It’s billed as the Battle in Seattle. In the suites will be the representatives of 135 nations gathered for the Third Ministerial Conference of the World Trade Organization, hosted by the Clinton Administration. On the streets will be a raucous gathering ranging from US environmentalists and union members to the Zapatistas from Mexico and José Bove, the French sheep farmer who became a folk hero when he tore the roof off a local McDonald’s with his tractor.
For Clinton, Seattle is legacy time. After having presided over the US adoption of NAFTA and the WTO, and the agreement on China’s entrance into the trade organization, Clinton wants the Seattle meetings to launch a new “millennial round” of global trade negotiations that he can portray as a historic achievement. Calling for the WTO to open up, to pay at least nominal attention to labor rights and the environment, Clinton will restate his commitment to putting a “human face on the global economy” while celebrating the progress of globalization on his watch.
For the demonstrators, Seattle will mark the rising tide of opposition to that same corporate-dominated trading system. At the last WTO conference, in Geneva in May 1998, the protests of thousands caught officials by surprise. The even larger protests in Seattle will put all on notice: The era of backroom deals among private interests is over. Indeed, the Clinton years may be remembered less for the triumph of the corporate trading system that he has promoted than for the beginning of the struggle to call it to account. At the very least, from now on the future will be contested.
The WTO has been in existence for only five years, overseeing and enforcing the trade accords that countries have signed on to. Globalization preceded the WTO and would have proceeded without it. So why is it such a lightning rod? To understand what is at stake in Seattle, it is worth stepping back to get the context.
Over the past quarter-century, transnational corporations and banks forged a new global economy, with the flow of goods, services and particularly money across national lines expanding exponentially. Apologists paint this as an act of nature, driven by revolutions in technology, communications and transportation. But markets are made, not born. This global market was constructed by and for global corporations, aided by a forceful assertion of state power. When conservatives seized the commanding heights of the industrial world starting in the seventies–Thatcher in Britain, Reagan in the United States, Kohl in Germany–a new consensus formed on privatization, deregulation, fiscal austerity and “free trade.” Indebted developing countries were force-fed what became known as the “Washington consensus” by their creditors, with the International Monetary Fund acting as Big Nurse.
The WTO is the culmination of this process. Former director-general Renato Ruggiero characterized the task as creating the “constitution of a single global economy.” The impetus behind it was the desire of global corporations and banks to regulate the world economy in their interest–setting global standards, protecting investments, enforcing patents, quashing nonconforming local and national laws and regulations. The various agreements that the WTO enforces were initialed by the member countries, but they were largely drafted by and for corporations. For example, a coalition of corporations including Monsanto, Du Pont, Merck and other giants helped draft the US position in the Uruguay Round of GATT negotiations on patents and copyrights. Needless to say, the end agreement–hammered out behind closed doors by the rich economies and foisted on the poor ones–protected the interests of the wealthy, not those of the small farmers, subsistence peasants or consumers of the world.
The global economy that the WTO is now intended to police has worked remarkably well for the multinationals. By 1999 the United Nations Development Program was reporting that multinationals accounted for a third of all global exports. A wave of cross-border mergers is creating megacorporations. The ten largest corporations in each sector controlled 86 percent of the telecommunications industry, 85 percent of the pesticides industry, 70 percent of the computer industry, 35 percent of pharmaceuticals, 32 percent of commercial seed. The combined assets of the three wealthiest billionaires were more than the combined GNP of the forty-eight least-developed countries.
But the new economy has not worked very well for most working people. By 1999, 200 million more people lived in abject poverty (on less than $1 a day) than in 1987. Inequality has grown both between and within countries. Only thirty-three countries achieved sustained 3 percent annual growth in GNP from 1980 to 1996. In fifty-nine countries, primarily those in sub-Saharan Africa and the former Eastern bloc, GNP per capita actually declined. Environmental despoliation is getting worse. The Nike economy saw the rebirth of the satanic mills–child labor, young women working for a pittance in export-processing zones where union organizers are routinely fired, beaten or killed.
Even in the advanced countries that should have benefited the most from the system, workers haven’t fared particularly well. In Europe, slow growth has left millions unemployed. Japan has suffered a decade of decline. In the United States, now basking in its extended growth, wages declined after the mid-seventies and still have not recovered the ground lost over those years. Inequality has hit new heights, while most families actually have less net worth now than they did two decades ago.
Opponents of all this were generally dismissed as protectionist victims–the “turtles,” as New York Times columnist Tom Friedman dubbed them–who just couldn’t keep up. But then, beginning in 1997, the opposition showed its clout in the United States. An unlikely coalition of progressives concerned about labor rights and the environment and isolationist conservatives blocked fast-track presidential trade authority twice. The political defeat was reinforced by the global financial crisis–the worst since the Great Depression–which shook the confidence of the financial elite.
Since that time, the Clinton Administration has been scrambling to contain and co-opt the rising opposition. The Jubilee 2000 movement, a coalition of religious and secular groups, forced wealthy countries to put debt relief for the most impoverished countries on the global agenda. A coalition of labor, consumers and environmentalists torpedoed negotiations on the Multilateral Agreement on Investment, which would have pushed financial deregulation further. Consumer revolts, led by students against sweatshops, had companies like Nike scrambling for the cover of codes of conduct.
President Clinton’s response was to adopt the rhetoric of reform, calling on the WTO to be more open, pushing the International Labor Organization to promote a ban on the worst forms of child labor, supporting a working group on labor rights at the WTO. But as Seattle’s streets will illustrate, the President’s gestures won’t suffice. By its very existence, the WTO strips away the myth of free trade. That becomes even clearer as its secretive panels of corporate trade lawyers and experts challenge national laws that conflict with WTO rules–a European ban on hormone-treated meat, a US law to protect dolphins, a Massachusetts law to boycott Burma. If the global economy is regulated, people will demand that its regulations reflect more than the private interests of corporations and banks. As AFL-CIO president John Sweeney has made clear, labor will applaud progress on a working group to study labor rights at the WTO but will not end the demand for enforceable labor rights in trade accords.
The real tests won’t come in Seattle. They will come in continuing battles on fast track, environmental regulation and future trade accords. They will come when the US trade deficit becomes unsustainable. They will come as developing countries turn away from export-led growth. It is only if the corporate project is stalled that governments will be forced to respond to their people.
The current moment is akin to the last period of Progressive reform at the turn of the century. At that time corporate trusts and banks forged a national economy that featured the stark inequalities of sweatshops in the Gilded Age. To consolidate their position, pre-empt local and state regulation, manage competition and limit instability and protest, the corporate leaders wielded their political clout to develop new national regulatory laws and authorities. But a rising tide of popular movements–unions, women’s movements, socialist and populist parties–forced broader reforms. Over time, national laws were passed to enforce the forty-hour week, a minimum wage, consumer and environmental protections, the right to organize, prohibitions on child labor. But each concession was bitterly fought. In the end, it took a Great Depression and World War II to make significant progress.
The struggle to civilize the global economy has just begun. Progress will be slow; the resistance will be fierce. Perhaps the agonies of the past century of reform will make the way easier in the next. But as the demonstrators in Seattle would say, don’t count on it.