How the WTO Works
For activists from the industrial North, the Battle of Seattle was a fight to preserve the last vestiges of democracy. For those from the developing South, it was about basic survival. In 1998 I and my friends had never heard of the WTO, which receives virtually no media coverage. In fact much of our preparation for the November 1999 demonstration consisted of educating ourselves about globalization, the WTO, and “free” trade. Once we realized what the WTO was – that it had the power to overturn all federal, state and local legislation harmful to business interests – we realized that “free” trade erased any pretense that Americans still have democratic input into the political process at any level of government. That corporations now had the ability to control virtually all aspects of their lives.
The WTO, created by international treaty in 1995, gives corporations (member countries file complaints on their behalf) the right to complain to the WTO about the laws of any country, state, city, or town that interfere with their ability to conduct business. These cases are decided by a tribunal that meets in secret in Geneva and nearly always rules in favor of the corporations. The country (or state or local authority) must then rescind the law or face major economic penalties.
The Ability to Overturn ANY Federal, State or Local Legislation
In many cases, these laws relate to environmental protection or public health. Examples include a 1998 ruling against the US Endangered Species act that forced the US to allow shrimping fleets to use deep sea nets that were killing endangered sea turtles. Other WTO rulings forced the state of California to rescind a ban on a dangerous gasoline additive and the European Union their ban on imported US beef treated with growth hormone and requirements that genetically modified foods be labeled. The WTO also has the ability to overturn labor rights legislation.
Destroying Third World Farmers
Although the WTO was supposedly created to lift third world countries out of poverty, its impact on developing countries has been even more disastrous. There is no level playing field at the WTO. Countries with the most money, best lawyers and most political influence nearly always win out.
The immense damage the WTO has done to developing countries stems mainly from US “dumping” of agricultural surpluses (mostly corn, wheat and potatoes). After the WTO forced member countries in Africa and Asia to repeal their tariffs and import quotas, American agribusiness took advantage by selling (”dumping”) surpluses in Africa and Asia for prices that were below the cost of production. This wiped out hundreds of local farmers, forced to sell their products below the cost of production or discard them. This is why the Korean farmer Lee Kyang Hae publicly killed himself at the 2003 WTO Ministerial in Cancun.
The skewed playing field against smaller, poorer countries is clear from the seven complaints New Zealand has filed with the WTO:
- A complaint against Hungary because of export subsidies (as explained above, export subsidies give exporters an unfair advantage by allowing them to sell their products below cost) – settled by mutual agreement (Hungary repealed the subsidies).
- A complaint against European Union for classifying spreadable butter in a way that resulted in tariff on it (tariffs are local taxes that make foreign products uncompetitive by increasing their cost) – settled by mutual agreement (the EU reclassified spreadable butter from New Zealand in a way that made it tariff-free).
- Against India for restrictions on agricultural, textile, industrial imports – supposedly settled by mutual agreement, but India still restricts imports.
- Against the US for unnecessary safeguards on imported fresh, chilled, and frozen lamb – the US dragged out the process for two years before eventually repealing the law, at immense cost to New Zealand taxpayers.
- Against the US for restricting steel imports – although the US eventually repealed the law, they dragged out the process for years, making the demand that the WTO issue eight separate panel reports for different types of steel.
- Against Canada for export subsidies on dairy and other products – settled by mutual agreement (Canada repealed the subsidies).
- Against Australia for banning the importation of New Zealand apples, with the spurious claim that they carry fire blight (which only infects stone fruit) – after dragging the process out for many years, at great expense to New Zealand, Australia finally repealed the law, but continues to find trivial reasons to reject our apples (discolored stems, etc).
Obviously the benefits New Zealand has enjoyed from WTO membership are very minimal, when compared with the immense damage globalization has done to our manufacturing sector, balance of trade and debt levels.
To be continued.