ABC’s OF THE WTO
IN WHICH WE MAKE ALPHABET SOUP AND EVEN TRY TO EAT IT
By Janet Thomas: Sometime in 2000
a result of the war, corporations have now been enthroned and an era of
corruption in high places will follow... until all wealth is aggregated in a
few hands, and the Republic is destroyed.”
Who makes things happen? A simple question with endless answers - many of them abbreviated into ease-of-mouth initials. AAA keeps us on the road, AA keeps us sober, AT&T keeps us connected; ABC keeps us (somewhat) informed, and sometimes CBS does, too; NPR and PBS keep us giving and giving and giving, the UN tries to keep us globally aware, the IRS tries to keep us honest, B.C. gives us Christmas and is also British Columbia. Most of the time, we have an instant understanding of what the initials in our world stand for, what they do, and why. But we don't usually know who. We trust the organizations; therefore, we trust those who work there.
Which brings us to the World Trade Organization--the WTO--and its relatives, GATT, NAFTA, IMF, MAI, TNCs, and TRIPS. The brain glazes. It can make one feel like a SAP (otherwise known as a structural adjustment program). But if we are to really understand what goes on in our world - and why - we have to eat our alphabet soup. And it's good to know what's in it.
At the Mount Washington Hotel in Bretton Woods, New Hampshire, in 1944, the stage was set for our current economic system. World War II was not quite over; Hitler was still at large, but Mussolini had been overthrown. The allies had invaded Normandy, but dropping the bomb on Hiroshima and Nagasaki was more than a year away. There was, however, some future planning going on by economic leaders who assumed the war would eventually end, and that when it was over, the world would need prosperity as well as peace. So they met at Bretton Woods and created institutions that have defined and controlled our world economy ever since.
This historic meeting, held by the United Nations Monetary and Financial Conference, became known in the rarefied world of economists as simply “Bretton Woods.” A folksy, woodsy way of saying that everything ever deemed important about money, development, and the worth of the world was determined here. And it was here that the World Bank and the International Monetary Fund (the IMF in the soup) were born (Note that the "World Bank" has such a nice, round sound that it doesn't need initials.)
Although Bretton Woods set the stage, economic construction started earlier, in the 1930s, with the U.S. Council on Foreign Relations. This was when the corporate and foreign-relations experts of the day gathered together to figure out how the growing global economy could be controlled by U.S. Corporate interests. One key was having access to the natural resources of other countries - this would serve industrial growth. Another key was the creation of worldwide financial institutions that would stabilize currencies - this would help ease investment in foreign lands where the wealth of raw materials was abundant, but where financial help was needed to build the mines, roads, factories, et cetera, for easy access.
At the opening session of Bretton Woods, Henry Morgenthau, the U.S. Secretary of the Treasury - and the president of the conference - was the visionary-at-large. He saw “a dynamic world economy in which the peoples of every nation will be able to realize the potentialities in peace and enjoy increasingly the fruits of material progress on an earth infinitely blessed with natural riches.” But just how long can one cup runneth over?
Forever, according to the World Bank, which, after its birth at Bretton Woods, got right to work. Forever, says the International Monetary Fund, which makes sure the World Bank doesn't run out of money while it's doing its job. And so began our current way of doing worldly business. For more than fifty years, this system of lending money to Third World countries so they can pay people from First World countries to build things, know things, manufacture things, and excavate things has been the foundation of trade.
But all was not wonderful. “We're going broke paying back the interest on the debt, let alone the principal,” realized Third World countries. “Tough,” said the Big Lender, “so cut your social, health, and education programs.”
“But, but, but. ...”
This is where the SAP comes in. A Structural Adjustment Program is a fancy way of saying, “We’ll give you more money to get outta debt, but you gotta do it our way.” who has a Ph.D. from Stanford, has taught at Harvard, and has worked for both the U.S. Agency for International Development and the Ford Foundation, (coincidentally held in Bretton Woods on the fiftieth anniversary of the other conference).
The main demand that the IMF and the World Bank make of countries to which they lend money is this: Get over self-sufficiency and sign up for an export/import lifestyle in which the Big Guys from the developed countries will invest in your natural resources, build an infrastructure to get to them all, and then export them for big bucks. This means you'll have jobs and money, but maybe not enough to pay the high price of the other things in life you need - the stuff that has to be imported because you can no longer produce it yourself. But don't worry, that keeps the other Big Guys rich so that they, too, can keep their workers working.
Coffee, that Northwest staple, is a good example. Growing corporate coffee beans depletes the land, the birds, the shade, and the scenery. It also means that growing anything else - like vegetables for the family - becomes impossible. But because your country agreed to specialize in growing coffee beans for export as a condition of its World Bank loan, grow coffee beans you must. Besides, you can buy imported vegetables from the country next door - even though you can't afford to because you're being paid practically nothing for the coffee beans in the first place. It's those guys who sell it in Seattle who make all the money - and all those shareholders who love their lattes. And the non-shareholders, too (like me), who also love to drink it at about $2 a shot - -which is likely to be a day's wage on some coffee plantations.
This is, of course, a vast oversimplification. But the scenario is true; working people from all over the world are being deprived of self-sustaining lifestyles so that corporate interests can be fed. And the systems that serve these corporate interests are deeply imbedded in global economics through the actions of the World Bank and the IMF. It has become a closed system, in which the people outside the corporate architecture have no say in the goings-on that define their lives.
Yes, Bretton Woods exceeded its goals of economic expansion: International trade is booming and foreign investment is expanding at an even greater rate - but at what cost? David Korten,acknowledged this success in his keynote address at the 1994 convention of the Environmental Grantmakers Association of America But after doing so, he went on: “Yet, tragically, while these institutions have met their goals, they have failed in their purpose. The world has more poor people today than ever before. We have an accelerating gap between the rich and the poor. Widespread violence is tearing families and communities apart nearly everywhere. And the planet's ecosystems are deteriorating at an alarming rate.” There are fatal flaws in the economic ointment.
Back in the beginning, there were, of course, good intentions: Jobs at home and abroad. Food for all. A system of prosperity that would serve everyone. Lofty goals, indeed, but material progress doesn't bear fruit, it bears more material progress. Fruit can sustain itself, material progress can only deplete itself.
An example of the World Bank run amok is the dams that are being built in India. Arundhati Roy, who wrote the best-selling novel The God of Small Things, also wrote The Cost of Living, two nonfiction essays about two tragedies in India - dams and nuclear weapons. Millions of people are being displaced from self-sustaining agrarian lives to the slums of big cities because of the hundreds of dams being built throughout India. The World Bank was offering money to build the biggest, the Sardar Sarovar, before it was even determined whether it was a good idea. Why? Because dams take a long time to build, use a lot of raw materials, require a lot of heavy lifting, and rely on a lot of professional expertise-most of it from foreign experts from foreign corporations. There's lots of money to be made.
Now, because India owes more and more money to the World Bank, it has to keep borrowing to keep up its payments. Between 1993 and 1998, this impoverished country paid the World Bank $1.475 billion more than it received. That's a whole lot of interest. Yet the needs of the millions who go hungry and uneducated, whose lives are destroyed, appear not to be considered at all.
This, is where we raise the curtain on the WTO. But before we do, let's not forget its predecessor, from which the WTO got its clout, the mighty GATT. The General Agreement on Tariffs and Trade was negotiated in 1947 as a direct result of Bretton Woods. It's loaded with trade agreements about everything from soup (alphabet and otherwise) to nuts. The most recent version, GATT 1994 was absorbed into the WTO when the latter was established in the United States on January 1, 1995 voted in by a lame-duck Congress as a harmless trade association. But there is one big difference between the WTO and its predecessors, GATT and the North American Free Trade Agreement (NAFTA): The rulings of the WTO are binding.
And harmless this isn't.
In its few short years as a world governing body, the WTO has issued 175 rulings to settle disputes between countries. These have all favored corporate interests at the expense of the environment, labor rights, animal protection, family farms, and freedom of choice. And the decisions have been close to home. When Massachusetts passed a law forbidding the investment of state money in Burma (now Myanmar) because of its anti-democratic, anti-human-rights regime, the WTO ruled the law illegal. Yet it was because of such laws that citizens in the United States were able to contribute to the end of apartheid in South Africa and help free Nelson Mandela. If the WTO had been in place then, Mandela could still be in jail.
But the United States wields the WTO as well. Europe doesn't want to import U.S. hormone-treated beef, the WTO says it must, or sanctions will be imposed. The United States says genetically modified organisms (GMOs) are good for all; Europe says, “No way.” There's a big food fight going on, and it's getting messier and messier.
The WTO's Article III, National Treatment, gives us an idea of how intensely the WTO protects trade. Article III makes it unlawful for a government to discriminate against products that are manufactured, harvested, or produced in ways that are destructive to people and/or the environment. For instance, if one country uses child labor to make toys and another country doesn't, there can be no discrimination in trade. According to WTO law, the toy made by an underage kid working long hours in an unsafe factory for low wages has every right to the marketplace. Products are protected at all costs, as is their trade. Which brings us to the TNCs in the WTO alphabet soup.
A transnational corporation is like a floating company that has a national flag for every port. Its ownership crosses boundaries, so it can operate under the laws of whatever country has the best deal. The TNC approach is, “If Indonesia has cheaper child labor than India, let's manufacture our shoes (or toys, or clothes, or microchips, or whatever you need next) there.” A transnational corporation then has the freedom to find the most lucrative marketplace for its goods -usually the United States, Canada, Europe, or Japan, because that's where the money is. The most common story in production these days is that the workers can rarely afford to buy the products they make.
Now, it is extremely important to recognize that there is no single entity to blame. There is no big bad owner, no diabolical dictator at the helm. Nobody's name is rising to the surface. That's because we're living in the middle of a CC soup of our own - Corporate Culture. As far as I'm aware, these dastardly initials are not in the common domain, but I use them here because the Corporate Culture is not only defining what we buy, it's defining who we are. Coca Cola Consciousness, CCC (just kidding), is a collective consciousness. Even if we don't buy the stuff, we're consumed by it as much as it's consumed by us. We are branded by brands, we live in a logo-land of infinite possibility. A virtual, and non-virtual, cornucopia of consumption is what defines our Corporate Culture. The bad guy is us. And it's them.
Which brings us to the ubiquitous Inc. This is where the fun really starts. What, exactly, is a corporation? According to the official American Business Association dictionary, the definition of “corporation” starts out with “a fictional entity.” (Try telling that to anyone whose midnight ramblings take them straight to the freezer for Ben & Jerry's ice cream.) Here's the definition in its entirety: “Corporation: A fictional entity created under state statute that can act only through human agency: directors, who are elected by shareholders, and who guide its general policies and elect its officers. The officers in turn, run the day--to-day operation of the corporation and select and hire employees.”
The questions this definition provokes are endless. What is “human agency”? What's a state statute? How do employees know who they are really working for? Who's in charge of a fictional entity? A quick, knee-jerk analysis is that the shareholders are the key. Whoever has invested the most money gets to pick the directors, who in turn elect officers, who run the corporation and hire employees. So who, exactly, is making the decisions? It's a slippery slope, and that appears to be precisely the intent. A corporation is a fictional entity passing for a person, a person without name, face, or fingerprints. The unaccountable. No one person in a corporation can ever be blamed for anything. No one person can be sued or held responsible. In a corporation, the power is so far behind the scenes that even the stagehands don't know who the actors are. Herein lies the twisted secret: A corporation is a fictional front for reality. The real question is: What is reality?
This is where it really gets tricky.
At one end of the corporate ladder, and easiest to make sense of, are companies that are readily identifiable with their products - The Gap (clothing), Nike (sports stuff), Starbucks (coffee products), McDonald's (hamburgers). Unless they've branched out into leather products recently, Ben & Jerry's also falls into this category.
At the other, more obscure end are the transnational corporations with such complex international holdings and interests that it's very difficult to readily identify their products - often because they make or mine the materials that go into the products made by other corporations: Dow Chemical, Monsanto, Union Carbide, Boeing (lots of weapons parts as well as 747s), Pfizer, Mitsubishi, and IBM, for example. And then, of course, there is your local financial institution, which is likely linked up with any number of international financial institutions.
Transnationals, be they visible or invisible, work in various guises in various countries, with various connections to local and international players. To complicate matters even further, corporations are merging with other corporations, banks with banks, media empires with media empires, industry with industry. And at the very tip of this megacorporate iceberg is the notably undemocratic World Trade Organization, where decisions are made to support the corporate powers sprawling just below the surface. The very people making these decisions are trade representatives from the Corporate Culture. They are appointed by the governments of Corporate Culture - and should you be enamored of our congressional democratic system as it now looks, just know that nearly all top-level elected officials come out of the Corporate Culture and go back to it when their public tour of duty is over. It never ends.
This is a hugely complex issue. Which is why more than 50,000 people - -with more than 50,000 reasons - showed up on the streets of Seattle to protest the policies of the World Trade Organization. Unlike a corporation, which in its unreality can elude one's grasp so cleverly, every single person on the streets of Seattle during WTO week had the inside scoop on their very own personal reality. Whether or not they were inspired to be there because of the environment, human rights, workers' rights, women's rights, children's rights, farmers' rights, labor rights, animal rights, WTO delegate rights, anarchists' rights, or that numinous, inarticulate right to spiritual harmony, they were there for a most personal reason. The decisions trickling down from the lofty heights of the World Trade Organization have had an effect on their lives, and on the lives of those to whom they are linked. They came from all over the world to tell their stories. And the corporation, that wily, elusive, fictional entity, was at the top of the list of offenders.
The modern corporation came to life in the hands of nine men. In Santa Clara County vs. Southern Pacific Railroad, an 1886 dispute over a railbed, the U.S. Supreme Court made a historic decision. It held that, under the U.S. Constitution, a private corporation was a “natural person,” entitled to all the rights and privileges of a human being.
This single legal stroke changed America fundamentally. From that moment on, the country's citizens would have to think of corporations very differently. Every corporation - though it was still technically only an idea, a paper phantom - nonetheless had its own "life" now, its own "ago." Corporations could compete directly against real people and demand equal treatment under the law.
Were corporations suddenly as powerful as people? No. Because of their vast financial resources, they were now much more powerful. They could defend and exploit their rights and freedoms more than any individual. In real terms, the corporation was actually more free than any private citizen. The whole intent of the U.S. Constitution - that all citizens have one vote, and exercise an equal voice in public debates - had been undermined.
From “Corporate Crackdown” by Kalle Lasn and Tom Liacas, in Adbusters - Journal of the Mental Environment, August/September 2000