The Bush Administration is very anxious about the coming "free trade" negotiations currently being worked out in 1992 - certainly more anxious than they were over the U.N. Conference on Environment and Development, whose proposals and agreements were resisted at every step by the United States. Why? Bush says free trade will mean fair trade - consumers will get a better deal in the marketplace - and will mean more jobs created here in the U.S. But what these negotiations really mean is a freer hand for the multinationals or TNCs (trans-national corporations) and a subversion of democracy and national sovereignty. If anything, they are a threat to freedom. Currently being discussed at three different levels or 'tracks' are: GATT, NAFTA, and EAI. The General Agreement on Tarriffs and Trade was initiated after WW II by the G7 (seven richest nations) and has proceeded in several 'rounds': the most current round began in Uruguay in 1986 and is thus known as the Uruguay Round. The North American Free Trade Agreement began in 1988 and involves discussions over making the northern part of our hemisphere (Canada, Mexico, and the U.S.) into a free-trade zone. Bush's Enterprise for the Americas Initiative is an attempt to extend the goals and principles of NAFTA to Central America, South America, and the Carribean.
The history of 'free trade' as an idea is very important. Adam Smith, prophet of capitalism, argued against protectionism on the part of nations, suggesting that the use of high protective tarriffs to keep out foreign goods (the policy of mercantilism) interfered with the operation of the 'invisible hand' of the global marketplace and actually jeopardized the wealth of a nation. Still, many nations have tarriffs to protect various industries which are particularly young or vulnerable to foreign competition, and make this a hallmark of their industrial policy. Many nations are currently embroiled in disputes over free and fair trade - we are currently negotiating with the Japanese to get them to remove unfair trade barriers which prevent us from selling our goods in their marketplace. "Free trade" advocates insist that in an increasingly globalized marketplace, where the resources for making most products may be imported from all corners of the globe, that restrictive tarriffs only slow global economic growth. They insist that combatting a trade deficit - such as the one we currently have with Japan - by instituting protectionist measures can be counterproductive: companies should instead strive to compete in a global environment, and do so by modernizing and making a better product.
In this sense, free trade is a logical and fair concept. Protectionism on the part of large importers of foreign made goods - such as the U.S. - would endanger developing economies who rely on foreign trade for development. It also would allow domestic companies to rely on government protection in a global marketplace rather than putting their profits back into equipment and better wages to create a better product. In short, "protectionism" is bad. Bilateral trade agreements are going on all the time so that countries can work out fair trading practices and eliminate unfair protectionist measures. Unfortunately, GATT and its sister agreements are not just about eliminating protectionism: they are a sweeping threat to national sovereignty and democratic control of economic development. They empower trade bureaucrats to attack laws democratically passed by national governments in the name of international trade. They represent a new effort by northern governments to "colonize" the debt-ridden South and prevent it from developing sustainably and fairly.
The main issue people are arguing about for NAFTA and GATT is: will they create jobs? The answer is, in short, yes, but we must ask: what kind of jobs? And where are they being created? One need only look at the "Enterprise Zone" created between Mexico and the U.S. where the maquiladoras operate, largely in violation of most standards of wage equity, environmental laws, and worker safety. Thousands are employed in the maquiladora factories at slave wages under horribly oppressive conditions. What GATT will do is create a few more jobs in the entertainment, information, and biotechnology industries - highly skilled positions - but it will eliminate a lot more unskilled laborers' jobs, especially in the textile industry, which has already taken a massive beating through the 1980s. Why? Companies will take advantage of the lower minimum wage standards, lower taxes, and weaker or unenforced environmental and health regulations of other less developed countries such as Mexico: NAFTA will give these companies a "free ride" to head south and dump their unionized, better-paid and better-organized workers here in the U.S. Some of GATT's member countries may have no child labor or eight-hour workday laws, and companies may even move in order to benefit from a racially stratified proletariat, such as in South Africa.
George Bush said the free trade agreement was good for the U.S. (and other nations) which would mean increased exports and "jobs, jobs, jobs." (GATT would really have been good for Bush - if he had won - because it would have allowed him to carry on the deregulation agenda begun by his Quayle-run "Council on Competitiveness." in the murky halls of international dealmaking.) But increasing exports puts other considerations - such as sustainable development - aside: an export-oriented economy means greater use of energy (more shipping and transport) which probably portends more fossil fuel use; greater depletion of natural resources, even those on public lands; and less ability to control how "appropriate" exported technology is. For Third World nations, an export-focused economy means they may be less likely to grow the things they need, and more likely to be forced to provide what the North wants, such as coffee. (Controls on "dual-use" technology - items that can be used in armaments as well as civilian uses - {and which were openly sold to Iraq, but that's a whole other story} could go out the window too, jeopardizing efforts to halt proliferation of advanced weaponry and weapons of mass destruction.) The thing most likely to be exported is waste. The World Bank has openly said that the logic for locating polluting industries and toxic waste dumps in low-wage countries (even as it is done to poor, minority communities in the U.S.) is "impeccable." The Garbage Barge may be coming around to Africa again this time, and the Africans will be forced by econocrats to let it land.
GATT will also jeopardize food safety. Countries will be forced to "harmonize" with universal "scientific" international standards set by Codex Alimentarius, an organization in Rome that receives most of its funding from huge TNCs such as Coca Cola, Ralston Purina, and Nestle. (note that all are currently being boycotted by activists in the Third World - Nestle for selling hazardous infant formula which reduces the immune system-resistance of infants to various diseases.) Criteria for policy that are not "scientific" (i.e. not approved by corporate experts and not matters of "safety, quality, or efficacy") - i.e. involving social, economic, religious, or cultural concerns toward food imports - would face challenges by GATT. If a country decides to have food safety standards that are more stringent than Codex, an ominous group of trade bureaucrats, the Multi-Lateral Trade Organization (MTO), would have the power to strike those down as 'barriers to trade.' Ominously, Codex's standards for 'acceptable' levels of pesticides, food additives, growth hormones, and carcinogens are far below current United States standards (up to 50 times lower!). The U.S. ban on DDT or BGH (bovine growth hormone) could be challenged, as well as efforts to close the "Circle of Poison" (where substances banned in the U.S. are sold to developing countries, so they can use them on the crops which they sell back to us!) In the U.S.-Canada free trade agreement, Canada was forced to accept greater food irradiation and to strike down labelling laws explaining the chemical (preservatives, hormones, artificial colors, etc.) and nutritional content of food items which were stricter than the U.S.'s own.
GATT could also have tremendous impact on agricultural policy here in the U.S. and abroad. Its "intellectual property" clauses mean that valuable medicines discovered in developing countries could be patented by foreign researchers, preventing the country in which such resources are found from benefitting thereby. Countries like India that distribute medicines for free might find themselves facing heavy tarriffs for using substances 'patented' by scientists in the U.S., even if the genetic stock originates from their own country. GATT would surrender control of seeds, plants, and livestock to the biotechnology industry. (From the biotechnologists' point of view, loss of biodiversity is apparently unimportant; if we lose species, they seem to feel that all we need to do is 'cook up' the right replacement DNA in a lab.) Bans on importation of tropical timber or exportation of Pacific Northwest logs (to protect valuable ecosystems) could be undone by the MTO. Fair pricing of crops and agricultural subsidies - important for preventing harvested surplus from being wasted and destroyed - could be challenged. Lesser developed nations would be forced to sell "cash crops" on the world market (which they are largely doing already, due to a crushing external debt) which might be improper for their climate and jeopardize the quality of their local soil. GATT would deliver the death blow to small-scale farms and the peasant farmer, and benefit the agribusiness corporations.
GATT's effects on the environment could be horrible. All parties to the agreement must agree on international environmental standards which will, almost axiomatically, be much lower than most existing national standards. In effect, there would be unrestricted pollution and disposal of industrial wastes, because the developed nations would never agree to stringent regulations. Bans on imported rainforest beef, or imports of ivory from endangered species such as elephants or seals, or on cigarettes could be challenged and stricken. GATT has already declared the Marine Mammal Protection Act - created by our own democratic process to prevent dolphins and other mammals from being caught in tuna nets - a "barrier to free trade." Canada found their health care system, municipal 'safety net' of local services, and reforestation laws under challenge as "trade barriers" during the Canada-U.S. free trade talks. Concerns that "free trade" would lead to the cultural takeover of Canada by "McAmericanization" were justified, and now Mexicans are worried that their local customs and traditions will be gobbled up by the free flow of Western McGoods. (That doesn't seem to bother Salinas, who feels NAFTA will help 'solidify' his "reforms" {privatization, etc.} in case his PRI government loses power.) In effect, the effort of any country to control and conserve its own natural resources could be jeopardized by the MTO, which in effect is the legislative strongarm of the multinational corporations, who want unrestricted access to protected ecosystems such as the tropical rainforests.
The undemocratic nature of GATT is striking. Subregions of national governments - such as Canadian provinces or Native American principalities in Latin America- would have to bring their standards in line with the new MTO-enforced national standards. U.S. federalism could even be compromised, as the federal government begins to apply pressure to get each of the 50 states to abandon minority set-aside programs or municipal recycling laws that the free-trade bureaucrats don't like. Settlements of trade disputes will be done through a secret panel-deliberation process, denying access to consumer, environmental, and health NGOs (non-governmental organizations) and preventing their input into the defense of important regulations. The panel of three "judges" - who will all be economists - must reach consensus in order to strike down MTO rulings, not approve them, putting the burden of proof on the wrong side. The United Nations might find itself in the unusual position of advocating UNCED policies on biodiversity or climate change which are then challenged by the MTO's New World Order as obstacles to global trade. Canada's pharmaceutical industry, which relies heavily on generic drugs, could be threatened by NAFTA, because the U.S. drug patenting laws even allow one to patent a DNA sequence used for synthesizing protein! The pharmaceutical companies' price gouging here in the United States might become a hemispheric phenomenon.
In expectation of the arrival of GATT, nations all around the world have tried to form regional trading blocs. In addition to NAFTA, one finds the south Asian countries are forming the ASEAN trading group, the western European nations are joining the European Economic Community (EEC), Latin American countries are forming CARICOM, and some of the former Communist-led nations of eastern Europe are moving toward their own trading bloc. Africa is also making steps toward economic unity. The reasons for these new regional orders is, to some degree, a defensive response to GATT. If countries find themselves facing trade sanctions for MTO violations, they can at least continue trading within their own regional economic sphere. The EEC in particular has been reluctant to order member nations such as France to cancel agricultural subsidies to farmers, a huge stumbling block for the Uruguay Round of talks. If the U.S. puts 200% tarriffs on EEC agricultural products (esp. grapes and oilseeds) for their refusal to cooperate with GATT, the EEC nations have promised to 'retaliate' in tandem. The U.S. and the EEC have "gone to battle" before on other contentious issues during other GATT rounds, and one of the most recent disagreements was over beef hormones. Regional trade wars of this kind may be the "new world order" of the 21st century under GATT.
The IMF and World Bank look forward to the GATT agreements, which are the third part of the Bretton Woods triad. In their own way, they have been attempting to force the 'neoliberal' economic model ('austerity' or 'structural adjustment') on Latin American and other nations - by denying loan forgiveness to countries who refuse to deregulate corporations, lower taxes, give special 'kickbacks' to foreign investors, and denationalize industries. GATT is basically a bludgeon to hammer away at any nation that refuses to adopt the neoliberal laissez-faire model of development. Bush and his trade cronies want "Fast Track" authority on GATT and NAFTA: Congress has 90 days to vote, up or down, on the interntional agreements. No amendments, no substantive changes, no input: up or down. Congress' right and responsibility to deliberate treaties and offer advice and consent to the president on international agreements is being taken away. And they may also soon discover that their sovereignty is challenged, as laws passed by Congress to protect consumers or the environment are stricken down by faceless bureaucrats in the name of "free trade." But all they are really being given the option to do is to give multinationals a free ride, roughshod, over all of us and the planet.
Nonetheless, there are ways to fight GATTzilla's coming rampage. A number of coalitions and organizations have been formed, including the Fair Trade Campaign Coalition, INSTEAD (International Student Trade, Environment, and Development program), Tides Foundation, and others revolving around NAFTA, here in the U.S. Third World organizations formed in the wake of UNCED to promote sustainable development were dismayed at how much GATT was a non-issue in Rio, but they are treating at as the #1 threat to both environment and development. In the '92 U.S. elections, George Bush attacked Bill Clinton for 'waffling' on free trade (meaning, being willing to look at the weaknesses of the agreements), but strangely, only Ross Perot out of all three had a true anti-NAFTA stance, predicting a "giant sucking sound" south of the border. (Perot appears to have been more worried about increased immigration of Mexicans to the U.S. than by movement of jobs, according to some.) Now that Clinton is in office, he has said he is open to ancilliary agreements to deal with NAFTA's deficiencies as far as the environment and labor. But the interesting question is what he intends to do about GATTzilla: why, so far, has he simply fed it?