Seattle and Beyond: The Illegality of the WTO

http://www.covertaction.org ^ | by Michel Chossudovsky

[ATOMIC_PUNK]

Seattle and Beyond: The Illegality
of the WTO
by Michel Chossudovsky

Leading up to the Seattle Millennium Round of the World Trade Organization (WTO), over 1,200 groups and organizations from more than 85 countries called for a "Moratorium" on further liberalization under WTO auspices and the holding of an "audit" to be undertaken on the impacts of globalization. Their consensus statement ("Statement from Members of International Civil Society Opposing a Millennium Round") said:

[We] oppose any further liberalization negotiations, especially those which will bring new areas under the WTO regime, such as investment, competition policy and government procurement. We commit ourselves to campaign to reject any such proposals. We also oppose the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. We call for a moratorium on any new issues or further negotiations that expand the scope and power of the WTO. During this moratorium there should be a comprehensive and in-depth review and assessment of the existing agreements. Effective steps should then be taken to change the agreements. Such a review should address the WTO’s impact on marginalized communities, development, democracy, environment, health, human rights, labor rights and the rights of women and children. The review must be conducted with civil society’s full participation."

The Statement constituted an important step in challenging the official agenda of the WTO Millennium Round. It was based on a carefully worded consensus of a large number of individual organizations.

Yet this important document, in demanding a "Moratorium" on further liberalization negotiations, failed to question the very legitimacy of the WTO as an institution. It illustrates a critical dividing line in the demands of the tens of thousands of protesters who converged on Seattle.

The Marrakesh Agreement of 1994 constitutes a blatant violation of fundamental social, economic and cultural rights. The stakes in Seattle were fundamental and could not be addressed with a compromise statement tacitly accepting the legitimacy of the WTO as an institution. The WTO was put in place following the signing of a "technical agreement" negotiated behind closed doors by bureaucrats. Even the heads of country-level delegations to Marrakesh, Morocco, in 1994 were not informed regarding the statutes of the WTO which were drafted by technocrats in separate closed sessions.

"The Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations" was signed by ministers in Marrakesh on April 15, 1994, and instated the WTO as a world body. "The WTO framework ensures a ‘single undertaking approach’ to the results of the Uruguay Round—thus, membership in the WTO entails accepting all the results of the round without exception."

Following the Marrakesh meeting, the 550-page agreement (plus its numerous appendices) was either rubber-stamped or never formally ratified by national parliaments. The articles of agreement of the WTO resulting from this "technical agreement" were casually embodied in international law. In other words, the 1994 Marrakesh Agreement bypasses the democratic process in each of the member countries. It blatantly derogates national laws and constitutions while providing extensive powers to global banks and multinational corporations (MNCs). These powers have, in fact, become entrenched in the articles of agreement of the WTO.

So, the process of the WTO’s actual creation, following the Final Act of Uruguay Round is blatantly "illegal." Namely a "totalitarian" intergovernmental body has been casually installed in Geneva, empowered under international law with a mandate to "police" country-level economic and social policies, derogating the sovereign rights of national governments.

Similarly, the WTO almost neutralizes "with the stroke of the pen" the authority and activities of several agencies of the United Nations including the U.N. Conference on Trade and Development (UNCTAD) and the International Labor Organization (ILO).

Moreover, the articles of WTO are not only in contradiction with pre-existing national and international laws, they are also at variance with "The Universal Declaration of Human Rights." Acceptance of the WTO as a legitimate organization is tantamount to an "indefinite moratorium" or repeal of the Universal Declaration of Human Rights.

Apart from the blatant violation of international law, WTO rules also provide legitimacy to trade practices which border on criminality, including "intellectual piracy" by MNCs, the derogation of plant breeders’ rights, not to mention genetic manipulation by the biotechnology giants, the patenting of life forms including plants, animals, microorganisms, genetic material, and human life forms under the TRIPS agreement.

In the sphere of financial services, the provisions of the General Agreement on Trade in Services (GATS) provide legitimacy to large scale financial and speculative manipulations directed against developing countries which are often conducive to the demise of country-level monetary policy.

And the WTO Dispute Settlement Procedures uphold the legitimacy of these various manipulative procedures.

Economic and Social Destruction

As amply documented, humanity in the post-Cold War era is undergoing an economic and social crisis of unprecedented scale leading to the rapid impoverishment of large sectors of the world population. National economies are collapsing. Unemployment is rampant; Wall Street banks are "taking over countries" one after the other; regional wars have erupted along strategic gas-oil pipelines, and often behind the various "insurgencies" are powerful corporate interests which coincidentally are also lobbying for trade reform. In most countries the standard of living has collapsed.

This worldwide crisis of the late twentieth century is more devastating than the Great Depression of the 1930s. It has far-reaching geopolitical implications; economic dislocation has also been accompanied by the outbreak of regional conflicts, the fracturing of national societies, and in some cases the destruction of entire countries. This crisis is by no means limited to the developing countries. In Europe and North America, the welfare state is being dismantled, schools and hospitals are being closed down, creating conditions for the outright privatization of social services. This is by far the most serious economic crisis in modern history.

In a large number of developing countries, the services economy and banking are already in the hands of foreign capital, peasant economies have been devastated as a result of the dumping of European Union and U.S. grain surpluses. Genetically modified seeds produced among others by Cargill and Monsanto (together with carefully engineered farm inputs produced by these same agribusiness conglomerates) have been forced upon farmers throughout the world, often leading to mass poverty and the fracture of rural economies, not to mention the contamination of the food chain.

In turn, international agribusiness is intent upon driving the family farm into bankruptcy. This process is by no means limited to developing countries: Up to 30 percent of grain farmers in western Canada are on the verge of bankruptcy specifically as a result of the enforcement by the Canadian government of WTO provisions concerning farm subsidies. And if this is happening in western Canada which constitutes one of the world’s most resourceful "bread baskets," what will be the fate of farmers in other regions of the world?

China’s Accession to the WTO

The terms of China’s entry into the WTO, agreed upon in bilateral negotiations with the United States barely a few weeks before the Ministerial Conference in Seattle, spell havoc in a country of more than one billion people. It will devastate China’s agriculture; it will trigger a deadly wave of bankruptcies of state enterprises leading to mass unemployment. The provision of "national treatment" to western banks potentially could precipitate the fracture of the entire structure of Chinese state banking.

The Chinese authorities, fully aware of the ramifications, have attempted to convince Chinese public opinion that "the benefits from the agreement would justify the job losses and bankruptcies it will cause."1 In the words of China’s chief WTO negotiator, Long Yongtu, "a nation cannot develop and become strong without a sense of urgency and a sense of crisis."2

The New World Order

In the face of global economic and social devastation is an (official) "audit" really required as called for in the "Statement From Members of International Civil Society" to ascertain what is happening? Some of the NGO critics involved in the dialogue with the WTO argue that there are both "positive" and "negative" impacts of trade liberalization. This position is ambiguous: the devastating impacts of "globalization" are already known and documented; the NGO community has already produced a wealth of critical analysis and research. Moreover, the audit proposal accepts the legitimacy of the WTO, it presupposes that there are mistakes and "let’s talk and put this system on hold" for a few years "while we re-evaluate."

Do we need an audit to ascertain "whether or not" the world is in crisis? And by whom will this audit be performed and for whom? The key "partner NGOs" have already positioned themselves to undertake the relevant commissioned background studies. And these research contracts performed "sector by sector" in a "politically correct" fashion according to preestablished guidelines set by the funding agencies will take several years to complete.

The conduct of an audit has already been accepted by the European Union in its consultations with the NGOs. Former European Commissioner Sir Leon Brittan, on behalf of the European Union, had in fact proposed in 1998, "the commissioning of a study on the impact of the new Round on sustainable development." In other words, the audit was also part of the official agenda of the Seattle Round. In the meantime, while the audit is being conducted, economic, social and environmental destruction will continue unabated.

"De Facto" Millennium Round

In many developing countries, many of the clauses projected for the Millennium Round are already a "fait accompli." They are part of the "conditionalities contained in ad hoc loan agreements with the IMF and the World Bank. Under the structural adjustment program as well as in the context of the IMF-sponsored "bailout agreements" (e.g. Indonesia, Thailand, South Korea, Brazil), developing countries have already committed themselves to many of the propositions that were to have been taken up in the Millennium Round.

Many developing countries have been obliged, in the context of agreements signed with the Bretton Woods institutions, to liberalize trade, deregulate capital movements, privatize state public utilities, dismantle social programs and provide "national treatment" to foreign investors in a large number of economic activities including services, banking, procurement, and so forth. These provisions are often coupled with a "bankruptcy program" under the supervision of the World Bank with a view to "triggering" the liquidation of competing national enterprises. An "enabling free market environment" is implanted (without recourse to WTO clauses pertaining to "effective access to markets"), national producers are brutally displaced and destroyed, countries are casually recolonized.

Wall Street bankers and the heads of the world’s largest business conglomerates are indelibly behind this process. They interface regularly with IMF, World Bank, and WTO officials in closed sessions as well as in numerous international venues. Moreover, participating in these meetings and consultations are the representatives of powerful global business lobbies including the International Chamber of Commerce (ICC), the Trans-Atlantic Business Dialogue (TABD) (which brings together in its annual venues the leaders of the largest western business conglomerates with politicians and WTO officials), the United States Council for International Business (USCIB), the Davos World Economic Forum, and the Institute of International Finance, representing the world’s largest banks and financial institutions, etc. Other "semi-secret" organizations—which play an important role in shaping the institutions of the New World Order—include the Trilateral Commission, the Bilderberg Society, and the Council on Foreign Relations.

Financial Deregulation

To top it off, with "perfect timing" came the deregulation of the U.S. banking system which was approved by the U.S. Senate barely six weeks before the Millennium Round meetings in Seattle. The new legislation favors an unprecedented concentration of global financial power. In the wake of lengthy negotiations which concluded in the early hours of October 22, all regulatory restraints on Wall Street’s powerful banking conglomerates were revoked "with a stroke of the pen." Under the new rules ratified by the U.S. Senate and approved by President Clinton, commercial banks, brokerage firms, hedge funds, institutional investors, pension funds and insurance companies can freely invest in each other’s businesses as well as fully integrate their financial operations. The legislation has repealed the Glass-Steagall Act of 1933, a pillar of President Franklin D. Roosevelt’s "New Deal" that was put in place in response to the climate of corruption, financial manipulation and "insider trading" which led to more than 5,000 bank failures in the years following the 1929 Wall Street crash.3

In other words, a handful of financial conglomerates will gain effective control over the entire U.S. financial services industry. Coincidentally, these same Wall Street financial giants are also the main beneficiaries of financial services’ deregulation which provides "national treatment" to Wall Street’s giants in banking, insurance, brokerage services, actuarial services, etc. GATS is almost "tailor-made" to meet the standards set under the new U.S. financial services legislation. The financial giants oversee the real economy worldwide. They are creditors and shareholders of high tech manufacturing, the defense industry, major oil and mining consortia, and so forth. Moreover, as underwriters of the public debt, they also have a stranglehold on national governments and politicians. Ultimately, they also call the shots on trade reform.

Moreover, the clauses of the defunct Multilateral Agreement on Investment (MAI), which was to provide "national treatment" to foreign banks and MNCs (leading to the dislocation of municipalities and local governments) are also in the process of becoming a "fait accompli." The financial conglomerates are now fully integrated with the insurance companies. In turn, the latter oversee and control the multinational health care providers which were actively lobbying in Seattle for the deregulation of public health care under the GATS. The institutions of the welfare state are to be scrapped. The struggles of the entire postwar period are to be erased.

The worldwide scramble to appropriate wealth through "financial manipulation" is the driving force behind this restructuring of the global financial architecture of which the new U.S. banking legislation is an integral part. In concert with the WTO, the U.S. legislation favors the elimination of remaining barriers to the free movement of finance capital. In practice, it empowers Wall Street’s key players, including Merrill Lynch, Citigroup, J. P. Morgan, Deutsche Bank-Bankers Trust, and others, to develop a hegemonic position in global banking overshadowing and ultimately destabilizing financial systems in Asia, Latin America and Eastern Europe, and this process is ongoing irrespective of the outcome of the events in Seattle.

The Speculative Onslaught

In turn, financial deregulation in the U.S. allows speculative trade to prosper worldwide in a totally permissive environment. The Millennium Round was aiming to deregulate capital movements to provide greater legitimacy to such trade thereby empowering Wall Street to extend its global financial domain.

Institutional control over the channels of speculative trade provides the U.S. and EU financial giants with the tools to manipulate currency and stock markets and impair the role of central banks. The ultimate objective is to take control over the reins of monetary policy and oversee financial markets all over the world. In the 1997 Asian crisis alone, more than $100 billion were confiscated in a matter of months from the vaults of Asia’s central banks. Similar speculative assaults were carried out in Russia in 1998 and in Brazil in 1999. Derivative and option trade including the "short selling" of national currencies were behind these assaults leading to massive debt default and financial collapse. The IMF played a key role in facilitating the speculative onslaught on behalf of western and Japanese financial institutions.

In a cruel irony, the use of these deadly speculative instruments was formally legitimized in the Fifth Protocol of the GATS in the immediate wake of the Asian crisis. Totally disregarding the impending dangers, the GATS protocol negotiations coincided chronologically (October 1997) with the climactic meltdown of stock markets all over the world.

Disarming the New World Order

The WTO created from a "technical agreement" provides entrenched "legal" rights to banks and global corporations. In turn, the 1994 Marrakesh Agreement sets up procedures—including manipulative Dispute Settlements—which are now conveniently embodied in international law but which blatantly violate the rights of citizens all over the world.

Under WTO rules, the banks and MNCs can legitimately manipulate market forces to their advantage leading to the outright recolonization of national economies. In other words, the WTO articles provide legitimacy to global banks and MNCs in their quest to destabilize institutions, drive national producers into bankruptcy, and ultimately take control of entire countries.

Moreover, the Agreement formally instates a "triangular division of authority" between the WTO, and its sister organizations, the IMF and the World Bank, in a system of "global surveillance" of developing countries’ economic and social policies. This means that enforcement of IMF-World Bank policy prescriptions will no longer hinge upon ad hoc country-level loan agreements (which are not "legally binding" documents). All the main clauses of the IMF’s deadly "economic medicine" were expected to become permanently established under the Seattle Millennium Round. Countries will not only be "bonded" by external debt. They will be permanently "enslaved" by an international body controlled by the world’s largest business syndicates. These WTO articles were designed to set the foundations for "policing" countries (and enforcing "conditionalities") according to international law.

War and Globalization

War was also part of the globalization scenario. What happens to countries which refuse to deregulate trade and foreign investment and provide "national treatment" to western banks and MNCs? The western military-intelligence apparatus and its various bureaucracies routinely interface with the financial establishment. The IMF, the World Bank and the WTO—which "police" country-level economic reforms—also collaborate with NATO in its various "peacekeeping" endeavors, not to mention the financing of "post-conflict" reconstruction under the auspices of the Bretton Woods institutions.

At the dawn of the Third Millennium, war and the "free market" go hand in hand. War does not require a multilateral investment treaty (like the proposed Multilateral Agreement on Investment) entrenched in international law: "War is the MAI of last resort." War physically destroys what has not been dismantled through deregulation, privatization and the imposition of "free market" reforms. Outright colonization through war and the installation of western protectorates is tantamount to providing "national treatment" to western banks and MNCs in all sectors of activity. "Missile diplomacy" replicates and emulates the "gunboat diplomacy" used to enforce "free trade" in the 19th Century. The U.S. Cushing Mission to China in 1844 (in the wake of the Opium Wars) had forewarned the Chinese imperial government "that refusal to grant American demands might be regarded as an invitation to war."4

The "Seattle Round" purported to "peacefully" recolonize countries through the manipulation of market force—i.e., through the "invisible hand." It nonetheless constitutes a form of warfare.

War and globalization are not separate issues. There are ongoing and growing dangers of war. Thus, the citizens’ campaign against the WTO needs to be integrated with the antiwar movement against the bombing of sovereign countries by the U.S. and its European allies.

What Needs to be Done

We must act in relation to the original "iniquity" and "illegality" of the Final Act of the Uruguay Round which creates the WTO as a "totalitarian" organization. There can be no other alternative but to reject the WTO as an international institution, to imprint the WTO as an illegal organization. In other words, the entire process must be rejected outright.

It is vital that citizens’ movements around the world pressure their governments to withdraw without delay and cancel their WTO membership. Also, legal proceedings should be initiated in national courts against the governments of member countries, underscoring the blatant violation of domestic laws and national constitutions.

How can we postpone our struggle and "wait a few years" in the context of an "audit" while the world is consumed and destroyed? Is it not necessary to act now and to question the legitimacy of a system which ultimately destroys people’s lives?

This requires challenging politicians and international officials, unmasking their insidious links to powerful financial interests, and eventually overhauling and transforming State institutions to remove them from the clutch of the financial establishment. In turn, it requires "democratizing" the economic system and its management structure, challenging the blatant concentration of ownership and private wealth, disarming financial markets, freezing speculative trade, arresting the laundering of dirty money, dismantling the system of offshore banking, redistributing income and wealth, restoring the rights of direct producers, rebuilding the welfare state as necessary steps to dismantling this unjust economic system.

It also means combating the "media lies" and "global falsehoods" which uphold the WTO and the powerful business interests which it supports and the "false consensus" of Washington and Wall Street which ordains the "free market system" as the only possible choice on the fated road to a "global prosperity."

To achieve these objectives there must be meaningful freedom of the press. The global media giants fabricate the news, overtly distort the course of world events, and mask the truth. This precludes a collective understanding of the workings of an economic system which destroys people’s lives.

Concurrently, it requires building the conditions for a lasting world peace. This means eventually dismantling the military-industrial and security apparatus which sustains these financial interests, the abolition of NATO and the phasing out of the arms industry.

The only promise of the "free market" is a world of landless farmers, shuttered factories, jobless workers and gutted social programs with "bitter economic medicine" under the WTO and the IMF constituting the only prescription.

The lessons of Seattle are clear. The struggle must be broad-based and democratic encompassing all sectors of society at all levels, in all countries, uniting in a major thrust workers, farmers, independent producers, small businesses, professionals, artists, civil servants, members of the clergy, students and intellectuals—united across sectors. "Single issue" groups should join hands in a common understanding about how this economic system destroys and impoverishes. The "globalization" of this struggle is fundamental, requiring a degree of solidarity and internationalism unprecedented in world history. The global economic system feeds on social divisiveness between and within countries. Beyond Seattle, unity of purpose and worldwide coordination among diverse groups and social movements is crucial. A major thrust is required which brings together social movements in all major regions of the world in a common pursuit and commitment to the elimination of poverty and to the creation of a lasting world peace.

Footnotes

Michel Chossudovsky is Professor of Economics at the University of Ottawa and author of The Globalization of Poverty, Impacts of IMF and World Bank Reforms (London: Zed Books, 1997), available from CovertAction Quarterly (see p. 64).
1. Financial Times (London), Nov. 17, 1999.
2. Quoted in ibid.
3. See Martin McLaughlin, “Clinton Republicans Agree to Deregulation of U.S. Banking System,” World Socialist web site, Nov. 1, 1999.
4. Quoted in Michel Chossudovsky, Towards Capitalist Restoration, Chinese Socialism after Mao (London: Macmillan, 1986), p. 134

[dighton]

Concurrently, it requires building the conditions for a lasting world peace. This means eventually dismantling the military-industrial and security apparatus which sustains these financial interests, the abolition of NATO and the phasing out of the arms industry.

And that sums it up: he's nuts.

[Dr. Thorne]

I've always thought that the more radical elements here on FR closely resembled the anarchist idiots that attack Starbucks and then feel real good about themselves. You've proved me right. This website is being corrupted.

[rightofrush]

You believe. The NWO appologists and lackeys have done their job well.
May Big Brother be grateful, smile upon you, and give you peace with your Big Mac. Blessed be the names of Exxon, GM, and Coca-Cola.

[expose]

Conspiracy Nuts? To Hear Site Click on to hear clips from speeches

[LenS]

Ah, an enemy of the US speaketh out of his nether regions. Give me Exxon over anti-WTO anarchists anyday. Exxon makes my day better with cheaper gas and other petroleum products. Anti-WTO anarchists drive up the cost of living and destroy property in an attempt to enslave or exterminate the rest of us with their insane ideas. Hmm, I wonder if the US military could spare a daisycutter for the next major protest?

[Economist_MA]

the more radical elements here on FR closely resembled the anarchist idiots that attack Starbucks and then feel real good about themselves

The political spectrum is a circle - if you walk far enough to the right you end up on the left. There is no difference between the disenfranchised angries on either side, looking for something or someone to blame for their misery. Except themselves, that is.

[robbinsj]

Funny how the plans of the WTO engineered world society cabal doesn't seem to bother many at FR?

[rightofrush]

You missed my point (I hope). The WTO is a prescursor to the NWO one-world government.

[ATOMIC_PUNK]

yea i thought that was funny too lmao

[general_re]

I thought about trying my hand at a point-by-point refutation, but then I came across this passage...

As amply documented, humanity in the post-Cold War era is undergoing an economic and social crisis of unprecedented scale leading to the rapid impoverishment of large sectors of the world population. National economies are collapsing. Unemployment is rampant; Wall Street banks are "taking over countries" one after the other; regional wars have erupted along strategic gas-oil pipelines, and often behind the various "insurgencies" are powerful corporate interests which coincidentally are also lobbying for trade reform. In most countries the standard of living has collapsed.

...and it became immediately clear to me - he's not talking about the way things are around here. No, he's obviously decrying the state of the Martian economy or some such thing. He can't possibly be talking about this planet...

[sinkspur]

Funny how the plans of the WTO engineered world society cabal doesn't seem to bother many at FR?

Glad you see the humor. I've been laughing at the freaks who squeal about "engineered world society cabals" for the three years.

Anyone with a shred of sanity laughs at NWO conspiracists.

[rightofrush]

The political spectrum is a circle - if you walk far enough to the right you end up on the left.

An all too common misconception due to a simplistic view of realpolitic.

It's a straight line!!

One end is an idealistic benevolent anarchy, the other end is the all-to-common absolute dictatorship, it makes no difference whether it calls itself communist or fascist.
Republicrats are in the middle, flanked by 19th century Liberals on the right, and 21th century Liberals on the left.

Fascists are not on the right!!
Nazi is an acronym for National Socialist Workers Party.

[angry elephant]

Similarly, the WTO almost neutralizes "with the stroke of the pen" the authority and activities of several agencies of the United Nations including the U.N. Conference on Trade and Development (UNCTAD) and the International Labor Organization (ILO).

The sky is falling! The sky is falling! What would we do without the UN and International Labor Organization?

[July 4th]

Blessed be the names of Exxon, GM, and Coca-Cola.

You forget GE. Amen!

[rightofrush]

See my #5 & 10.

[glc1173@aol.com]

What the IMF and World Bank fear isn't riots at their conventions; that just distracts antiglobalists and takes their energy away!

What the World Bank most fears is a boycott of its bonds by pension funds and cities - much like the antiapartheid "divestment" crusade of 15-20 years ago. Already, antiglobalists have gotten a few small cities to boycott World Bank bonds - and are now trying to get a giant professors' retirement fund (TIAA-CREF) to boycott them. With the leftism predominant among college faculty, I give that effort excellent chances.

[Economist_MA]

idealistic benevolent anarchy

I respectfully disagree - the ideal of the lunatic right seems pretty close to the lunacy of the cultural revolution in China or certain ideas of Trotsky. Hatred of the economically successful, a deep distrust of commerce, business and the market, and a strong desire to impose their "moral" values on their countrymen (or the world).

[rightofrush]

Thanks. So many NWO Bush boosters, so little knowlege.