A WTO Primer

by Michael I. Niman
Originally Published in Buffalo Beat, December 7th, 2000

When all the teargas and pepper spray settled from last Novemberís "Battle in Seattle," as it has come to be known, the previously little known acronym, "WTO," had become a household word. For the thousands who turned out in Seattle to protest, this fact alone constitutes a massive victory ó the WTO would no longer operate in obscurity.

To understand fully the importance and impact of the WTO, we have to look at the array of people who oppose the actions of the WTO. Unlike most economic or environmental issues confronting us today, WTO opponents hail from across the political spectrum ó but seldom from the supposed "center." Presidential candidates Pat Buchanan and Ralph Nader, for example both oppose the WTO while candidates Bush and Gore both support it.

The coalition protesting the WTO in Seattle represented an historic coming together of the labor, environmental, social justice and peace movements. Union ironworkers marched side by side with deep ecologists. Anarchists and students marched with clergy and political leaders. Indigenous rights activists marched with farmers while longshoremen shut down docks from San Diego to Seattle.

This is a far cry from the 60s and 70s when construction workers did battle with students in what was as much a class war as an anti-war movement. Today, construction workers and students are united. In the old days the political mantras were easy to understand ó war bad, peace good. Todayís anti-globalization activists are taking to the streets with signs condemning "neo-liberal structural adjustments" and formally obscure organizations such as the International Monetary Fund (IMF) and the World Bank. Wísup?

To understand the WTO and the anti-globalization movement we have to back up and look at World War II. At the risk of oversimplifying things, World War II was the result of bad global economics. Yes, xenophobia played into things and the role of genocide should never be played down. But it was the global economic meltdown of 1929 and economic malaise in post World War I Europe that created the fertile soil for the rise of fascism just as it created fertile soil for the New Deal progressivism in the U.S.

Both fascism and progressivism, however, create bad environments for business. World War II had been the most destructive event in world history. Economically it destroyed infrastructure while killing off consumers and workforces. Hence, ner the end of World War II, approximately 700 world leaders came together near the non-existent village of Bretton Woods New Hampshire (Bretton Woods was the creation of a hotel developer) to map a strategy for global economic stability.

The result of this meeting was the creation of the General Agreement on Trade and Tariffs (GATT), the World Bank and the IMF. The next year the United Nations was formed to foster diplomacy and add a democratic venire to the newly emerging global order. The U.N., however, was never to enjoy the power held by GATT, The World Bank and the IMF. While the U.N. could make proclamations, it was the new economic order that actually controlled global purse strings.

Over the ensuing years, the World Bank and the IMF would bail out insolvent governments with massive loans, usually used pay off interest on other loans to first world banks. These new loans, however, would only come if the debtor nations agreed to "structural readjustment policies" dictated by the lending organizations. These policies usually mandated countries shore-up their currencies by cutting government costs in the form of education, health care and other social programs while lowering taxes and creating more business friendly economic environments. Proponents of these policies point to stable currencies as evidence of success while opponents point to hunger, illiteracy, disease and ensuing political instability as the true costs of structural readjustment. Hence, people on the streets of Buffalo and Seattle carry banners condemning "neo-liberal structural adjustments."

The WTO came into this mix in 1994 during the "Uruguay Round" of GATT talks. At that meeting, GATT member nations created the WTO as a sort of enforcement agency for the GATT created global economic order. As bouncer to the world economy, WTO would have enforcement powers to dole out economic penalties to its 140 member nations if they violated a WTO edict.

Nationalists and other right wing critics around the world complained that the WTO undermines national sovereignty, hence opposition from Pat Buchanan and his ilk. President Clinton and the American corporate backers of the WTO rebutted, arguing that if a WTO ruling was ever disputed by the United States, the US could simply back out of the organization, thus destroying it. Hence, the WTO emerged, like the IMF and the World Bank, as a US dominated organization. Iím using the term US loosely here, however, as US citizens donít have the opportunity to elect representatives to this new global government.

Following a free trade mantra, the WTO has spent the last six years working to reduce what it calls "trade barriers." Often times these so called trade barriers are in the form of national laws designed to protect worker safety, the environment or the health of consumers. Hence, the power to effectively nullify the laws of democratically elected governments, rests with the WTO, an unelected world body whose decisions are made by a tribunal that meets in secret behind closed doors in Geneva.

According to Ralph Nader and Lori Wallach, director of Public Citizenís Global Trade Watch, the WTO represents the "subversion of the democratic process." They write, "[WTO] 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." Nader and Wallach go on to point out, "once these secret tribunals issue their edicts, no external appeals are possible." Countries who violate WTO edicts face trade sanctions. Nations with small or weak national economies would find sanctions by the 140 WTO member nations to be devastating, threatening their very existence.

Under WTO guidelines, legislation providing subsidies to promote energy conservation or sustainable agriculture are violations since they are government subsidies to domestic industries in competition with foreign competitors. Complaints to the WTO originate with governments, but as Americans are all too well aware, governments often act on behalf big business. Ironically, a European government, for example, can challenge an American law on behalf of a European corporation, and the ultimate benefactor can be an American corporation. Such was the case in 1994 when the US Corporate Average Fuel Economy standards (CAFE) and US gas guzzler taxes were determined by GATT to be a partial barrier to free trade. US laws protecting dolphins were twice challenged under GATT and promise to be a target under WTO. Venezuela has filed a formal challenge to the WTO complaining that US Clean Air Act is a barrier to the Venezuelan oil industry. Thai laws limiting cigarette sales, Danish bottle recycling laws, Malaysian and US bans on raw timber exports, Canadian reforestation rules and a host of other laws have also come under WTO scrutiny.

WTO proponents argue that the organization can become a tool for implementing workerís rights rules and standardized environmental protection laws on a global level. In this respect, they argue, the best hope for a globally coordinated effort to reverse global warming lies with the WTO. The recent history of the WTO, however, leaves little room for hope. Environmentalists were optimistic six years ago when the WTO created a "working group" on the environment. Since then, according to Lori Wallach, the working group has turned into "a trade-dominated entity where government laws are studied not to safeguard them but rather to figure out how to get rid of them." Wallach argues that "we donít want to put the environment in the hands of an organization whose charge and world view is commercial.

Labor activists originally had hopes similar to those of environmentalists, but now show little hope for the WTO. The AFL-CIOís Thea Lee is concerned that "the WTO has no provisions protecting workerís rights." According to Lee, the only labor rule written into the WTO rules is that countries may restrict the import of goods produced with prison labor, a ruling that primarily affects the US and, should they be admitted to the WTO, China (China and Russia are the only major world powers who are not yet WTO members). Other labor standards, according to Lee, are covered by WTO rules, hence, she writes, "if a country wants to ban the import of good made with child labor or place trade sanctions on a country that is violently repressing independent labor unions, the WTO can strike it down as a trade restriction." Lee still has hope for the WTO, but argues that it needs to be reformed from the ground up.

This is an argument many WTO supporters make ó the organization needs massive reform so as to represent workers rights and protect the environment instead of protecting corporate rights for short term capitol accumulation. Operating out of the public spotlight, the WTO has evolved as a global corporate rights lobby with what opponents describe as dictatorial powers. The Seattle protests changed all that. The post-Seattle reality places the secretive WTO firmly in the global limelight with the organization unable to meet without full scale protests and the threat of police riots.

The new WTO has painstakingly moved to give lip service to environmentalists and labor rights activists. In fact, to hear them now, they sound no different than their opponents, laying down a thick paste of talk about the global disparity in income, the abuse of third world workers, the devastation of the environment, and so on. For protestors, this is a victory ó for the moment they control the dialog. In reality, however, they argue little has changed ó The WTO still meets behind closed doors and their policies are still undoing decades of environmental and workers rights legislation around the globe. The WTO, opponents argue, has just perfected their PR spin.

The reality, however, is that from here on in WTO will be a household word and the organization will never again enjoy obscurity. That is one legacy of last yearís Seattle protests. Another is the creation of a global movement of resistance to corporate dominated globalization that cuts across traditional political and cultural boundaries. This is the real legacy of Seattle ó for the first time in decades, the people are a force to be reckoned with.

For links to websites pro and anti-WTO, visit the special links site for this article at http://mediastudy.com/wtobeat.html