Today the U.S. House of Representatives barely approved fast track trade authority by a vote of 215 to 214, ending a long battle that pitted the Fortune 500 against a broad alliance of labor, environmental, religious, feminist, human rights, consumer, family farm and other activists. These diverse forces defeated fast track twice during the Clinton Administration and managed to delay a vote numerous times this year because of lack of support. Now that fast track has been approved, pro-free trade analysts would no doubt like to begin ringing the death knell of the opposition forces. To the contrary, there are several reasons why this vote is only a small setback in the fight against corporate globalization.
1.Free Traders Undermined Their Own Legitimacy with Sleazy Tactics
The K Street lobbyists, Capitol Hill horse traders, and White House spin-meisters had to really hustle to pull this one out. We will never know how many millions of dollars in campaign contributions or pork deals were needed to eke out a win. When money wouldn't work, the Administration diverted Colin Powell from the war effort to try to persuade members of Congress with the ludicrous argument that fast track was needed to fight terrorism. (Now that Bush has fast track, can we expect Osama bin Laden to emerge from his cave waving a white flag?) All this last-minute manipulation makes it impossible for free traders to claim that fast track passed on merit.
2. Just as NAFTA Created an Anti-Free Trade Groundswell, So Too Will this Vote Doom Future Deals
In 1993, NAFTA backers faced defeat in the House of Representatives even a week before the vote. Then, Clinton started buying support with promises of military contracts, research centers, and protections for various commodities. Although it succeeded in pushing the deal through, the strategy proved short-sighted. The tainted nature of that vote, along with NAFTA's dismal record, paved the way for the defeat of fast track in 1997 and 1998 and for the recent wave of mass demonstrations against globalization that first erupted in Seattle in 1999. This time around, we're likely to see similar fallout. Even free traders such as Norman Ornstein of the American Enterprise Institute warned in the days leading up to the vote that the last-minute arm-twisting could create such harsh feelings that Congress might reject future trade deals.
3. Planned Trade Deals Face Other Obstacles
What the House passed today was merely a procedural matter. Free traders still face high hurdles to obtain actual new deals. The two most significant on the horizon are:
Free Trade Area of the Americas: The idea to expand NAFTA to 31 other nations has few champions in the hemisphere. The populist government of Venezuela refused to agree to the timetable for negotiations worked out in April in Quebec City, Canada. The Brazilian government fears that it will lose its clout in South America by entering a hemispheric deal where it would be overshadowed by the United States. For Mexico, the FTAA would mean losing the privileged access to the U.S. market it now enjoys under NAFTA. Argentina is in economic meltdown and facing a growing backlash against free market polices. Small economies of the Caribbean fear that the loss of tariff revenues would cripple their public sectors. Meanwhile, a Hemispheric Social Alliance has formed that joins 50 million trade unionists and citizens networks across the Americas in opposition to the FTAA.
World Trade Organization: The Doha ministerial in early November managed to produce an agreement to launch a new round of negotiations, but the meeting hardly left the impression of rousing consensus. France (one of the biggest global agricultural exporters) and India (the world's biggest democracy) were both threatening to pull out at the 11th hour. Negotiators had to work past the deadline and through the night just to save face with an agreement that was so vague that countries on opposing sides of key issues could all claim victory. These divisions are likely to flare up once again once the real deal-making begins-and next time negotiators may not be thousands of miles away from the nearest protestor.
4. One Set Back Among Many Victories
The growing movement to oppose corporate globalization is unprecedented in the breadth of its composition, its demands and in its many cross-border alliances. While U.S. activists have suffered a blow on fast track, there have been -- and will continue to be -- victories on many other fronts:
WTO: At the recent WTO meeting, governments agreed to give poor countries better access to discounts on drugs for AIDS and other major killers. Previously, U.S. AIDS activists had pressured pharmaceutical firms and the U.S. government to back off challenges to South Africa's and Brazil's programs to offer affordable AIDS treatment. The U.S. government had alleged that these programs violated WTO rules on intellectual property rights.
International Bankruptcy: Last week the IMF made the surprise announcement that it now supports an idea promoted for years by progressives to create an international bankruptcy mechanism for developing countries facing debt crises. While the details remain to be seen, the idea is to establish a procedure based on Chapter 11 of U.S. bankruptcy law that would protect governments from being sued by creditors during negotiations over debt restructuring. Progressives have long argued that such a mechanism was needed to ensure that private investors are not bailed out while the poor bear the burden of economic crises.
MAI: In 1998, international activists, particularly in Canada and France, spearheaded the defeat of the Multilateral Agreement on Investment. Negotiated in the rich country club, the Organization of Economic Cooperation and Development in Paris, the MAI would have severely restricted the authority of governments to control the activity of foreign investors.
Debt: Since the late 1990s, several rich country governments have responded to pressure from religious and other activists by canceling debts owed to them by poor countries. (The IMF and World Bank also responded with a debt relief program, but this is only a partial victory since the institutions are demanding that debt relief be conditioned on onerous conditions and many impoverished countries, such as Haiti, are left out.)
Corporate Campaigns: A number of groups have been successful in pressuring specific companies to modify their behavior (for example, Rainforest Action Network's concessions from Home Depot to support sustainable forestry, certain companies pulling out of Burma over egregious human rights abuses). In addition, students have organized on dozens of campuses to pressure their administrations to adopt a code of conduct against purchasing college gear that has been made in sweatshops.
World Bank/IMF: Since the late 1990s, there have been victories in individual countries against policies promoted by the World Bank and IMF. Workers, peasants and others have been successful in fighting water privatization in Bolivia, gasoline price hikes in Nigeria, labor law reforms in Korea, and telecommunications privatization in Costa Rica. In the United States, Congress passed legislation in 2000 requiring U.S. representatives to the World Bank and IMF to oppose projects that include "user fees" on access to primary health care and education. These fees have been associated with lower school enrollment and reduced access to health care.
Global Financial Casino: Promoters of a tax on speculative capital flows (known as a "Tobin Tax") have succeeded in obtaining support from some European nations and Canada. In September 2001, the European Commission agreed to study the feasibility of such a tax.
John Cavanagh is Director of the Institute for Policy Studies in Washington DC. Sarah Anderson, is a Fellow at the Institute for Policy Studies.
1310The Institute for Policy Studies is a multi-issue research and education center founded in Washington, DC in 1963. See: www.ips-dc.org for more information on globalization and other topics.
- 110 Trade Justice