My reaction to the civil society discussions televised on
Saturday. Confronting the pro-free trade enthusiasm for
alleviating poverty and curing the world..

Confronting and debunking free trade dogma

Adam Davidson-Harden, Kingston, Ontario

While many of my friends were on the ground in Quebec city yesterday, I've been at home in my apartment in Kingston, Ontario, glued to CMAQ, other alternative media and the TV, following the events as they've unfolded. Prime Minister Chrétien seems like a wind up toy, with the tired refrains "free trade promotes democracy!" and "free trade can strengthen democracy!" constantly coming from his mouth. Of particular interest were the discussions at the 'civil society' meetings yesterday, televised on CBC in the afternoon. In the face of the forceful and persistent voices from outside the safe walls of the conference centre and the citadel (heavily symbolic..), the richer countries' leaders in particular (not to mention the corporate presence, of course) are quick to praise the benefits of free trade and its ability to cure all evils. One argument I'm quite tired of hearing is that free trade can help the poor. It seems particularly hypocritical to hear the NAFTA countries' leaders proclaim their enthusiasm for economic growth and its potential to alleviate the horrible poverty of latin america, when more and more stories of real people's pain emerge from areas which have been 'liberalized' according to free trade prescriptions, such as the area of the maquiladoras in the north of Mexico. Vicente Fox seems proud at his chance to extol the virtues of the corporations which drive job creation in Mexico. Alexander Goldsmith reported in 1996 about one particularly gruesome case of corporate crime and human suffering in Matamoros, near the Texas border. This case illustrates well the 'liberated corporate economy' and its social and environmental consequences. Think of it as a 'maquila 101':

"Maquiladoras import most of their raw materials from the United States and are supposed to return waste there for disposal, but, according to the EPA [environmental protection agency], a tiny percentage is actually returned. The EPA's Mexican counterpart, Sedesol, estimated that while half of the twenty-one hundred plants generate hazardous waste, only 307 have obtained official licenses.

The U.S. National Toxics Campaign has detected high levels of pollutants outside the plants, including drainage water containing xylene, an industrial solvent, at concentrations 6000 times the U.S. drinking water standard. Tests carried out by an EPA-certified laboratory reveal levels of xylene up to 50 000 times what is allowed in the United States, and of methylene chloride up to 215 000 times the U.S. standard.

Pollution-related health problems have been the inevitable result. In Brownsville, Texas, between 1990 and 1992, thirty babies were born with anencephaly, a fatal birth condition in which the brain fails to develop and is filled with liquid. This is four times the U.S. national average. During the same period in Matamoros, on the Mexican side of the border, fifty-three cases were recorded. In March 1993, twenty-seven Brownsville families filed a lawsuit against the eighty-eight different maquillas in Matamoros. They claimed that an airborne cocktail of solvents, acids, and heavy metals, blown over the Rio Grande by prevailing winds, was responsible for the high incidence of children with spina bifida and anencephaly. Among those accused were companies twinned with such international household names as General Motors, Union Carbide, Fisher Price, and Zenith Electronics. All of them deny responsibility.

Also in Matamoros, social workers identified 110 children who shared certain deformity symptoms: mongoloid features and a range of physical and mental defects. The worst-affected boys have only one testicle, and the girls have only partially developed vaginas. All seventy-six mothers had worked while pregnant at Mallory Capacitors, a maquilla that produces electronic components. Workers there, almost entirely young women, said they had handled highly toxic polychlorinated biphenyls without proper safety equipment or clothing.

Clearly, then, part of the "incentive" package that a government offers to companies when it creates FTZs [free trade zones] is the right to despoil the environment, the right to flout basic standards of social welfare, and the right to poison workers." (1)

Part of the neoliberal dogma of free trade is the economic concept of 'comparative advantage', which comes from the economist David Ricardo in the early 19th century. In this way of reductionist economic thinking, each country has a particular advantage or supply of a resource or product which gives it a special advantage relative to another country. This notion is still operative in the logic of the structural adjustment programs which enforce states to encourage the development of export industries at the expense of investment in domestic development and social programs, a movement which serves to entrench poverty. Neoliberal policies and priorities are dominating richer countries as well, causing an exacerbation of already-existing significant gaps between the rich and poor and an erosion of social programs and standards (2).

Why would powerful and influential corporations want to give up the 'comparative advantage' of low to non-existent labour and environmental standards in the maquiladoras? Corporate globalization encourages the exploitation of human and natural 'resources' to the most profitable degree. In this way the profit motive is essentially life-blind. John McMurtry (3) has described corporate globalization and its driving values structure of profit-above-all as a cancer spreading through environments and human communities. Transnational corporations are simply following a driving logic of capitalism, seen this way, in flocking to countries where labour and environmental standards are lower than in richer countries. It follows from a profitability perspective that companies such as Nike 'outsource' labour costs to markets which provide them with an amazingly higher return on investment. Meanwhile, the lives of workers and the state of environments are ignored, victims of a pathological corporate profit agenda.

At the civil society meetings yesterday, Pierre Pettigrew, Canada's international trade minister, made some interesting comments. He said to those assembled that the markets create wealth, but that's all they do. He emphasized the point that markets do not do the crucial job of redistributing wealth - states do. Before you think I'm applauding Pettigrew for his insights, I'd like to point out what he most obviously ignores. While acknowledging the role of states in redistributing wealth (ironically one of the titles of a forum of the people's summit), Pettigrew fails to acknowledge the corporate-influenced global policy hegemony in place which prevents this redistribution of wealth from happening effectively. Neoliberal policies and priorities, endorsed and enforced by the IMF, World Bank, OECD, WEF, and the countless other international trade bodies in the corporate pantheon, encourage the withdrawal of the state from its role of redistributing wealth and providing opportunities, or from ensuring adequate labour and environmental standards, or the provision of publicly funded universal services. The provision of public services is seen as 'trade-distorting' and privatization is relentlessly pursued, while standards of all kinds are seen as 'technical barriers to trade' and deregulation is an overriding goal. 'Dispute resolution mechanisms' such as NAFTA's chapter 11 (sure to be included in the proposed FTAA) add insult to injury by allowing corporations to capitalize from lawsuits against governments accused of providing 'monopolies in service' (read: universal health care, or publicly-funded education). In short, the corporate interests of profit always reign over the interests of the mass of citizens in terms of social equity, or environmental integrity. Incorporating poorer nations into an international 'free trade area' only ensures the continuance of neo-colonial dominance of transnational corporations, and their fundamental blindness to social and environmental goals.

The holy grail of the FTAA and other enforced neoliberal trade agreements is economic growth. But as Pettigrew says, simple economic growth, the 'creation of wealth by markets', doesn't translate into an equitable distribution of that wealth, or the assurance of protection and encouragement of the interests of social and environmental goals. Robert Zoellick, U.S. trade representative at the FTAA, cited a World Bank study (4) during the civil society discussions which purportedly shows 'globalizing' economies (i.e. those adopting trade liberalization measures) to show more growth in per capital income than 'non-globalizing' economies. Even if so, however, with latin american nations showing the largest unequal distribution of wealth in the world, the 'wealth creation' facilitated by corporate globalization never 'trickles down', but always moves upward, and always in blindness to wide social and environmental goals. The consequences of polarization in wealth throughout the world are evident in Socialwatch's recently released studies (5). Canadian activist and researcher Karl Flecker has described the global economy as showing systemic racism in its distribution of suffering (6). Women worldwide also bear the brunt of the poverty and social inequity sustained and exacerbated by neoliberal reforms and programs (7).

In a welfare state system, unless economic activity is regulated and 'interfered with' by the state, the interests of citizens cannot be served, and 'effective democratic participation' which I heard Vicente Fox speak of can never be guaranteed. With increasingly unfettered capitalism triumphant at the so-called 'end of history', however, our 'democratic' systems have become simple agents for international trade interests, dominated and steered by the interests of globalizing corporations. This, more than anything else, is what the FTAA represents. Pro free-trade enthusiasts may mouth arguments about strengthening democracy and alleviating poverty and even protecting the environment, but this is all smoke - to hide the extent of corporate dominance which fuels capitalist economic growth. This force, and the cancerous values (echoing John McMurtry again) which it represents, are the real contradictions behind social and environmental destruction which need to be challenged. The struggle against free trade dogma and corporate globalization is also a struggle for fair trade, and the defense and encouragement of social and environmental goals as our first priority as local and global communities.

REFERENCES

(1) Goldsmith, Alexander. (1996) "Seeds of Exploitation: Free Trade Zones in the Global Economy". in Mander, J. & Goldsmith, E, (1996) The Case Against the Global Economy, and For a Turn to the Local. San Francisco: Sierra Club books. for more information on the maquiladoras region, go to the Mexico Solidarity Network at http://www.maquilasolidarity.org/resources/maquilas/index.htm

(2) Chossudovsky, Michel. (1998) The Globalisation of Poverty, Halifax: Fernwood. see also "Structural Adjustment Programs in Canada". ECEJ (Ecumenical Coalition for Economic Justice) (1999) http://www.ecej.org/wssdsaps.htm, and Gary Teeple (2000), Globalization and the Decline of Social Reform, Aurora: Garamond press.

(3) McMurtry, John (1999). The Cancer Stage of Capitalism. London: Pluto press. see also McMurtry's (1998) Unequal Freedoms: the Global Market as Ethical System. Toronto: Garamond press.

(4) "Does More International Trade Openness Increase World Poverty?" World Bank Briefing Papers. (Part 2 of a four part series) http://www.worldbank.org/html/extdr/pb/globalization/paper2.htm

(5) Socialwatch (2001). "The Haves and the Have Not", pub. in Uruguay. Http://www.socialwatch.org/2001/eng/charting/PBI%20per%20capita%20OK.swf see also Stevenson, Paul. (1999) "Globalization and Inequality: the negative consequences for humanity", http://www.uwinnipeg.ca/academic/as/sociology/stevenson/page4.html

(6) Flecker, Karl (2001). "Racial implications and problems with the service industry". Panel presentation/talk given at the Queen's International Affairs Association meeting, March 14, Queen's University, Kingston, Ontario, Canada.

(7) Swenarchuk, Michelle (2000). Year 2000 World March of Women To End Poverty and Violence against Women ISSUE SHEETS. web address: http://www.nac-cca.ca/march/infosht1_e.htm see also Townson, Monica (2000) "The Feminization of Poverty: Women in Canada remain among "poorest of the poor"" CCPA monitor, May issue. http://www.policyalternatives.ca