Vol. VI, Bulletin No. 8. July 5, 2001
'Trade Promotion' as a Lever of Power
A high-stakes power struggle is underway in Washington. It currently centers on President Bush's demand that Congress grant him what the administration calls "Trade Promotion Authority." If granted, its most immediate effect would be to enlarge the power of the White House to regulate commerce with foreign nations, a power that the U.S. Constitution assigns to Congress.
The administration claims that this Trade Promotion Authority (or TPA) is required to clinch trade deals with other countries. That's not quite true. The Clinton Administration negotiated dozens of trade agreements -- bilaterally with China, Vietnam, Jordan, and other countries and multilaterally on information technology, financial services, and telecommunications -- even though Congress rejected Clinton's full-court press for the sweeping powers then called "fast track," the previous label for TPA.
"Fast track," under a new name, is being revived to assure White House dominance in deciding the broad range of domestic and international policies lumped together under the term of "trade." With this power, the White House could, during the next five to seven years, send Congress voluminous "trade" agreements and demand its approval on a rush-rush, take-or-leave-it basis, bypassing normal committee procedures, with no chance for amendment or for serious debate.
Radical Changes in Content and Context of What's Called 'Trade'
Approving TPA would accelerate a trend that began in the 1930s. Since then there has been a "shift of power in trade-policy initiatives and management [from Congress] to the executive branch" (in Economist Jagdish Bhagwati's words). So, although on the surface the Administration's proposal does not appear all that new, its content and context have changed radically in recent years, in four important ways:
In short, so-called "trade" negotiations are part of a new system of global governance. By design, that system is woefully lop-sided. It protects the global rights of business, often with civil and criminal sanctions, while completely ignoring the rights of workers. It protects the world's commercial environment but not its human environment. In the process, it greatly strengthens the economic and political power of Western-based corporations in all their dealings, not just with labor but with local communities and developing countries.
- The proposal is not just about trade. Far from it. Trade, as traditionally defined, covered 1) mainly goods, tangible things from socks to jet liners, and 2) their international transfer from one company to another. But "trade" as now used covers much, much more: international investments, copyrights, profits, government procurement, banking, competition, food regulations, and so on and on and on. And much of trade (about 40% in the case of the U.S.) is now between the branches of the same corporation, and thus not international trade in the traditional sense.
- Under globalization international commerce is now dominated by a "cohesive global production system" (as the UN Conference on Trade and Development puts it) operated by multinational corporations. That integrated system employs more than 40 million persons directly and many millions more through contractors and subcontractors, and has a total output comprising roughly a quarter of the world's gross domestic product. Power within the system has become more and more concentrated. In the past 20 years the total number of corporate mergers and acquisitions has exploded at a rate of 42% annually.
- The 1993 North American Free Trade Agreement (NAFTA) and the 1994 World Trade Organization (WTO) Agreement buttressed that concentration in many ways. Both protect a wide range of cross-border property rights, to the detriment of labor rights. Both automatically required the revision of U.S. laws held to have some relation to foreign trade and investment. Those statutory changes, covering many thousands of pages, were "fast-tracked" -- i.e., railroaded -- through Congress. TPA would follow that same pattern.
- Further, both NAFTA and WTO have "courts" that, in secret procedures, can and do override U.S. federal, state, and local laws. Future trade agreements would do likewise if White House pressures prevail.
Mounting Inequalities in Wealth and Power Between and Within Countries
Unsurprisingly, the result has been to increase inequalities greatly -- inequalities in power, inequalities in income and wealth, and inequalities within countries and among countries. Those gaps have reached proportions large enough to cause concerns even in some conservative circles. The front cover of the June 16 Economist asks: "Does inequality matter?" Somewhat equivocally, it answers Yes, and suggests that the very wealthy people in the West should follow the example of Microsoft's Bill Gates and give away some of their millions to help the poor.
Giving away part of your surplus wealth is praiseworthy. Like first aid for health emergencies, charity -- private and governmental -- is necessary, but so is a radical reform of today's discriminatory system of global governance.
Awakening to Global GovernanceA special supplement in the July 2-16 issue of the American Prospect magazine contains a series of insightful articles on globalization. Here are a few highlights from two of them, "Localizing Globalization" by Chris Mooney and "Government without Democracy" by Richard C. Longworth. The articles, plus background information, can be found on the magazine's Website (www.prospect.org).California and the Principle of Subsidiarity vs. NAFTA
Does the state of California have the right to ban a gasoline additive that may cause cancer in humans? No, insists a Canadian corporation that produces and exports the banned additive. The corporation, Methanex, argues that California's anti-pollution measure confiscates its property, and is suing the U.S. government for $970 million.
Methanex bases its lawsuit on the North American Free Trade Agreement (NAFTA). One of its little known provisions requires the governments of Canada, Mexico, and the United States to overrule state laws inconsistent with NAFTA's protection of property rights, including protection against actions "tantamount" to expropriation. A secret tribunal arbitrates such claims.
California is challenging the Methanex suit. In a letter to the U.S. Trade Representative, the state senate's select committee on international trade policy and state legislation has written: "We find it disconcerting that our democratic decision-making...is being second-guessed in a distant forum by unelected officials." A consultant to the committee, Law Professor Robert Stumberg of Georgetown University, argues that NAFTA's investment protection procedures violate the principle of subsidiarity, which holds that the government level closest to the people is the most responsive to the people's needs.
But NAFTA marches to a different drummer. So will the proposed Free Trade Area of the America (FTAA) if its proponents have their way.
Will California and other states be able to block their plans? In his article "Localizing Globalization," Chris Mooney, an American Prospect writing fellow, describes the growing awareness of an issue on which both NAFTA and FTAA are vulnerable.
* * *Globalization's Rule-Writers vs. Democracy and Equity
Far from floating free and unregulated across national borders, the global economy is actively managed by "dozens of forums, from Montreal to Paris to Basel, [where] effective laws, rules, and standards are being written," largely unnoticed, by groups of government officials and international experts. Richard C. Longworth, senior writer of the Chicago Tribune, examines their mission in "Government without Democracy."
Those men and women are "weaving a legal and supervisory web around the global economy" that is growing day by day, Longworth writes. "These people come from many different countries, but they share a faith in markets and a distaste for the messier aspects of democracy....Their mandate is a narrow one: efficiency rather than equity. If the world is made safer for bankers or investors or corporations, then they have done their job. They aren't under orders to look out for labor or communities or the environment, which have no voice."
But business does. In fact, Longworth says, "corporations and traders -- the only players who really understand what's going on -- are [partners in] writing and enforcing their own rules."
These new global laws, Longworth emphasizes, "supercede national laws and increasingly govern the lives of citizens who have no say in how they are written." And those citizens generally don't even know about the new global legislation. Why not? Mainly because:
Nevertheless, Longworth adds, "this work -- no matter how arcane-- makes a difference in how people live. It matters how and for whom banks are run. Lending codes, for instance, determine which projects get financed, which factories get built, and which workers get jobs."
- "Outside scrutiny is not encouraged. Much of the activity takes place in countries like Switzerland, free of open-meeting rules."
- "Almost all this work is complex and tedious. This is enough to keep away congressional scrutiny and press coverage. No political or journalistic reputations are made here."
Thank You, You >#@%-)&*< Protesters!
Those troublesome demonstrators in Seattle, Quebec City, and elsewhere have done the world a big favor. At least that's the opinion of a leading weekly news magazine. In a June 23 editorial titled "More Tomatoes Please," the Economist takes a look at the bright side of the protests against the World Trade Organization, the International Monetary Fund, the World Bank, and other multilateral organizations.
Those institutions, the magazine points out, "have long shared a common problem. Nobody (aside from a few eccentric publications, such as this one) wanted to write about them. Nobody wanted to hear about them. Mention of their names was enough to kill conversation."
Now, thanks to the protest movement, much has changed. The media is paying unprecedented attention to those organizations. As a result, the Economist continues: "The dismal science is suddenly sexy. Even more shocking, so are multilateral organizations. People [in the WTO, the IMF, and the World Bank] who used to be regarded as pen-pushing bureaucrats have become warriors in the struggle between the forces of global capital and the forces of something-or-other."
Further occasions for making economics sexy are on the calendar later this year. The two major ones:
Activists are gearing up for both events. The Washington-based organization, 50 Years Is Enough, is inviting people from all over the world to Washington for a week-long protest against "the illegitimacy of the institutions and officials who continue to claim the right to determine the course of the world economy." A Canadian group, the Common Front on the WTO, blasts the WTO for doing "the cowardly thing" by convening in small, far-away, and unknown Doha, and is planning not only to organize demonstrations internationally but also to give intensive publicity to the WTO's highly ambitious global activities.
- The bi-annual meetings of the World Bank and the International Monetary Fund October 2-4 at the Wardman Park Marriot in Washington, D.C.
- The bi-annual ministerial conference of the World Trade Organization November 9-13 in Doha, Qatar, which may launch a new global trade round.
In a separate category is the reaction of the U.S. Treasury Department, which represents the dominant member country (and funding source) of both the Bank and the IMF. In May and again in June, Treasury Secretary Paul H. O'Neill publicly criticized both institutions as in need of serious reform. The protesters won't have his company on Washington's streets, but neither is he all that helpful to the bureaucratic warriors in the struggle between the forces of global capital and the forces of something-or-other.
China's Continuing Assault on Its Workers
Millions of China's women and men work under a system of forced and bonded labor, Anita Chan, a researcher at the Australian National University, charges in her latest book, "China's Workers Under Assault: the Exploitation of Labor in a Globalizing Economy" (M.E. Sharpe publishers). She documents how China's system of regulatory controls over 80 million "migrant" workers are comparable to the passbook system under South Africa's apartheid cruelties."The discrimination against migrant workers in the Chinese case is not racial," she writes, "but the control mechanisms set in place in the so-called free labor market to regulate the supply of cheap labor, the underlying economic logic of the system, and the abusive consequences suffered by the migrant workers, share many of the characteristics of the apartheid system."For this and her other indictments of China's violations of worker rights, Chan has compiled supporting evidence from China's own official and unofficial sources, the earliest going back to 1991, and she adds context and analysis based on her own on-site research in China. The logical question, which she herself poses, is whether conditions have improved recently. No, to the contrary, she answers. "China's workers in 2000 seem even more vulnerable."
Chan, once a "dispassionate" social scientist researching labor conditions, one day found herself being "deeply moved" by accounts of the harsh realities of life endured by China's factory workers. She collects two dozen of such accounts in this book. Anyone reading them is bound to be deeply moved too.
Diary: A 15-Year Assignment Ends
Bad news. An encyclopedia yearbook, the Americana Annual, for which I have written at least one article a year for 15 years, is getting a quiet burial. The demand for encyclopedias isn't what it used to be. Normally, at this time of the year, I would be signing a contract with the publisher, Grolier Inc., commissioning me to do a feature later this year about the major human rights developments of 2001. But, sadly, that's finished.
As a teen-ager, I wrote an article for This Week Magazine, a nationally circulated Sunday supplement akin to today's Parade. It no longer exists. Neither do a batch of publications that over the years have carried my by-line at least once. Among those ill-fated ones: Chicago Daily News, Washington Star, Ave Maria, Sign, The Queen's Work, Freedom Review, Work, CIO News, Butcher Workman, Today, and Young Catholic Messenger. Then there's a book publisher, Helicon Press, which faded away after publishing a book of mine, "Primer on Interracial Justice."
But before word gets around that my by-line is death-dealing, here's some meager reassurance for editors. Time, for which I wrote as a Chicago "stringer" in the '50s, is still around. So are the New Republic, the Washington Post, America, Commonweal, and assorted other publications that have occasionally published my work -- occasionally enough not to affect their future one way or another.
What might I do with the time no longer spent researching, writing, and rewriting material for the Americana? I have article ideas aplenty. Written up, they would fill an encyclopedia.
Human Rights for Workers: Bulletin No. VI-8, July 5, 2001
Robert A. Senser, editor
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