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Growing Concerns Over WTO


Mark Weisbrot

In

just a couple of months thousands of environmentalists, steel workers,

longshoremen, AIDS activists, farmers, and others will descend upon Seattle in a

"mobilization against globalization." They will hold marches,

protests, teach-ins, and conferences.

The

occasion? The World Trade Organization is holding a meeting of ministers from

its 134 member countries, to talk about launching a new round of trade talks.

The

opposition’s plans have already attracted more press attention than the official

meeting. This suggests there is something big at stake here. There is.

In

fact, something big happened more than four and a half years ago, when the WTO

came into existence, and our own membership was ratified by the United States

Congress. But the consequences of this action are only now beginning to be

understood outside of narrow policy circles.

The

new bureaucracy of the WTO was given the authority to determine whether national

laws on such matters as environmental protection and food safety violate

international trade rules.

In

other words, the burden of proof has shifted: for example, if our Environmental

Protection Agency wants to regulate the content of gasoline in order to reduce

pollution, it must be careful not to infringe upon the rights of foreign

producers.

This

principle was actually tested when Venezuela, on behalf of its gasoline

producers, challenged EPA regulations on gasoline quality at the WTO. In 1997

the WTO ruled in their favor. The EPA subsequently changed its regulations,

weakening its ability to enforce federal air quality standards.

Another

WTO ruling last year undermined our Endangered Species Act. We have attempted to

protect endangered sea turtles from extinction by requiring that shrimp fishing

boats install devices that allow the turtles to escape the nets. The law applied

to all shrimp sold in the United States, but the WTO ruled that this was unfair

to other countries.

This

is a good example of how the trade principles embodied in the WTO erode

environmental standards. We have these standards because the public has decided

that certain protections of our natural environment are important. We are

willing to pay a higher price for certain consumer goods, for example, in order

to achieve these goals. But what happens when other countries– and very often

this means our own corporations producing in other countries– do not make the

same choice? If we cannot apply our standards to foreign-produced goods that are

sold in the United States, these goods will simply drive American-made goods out

of the market, and defeat the purpose of the environmental legislation.

The

WTO’s critics argue that it is time to stop and assess the record of the last

four and a half years, before creating any new rules. But the Clinton

administration is having none of this: it’s full speed ahead, not a moment to

lose.

The

Administration might have an argument if it could be shown that we risk missing

out on some great windfall. But the gains to the United States from the last

round of the GATT (the General Agreement on Tariffs and Trade, the WTO’s

predecessor) have been estimated at less than $700 million a year. This is less

than one-third the cost of one B-2 bomber.

Against

these meager gains we must consider the impact of trade on the distribution of

income. As trade has expanded over the last quarter-century, the median real

wage in the United States has actually fallen. There is no longer any doubt

among economists that these two trends– increasing trade and falling real

wages– are related. It’s not hard to see why: without any standards for labor

or human rights, increasing trade creates a "race to the bottom" for

wages and working conditions in the same way that it undermines environmental

standards.

The

broad-based challenge to the WTO reflects a growing awareness that the decisions

of these powerful institutions– including the International Monetary Fund, the

World Bank, and others– have a considerable impact on our lives and

livelihoods. And unlike national governments, they don’t have to care what any

angry voters might think.

You

don’t need a conspiracy theory to see that this unaccountability is deliberate.

All the more reason to stop and look at what the WTO has done, before expanding

its power.

Mark

Weisbrot is Research Director at the Preamble Center, in Washington, D.C.

 

 

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