Of World Trade, Democracy,
and the Pursuit of Happiness
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Sea Turtles from Animal Welfare Institute March
Against World Bank and International Monetary Fund
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Seattle II
: Demonstrators arrived in Washington, DC on April 16th to protest another aspect of the international economic order as proposed by global businesses - namely the operations of the World Bank and International Monetary Fund.
William Greider, writing for The Nation, points out that these two institutions with their poor economic, cultural and environmental track records, are really at the bottom of the economic hierarchy.
The global economic community is headed by finance capital firms like Goldman Sachs, large corporations like Novartis, the national governments which are subservient to the corporate institutions (due to various forms of legal and illegal corruption), and finally the IMF and the World Bank. All work together.
Take the planned $100-125 million World Bank investment in the controversial Chad-Cameroon Oil Pipeline which will serve three companies, Elf, Exxon, and Shell.
The Bank proposes to finance a pipeline through the richest agricultural region of Chad to the ocean through Cameroon. Citizen reports note that numerous people have been murdered in the path of this pipeline to eliminate opposition, an opposition parliamentarian, and two journalists have been jailed for speaking out about the project. A US ambassador was withdrawn by the State Department for threatening a citizen group over the project.
The project violates the World Bank corruption guidelines. Transparency International ranks Cameroon one of the ten most corrupt governments in the world, and graft is also extreme in Chad. But that has not dissuaded Bank officials from pushing the project.
To be fair, this project on behalf of three major oil companies might be profitable enough to service its debt - unlike the half of the World Bank project loans that fail. But this is only if the proposed offshore escrow accounts prevent theft of the money by bureaucrats. This project might even increase poverty.
Major Source of Global Warning Investments
The World Bank remains the world's largest lender to developing nations for obsolete types of inefficient, mega- energy projects, ranging from coal fired plants, dangerous to world climate, to dams that displace huge populations and create environmental refugees.
Efforts of citizen groups, like ourselves, to persuade the Bank to consider large scale efficiency, solar and wind power, power plant maintenance, or co-generation funding have been stonewalled.
But we must not forget that the World Bank is now only part of the international trade and finance conglomeration - and in recent years has become much less important than 40 to 50 large private finance firms. When the World Bank finally agreed not to fund the Three Gorges Dam in China, Lehman Brothers, J.P. Morgan, Salomon Smith Barney, Merrill Lynch and others stepped in to raise private funding.
The International Monetary Fund (IMF) has even less of a record to show for taxpayer investments than the World Bank. They contributed most recently to the collapse of Far Eastern and Russian national economies with adverse ripple effects on our own economy. Their record led Ralph Nader to question whether IMF's management ever considers a program to be a failure?
Trade Without Democratic Institutions
The country of Butan has an index of Gross National Happiness which requires an evaluation of the effect of economic activity to welfare. In comparison, the mantra of the US President and both presidential candidates is that economic growth and trade are desirable at any cost.
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How to Participate: The best way is to contact your Congressman and Senators, and ask them to cut IMF and World Bank funding.
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Loss of democratic control and feedback about world trade and investment decisions is at the heart of the demonstrations of 50,000 people in Seattle and continuation of the protest in Nation's Capitol.
Carl Pope, executive director of the Sierra Club, recently assessed the issue in his article "Trading Away Democracy" for the Sierra magazine:
". . . As (President) Clinton explained to me and other environmental leaders while talks (in Seattle) were unraveling, Washington DC recognizes two types of public-policy matters: ‘contract’ and ‘normative’ issues. Contact issues are those . . . which voters acknowledge are so complex and so removed from their personal priorities that they are willing to contract them out to trusted elected leaders.
Normative issues, on the other hand, are those like school prayer or abortion; on which most voters have firm opinions. They decide to trust – or distrust – politicians based on the degree to which the politician’s position echoes their own values and feelings . . ." |
Many of world and regional trade issues involve normative issues in which most citizens would never want to entrust to un-elected bureaucrats, often located in another country, to manage.
The European Economic Community, in contrast, spent decades in an effort to establish some democratic procedures and institutions, including a Parliament, and an effective veto by smaller countries. No such veto is allowed by the WTO. European citizen groups are now trying to gain the right to take their concerns to European courts.
Cautionary Tales From Numerous Examples of Trade Agreement Abuses
Experience with the regional North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico has illustrated pitfalls of commercial trade unregulated by democratic feedback. Unregulated global trade promises thornier drawbacks.
1) Lawsuits Against US and Canadian Governments By Foreign Corporations: Last July, the Vancouver- based Methanex Corporation filed a $970 million lawsuit against the United States under Chapter 11 of the North American Free Trade Agreement - seeking compensation for the loss of their profits and stock values resulting from the decision of the State of California to ban the gasoline additive WBE. Yet this additive, which contaminates the groundwater in many states, is a legitimate public health issue.
Likewise, the US based Ethyl Corporation in 1996, filed a $251 million lawsuit against the Canadian Parliament under NAFTA. The company claimed that the Parliamentary debate about the health effects of another gasoline additive called MMT (manganese based) and the decision of the Parliament to ban MMT, interfered with the Ethyl's enjoyment of its property. Out the door goes freedom of speech in a democracy.
Excessive manganese exposure causes Parkinson's disease, childhood learning disabilities and violence all sufficient grounds for governmental action to protect the public health and welfare.
Faced with the lawsuit, the Canadian Parliament amazingly withdrew its ban of MMT, and agreed to pay Ethyl $13 million to settle the case. Only one good thing came out of this effort. Oil refiners, concerned about their legal liability in using MMT, are selling less in Canada. (Ethyl is the company that poisoned a whole generation of children with leaded gas.)
2) Aggressive Reading of NAFTA: The two lawsuits represent an extremely aggressive reading of one provision of Naiveté’s Chapter I 1, designed originally as a defensive measure against expropriation of foreign investor holdings. Now, if s being interpreted as a provision requiring the taxpayer to reimburse companies for not producing hazardous and defective products. As Howard Mann of the International Institute for Sustainable Development laid out the issue:
"The idea that a regulation to protect the environment requires compensation to a foreign investor is an extremely aggressive reading." |
3) WTO Asserts Trade Supremacy and More: The World Trade Organization (WTO) was established on January 1995, as a supreme arbitrator on global trade. What distinguishes the 1995-trade treaty from earlier ones is that no signatory government can oppose the ruling of three person trade dispute panels located in Geneva without risking extreme trade retaliation.
In 100 cases brought before it the WTO panels have favored corporations over country standards in every case. The United States has been trying to use free trade, as enforced by the VVTO, to force Europeans to buy hormone contaminated American beef and genetically engineered food. As Steven Shrybman commented on the issue:
"Many have described WTO as an international bill of rights for multinational corporations ... When the Canada-US Free Trade Agreement was concluded in the 1980s, President Reagan described it as the economic constitution of North America. Recently the Director General of the WTO, Renato Ruggiero used similar language to describe the WTO. But the WTO is a constitution for corporations. Its rules take little or no account of people or the environment." |
4) Pollution Prevention and Recycling - An Example: Like NAFTA's governing body, the WTO has taken a very aggressive viewpoint to assert the supremacy of trade over health, environment, and welfare.
A progressive directive proposed by the European Commission last year would have required manufacturers of electronic equipment - (which usually contains high levels of hazardous materials like lead, mercury and fire retardants) - to take back their equipment once it reaches the end of its useful life.
The proposal was strongly opposed by the US Trade Representative and the US electronic companies as a restraint of trade. A cradle to grave program for toxic substances is good public policy, yet the WTO offers an opportunity to attack it in a non-democratic venue.
Further Flaws in the Free Trade Concept
James Goldsmith points out that the extreme wage differentials between industrial and developing nations and huge populations involved, guarantees that global free trade will seriously depress wages and standards in industrial nations, while trade causes massive migration of the displaced from developing nations. Regional trade pacts would make more sense.
Citizen opposition has sidelined "fast-track authority" for NAFRA that would have cut the US Congress out of the negotiation of trade agreement details, and the Multilateral Agreement on Investment (MAI) which would prevent regulation of investment flows, including hot speculation money, anywhere in the world. Even speculator George Soros was opposed to that.
- Goldsmith, James, "Global free trade and GATT", extract from Le Piege by Goldsmith
- Dept. Planet Earth, "Debt and Economic Performance" (1997)
- Naim, Moises, Ed., "Lori's War", Foreign Policy (Spring 2000)
- Pope, Carl. "Trading away democracy", Sierra (Mar./Apr. 2000)
- Greider, William, The Nation, (April 7, 2000)
- Schoen, Deborah, "NAFI'A loophole threatens environmental legislation:, Environ. Sci & Technol. (Oct. 1, 1999)
- Shrybman, Steven, "The World Trade Organization, the new world constitution laid bare", Ecologist 29/4 (July 1999)
- 60 Minutes, "Butan-gross national happiness", (Feb. 6, 2000)
Explorations of Overconsumption
Signs of ecological failure are widespread, such as the collapse of fisheries, leading to investigations of what could be done. Paul Hawkins presents some technical remedies, but others worry about consumption itself. Brown and Cameron's recent article, "What can be done to reduce overconsumption?" quotes Elkins:
"Within this context, overconsumption is defined as the excessive use of goods and services arising from a mistaken belief that ... the possession and use of an increasing number and variety of goods and services is the principal cultural aspiration and the surest perceived route to personal happiness, social status and national success."
The marvelous picture study by Peter Menzel, Material World, A Global Family Portrait, brings this issue home. A picture review of the material possessions of families across the world begs the question of whether having so many more things produces more happiness. In his chapter, "Betting the planet", Charles Mann wonders aloud about survival: "In effect, the human race has entered into a great wager. We are, so to speak, betting the planet..."
Jane Jacobs in her latest book, The Nature of Economies wonders whether the human being is different from all other species. "What I'm pursuing ... is the question whether our species has inborn traits that restrain habitat destruction." (Some good signs.)
Donna Meadows who co-authored Beyond the Limits, has recently become less interested in winning the environmental debate, and more concerned with the "intransigent nature of the discussion".
- Brown, Paul M & LD Cameron, "What can be done to reduce overconsumption?" Ecological Economics 3211 (Jan 2000)
- Hawkins, Paul et al, Natural Capitalism Little Brown (1999)
- Meadows, Donella H et at, Beyond the Limits Chelsea Green, Post Mill, Vt. (1992)
- Jacobs, Jane The Nature of Economies The Modern Library, NY (2000)
- Menzel, Peter, Material World Sierra Club Books, San Francisco (1994)
Negotiations Continue in Bonn on Treaty for Phase Out of 12 Persistent Organic Pollutants (POPs)
Delegates from 110 nations converged on Bonn, Germany on March 20th for six days of negotiations to further develop a global treaty proposal to phase out twelve persistent organic pollutants (Pop’s) that should have been discontinued or prevented long ago.
These pollutants are DDT, chlordane, heptachlor, aldrin, dieldrin, endrin, mirex, toxaphene, PCBS, hexachlorobenzene (HCB), dioxins, and furans.
It was the fourth negotiation session (INC4) of a process that began in Brazil in 1992. A fifth session will be held in South Africa in late October or early December, and the treaty is scheduled for signing in a meeting in Stockholm, May 21-23, 2001.
Despite great efforts by health and environmental groups to negotiate with the United States delegation before they left for Germany, and a large international citizen delegation in Bonn to try to ride herd, foot dragging by the United States was responsible to a great extent for stalemate on key issues.
The key overarching issues of the citizen community were: 1)a goal of elimination rather than just regulation; 2) the precautionary principle; 3) sufficient financial and technical assistance for developing nations; 4) an easy criteria for adding new POPs to the list for future phase out; 5) and, avoidance of a supremacy clause to allow the WTO a veto. The elimination of DDT was another issue, which requires alternatives for control of malaria for success.
EPA's Staff: We Will Have to Ban Volcanoes!
The staff of the US Environmental Protection Agency claimed that elimination of HCB, dioxin and furans was impossible, because small amounts are produced by volcanoes and fireplaces.
Since we can't eliminate small sources, they asserted, we shouldn't try to eliminate large sources. We should also not attempt to reduce chlorine as a feedstock in products that are incinerated to prevent dioxin. If you can follow this logic, you are doing better than we are.
Along these lines is new study by Lemieux found that emissions of dioxins from open burning of household waste in barrels is massively large. Two to 40 house- holds burning their trash daily in barrels can produce average dioxin-furan emissions comparable to a 200 ton a day municipal incinerator. What this says is that American trash is so loaded up with chlorinated plastics that the only good solution is to eliminate chlorine as a feedstock in manufacture of household products. The EPA staff would rather focus on the ban of barrels.
Wunderli's study of dioxins and furans from wood combustion (remember the fireplace) found that "native" wood is very minor source of dioxin. In contrast, residual wood like chipboard emits 1000 times more dioxins when burned, and waste wood that has been painted or glued, emits 10,000 times more dioxin than "native" wood.
It would make sense to eliminate the use of chlorine in paints and glues. Instead, EPA's staff would like to eliminate the wood. Volcanoes are also minor sources. Here too, the EPA would rather focus on volcanoes rather than chlorine as a feedstock. So that's the logic of our regulatory agency, and it certainly comes from the campaign finance center at the White House.
Precautionary Principle First Used in Europe
The European Community (EU) has adopted an advisory precautionary principle document to try to prevent harm in the face of scientific uncertainty. Recent Swedish findings of a dramatic buildup of PentaBDE, a POPs used as a flame retardant for polyurethane foams, in human breast milk led to concerned debates in technical committees at the EU.
In November 1999 a meeting of "Competent Authorities" in Helsinki agreed that there is a need to reduce the risks from this substance without waiting for further research. This will likely lead to a ban of PentaBDE by Member States this year.
- Lemieux, Paul Met at, "Emissions of polychlorinated dibenzo-p-dioxins and polychlorinated dibenzofurans from the open burning of household waste in barrels", Environ Sci & Technol 34/3 (2000)
- Wunderli, Samuel etal, "Determinationofpolychlorinateddibenzo-p- dioxins and dibenzo -furans in solid residues from wood combustion... " Chemosphere 40 (2000)
