Soviet Union where the regions are

left to their own devices because Moscow doesn't transfer any money.

Potentially it could happen in the United States as well. It is guaranteed

to produce a situation of conflict, internal strife.

Israel: Mutually unproductive conflict?

Chossudovsky: Yes because people are impoverished to such an extent that

they start fighting.

Israel: On every basis, especially ethnic.

Chossudovsky: Incidentally in Somalia there weren't any ethnic groups, but

it worked there too. You don't need a multi-ethnic society to have

divisions, to have Balkanization.

Israel: And you're saying this is part and parcel of a plan for Empire?

Chossudovsky: I am saying this is recolonization. Countries are

transformed into territories, colonies essentially.

Israel: What distinguishes the two?

Chossudovsky: Countries vs. territories

A country has a government. It has institutions. It has a budget. It has

economic borders. It has customs. A territory has only a nominal

government, controlled by the IMF. No schools and hospitals, as those have

been closed down on orders of the World Bank. No borders because the WTO

has ordered free trade. No industry or agriculture because these have been

destabilized as the result of interest rates of 60% per anum and that is

also the IMF program.

Israel: 60% per year?

Chossudovsky: In Brazil it's much higher. I'm looking at Botswana now. The

interest rate is horrendously high.

Israel: And this is imposed by the IMF?

Chossudovsky: They put a ceiling on credit. Do you see? So people can't

get bank loans; it drives interest sky high and that kills the economy.

Then they open it up to free trade. So the local capitalist enterprises

have to borrow at 60% from the local banks and then they have to compete

with commodities from the United States or Europe where interest rates are

6 or 7%. These reforms are essentially aimed at destroying local

capitalism.

===============================================================

               Extracts from “The World Bank's practices allow the rich to steal from the poor”.G. Monbiot, The Guardian,Thurs, April 13, 2000.

Of course - the poor only started to demand - and acquire - rights in the

last two or three centuries. The rich stealing from the poor has been a

fairly standard practise - where the process was hindered for a time by

popular empowerment it has came back into fashion as the principal purpose

of "neo-liberalism".

...

As the researcher Mark Lynas has shown, the World Bank's "reforms" are

directly responsible for the deaths of tens of thousands of Zambian

people. Most cannot afford to buy their own medicines, so they die of

easily treatable diseases. Partly as a result, infant mortality in Zambia

has risen by 25% since 1980, while life expectancy has fallen from 54 to

40. The cuts have forced Zambia's Siavonga Hospital to merge its

obstetrics and tuberculosis wards, with predictable results. The

government has also been forced to slash its spending on education, from

40 per primary school pupil in 1991 to 10. Enrolment has fallen from 96%

in the mid-1980s to 77% today.

On Sunday, thousands of people will converge in Washington to protest

against the World Bank's policies. There will be plenty to keep them busy.

For the World Bank is not, as it pretends to be, the saviour of the

world's poor, but their most deadly enemy.

Every one of the bank's policies is beset by contradictions. It claims,

for example, to be the champion of free choice, yet its prescriptions are

resolutely Maoist. It promulgates precisely the same approach to

development everywhere on earth, regardless of circumstance. It rules not

by science but by slogan: the great leap forward will be achieved by means

of "comparative advantage", "privatisation" and "trade liberalisation". It

keeps pursuing its crazy schemes even in the face of repeated failure: the

bank is still funding hydroelectric dams all over the developing world,

for example, despite scores of social and environmental catastrophes.

The World Bank assures us that it is now the champion of female education,

having launched a handful of high profile schemes to provide schooling for

girls. But every year its "structural adjustment" policies force millions

out of school. Like the International Monetary Fund, it uses third world

debt to extract concessions from developing countries, obliging them to

cut their spending and hand the public sector to foreign corporations. As

schooling throughout much of sub-Saharan Africa is now available only to

those who can pay, the girls are dumped.

The bank claims to be fighting corruption. Yet it is one of the most

corrupt and corrupting institutions on earth. It lent Indonesia's

President Suharto a total of $25bn, much of which was stolen. Bank staff

knew this was happening and colluded in the theft, covering up for the

government in order to save face. In Washington the World Bank is enmeshed

in a sticky web of crony contracting, as large US companies lean on their

government to persuade the bank to give them work. Last month, it

demonstrated that it had picked up a few tips from the corrupt regimes

with which it cheerfully does business, by appointing as its chief

economist the brother of one of its vice-presidents.

About once a year, the World Bank admits that it has erred, and promises

that it has learnt from its mistakes. And every year it immediately

repeats them. When the massive migration schemes it funded in Indonesia

and Brazil led, predictably enough, to the displacement and murder of

indigenous people, the bank acknowledged that it should not have provided

the money. Today, however, it is investing in an almost identical scheme

in western China. In 1991, it conceded that its forestry programmes were a

disaster, and claimed to have changed its approach. Two months ago the

bank admitted that the new policy is just as bad as the old one. It's not

hard to see why the World Bank is destined to sow destruction wherever it

goes. The "disciplines" it imposes are not, as it claims, market

disciplines, but political disciplines. It has just one true mandate: to

engineer a neoliberal world order so that first world countries can seize

third world resources.

...

The World Bank has become the means whereby the rich are empowered to

steal the incomes of the poor. It claims to be defending the world from

disasters. In truth its purpose is to promote them.

...

THE WTO AGREEMENT ON AGRICUITURE

Agriculture is still the primary source of livelihood for three quarters of humanity, and is as much a cultural activity as an economic one. The AOA is a rule-based system for trade liberalisation of agriculture that was pushed by the United States and its global agribusiness corporations. Its effect is to impose global competition on the domestic farm sector undermining the viability of small farms that are unable to compete with cheaper imports As a result, it will drive millions of small farmers off the land and ensure that agriculture is controlled by global corporations. In so doing, it will constitute the biggest refugee creation programme in the world.

V. Shiva, The threat to Third World farmers, The Ecologist Report, Sept., 2000.

Corporate mergers and acquisitions grew at a rate of almost 50 percent per year in every year but one between 1992 and 1998. Globally, more than two trillion dollars worth of mergers were announced in the first three quarters of 1999.  It is the greatest merger wave in capitalist history.

Increasingly we are faced with a world economy governed by financial speculation and the attempt to create global monopoly (or oligopoly) power…

J. Bellamy Foster, Monopoly Capital and the Turn of the MillenniumMonthly Review, April, 2000, pp. 10-12.

Economic globalisation, as promoted by the World Trade Organisation, is a planned project of exclusion that _siphons the resources and knowledge of the poor of the South into the global marketplace and strips people of their life support systems, livelihoods, and lifestyles. Global trade rules, as enshrined in the WTO's Agreement on Agriculture (AOA) and in the Trade Related Intellectual Property Rights (TRIPs) agreement, are primarily rules of robbery, camouflaged by arithmetic and legalese. In this economic hijack, the corporations gain, and people and nature lose.

V. Shiva, The threat to Third World farmers, The Ecologist Report, Sept., 2000.

Multinational corporations want free trade because they  are trying to get Governments off their back so that they can exploit the profits that they can make with the minimum of interference…

         T. Bern, “Free us from trade”, Ecologist, 30.6. S ept. 2000.

These agreements, these organizations are set up only to protect and

increase the power and privilege of the wealthy elite. Our wealthy senior politicians are in full collusion. ..the reforms of the   1980s in Mexico were, indeed, great for foreign         investors and a very small sector of the Mexican population, the Mexican rich, including many new billionaires, but they were a total disaster for the overwhelming majority of the  "intellectual property rights" agreements, which are highly protectionist, have just been built into the recent trade agreements including NAFTA. They impose protectionist rights in favour of corporations of an extreme kind. ..

In the United States, the original idea of NAFTA was to ram it through in secret. That's pretty clear. The NAFTA agreement was signed in August of 1992 right in the middle of the presidential campaign. All eyes were focused on the election. It was barely even reported…

The main opponents of the NAFTA agreement was the labour movement. There happens to be a law in the United States, the Trade Act of 1974, which requires that the labour movement be consulted and that they participate in any trade agreement. Well that was totally violated. They weren't even told about it until September 8~, 1992. The Labour Advisory Committee, the relevant group, was informed on September 8th that they were to submit their reaction to ~NAFTA on September 9th. That is within one day and that's a month after it had been initialled , by the President, almost in secret. The idea was that the Committee wouldn't be able to meet…

Well, interestingly, despite the huge propaganda effort, the public as I mentioned, remained opposed. It was all corporate propaganda, like 100%, with a total silencing of the opposition. About the only person they let in was Ross Perot. He was allowed in, if only because he was a billionaire, but for another thing, because he's kind of a funny-looking guy and he was saying some pretty dumb things, so you could make fun of it. But the serious proposals were cut out, including the ones required, by law, from the labour movement and the Congressional research bureau and, of course, all the grassroots organizations, which goes p' without saying. It was passed despite the 111 enormous public opposition.

         N. Chomsky, “Whose world order”, Monetary Reform, 10,  2000.

These big firms now want to break down the barriers so that they can take over the  local firms and farms of the developing world and increase their monopoly. I ~ Thus we now see the liberalisation of trade, finance and investment. But in areas where the big companies and their governments would lose from liberalisation, they practise protectionism, for example the imposition of high intellectual property standards throughout the world which is protectionist, in creating monopoly of technology by the big companies and hindering technology transfer.     ..

Globalisation is a process that can be called re-colonisation…

There has been the great pressures of the rich countries to get the poorer countries to liberalise their economies, but the North practises protectionism when they insist on patenting their technologies, when they practise bio-piracy, when they do not open their doors to labour coming from the South.   

M. Khor, Millennium Forum, UN General Assembly Hall, New York, 22.5.2000.  ERA Newsletter, 30.5.2000

"Since liberalisation began in Russia in 1989, inequality has doubled wages fell by almost half, and male , life expectancy has declined by . more than four years to 60 years."

 United Nations Development Programme, 1999.

Developing countries in the past have used a combination of subsidies and measures to protect local markets as a development strategy.

The success of Japan, Korea, and other countries was based on

just such practices. The WTO rules, which the core countries

have pushed, prevent such development trajectories. Even

local food self-sufficiency is a target of the WTO. As countries

are forced to open their markets to foreign grains and other basic foods, local farmers are driven offthe land and into cities hardly ready for such an influx. ..

Hertel of Purdue University and Will Martin of the World Bank       have shown that rich countries' average tariffs on manufacturing imports from poor countries are four times higher than those on imports from other rich countries. Rather than receiving favoured treatment, the developing countries are treated far more harshly…

a sustained and far reaching class struggle from above has been engaged in and has successfully weakened labor, diminished trade union

membership, reduced living standards, worsened working                                                  

conditions, and strengthened ruling-class control over the state and its allocation of expenditures and collection of tax  revenues. ..

Budgets are heavily skewed toward tax reductions for the rich, cuts in health, welfare, and education and sharp increases in expenditures for overseas expansion military intervention, and bailout of overseas speculators. The winners and losers reflect the class nature of the state…

         W. K. Tabb, Understanding the Politics of Globalisation, Monthly Review, March, 2000, pp. 10, 1-19, 31.

 For what we are doing in the name of globalisation to the poor is brutal and unforgivable. This is specially evident in India as we witness the unfolding disasters of globalisation, especially in food and agriculture.

And the take-over of the edible oil industry has affected 10 million livelihoods. The take over of flour …by packaged branded flour will cost 100 million livelihoods. And these millions are being pushed into new poverty…

The globalisation of the food system is destroying the diversity of food cultures and local food economies…

Recently, because of a W.T.O. ruling, India has been forced to remove restrictions on all imports…

         V. Shiva, Reith Lecture, Email Newsletter of ERA, 22.5.2000

If a banker were to lend a million dollars  to Al Capone to build the world's largest toothpick factory, and he skipped off with the cash, we'd say that banker was a fool and deserved to swallow his losses. If that same banker lends a million dollars to a Third World dictator, he need never do so, because he knows the IMF will always be there to squeeze the money out of the dictator's former victims. (If millions of children have to go hungry as a result, so be it.)

globalization means reducing restrictions on those who are already rich

and powerful, and strengthening the walls which imprison the poorest and

most vulnerable. It is plainly immoral. That's why so many thousands of America’s young people having been mobilizing to protest it, and demanding a form of globalization which will actually benefit the vast majority of people with whom we share this earth.

. . . the single most significant form of protectionism in the world today is our gargantuan system of patents and copyrights.

D. Graeber, “What real globalisation would mean”, ERA email network, 18.6.2000

Ultimately then the pressure of globalisation comes to rest on wages. These is pressure to cut the social wage (i.e., welfare spending)_ to get an “internationally competitive” tax regime and to cut wages to “internationally competitive” levels.  This is the bottom line for governments and explains much of the policy agenda over the last two decades in Australia and elsewhere…Economic regulation, taxes or higher wages will simply mean that capital will be invested elsewhere.”

G. Ogle, "Putting public ownership back on the agenda”, Green Left, June 5, 1966, p. 3.

“Trade liberalisation and structural adjustment policies are destroying local productive capacity in rural societies, and small farmers livelihoods.  They push countries into cash crop export production at the expense of domestic food production.  Around a million families lost their livelihoods as maize prices plummeted in Mexico due to cheap, subsidised imports with the implementation of NAFTA in 1994.”

“In June, the WTO Special Session of the Committee on Agriculture heard that liberalisation has “broken the agricultural backbone of many developing countries.  A group of l11 Asian, African and Central American countries reported that key agricultural sectors vital for the economy in terms of food supply, employment, economic growth and poverty reduction were being seriously eroded due to the inability to compete with cheap imports.”

A. Choudry,  “Force feeding free market fundamentalism vs fighting for the freedom to farm”, The Big Picture, Nov. 2000, p. 10-11.

Globalisation “ …is increasing poverty, inequality and environmental degradation, virtually everywhere.”  199.

C. Hines, Localisation; A Global Manifesto, London, Earthscan, 2000.

Globalisation makes it easier for criminals to launder money.

G. Winslow, Capital crimes; The political economy of crime in America, Monthly Review, Nov., 2000, p. 40.

Globalization is not about trade, as its promoters would like us to believe, it is about power and control. It is an attempt by the largest international banks and multinational corporations to run the world their way, for the right to own benefit and by their own set of rules, rules that would allow them to undo a century of social progress and to alter the distribution of income from inequitable to inhuman.   P. vi.

P. Hellyer, The Evil Empire, Toronto,1997.

Driven by a single-minded dedication to generating ever greater profits for the benefit of their investors, global corporations and financial

institutions have turned their economic power into political power. They

now dominate the decision processes of governments and are rewriting the rules of world commerce through international trade and investment

agreements to allow themselves to expand their profits without regard to

the social and environmental consequences borne by the larger society.

Continuing with business as usual will almost certainly lead to economic,

social, and environmental collapse.  6

         D. Korten, The Post Corporate World, p. 6.

David Korten describes TNCs as 'instruments of a market tyranny that is extending its reach across the planet like a cancer, colonising ever more of the planet's living spaces, destroying livelihoods, displacing people, rendering democratic institutions impotent, and feeding on life in an insatiable quest for money. The worst aspect of this tyranny is that it hits hardest at the most vulnerable people, the poor…

         D. Korten, The Post Corporate World, p. 6.

Furthemore, the effect of the liberalization of markets in the USA has

been the drastic worsening of the distribution of income. The real wages

of two-thirds of American workers have dropped considerably (weekly

wages fell by 18 per cent between 1973 and 1990), causing a significant

widening of inequality.' Thus, although average household income

climbed 10 per cent between 1979 and 1994,97 per cent of the gain wentto the richest 20 per cent. The USA trends are sure to be reproduced soon all over the North, particularly after the collapse of the altemative 'Rhineland' model of 'social market' capitalism. 101

T. Fotopoulos, Towards an Inclusive Democracy, 1996.

Thus, according to the ILO, in the early 1990s, 120 million people were unemployed and 700 million people were underernployed living below subsistence level. In other words, about 30 per cent of the world's population which is capable of working do not have enough work for subsistence, a crisis correctly described as worse than in the

1930s. Furthermore, according to the latest UN Human Development Report (1996), the total wealth of the world's 358 billionaires equals the combined income of 2,300,000,000 people, the poorest 45 per cent of the world population. '..

         D. Korten, The Post Corporate World, p. 142.

The freedom of such capital to move internationally offers unparalleled opportunities for profit. The growth of the gap between the rich and poor will continue" (ibid.` 225)

Basically, what free trade means is that the capitalist or independent class can ask the laboring or dependent class to reduce its standard of living to Third-World levels, while the capitalists  grow more wealthy from the abundance of opportunity afforded by a low-wage global economy.

This is where our addiction to exponential growth is taking us. As long as capitalists are free to invest where they will,  without regard to national and community concerns, such as balanced trade, decent wages, and job security, we will continue to  continue to  become an increasingly fractured society. This is the road to crisis of one sort or another.

         R. Terry, Economic Insanity, p. 165.

Who Benefits from the Free Trade Agreements?

All our political leaders, our business organizations, and most of our

university academics proclaim that the free trade agreements benefit Canada,

the United States and Mexico, and the proposed Free Trade Area of the

Americas (FTAA) will benefit the less developed countries in Latin America.

I spent the month of March touring Mexico, looking for information on the

impact of the new free market free trade regime on Mexican development.

In Canada this new political economy system is called globalization; in Latin

America it is called neoliberalism. First, it should be remembered that these agreements have very little to do with trade. Even before they were signed we had almost complete free trade. The new agreements are primarily about private investment rights.

How does one judge whether a political economy regime is a success?

Mainstream economists usually cite figures on economic growth. In Mexico the

period 1945 to 1974 was the period of state-led Keynesian political economy.

During that period real annual growth averaged 6.4% and inflation 3.1%.

Manufacturing grew at a rate of 7.6%, and many jobs were created. This

period was called "the economic miracle." Between 1973 and 1983 real

economic growth averaged 4.8%, and inflation rose to 16.5%.

In the period of neoliberalism, from 1982 to the present, the real rate

of growth has averaged 2.8%.The average annual inflation was 45.7%. These

basic figures alone explain why there is such skepticism of neoliberal

policies in Mexico.

Mexico has always been characterized by inequality, but this has risen

under the neoliberal regime. The World Bank reported in March that the

bottom 10% of the population earned only 1.5% of total income whereas the

top 10% earned 42.8%. The distribution of wealth, which would be very hard

to measure, is believed to be much worse.

The poverty line set by the Mexican government is two daily minimum

wages for a family of five. Today this is 80 pesos or around $13 Canadian.

The World Bank argues that since the inauguration of NAFTA (1994-2000) the

number of working people living below the poverty line has risen to 36

million persons or 62% of the economically active population. Over this

period the real minimum wage has fallen by 40.7%.

In the latter part of March the Mexican government sponsored a national

symposium on poverty. Julio Bolvitnik, an economist from El Colegio de

Mexico, argued that 71 million people or 73% of the population live in

poverty and 45 million in extreme poverty. James Foster, an economist from

Vanderbilt University who works for the World Bank, argued that economic

growth does not solve poverty and that rising poverty and inequality were a

"time bomb" in Mexico.

Labour's position in the economy has steadily declined during the

period of neoliberalism. Mexican government figures (INEGI) report that

between 1993 and 2000 the gap in wages in manufacturing between Mexico and

the United States rose from $9.6 to $12.1 per hour. The Organization for

Economic Co-operation and Development (OECD) reports that since 1995 real

wages in Mexico have declined by 10%. But over this period labour

productivity increased by 45%. This is due almost exclusively to the fact

that many workers have increased their hours of work from eight to twelve

hours per day. The number of Mexicans working more than 48 hours per week

rose from 2.3 million in 1988 to 9.3 million in 2000.

A study by economists at the National University in Mexico City shows

that over the last three years labour's share of the Gross Domestic Product

has declined from 34.16% to 30.66%. In 2000 13.3 million workers earned less

than the minimum wage (40 pesos per day, or $6.55 Canadian), which is

roughly one-third of all workers. UNICEF reports that there are five million

children under 14 working in Mexico. The Constitution prohibits children

under 14 from working.

In 1980 the average automotive worker in Mexico earned about one-third

of the wage of an American automotive worker. By the year 2000 this average

worker earned only one-twelfth of his American counterpart.

The Bank for International Development, Latin America reported in March

that employment in the formal sector of the economy (jobs which pay a wage

or a salary) are in decline in Mexico and throughout Latin America. The

percentage of people working self-employed in the informal economy, with

very long hours, usually seven days a week, low income, and no social

security benefits, is rising steadily. In Mexico this was 40% of the

economically active population in 1990 and is now over 50%.

Mexico has no unemployment insurance and no social assistance. Medicare

does not exist. Only those who work for the government or a private company

which is registered with the national system (IMSS) have any pension, about

one-third of the economically active population. The ability to provide

social programs has been limited by the structural adjustment programs

imposed on Mexico by the World Bank and the International Monetary Fund and

supported by the Mexican political and economic elite. Today total

government expenditures are only 19% of Gross Domestic Product. That

compares to an average of 40% in the industrialized countries of the OECD.

Neoliberalism and NAFTA have been good for the rich in Mexico and the

large corporations. The banks, privately owned and robbed by the Mexican

rich, have been bailed out of bankruptcy twice by taxpayers. The illicit

drug industry flourishes and is now more important than the oil industry,

and free trade and cross-border trucking have made marketing much easier.

Mexicans know that their country is falling behind the United States

and Canada in every area. Aside from incomes, spending is very low on

education, health, agriculture and rural development, and research. It is

not surprising to find that most people, including academics, do not believe

that so-called "free trade” has been good for their country.

John W. Warnock is a Regina political economist and author of The Other

Mexico: The North American Triangle Completed.

John W. Warnock., 2156 Retallack St.,Regina, Canada.   SK S4T 2K4 (306) 352-5282

Published by Economic Reform Australia, ERA EMAIL NETWORK, Sun, 15 Apr 2001

The number of people living in poverty has risen from 1.1 billion in  1985 to 1.2 billion in 1998, and will be 1.3 billion in 2000.

W Bello, From Melbourne to Prague;  The struggle for a deglobalised world,  Economic Reform Newsletter,  12, 15, Dec., 2000,p. 8.

Brenner refers to “…the countries which euphemistically are called developing.  In almost all these countries a modest rise in productivity was accompanied by a deterioration in the living standards of the majority of the population and an increase in affluence of a minority.”

            Y. S. Brenner, The Rise and Fall of Capitalism, Aldershot, Elgar, 1991. PO. 4.

“Eighty nine countries were economically worse off in 1995 than they had been ten years earlier...1.6 billion people ...are worse off than they were fifteen years ago.  In seventy developing countries today’s levels of income are less than those reached in the 1960s or 1970s...In 19 countries ...per capita income today is less than the level of 1960...”   (Human Development Report, United Nations, 1996, quoted in Schwarz and Schwarz, 1998, p. 155.)

In 1992 the World Bank estimated that poverty had increased in most developing countries.

            B. Schneider, The Scandal and the Shame, New Delhi, Vikas,         1995.

Trade liberalization has already exposed developing country farmers to

ruinous competition, driving down prices, undermining rural wages and

exacerbating unemployment. In the Philippines, opening up of corn

market in 1997 reduced corn prices by one-third. At that time, US corn

growers were receiving US $ 20,000 a year on average in subsidies,

while Filipino farmers in Mindanao had average income levels of US $

365. Between 1993-2000, cheap corn imports from US into Mexico

increased eighteen times, leading to accelerated migration from rural

areas to urban centre

Devinder Sharma, “WTO and Agriculture, THE GREAT TRADE ROBBERY”,([India's national co-ordinator for ISPO, the International

Simultaneous Policy Organization.)

Trade liberalization has already exposed developing country farmers to

ruinous competition, driving down prices, undermining rural wages and

exacerbating unemployment. In the Philippines, opening up of corn

market in 1997 reduced corn prices by one-third. At that time, US corn

growers were receiving US $ 20,000 a year on average in subsidies,

while Filipino farmers in Mindanao had average income levels of US $

365. Between 1993-2000, cheap corn imports from US into Mexico

increased eighteen times, leading to accelerated migration from rural

areas to urban centre

Devinder Sharma, “WTO and Agriculture, THE GREAT TRADE ROBBERY”,([India's national co-ordinator for ISPO, the International

Simultaneous Policy Organization.)

         FINANCE

Probably the biggest problem is set by the freedom now given for flows of capital.  Much capital can rush into a booming region, then suddenly be withdrawn when the boom falters, collapsing the economy, e.., cutting the exchange rate of its currency and therefore what it can earn from exporting.  This is what happened in the Asian Meltdown late in the 1990s.

There are certainly many contributing factors to the economic crises which have spread in the past year throughout Asia, moved to Russia and which now threaten much of Latin America and South Africa. But atop the list is "hot money" -- foreign loans and investments which pour especially into developing countries in pursuit of high returns but pull out at the first

sign of economic downturn.

In the last two decades, countries around the world have opened themselves to "hot money" under pressure from the International Monetary Fund (IMF) and in response to a near-consensus among establishment economists, Wall Street advisers, aid agencies and development analysts that openness to unregulated capital inflows and outflows is the only path to economic salvation.

The last year has shown, instead, that failing to regulate capital flows

invites economic ruin. The basic problem is that, when foreign lenders and

investors fear a country may have difficulty paying back loans, they flee

en masse. With investors overwhelmingly seeking to exchange their rupiah

or ringgit or rules for dollars or other dependable currencies, the value

| of the developing country currency plummets, throwing the country into

economic crisis.  

With developing countries across the globe facing enormous uncertainty,

two developing nations stand out for having weathered the economic storms better than most: Chile and Taiwan.

Their common trait? Both impose meaningful capital controls. T

Now Malaysia is looking to follow …

B. Dwyer, Ending Wall Street’s reign, Prout Organization, NZ, 9.4.98.

CONTRIBUTING TO ORGANISED CRIME

In Bolivia and Peru, IMF-guided reforms to the banking system have facilitated a free flow of currency in and out of the country. Said one observer, 'this amounts to nothing less than the legalisation of money laundering by the Peruvian financial system.

         Third World Resurgence, 80, p. 19.

___________________________________________

EFFECTS ON LABOUR

Wages for footwear workers in China and Thailand were 23 – 46 pence per hour.   106.  In Indonesia “…to attract foreign investment, the minimum wage is set at just 6% above the poverty line.”  107.

            J. Madely, Big Business, Poor Peoples, Zed, 1999.

(Increasing competition...between workers,)

In the drive to become "competitive", companies are restructuring their        

operations on a global scale. It is not        companies which are competing, however but workers and communities.

Workers are being pitted against workers and communities against communities as companies relocate from one country to another in search of new markets, the weakest trade unions, the most flexible rules on working conditions and the largest subsidies.

T. Hildyard, C. Hines and T. Lang, “Who competes?”, The Ecologist, 26.4. July/Aug, 1996, p. 123.

Corporations have been steadily "downsizing" their workforces. Information technology is making middle managers expendable along with clerical and assembly workers.  Between 1979 and 1992, the total worldwide employment of the Fortune 500 companies dropped from 16.2 million to 11.8 million.

The Ecologist, 26, 4, July/Aug, 1996, p. 187.

In all OECD countries there has been in recent years a sharp fall in labour’s share of the gross domestic product, and a parallel rise in the share of profits.

F. Clairmont,  The Rise and Fall of Economic Liberalism, Third World Network, Penang, 1966, p. 48.

“Throughout the 1980s and 1990s incomes declined or were stagnant for the poorest 60% of Americans,…judged by stock market capitalisation alone, the rich became fabulously richer.”

            F. Clairmont, USA; The making of the crash, THIRD WORLD RESURGENCE, 125-126, 2001, P. 45.

Between 1980 and 1993 the top 500 US corporations shed 4.4 million jobs.  In the same period their sales volume increased 1.4 times, assets increased 2.3 times, and payments to CEOs increased 6.1 tim es.

D. Korten, "The failures cf Bretton  Woods", In J. Mander and E. Goldsmith, Eds., The Case Against The Global Economy,

1997, p. 27.

Transnational corporations only employ 12 million people in the Third World, which is 2% of Third World labour.  And many of these jobs have displaced local jobs  that used to exist in firms bankrupted by the coming of the transnationals. c.xiv.

J. Madeley, Big Business, Poor People, Zed Books, 1999.

Evidence of falling real wages in Australia:

Between 1983-84 and 1995-96 award rates pay increased by 58.6% while prices increased by 76.6% (ABS, 1997, 1993). So there was a fall in real wages during the period while the unemployment rate fluctuated but remained relatively high. Over the same period of time, the profit share of national income (corporate gross operating surplus as a percentage of gross non-farm product at factor cost) increased by nearly 15C/c while the wage share (comprising non-farm wages, salaries and supplements) decreased by 5% (ABS, 1997, 1993.) _ ,

The OECD's own study of unemployment (OECD, 1994) points to the increased wage dispersion that has occurred in English-speaking countries in recent years. In the case of Australia, the real wages of low-paid workers (workers in the tenth percentile of the overall earnings distribution for males) fell over the 12-year period under consideration, 1980 to 1991.

M. Lombard, “Excessive real wages?”, Good Government, Aug., 1994, p. 5.

“…wages have been on a downward trend in many developing countries for more than a decade.  This is certainly the case in Mexico where minimum wages dropped in real terms y more than 80% since 1981….It is also the experience of much of Latin America (with few exceptions).

W. Nadel, “World Investment Report, 1999; Flawed on Many Fronts, Third World Resurgence, 110/111, p. 33.

_______________________________________

EFFECTS ON WELFARE

Changes since the mid-1980s include the following: the universal family  benefit was abolished; eligibility for income or means-tested programs! such as unemployment, sickness and widowhood has been tightened considerably and the level of benefits reduced, resulting in up to 30 per cent reduction in benefits for the unemployed. Universal retirement pensions have become subject to a 25 per cent surcharge for higher income seniors and the age of retirement is to rise from 60 to 65 by 2001.   48.

         R. Mishra, Globalisation and the Welfare State, Elgar, 1999.

Between 1981 and 1992,federal spending for subsidised housing fell by 82%; job training and employment programs were cut by 63%, and the budget for community development and social service block grants was trimmed by 40%.  Between 1972 and 1992, welfare and food-stamp benefits for single mothers declined by an average of 27% nationwide…no state in the early 1990s …provided grants and subsidies equal to 100 percent of the poverty level.”

            G. Winslow, Capital crimes; The political economy of crime in America, Monthly Review, Nov., 2000, p. 45.

______________________________________

EFFECTS ON AUSTRALIA

Given our geography, our population size and the strengths and weaknesses of our people the old economic policy of the 50s and '60s , was roughly right.

It depended on developing a manufacturing industry behind a protective shield of a mixture of tariff quota and currency control.   Different cases were taken on their merits.

The policy was a muddle of anomalies, inconsistencies, the giving in to certain pressure groups -and a lot of discretion in the hands of the Department of Trade and - the Reserve Bank. But it worked. , The free market orthodoxy that ruled from the early '70s to today assumes that any form of protection Is bad Governments have worked to reduce protection and deregulate financial markets.

our overseas debt is a tribute to the fact we cannot earn enough from our exports to pay for the demand for imported goods now that a large proportion of our own manufacturing industry has -been destroyed.

Australia needs to return to the state of 10 years ago when for Instance about half the goods in the local hardware shop were locally made; today it is more like 5 percent or even less.

We have to accept that our manufacturing industry will never be

internatlonally competitlve except tn unusual cases which we should

take as a bonus, not as the staple.

In a world in which our wage rates are 20 times those of some of

our Asian competitors, no degree of politlcal tinkering to reduce real

wage rates, or to remove government charges on business, will balance the equatlon.

         _

Economic rationalists wlll reply that protection introduces inefficiency, facilitates corruption and requires thousands of bureaucrats making sensitive economic decisions for which they are ill-trained. Maybe. We have no choice.

Australia will never export manufactured goods on a significant scale.

Consequently a return to protection has to be seen as building a wail

behind whlch a sound industrial base is restored, one which manufactures predominantly for the home market,

Import substitution is the only practicable policy given the $25 billion figure.  It goes without saying that the export of manufactured goods is to be welcomed, but it is a delusion to think this might happen on a scale to make a worthwhile contribution to the balance of payments equation.

Simple arithmetic tells us that purist dedication to international free trad e and letting every company prove itself in the tough world of open international competition is a luxury which economic reality has closed off.  The real choice is between two types of protection: protection done

badly and protection done reasonably well.

Many economic rationalists still claim, that the policies of the 1980s were right, they were just not given time to work. Wait another five years, or 10, and Treasurer Paul Keatlng s "beautiful trend" upwards will appear, by which is meant a significant number of internationally competitive manufacturers exporting vigorously to the rest of the world. . ,

The arithmetic makes this policy ludicrous for “significant" means in the order of S20 billion in extra exports…

The European Comrnunity is heavily protected in a way that severely punishes Austrtalia and  the obvious has been proved, that our

virtue influences the Europeans not one jot to reduce their own levels of protection. They simplydo not give a damn.

And if free trade is such a virtue why is It that the most successful

contemporary economy, the Japanese, is crlss-crossed with quotas and tarlffs restricting the entry of foreign goods? Why Is It that Japan’s brilliant export Industries grew up under a protective canopy including generous subsidy?

However, Australia has a manufacturing sector of significant size only because it was allowed to grow up behind protective walls.  Without protectlon there would have been no BHP. 

The experience of the 1980s suggests that if Australia reduces tariffs it will end up not with a more efficient manufacturing sector  but with no manufacturing at all.

Notes from three articles in the Australian 6th march, c 1998, by J. Carroll.  

The IMF has urged Australia to push on with more economic reforms, including abolition of all tariff protection of industry, reducing the award system to a simple safety net, slashing the top tax rate and “substantially” increasing work tests on the unemployed.”

It also proposes that “…the government end the indexation of pensions and welfare benefits to average weekly earnings and let pensions fall relative to workers’ incomes….while substantially increasing participation requirements for welfare recipients.”

The mission “…urged that tax cuts focus on reducing the top 47% marginal tax rate, and raising the $60,000 threshold at which it cuts in…”

            IMF Report, The Age, 23rd March, 2001.

.

____________________________________________

ASSISTANCE TO BUSINESS

Government subsidies to Australian business, 1994-5, $12.5 billion.  In addition tax exemptions totalled $7.5 billion.

D. Bryan and M. Refferty, The Global Economy in Australia, Allen and Unwin, 1999.

__________________________________________

DRUG COMPANIES' BEHAVIOUR

.

The large drug companies are fighting to stop the Third World governments from producing very cheap versions of drugs the corporations have patented, and will only sell at high prices, which means that most Third World people .can’t afford them.  As a result millions of people die each year because they can’t get crucial treatment, especially for aids.  Sometimes the cheaper “generic” version of the drug is 1/20 the price charged by the drug companies. 

Note that the lower price is sufficient to cover the cost of production plus a small profit.  The drug corporations refuse to sell at less than the very high prices that maximise their profits, and therefore confine sales to the rich.

Is this justified b y the high costs of developing a new drug?  Firstly the drug companies are among the most profitable corporations in the world; they could easily afford to set much lower prices for poorer customers.  More importantly, in a number of important cases the new drugs were not developed by the drug companies but were developed in government laboratories and given or sold to the drug companies.

It would be difficult to find a more blatant instance of corporate greed having massively catastrophic consequences for millions of people. 

Drug companies spend 15-20% of turnover on marketing, which is more than they spend on the development of new drugs.  146.

“Pharmaceutical TNCs have hindered attempts by developing country governments to provide people with safe, effective, low cost generic drugs.”   153.

In 1982 Bangladesh began a generic drugs program.  The TNCs tried to prevent this.  The program saved $600million and improved quality.  The US supproted the transnational corporations.

In Sri Lanka the US ambassador threatened cessation of food aid if they persisted with the plan to bet Pfizer drug co to use local inputs in production of drugs for sale there.  155.

J. Madeley, Big Business, Poor People, Zed Books, 1999.

“…the drug scene is nothing short of scandalous.”  S. George, quoted, p xiv.

J. Madeley, Big Business, Poor People, Zed Books, 1999.

Impeding AIDS prevention

AIDS is set to kill one in four people in Black Africa, unless anti-AIDS drugs can be made more widely available. However global pharmaceutical corporations charge such exorbitant fees for their products that they are prohibitively expensive in most of Africa. One way round this is for countries such as Brazil India and Argentina to produce the same drugs much more cheaply and export them to poor countries. US, British and Swiss pharmaceutical giants are furious at this, and thanks to the WTO's Trade-Related Intellectual Property Rights Agreement - designed to provide fierce protection for manufacturers' patented products - are in an excellent position to stop it.

In an attempt to reduce its infant mortality rate, Guatemala passed a law and issued regulations in 1983 encouraging new mothers to breast feed their infants and fully understand the health threats to their babies of using infant formula as a substitute for breast milk. To be accessible to illiterate people, Guatemala's regulations also included prohibitions against visual depictions of infants that 'idealise the use of bottle feeding'.

One infant formula producer, Gerber Food, bridled at the Guatemalan law and regulation because its trademark logo includes the picture of a rosy infant, the 'Gerber Baby' which it refused and still refuses to change for the Guatemalan market.

Gerber threatened to bring about WTO action to overturn the law. Bv 1995, Gerber's threats, taken seriously by the Guatemalan government at home and by its Washington embassy, succeeded. The law was changed so that imported baby food products would be exempt from its infant food labelling policy.

China, like Russia, has seen conditions for the majority of its citizens worsen as both countries have opened up to the global market. Should China join the WTO, the situation will worsen both internally and for other developing countries competing for the same export markets. Wages and conditions will remain very low and probably worsen. An estimated 100 million people have already left the land in search of work in towns and cities, thought to be the biggest migration in human history. WTO membership will result in cheap food imports, thus accelerating rural decline and the move to urban centres. In addition it is expected a further 150 million jobs will be lost as 'inefficient' state enterprises are made ready for international competition.  Whatever the actual final numbers, this trend will ensure a permanent cheap labour force whose products will undercut workers in other developing countries as well as in the  North.

         The Ecologist Report, The Ecologist, Sept., 2000, p. 50.

Aids drugs in rich countries cost $15,000=$30,000 pa for one person.  In India they can be supplied via the government’s system for $700.  Half the AIDS drugs were developed in public laboratories.

            ABC Radio, 5th march, 2001.

One-third  of the world's population lack access to essential drugs. In

the most impoverished parts of Africa and of Asia, more than half the population do not have access to essential         'drugs.

Pharmaceutical investments focus R&D on products that may be attractive from a commercial point of view but which add little to therapeutic innovation. In the period 1981-    1998, an assessment of 1,779 new         drugs in France showed that only seven could be considered a real therapeutic       breakthrough. In total, 1,043 were drugs that fell into the category         'nothing new' and were mostly 'me too' products. A 'me-too' product is an imitation - a slightly modified molecule - of a successful product of a competitor brought out to secure a share of a particular segment of the market. It hardly ever provides significant new therapeutic possibilities


E.T. Hoeh, “Globalisation and equitable access to  essential drugs”, Third World Resurgence, 120-121, p. 13. (2000)

  Organisations like Doctors Without Borders believe that efficient procurement of generic drugs could drop the cost of HIV/AIDS medicines an additional 90% from the estimated drug-industry 'discounts'. That would  put the cost of combination HIV/AIDS drug therapies at approximately $200.

R. Weissman, “ Killing Africa with kindness”, Third World Resurgence, 120/121, p. 25.

the World Trade Organisation's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is denying patients in the developing world access to life-saving essential medicines. 

 By virtue of TRIPS  protection, no generic equivalent can come into the market until expiry of the 20 years, denying patients cheaper alternatives.

The Thai government passed a law banning parallel imports in 1992, under the threat from the US to limit textile imports

In Geneva, the developing countries in the Group of 77 proposed a new text, which proposed that essential and life-saving medicines be excluded from patentability in order to advance access to such medicines at affordable prices. This text further recognised that intellectual property rights under the TRIPS Agreement should not take precedence over the human right to health care, and he ethical responsibility to provide life-saving medicines at affordable prices.

Again, the developed countries the US, the EU, Canada, Japan and Australia - objected to this proposal.

'Medicines cannot be treated as mere commodities, access to medicines is a question of life or death,' asserted Ellen 't Hoen. During her presentation, she cited several examples of how patenting of drugs has resulted in consumers having to pay exorbitant prices for branded essential medicines, many times more than the cost of generic alternatives.

'Protecting public health  should have primacy over commercial interests,' she added.

It was clear that the developed country governments did not share the same view.

C. Oh, “TRIPS and pharmaceuticals”, Third World Resurgence, 120/121, p. 10.

___________________________________________

EMPLOYMENT GENERATED BY CORPORATIONS

"Wealth that goes to large companies does not 'trickle down' to the poor via employment opportunities: though the top 100 TNCs control around 14 per cent of all the world's wealth, they employ less than half of one per cent of the world's workforce."  (Christian Aid, 'Fair  Shares? Transnational companies; The WTO and the world's poorest communities.)

         The Ecologist Report, Globalising Poverty, Sept., 2000, p. 5.

The world's 200 largest corporations account for 28% of global activity, while employing less than one quarter of one per cent of the global workforce.

                  S. Turnbull, in ERA Newsletter, Nov-Dec, 2000.

_________________________________________

EVIDENCE ON THE SUCCESS/FAILURE OF NEO-LIBERAL POLICY

The promised land of export-led, private sector growth that would        raise the living standards of the poor often receded further in the future with each new Bank loan: Mexico had been a model pupil through the '80s and early '9Os, and the living standard of more than half the population was lower in 1996 than it had been in 1980.

B. Rich, “Still waiting; Globalising poverty”, The Ecologist Report, Sept., 2000, pp 10, 11, 16.

The Bank's other standard response, apart from the 'fiscal space' rationale, was that its projects promoted growth and created employment - an assertion that could justify almost any project.  But even on these grounds the record is suspect. In 1997 MIGA claimed that the 70 guarantees it approved facilitated some $4.7 billion in foreign direct investment,  creating 4,000 jobs in host countries. This amounts to $1.175 million dollars in investment per job. If the goal is job creation for the poorest of the poor, this is a bankrupt strategy.

B. Rich, “Still waiting; Globalising poverty”, The Ecologist Report, Sept., 2000, pp 10, 11, 16.

45 per cent of World Bank lending goes directly to international

companies through so-called international competitive Bidding, most

of whom are based in G7 countries. The us and Germany each get six

per cent of contracts and the UK three. US Treasury Department

officials even calculate that for every $1 the United States contributes

to international development banks, us exporters win more than $2 in  bank-financed contracts.       

B. Rich, “Still waiting; Globalising poverty”, The Ecologist Report, Sept., 2000, pp 10, 11, 16.

Failing to deliver the results.

The World Bank's raison d'etre, in its own words, is environmentally sustainable poverty alleviation; it is really the only reason why taxpayers in the industrialised world, already faced with a shrinking domestic social safety net, should support such an institution.

Yet, as the Bank works through its sixth decade of trying to promote something called 'development', the poor in most of its     borrowing countries are in worse shape than they were a decade and a half before. According to the United Nations Development Program (UNDP), since 1980, "economic decline or stagnation has affected 100 countries reducing the incomes of 1.6 billion people". For 70 of these countries, average incomes are less in the mid 1990s than in 1980 for 43, less than in 1970. In the early 1990s incomes fell b~20 per cent or more in 21 countries, mainly in the former Soviet Empire. The poorest fifth of the world's population has ~n its share of global income fall from 2.3 per cent to 1.4 percent over the past 30 years.

Even according to the Bank's Operations Evaluation Department's latest Annual Review of Development ,' Effectiveness 1999, "poverty trends have worsened.  The number of poor people living on less than US $1 a day rose from 1,197 million in 1987 to 1,214 million in 1997.  Excluding China, there are 100 million more poor people in developing countries than a decade ago". Furthermore, since 1990 life I expectancy has declined in 33 countries. …the Bank's own internal audits reveal an astonishing 51 per cent failure rate to achieve sustainable results in fiscal years  1998-99, a performance that has not changed appreciably in the last decade. This failure rate is even more acute in the poorest countries and in the developmentally most critical sectors.

B. Rich, “Still waiting; Globalising poverty”, The Ecologist Report, Sept., 2000, pp 10, 11, 16.

___________________________________________

FORCE IS NO LONGER NEEDED TO DOMINATE THE EMPIRE

Not long ago capitalism needed repressive states in the Third World; not now.

"In the new climate, the brutal dictatorships that characterized the free world regimes of the periphery, with their naked repression, mass murders, torture and extortionist attitudes towards business activity within their territories , are no longer required.  They are costly, inefficient from a business point of view, and tend to crystallise mass opposition...Better to have democratic governments, managed by local elites who are committed to transnational capital's globalist vision .   In this way, well-meaning, democratically elected governments enforce IMF austerity, arguing that there is no alternative to market-oriented globalism."  (p. 3.)

            W. Tabb, "Progressive globalism", Monthly Review, 50, 9 , 1999.

“The economically overdeveloped countries… continue to exploit the other countries of the world, but they now do so through transnational corporations and global financial and regulatory institutions.”  21

K. Jones, Beyond Optimism, Jon Carpenter, 1993.

___________________________________________

GATS; GENERAL AGREEMENT ON TRADE IN SERVICES.

Note that the aim of GATS, the transfer of service provision by public institutions to private corporations, has been achieved in the Third World by Structural Adjustment Packages.  These include the demand that public services be privatised.

M. Barlow,  ,A GATS Primer, 20th March, 2001, Era Email Newsletter,

22/3/2001-03-30.

“In secret governments are negotiating the end to all not-for-profit public services.  In less than two years, 130 plus governments expect to quietly sign an agreement called GATS.”

E. Elliott and M. Barlow,  GATS, Privatising all Services!, wwwcommunitycauldron.com

Not so long ago things like health, education and water were regarded as rights, which governments were to extend to all citizens.  Now they have been transformed into commodities private corporations sell to the highest bidder, and if some can’t afford them that’s too bad.

“The philosophy of GATS is the auctioning of vital resources and essential services and transforming them from fundamental rights of citizens to markets for global corporations.”

“The promise is that services would be provided more efficiently and prices of essential services would reduce.  But the experience of water privatisation in Bolivia,  Puerto Rico and Argentina and energy privatisation in California and Maharashtra state in India shows that this is totally false.”

“…water, health and education cannot be guaranteed to all members of society because theyare no longer rights provided through public services, but are commodities to be bought in the market place.”

“The; US and European Union pressure to commercialise essential services through GATS so that their corporations can make money out of the survival needs of the poor is a new wave of the genocide unleashed through  WTO.”

“Trade liberalisation of agriculture is killing thousands of farmers, the TRIPS agreement is denying cures to millions suffering  from Malaria, TB, HIV/AIDS.”

            V. Shiva, “An accord to auction vital resources”, The Hindu, 3 rd April,  2001.

Commerce moving into education:

The Youth News Network provides Canadian schools with television etc equipment…in exchange for the right to broadcast 2.5 minutes of advertisements into all classrooms each day.

“The meaning of education has changed from being a right that is an inherent part of a civilized and democratic society to being a product or service to be purchased by a consumer.”

Why Corporate Globalization Destroys Public Education, J. McMurtry.  Sustainable Economics, 49, March, 2001, p. 48.

One undesirable effect of the increasing commercialisation of education is the reluctance of academics to jeopardise their institution’s capacity to earn money from the corporate world.

The Australia Institute found “…that more than half the academics in a nation-wide poll, believe that growing dependence on private sector money prevents them from criticising the oganisations on which their university depends.

One in three said they could not shard knowledge because of “commercial in confidence” arrangements.

17% said they had not been allowed to publish contentious results.  Academics tend to focus on safe research topics.

Note that academics now have to solicit more of their research funding from business, again meaning they will be reluctant to study or say things that are critical of the corporate world.

Because universities must attract fee paying students they will be increasingly inclined to offer vocational courses.

Problems will only be studied if they promise profitable conclusions.  Problems suffered by poor people will be ignored.

Academia muzzled by commerce, 20 March 2001, ERA EMAIL NETWORK.

McMurtry refers to "...a plan for systematic takeover of public education and higher research, a bigger prize in net monetary value than past colonial occupations.  The ...domestic public sector has replaced the external colony as the target for private capital occupation and growth."

            J. McMurtry, "At the edge of a new dark age", Committee on Monetary         and Economic Reform,, 12, 1, Jan, 2000.

Extracts from

THE LAST FRONTIER:

M. BarlowThe Ecologist, 31, 1, Feb., 2001, pp 38-

A global agreement currently being negotiated will allow corporations to take over the world's public services - whether people want it or not. If implemented, it will spell the end of the public sector. Maude Barlow explains why it must be stopped.

You probably haven't heard of GATS - few people have…  But you should know what it will mean for you.  ..negotiations are still, quietly, going on. Their purpose is, simply, to prise open the whole world's public services   to corporate takeover; to make the very concept of public services not only unlikely, but probably illegal.

GATS is paving the way for the privatisation of public services all across the world.  Nothing will be exempt - education, health care, social  services, postal services, museums and libraries, public transport; all will be opened up to corporate interests. Every and any service currently provided by governments in the name of the public good will be opened up to private corporations, and run for profit. GATS could, quite simply, be globalisation's last frontier: the end of the very concept of  not-for-profit public services.

GATS will come into force in over 130 countries, quietly and with little fuss, in less than two years. If nothing is done.

WHAT IS GATS?

 The General Agreement on Trade in Services is one of more than twenty trade agreements administered and enforced by the World Trade Organisation.  …

The mandate of GATS is the liberalisation of trade in plain English, this means the dismantling of government barriers to the privatisation of public services.  Its aim is to make it impossible for  governments to run public services on a not-for-profit basis, without the participation of private companies. GATS will allow the WTO to restrict government actions relating to public services through a set of legally binding constraints. Any government disobeying the rulings of the WTO will face sanctions.

So what will happen if GATS is implemented? … Between them, the corporations identified the following priority areas for trade liberalisation: health care; hospital care; home care; dental care; child care; elder care; education primary secondary and post-secondary; museums; libraries; law; social assistance; architecture; energy; water services; environmental protection services; real estate; insurance; tourism; postal services; transportation; publishing; broadcasting and many others.

The implications of this are chilling. It means that 137 countries of the WTO are about to agree to open up public services, lock stock and barrel, to free trade laws which have allowed the WTO to strike down health, food safety and environmental laws in dozens of countries. The corporate wolves being allowed into the last remaining fold. And once will be too late to ever get them out.

Unlike any other global institution, the WTO has and the lelgislative and judicial power to challenge the laws, practices and policies of individual countries and strike them down if they are 'trade restrictive'. The WTO contains no minimum standards to protect labour, human rights, social or environmental standards; every single time (but one) that the WTO has been used domestic health, food safety, fair trade or environment the WTO has won. Over the past six years, the operation show that it has become the most powerful, secretive, and ant-democratic body on Earth, rapidly assuming the mantle of government and actively seeking to broaden its powers and reach.

CARVING UP THE SERVICES

Public services are next in line for the WTO's corporate battering ram.  Global corporations have been so successful in persuading governments everywhere that their agendas are the same – that the pursuit of corporate profit and the good of society are one and the same – that their access to many areas of public life has already been improved.  Now they want to go the whole hog.  Services is the fastest-growing sector in international trade, and offer rich pickings for canny corporations. And of all public services, health, education and water are shaping up to be the most potentially lucrative. Global expenditures on water now exceed $1 trillion every year; on education, they exceed $2 trillion, and on health care, they exceed $3.5 trillion.

In many parts of the world, what GATS will accelerate has already begun.

The USA might suggest a model for the dismantling of public services which GATS will unleash all over the world. In America health care has already become a huge business, with giant health-care corporations registered on the New York Stock Exchange.

Many parts of the 'Third World' have been forced to dismantle their public infrastructures in recent decades under Intern Monetary Fund-imposed structural adjustment programs. I to be eligible for debt relief, for example, dozens of 'developing' tries have been forced to abandon public social programs over the last 20 years, allowing foreign corporations to come in and sell health and education ‘products' to 'consumers’ who can afford them and leaving  millions without basic  social services.  Latin American countries are currently experiencing an invasion of US health corporations and Asian countries allow branch plants of foreign university and health care chains. Recently, the World Bank has been  forcing the same countries to privatise their water services openly working with corporate water giants like Vivendi a Lyonnaise des Eaux, to establish their 'rights' to profiteer in the World. 

Now, through the GATS negotiations, these corporations want binding, global and irreversible rules guaranteeing them access to government service contracts everywhere in the world. And they are succeeding. Already, over 40 countries, including all of Europe, have  listed education within the realm of the GATS, opening up their public education sectors to foreign based corporate competition. Almost 100 countries have done the same with health care.

As the new talks progress, it will be very hard for any country to swim against the tide - even if any are brave enough to try.

WHAT’S IN THE GATS?

The existing GATS agreement - which is by no means finalised, and could get even worse - covers all service sectors and most government measures, including laws, practices, regulations and guidelines, written and  unwritten. No government measure that affects trade in services,  whatever its aim, even for environmental or consumer protection,  universal coverage or to enforce labour standards, is beyond the reach of GATS.       Nothing public is safe.

WHAT’S PROPOSED FOR THE GATS?

On top of this, the powerful Western countries will be pr essing for more binding Market Access provisions, pressing 'developing’ countries for guaranteed, irreversible access to their markets, and diminishing democratic government authority.  Secondly, GATS officials are seeking to place severe restraints on domestic regulations, thereby limiting governments' ability to enact environmental, health and other standards that hinder free trade. Article Vl:4 calls for the development of any ‘necessary disciplines’ to  ensure that 'measures relating to qualifications requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade'. Translation: don't let your pesky national standards get in the way of foreign corporate interests.

Together, these proposals will hugely expand the authority of the WTO day-to-day business of governments. They will make the exercise of democratic control over the future of basic public services ! al impossibility.

HOW GATS WILL AFFECT YOU

 Every single aspect of public life will be affected by GATS. Already as  a result of economic globalisation, every country in the world is undergoing a fundamental transformation. Wealth is gushing to the top as a growing economic chasm separates those who are benefiting from the system from an ever-expanding underclass. To ensure what American education writer Jonathan Kozol calls 'survival of the children of the fittest,' a tiered system of education and social security  becoming the norm all over the world as we collectively abandon earlier dream of universal rights. We are creating top schools and health care systems for the elite of the world and a tiered system no system at all for those who don't count.

The GATS serves this corporate, profit-driven vision of society.  It’s  important to understand, in no-nonsense terms, what is at stake.

Under the proposed GATS regime, foreign health and education corporations will have the right to establish themselves in any WTO country. They will have the right to compete for public money with public institutions like hospitals and schools. Standards for health and education professionals will be subject to WTO rules to ensure they are not an 'impediment to trade'.  Degree-granting authority will be given to foreign-based education corporations.  …   countries won’tybe able to stop the trans-border competition of low-cost health and education professionals.

Already, the WTO Services Division has hired a private company called the Global Alliance for Transnational Education to document worldwide policies that 'discriminate against foreign education providers'. The results of this 'study' will be used to pressure those countries that still retain a public education sector to relinquish it to the global market.

Disturbingly, GATS also includes authority over 'environmental services' and natural resource protection. Our parks, wildlife, river systems, and forests could all become contested areas as global transnational 'environmental service' corporations demand the competitive model for their 'management'. Profit-hungry child care chains would invade every country, as would prison chains like Wackenhut its reputation for violence and abuse against both prisoners and staff. Virtually unlimited access to foreign suppliers would have to be given to municipal contracts in construction, sewage, garbage disposal, sanitation, tourism and water services.

Simply put, the 'commons'- or what's left of it - will come under full assault if GATS is enacted. What used to be areas of common heritage, like seeds and genes, air and water, culture and heritage, health care and education, will be slated to be commodified, privatised and sold to the highest bidder on the open market countries like Canada and France, which have (and cherish) national universal health care and education systems will lose them.

Prying open the South’s government business.

The World Trade Organisation will soon set up a new working group to study 'transparency in government procurement practices' and develop elements for 'an appropriate agreement'. Whilst the study and the agreement only cover transparency (and not the practices themselves), the major countries pushing this issue have made clear their ultimate goal: to fully integrate the lucrative multi-billion-dollar government procurement market into the WTO rules and system. This will have serious implications. For, if the North gets its way, governments in developing countries in future will not be allowed to give preference to local companies to supply goods and services or to carry out development projects.

. .

But the prime mover of this initiative, the United States, has made it clear that in its scenario, this is only a first step towards a full-scale opening up of the 'market' for government procurement for foreign companies.

What the major countries especially want to see eradicated in developing countries are the types of government procurement policies and practices that currently favour local enterprises and people—practices that the major industrialised countries had followed not too long ago within their countries and which had benefited some of their giant corporations.

            Corporate takeover of health

"Powerful transnational groupings like the Coalition of Service industries in the US have long protested that the public ownership of health care in many countries has been an impediment to the ambitions of American private sector interests - with the pharmaceutical and insurance industries at the forefront."

The WTO argues that in health systems in which there is a combination of public and private funding, health service provision "...should be wide open to foreign corporations.  In other words, in much of the developing and developed word everything from hospitals and outpatient clinics to home care facilities will be up for grabs.  Income and health inequalities will continue to widen."

            W. Brittenden, New Zealand Doctor, 15th March, 2000.

The corporations are out to control water supply.   "Instead of letting countries treat it as a commonly held resource allocated for the general good, they want it considered as a commodity traded by private investors for profit."  The claim is that "...water, ...is merely one form of goods, subject to the new rules of global trade.  We're talking about ...whole lakes and acquifiers bought and mined, rivers siphoned off, the Great Lakes themselves on the market. ...multinationals are ready to use supertankers, pipelines, canals, river re-routing, and their mammoth schemes to shift the product from the water-rich to those willing to pay top dollar."

"Global Water Corporation...has cut a deal with Sitka, Alaska, to haul 18 billion gallons of water per year from nearby Blue Lake to China."

"The great Recycling and Northern Development Canal involves building a dike across James Bays to capture water from 20 rivers that fed it, converting the bay into a giant reservoir, then building a network of canals, dams, and locks to move the water 400 miles south to Georgian Bay, where it would be "flushed through" the Great Lakes into pipelines that would take it to America's Sun Belt for lawn watering, golf course sprinkling and other essentials."

"The McCurdy Group hopes to 'harvest' some 13 billion gallons of water a year from one of  that province's lakes, pipe it to the coast, pump it into old oil tankers, and ship it to the Middle East for a hefty profit."

The pressure is intense to let the market decide who gets water.

"Sun Belt Water Inc, based in Santa Barbara, California, has filed the first NAFTA water case.  It had an agreement with a British Colombia (Canada) company to ship water in tankers from British Colombia to Southern California.  But such an outcry ensued when the scheme became public the provincial government enacted a moratorium on all water exports.  The corporation sued Canada in 1998...under NAFTA's Chapter11, and claimed that Canada owed it $468 million."

The corporations "...will deliver the water to whoever will pay the most"

            "Blue Gold: The Fight for Canada's Water Has Only Begun", Utne Reader,

            http://www..utne.com/magazine/freeissue.html

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GLOBALISATION AS TAKEOVER

See also GATS; the move underway for takeover of government services.

"Liberalisation, in short, is a mechanism...(whereby)...metropolitan capital gets control over Third World resources and enterprises...at throwaway prices."

P. , "Capitalism in Asia at the end of the millennium", Monthly Review, July-August, 1999, p. 58.

The application of conventional economic policies in Eastern Europe is a deliberate strategy to cause immense destruction and then take over these economies:

There are clear political objectives; to dismantle the production structures of the countries of Eastern Europe and the former USSR in order to reincorporate them into world capitalism as subordinate peripheries…to demoralise working classes, and to reinforce the new comprador bourgeoisie…”  21

S. Amin, Capitalism in the Age of Globalisation, Zed Books, 1997.

The collapse of the USSR has been an enormous boom for capitalism; huge opportunities for takeover and investment.

G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.

GLOBALISATION AS RECOLONISATION; TAKE-OVER BY THE CORPORATIONS OF MUCH MORE OF THE WORLD'S WEALTH; THE TRIUMPH OF THE RICH.

Globalization Is Nothing but a Modern Form of Colonization.

According to Martin Khor of the Third World Network in Malaysia, "What is called globalization today has been called colonization the Third World for the past 500 years, ever since the Indians discovered that Columbus had landed on their shore." What globalization means to the South is that an already bad situation will get worse.

What they want is the right to enter any country they want, establish operations in any country they want, buy whatever they want, repat ate as much profit as they want and demand the "harmonization" environrnental and labour laws to any extent they want. This would strip  governments of their ability to regulate corporations and investment.

S. Hunt, “On the costs of economic globalisation, Schroyer, Ed., Towards a World That Works, 1998, p. 42.

It should come as no surprise why the industrialised countries are piling on the pressure on this issue.  They would like their companies to be able to operate much more freely  in developing countries, and thus are asking that current restrictions and regulations be removed. Gaining access to the resources and markets of the South, and to the right to invest and operate in the developing countries, has  been a major strategic objective of the governments and companies of the North.

M. Ehor, "Globalisation; Implications for development policy”, Third World Resurgence, 74, 1996, p. 26.

World Bank funded projects often "...displace the poor so that the lands and waters on which they depend for their livelihoods can be converted to uses that generate economic returns, meaning converted to use by people who can pay more than those who are displaced."

D. Korten, The truth about global competition”,  Development and Change, March, 1996, pp. 4-6.

The World Bank is perhaps the most important instrument of the developed capitalist countries for prying state control of its Third World member countries out of the hands of nationalists and socialists who would regulate international capital’s inroads, and turning that power to the service of international capital.

J. Devine, “Capitalism is church universal”, Monthly Review, (date not recorded.)

Colonies provided the means by which the European powers could secure access to cheap food, cheap raw materials and cheap labour, plus new markets for manufactured goods and new investment opportunities. It was as simple as that. Where economic penetration could be achieved through trade, was no need to annex countries outright. Where this could not be achieved the West sought to impose its will by gunboat diplomacy, eg the opium forced on China, or through direct political rule, as in India. 1944 saw the Bretton Woods agreement. Its main objective was to reduce the possibility of another 1929 depression. The best means of doing so , it was decided, was to bring the colonies further into the orbit of the Western industrial system so as to provide a continuously expanding market for w manufactures, whilst maintaining the supply of cheap food and raw materials.

Three key institutions were set up to implement the policy: The International Monetary Fund, the World Bank, and in 1948 the General Agreement on tariffs and Trade. Together these agencies formed a single integrated structure, dominated by US interests, and effectively in control of the world’s economy. The original role or the IMF was to make sure that member nations pegged their currencies to the US dollar or to gold, of which the US held 72% of the world supplies. This made it difficult for debtor countries to get out of their financial obligations to the Western Banking System by manipulating their currencies. The World Bank, after the reconstruction of Europe, turned its attention to the Third World, its main aim being to prevent Third World countries from making goods locally which could be bought from western countries.

The IMF complements the work of GATT.   Loans either from the IMF or World Bank have only been provided by governments that have undertaken to observe IMF conditions.  These are

-       Scrap import quotas and reduce import tariffs thereby preventing Third World countries from protecting their fledgeling industries

-       Devalue their currency to make their exports cheaper to the larger nations - and which means that the Third world has to pay more for imports;

-       Cut expenditure on Social Welfare, especially on subsidies to the poor;

-       Undertake to mechanize agriculture, thus providing an important market for Western agricultural machinery and agro chemicals.

 Those nations which have resisted these policies have quickly discovered that the gunboat mentality of the colonial era is far from dead!

But despite all the measures taken over the past forty years to open up markets in the Third World, multinational corporations, despite the fact they already control 80% to 90% of the trade in tea, coffee, cocoa, cotton, forest products, tobacco, jute, copper, iron ore, and bauxite, still insist that they do not have sufficient access to world markets and are seeking further concessions.  In particular, they want to extend GATT so that it encompasses services such as advertising, stockbroking, and banking. They want the few remaining restrictions on investment to be removed so that they have total freedom to invest how they want and where they want.

If the new rules are implemented, it would be "GATT-illegal"

-       To re-regulate the investments and operations of foreign companies if the regulations can be deemed a barrier to trade. Logging companies, toxic waste companies, mining companies, etc would have a free hand to act as they liked within World countries;

-       To restrict in any way, the importation of cheap agricultural produce. This would drastically undermine the livelihoods of local farmers who cannot compete with foreign imports;

-       To take vulnerable eroding land out of use.

-       To take measures to protect scarce resources if such measures are judged to be in restraint of trade;

-       For one country to impose stricter pollution controls than those in force elsewhere, if those controls interfere with trade.

The recently signed Canada - US Free Trade Agreement provides a foretaste of what is in store. The Canadians have been forced to abandon measures to protect threatened Pacific salmon. Canada is prevented from restricting the sale of its water resources to the USA even in times of drought. Canadians have been forced to bring their pesticide regulations into line with the far laxer US standards. Canada's ban on the sale of irradiated food has been judged illegal, as have Canadian proposals to reduce emissions from lead, zinc, and copper smelters.

The Economic Reformer, 729 April, 1990, 3.4.

Operating in conjunction with transnationalist interests in the South, northern capital has skilfully exploited the weak bargaining position of

indebted Southern countries to force through programmes that further open up the South to northern commercial interests.  State enterprises have been privatised; whole sectors of the economy deregulated; tariffs and other trade barriers removed; and controls on the movement of capital “liberalised’”

The Editors, The Ecologist, 26.4.  July/Aug, 1996, p. 123.

North’s intention to open up markets.

The expressed intention of major countries was primarily to open up all

remaining national economic spaces in developing countries by removing  their present legitimate barriers and safeguards that were now in place, so that the big corporations of the North could have greater and greater 'market access' in the South.

…WTO rewards the strong and ruthless  and punishes the weak and poor. In fact it defines the criteria for success  and failure, for survival and collapse. Its paradigm places profits and greed above all else, and its unregulated  operation will continue to downgrade development,         social and environmental concerns at both national and international levels.

It is the antithesis to sustainable development and to global partnership.

M. Khor, “Globalisation is undermining sustainable development”, Third World Resurgence, Jan, 1997, p. 24.

"The goal everywhere is the same; free all resources to serve the needs of corporations, not people or the environment.''

 J. Mander, “Facing the rising tide”, In J. mander and E. Goldsmith, Eds., The Case Against the Global Ecohnomy, 1997.p. 12.

"...almost every politician in the US and Australia must become or  has become, in some degree, an advocate for business. ..."...governments reactively and continually  place business interests before public interests.”

N. Chomsky, Foreword in A. Carey, Taking the Risk Out of  Democracy, UNSW Press, 1995, p. 3.

"Globalization is not about trade. It is about power and control. It is the reshaping of the by world into one without borders ruled a       

dictatorship of the world's most powerful central banks, commercial banks and multinational companies.

Editorial, Monetary Reform Magazine, Winter, 1997-8, p. 4.

''...globalisation is increasing income inequality all around the world."

M. Tanzer, 'Globalising the economy’, Monthly Review, Sept., 1995, p. 12.

with capital mobile and labour relatively immobile, all of the advantages labour has gained in the last two hundred years of organizing, including wages above subsistence, social security, unemployment insurance, child labour laws, health insurance, paid vacations, the right to organize and strike - will disappear. All of these advantages enjoyed due to hard bargaining by American Labor, will be wiped out if we have to compete with Mexican labour in the maquiladores, with free trade zones in the rest of the Third World, with the limitless labour supplies of China and India, all at the subsistence level. Capital has learned to move in the last few decades, and the results are already seen in a 10% lower standard of living in the USA. This is only the beginning of the "advantages" of free trade, which will indeed convert us into a "global village". And who are the winners in our drive to free trade? The owners of capital.

Robert Schutz. 7899 St Helena Road, Santa Rosa, U.S.A.. CA 95404.

"Humanity is undergoing in the post-cold War era an  economic crisis of unprecedented scale leading to the rapid impoverishment of large sectors of the world population...This is by far the most serious economic crisis in modern history."

"...some 500 billion dollars worth of  Russian assets...have been confiscated through the privatisation programs and forced bankruptcies and transferred into the hands of Western capitalists...an entire economic and social system is being dismantled."

"The worldwide scramble to appropriate wealth through 'financial manipulation' is the driving force behind this crisis."  This is"...a form of financial and economic warfare.  No need to recolonise lost territory or send in invading armies.  In the late twentieth century the outright 'conquest of nations"  meaning the control over productive assets, labour, natural resources and institutions can be carried out in an impersonal fashion from the corporate boardroom."

"The appropriation of global wealth through this manipulation  of market forces is routinely supported by the IMF's lethal macro-economic interventions which act almost concurrently in ruthlessly disrupting national economies all over the world."

"In 1997 more than 100 billion dollars of Asia's hard currency reserves had been confiscated and transferred into private financial hands...real earnings and employment plummeted virtually overnight leading to mass poverty."

            M. Chossudovsky, "Financial warfare", http://ww.corpwatch.org/trac/globalization/financial/warfare/html

“The so-called “free trade” treaties are not about trade, but about opening up the world’s economies, resources, and labour pools to unregulated exploitation  by the multinationals.”

R. Moore, “Human rights and the new world order”, New Dawn, Jan-Feb 1996, p. 13-14.

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HOW DO THEY GET THE NEW RULES ESTABLISHED.

“In secret governments are negotiating the end to all not-for-profit public services.  In less than two years, 130 plus governments expect to quietly sign an agreement called GATS.”

E. Elliott and M. Barlow,  GATS, Privatising all Services!, wwwcommunitycauldron.com

Access to those sessions, known as 'green rooms', was limited to members invited or endorsed by Barshefsky and Moore. The meetings were held at undisclosed locations and delegates     from poor countries complained that it remained unclear which members had been consulted on what.    

A. Aslam, “Developing countries assail WTO “dictatorship”, Third World Resurgence, 112/113, 2000, p. 23.

US bullying tactics at Seattle, which helped to lead to breakdown of the trade talks.

US trade Representative Charlene Barshefsky presided over a totally undemocratic process. She announced on the second day her 'right' as chairman of the conference to use procedures of her own choosing to get a Declaration out of the meeting, a statement that infuriated the developing country delegations.      

Barshefsky and the WTO Director-General Mike Moore set up several 'green room' meetings, some running simultaneously, on key issues of disagreement. Only 10 or 20 countries (the major powers plus a few selected developing countries) were invited to a typical such meeting.

The plan of the organisers was to get the major powers (mainly the US

and the EU) to agree among themselves, then apply pressure in the green      _

rooms on a few influential developing countries to go along, and then pull together a Declaration to launch a new round which all members would be coerced to accept in a special meeting on the last day.

The vast majority of developing countries were shut out of the whole

green-room process. They were not even informed which meetings were going on or what was being discussed.

Ministers and senior officials of most developing countries were left hanging around in the corridors or the canteen, trying to catch snippets of news or negotiating texts.

Their anger at the insult of being at the receiving end of such shabby

treatment boiled over on the third day of the conference. The African Ministers issued a strong statement that there was 'no transparency' in the meeting, that African countries were generally excluded on issues vital to their future.

What has been going on in Seattle is a scandal.  Developing countries that form more than two thirds of the members of the WTO  are being coerced and stampeded by the major powers, especially by the host country the US, to agree to a Declaration which they were given very little opportunity to draft or to consider.

Most of the important negotiations have taken place in “green room” meetings where only a few countries are invited.  Most of he developing-country members of the WTO have not been able to participate. Even if a country is invited to meeting on a particular issue, it may not be a participant in other issues. Many developing countries were not invited to any meeting on any issue at all.

As a result most Ministers have been insulted by their not being able to take part in decisions that seriously affect their countries and people. Worse, they have had little chance to even know what is being discussed, by whom or where.

THIRD WORLD RESURGENCE NO 112/~113, 2000.,  12.

The basic procedure for establishing the new rules is that the rich countries work out between themselves what suits them, then invite the Third World nations to join in.  Poor countries can’t trade freely with rich countries if they don’t.

J. Madeley, Big Business, Poor People, Zed Books, 1999.

Eventually, Guyana was invited ' to a Green Room meeting, but 'it turned out to be a joke,' said Rohee. ( 'After we made our voice heard, I received an invitation to a Green Room meeting on agriculture. To my

amusement, when I turned up at the         meeting, the chairman of the meeting, presented this 'non-paper' to us. We were informed no changes could be made.  I created a stink. I asked what is the status of this document, and why are we called here. When I was told    we were only invited here to be informed, I felt it wasn't a serious meeting at all. It was only a joke.  The chairman and a senior WTO  Secretariat official were trying to bamboozle us to accept their draft on agriculture. I told the official, you are from the Secretariat, you should shut up, I am a Minister, it is for me to discuss this issue. All the Ministers in the room packed up our files and    walked out.

'We found out that this so-called Green Room meeting, which was held

on the second floor, was only a diversion. Since we had asked to take part

in a Green Room meeting, they gave one to us.

They were only paying lip service to transparency and inclusiveness. The reality was opposite. If there had been a draft Declaration placed be

fore us (on the last day) there would have been a total revolt. The African, Caribbean and Latin American countries had issued statements protesting the process.

In reality, however, in the past  five years the WTO has contributed to

the concentration of wealth in the hands of the rich few; increasing poverty for the majority of the world's  population and unsustainable patterns of production and consumption.

“NGOs voice their views at Seattle,” Third World Resurgence, 11.2.2001, p. 35.

Barlow says of the current GATS meetings, “…our governments are meeting behind closed doors once again to carve up our rights for the benefit of their corporate friends.”

M. Barlow,  ,A GATS Primer, 20th March, 2001, Era Email Newsletter, 22/3/2001-03-30

Prime minister Howard sent 8 representatives to oversee Australia’s interests at the Seattle WTO talks;  all were from corporations.

Social Alternatives

The officials of many developing countries were not really aware of what they had signed in the many complicated Uruguay Round agreements. .

M. Khor, The new frontier”, . Third World Resurgence, 2000, p. c 45.

"Agreements are supposedly reached by consensus but in reality the United States, Canada, Europe and Japan reach agreements which are then presented to smaller and developing countries."

Delegations are not representative.  "The Australian Seattle delegation included eight business representatives and no other community organisations."

"WTO complaint processes, conducted behind closed doors, have consistently defined environmental regulation and food labelling regulation as barriers to trade."

In the last year the Australian government moved to change the law protecting the Australian salmon industry from imported salmon (which might contain diseases), without any attempt to resist.

P. Ranald, "What's wrong with the WTO and Australia's policy towards      it?"  Aidwatch, 20, Aug., 2000.

"In the United States the original idea of NAFTA was to ram it through in secret...The NAFTA agreement was signed in August of 1992 right in the middle of the presidential campaign.  All eyes were focused on the election.  It was barely even reported."

"There is a US law which says the labour movement has to be consulted on trade agreements.  This was ignored; they were not even told about the agreement until a month after it was signed, then were given one day to submit their response!

            N. Chomsky, "Whose world order?" Sustainable Economics, 8, 3, M ay        2000. p.  56.

In the United States public opinion polls showed the general public against NAFTA even after incessant propaganda, but the mass media supported and it was passed.

In country after country social democratic parties have accepted neo-liberalism, despite the contrary preferences of great majorities of their voting constituencies.

E. S Herman, "The Threat of Globalisation", Economic Reform Australia      Newsletter, 2nd Dec., 1999. p. 3, 5.

"The WTO was put in place following the signing of a 'technical agreement'  negotiated behind closed doors by bureaucrats.  Even the heads of country level delegations to Marrakesh in 1994 were not informed regarding the statutes of the World Trade Organisation which were drafted in separate closed sessions by technocrats."

"...the process of actual creation of the WTO...is blatantly illegal'...a 'totalitarian' intergovernmental body has been casually installed in Geneva, empowered under international law with the mandate to 'police' country level economic and social policies, derogating the soverign rights of national governments."

"...the articles of the WTO are not only in contradiction with pre-existing national and international laws, they are also at variance with The Universal Declaration of Human Rights."

            M. Chossudowsky, “Seattle and Beyond; Disarming the New World Order."          Economic Reform Australia Newsletter, 25th Nov., 1999.

 “The public hasn’t the foggiest idea what’s going on.  In fact, they can’t know.  One reason is that NAFTA is a secret.  It’s an executive agreement which is not publicly available.”

            N. Chomsky, Keeping the Rabble in Line, 1994, p. 45-46.

_________________________________________

INCENTIVES FROM THE STATE TO GET CORPORATIONS TO INVEST.

US government subsidies to business, $75 billion in cash subsidies, plus $60 billion in tax breaks.  Hawken estimates that corporations get more subsidies from the government than they pay in tax.

Estes (Tyranny of the Bottom Line) estimates that corporations cost the economy $2,400 billion p.a., due to things like unsafe vehicles.

            D. Korten, The Post-Corporate World, Kumarian, 1999. 47.

In the 1950s corporations paid 39% of US tax, and individuals paid 61% of US federal tax.  In the year 1990-5 corporations paid 19% and individuals paid 81%.

The corporate share of local taxes fell from 45% in 1957 to 16% in 1987.

            D. Korten, The Post-Corporate World, Kumarian, 1999,  p. 47.

Examples of Corporate Deals in NSW:

. $15.5 million in payroll tax concessions etc. To induce Optus to make NSW its centre of operations.

• $5.5 million in subsidies to American Express to set up headquarters in Sydney.

• $5.2 million to Motorola to set up a wireless communication centre in NSW.

. $48 million to pay television operator Australis Media, to set up its production centre in Sydney.

• $0.5 million to Cathay Pacific to set up a data processing centre at Baulkham Hills.

S. Turnbull, “”The system does not need labouR” ERA Email Network, 2, 15, Nov-Dec, 2000. (and Sydney Morning Herald, 7. 12.1999.

In 1977, for example, the state of Ohio in the US 'induced Honda to build

its auto plant there by promising $22 million in subsidies and tax breaks: by1986 it took a $100 m. package from Kentucky for Toyota to create about the same number of jobs there' (Reich, 1992, p. 296). When in 1985 Mitsubishi announced that it would begin assembling automobiles in America, four  states competed for the plant. The 'winner' was Illinois, with a ten-year package of $276 m. in incentives and direct aid costing about $25 000 a year for each new job to be created.  45.

         R. Mishra, Globalisation and the Welfare State, Elgar, 1999.

_________________________________________

MERGERS AND ACQUISITIONS TAKING PLACE AT AN ACCELERATING RATE.

Corporate mergers and acquisitions grew at a rate of almost 50 percent per year in every year but one between 1992 and 1998. Globally, more than two trillion dollars worth of mergers were announced in the first three quarters of 1999.15 the greatest merger wave in capitalist history

Increasingly we are faced with a world economy governed by financial speculation and the attempt to create global monopoly (or oligopoly) power…

J. Bellamy Foster, Monopoly Capital and the Turn of the MillenniumMonthly Review, April, 2000, pp. 10-12.

two-thirds to three-quarters of all the money labelled "Foreign Direct  Investment" is not devoted to new, job-creating investment but to Mergers and Acquisitions which almost invariably result in job losses.

S. George, A short History of Neo-liberalism, ERA Email Netowork, 17.7.1999.

“Over 80% of this foreign investment is takeover of domestic firms.”  60.

J.McMurtry, The Cancer Stage of Capitalism,  London, Pluto, 1999.

80% of foreign investment is to buy existing Australian owned business. . . The level of foreign ownership has doubled in the last decade to 21% of gross domestic product, and the money leaving Australia for foreign owners also doubled, reaching $12 billion.

Frank Walker, The Sun-Herald [17.9.00]

Mergers and Acquisitions at Record Levels, especially in Australia.  In the first half of this year global mergers and acquisitions showed a 54% rise in activity, reaching $44 billion. Five of the top six global deals were in telecommunications and technology, but nearly 30% of local deals were in financial services. Australia continues to have one of the highest levels of cross border M & A activity in the world, half of it involving foreign bidders.

Anthony Hughes, Sydney Morning Herald, 19.7.00]

The number of mergers has increased at 50% p.a. in the 1990s!

            D. Korten, The Post-Corporate World, Kumarian, 1999. P. 42.

 Corporate mergers and acquisitions grew at a rate of almost 50 percent per year in every year but one between 1992 and 1998. Globally, more than two trillion dollars worth of mergers were announced in the first three quarters of 1999.15 the greatest merger wave in capitalist history

Increasingly we are faced with a world economy governed by financial speculation and the attempt to create global monopoly (or oligopoly) power…

J. Bellamy Foster, Monopoly Capital and the Turn of the MillenniumMonthly Review, April, 2000, pp. 10-12.

 

80% of all foreign investment goes into mergers and acquisitions.  14.

            C. Hines, Localisation; A Global Manifesto, London, Earthscan, 2000.

__________________________________________

PRIVATISATION.

The campaign in the US to privatise the pension scheme.  The Social Security fund constitutes a huge sum of money now under the control of the government that the business world is itching to get its hands on  “The prospect of 140 million new investment accounts, from which financial interests can extract fees and commissions, is a potential gravy train that capital simply can’t resist.”   “The Bush campaign received its largest contributions from the investment (securities) industry, which has made privatization of Social Security its primary political goal.”

The editors, “Social security, the stock market and the elections”, Monthly Review,  52, 5, Oct. 2000,  p. 9.

The privatisation of health services clearly raises costs and reduces the number covered.    The US spends 11% of DGDP on health, but the UK with a more public system spends 6%, and the effects are not better in the US.    92.

            P. Self, Rolling Back the Market, New York, St. Martins, 2000.

In 1996 alone privatisations to the value of $100 billion took place.  187  “In a number of countries increased malnutrition and other diseases have appeared in the wake of privatisation.”  19.

J. Madeley, Big Business, Poor People, Zed Books, 1999.

The privatization of municipal water services has a terrible

record that is well documented. Customer rates are doubled or

tripled; corporate profits rise as much as 700 per cent;     y~} <. ,6

corruption and bribery are rampant; water quality standards

drop, sometimes dramatically; overuse is promoted to make

money; customers who can't pay are cut off.  In France, both water giants Vivendi and Suez-Lyonnaise  des Eaux have been repeatedly cited for corruption. When water was privatized in Great Britain, water meters were installed in homes and company employees shut off service to

many thousands of customers who could not pay their full

water bills. When privatization hits the Third World, those

who can't pay will die. The Bolivia story has a happy ending (for now). By the hundreds of thousands, Bolivians marched to Cochabamba in a

showdown with the government. On April 10, they won. The

Bolivian government kicked Bechtel out of the country and

revoked its water-privatization legislation. Oscar Olivera, the

humble Bolivian shoe maker who led the fight, brought his

message to a Washington rally during the recent IMF/World

Bank meetings. He said if water is privatized and commodified for profit, it will never reach the people who need it but serve only to make a handful of water corporations very rich.  There is no way to overstate the crisis of fresh water facing the world today. No piecemeal solution will prevent the collapse of whole societies and ecosystems. A radical

rethinking of our values, priorities and political systems is

urgent and still possible. Water belongs to the Earth and all

species; no one must be allowed to expropriate it for profit.

         …from M. Barlow.

“…the state…once defended social values against adverse market impacts, but is now generally supportive of global capitalism and is left with much of the blame for its ill effects.”  Xi

            P. Self, Rolling Back the Market, New York, St. Martins, 2000.

___________________________________________________________________

RURAL DECLINE

In 1960 there were 3000,000 farms in Australia.  In  2001 there are only 100,000.  They employ 30% fewer workers.

E. Fayner, Globalisation and the Australian economy”, ERA Newsletter, 12, 17, March-April, 2001, p. 4.

_________________________________________

SOCIAL DAMAGE CAUSED.

            See also the section "Nature and effects of globalisation".

“…  in Britain it was recently revealed that many hospitals have reduced the age limit for treatment of several diseases to 65! (p. 456).

T. Fotopoulos, “Welfare state or economic democracy”, Democracy and Nature, 5. 3. 1999, 433-468.

“Since multinationals pay little tax, these services are becoming increasingly hard for governments to provide.”

E. Elliott and M. Barlow,  GATS, Privatising all Services!, wwwcommunitycauldron.com

Between 1981 and 1992,federal spending for subsidised housing fell by 82%; job training and employment programs were cut by 63%, and the budget for community development and social service block grants was trimmed by 40%.  Between 1972 and 1992, welfare and food-stamp benefits for single mothers declined by an average of 27% nationwide…no state in the early 1990s …provided grants and subsidiesequal to 100 percent of the poverty level.”

            G. Winslow, Capital crimes; The political economy of crime in America, Monthly Review, Nov., 2000, p. 45.

To sum up: the 'Fordist' labour market typical of the post-WW2 welfare

state is giving way to a more 'flexible' and fragmented labour market where   average wages, benefits and job security are lower than was typical of the Fordist era. Much of our evidence has been drawn from the US but similar trends can be seen at least in most of the English-speaking countries. If the evidence from the US is an indicator of the logic of globalization at work, it is clear that employers can no longer be relied upon to provide workers with good wages and benefits such as health insurance and pensions. Increasingly workers and their families are being left to fend for themselves, which they are less able to do in a situation of job insecurity and declining wages.  28

         R. Mishra, Globalisation and the Welfare State, Elgar, 1999.

___________________________________________

STATE SPENDING BEING CUT.

___________________________“…  in Britain it was recently revealed that many hospitals have reduced the age limit for treatment of several diseases to 65! (p. 456).

T. Fotopoulos, “Welfare state or economic democracy”, Democracy and Nature, 5. 3. 1999, 433-468.

“Since multinationals pay little tax, these services are becoming increasingly hard for governments to provide.”

E. Elliott and M. Barlow,  GATS, Privatising all Services!, wwwcommunitycauldron.com

Between 1981 and 1992,federal spending for subsidised housing fell by 82%; job training and employment programs were cut by 63%, and the budget for community development and social service block grants was trimmed by 40%.  Between 1972 and 1992, welfare and food-stamp benefits for single mothers declined by an average of 27% nationwide…no state in the early 1990s …provided grants and subsidiesequal to 100 percent of the poverty level.”

            G. Winslow, Capital crimes; The political economy of crime in America, Monthly Review, Nov., 2000, p. 45.

To sum up: the 'Fordist' labour market typical of the post-WW2 welfare

state is giving way to a more 'flexible' and fragmented labour market where   average wages, benefits and job security are lower than was typical of the Fordist era. Much of our evidence has been drawn from the US but similar trends can be seen at least in most of the English-speaking countries. If the evidence from the US is an indicator of the logic of globalization at work, it is clear that employers can no longer be relied upon to provide workers with good wages and benefits such as health insurance and pensions. Increasingly workers and their families are being left to fend for themselves, which they are less able to do in a situation of job insecurity and declining wages.  28

         R. Mishra, Globalisation and the Welfare State, Elgar, 1999.

________________________________________

TAKEOVER OF YOUR NATIONAL RESOURCES.

Note how GATS (above) involves the right of foreign corporations to take control of water and electricity supply; this is another area in which globalisation will lead to national resources moving out of national control.

“We're in a huge battle over water that we've got to begin to pay attention to. Maude Barlow out of Canada has a wonderful report ... called "Blue Gold'' about Canadian water. We've got a huge water shortage developing around the world. You think, well, 70 percent of the globe is covered with water; well, yes, but only one half of 1 percent of that is fresh water and drinkable water. And 20 percent of that is in Canada, so corporations have very strong designs on Canadian water, and I'm not talking about Perrier. I'm not talking about bottling the water.

I'm talking about massive wholesale moving of that water out of Canada to the highest bidders around the world, which is mostly going to go to the agribusiness corporations, suburban developments and the golf courses.”

(Source not recorded.)

North American Free Trade Agreement (NAFTA) and institutions such as the World Trade Organization (WTO). .. agreements effectively give transnational corporations the unprecedented right to the water of signatory countries.

Already, corporations have started to sue governments in order to gain access to domestic water sources. For example, Sun Belt, a California company, is suing the government of Canada under NAFTA because British Columbia (B.C.) banned water exports several years ago. The company claims that B.C.'s law violates several NAFTA-based investor rights and therefore is claiming $220 million in compensation for lost profits.

With the protection of these international trade agreements, companies are setting their sights on the mass transport of bulk water by diversion and by super-tanker.

The International Forum on Globalization (IFG) has issued a 46 page report, June 1999, titled:  Blue Gold: The Global Water Crisis and the Commodification of the World's Water SupplyAuthor: Maude Barlow

How globalisation enables resources to be taken

the world is running out of fresh water sources at an alarming rate and that conflict over what remains will be inevitable.

To respond to the crisis,-the World Bank has recently adopted a policy of

water privatization and full-cost water pricing. This policy is causing

great distress in many Third World countries, which fear that their

citizens will not be able to afford for-profit water. Ironically, this

policy has also created the first of the "water wars" Mr. Serageldin

predicted, the bloody civil unrest that plagued Bolivia in recent weeks.

Two years ago, the World Bank (whose official attends Bolivian government cabinet meetings as a full participant) refused to guarantee a $25-million (U.S.) loan to refinance water services in Cochabamba, Bolivia's third-largest city, unless the government sold the public water system to the private sector and passed the costs on to consumers. Only one bid was considered, and the utility was turned over to a subsidiary of a conglomerate led by Bechtel, the giant engineering company implicated in the infamous Three Gorges Dam in China, which has caused the forced

relocation of 1.3 million people.

In January, 1999, before the company had even hung up its shingle, it

announced the doubling of water prices. For most Bolivians, this meant

that water would now cost more than food; for those on minimum wage or unemployed, water bills suddenly accounted for close to half their monthly budgets. To add insult, the World Bank granted absolute monopolies to private water concessionaires, announced its support for full-cost water pricing, pegged the cost of water to the American dollar and declared that none of its loan could be used to subsidize the poor for water services.  All water, even from community wells, required permits to access, and peasants and small farmers even had to buy permits to gather rainwater on their property.

M. Barlow, “The World Bank must realise water is a basic human right”, 9th  May, 2000, ERA Email Network, 13.5.2000.

The "discipline imposed under SAPs "… has just one true mandate: to

engineer a neoliberal world order so that first world countries can seize

third world resources.

            Extracts from “The World Bank's practices allow the rich to steal from the poor”. G. Monbiot, The Guardian, Thurs, April 13, 2000.

“The more global the economy the easier is their  (corporations and  banks) access to whatever of the world’s wealth remains.”  82

            D. Korten, The Post-Corporate World, Kumarian, 1999.

The goal is to run down public institutions so they can be taken by corporations:

McMurtry refers to a strategy “…to defund all social sectors across the world which provide non-profit, life serving goods so that they can be commodified by for profit service corporations.”  This is an “…unseen program of corporate privatisation of the civil commons…”

J. McMurtry, “Understanding the agenda of tax cuts”,  8, July, 2000, p. 80.

“…liberalising their economies…means making them more open to corporations.”  Xi.

J. Madeley, Big Business, Poor People, Zed Books, 1999.

Former U.S. Trade Representative Mickey Kantor later explained that

"the troubles of the tiger economies offered a golden opportunity for

the West to reassert its commercial interests. When countries seek help from the IMF, Europe and America should use the IMF as a battering ram to gain advantage."

         M. Weisbrot, :”Hoodwinked”, ERA Email Network, 19.3.20.

According to M. Kantor, former US trade official, "The IMF is being  used as a battering ram to open up the doors of the Asian economies so that our companies can have market access." M .Khor, "The Asian tiger economic meltdown", Monetary Reform,     Fall/Winter, 1998-1999, p. 27.

McMurtry refers to "...a plan for systematic takeover of public education and higher research, a bigger prize in net monetary value than past colonial occupations.  The ...domestic public sector has replaced the external colony as the target for private capital occupation and growth."

            J. McMurtry, "At the edge of a new dark age", Committee on Monetary        and Economic Reform,, 12, 1, Jan, 2000.

_____________________________________________________

TAX; CORPORATIONS PAY LITTLE TAX.

Corporations tend to pay little tax.  Half the transnational corporations in Australia pay none at all!  They will invest where they are not asked to pay much tax.  Governments therefore compete against each other to attract corporations, by reducing their tax obligations.  This is the reason why governments are dramatically cutting spending, selling public assets, shifting the tax burden to ordinary people (e.g. via  “introduction of GST)and impoverishing welfare, health etc services –because globalisation is reducing their capacity to raise tax income.

A major mechanism is transfer pricing. The corporations are able to put artificial prices on items imported to their branches in Australia that are so high that their costs seem to be as high as their earnings, meaning that they seem to make no profit in Australia and therefore do not have a taxable income. Their profits are made to appear in the countries they operate in where the tax rates are lowest.

Globalisation is about increasing the freedom corporations have to do things like this.

“…according to the magazine ‘News Weekly’, 13th JUNE, 1998, 60% of the transnationals operating in Australia pay no taxes to the country and the remaining 40% pay very little.

E. Fayner, Globalisation and the Australian economy”, ERA Newsletter, 12, 17, March-April, 2001, p. 4.

55.4% of the  multinational corporations operating in Australia paid no tax in 1995-6.

This is an increase from 53.3% the year before.

Transfer pricing  by transnational corporations cost Australia hundreds of millions of dollars every year in lost taxation.

15% of corporations said they had no documentation to show that their transfer pricing was acceptable, i.e., not a taxation avoidance device.  420  of the firms surveyed did not reply to the question on how they justified their transfer pricing arrangements. 

            See Australian Financial Review, Friday 3rd April, 1998.

Saul points out that " the key effect of globalisation has been to shift the tax burden from large corporations onto the middle class. When the income tax rates … can go no higher, this shift is continued through taxes on goods and services". And, you might add, if this is not popular, the government can cut back on health, education and welfare, the very areas where disinterest reigns. And why does globalisation have this effect? Because " Our governments can no longer decide tax levels on resident corporations. They are set arbitrarily by an abstract replacement for government called the global economy. The effective tax rate on large corporations throughout the West is now 13%. I repeat 13%. Raise that rate and they'll leave town".

         J. R. Saul, Unconscious Civilisation, 1997.

“Take General Motors Corp., the largest corporation in the US as measured in revenue.  It reported $4.61 billion in world-wide

income in its 1998 annual report. “Your company is in better finanaal state than it has been in many years,' Chaiman John F. Smith Jr. assured shareholders in June. But for 1998, the auto maker owed the IRS just $36 milllon—0.8% of its global pre-tax incorne. ..

Globalisation has been a major factor in making this possible. And its possibilities for enabling  corporations to outmaneuver national tax authorities has been a principal motivation behind the globalisation campaign. "It creates vast opportunities to shift profits to lower-tax countries, while moving their tax-deductions to the US.

         Hotson on Hixon, Sustainable Economics, 7.6, Nov., 1999, p., 125.

Over 300 corporations that made over half a million dollars in profit, paid little or no corporate income tax…

         Monetary Reform, 10, 2000, p. 53.  ( Re Canada.)

In the 1950s corporations paid 39% of US tax, and individuals paid 61% of US federal tax.  In the year 1990-5 corporations paid 19% and individuals paid 81%.

The corporate share of local taxes fell from 45% in 1957 to 16% in 1987.

            D. Korten, The Post-Corporate World, Kumarian, 1999,  p. 47.

26% of corporate assets are in tax haven countries.

Only 4% of German tax revenue is raised from corporations.

J. Braithwaite, Centre for .Tax System Integrity, ANU, speaking on ABC BACKGROUND BRIEFING, 27TH MARCH, 2001.

In all countries the tax system is being restructured.  Taxes on individuals are increasing.  Taxes are becoming more regressive.  There is more use of indirect tax, levies, and of lotteries and gambling as sources of state revenue income.

Note that when capital was nationally based it had an interest in paying tax, i.e., to enable development of the nation’s infrastructures.  But now that capital is international the incentive does not exist.

“Everywhere the result has been the restructuring of tax regimes in which the working class bears the larger and rising share of tax with capital responsible for a smaller and declining share.  The accompanying trend, the growing regressiveness of taxation on wages and salaries, is forcing a greater tax burden on middle and lower incomes and producing a decreasing burden on upper incomes.…the subordinate classes will increasingly be the source of revenue for maintaining the state…”  95

G. Teeple, Globalisation and the Decline of Social Reform, Humanities, 1995.

“Their enormous size, economic power, and increased mobility have allowed companies to reduce taxation by playing nations off against each other.  Everywhere the result has been the restructuring of tax regimes in which the working class bears the larger and rising share of tax with capital responsible for a smaller and declining share.   95

“…maintenance of the public sector is being disproportionately financed as a tax burden by the working classes  rather than..the corporate sector or the rich.”

G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.

55.4% of the  multinational corporations operating in Australia paid no tax in 1995-6.

This is an increase from 53.3% the year before.

Transfer pricing  by transnational corporations cost Australia hundreds of millions of dollars every year in lost taxation.

15% of corporations said they had no documentation to show that their transfer pricing was acceptable, i.e., not a taxation avoidance device.  420  of the firms surveyed did not reply to the question on how they justified their transfer pricing arrangements. 

            See Australian Financial Review, Friday 3rd April, 1998.

“The process of globalisation under capitalism is generating enormous misery, deprivation and violence.”

R. Burbach, “For a Zapatista Style Postmodernist Perspective”, Monthly Review, March, 1996, p. 36.

The 1980s marked the end of the effort to reform capitalism, to make it more just.  2

In the late 1970s there “…was a decline of social rdforfm everywhere in the industrialised nations.”  71

Chile was the first market society; i.e., not just an economy but a whole society operating on market principles.

“The idea that politics determines national policies has gradually dissipated, and in its place has come the open assertion that economics is the deciding factor in more and more aspects of society.”  3.

Teeple concludes that Export Processing Zones have not earned much, do not employ many workers, yield little or no technology transfer, and cost the host state a lot (e.g., to provide infrastructure.)

G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.

The world average effective tax rate for corporations is 13%

J. R. Saul, Unconscious Civilization, 1997

A US HOUSE OF REPRESENTATIVES COMMITTEE OF INVESTIGATION FOUND THAT 36 CORPORATIONS WITH SALES TOTALLING $329 BILLION IN A DECADE, PAID ONLY $5 BILLION IN TAX.

            M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

Study Finds Resurgence in Corporate Tax Avoidance Date: Wed, 1 Nov 2000

<http://www.ctj.org/itep/corpOOpr.htm> Thursday, October 19, 2000

ITEP's new report examines the U.S. profits and federal income taxes of 250 of the nation's largest and most profitable corporations over the 1996-98 period. Although big corporations ostensibly are supposed to pay 35 percent

-of their profits in taxes, the 250 companies in ITEP's survey paid only 20.1  percent in 1998. That was down from 22.9 percent in 1996, and far below the   26.5 percent that a similar group of large companies paid back in 1988, soon after passage of the loophole-closing 1986 Tax Reform Act.

Forty-one companies actually paid less than zero in federal income taxes inat least one year from 1996 to 1998. In those tax-free years, the 41

companies reported a total of $25.8 billion in pre-tax U.S. profits. But

rather than paying $9 billion in federal income taxes at the 35 percent

rate, these companies enjoyed so many excess tax breaks that they received $3.2 billion in rebate checks from the U.S. Treasury. Just one company, Texaco, reported $3.4 billion in U.S. profits and $304 million in tax rebates over the three years.

In 1998, twenty-four corporations got tax rebates. These 24

companies--almost one out of ten of the companies in the study—reported U.S. profits before taxes in 1998 of $12.0 billion, yet received tax rebates totalling $1.3 billion. The list of big-name companies getting tax rebates in1998 included, among others, Texaco, Chevron, CSX, Pepsico, Pfizer, J.P.

Morgan, Goodyear, Enron, General Motors, Phillips Petroleum and Northrop

Grumman.

A hundred and thirty-three of the 250 companies paid effective tax rates of less than half the 35 percent rate in at least one of the three years (and many did it more than once). In the years that these 133 corporations paid such low tax rates, they paid a mere 8.5 percent of their $209 billion in U.S. profits in federal income taxes.

Over the 1996-98 period, petroleum was the lowest-taxed industry in America, with an effective tax rate of only 12.3 percent. In 1998, the tax rate on the 12  big oil companies in the study fell to only 5.7 percent. Only one industry, publishing, paid an effective tax rate of more than 30 percent. The Size of the Tax Breaks Had all 250 companies paid the full 35 percent corporate tax rate on their $735 billion in pre-tax U.S. profits from 1996 to 1998, their federal income.

Taxes would have totalled $257 billion. But instead, tax breaks for the 250 companies lowered their taxes by $26.9 billion in 1996, $31.8 billion in 1997 and $39.3 billion in 1998, for a total of $98 billion in tax savings over the three years.

Almost half of those tax-break dollars went to just 25 companies, each

getting more than a billion dollars in tax breaks. General Electric topped the list with $6,9 billion in  tax breaks over three years.

X

     CORPORATE WELFARE

     Institute on Taxation and Economic Policy, October 19, 2000

     Large corporations are theoretically taxed at a 35 percent rate. 250

     of the nation's largest and most profitable corporations paid only

     20.1 percent of their profits in taxes in 1998, down from 22.9 percent

     in 1996. Forty-one companies actually paid less than zero in federal

     income taxes in at least one year from 1996 to 1998. During those

     years, the 41 companies reported a total of $25.8 billion in pretax

     U.S. profits. But rather than paying $9 billion in federal income

     taxes at the 35 percent rate, these companies enjoyed so many tax

     breaks that they received $3.2 billion in rebate checks from the U.S.

     Treasury. Just one company, Texaco, reported $3.4 billion in U.S.

     profits and $304 million in tax rebates over the three years.

     http://www.ctj.org/itep/corp00pr.htm

'The IRS (US Federal tax agency) estimates that transfer abuses cost the government $2.8 billion in lost revenue each year.  Other estimates are much higher…(some of these) believe that the loss to federal revenue in 1998 was $35.6 billion, with more companies joining the party each year. Tax watchers debate the accuracy of Florida International's lost-revenue estimates, but the study's anecdotal evidence is eye catching. Combing through anonyrnous  Customs records, the researchers found $18,000 dot-matrix printers being imported from Japan and $2,000 radial tires from Indonesia, and somebody in the US is exporting $12,000 helicopters and $135 howitzers to South Africa ".

         Sustainable Economics, 7. 6. Nov. 1999, p. 125.

Government subsidies to Australian business, 1994-5, $12.5 billion.  In addition tax exemptions totalled $7.5 billion.

D. Bryan and M. Refferty, The Global Economy in Australia, Allen and Unwin, 1999.

Business tax has fallen from 46% in 1980, to 36% in 1995-6.

D. Bryan and M. Refferty, The Global Economy in Australia, Allen and Unwin, 1999.

The Washington Institute on Taxatin and Economic Policy found that in 1996-1998 41 US corporations paid less than zero federaol income tax at least one year…while reporting $25..8 bilion in pre-tax profit.  They should havbe been paying the standard 35% tax, but actually received $3,2 billion in tax rebate cheques.  Texaco reported  $3.4 billion in profits but was paid $304 million from the tax department

For the 250 corporations studied tax relief llowcered total taxby $98 billion over three years.  Gedneral Electric got $6.9 billion.  It appears Microsoft paid no tax in 1999.

No taxation but so much representation”, Ecologist,, 30, 9, Dec.Jan 200-2001, p.  9.

Shoppers in UK use 8 billion plastic bags shopping p.a.

Ecologist,, 30, 9, Dec.Jan 200-2001, p.

A recent study (1990) of the US Congress found that more than half of about 40 foreign firms surveyed had paid virtually no taxes over a ten-year period (Dicken, 1992, p. 391). In 1987, a boom year, it was found that 59 per      cent of foreign corporations reported no profits in the US and paid no tax. Over the last three years their revenue had gone up by 50 per cent but taxes paid by only 2 per cent (Barnet and Kavanagh, l994, p. 345). Clearly multinationalization of production is providing corporations with plenty of opportunity for tax avoidance. 44.

         R. Mishra, Globalisation and the Welfare State, Elgar, 1999.

According to a study by Australian tax authorities 'billions of dollars' are being lost in revenue to MNCs. Deductions for interest payments and transfer pricing policies account for most of the revenue loss in Australia. Thus during l993 - 4, 60 per cent of the MNCs (both foreign and Australian) claimed to have made no profits and paid no taxes (CCPA, 1997, p. 3).

         R. Mishra, Globalisation and the Welfare State, Elgar, 1999.

All of these developments contribute, perhaps substantially, to the erosion of the tax base. While national governments are aware of the issues involved and the OECD has been studying aspects of taxation for some time, nothing concrete has emerged so far. Apparently the governments of OECD countries  have 'shown no appetite to address the broader question of what globalization is doing to the overall integrity of their tax bases.  45

         R. Mishra, Globalisation and the Welfare State, Elgar, 1999.

_________________________________________

THE MAI PROPOSALS.

Under the current draft of the MAI, investors and companies will have the right to sue governments for losses caused by environmental or health legislation, as in the case with Ethyl Corporation and Canada.

• The MAI draft text would also grant "Most Favored Nation" status to corporations and investors from all signatory countries. Governments would not be able to pick and choose with whom they would do business based on human rights, environmental, labor, arms control, or other concerns…governments would have to treat foreign investors and multinational corporations as well or better than domestic companies.  Tax incentives and laws designed to grow small, domestic businesses could be challenged because such laws discriminate against foreign inv estors and corporations.

In awarding contracts for health and social services, such as garbage collection or water and sewage, local governments couldn't favour local companies and non-profit organizations wlthout the fear of being sued under the MAI.

MAI free zonesYes!  Spring, 1999, p. 532.

• The MAI also prohibits local, state, and federal governments from setting up "performance requirements" under which foreign investors are required to operate to protect the interests of the country's citizens. Such requirements might include: hiring a minimum number of local people in a foreign firm, reinvesting a minimum amount in the local community,  or using a certain percentage of domestic products.

• Finally, if a country decided that the MAI wasn't in its best interests it would still be bound to MAI obligations for 20 years.

         Yes! A Journal of Positive Futures.  Spring, 1999, p. 53

The MAI proposal "...prohibits governments from making new laws which interfere with the right of capital to free investment here and when it likes, and rolls back existing restrictions on capital...Nations would lose control over their economies and could be sued for interfering with transnationals...."...Capital is attempting to create an international regime with powers unaccountable to elected governments."  (p. 7.)

            W. Tabb, "Progressive globalism", Monthly Review, 50, 9 , 1999.

Under the MAI "...we would create a situation for the world where all countries then are obliged by law to give  up their govoernmental powers to regulate the inflow and outflow of foreign funds...and so give up their powers to be able to regulate the activities of these investors when they are in the country..."

            M . Khor, The Asian tiger economic meltdown",   Monetary

            Reform, Fall/Winter, 1998/1999, p . 23.

And the MAI is protect their rights to exploit children, maintain swe commit environmental atrocities without fear that can be barred entry into any country for those reasons.

the MAI has written into its detailed draft articles the rights of transnational corporations:

•       to export their commodities or services across all

borders to other societies' markets with no conditions attached;

•       to unilaterally purchase and own any structure or productive capacity of any other signatory nation with no requirement to sustain its viability, employ or location in the home country;

•       to own any saleable natural resource of other countries and to have national right to any concession, licence or authorization to extract its oil, forest, mineral resources with no obligation to sustain these re or to use them in the interest of the host society

•       to bid for and own any privatized public infrastructure, social good or cultural transmission without of foreign control permitted by law;

•       to have access to any domestic government grant, loan, tax incentive or subsidy with the same rights domestic firm, with no means test, locale requirement, or public-interest distinction permitted;

•       to be free of any and all performance requirements of job creation, domestic purchase of goods, import/export reciprocation, and technology or knowledge tr the host society.

P. Hellyer, The Evil Empire, Toronto,1997.

__________________________________________

THE ROLE OF THE STATE IN GLOBALISATION.

Under the current draft of the MAI, investors and companies will have the right to sue governments for losses caused by environmental or health legislation, as in the case with Ethyl Corporation and Canada.

• The MAI draft text would also grant "Most Favored Nation" status to corporations and investors from all signatory countries. Governments would not be able to pick and choose with whom they would do business based on human rights, environmental, labor, arms control, or other concerns…governments would have to treat foreign investors and multinational corporations as well or better than domestic companies.  Tax incentives and laws designed to grow small, domestic businesses could be challenged because such laws discriminate against foreign inv estors and corporations.

In awarding contracts for health and social services, such as garbage collection or water and sewage, local governments couldn't favour local companies and non-profit organizations wlthout the fear of being sued under the MAI.

MAI free zonesYes!  Spring, 1999, p. 532.

• The MAI also prohibits local, state, and federal governments from setting up "performance requirements" under which foreign investors are required to operate to protect the interests of the country's citizens. Such requirements might include: hiring a minimum number of local people in a foreign firm, reinvesting a minimum amount in the local community,  or using a certain percentage of domestic products.

• Finally, if a country decided that the MAI wasn't in its best interests it would still be bound to MAI obligations for 20 years.

         Yes! A Journal of Positive Futures.  Spring, 1999, p. 53

The MAI proposal "...prohibits governments from making new laws which interfere with the right of capital to free investment here and when it likes, and rolls back existing restrictions on capital...Nations would lose control over their economies and could be sued for interfering with transnationals...."...Capital is attempting to create an international regime with powers unaccountable to elected governments."  (p. 7.)

            W. Tabb, "Progressive globalism", Monthly Review, 50, 9 , 1999.

Under the MAI "...we would create a situation for the world where all countries then are obliged by law to give  up their govoernmental powers to regulate the inflow and outflow of foreign funds...and so give up their powers to be able to regulate the activities of these investors when they are in the country..."

            M . Khor, The Asian tiger economic meltdown",   Monetary

            Reform, Fall/Winter, 1998/1999, p . 23.

And the MAI is protect their rights to exploit children, maintain swe commit environmental atrocities without fear that can be barred entry into any country for those reasons.

the MAI has written into its detailed draft articles the rights of transnational corporations:

•       to export their commodities or services across all

borders to other societies' markets with no conditions attached;

•       to unilaterally purchase and own any structure or productive capacity of any other signatory nation with no requirement to sustain its viability, employ or location in the home country;

•       to own any saleable natural resource of other countries and to have national right to any concession, licence or authorization to extract its oil, forest, mineral resources with no obligation to sustain these re or to use them in the interest of the host society

•       to bid for and own any privatized public infrastructure, social good or cultural transmission without of foreign control permitted by law;

•       to have access to any domestic government grant, loan, tax incentive or subsidy with the same rights domestic firm, with no means test, locale requirement, or public-interest distinction permitted;

•       to be free of any and all performance requirements of job creation, domestic purchase of goods, import/export reciprocation, and technology or knowledge tr the host society.

P. Hellyer, The Evil Empire, Toronto,1997.

_________________________________________

THE WORLD BANK AND INTERNATIONAL MONETARY FUND.

When a country finds itself with a serious debt problem the World Bank  and IMF will initiate reschedule repayments and arrange new loans…on condition that a Structural Adjustment Package is accepted.  The package typically involves cutting state spending in order to enable debt repayment, which means the reduction in spending on the poorest.  It involves the promotion of exports (to rich countries , which rich countries like, devaluation of the currency, which makes their exports cheaper and their imports (from us) more costly.  Public enterprises are to be privatised (which enables foreign  corporations to buy them cheaply).  Above all the economy has to be moved towards free market principles…which again enables  foreign corporations to take over more of the resources and firms and markets.

The following extracts make clear that there is a huge amount of evidence showing that these drastic reorganisations have now been inflicted on more than 100 countries, with catastrophic effects on billions of people.  SAPs are among the main devices enabling the rich to plunder poor countries;

The reasoning derives from conventional economic theory, whereby outlays have to be cut and earnings raised if debt is to be paid off. 
There is no debate about the justice of the debt in the first place and whether it should be written off, or why debt repayment should be of supreme importance, regardless of consequences for the people and their ecosystems.  However, the evidence is that SAPs do not work, even in conventional terms; they do not result in solution of debt problems or restore economies to normal performance.  They are however a fabulous bonanza for the rich in this world; the rich countries and their corporations have much greater access to the country’s wealth.

  (Alarge amount of material will be located here soon.)

__________________________________________

TRIPS AND TRIMS.

GETTING CONTROL OF “INTELLECTUAL” PROPERTY.

Central in the moves being made at the WTO level is the effort to have "intellectual property rights" established.  These are rules to protect corporations, despite the fact that the WTO and corporate push to dominate the world economy is based on the ideology of freedom for markets and the importance of eliminating protection!

These rights have been built into various trade agreements, including NAFTA  "They impose protectionist rights in favour of corporations of an extreme kind....They effectively grant a pharmaceutical corporation the right to control a product for about forty years."...and "...they bar other countries...from finding smarter ways to make the same product..."  This was permitted under earlier patent rules.  The earlier rules were process patents, not product patents; i.e., an inventor or company could patent its process for making something, but not the product.

W

N. Chomsky, "Whose world order?" Sustainable Economics, 8, 3, M ay        2000. p.  56.

_________________________________________

THE WORLD TRADE ORGANISATION;

 General critical comments. (25 pages)

The WTO involves introduction of new rules governing trade between nations.   These rules make freedom of trade from regulation by governments into the supreme and almost sole principle.  This is greatly in the interests of the transnational corporations and banks, and the richest countries, but it means devastation for many poor people, workers and regions because protection for them will be eliminated. All will have to compete against each other in the one unified global market place, meaning that workers in rich countries will be competing against wages paid in the poorest countries, etc.

These notes include items on GATT, the previous trade system which the WTO has recently replaced.

Note that the rules prevent the banning of something unless it can be proved that it is not safe; it is not possible to ban something because you think it could be a problem and would prefer not to take the risk.  A major case was where the EU tried to ban importation of  hormone treated beef, but the STO authorised a $116 million penalty on the EU.  222

This means that Genetically Modified crops and foods could not be banned on the fear that they might be problematic.  226.

            C. Hines, Localisation; A Global Manifesto, London, Earthscan, 2000.

"Under the World Trade Organisation it becomes illegal for a country to put barriers in the way of free trade, even if it considers that trade potentially hazardous for its people.  Laws to safeguard the environment, health and safety standards, human rights or local economies are liable to  be declared illegal..."

            N.  Tanczos, (Green MP), "Melbourne and S11", The Evening Post, (New Zealand), 16th Sept, 2000.

The WTO proposals "...would effectively be the end of macroeconomic policy-making or long-term structural development planning."   "Developing countries would essentially lose their economic sovereignty."

            The Editors, Third World Resurgence, 108/109, 1999, p. 1.

            The proposed agreement on agricultural trade:

Agriculture is still the primary source of livelihood for quarters of humanity, and is as much a cultural activity economic one. The AOA is a rule-based system for liberalisation of agriculture that was pushed by the

States and its global agribusiness corporations. Its effects impose global competition on the domestic farm undermining the viability of small farms that are unable to compete with cheaper imports. As a result, it will drive most of the small farmers off the land and ensure that agriculture is controlled by global corporations. In so doing, it will constitute the biggest refugee creation program in the world…

V. Shira, “The threat to Third World farmers”, Third World Resurgence, 2000, p. 39.

"The WTO was put in place following the signing of a 'technical agreement' negotiated behind closed doors by bureaucrats.  Even the heads of country level delegations to Marrakesh in 1994 were not informed regarding the statutes of the World Trade Organisation which were drafted in separate closed sessions by technocrats."

"...the process of actual creation of the WTO...is blatantly illegal'...a 'totalitarian' inter-governmental body has been casually installed in Geneva, empowered under international law with the mandate to 'police' country level economic and social policies, derogating the sovereign rigs of national governments."

"...the articles of the WTO are not only in contradiction with pre-existing national and international laws, they are also at variance with The Universal Declaration of Human Rights."

            M. Chossudowsky, Seattle and Beyond; Disarming the New World Order."             Economic Reform Australia Newsletter, 25th Nov., 1999.

The 137 nations that are members of the WTO have already agreed to open up all of their service sectors to free trade laws.

WTO free trade laws have struck down health, food safety and environmental laws in dozens of countries.

our governments (are) negotiating away our most basic rights when almost no one knows about it and no one voted for it…”

The WTO contains no minimum standards to protect labour, human rights, social or environmental standards…

“…every time but one that the WTO has been used to challenge a domestic health, food safety, fair trade or environmental law, the WTO has won.

Over the past six years, the operations of the WTO show that it has become the most  powerful, secretive and anti-democratic body on earth, rapidly assuming the mantle of a global government and actively seeking to broaden its powers and reach…

M. BarlowA GATS Primer, 20th March, 2001, Era Email Newsletter, 22/3/2001.

It's your consumer and environmental standards that have to prove they're not trade restrictive. And the decision maker is not your court. The decision maker is not your Parliament. The decision maker is a secret tribunal under the World Trade Organization in Geneva, Switzerland, from which all citizens and press are excluded, and for which there is no independent appeal. And if you lose, you will have to either repeal your law or pay economic fines to the winning country.

Gold mining, for instance, uses cyanide. If Canada banned the substance, it would seriously affect the profits of foreign mining interests. Under the MAI, the foreign companies could sue the government in an international court.

For decades, Ottawa has been forging laws to protect culture—our own magazines, books and films. But the WTO recently ruled magazines are a business that should be open to competition. Canada must strike down its laws.

      "Open for business; MAI", from CBC script, 10th Dec., 1997.

The new World Trade Organization established by the Uruguay ' Round of GATT is designed, in effect, to serve as a global governing body for transnational corporate interests. The WTO will have both legislative and judicial powers and a mandate to eliminate all barriers to international investment and competition. Under the WTO, a group of unelected trade representatives will act as a global parliament with the power to override economic and social policy decisions of nation-states and democratic legislatures around the world.

R.Clarke, "Mechanisms of corporate rule", in J. Mander and E. Goldsmith, Eds.,  The Case Against the Globa1 Economy,  1996, p. 301.

The World Trade Organisation and its agreements do not serve the interests of developing countries, they serve those of the developed world, and the USA in particular. …

From the free market paradigm that underpins it, to the rules

1t and regulations set forth in the different agreements that make

f up the Uruguay Round, to its system of decision-making and

accountability, the WTO is a blueprint for the global hegemony

of Corporate America. 

W. Bello, “WTO –Serving the wealthy not the poor”, ”, The Ecologist Report, Globalising Poverty, Sept., 2000. P. 36

Whose interests are they serving? “The interests of the economy' we are told. But what concrete reality lies behind that abstraction?  Why benefits?  Overwhelmingly it is transnational capital - not labour, not small business, not peasant farmers, not the environment.     

         H. Daly, on IMF, WTO and World Bank., in  ”, The Ecologist Report, Globalising Poverty, Sept., 2000,

“Local policies aimed at rewarding companies who hire local residents, use domestic materials, or adopt environmentally sound practices are essentially illegal under the WTO.”

Top 10 reasons to oppose the World Trade Organisation, Sustainable

Economics, 8. 2. March 2000, 33-34.

Any WTO Member may challenge any U.S. Iaw as an illegal trade  barrier before-a WTO tribunal in Geneva. The tribunal has the power to approve sanctions against countries that refuse to remove laws that are

deemed GATT-illegal. Such decisions are made by officials of other countries and by lobbies that have no accountability requirements.      l

The concept of non-tariff barriers being illegal gives corporate interests

a powerful tool to undermine safety, health, or environmental regulations

they do not like. For example, right now, pesticide manufacturers and

wine importers are using GATT and NAFTA to claim that the United

States cannot institute a planned ban of the carcinogenic fungicide Folpet

on food residues.

R. Nader and L. wallach, G8TT, NAFTi: and the subversion of the democratic process , in J. Mander and E. Goldsmith, Eds., The Case Against the Global Economy, 1996, p. 97.

It's a very neat arrangement. European corporations target U.S. Iaws

they do not like. U.S. corporations target European laws they do not like.

Then European and U.S. corporations attack Japanese laws and vice versa

the process can go on until all laws protecting people and their environment have either been reversed or replaced by weaker laws that do not  interfere with the immediate interests of the corporations.

the trade advisory committees on timber, chemicals, and other key environmental and consumer interests have exclusively business representatives.

R. Nader and L. wallach, G8TT, NAFTi: and the subversion of the democratic process , in J. Mander and E. Goldsmith, Eds., The Case Against the Global Economy, 1996, p. 97.

Control by corporations: Their staff make and administer the rules.

 During the GATTtalks, for example, representatives from the TNCs chaired and staffed all of the 15 advisory groups set up by the Reagan administration to draw up the US negotiating position. Likewise, in Europe, it was the heads of Fiat and Philips who drafted the original proposal for the European Single Market.

The Editors, "Denying the global a  home, “ The Ecologist,

26, 4, July/Aug., 1996, p. 123.      

~

The convention, attended by more than nine hundred representatives of peoples,' movements, produced the 'Declaration of Indian People against the WTO' which states that “We, the people of lndia, hereby declare that we consider the WTO our mortal enemy, This unaccountable and notoriously undemocratic body called the WTO has the potential not only to suck the sweat and blood of the masses of two-thirds of the world, but has also started destroying, our natural habitats and traditional agricultural and other knowledge systems ... converting us into objects of Transnational Corporations' economy of consumerism.  The WTO will kill us unless we kill it"

Peoples' Global Action - From Freedom, 23 May 1998

The Uruguay Round Agreements have functioned principally to prise open markets for the benefit of transnational corporations at the expense of national economies, workers, farmers and other people; and the environment.

In addition, the WTO system, rules and procedures are undemocratic,

untransparent and non-accountable and have operated to marginalise the majority of the world's people

STATEMENT FROM MEMBERS OF INTERNATIONAL CIVIL SOCIETY OPPOSING ROUND OF TRADE NEGOTIATIONS

Under the old GATT rules, there had to be unanimous approval of all GATT's contracting parties before trade sanctions were imposed on a GATT nation by the other nations. Under the new WTO rules, the determinations by        WTO tribunals become automatically binding. This holds unless all Member countries vote to stop the decision within ninety days. This is another case where antidemocratic procedural rules determine much of the outcome; the obvious result is that few, if any, tribunal decisions would ever be voted down unanimously. This requirement of consensus to stop the action of an international institution rather than to authorize it is uniquely empowering for the WTO; it means its bureaucratic decisions will be honored and feared, thus further intimidating any resistant strains among nations.

R. Nader and L. Wallach, GATT, NAFTA and the subversion of the democratic process , in J. Mander and E. Goldsmith, Eds., The Case Against the Global Economy, 1996, p. 104.

“Approval of World Trade Organisation etc… agreements has institutionalized a global economic and political situation that places every government in a virtual hostage situation, at the mercy of a global financial and commercial system run by empowered corporations. This new system is not designed to promote the health and well-being of human beings but to enhance the power of the world's largest corporations and financial institutions.

Under the new system, many decisions that affect billions of people are no longer to be made by local and national governments but instead, if challenged by any WTO Member nation, would be deferred to a group of

unelected bureaucrats sitting behind closed doors in Geneva. The bureaucrats can decide whether or not people in California can prevent the destruction of their last virgin forests or determine if carcinogenic pesticides can be banned from their food; or whether European countries have the right to ban the use of dangerous biotech hormones in meat. Moreover, once these secret tribunals issue their edicts, no external appeals are possible; worldwide conformity is required. A country must make its laws conform or else face perpetual trade sanctions.

At risk is the very basis of democracy and accountable decision making

that is the necessary undergirding of any citizen struggle for sustainable, adequate living standards and health, safety, and environmental protections. The decline of democratic institutions in favour of deepening multinational corporate power has taken place in Western nations over the past several decades; but the establishment of the World Trade Organization (WTQ) marks a landmark formalization, strengthening, and politicalization of this formerly ad hoc system.

Best described as corporate globalizatlon, the new economic model establishes supranational limitations on any nation's legal and practical ability to subordinate commercial activity to the nation's goals. The objective is to overrule democratic decision making on matters as intimate as food safety or conservation of land, water, and other resources…

From the corporate perspective, a good new system eliminates barriers to trade on a global scale, whereas from any other perspective, such barriers —that is, any nation's laws that foster economic well-being, democratic processes, worker and citizen health and safety, and sustainable use of resources—are seen as valued safeguards on unfettered, harmful business activity. From a corporate perspective, the diversity that is a blessing of democracy is itself the major barrier.

The Wall Street Journal was more direct. After the agreement was signed, the Journal editorialized that GATT "represents another stake in the heart of the idea that governments can direct economies. The main purpose of GATT is to get governments out of the way so that companies can cross jurisdictions (i.e., national boundaries) with relative ease. It seems to be dawning on people . . . that government is simply too slow and clumsy to manage trade." Should it be corporations, then?

What makes such statements especially alarming is that what is being characterized as "trade" these days includes the workings of a large portion of each nation's economic and political structures. GATT and other trade agreements have moved beyond the traditional roles of setting quotas and tariffs and are instituting new and unprecedented controls over investment flows, innovations, public assets, and democratic governance. Undermining national and local laws and erasing economic boundaries via capital mobility and "free trade" have caused the likes of Monsanto, Pfizer, Citicorp, General Motors, Cargill, Shell, and other corporations to rejoice. But the prospect of global commerce without democratic controls suggests impending disaster for everyone else in the world.

R. Nader and L Wallach, “GATT, NAFTA and the subversion of democratic process”, In J. Mander and E. Goldsmith, The Case Against the Global Economy, 1996, 93-95.

"Essentially, any local or national health, safety or environmental standards that exceed international standards set by an unelected body...may be challenged as trade barriers." P. 8.      

"This already means that Australia will be forced to accept -

food imports with higher levels of DDT residue than previously

held to be safe for human consumption under Australian law.' P. 10       _

But throughout product regulation, corporate regulation, selective investment and contracting the GATT/WTO reverses the power of cornmunities to control their own fate vis a vis trade and their resource use

R. Kennedy, "Trade and environment         ", Essence, Autum, 1995       

The trade agreements are about removing rules which protect    

people and the environment, but adding rules which protect

corporations:      

GATT and NAFTA do not target for elimination all "fetters" on commerce. Rather, the agreements promote the elimination of restrictions

that protect people but increase protection for corporate interests. For in

stance, the regulation of commerce to protect environmental, health, or

other social goals is strictly limited, and labor rights, including prohibitions on child labor, were entirely left out as inappropriate limitations on global commerce. On the other hand, the protection of corporate property rights (such as intellectual property) received expanded monopoly power.  

The right to invest capital in any country without local restrictions or conditions was also strengthened.

R. Nader and L. Wallach, "GATT, NAFTA and the subversion  ~

of the democratic process", in J. Mander and E. Goldsmith, The Case Against the Global Economy, 1996, 95-96.

The WTO s global health and safety standards relating to food are set by a group known as the Codex Alimentarius Commission, or Codex. It is an intergovernmental body established in 1963 and run jointly by the UN Food and Agriculture Organization (FAO) and the World Health Orrganization (WHO) to establish international standards on things such as pesticide residues, additives, veterinary drug residues, and labeling. Critics of Codex observe that it is heavily influenced by industry and has tended to harmonize standards downward. For example, a Greenpeace USA study found that Cadex safety levels for at least eight widely used pesticides were lower than current U.S. standards by as much as a factor of twenty-five.'° The Codex standards allow DDT residues up to fifty times those permitted under U.S. law."

Governmental delegations to Codex routinely include non-governmental representatives, but they are chosen almost exclusively from industry. One hundred forty of the world s largest multinational food and agrochemical companies participated in Codex meetings held between 1989 and 1991. Of a total of 2,587 individual participants, only twenty-six came from public-interest groups. Nestle, the world s largest food company, had thirty-eight representatives. A Nestle spokesperson explained, "It seems to me that governments are more likely to find qualified people in companies than among the self-appointed ayatollahs of the food sector."

K. Korten, When Corporations Rule the  World, 1995, p. 179.

The secret proecess:

The binding provisions that define the WTO's functions and scope do not lncorporate any environmental, health, labor, or human rights considerations. …

 Disputes are not decided by democratically elected officials or their appointees but by secret tribunals of foreign-trade bureaucrats from a preset roster. Only national government representatives are allowed to participate in the dispute resolution process. State and local government representatives (such as a state attorney general), citizens, and the press are locked out.

All documents, transcripts, and proceedings are secret.

• No media and no citizens can sit in and observe the proceedings. And there is no outside appeal or review available.

R. Nader and L. Wallach, GATT, NAFTA and the subversion of democracy", in J. Mander and E. Goldsmith, The Case Against the Global Economv, 1996, p. 102.

In the crucial decision making meetings between 1989 and1991 251 of the participants were from industry and only l% from the public.   P 11

Central in the trade agreements is the rule that countries must not give to their own people any rights that are not allowed to foreign investors; it is not acceptable for a country to favour its own people.

It will be possible for a transnational corporation exporting paper or aluminium to challenge as an interference with free trade any recycling practice assisted by government, because these affect the supply and price of recycled paper and aluminium on sale within the country, and thus affect the transnational's chances of selling its product within the country.

If any country wants to set higher standards than the level agreed by the trade officials, it will have difficulty doing so. These will be challenged as interfering with free trade. Thus countries will not be able to set high standards to protect their citizens from pollutants in foods being imported; the standards will be driven down to the lowest acceptable to the trade authorities... to those which suit the corporations doing the exporting.

These provisions can be challenged, but penalties will automatically automatically be imposed unless all parties, i.e., nations involved in the agreements agree not to impose them. "Such a consensus is virtually impossible to arrive at; the diplomacy required to get 125 countries to agree to anything is beyond the scope of most countries..."

"If a panel decided that a domestic law is in violation of WTO trade rules it may recommend that the offending country changes its law. Countries are then expected to do so within a prescribed period. If not, trade sanctions may be applied to enforce free trade...

Y. Bello, Toward a people's Pacific", Essence, Autumn, 1995.

"... free trade policies work against the interests of the vast majority of producers and consumers --in both North and South -by systematically dismantling locally-based economies."

E. Goldsmith, et al., The Future of Progress, Green Books 1-~99 5, p. 21.

This collection of essays”…shows how the free trade agreement between the USA and Canada has, in two years, destroyed to autonomy of Canada, moved many of its jobs South, and made useless the hard built cross nation infrastructure which held Canada together and made possible its unique national health and other social services. It shows how the deepening bilateral economic arrangements with Mexico has increased abuses on freedoms and the rights to organize workers in Mexico

John Wiseman on Canada's k

IMAGINE THE REACTION. In the name of free trade Australia signs an agreement with Japan which guarantees Japanese corporations a fixed share of Australian energy and water resources regardless of Australian shortages or changes of government. The agreement, which also includes Indonesia, forbids any Australian government 'discrimination' against Japanese or Indonesian trade or investment. This means no tariffs, no foreign investment controls and no 'hidden subsidies' for Australian industry. 'No hidden subsidies' means bringing Australian environmental regulations, health and safety standards, industrial relations, health insurance and education systems into line with those in Japan or Indonesia.

This recipe for deliberately undermining national sovereignty may sound bizarre. But this is just part of the price Canadians have paid for signing the Free Trade Agreement (FTA) with the United States in 1988 and the North American Free Trade Agreement (NAFTA), including Mexico, in 1994. At a time when APEC and free trade are all the rage in Canberra it is timely to look at the bitter Canadian experience of NAFTA.

The most important feature of NAFTA is that it is not primarily a free trade agreement. It certainly tears down Canadian and Mexican trade barriers while leaving the United States with plenty of room to control imports. But the real purpose of NAFTA is to create a 'free investment agreement' or corporate bill of rights guaranteeing the unrestricted and unregulated mobility of capital. As Maude Barlow (President of the Council of Canadians) has argued, it lays the foundations for 'an alternative non-elected continental governing structure'.

Signatories to NAFTA are expressly forbidden from discriminating against foreign investment. This means far more than just the removal of tariffs and restrictions on the movement of finance and investment capital. It means that governments are forbidden from constructing tariff barriers such as subsidies or regulatory standards that might benefit national companies or limit the investment and trade decisions of domestic and foreign corporations. Preference arrangements designed to assist local industries and employment are forbidden.  All public sector enterprises must operate commercially and be open to private competition. Once a function or service is privatized it must be governed by NAFTA rules forbidding national subsidies.  Privatised enterprises cannot be returned to the public sector without compensation to companies which are, or even might be, involved in the area.

Over 550,000 Canadian workers have lost their jobs since the FTA was signed in 1988 and much of the new employment growth has been in low-paid, part-time and casual jobs.  Whiie NAFTA supporters blame the recession it is now clear that Canada has staggered into a much slower recovery than the United States. Surveys of Canadian and US employers show that NAFTA has been their major justification for relocating investment and jobs from Canada to Mexico and the United States.

NAFTA has served as a powerful justification for tax cuts, expenditure cuts, privatization and the rapid dismantling of the Canadian welfare state with over $25 billion chopped out of social policy  expenditure in the last five years. After all, as the Chairperson of the Canadian Manufacturers Association recently argued, 'All Canadian governments must test all their polices to determine whether or not they reinforce or impede compentlveness. If a policy is anti-competitive, dump it ... The social programs we've come to depend on ... we're going to have to abandon. We're going to be shutting down hospitals like it or lump it'.

NAFTA has also laid the foundations for an unprecedented assault on Canadian health and safety standards and environmental regulations, as US and Canadian corporations have successfully argued that such regulations are an infringement of free-trade and corporate rights. This argument has been successfully used to challenge and overturn recycling measures, acid rain prevention programs, asbestos safety standards, safety regulations and salmon and herring conservation programs .

Monsanto reilied on NAFTA's anti-regulation provisions to overcome controls on the introduction of rBGH genetically engineered hormones in dairy cattle. Philip Morris blocked the introduction of plain packaging for cigarettes as an infringement of corporate rights.

Bans on export controls have been successfully used to overcome opposition to the construction of vast new oil and gas pipeline systems and the export of raw timber. National energy subsidies are still allowed for military purposes and for oil and gas exploration. Subsidies for the development of renewable energy are not permitted.

In a few short years of deregulated fishing the vast cod resources of the Grand Banks have disappeared and the cod are now virtually extinct. The fishing communities of Newfoundland and the Maritime Provinces have been told that it is becoming impossible for employment or services to be maintained in these areas. They will simply have to move. Perhaps, as one senior public servant recently suggested, they should learn Spanish, reduce their expectations and take up fishing in the Gulf of Mexico.

For many citizens of Canada, the United States and Mexico, free trade in the post-NAFTA world has meant learning to survive in a 'race to the bottom' in which corporations attempt to play off workers and communities against each other by lowering wages and reducing working conditions, all in the name of flexibility and competitiveness. It appears that the great god of 'international competitiveness' requires the sacrifice of many citizens and geographical regions deemed uncompetitive and therefore expendable.

John Wiseman on Canada’s biter esperience in the free trade-wars, Arena Magazine, April – May, 1995.

WTO rulings can force governments to abandon their standards:

any member country can challenge, through the WTO, any law of another member country that it believes deprives it of benefits it expected to receive from the new trade rules. This includes virtually any law that requires imported goods to meet local or national health, safety, labor. or environmental standards.  Unless the government against which the complaint is lodged can prove to the satisfactionof the WTO panel that a number of narrowly restrictive provisions have been satisfied, it must bring its   own laws into line with the lower international standard or be subject to perpetual fines or trade sanctions.  The WTO's goal is the "harmonization" of international standards.  Relguations requiring that imported products meet local standards on such matters as recycling laws, use of carcinogenic food additives auto  safety requirements, bans on toxic substances, labelling, and meat inspection could all be subject to challenge. The offending country must prove that a purely scientific justification exists for its action. The fact that its citizens simply do not want to be exposed to the higher risk accepted by lower WTO standards isn't acceptable to the WTO as a valid justification.

Conservation measures that restrict the export of a country's own    resources—such as forestry products, minerals, and fish products could be ruled unfair trade practices, as could requirements that locally harvested timber or other resources be processed locally to provide local employment. Cases may also be brought against countries that attempt to give preferential treatment to local over foreign investors or that fail to protect the intellectual property rights (patents and  copyrights) of foreign companies. Local interests are no longer a valid basis for local laws under the new WTO regime. The interests of interational trade, which are primarily the interests of transnational corporations, take precedence.

When a challenge to a national or local law is brought before the WTO? the contending parties present their case in a secret hearing before a  panel of three trade experts—generally lawyers who have made careers of representing corporate clients on trade issues. There is no provision for the presentation of alternative perspectives, such as … briefs from non-governmental organizations, unless a-given panel chooses to solicit them. Documents presented to the panels are secret except that a government may choose to release its own documents. The identification of the panelists who supported a position or conclusion is 'explicitly forbidden' The burden of proof is 'on the defendant to prove that the law in question is not a restriction of trade as defined by the GATT.

When a panel decides that a domestic law is in violation of WTO rules, it may recommend that the offending country change its law.  Countries that fail to make the recommended change within a prescribed period face financial penalties, trade sanctions or both.   Under the proposed rules, the recommendations of the review panel are automatically adopted by the WTO sixty days after presentation unless there is a unanimous vote of WTO members to reJect them.  This means that over 100 countries including the country that won the decision, must vote against a panel decision to overturn it, rendering the appeals process virtually meaningless.

As was GATT, the WTO is a trade organisation and its mandate is to eliminate barriers to international trade and investment.

D. Korten, When CorporationS Rule the World, Kumarian Press

174-177.   

Free trade zones such as APEC—an Asian zone supported strongly by the Australian Government—and the North American Free Trade Agreement (NAFTA) are supposed-to bring wondrous economic benefits to us all, but the evidence suggests otherwise.

In the two years since the implementation of NAFA, the circumstances of workers, farmers and women, as well as environmental conditions, in Mexico and the United States have deteriorated, according t a sdy released by non~government organzations in both countries.

The evidence shows that instead of engendering sustainable development, NAFTA is leading our countries down a path of inecreasing inequality and environmental destruction…Unemployment doubled in Mexico between
September 1994 and “September 1995, and the purchasing power of the average Mexican wage fell by 54%.  At least 334 US firms have moved to Mexico, many in highly polluting industries, the study said.  Rural communities in both countries are suffering under NAFTA, according to the report.  Mexican production of basic grains has fallen over the past two years as the market is flooded with grain imports from the USA. In the United States, nearly 40 per cent of NAFTA-related job losses have been in rural communities,  particularly in low-wage manufacturing.

The study documents the fact that women on both sides of the border have borne the brunt of NAFTA. In the United States, the largest number of NAFTA-related ~ losses has been in the electronics  and apparel industries both of which employ high numbers of women. In Mexico the booming 'maquiladora' assembly plants along the border prefer to employ wornen because they are paid less and are perceived as more submissive. The beneficiaries of NAFTA are the large US corporations that take advantage of cheap labour'' said Sarah Anderson of the IPS “while the people NAFTA was supposed to help, North American workers, are worse off because of the treaty.

Frontline, 31, Jan., 1996, p. 15.

Paradoxically the preservation offood security, the protection of knowledge and the collective use of biodiversity, the sustainable use of the ecosystems and the existence of fair and equitable systems for the distribution of the benefits obtained from  natural resources, are today considered to be limitations on trade.'

A. Gonzales' "Free trade area of the Americas", Third World Resurgence, 93, 1998, p. 13. -

“Liberalisation" of Philippine agriculture has resulted in increased US grain exports:

Since the mid-1980s, agriculture in the Philippines has been opened to foreign competition under successive liberalization programmes.

In 1987, as part of the country's structural adjustment programme, the government opened trade in wheat to the private sector and began to reduce import restrictions which are now negligible. As a result, imports of wheat have doubled to over two million tonnes.

Quantitative restrictions on rice and maize imports were reduced after 1989, leading to a surge in imported maize in 1990, primarily from China, Thailand and the US.

Much of the imported wheat comes from the United States, which has systematically been cultivating the Philippines as a lucrative agricultural export market in recent years…

(The government is also boosting export cropping.)

The plan's overarching aim is to reduce the five million hectares currently planted to the two main food staples, rice and maize, to just under two million hectares, and to divert the remaining three million hectares into the cultivation of cash crops and livestock production.      

The Philippines' government acknowledges that further import liberalization will result in a loss of livelihoods in the staple food sector for at least 35,000 households.

The Ecologist, 26, 4, July/Aug., 1996, p. 172.

Under the WTO, the race to the bottom is not only in standard of living, environmental, and health safeguards but in democracy itself. Enactment of the free trade deals virtually guarantees that democratic efforts to make corporations pay their fair share of taxes, provide their employers a decent standard of living, or limit their pollution of the air, water, and land will be met with the refrain, "You can't burden us like that. If you do, we won't be able to compete. We'll have to close down and move to a country that offers us a more hospitable climate.', This message is extremely powerful—communities already devastated by plant closures and a declining manufacturing base are desperate not to lose more jobs.

R. Nader and L. Wallach, "GATT, NAFTA and the subversion of democracy", in J. Mander and E. Goldsmith, The Case Against the Global Economy, 1996, p. 107.

“By setting up the WTO, countries and governments  discovered that they had set up a legal system that enshrined the priority of free trade above every other good – above the environment, justice, equity and community.”

This article refers ;to the supply of aids drugs from Argentina for one quarter the price charged by the giant drug co Glaxo, under TRIPS protection.

G. Palast, “Keep taking our tablets”, Third World Resurgence, 120/121 2000, p. 29.

GATT, WTO and the NAFTA agreement also give top priority to corporate investor and intellectual property rights, to which all other considerations must give way....In these agreement...TNCs have no responsibilities and none can be imposed on them. p. 5.

E. S Herman, "The Threat of Globalisation", Economic Reform Australia      Newsletter, 2nd Dec., 1999.

"Any country that decides, for example, to ban the export of raw logs as a means of conserving its forests, can be charged under the WTO by member states on behalf of their corporations for obstructing the free flow of trade and investment."

Tony Clarke, "Twilight of the corporation", The Ecologist, 29, 2.        May/June, 1999, p. 160.

About 799 organisations from 73 countries are fighting against the WTO proposals late in 1999.  They claim "...the WTO has worked to prise open markets for the benefit of transnational corporations at the expense of national economies, workers, farmers and other people.

There is no discussion of rules preventing corporations from engaging in unacceptable practices, such as"...secret agreements and cartels, dumping and transfer price manipulation, speculation and insider dealing, financial crime, tax evasion and money laundering, spying and piracy, surveillance and exploitation of workers, banning trade unions, plundering and embezzlement of collective resources and common property, endemic corruption of economic channels ..."

                        --------------

“By setting up the WTO, countries and governments  discovered that they had set up a legal system that enshrined the priority of free trade above every other good – above the environment, justice, equity and community.”

This article refers to the supply of aids drugs from Argentina for one quarter the price charged by the giant drug co Glaxo, under TRIPS protection.

G. Palast, “Keep taking our tablets”, Third World Resurgence, 120/121 2000, p. 29.

A trade tribunal has begin to consider a claim that the US must pay a foreign investor almost $1 billion because California attempted to prevent water contamination from one of it products.  The Canadian corporation Methanex says the plan to remove the toxic chemical MTBE from California petroleum violates the North American Free Trade Agreement.  The corporation claims it will lose $970 million in profits if California bans the substance.

The Governor of California had decided that  the additive must be taken out of sale by 2003 after studies showed that it may cause cancer and other problems in humans.

In a similar case decided earlier a tribunal ordered Mexico to pay $16.6 million to a Californian company after Mexican governments had refused to allow the company to operate a hazardous waste facility near dwellings.  NAFTA tribunals meet behind closed doors, with no public participation.

            Environment News Service, Sept 11 ,2000.

The world's trade representatives are "...unelected, unaccountable corporate goons deciding world government policy in the name of 'free trade'.  These are the peopled running and operating the WTO.  With their hands in the pockets of the various multinational corporations, they have succeeded in establishing a New World Government based on profit.  This is a government of and for the corporations..."

            M. Reichl, The WTO and Education. ERA Email Newsletter, 5th Sept,          1999.

"Last week, the WTO rued that the EU must drop an 11 year ban, imposed to safeguard health, on US beef treated with hormones."

Re food etc standards, "The WTO makes the world observe these standards and no other.  A democratically elected government cannot choose to set tougher ones to protect is people.  If it tries, the WTO can rule the measure illegal and hit the country with punitive sanctions."  

The WTO "...is also forcing developing countries to introduce rules which could enable multinationals to patent foods and natural medicines that their people have used for centuries; one US company has 'patented' basmati rice.  poor people may thus be forced to pay for products they have traditionally used."

How free trade devastates Third World producers; "Under the trade rules...the Philippines is importing American corn that is far cheaper than its local equivalent.  As  a result, says Oxfam, half a million poor Filipino farmers risk losing their livelihoods."

Note that this corn is being exported from American farmers who are heavily subsidised!  Each American corn farmer is subsidised $29,000 p.a.  This is 100 times the annual income of a Filipino farmer.  The protection on  the Filipino farmers is removed because it is an "interference with free trade". 

"Aren't such subsidies an impediment to free trade?  The WTO seems to have a selective view.  While Third World countries are forbidden to subsidise their crops, Western nations quintupled their agricultural subsidies from $47 b to $247 b in the first four years of the WTOs existence."

            "The hidden tentacles of the world's most secret body", Sunday         Independent, London, 17th July, 1999, In Economic Reform Australia           Email Network, 12th August, 1999.

"For more then 20 years the European Union has helped small West Indian banana growers to scratch a living by favouring imports of their fruit. ..they cannot compete with cheaper fruit grown on giant estates in Latin America by big US companies such as Chiquita.  The EU scheme gives them a chance, while not doing much to affect world trade.  The US government has challenged the arrangement (...coincidentally following a $500,000 donation by Chiquita to the Democratic Party...)  The WTO upheld the complaint, ordered the EU to stop its help, and authorised the US to start a trade war by penalising imports of a host of European goods...The EU backed down.  Experts expect the unemployed farmers to switch to growing cocoa and marijuana for smuggling into the US."

"The hidden tentacles of the world's most secret body", Sunday Independent, London, 17th July, 1999, In Economic Reform Australia       Email Network, 12th August, 1999.

Laws to safeguard the environment have fallen prey to free-trade rules...the WTO stopped the US cutting air pollution by cleaning up petrol, and the grounds that this would discriminate against producers of dirtier oil, such as Venezuela.  This overruled a vote in the US Congress and forced the Administration to change its Clean Air Act."

"The WTO stopped the US requiring nations from which it bought shrimps to bring in regulations to ensure that their boats did not catch critically endangered set turtles."

"The hidden tentacles of the world's most secret body", Sunday Independent, London, 17th July, 1999, In Economic Reform Australia       Email Network, 12th August, 1999.

the WTO and the “free trade'' policies it was set up to enforce are the most direct threat to democracy and popular sovereignty since the rise of the corporate state under National Socialism in Germany in the late 1930s…

the overarching        goal of the WTO (and of .'free trade' policies in general) is to diminish the power of governments, and thus to reduce

governments' capacity to influence the behavior of transnational corporations. The WTO was set up as a forum in which

transnational corporations can challenge and effectively repeal

restrictions imposed upon them by nations (or by sub-governments

within nations). In other words, rather than "globalization," the real purpose of the WTO is "global corporatization" --         increased corporate control over all the nations and economies of the world.

Created by international treaty in 1995, and now boasting 134

nations as members (nations that are not members can be iced out

of international trade), the WTO has written 700 pages of rules

which add up to an enforceable commercial code governing markets

and trade world-wide -- a code enforceable not by nation-states

but by the WTO itself. One of those rules is called the

Government Procurement Agreement (GPA).[4]

The GPA basically says that governments can set standards for the PERFORMANCE of purchased mate

but cannot set standards based on METHODS OF PRODUCTION. Therefore, government purchasing polic

cannot discriminate a

gainst materials produced by child labor or slave labor, for example. Likewise, requiring that be manufactured from recycled materials would be prohibited under the GPA.

Thus the GPA provides one more way for corporations to strike down laws that curtail their freedoms…

The corporate rulers of Europe, Japan and the US agree on this; the public has no right to impose moral standards on economic activity. The economy is not subject to democratic control. The Government Purchasing Agreement is where they are making their stand, campaigning to diminish the vestiges of democracy wherever they remain.

         Greenleap Newsletter, 9th May, 2000.

For the WTO, deregulation (and greater freedom for transnational capital to do       what it wants, where and when it wants) is the sole agenda.       

Furthermore, only countries have “standing”, the right to participate in WTO proceedings.  Indigenous peoples like the Ogone, who might challenge what Shell is doing to its lands (with the willing participation of the repressive Nigerian government), do not.  Nor do the inhabitants of western New Guinea, since standing is only given to governments—like the Indonesian government, which refuses to respect the rights of those in western New Guinea, murders those who protest, and steals their resources, leaving their environment devastated.

Nor is there standing in the Non-Governmental Organizations        (NGOs), some of which might advance the rights of indigenous peoples or factory workers who are repressed, jailed, and murdered by their governments in the interests of a "good" labor climate for multinationals. The WTO is a forum for trade rights of capital, on terms negotiated by the agencies of governments that represent the interests of capital. No other rights count.

The U.S. Trade Representative is pushing (on behalf of the U.S.'s giant HMOs) for the right to compete with European : ~ national health systems to provide medical care, which would lead to the destruction of the current (and far superior) health care systems that exist in much of Europe. Other suits include one by a U.S. parcel and letter delivery service against European government "monopoly" postal services, which would

have a similar impact on the right of democratically elected governments to make their own decisions about how their  mail is delivered.

he United States challenged Japan's pesticide-residue testing requirements for agricultural imports. In 1998 and again in 1999, the WTO ruled that Japan's standards are higher than WTO standards

I for pesticide residues; hence, the Japanese must now accept higher levels of pesticide. Guatemala followed WHO/UNICEF guidelines in banning packaging that equated infant formula with healthy babies, but Gerber Corporation got the U.S. State Department to argue that this interfered with Gerber's intellectual property rights, and to threaten a challenge under WTO. Consequently, Guatemala now allows labeling in this area that goes against WHO/UNICEF guidelines. The WTO, on behalf of the Clinton government, tells Europeans they cannot keep out beef with artificial hormones because they cannot prove, to the WTO's satisfaction, that it is a health risk. In the past, it would have been producers who had to prove that their products were safe, and up to democratically accountable, elected representatives to decide. Under the WTO, it is governments that must offer conclusive proof. Thus transnationals get their way before WTO dispute settlement panels, which meet in secret

and from which NGOs and other interested parties that are

not nation-states are banned.  One of the last big measures of the preceding Conservative government had been to privatize the railways, despite the fact that only 15 percent of the population supported such a measure.

W. Tabb, “The world trade organisation; Stop world takeover”, Monthly Review, 51.8 Jan, 2000.

Extracts from a NGO statement, endorsed by hundreds of organisations.

It is inappropriate and unacceptable for social rights and basic needs to be constrained by WTO rules. Thus WTO Agreements must not apply to issues critical to human or planetary welfare, such as food and water, basic social services, health and safety, and animal protection. '

In particular, areas such as health, education, energy and other basic human services must not be subject to international free trade rules. We demand the removal of the Trade-Related || Intellectual Property Rights Agreement (TRIPS) from the WTO. There is no basis for inclusion  of intellectual property claims in  a trade agreement.

. The patenting of life forms must be prohibited in all national and international regimes. Measures taken to promote and protect food security and sovereignty, subsistence farming, humane farming practices and sustainable agriculture must be exempt from international free trade rules. There must be a prohibition on export subsidies and other forms of dumping of agricultural products, especially on Third World countries. The trading system must not undermine the livelihood of peasants, small farmers, artesanal fishers and indigenous peoples. The WTO Trade-Related Investment Measures (TRIMS) Agreement must be eliminated. All  countries and especially Third World countries must have the right to use policy options (such as local content policy) to increase the capacity of their own productive sectors, especially small and medium enterprises.

Actions taken to implement multilateral agreements dealing with the environment health, development, human rights, safety, indigenous peoples' rights, food security, women's rights, workers' rights and animal welfare cannot be challenged at or undermined by the WTO.  The

WTO operates in a secretive, exclusionary manner that shuts out most Third World country members and the public. It is dominated by a few powerful governments acting on behalf of their corporate elites.

The WTO dispute settlement system  is unacceptable. It enforces an illegitimate system of unfair rules and operates with undemocratic procedures. It also usurps the rulemaking and legislative role of sovereign nations and local governments. The use of structural adjustment conditionality to force trade liberalisation in Third World

countries and elsewhere must be stopped.       

The world trade rules are “… a grubby set of global guidelines drawn up at the behest of the powerful for the benefit of the powerful.”  X

C. Hines, Localisation; A Global Manifesto, London, Earthscan, 2000.

"…the implications and consequences of the founding of the WTO had become as clear to large numbers of people as a robbery carried out in broad daylight.

W. Bello, From Melbourne to Prague, in ERA Email Newsletter, 2, 15,
Nov. Dec. 2000.

By setting up the WTO countries and governments discovered that they had set up a legal system that enshrined the priority of free trade above every other good - above the environment, justice, equity and community.

W. Bello, From Melbourne to Prague, in ERA Email Newsletter, 2, 15,
Nov.Dec 2000.

________________________________________________________________________

THE WORLD TRADE ORGANISATION; Actual cases decided. (12 pages.)

There have been several notorious cases where governments or groups have tried to ban the importation of something that is undesirable, but have been prevented from doing so by the WTO on the grounds that this would be to interfere with the freedom of trade.

Sea turtles can live to 80 years and weigh 1400 lb.  125,000 are killed each night by shrimp and other  fish netting.  At least four of the existing species face extinction.

The US Congress placed a limitation on the importation of shrimp from nations which have not taken steps to protect turtles.  A number of notions complained to GATT and to the WTO "...on the grounds that the US was forcing its environmental ideals on  others and violating the rules of the free trade regime.  The WTO agreed."

"The purpose of the agreement is free trade and nothing can stand in the way of this overriding goal.

"Financial liberalisation and crisis have been good for transnational capital, making it easier for financial imperialism to penetrate and control developing economies."

            W. A. Tabb, "Turtles, Teamsters and Capital's Designs", Monthly Review,             July-August, 2000, p. 38.

“…the European Union has banned beef raised with artificial growth hormones. …

 The WTO recently ruled that this public health law is a barrier to trade and should be abolished.  The EU has to rollback its ban or pay stiff penalties.  Under the WTO, governments can  no longer act in the public interest.”

“Free trade is not working for the majority of the world.”

Top 10 reasons to oppose the World Trade Organisation, Sustainable

Economics, 8. 2. March 2000, 33-34.

The WTO “…has ruled that it is illegal for a government to ban a product based on the way it is produced (i.e., with child labour, and governments cannot take into account the behaviour of companies that do business with vicious dictatorships such as Burma.”

The WTO is being used by corporations to dismantle hard-won environmental protections,  (these are called) barriers to trade.”

“Recently the WTO declared illegal a provision of the Endangered Species Act that requires shrimp sold in the US to be caught with an inexpensive device that allows endangered sea turtles to escape.  The WTO is currently negotiating an agreement that would eliminate tariffs on wood products, which would increase the demand for timber and escalate deforestation.”

Top 10 reasons to oppose the World Trade Organisation, Sustainable

Economics, 8. 2. March 2000, 33-34.

The dolphin case:

a 1991 ruling in which a WTO panel overturned a U.S. prohibition on imports of tuna from countries whose fleets used such methods as purse seine net fishing that kill large numbers of dolphins. It was a preposterous ruling, in effect outlawing the use of any trade measures to protect the environment or to conserve species.

B. Nova and M. Sforza-Roderick, "Worse than NAFTA", in T. Schroyer, Ed., Towards a World That Works, 1997, p. 29.

In February, 1999, the World Bank told the mayor of Cochabamba that if | the city did not privatise its water system it would not receive another cent | of financial assistance for local water development. Then, after judging the resulting Misicuni privatisation project financially unviable, the Bank proceeded to back it anyway, insisting on water pricing that would | cover the excessive costs, and guarantee that Bechtel would earn a 16% profit.

Water~prices for many locals tripled, meaning some people were paying 20% of their income for water. In a scenario impossible to parody, people not even hooked up to the system were told that they would have to put metres on their private wells and pay Bechtel for the water they drew. The resulting citizens' revolt shook the Bolivian government. It led to a week of protests, general strikes, and highway blockages which brought major areas of the country to a virtual standstill. The government caved and told Bechtel to leave. The privatisation was reversed and the water system handed over to the town.

But Bechtel had not given up. Apparently anticipating trouble, Bechtel made moves before its expulsion that guaranteed it access to one of the world's 1,500 powerful Bilateral Investment Treaties (BIT). These treaties - mini-MAIs with all of the intrusive power of the failed Multilateral Agreement on Investment - allow corporations to sue governments directly. And Bechtel, knowing that Bolivia had such an agreement with Holland, transferred its holding company from the Cayment Islands to Holland. It is now using the BIT to sue Bolivia for US $40-million.

M. Dobbin, Water: Right Or Commodity, The National Post, Financial Post Sedction, 8th Feb., 2001; Canada.  Reported in ERA Email Network Newlsetter, 134, Feb., 2001.

In  April of 1997, the US-based Ethyl Corporation sought $251 million in damages in a lawsuit against the Canadian government over their ban of methylcyclopentadienyl manganese tricarbonyl (MMT).

MMT is a fuel additive that is mixed with gasoline to prevent engine knocking. Many scientists believe that the manganese portion of MMT is a dangerous neurotoxin that can / cause nerve damage leading to psychosis, ,. memory loss, and death. MMT has also been known to damage automobile emission control systems.

… MMT is banned in some US states and simply not stocked in others because of its dangerous properties.  After a long debate the Canadian parliament voted to ban the import and interprovincial transport of MMT.

Ethyi Corporation retaliated immediately by suing the Canadian government before a NAFTA tribunal for the "expropriation" of its assets - the profits it was denied because of the ban - and for the damage such a lawsuit and even the mere debate over the issue would do to its reputation. When the Canadian government realized that its MMT ban would be ruled illegal under NAFTAs rules, they settled with Ethyl Corporation in July of 1998. Canadian taxpayers paid the company $20 million in damages, and the government was forced to announce that MMT "poses no health risk."

YES! A Joumal of Positive Futures ~ Spring 1999

"Last year, for example, the state of Massachusetts was forced to drop its boycott of companies trading with the murderous military regime in Burma."  The judge "...cited an appeal to the World Trade Organisation which argued that the sanctions were an unfair barrier to trade."

"Last week the UK forbade the sale of asbestos.  Canada, which mines asbestos, will use the WTO to force us to life the ban."

""...the US sought to oblige Europeans to eat beef contaminated with six … hormones, one of which has been identified as a potent cause of cancer in children.  Europe refused, so the WTO allowed the US to levy $160 million worth of sanctions."

            G. Monbiot, WTO: Charter for Corporate Government, The Guardian, 30th Nov., 1999.

Methanex corporation is suing the Californian government for nearly $1 billion in damages because the government directed that an additive be removed.  The additive has been linked to health disorders in animal studies and the US Environmental Protection Agency regards it as a possible cancer causing agent.

            ERA Email Network, 4th July, 1999.

In 1997 the US tried to ban sale of petroleum imported from Venezuela containing a toxic additive.  The exporting corporation got the Venezuelan government to challenge this action in the WTO, forcing the US Environmental Protection Agency to back down and change its standards for air quality in the US.

Similarly the US Endangered Species act was used to ban imports of shrimp caught in ways that kill sea turtles, unless devices that enable the turtles to escape were used.  The WTO ruled that this was not permitted.

            M. Weisbrot, "Growing concerns Over World Trade organisation", ERA      Email Network, 27th August, 1999.

From The Global Futures Bulletin, 117, 2000.

One of the key problems of economic globalisation in its current form is the erosion of national, sub-national and community political sovereignty - that is, the right to self-determination.

Some recent cases include:

Ethyl Corp (US) sued Canada for banning Ethyl's fuel additive MMT (because it was shown to be a health risk and also clogged catalytic converters). Canada repealed the ban, publicly apologised, and paid US$13m to avoid the US$251m lawsuit.

Methanex Corp (Canada) is suing the US for US$970m because California banned MTBE fuel additive. MTBE has been showing up in groundwater with studies showing a link to cancer.

Metalclad Corp (US) sued Mexico for US$90m (was awarded US$16.7m in Aug 2000) because residents of San Luis Potosi refused to allow construction of a toxic waste plant. Michelle Swenarchuk of the Canadian Environmental Law Association says 'This case is a terrible example of how necessary environmental controls can become near impossible for local communities.' [1] The Mexican Govt will appeal in a neutral court (in BC, Canada).

S.D. Myers Inc (US) which incinerates PCBs is suing Canada for US$20m in lost business because Canada imposed a ban on the export of PCBs (as obligated to do under the Basel convention) [2]. S.D. Myers is suing under the UN Commission for International Trade and Law (UNCITRAL).

Loewen Group (Canada) funeral business is suing the US for $725m because, and even though, it was found guilty of fraud by a Mississippi civil court (arguing the verdict was an unfair burden on i business).

Sun Belt Water Inc (US) is suing Canada for US$220m after British Columbia enacted a moratorium on the export of water that invalidated a 1991 water contract Sun Belt had signed with a Canadian firm [3]. (They argue that the Canadian firm was awarded compensation while they were not).

Pope & Talbot (US) is suing Canada for imposing restrictive logging export quotas and is seeking US$507m in damages

Other cases include:

The US is using the WTO to prevent the EU banning the importation of (US) Bt hormone-treated beef, and against Japan's rigorous fumigation process on imported fruit [5] (the latter may be little more than a trade barrier in disguise, but the former is based on strong publi concerns and scientific doubt regarding the safety of Bt beef).

The US in turn has been challenged by Venezuela through the WTO for its high environmental standards for petrol (gasoline), as well as its ban on tuna where dolphin-safe fishing techniques have not been used, and shrimps where techniques safe for endangered Asian turtles have not been used.

A US federal judge overturned a ban by Massachusetts state government on buying products from companies that do business with Burma after pressure by the EU, Japan and ASEAN via the WTO process [6].

US baby food and infant milk formula manufacturer Gerber ('Babies Are Our Business') threatened to take the Guatemalan government to the WTO over a law which: - prohibited labels depicting idealised healthy chubby babies - required labels to include a statement that breast-feeding is nutritionally superior. - prohibited free samples of infant formulae - prohibited marketing to young mothers in the hospital.

The Guatemalan government backed down. Only 44% of infants in the developing world are breast fed [7]. Advertising implying that infant formula is superior to breast milk is responsible for the deaths of 1.5m infants each year due to diarrhoea from the use of contaminated water in preparing infant formula, according to UNICEF [8]. The Guatemalan law can be seen as an extension of the WHO 'Code on Marketing of Breast-Milk Substitutes'.

"In reality...in the past five years the WTO has contributed to the concentration of wealth in the hands of the rich few, increasing poverty or the majority of he world's population, and unsustainable patterns of production and consumption.".   The agreements "... have functioned principally to prise open markets for the benefit of transnational corporations at the expense of national economies, workers, farmers and other people and the environment."

This is from the conclusions of the International Civil Society Opposing a Millennium Round or a New Round of Comprehensive Trade Negotiations, signed by representatives from more than 800 non-government organisations.

The editors, "No new round, instead turnaround!", Third World Resurgence, 108/109, p. 17, 1999.

In 1998   US company sued the Canadian government because it banned the export of Canadian water to California, on the grounds that the ban contravened NAFA rules.  Thus the free trade agreement gives the company the right to decide Canada's national water policy.  The company is seeking $400 million in damages.

"The WTO, which contains no minimum standards to protect the environment, labour rights, social programs or cultural diversity, has already been used to strike down a number of key nation-state environmental, food safety and human rights laws.  Recently, US laws to protect endangered Asian sea turtles from shrimp nets and dolphins from drift nets have been successfully challenged at the WTO."

"...measures such as  food subsidies, control of land speculation, agrarian reform and health and environmental standards can be challenged as 'illegal' under the MAI.  This same illegality is extended to community control of forests, local bans on use of pesticides, clean air standards, limits on mineral, gas and oil extraction, and bans on toxic dumping."

            M. Barlow, "Global rules could paralyse us", ERA Email Network, 2nd         Sept., 1999

Indonesia proposed to ban the export of rattan, which is a very important forest product. It is getting scarcer and Indonesia wanted to retain rattan for domestic use. This of course is welcomed by environmentalists who do not want to see the depletion of forest resources. Immediately, however, the United States and the European Community criticised the Indonesian government and said that the export ban was against the principle of free trade. They accused the Indonesian government of taking protectionist steps, and threatened retaliation.

E. Goldsmith, “Development Fallacies”, in E. Goldsmith et al., The Future of Progress, London, Green Books, 1995, p. 46.

Part of Denmark's returnable-bottle law was declared a violation of free trade by I the European Court of Justice. .`

Exporting countries that "mine" the environment have an economic advantage over countries adopting environmental policies that promote sustainable development. Yet the GATT staff asserts 'It would not seem desirable for any country to adopt measures designed to stem such flows of investment and trade as might result from international differences in pollution control norms."  

Governments argue that their citizens support unfettered free trade. But in 1989 almost three in five Canadians voted against the free trade agreement in a virtually single issue national election, but their vote was split between two parties. In 1988,  60 percent of Mexicans voted for a presidential candidate vigorously opposed to the 3 free trade policies of the existing government, but Mexico's ruling party refused to abide by the results of that election.

D. Morris, Free trade purism imperils meaningful democracy, St Paul Pioneer Press, 7..5. 1990.

 The case ofEthyl Corp. suing the Canadian government for revoking its right to market the fuel additive MMT is a case in point. The Canadian government decided to ban MMT on public health grounds, but was forced to pay Ethyl Corp. $13m in compensation *and* back down on its decision to ban the product. This is an outrageous assault on national sovereignty.

         IGFR, Bulleton, 11.4.98.

In August 1991 a GATT dispute committee ruled that a US law bann~ng imports of yellow-fish tuna from Mexico was contrary to international trade rules. The ban had been imposed as a punitive measure to prevent the death of dolphins who swim above the tuna and get caught in the Mexican industry's drift nets. This was the first test of whether environmental considerations, extending beyond a country's  jurisdiction, can be a factor in restricting imports. The GATT's answer was no.

. One trade dispute presently before NAFTA closed door dispute settlement panel foretells of things to come. Ethel Corp in the US makes a gasoline additive which contains manganese. There is enough danger that this element inhibits pollution control devices in cars that a law was passed forbidding its use in Canada.  Through NAFTA Ethyl Corporation is suing the Canadian Government for $251 million for business lost due to this law.  NAFTA has the power to declare our law illegal so we would either have to repeal it or pay the quarter billion dollars in damages to Ethel Corporation.

         Sustainable Economics, 6, 1, Jan, 1998.

WTO restrictions on environmental labelling schemes: -

Europe has devised a scheme giving buyers information on ecological aspects of the products they might purchase, on labels to do with paper products. This will not be implemented because the US Paper ~-Manufacturers Association says it will get the WTO to reject it..

The Canadian government has asked the WTO to confirm that all ecolabelling schemes pointing to sustainability differences, e.g. how the wood was produced, are illegal under WTO rules. This probably means ~n aid organisation could not use a label saying this product was produced in ecologically acceptable ways, or that product comes from a peasant producers' coop and will benefit poor people. Any such labelling will be judged as an interference with the right of other companies to free trade.

K. Watkins, "Goods for some are bad for others", in T. Schroyer, ed., Towards a World That Works, 1997, p. 31.

The Ethyl Corporation of Virginia which makes an additive called MMT which is being added to gasoline was ruled a health hazard in_ the United States and was banned in the State of California. When the Canadian government banned MMT—the transportation of MMT in Canada—Ethyl, now of Virginia, has launched a $347 million lawsuit against the Canadian government for daring to ban their product.

The second case under NAFTA that is going forward is the Metalclad Corporation of California which bought a toxic waste dump in Mexico—thought it would be a tremendously advantageous paying proposition. The Mexicans took machetes in their hands and shut the toxic waste dump down. And Metalclad Corporation is now suing the Mexican government for the right to reopen their toxic waste dump under the NAFTA provision. And this is same NAFTA provision which is expanded into the MAI.

"The MAI in question, Monetary Reform Magazine, Winter 1997_1998, p. 27.

B. Coote, The Trade Trap, Oxfam, 1992, p. 119.

Impeding AIDS prevention -     -

AIDS is set to kill one in four people in Black Africa, unless anti-AIDS drugs can be made more widely available. However, global pharmaceutical corporations charge such exorbitant fees for their products that they are prohibitively expensive in most of Africa. One way round this is for countries such as Brazil, India and Argentina to produce the same drugs much more cheaply and export them to poor countries. US, British and Swiss pharmaceutical giants are furious at this, and thanks to the WTO's Trade-Related Intellectual Property, Rights Agreement - designed to provide fierce protection for manufacturers' patented products - are in an excellent position to stop it.

In an attempt to reduce its infant mortality rate, Guatemala passed a law and issued regulations in 1983 encouraging new mothers to breast feed their infants and fully understand the health threats to their babies of using infant formula as a substitute for breast milk. To be accessible to illiterate people, Guatemala's regulations also included prohibitions against visual depictions of infants that 'idealise the use of bottle feeding'.

One infant formula producer, Gerber Food, bridled at the Guatemalan law and regulation because its trademark logo includes the picture of a rosy infant, the 'Gerber Baby' which it refused and still refuses to change for the Guatemalan market.

Gerber threatened to bring about WTO action to overturn the law. By 1995, Gerber's threats, taken seriously by the Guatemalan government at home and by its Washington embassy, succeeded. The law was changed so that imported babv food products would be exempt from its infant food labelling policy…

China, like Russia, has seen conditions for the majority of its citizens worsen as both countries have opened up to the global market. Should China join the WTO, the situation will worsen both internally and for other developing countries competing for the same export markets. Wages and conditions will remain very low and probably worsen. An estimated 100 million people have already left the land in search of work in towns and cities, thought to be the biggest migration in human history. WTO membership will result in cheap food imports, thus accelerating rural decline and the move to urban centres. In addition it is expected a further 1S0 million jobs will be lost as 'inefficient' state enterprises are made ready for international competition. Whatever the actual final numbers, this trend will ensure a permanent cheap labour force whose products will undercut workers in other developing countries as well as in the North.

         The Ecologist, Sept., 2000.

“Gerber Products Co instigated the United States government to challenge a Guatemalan law that did not conform to the WTOs Agreement on Trade Related Intellectual Property Rights {TRIPS}.  Under the guidance of the World Health Organisation, Guatemala outlawed advertising and packaging techniques that displayed chubby, healthy babies on infant formula.  The Guatemalan government believed these marketing practices encouraged women to purchase infant formula and discouraged breastfeeding.  After the implementation of the law, the Guatemalan infant mortality rate decreased substantially.  However it was overturned by the WTO because the law violated Gerber’s trademark…”

            THE BIG PICTURE, 24,  Feb/March, 2001. P. 3.

Metalclald sued Mexico because Mexico refused the company permission to run a hazardous waste dump in their country.  Metalclad claims that municipal authorities in Mexico ruined their investment plans because they denied Metalclad building m permits. In September 2000 Mexico was ordered by NAFTA tribunal to pay Metalclad $16.7 million (US) in compensation feed.”

            THE BIG PICTURE, 24,  Feb/March, 2001. P. 4.

The U.S. giant Ethyl Corporation is suing Ottawa for $215-million, U.S., under NAFTA even though MMT (A chemical additive) is not permitted in many U.S…

P. Hellyer, The Evil Empire, Toronto,1997.

In April of 1997, the US-based Ethyl Corporation sought $251 million in damages in a lawsuit against the Canadian government over their ban of

methylcydopentadienyl manganese tricarbonyl (MMT).  MMT is a fuel additive that is mixed with gasoline to prevent engine knocking. Many

scientists believe that the manganese portion of MMT is a dangerous neurotoxin that can  cause nerve damage leading to psychosis,

memory loss, and death. MMT has also been known~o damage automobile emission control systems.

MMT is banned in some US states and  simply not stocked in others because of its dangerous properties. After       a long debate, the Canadian parliament voted to ban the import and inter-provincial transport of MMT.

Ethyl  Corporation retaliated immediately by suing the Canadian government before a NAFTA tribunal for the "expropriation" of its assets - the profits it was denied because of the ban - and for the damage such a lawsuit and even the mere debate over the issue would do to its

reputation. When the Canadian government realized that its MMT ban would be ruled illegal under NAFTA's rules, they settled with Ethyl Corporation in July of 1998. Canadian taxpayers paid the company $20 million in damages, and the government was forced to announce that MMT "poses no health risk."

         MaiFree Zones, Yes!, Spring, 1999, p. 52.

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