A little broken glass in the streets of Seattle has transformed the World Trade Organization into a popular icon for the unregulated globalization that tramples human values on every continent, among rich and poor alike. The guys and gals in turtle suits, with a little help from overanxious cops, woke up America and maybe the world.
The WTO, I had assumed, was already a doomed institution. It lacks the legal authority to police the domain it grandiosely claims to govern. Nor are its founding sponsors going to allow genuine reform, since accepting the legitimacy of labor and environmental rights, social obligations and national sovereignty would destroy the WTO's usefulness for global business and finance. Given the dilemma, I do not expect this queer duck of pseudogovernance--a private club for deal-making among the most powerful interests, portrayed as a public institution searching for international "consensus"--to survive. Of course, it may take years of agitation and conflict before the global establishment accepts reality. Arrogance designed the WTO; arrogance will doubtless defend it. In the meantime, the WTO can serve as a splendid rallying point for popular resistance.
The organization was created in 1995 based on a colossal error in judgment: Multinational firms and financiers, joined by political elites in wealthy nations, failed to grasp that once the cold war was over, people would be able to look more directly upon the pathologies and instabilities of the globalizing economy. For four decades, critics and victims were silenced by the cold war's imperatives. Now the veil has fallen away, and a burgeoning worldwide movement is finding its voice.
Bill Clinton bet his presidency on the same misjudgment. He formed an obsequious alliance with US multinationals and Wall Street finance to secure his own power, while his famous charm was used to deflect the disappointed constituencies he betrayed. Those groups--organized labor, environmentalists, the religious faithful, free-spirited humanists--called his bet in Seattle, and this time manipulation failed him. When John Sweeney of the AFL-CIO refused to accept one more fig-leaf gesture of the President's good intentions, Clinton dared not move forward with another business-friendly sellout.
Clinton and the trade lawyers in his Administration may have been misled by believing their own simple-minded rhetoric on free trade--"more trade good, no trade bad," the mantra they repeat in response to every grievance. It is a non sequitur that dodges the fundamental issues. Without the cold war, it no longer persuades a majority of Americans. The mantra also misrepresents the essential nature of the global system. Yes, trade liberalization reduces formal barriers like tariffs, but the operating reality of the global system is a complex, informal arena of irregular political bargaining among producers and suppliers, investors and governments--deal-making across national borders that shapes every sector of commerce.
Does Boeing want to sell more airplanes to China? Then Boeing must negotiate terms for market access. China demands a share of the production, jobs and advanced technology. Boeing meets the demands; China buys more planes. All multinational giants, from AT&T and Motorola to Volvo and Toyota, routinely do similar sorts of deals. This is not free trade; it's a crude system managed by political bartering among major interests. The GATT agreements, dating from the first one in the forties, simply provide a set of closely argued rules of the road for deal-making. An agreement typically starts with a few broad principles about equal treatment for all trading partners, but what fills up the text is the crazy quilt of lawyerly exceptions--the fine print that spells out how certain principles can be ignored in certain cases, how some forbidden practices are allowed by mutual agreement among the self-interested companies and governments.
This is not law, and the players are bound to cheat (and not just the poorer nations). So the WTO was created as an enforcement officer. Now the barter process has been stretched to include national laws and standards, even national values, on any matter that disturbs someone's trading interests. If a nation passes legislation--to save dolphins or French farmers--that intrudes on the sacred freedom of commerce, the offending nation will be ordered to pay the aggrieved parties. That money-driven enforcement process is a ludicrous approach to global law-making and, without popular consent, impossible to achieve. The WTO aspires, in effect, to create a bill of rights for capital, crafted one case at a time by the corporate lawyers filing their confidential pleadings in Geneva. It is not hyperbole when critics say the system defends property rights but dismisses human rights and common social concerns as irrelevant to trade.
In Seattle developing countries were blamed for the rejection of labor rights and environmental protections, but the media neglected to mention that the AFL-CIO collected endorsements for its demands from more than 100 labor federations around the world, including struggling independent union movements in the poorest places, where labor is often brutally suppressed by force. They know they're on a hopeless treadmill without international protection, because their wages and working conditions will be undercut by the next poor country below them on the food chain, bidding for industrial jobs by sacrificing workers.
The media also ignored the plain truth that India, Brazil and Pakistan could not prevail alone but were joined in opposition by the largest multinationals. Does Boeing support the idea of independent trade unions in China, where its workers are supervised and disciplined by CP cadres? Will Motorola, Intel and the other US semiconductor manufacturers inform the Malaysian government that they no longer oppose independent unions for the young women working in Malaysian factories? No, of course not. In China, Mexico and many other low-wage production platforms, factory wages are effectively set by the government itself, not by free-market competition or collective bargaining. The companies like it that way. So, of course, do those governments.
The campaign for authentic reform will be a long and uphill struggle, but it may already be time to open a new front. The next target for protest, I suggest, ought to be the major multinationals themselves, at least those that claim America as home base. If we are told that the WTO cannot consider such straightforward matters as child labor and humane working conditions, then the task of global reform must reside in the national legislatures, including Congress. America cannot tell other nations how to govern their domestic affairs, but it certainly can tell its own companies what's intolerable to US consumers and citizens. If Congress can prohibit overseas bribery by US corporations, it can prohibit abuses of humanity in their foreign factories, especially when the goods are produced for American consumers.
As national legislation is developed to hold our global firms accountable for their behavior, we will be told that this approach violates our agreement to accept the WTO's governance. That's true. We do not accept it.