week of 3/6/02
 
 
 

An elite club that holds tightly to economic power
By Doug Wingeier
Recently, my wife and I went to New York to join along with 20,000 others from all over the world (far more than press and police estimates, which don’t like to admit how strong the world-wide movement against corporate globalization has become) in the peaceful protests against the World Economic Forum.

We participated in the rally and march, were appalled at the extent and cost of the massive police controls which restricted freedom of expression, and experienced the strong, celebrative witness of the demonstrators against the global economic domination and exploitation of the world’s poor by the corporate elite.

But even more significant for us was our attendance at the three-day “Public Eye on Davos” forum leading up to the street demonstrations. Here is a summary of the critique of the World Economic Forum (WEF), and the World Trade Organization (WTO) which it spawned, made by the speakers and panelists in this forum.

The WEF is a private organization comprised of representatives from 1,000 of the world’s largest corporations. Originally formed in 1971, the Swiss-based group has grown into a major global agenda-setter and a leading proponent of free trade theory and corporate globalization. Until this year, the organization held its annual meeting in the Swiss mountain resort town of Davos, but moved it to New York this year because last year’s protests in Davos were too much for the small town to handle.

The exclusive meeting is open to members — who pay $175,000 to join and $25,000 more to attend — as well as selected politicians, journalists and academics. While the WEF helps set global economic and trade agendas that affect the entire world, 69 percent of its members are from Europe and North America.

The WTO, established in 1995, is a powerful global commerce agency which promotes free trade policies, resolves trade disputes, and acts as a global trade arbiter. Its role is to oversee the trade liberalization process, and its 142 member governments negotiate agreements to open their markets step-by-step as long as others do the same. National laws enacted to protect workers, the environment, and people’s health and safety, have been successfully challenged and overruled by the WTO’s secret, three-person panel of judges.

Supporters of this trade liberalization believe that countries adopting free trade can improve their economic prospects. To do this they must specialize in producing what they’re best at, and then trade with each other. They should also open their markets by dropping trade restrictions, and force their companies to compete internationally. The idea is that this increases competition and efficiency, which in turn drives down prices, making products more attractive to consumers, and increasing demand. Business booms, national income increases, and everyone benefits as the wealth trickles down. However, there is a great deal of evidence suggesting that the reality of free trade is rather different.

Here is what has actually happened:

° The gap between the rich and poor is getting wider — 1.2 billion people are still obliged to survive on less than $1 a day, and consumption in Africa is now 20 percent lower than it was in 1980. Basic needs (nutrition, literacy) are still not met. Eleven million children under age of 5 die each year from preventable causes. Between 1975 and 1999, as global trade expanded, the average wealth per person in the world’s 30 richest countries increased, yet in 53 poor countries it actually declined. In 1960, the 20 percent of the world’s population living in the richest countries were 30 times richer than the poorest 10 percent; by 1997 they were 74 times richer.

° More production and trade has led to excessive use of natural resources. Trade liberalization encourages richer countries to consume more and poorer countries to export more, often destroying irreplaceable natural resources — fish, forests, metals, fossil fuels — and contaminating water and polluting the air.

° Companies are becoming so powerful it’s difficult to control their activities. (The Enron debacle is exhibit A of this.) The world’s largest companies, with ready access to high level decision-makers, have steadily strengthened their position in the global economy by increasing their access to foreign markets and reducing standards and costs through mergers and acquisitions. About two-thirds of world trade is now done by just 500 companies; some make more money than many countries. In 1997, the five largest companies in the world together had sales greater than the combined incomes of the world’s 46 poorest countries. This makes it hard for governments to resist their demands.

° Small businesses and farms can’t compete and jobs are being lost. Mergers have led to many losing their jobs. Businesses shift their offices and factories to countries with cheaper labor and fewer anti-pollution laws. The pressure of global competition causes countries to adopt weaker labor and environmental protections.

° Poorer countries have to negotiate on unequal terms. WTO policies and decisions are heavily influenced by a small group of powerful trading nations (US, EU, Canada, Japan). Other nations risk isolation in the global economy if they don’t join the WTO. However, even as members, they are often excluded from meetings where important decisions are made. (One speaker likened this negotiation between large and small nations to a shark saying to a minnow, “You take a bite out of me and I’ll take a bite out of you.”)

Drawn from data presented during the forum by economists, NGOs and third world victims of these policies, here are some reasons why the WEC and WTO are bad for people and the planet:

° They’re undemocratic. Powerful countries wield enormous influence, often determining negotiating agenda, putting pressure on smaller, poorer countries to conform, and making decisions behind closed doors.

° The WTO is transparent and unaccountable. It provides only limited access for parliamentarians and civil society. Dispute settlements and appeals are conducted in closed sessions with no public access and little external input. Leaders are not elected, and public access to information is restricted.

° Economic practices resulting from WTO decisions favor rich countries and big business, and are increasing inequality and food insecurity, particularly because of impact on food production and consumption.

° The WTO rules regard development and social issues as barriers to trade. One example cited was the way the EU’s preferential import policy for Caribbean bananas — aimed at supporting small scale growers — was deemed incompatible with WTO rules. This was done under pressure from U.S. giants Chiquita, Dole, and Del Monte.

° WTO rules, which regard environmental and health issues as barriers to trade, conflict with many national laws and practices intended to promote sustainability and protect the environment. These rules have been used to decide in favor of free trade and against measures that would have banned hormone-treated beef, shrimps caught using turtle-excluder devices, and a California gas additive that was contaminating the water supply.

° WTO rules regard labels and certification systems — of timber, paper, fairly-traded products, and genetically modified foods — as barriers to trade, and in some cases have undermined them.

° The WTO is eroding cultural diversity. The WTO international property rights agreement allows companies to expropriate knowledge from local peoples in developing countries who have been cultivators and protectors of their native plants for thousands of years. It permits transnational corporations to claim traditional plant varieties or plant uses as inventions that must be respected the world over.

° Influence at the WTO can be bought. Some of the world’s largest companies pay hundreds of thousands of dollars in hope of gaining privileged access to key negotiations during meetings of the WEF, WTO, and finance ministers.

° Pressure from world financial institutions like the World Bank and the IMF to force the Heavily Indebted Poor Countries to adopt structural adjustment measures like privatization and reduction of health and human services in order to pay the interest on their debt, is driving increasing numbers to the brink of financial ruin and starvation. (Argentina is the current Exhibit A of this.)

° The free trade theory, with its dependence on greed, growth, and globalization, is fatally flawed. An economic model that values profits above people and produces extremes of wealth, poverty, and debt, a polluted planet, depleted natural resources, and reduced human services, is headed for collapse. Enron and Argentina are just the tip of the iceberg — and the Titanic is headed straight for it full speed ahead.

The 20,000 demonstrators who took to the streets in New York were protesting these realities, chanting slogans like “They are Enron; We are Argentina;” “Money for Jobs Not for War;” “Hey Hey, Ho Ho, the WEF has got to go;” and “A Better World IS Possible.” They were also advocating for changes in the world economic system which would: replace free trade with fair trade, with benefits shared more equally, local communities strengthened, and the environment protected; review the current trade system and rules to reduce the power of the WTO and assess the results of its rules (economically, environmentally and socially) and make economic decisions and policies more democratic, transparent, inclusive, and beneficial to the people thus far excluded from the global economy — poor countries and people, women and children, workers and the indigenous.

That’s why we were there, and why we will continue to oppose the power of a world economic system that is oppressing the poor, destroying the environment and undermining our democracy.

(Wingeier is a resident of Haywood County. He can be reached at dcwing@dnet.net)