Only six weeks after Canadian Trade Minister Pierre Pettigrew pronounced Ã¬I draw great satisfaction out of the fact that the phenomenon of anti-globalization has completely disappearedÃ® (1) MontrealÃs Queen Elizabeth hotel canceled its booking for next weekÃs World Trade Organization meetings, fearful that expected large protests would be disruptive.
We certainly believe that disruption of this anti-democratic organization is in the interest of most Canadians. The WTO is an institution that has never been democratically legitimized in Canada. Little about its quasi supra national powers is known, even though on numerous occasions WTO decisions have directly impacted Canadians.
Two of these rulings demonstrate its long-term deleterious effects on Canadians. In 2000, the Liberal government acceded to a WTO ruling further strengthening patents by making it illegal for generic companies to stockpile drugs in anticipation of the termination of a patent. This has added millions to the skyrocketing costs paid by individuals and cash-strapped Medicare. And now, with the stronger dollar, the WTO ruling against the Canadian Auto Pact, an agreement that forced American automakers to make a certain percentage of their cars in this country, could have major consequences in the years ahead.
But these two decisions are only the tip of a neo-liberal iceberg.
Lurking below the surface, the WTO is part of an agenda of economic transformation, which for the past 25 years has re-shaped the world economy in the interests of trans-national corporations and international investors. Ideologically this agenda is underpinned by what is commonly referred to as neo-liberalism, a political option whereby trade and investment is liberalized, state-owned companies are privatized and social spending is reduced.
Has it worked? What has been the result? Are people better off? Which people? Would most people be better off with another option?
While the world will never know what could have been, the agenda has been in place for sufficient time to see that neo-liberalism is definitely not in the interests of most of our planet.
Last yearÃs political explosion in Argentina is one vivid example of how neo-liberal reforms lead to a stagnation or reduction in peopleÃs living standards and social breakdown.
The fortunes of Mexico, CanadaÃs partner in the North American Free Trade Agreement (whose authors also subscribed to neo-liberalism), provides another illustration closer to home. After the 1982 peso devaluation Mexico, under pressure from foreign investors and governments, began to reorient its economy towards attracting foreign investment and transnational corporations. A central component in this process was the expansion, through tax subsidies and infrastructural development, of MexicoÃs export processing zones, called Maquilladoras.
The underlying logic of Maquilladoras was to attract foreign capital by using a ‘cheap’, compliant labour force. If labour costs increase beyond what the companies could pay elsewhere (transportation and raw material costs being equal), they would move elsewhere, which they have now done. Since 2000, with the entrance of China into the WTO, 250,000 Maquilladora jobs have disappeared. (2) While some of this job loss is a result of the downturn in the U.S. economy, most of the work has simply moved to China. Mexican workers make $1.47 (US) per hour whereas Chinese workers can be paid a third this rate. (3) But not only are Maquilladora jobs leaving the country, the Financial Times reports that Ã¬better paying manufacturing jobs that support entire families are fewer now than when the [NAFTA] agreement was signed.Ã® (4)
When Mexico signed NAFTA, proponents both within and outside the country claimed Mexicans were set to join the ranks of the worldÃs wealthy. If defined by the percentage increase in the number of billionaires, this is correct.
Unfortunately the overwhelming majority of Mexican are not billionaires and are no closer to joining their ranks. Instead, desperate Mexicans are now fleeing to the U.S. in record numbers. The number of illegal immigrants doubled in the 1990s to seven million. Recent estimates put the number of undocumented Mexicans in the U.S. at 4.8 million, most of whom work in extremely low wage jobs (5).
Last year Mexicans in the U.S. remitted a total of $10 billion US, which many say is the lifeblood of the Mexican economy. (6) So a decade after joining NAFTA and after two decades of neo-liberal reforms, MexicoÃs economy is dependent upon people sneaking across the U.S. border.
Even many former proponents of neo-liberalism have realized its shortcomings. People such as Columbia economist Jeffrey Sachs and international financier George Soros who once supported the liberalization/privatization ideology have shifted their positions. Most noted amongst the new found dissidents is Joseph Stiglitz, former chief economist of the World Bank, whose book Globalization and its Discontents highlights a number of neo-liberalismÃs limitations.
Of course, for the neo-liberal dogmatists this is irrelevant. Pierre Pettigrew maintains that more trade and investment agreements Ã¬mustÃ® benefit the worldÃs poor.
The thousands who will take to the streets of Montreal next week and the tens of thousands preparing to oppose the WTO next September in Cancun think otherwise.
Canadian Press June 07
La Presse, January 12
La Presse, January 12
Financial Times July 1
LA Times Magazine July 20
LA Times Magazine July 20
Yves Engler is a member of the Popular Mobilization Against the WTO he can be reached at [email protected]