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Issue No. 11 (January / February 2000) -- Mark Satin, Editor
Like every other Baby Boom dreamer in America, my heart leapt when I saw the first pictures of the demonstrators in Seattle last month, angrily protesting the meeting of the World Trade Organization (WTO).
Instead, some of them wanted to protect American manufacturing jobs even if it meant that the poorest countries would be forever shut out of our markets.
Some of them wanted to impose strict environmental standards on developing countries with no trade concessions in return.
And some of them simply had it in for “capitalism,” “the corporations,” “the suits,” whatever.
Seattle was important, but for a different reason than the protesters thought.
It illuminated, as with a lightning bolt, the real political forces in this country.
They were all there in Seattle -- if not in the streets, then in the suites or at conferences or teach-ins.
Forget the Democrats. Forget the Republicans. As we enter the new Millennium, five political forces are jockeying for power in this country.
Each of them took a different stand in Seattle.
And only one of them, the “Radical Middle,” was unabashedly for free
trade AND social justice.
It used to be that politics was like a straight line running from left to right. But after Seattle, it’s clear that politics in America is more like a divided circle.
The Vanilla Left, in the upper left hand part of the circle, was represented in Seattle by groups like Public Citizen, the Sierra Club, and the AFL-CIO. They want the WTO to stop expanding trade and then to adopt measures considerably restricting trade.
Radical Decentralism, in the lower left hand part of the circle, was represented in Seattle by groups like the International Forum on Globalization, the U.S. Greens, and the Ruckus Society. They want to shut down the WTO and someday re-invent it as a “people’s” trade organization.
The New Nationalism, in the lower right, was represented in Seattle by Pat Buchanan and his brigades. They want the U.S. to withdraw from the WTO.
The Corporate Right, in the upper right, was represented in Seattle by innumerable corporate lobbyists with copies of The Economist in their attache cases. They want the WTO to expand trade without regard to short-term social or environmental consequences.
The Radical Middle, the circle within the circle, was represented in Seattle by groups like the Brookings Institution, the Progressive Policy Institute, and the Institute for International Economics. They want the WTO to continue expanding trade while hammering out measures designed to make trade more of an option for the poorest countries and more responsive to labor and environmental concerns.
The protesters (essentially, the first three groups above) were wrong on the issues in Seattle. But they managed to dominate -- and polarize -- the media debate.
Look for that to change, though. The best arguments are all on the side of the Radical Middle (a term I’ve borrowed from social theorists ranging from Marilyn Ferguson to Alan Wolfe to Tony Giddens; see RAM #1, p. 7).
Learning to love the WTO
John Sweeney, President of the AFL-CIO, recently told the National Press Club that the WTO is crippling U.S. manufacturing and taking jobs away from American workers. And in its new book, Whose Trade Organization? (1999), Public Citizen says the WTO is hurting the American consumer.
But the evidence doesn’t support any of those claims.
In a recent paper, Greg Principato of the Progressive Policy Institute makes the following points:
In the Institute for International Economics’ book Measuring the Costs of Protection (1994), Kimberly Elliott and Gary Hufbauer show that the annual consumer cost per U.S. job saved by special protection averages $170,000 per worker.
In the current Foreign Policy, Bruce Stokes -- formerly at Worldwatch, now at National Journal -- credits imports with keeping U.S. inflation in check.
According to the Vanilla Left and the Radical Decentralists, the WTO is increasing global poverty.
But poverty is not increasing! “The number of people in developing countries living below the ‘poverty line’ stayed roughly constant at around 1.2 billion over the past decade,” says Jenny Bates of the Progressive Policy Institute. And population was “rapidly growing.” All told, “millions more people in developing countries moved out of poverty over the period than were born into poverty.”
Even the widening income gap between rich and poor countries “is due mainly to rising incomes at the top rather than falling incomes at the bottom,” says Bates. “For example, between 1980 and 1997, per capita income grew by 18% in South Asia (one of the poorest regions in the world), but by 36% in the developed countries.”
Vanilla Leftists and Radical Decentralists passionately agree that any world trading system worth its salt would insist that the developing countries set much higher labor and environmental standards than they do now. Public Citizen captures the mood when it says, “Commerce takes precedence over everything [now].”
There’s just one little problem. As Steve Charnovitz of the Progressive Policy Institute puts it, “[T]he strongest resistance to the idea of linkage comes from the developing nations that comprise the majority of the 135-member WTO.”
It’s not that countries like India or Brazil don’t care about labor or environmental standards. It that they want to build strong economies first -- just like the U.S. did in the late 19th century.
Vanilla Leftists and Radical Decentralists find something sinister about this. Radical Centrists are more accepting of it (especially since the majority of the developing countries are democracies), and offer two ways forward.
First, dicker with the developing countries. Offer them generous trade concessions in exchange for progressively raising labor and environmental standards.
Second, and simultaneously, just keep on trading with them and let popular pressure for reform bubble up from below.
Building economic prosperity around the world “will lead to higher [labor and environmental] standards,” says Robert Litan of the Brookings Institution. “The best way to do that is trade with these other countries -- so they get richer and their people then demand these standards.
“That is the history of the U.S. and Europe.”
Are we losing our sovereignty to the WTO? The New Nationalists and Radical Decentralists certainly think so.
Jerry Mander, President of the International Forum on Globalization, speaks menacingly of the WTO’s “ability to strike down the domestic laws . . . of its member nations,” and the Buchanan campaign’s Scott McConnell states flatly that the WTO has declared certain American laws “illegal.”
They’re really out to lunch on this one.
As Jenny Bates explains it, decisions of the WTO’s dispute settlement panel “are binding.” However, “if the panel rules against a member country, that country [has three choices. It] must modify their offending regulations, compensate the complaining parties, or face retaliation in the form of increased tariffs on their exports.”
In other words -- countries that don’t want to modify their laws can agree to negotiate with the winning party or parties.
And isn’t that fair? If we want the nations of the world to cooperate, shouldn’t they give as well as take?
Peter Gerhart, a professor of international law writing in the Washington Post (Dec. 6), made this point beautifully with regard to the now notorious shrimp-turtle case. “The WTO did not rule that endangered species . . . may not be protected,” he said. “It ruled that before the U.S. bans the importation of Thai shrimp, it has an obligation to sit down with Thailand . . . and come to an agreement that meets the interests of both countries. [And] the U.S. may have to give a little to get its way. . . .
“I do not believe -- as the protesters apparently do -- that the only way to protect turtles is to impair the livelihood of Thai fishermen. Instead, we should buy Thai shrimp and negotiate with Thailand to see what it will take to get that country to protect the turtles. That is the WTO way, and both countries win.
“If the protesters had their way, the people of Thailand would bear all the cost of a better world.”
Vanilla Leftists and Radical Decentralists are outraged that the WTO is -- to cite their favorite word -- “undemocratic.”
For the AFL-CIO’s Sweeney, that means primarily that workers don’t “participate in trade decisions.” For groups like Public Citizen and Sierra Club, it means NGOs don’t participate.
These are astonishing claims. Most unions and NGOs are free to filter their concerns through the governments that constitute the WTO. Why should certain prominent, primarily rich-country NGOs get what would essentially be a “second seat” at the WTO negotiating table? Why should the interests of Sierra Club members weigh more heavily in trade negotiations than the interests of, say, welfare mothers who shop at Wal-Mart?
“To claim that the WTO is ‘undemocratic’ is literally untrue,” writes Jenny Bates. “Indeed, the WTO is ‘hyper-democratic’ in that it operates on the basis of one member, one vote -- giving small, weak nations the same voting power as large, powerful ones. [And] amendments to WTO rules require at least a two-thirds majority of support among member governments.
“It is hard to see how an international institution -- short of a directly elected global government -- could be any more democratic.”
Making it better
The Radical Middle is sensitive to the needs, grievances, and fears of the other four political forces. That’s why its spokespeople have spent much of their time proposing improvements to the WTO. Some quick examples:
1.) Provide “social labels.” Rather than preventing imports of products, Steve Charnovitz of the Progressive Policy Institute would “promote new labeling systems to certify that the production process did not violate any core labor [or environmental] standards.”
He wants the WTO to “establish a working group to examine social labels and other methods of promoting corporate best practices.”
2.) Eliminate socially harmful subsidies. In a statement issued just before the Seattle WTO meeting, the Environmental Defense Fund urged phasing out “all environmentally damaging subsidies -- not only fisheries subsidies, but also fossil fuel, agriculture, tobacco, timber, and other subsidies.”
3.) Require offending countries to liberalize their trade policies. “The right of countries to accept further trade restrictions as [a penalty] for maintaining their own [restrictions] was an outcome of the negotiations establishing the WTO,” writes Greg Principato of the Progressive Policy Institute.
“The WTO should adopt new rules requiring the offending country to offer offsetting [trade] liberalization [instead. That way,] at the very least, WTO findings in disputes won’t have the perverse . . . effect of adding to trade restrictions.”
4.) End tariffs on all goods exported by the poorest nations. In the current Foreign Policy, Bruce Stokes calls on WTO negotiators to “finally dismantl[e] industrial country trade barriers that impede imports of African, Asian, and Latin American agricultural products, light industrial goods, and textiles and apparel.”
Just imagine what the AFL-CIO and Sierra Club would say to that!
5.) Make the WTO more transparent. All five U.S. political forces agree that the WTO is absurdly secretive.
The Radical Middle understands this secretiveness has to do with the status-obsessed M.O. of an international bureaucracy -- not with a Corporate Conspiracy. In other words, it’s eminently changeable.
“The organization has recently taken steps to improve its openness,” writes Jenny Bates of the Progressive Policy Institute, “and many improvements [can still] be made. For example, panel dispute hearings are closed to the public, and many documents are not released.”
6.) Make the WTO more responsive. Robert Litan of the Brookings Institution suggests “opening up the WTO’s dispute-resolution procedures to filings from NGOs and other private parties.” Charnovitz suggests that “once a year, the WTO convene a meeting of various groups such as consumers, business, environment, and labor.”
7.) Stress mediation more, dispute proceedings less. “The WTO dispute settlement provisions authorize the director-general to offer good offices, conciliation, and mediation -- but these proceedings have not been utilized,” writes Charnovitz. He’d have the WTO appoint a special “high-level conciliator” whenever new disputes arise.
8.) Don’t slight the domestic arena. Improving the WTO is only part of building an integrated world. Another part is making sure that all citizens benefit from integration.
Will Marshall, President of the Progressive Policy Institute, calls for “expanding the winner’s circle” in the U.S. by “creating a public-private lifelong learning system for U.S. workers,” creating “a ‘rapid reemployment’ system based on new information technologies,” and “empowering workers to . . . become stakeholders in their companies and in the U.S. economy as a whole.”
At the Institute for International Economics, Gary Hufbauer suggests dedicating “a portion of capital gains taxes to creating a fund for . . . wage insurance (and health care and moving allowances) for all dislocated workers. . . . It is only fair that a slice of the rewards generated by the new economy be returned to those shaken up by its dislocations.”
Beyond the new alienation
The WTO protesters are offering us a new alienation -- a conviction that globalization (= the modern world) is Bad and that it’s driven by the Bad Guys. Call it Late Sixties redux. Do you really want to go back to that mind-set?
The Corporate Right is offering a new selfishness -- call it Eighties redux -- that even many Fortune 500 executives and top business schools are rejecting.
With their commitment to free trade and social justice, Radical Centrists are offering a new connectedness to all the world’s peoples, mediated by (evolving) international organizations such as the WTO. Organizations with the authority to insist that (imperfect) governments sit down and bargain with each other. Some might call that a promising future.
References: All the organizations mentioned above have web sites full of WTO-related materials, which I drew on shamelessly for this article. The latest Radical Middle WTO book is Will Marshall, ed., Trade in the New Economy (1999, available online at www.dlcppi.org/texts/trade/reader.htm). Cf. Jagdish Bhagwati, A Stream of Windows (1998, Corporate Right); Pat Buchanan, The Great Betrayal (1998, New Nationalist); Jerry Mander and Edward Goldsmith, eds., The Case Against the Global Economy (1999, Radical Decentralist); and Lori Wallach and Michelle Sforza, Whose Trade Organization? (1999, Vanilla Left).
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