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You could call him the Generalissimo of Globalization. The World Trade Organization’s director general, Pascal Lamy, was a bit defensive, wanting to assure us that the WTO “wasn’t created as a dark club of multinationals secretly cooking plots against the people. We do things in the open. Look at our website.”
It’s been a year since globalized finance brought the planet to its knees, yet here in Geneva, where in late November the WTO opened its grand “seventh ministerial,” the diplomats are in denial. One confidential document from the files of WTO members–definitely not on the WTO website–tells us that despite financial and environmental crises, the globalizers still want to party like it’s 1999.
In that year, just eight months before the Battle of Seattle, the WTO’s Financial Services Agreement (FSA) became global law, breaking down old rules against cross-border trade in currency and financial derivatives. Financial goods spread rapidly. So did financial bads. The result: the collapse of US mortgage-backed securities slammed holders worldwide. When California home prices swooned, Iceland’s banks melted.
But Lamy, throughout our lengthy one-on-one chat, insisted we see the WTO not as a corporate enforcer of deregulation but rather as the promoter of “interdependence,” a kind of Oxfam or ACLU for trade. “This interdependence has a lot of good sides,” he told me, “about freedom, about human rights, about technology, about media, about political civil liberties.”
I suggested that, outside the WTO’s gated compound below the Alps, few people associate derivatives and mortgage securitization with human rights and freedom. “They should!” Lamy said. “They should!”
I attempted to steer the director general back to the devilish details of this document, marked “ensure this text is not made publicly available”: the demand of the European Union, echoed by the United States, that Brazil open its borders to derivatives trading and the sale of other exotic products of foreign banking giants. The EU nations were none too happy, it seems, that “Brazil has not yet accepted the Fifth protocol,” that is, stood alone among major nations in flat-out rejecting the FSA.
Brazil’s president, Luiz Inacio Lula da Silva, resisted hopping into the financial free-trade free-for-all, which saved his nation from most of the pain of the Great Recession, allowing its GDP to rocket upward at a 9 percent rate over the past three months. Wasn’t it just a bit nuts to demand that Brazil now join the derivatives casino? Lamy replied, not unreasonably, “Trade is not the problem. The problem is whether what you trade is regulated or not.”