29 May 2001

Contents:

As reported in previous Bulletins, DFAT will hold consultation meetings in most capital cities in June and July. AFTINET will advertise dates as soon as they are announced, which should be next week.

DFAT has also invited submissions by July 1 for consideration before the WTO meeting to be held in Doha, Qatar, in November.

A draft set of points for AFTINET members’ submissions will be circulated next week for comment. These will be based on our submission to the parliamentary Inquiry and will cover general issues. Many organisations will make more detailed submissions on special areas of interest to them. It is important that many submissions go in: please consider making a submission, however brief.

• Desirability for Australia's interests of including in the WTO's negotiating agenda new issues such as trade and investment; trade and competition policy; trade and environment; transparency in government procurement; electronic commerce; industrial market access and WTO institutional issues;

Submissions should be sent by mail fax or email by July 1 to:

Trade Policy Section
Trade Negotiations Division
Department of Foreign Affairs and Trade
R G Casey Building
BARTON ACT 0221

Facsimile 02 / 6261 3514

E-mail address trade.consult@dfat.gov.au ( Microsoft Word compatible format)

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by Clare Joy (World Development Movement, UK), Lori Wallach (Public Citizen, US) and Vicente Paolo B. Yu III (Friends of the Earth International) with editorial assistance of Markus Krajewski (AG Handel, Forum Umwelt und Entwicklung, Germany). Comments were provided by Elisabeth Türk (Center for International Environmental Law Europe) and Erik Wesselius (Corporate Europe Observatory, Netherlands).

We advise you to read this introductory paper first.

In mid March 2001, the WTO Secretariat released a paper entitled GATS: Fact and Fiction in an attempt to pre-empt a meeting and a news conference of a global network of civil society groups expressing concern about the GATS and its impact on social, environmental and economic regulatory policies.

The Secretariat's paper is also part of larger, increasingly hostile campaign by some governmental and WTO officials and business leaders aimed at the growing critique of current GATS negotiations voiced by civil society groups around the world.

This document is a reaction to the Secretariat's paper written by representatives of some of the groups involved in the March meeting and press conference. Even though we will only react to some specific points made in the paper, it should not be assumed that we do accept other parts or the entire approach of the paper.

Missing 'Facts'

As one leading developing country negotiator put it, "GATS: Fact and Fiction" is yet another WTO Secretariat document which "presents the facts but not all the facts". We find this to be true concerning the Secretariat's presentation of civil society's critiques, as well as the political reality in which GATS rules operate.

Civil society's concerns

Civil society's concerns relate not only to the existing agreement, but also and more importantly to proposals being discussed as part of new negotiations aimed at expanding the agreement. However, the WTO Secretariat's paper continually refers to the current, existing GATS rules as its only defence against civil society critiques of the proposals now being discussed to change the current rules. By focusing on the agreement as it stands today, the WTO Secretariat fundamentally misses the point of the arguments of GATS critics.

The context of GATS

Dismissing concerns about an agreement which locks into place policies which are yet to be assessed in terms of environmental and social impacts, or the overall benefits they bring to a country, is highly irresponsible and of great concern to environmental and social justice campaigners. As experience around the world is demonstrating there is an ongoing debate about the benefits and problems associated with service liberalization. GATS exists in the context of this debate and must consider this work.

Political realities of GATS negotiations

The services economy is heavily dominated by Northern transnationals who are actively engaged in corporate lobby groups that set the agenda for the big WTO players (EU, US, Canada and Japan). These countries have also made it clear that GATS is about expanding their export opportunities benefiting economies' ever more reliant on the services sector. Nowhere in "Facts and Fiction" are the political realities of international trade negotiations acknowledged.

Removing the 'right to regulate"

'Throughout "Fact and Fiction", the WTO continually claims that the 'right to regulate' is protected under GATS. Yet the ability to regulate depends on governments knowing how, and when, to make exceptions and impose limitations when they commit sectors to liberalization. This requires an unrealistic level of foresight and capacity. Furthermore, the purpose of the current GATS negotiations is to remove any exceptions and limitations on commitments governments have scheduled so far through "progressive liberalization of services" (see Art. XIX GATS). A key reason for the agreement is said to be to reassure potential foreign investors that the regulatory climate will not change, which is why it is so difficult for countries to reverse the decisions.

What benefits of services liberalization?

This is not a neutral agreement, it is an agreement that presupposes the benefits of service liberalization, and locks countries in with a liberalization ratchet. Over a decade ago the WTO promised developing countries an assessment of service liberalization. No such assessment is taking place.

Creating 'Fiction'

The WTO Secretariat's remarkable understanding of 'fact' and 'fiction' is illustrated by its use of (mis)quotes. In the first version of the paper released in March a number of NGOs were misquoted. We will point to some examples of this in our rebuttal. The Secretariat later corrected those quotes in the second version of the paper released in April and apologized to those NGOs misquoted. Nevertheless, we wonder why a paper full of misquotes was released to journalists right before the March press conference of GATS critics. It is unlikely that the journalists who received the first version, ever went back to WTO homepage and got the second version to check if there were any changes. "Honi soit qui mal y pense" (Evil to him who evil thinks).

Let the real debate begin!

The WTO and its defenders have developed an unfortunate habit of dismissing their critics as anti-trade, anti-investment, anti-rules and generally anti-progress. The groups writing this paper have always made it clear that we believe that a rules-based trading system is the best way to defend and promote the interests of developing countries. Our concern is that the current WTO rules have increased rather than reduced the imbalance between rich and poor and have restrained rather than promoted governments' ability to meet the needs of their citizens. This WTO bunker mentality may be an effective way to avoid real debate but it is a very poor way of dealing with the widely acknowledged need for fundamental reform of the WTO. The 'commit now: ask questions later' approach is highly irresponsible.

The groups who met in Geneva in March 2001 called for a moratorium on negotiations so GATS can be properly scrutinized and assessed. It is time for the WTO and its champions to climb out their bunkers : let the real debate commence.

Find out the true facts and fiction about GATS in the side by side rebuttal of the most troublesome claims made in the WTO paper. It was written by different people in direct reaction to the respective paragraphs of the Secretariat's text and should be read in the same way. Some of our comments tend to be rather technical, because they relate to specific arguments made by the Secretariat. This rebuttal is thus not a general overview of civil society's concerns about the GATS. It is at:

http://www.xs4all.nl/~ceo/gatswatch/rebuttal-intro.html

AFTINET www.aftinet.org.au
GATSwatch home page www.xs4all.nl/~ceo/gatswatch/
Public Citizen www.citizen.org
Friends of the Earth International www.foei.org/campaigns/TES/indextes.html

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Finance Ministers of the G8 (the 8 richest) countries are working out what should be decided at the G8 summit in Genoa July 22 to 24. They discuss & issue various communiques in the lead up to the summit. Please send a message to them urging them to agree on a New Deal on Debt, especially to tell the IMF & World Bank to write off 100% of debts owed to them by the poorest 52 countries.

Jubilee Plus in the UK have commissioned research which shows that it is financially feasible for these multilateral institutions to take this step.

Please email:

The April 30 edition of Newsweek (p. 32) contains an essay attacking the movement against corporate globalization. In this piece, Fareed Zakaria, an editor at Foreign Affairs, the premier mainstream US journal of international relations, attacks the protesters in Quebec as ignorant, self-interested, anti-democratic, elitist nationalists who are betraying the heritage of what Zakaria calls the "democratic left". The following is a response to Zakaria’s piece.

Fareed Zakaria’s essay "The New Face of the Left" (Newsweek, April 30, 2001 p. 32) is a confused and confusing diatribe against the international movement opposing corporate-directed globalization. The essay is off the mark in so many places that it is hard to know where to begin criticizing it. Certainly its most obvious problem lies in Zakaria’s apparently comprehensive ignorance regarding the actual people who make up this movement. Zakaria feigns familiarity with the protesters, their beliefs, even their motivations and intentions. Yet he gets so many things wrong that it’s obvious he has had little if any direct contact with real movement activists. For over a year, I have been interviewing and working alongside these activists. So why could I recognize almost nothing I know of them in Zakaria’s distorted portrait? He seems to have constructed a sort of protester piņata out of media caricatures and misrepresentations, and then whacks away at it with stock neoliberal cliches, backed up only by a strained, if novel, reading of left political history . The result is an uninformative hatchet job.

Let me try to tease out and respond to some of Zakaria’s criticisms of the anti-corporate globalization movement. He begins with a condescending dismissal of the movement’s views, moaning about how "pointless" it is to have to "rebut, one more time, the arguments made by the protesters in Quebec City." Flippant and patronizing, his tone suggests that by now any rational person who is not either deluded, naīve, or willfully ignorant must have come to accept the predictable free market catechisms and boilerplate apologies for corporate neoliberalism routinely penned by commentators like Thomas Friedman. Zakaria accuses protesters in Quebec of "misunderstanding" what he calls "basic economics," as though what is taught as "economics" in the American academy is some sort of genuine science, like geology or physics, instead of what most real scientists deem it to be: a partial, rather obviously ideological depiction of human society as viewed from the perspective of businesses and consumers.

He fails even to gesture to the spate of denunciations of the neoliberal model issued recently by prominent business leaders like George Soros and high-ranking economic officials like former World Bank chief economist Joseph Stiglitz. He completely ignores several recent economic studies, by analysts ranging from the business backed Economic Strategy Institute, to the Economic Policy Institute, to critics like Thomas Frank and Global Trade Watch’s Lori Wallach, that are widely acknowledged to have undermined much of the theoretical and empirical grounds for enthusiasm about the neoliberal model of globalization.

Zakaria continues by denouncing the Quebec protesters’ slogans as "confused and contradictory," without, however, providing even a single illustration of what he is referring to. Presumably he means to criticize the demonstrators for failing to submit to a party line and then stick to its script, in the manner of, say, those who speak for the US Federal Reserve, the IMF, or the World Bank. (If he is really troubled by the protesters’ "confused and contradictory" views, then a brief comparison with the campaign platforms of the Democratic or Republican Parties, or with a transcript of President Bush’s off the cuff remarks at the Quebec summit, should prove reassuring).

The protest movement against corporate globalization is not intellectually confused, but neither is it some sort of ideologically brainwashed army marching in lockstep to the drums and whistles of a conspiratorial leader cadre. It is, rather, a diverse coalition of distinctive groups and individuals, with varying, and often divergent, political views, attitudes, and ideas about what sorts of tactics and strategies are appropriate for coping with the impending crisis that confronts the planet today. What they have in common is a distrust of what they understandably view as a corporate led plot to sneak into law a binding set of international trade and investment rules that will only aggravate that crisis, while benefiting primarily business elites at the expense of everyone else.

In another astonishing gaffe, Zakaria accuses the protest movement of seeking to avoid public debate over international trade rules. "By taunting the police, beating drums and throwing rocks, the rioters make it pretty clear that they want not a rational debate but the world’s attention…" This while the text of the secretly negotiated and drafted FTAA agreement itself still remains inaccessible by the public, and while the heads of state of the entire western hemisphere – save Cuba – were attending closed meetings behind a ten foot fence! Is Zakaria unaware that for years, knowledgeable movement intellectuals like Walden Bello, Kevin Danaher, Lori Wallach, Noam Chomsky, and any number of others have been pleading with representatives of the WTO, IMF, and related institutions to agree to a public forum where issues of corporate globalization could be debated before a national audience? Others of us have debated frequently in more local forums with economists, business representatives, and government officials over the merits of NAFTA, the WTO, FTAA, and other such agreements. So far as I know, in none of these local public debates has our position failed to make its case and win the support of those present. This undoubtedly helps explain why advocates of the corporate globalization model are so afraid to engage these issues in front of national audiences.

Indeed, the fear that neoliberal ideology is losing intellectual credibility may be the hidden subtext of Zakaria’s acknowledgement that the "success" of recent protests around the world against corporate globalization "has begun to persuade some left of center politicians in the West to start speaking the new language of anti globalization." Yet, oddly, he views this partial success in forcing some modicum of public accountability and government responsiveness into the public debate over the future structure of the international economy as somehow "anti-democratic". He actually says that "[t]he anti-globalization crowd is anti-democratic" because it is, he accuses, "trying to achieve, through intimidation and scare tactics, what it has not been able to get through legislation. The lesson of Seattle seems to be: if you cannot get your way through traditional democratic methods, through campaigns, lobbying, and legislatures, then riot and rabble-rouse on television."

What a pathetically confined and hobbled conception of democracy Mr. Zakaria has! As he is surely aware, today in the United States, and for that matter throughout the rest of the incipient Free Trade Area of the Americas, what he calls "traditional democratic methods" provide virtually no meaningful political avenues for opposing corporate neoliberalism. In the US, the combination of overwhelming business domination of US economic policy making, the permanent forestalling of campaign funding reform, the ever-tightening control by corporate-owned media over the public discourse on globalization, and, not least, the legal and political trammels ratcheted into place by successive trade agreements like NAFTA and the WTO, have obviously undermined, not strengthened, popular democratic control over foreign economic policy. What, after all, are WTO tribunals, fast-track presidential treaty negotiating authority, and secretly drafted, hurriedly approved international economic agreements if not blatant political subterfuges that give the barest cover of law to transparent devices for evading democratic accountability?

Just as the pre-Civil War deference to states’ rights prevented abolitionists from using "traditional democratic means" to effectively challenge slavery, and just as business dominance over all three branches of the federal government in the late 19th and early 20th centuries prevented US workers from securing fair labor laws and standards, so too today the political-economic structure faced by anti-corporate globalization activists today for the most part denies them meaningful opportunities for genuine democratic participation through ordinary channels.

Under such conditions, what, then, does democracy look like? In what does democratic political action consist? Democracy must mean more than voting every four years for one of two corporate-approved presidential candidates with nearly indistinguishable neoliberal economic ideologies. It must be, in Lincoln’s felicitous phrase, self-government "of, by, and for the people." But the US is rapidly becoming none of the above. It is being steadily transformed into a government of, by and for the wealthy and powerful – an oligarchy, or, better, a plutocracy. Far from furthering democracy, NAFTA, the WTO, and the FTAA only exacerbate the process whereby this plutocracy is increasingly able to orchestrate the national and global economies almost entirely without public input or accountability.

Democratic citizens who are justifiably outraged by such a situation have a right to be heard, if not in the halls of the world’s legislatures then in the streets of the world’s cities. Whenever governments have refused to respond to legitimate popular demands presented through ordinary political avenues, then the people have always recognized their right to pursue extraordinary means to ensure that their grievances are redressed. The resounding lesson of the past two hundred years of US political history is that frequently only the power of confrontational politics can snatch justice from the teeth of the powerful. As John Brown and others came to understand, the Abolitionists would never have rid the country of slavery if they had restricted themselves to ordinary politics. Had it not been for mass demonstrations, civil disobedience, and direct actions, the rights of workers to organize unions, of African-Americans and women to vote, and of young men not to be forced to die in the criminal US war against Vietnam might never have been secured. The pursuit of justice by the progressives and radicals of their times engaging in the politics of confrontation in many ways represents the US’s noblest democratic tradition.

To be sure, Zakaria does openly acknowledge that it is "the right" that has long been suspicious of and hostile to real democracy. As he observes, they opposed democracy because "[s]ocial conservatives revered the aristocracy and traditional hierarchies, and free marketeers thought that the rabble would take away their property." And, as he points out, one of the greatest traditions of the left "has been a concern for the fate of democracy… The widening of democracy in the West and then its worldwide spread has been a lodestar of the left." But then, in yet another strange twist, Zakaria asserts that in Quebec it was the "historically left-wing forces" who "joined hands to oppose the strengthening of democracy in the Western Hemisphere." So when, exactly, did the social conservatives and free marketeers inside the citadel in Quebec suddenly convert to democracy? And when, exactly did the leftist "rabble" outside the fence lose their historically democratic compass and pedigree? In Zakaria’s bizarre interpretation, it is the fence itself that now delimits democracy, but, oddly, by ensuring that the tyrannical citizenry are prevented from subverting the popular democratic impulses of their social conservative and free marketeer leaders.

In still another bizarre characterization, Zakaria accuses the protest movement of betraying the left’s justifiably proud tradition of internationalism, by, he claims, embracing "economic parochialism." Yet here, once again, he either intentionally mischaracterizes or profoundly misunderstands the views and values of most movement activists. Zakaria depicts this amazingly diverse and eclectic movement as comprised predominantly of protectionist economic nationalists seeking, as he puts it, "shelters and subsidies for their own, invariably inefficient, industries." (This after admitting explicitly that "[t]he economic benefits to be had through regional trade agreements are few and of dubious value"!) But, as he is surely aware, it is not so much protesters, but rather powerful and influential multinational corporations who are the primary actors lobbying behind the scenes, seeking "protectionism" wherever their own profit making and rent earning opportunities are threatened or adversely affected by "free trade." An obvious example is the furor surrounding "intellectual property protections."

Hollywood wants to "shelter" its movies and CDs from bootleg duplication. Intel wants the same protections for its latest (not infrequently heavily "subsidized") chip technology. The world was recently shocked by lawsuits involving pharmaceutical companies seeking property rights "protection" from the governments of poor countries who want to make anti-retroviral AIDS drugs available cheaply to those of their citizens who will die without them.

At the same time, of course, transnational corporations will fight under their own banner of internationalism when it serves their interests. A major weapon in their arsenal at the moment is the notorious Chapter 11 clause of the NAFTA agreement, which set up a new system for transnationals to sue governments when democratically enacted laws threaten business profits. In over 15 recent cases, companies have usurped the traditional democratic rights of communities and governments by effectively nullifying their laws to protect foreign capital investments. Far beyond simply weakening protectionism, Chapter 11 challenges the sovereignty of elected government itself.

Zakaria apparently misses the logical contradiction in such blatant examples of corporate hypocrisy, or at least finds it unobjectionable. Yet at the same time he damns it as vile protectionism when tens of thousands of ordinary Canadian citizens take to the streets to protest against a system of international rules that has allowed US companies to force Canadians to export water to the US by supertanker and allow the sale in Canada of US gasoline tainted with dangerous additives, and then be forced to pay the companies’ legal bills. Given the current medical care crisis in the US, is it "protectionist" for these Canadian demonstrators to try to protect their "sheltered and subsidized" health care system – until recently perhaps the best in the world – from becoming horribly "Americanized" as a result of the global privatization of medical and other public services under the auspices of NAFTA, the WTO, the FTAA, and other such agreements?

Zakaria also apparently has little but contempt for labor unions, whom he dubiously claims " provided most of the money and bodies for these protests". Yet, as he should know, it is precisely the long string of political victories won over the years by these very unions, and the political parties that represent them, that have made everyday life for Canadian and European workers far safer, more secure, and more comfortable than the lives of most working Americans. Why shouldn’t such workers want to protect themselves from suffering the fate of their fellow workers south of the 48th Parallel? What could possibly be wrong with Canadian unions taking to the streets in international solidarity with US and Latin American labor organizations, to protest against an international economic order constructed by their corporate enemies, one whose rules are designed to make it even harder for unions in the US, in Mexico, the Caribbean, and throughout Latin America to duplicate their successes?

Who but a corporate stooge could fail to see the political logic and moral justice in such solidarity? If it is not "protectionism" to clamp down on international trade in products that cut into opportunities for Hollywood entertainment companies, computer software manufacturers, and pharmaceutical producers – three of the most profitable industries on the planet – to earn exorbitant rents from their "intellectual property", then why is it "protectionism" to try to regulate international trade in such a way as to protect turtles, old growth forests, union jobs, public health care, hormone- and genetic engineering-free food, and, not least, democracy itself?

Economic nationalists? Hard to imagine. The emblem that perhaps best captures the movement’s sentiments regarding nationalism is the Ruckus Society banner that was briefly suspended on the Figueroa Hotel during the Los Angeles DNC convention last year, until police cut it down, nearly killing a protester in the process. The banner showed the US flag with stars replaced by the corporate logos of McDonalds, Exxon, Nike, Oxy Petroleum, and other transnational corporations who underwrite the two mainstream US political parties. Nearly every movement activist I know is a fervent internationalist. What they are seeking is open, not fenced, borders; more, not less, cultural exchange; more, not less cross-border human contact; more, not less international solidarity. What they object to is a system that permits basketball shoes manufactured in sweatshops or toys made by exploited children or trafficked women or slaves to enter rich countries without any public accountability for the conditions under which these commodities are produced, while thousands of peaceful, non-violent citizens who seek nothing more than to express their indignation at this situation are detained at international borders. What they object to is the emerging system of global trade and investment that sanctions only those international activities that benefit only business corporations, while restricting and obstructing international demands for justice and internationalist expressions of human freedom and solidarity. What they oppose is not globalization, but globalization without any meaningful input from the citizens of countries likely to be harmed by it -- globalization without representation.

Zakaria’s confused screed does manage to get one thing right. He recognizes that, as he puts it, with this emerging protest movement against corporate globalization "[t]he new map of politics is being charted." No doubt the real enemies of democracy and internationalism will continue to rely on the political maps drawn by Zakaria and other imperial cartographers to erect and garrison ever stronger fortresses against the further spread of the movement against corporate globalization. Movement activists will do well to take their inspiration instead from the mapmaker Fra Mauro, in James Cowan’s novel A Mapmaker’s Dream, who declares "My role as a cartographer is tantamount to the discovery of the world."

5. Coming Events

Hear Bill Hare, Climate Policy Director of Greenpeace on International on Climate change: Australia’s role on the world stage.

• Brian Jenkins, WA Stop MAI Spokesperson:The GATS treaty and the limitations it poses for governments.
• Dee Margetts, former WA Senator and newly elected Greens MLC: GATS and National Competition Policy.
• John Croft. Gaia Foundation of WA : community-based economic systems.