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MAKING CONTACT Transcript: #40-99 The Price of Free Trade Phillip Babich: This week on Making Contact... Don Kegley: Every American should be appalled that an organization that has no elected officials, that has a vested interest only in the wealthy, would say that they're going to write a global constitution for humanity. Lori Wallach: It's going to be the most corporate-infested ministerial known to man, to the extent that the European Union has sent a formal protest, saying, "We're very upset about this. U.S. corporations will have better special interests than the EU corporations." Phillip Babich: In preparation for the upcoming World Trade Organization summit later this year, some of the biggest corporations in the world are scrambling to set-up new public relations outfits to combat anti-global trade sentiment. Momentum is building as thousands of activists prepare to stage public forums and counter-demonstrations during the WTO meeting. On this program we take a look at the WTO, its goals and how its decisions have affected the world's economies. I'm Phillip Babich, your host this week on Making Contact: An international radio program, seeking to create connections between people, vital ideas and important information. Since countries began negotiating the General Agreement on Tariffs and Trade fifty years ago, industrialized nations of the world have been pushing for increased access to foreign markets, and freedom to harness labor and use natural resources around the world. Out of the last round of GATT talks came the World Trade Organization, the WTO. Its primary func-tion is to enforce GATT and to create and adjudicate international trade laws. Over the years, WTO policies have gained in strength. WTO rules can override national, state, and local laws in member countries. In fact, several WTO rulings have already weakened environmental and safety laws in North America and Europe. In the United States, some lo-calities have passed resolutions that call to question the WTO's authority. Brian Derdowski: I have to tell you, that as a King County council member, when I was elected, I fully expected to be involved in zoning, and buses, and sewage, and water, and police, and roads. That was my job. Phillip Babich: Brian Derdowski is a King County council member in Washington State. Brian Derdowski: Little did I suspect that I was going to have to become knowledgeable about world trade...that in addition to my King County code and state laws, that I better have a copy of NAFTA and GATT and MAI on my desk, or else I would not be about to represent my citizens' interests fully. Who would have thought that? And the very fact that a local government official needs to be involved in international treaties, is evidence of the absurd situation that we're in. In the trade agreements that are being negotiated and signed by the federal government are the seeds of the destruction of our federal system of government. The power and the states, and the power of local government, will be severely undermined by the trade agreements that are being negotiated at the federal level. Phillip Babich: Derdowski , a Republican council member, was one of five votes on the 13-member legislative body to vote against welcoming the World Trade Organization to Seattle, King County's largest city. He called his September 7th vote "a statement of principle." Brian Derdowski: In a very real sense, the current situation is such that a small country that is heavily influenced by international capital, those leaders do not have the freedom to act on behalf of their citizens without worrying about what the investors think about their decisions. So, if a country decides that their citizens are being poisoned by a chemical, or their forests are being cut down too quickly, or that their interest rates are too high or too low...and if that country passed laws to change the situation, they're looking over their shoulder and saying, "Are we alienating these corporations, who have the power to swoop in, pull our capital away, and overnight we lose 30 years of our progress?" And that is what is currently happening under today's trade regimes. And so I believe that is a major destabilizing influence on the world. Phillip Babich: King County Council member Brian Derdowski... The World Trade Organization also presents another challenge to local governments: How can they exert political pressure through boycotts? The state of Massachusetts cur-rently faces this very dilemma. In 1996, Massachusetts signed into law a so-called "selective purchasing" law, which banned government agencies from contracting with companies that conduct business in Burma, now ruled by a brutal military junta. That law has come under attack on two fronts. On one front, the U.S. Federal Court of Appeals in June upheld a previous federal court ruling that found the law to be unconstitutional. The court said that the law impinged on the powers of the federal government to regulate foreign trade and conduct foreign policy. On the other front, Japan and the European Union have filed complaints with the World Trade Organization. For more on the Massachusetts Burma Law, correspondent Chuck Rosina spoke with Simon Billenness, a member of the Burma Roundtable in Boston, a group which helped pass the Massachusetts Selective Purchasing law. Simon Billenness: When this law was enacted in 1996, what caught the attention of the European Commission and Japanese government was the fact that Massachusetts was now boycotting any company that did business in Burma, including, not just U.S. companies, but also companies based in Europe, companies based in Asia, like Japan. And in order to implement this law, Massachusetts sent letters to companies that were doing business in Burma to inform them that this law was in place. But also to give them the opportunity to show to the state that they were no longer doing business in Burma. Those letters that went out to a number of Japanese and European companies caused quite a ruckus. In fact, by December of 1996, the state department received diplomatic communiqués from countries all over Europe and Asia, asking what the hell Massachusetts was doing by boycotting their companies. And, finally it culminated in January of 1997 with the European commission sending a demarcate, or a formal protest to the U.S. government stating that they believe that this law was in violation of a World Trade Organization side agreement, called the Government Procurement Agreement. And so we found ourselves in a situation where we were supporters of the first state law ever to be challenged in the World Trade Organization. It is still the only one. And then the challenge for us was: How do you defend a law from the WTO challenge, through grass roots political action. Chuck Rosina: It actually undermines democratic values for the sake of financial interests? Simon Billenness: Exactly. It's an attack on democracy on two levels. First of all, by attacking a law that was passed unanimously by the Massachusetts legislature, and signed into law by Governor Weld, it is attacking a law that was enacted though the democratic process. And, more importantly, it's a law that was enacted in solidarity with the democracy movement in Burma, and whose leaders have specifically called for economic sanctions, whose leaders have specifically praised selective purchasing laws. And we're talking about leaders who did win an election in Burma in 1990, but were not allowed to form a government by the military junta. Chuck Rosina: The tactic of selective purchasing laws is nothing new. Simon Billenness says similar laws were passed over 200 years ago. Simon Billenness: During the American Revolutionary War, town meetings (the predecessors of our city councils and state governments) would debate and frequently adopt resolutions boycotting goods made in Britain. And so, right from the Revolutionary period, you see citizens directing how their cities, how their towns, how their local governments should spend their tax dollars, and making it very clear that the political and moral reasons are just as good reasons to determine how you spend your money, as purely economic (reasons). And so it really is an attack on the fabric and political culture of the United States, to suddenly turn around and say: "Oh, no, states are not allowed to set moral criteria on how they spend citizens' tax dollars." Phillip Babich: Simon Billenness of the Burma Roundtable in Boston, speaking with Chuck Rosina. Under WTO rules, virtually any tariff or what are called 'non-tariff trade barriers' can be challenged by member countries. A non-tariff trade barrier would be regulations that place certain requirements on products or services, such as environmental regulations or labor standards. These challenges are heard by a WTO tribunal of 3 trade lawyers, typically chosen from the ranks of attorneys who have served GATT or member countries. One such challenge in 1995 involved the U.S. Clean Air Act. Part of this law banned gasoline that had high rates of toxic emissions when burned. Lori Wallach, a trade attorney and director of Public Citizen's Global Trade Watch, based in Washington, D.C., tells Making Contact's Laura Livoti that the WTO tribunal ruled against the U.S. Clean Air Act. This allowed gasoline into the United States from Venezuela that did not meet emission standards. Lori Wallach: Clean Air Act rules were changed, and so in the cities that have the dirtiest air, where reformulated gasoline is required during the heavily polluted months, that's correct. Venezuelan gasoline is now allowed into the U.S. at a dirtier level of contamination as was previously allowed prior to August of 1996 when the WTO ruling was implemented. Laura Livoti: I'm wondering if you can talk about another real world example. When I was in elementary school, my mom wouldn't make me tuna fish sandwiches. She was boycotting tuna because of fishing practices that caused dolphin deaths. And then the Marine Mammal Protection Act was passed and we saw tuna on the shelves of the stores that was actually labeled "dolphin safe." I'm wondering, is our tuna still dolphin safe, and if not, how is the WTO implicated? Lori Wallach: Well, this is actually a very tragic story. We've given it a sort of a sarcastic name, because it really is depressing. We call it: How GATTzilla Ate Flipper. That law was eviscerated, and as of the fall of this year, the U.S. market will once again be open to tuna fish caught by encircling dolphins with these dreadful purse seine nets that are know to drown and kill dolphins by the tens of thousands. How this came to pass was that several countries who wanted to use the encirclement fishing technique challenged the U.S. Marine Mammal Protection Act. That law said: "You cannot sell tuna fish in the U.S. if it's caught in ways that kill dolphins." It's the same rule if you're a domestic fishermen or a foreign fishermen. You can't sell it here if you catch it that way. And under the GATT (under the WTO), you're not allowed to distinguish between the way something is harvested, manufactured, caught. Laura Livoti: So I understand that the WTO is going to be holding its ministerial meeting at the end of 1999 in Seattle. This summit in Seattle is to be funded by private corporations, and that the budget is nine million dollars that's being sought from corporations. Some that have already committed include Weyerhauser (timber), General Motors, Ford, Microsoft, Boeing. Previous summits have been funded by member governments, I believe... Lori Wallach: Correct. Laura Livoti: ...and I'm wondering, what do you think of this trend? Lori Wallach: Well, the serious answer is, amongst the many outrageous things I have seen in 10 years of working on trade and globalization, this ranks up near the top. The sarcastically humorous point is, I guess the U.S. decided they should privatize everything, including our multilateral treaty negotiations. It's really a scandal. The whole thing came really to light, when a letter went around that we were lucky enough to get sent to us by a company who was on the mailing list, who was so offended just of the principal of literally this amount of crass access selling, that they faxed us the letter anonymously. And it was a letter that said it was from the two chairs of the corporate host committee putting on this ministerial, allegedly government event, the CEOs of Boeing and Microsoft. So we get a letter from Bill Gates that said, "Hi, we're putting on a party. And you need to pay. And here's what you get. And it had different levels of goodies for different levels of cash. At the Emerald Level, $250,000 contribution, you get five seats to the official state dinner, you get six seats to this, you get access to that, special private planning meeting with the secretary-general to the ministerial with U.S. negotiators. On the other hand, if you didn't have as much, at the Diamond Level, $150,000, you got three seats at the state dinner. Footnote: on the invitation it said that you will be seated next to high-level officials as requested to the extent permitted by State Department protocol. No joke. They really sent out a letter like this. These crass sellings of seats seems to have been retracted somewhat, though it's going to be the most corporate infested ministerial known to man... to the extent that the European Union has sent a formal protest, saying, "We're very upset about this. U.S. corporations will have better special interests than the EU corporations." Of course, it begs the question, what about the most of us who will live with the results? Phillip Babich: Lori Wallach of Public Citizen's Global Trade Watch speaking with Laura Livoti. As a side note: Boeing, General Electric, IBM, and other U.S.-based multina-tional corporations, have joined a new front group called the U.S. Alliance for Trade Expansion. The purpose of this public relations organization is to present pro-business arguments to the media during the WTO ministerial. A spokesperson for the Alliance told a Seattle-based newspaper that, "The anti-WTO forces have been more effective, thus far, than we have, and that's why we're here. We're here to make sure a lot of the crazy things [the opposition says] don't go unanswered." Shereen Meraji: You're listening to Making Contact, a production of the National Radio Project. If you'd like to get in touch, we'll be giving out our toll free number at the end of this broadcast. Phillip Babich: When the WTO meets this November in Seattle, another trade issue that's expected to be discussed is agriculture. Multinational agricul-ture companies are pushing the WTO to adopt rules that will open up foreign markets and keep intact domestic subsidies. But as big agribusiness does its lobbying, rural farmers from developing countries around the world are orga-nizing to reverse what's often called liberalization in the agriculture sector. Walden Bello is co-director of Focus on the Global South, a trade policy orga-nization based in the Philippines. He's also a senior fellow at the Institute for Food and Development Policy, also known as Food First. Bello explains that as developing countries are flooded with cheap imported agricultural products, small farmers can't make a living. In Thailand, for example, some family members must migrate to urban centers, where the get low-wage jobs, to try and support their families. Bello says this essentially amounts to a transfer of wealth. I asked him how this was the case. Walden Bello: You had the World Bank, which basically has promoted for a long time this development model that was based on the priority for industrializa-tion, particularly export-oriented industrialization. And as we all know, this was for a long, long time. And I don't think it has changed. Export-oriented manufacturing has been the policy that the bank has pushed on many of these countries, not only in Asia, of course, but in other parts of the South. And there have been other international players that have affected this, including big agribusiness and agricultural interests in the North. Just like many other OECD (Organization for Economic Cooperation and Development) countries, or many other developed countries, the United States subsidizes its agriculture. And because of the tremendous subsidization that has been put into agriculture in this country, there's been so much produc-tion, and that production has demanded export markets, and East Asia, South-east Asia, has been seen as very important in the U.S. Department of Agriculture scheme of things. Indeed, I understand that the plan is to have East Asia absorb about 60% of U.S. agricultural exports by the end of the century. Phillip Babich: I want to ask you how the World Trade Organization, the WTO, fits into this equation. How did they participate in, or even create the situation where there is a transfer of wealth, or how countries that had farming sectors now depend on export agriculture from the United States? Walden Bello: Well, the World Trade Organization is oftentimes pictured as a sort of agency of free trade in the world..that it's supposed to create the rules that will move the world faster into a global free market where there are no barriers to trade. But there are particularly two agreements that are really pushing monopolies, and that is the Trade-Related Intellectual Property Rights - which was really created to protect Bill Gates - and the Agreement on Agriculture, which was really what we in Asia call an agreement that was arrived at principally between the European Union and the United States to be able to create the rules of engagement for dividing up world agricultural markets. So, the AOA (the Agreement on Agriculture), was never intended to dismantle monopolies. It was mainly created to be able to formulate the rules of engagement between the U.S. and the European Union for the dumping of their surpluses on Third World markets. So basically that is the role of the Agreement on Agriculture, within this larger body called the GATT/WTO. Phillip Babich: Interesting. Well, in May of this year - just to talk more about this and the WTO role - in May of this year agribusiness heavy-hitters in the US pulled together a coalition called the Seattle Round Agriculture Committee, which has come up with recommendations for the WTO, which is holding its ministerial later this year in Seattle, as you know. And the groups include the American Farm Bureau, Cargill Incorporated - the huge multinational agribusiness - ConAgra and the Grocery Manufacturers of America. Did you hear about this gathering, and what are your thoughts on it? Walden Bello: Well, I've heard about the gathering, and I'm not surprised that they have come together, because the American agricultural lobby has been one of the most formidable in the world...you know, Cargill and its friends and colleagues. And basically these are the people who pushed through the agreement on agriculture back in 1994, when GATT was signed. And they were also able to push through, as a provision of the 1994 America Accord, which was the accord that institutionalized the WTO, that in 1999 and the year 2000 that there will be new negotiations for further liberalization of markets. Agriculture and services are the two sectors in which there is an explicit mandate for new negotiations. So basically this body, working closely with the Department of Agriculture, and with the US Trade Representative, has always been very much of a body that has pushed the interests of these agricultural multinationalists and exporters. You know, they're coming together to be able to formulate an airtight game plan for further liberalization, as well as a strategy for dealing with the Europeans and Japan and South Korea. And they also want to eliminate those subsidies for European agriculture that continued after the GATT/Uruguay round, that they feel benefits the European producers in terms of the competition for Third World markets. But they are absolutely against the elimination of those significant subsidies for American agriculture. Phillip Babich: Walden Bello, co-director of Focus on the Global South, based in the Philippines. Typically, driving up profits means driving down labor costs. Nowadays, large companies scour the globe in search of cheap labor. In some countries, workers make less than $1 a day as they sew clothing or assemble electronic equipment for brand name multinational corporations. At the same time, corporations are relocating manufacturing operations from countries with relatively high wages, such as the United States, to cheaper countries. In recent years, big names such as Levi Strauss and RCA have shut down U.S. operations and relocated to developing countries. That's why some sectors of organized labor have gotten involved in the anti-WTO fight. Erle Ingram is with the United Steelworkers of America. Erle Ingram: The WTO is more like a dictatorship, where you're going to be governed by big business, and big business will rule all the countries. And a democracy is the people themselves electing their officials and saying what they want done. So I think it's a step backwards when a group can take away from the United States what we have as one of the biggest countries and one of the wealthiest countries. And take that and move it to other countries and leave us without - without safeguards for the environment, safeguards for labor, or the people themselves. Phillip Babich: Ingram adds that protecting jobs here in the United States isn't good enough, though. Organized labor must stop this "race to the bottom," he says. Erle Ingram: It will pretty much make...almost like slave labor again. I mean, we had the sweat shops, and still do have sweat shops in Third World countries. It'll make them more rampant, because when a company moves in, a transnational company like Ford Motor, for example...when they move a plant to another country, they aren't concerned with environmental laws, they aren't concerned with labor laws. They give the people the minimum that they can give them. And they pretty much ruin the environment of that country, and when they've depleted everything there, they'll move on to somewhere else. Phillip Babich: Don Kegley, also with the United Steelworkers of America, says that the WTO is fundamentally undemocratic. WTO officials have said in the past that they want to "write a global constitution" for business, which would over-ride national, state and local laws. Don Kegley: Everyone should be appalled that an organization that has no elected officials, has a vested interest only in the wealthy, would say that they are going to write a global constitution for humanity. Everything about that is against democracy and decency. I'm pretty sure in that rewriting process, labor unions don't even exist. Phillip Babich: But, there are plenty of reasons to be hopeful. Opposition to world trade is mounting. For more information on the WTO ministerial and counter demonstrations call toll free 877 STOP WTO. Also, check out Public Citizen's Global Trade Watch on the web: www.tradewatch.org. That's it for this edition of Making Contact, a look at the World Trade Organization. Thanks for listening. But before we go, we'd like to tell you about a special series on the WTO ministerial in Seattle. During the five day summit, the National Radio Project will be collaborating with the Institute for Public Accuracy and Corporate Watch to broadcast live, one-hour daily programs from Seattle. The collaborative project is called World Trade Watch and it will be hosted by Norman Solomon and Julie Light. If you'd like more information on these broadcasts please call World Trade Watch at (510)251-1077. You can also call the National Radio Project. Our toll free number will be given out in a moment. Laura Livoti is our managing director. Peggy Law is executive director. Stephanie Welch is associate producer. Norman Solomon is senior advisor. Our national producer is David Barsamian. Our production assistant is Shereen Meraji. Din Abdullah is archivist. And, I'm your host and managing producer Phillip Babich. If you want more information about the subject of this week's program, call the National Radio Project at (800)529-5736. Call that same phone number for tapes and transcripts. Making Contact is an independent production. We're committed to providing a forum for voices and opinions not often heard in the mass media. If you have suggestions for future programs, we'd like to hear from you. Our theme music is by the Charlie Hunter trio. 'Bye for now. |