MAY 1990 - VOLUME 11 - NUMBER 5
E D I T O R I A L
Trading Away Rights
With their seemingly benign call for trade liberalization, multinational corporations are seeking to appropriate national sovereignty and promote deregulation on an international scale.
The current round of negotiations for the General Agreement on Tariffs and Trade (GATT), which is adhered to by 124 nations and governs approximately four-fifths of the over $3 trillion in annual trade between nations, is the arena for this corporate assault. The United States and its major trading partners are negotiating new GATT agreements in what is known as the Uruguay Round, scheduled to be completed at the end of this year.
Using GATT principles as the basis for the global economic framework would have a devastating impact on Third World countries, which would lose their ability to regulate trade and investment in their national interest. Trade barriers and subsidies needed to promote national industries or to defend domestically oriented agricultural sectors would be prohibited.
The United States has proposed that service industries--ranging from banking and insurance to telecommunications to construction--be given the right to operate in all GATT signatory countries with almost total freedom. These proposals could destroy a large portion of Third World service companies, which cannot compete with corporations from the developed world. Proposals to regulate intellectual property would enable multinational agrochemical companies to take out patents on seeds which are indigenous to the Third World--and then to charge the nations from which the seeds originated for the right to use them.
Lowering trade barriers will also enable multinational corporations to move production sites throughout the world more easily, strengthening corporate power in, and control over, industrialized nations. Free trade will enable corporations to play countries against one another. With completely open borders, corporate executives will claim that higher wages or more stringent national regulations raise production costs in a country and make it "uncompetitive." They will threaten to close plants in countries like the United States and move to anti- labor bastions such as Malaysia if wage differentials are too large. The same dynamic will hold for environmental and worker health and safety regulation. Individual countries will be at the mercy of mobile corporations; they can either lower their standards or watch companies flee beyond their borders.
GATT proposals would have an equally devastating impact on countries' ability to maintain consumer safety programs. The proposed changes would prevent countries from establishing their own consumer safety standards, instead requiring that standards be "harmonized," or made equivalent in all countries.
The harmonization process would benefit multinational companies in a number of ways. It would set maximum standards which could not be exceeded by any country. It would eliminate the possibility that corporations would have to meet stiffer local or state standards, like the new California pesticide initiative, and squash the ability of locales to exert an upward push on safety standards. And it would remove the standard-setting process from relatively accessible national, state and local bodies to unaccountable international commissions. A Rome-based United Nations agency, Codex Alimentarius, would be responsible for establishing international food safety standards, for example.
Codex is heavily influenced by large chemical and food companies--a recent U.S. delegation to Codex included executives from Nestle, Coca-Cola, Pepsi, Hershey, CPC International, Ralston Purina, Kraft and representatives from several trade associations--and its standards are inferior to those of the United States. Codex's pesticide standards allow 50 times more DDT on bananas and peaches and 33 times more DDT on broccoli, lettuce and pineapples than the U.S. Food and Drug Administration permits. Subjected to the inevitable assaults by corporate lobbyists, Codex is likely to water down even these standards. Non-governmental organizations do not have the resources or the leverage with unelected and unaccountable bodies to counteract corporate influence.
One of the most significant U.S. food safety laws, the Delaney Clause, which prohibits the use of any amount of carcinognic additives, including pesticides, in food products, could be one of the first casualties of the proposed GATT agreements. Jean Marc Luc, director of the Agriculture Division of GATT, has stated that "world trade cannot survive with a zero tolerance" for pesticide residues on food.
Members of Congress have introduced resolutions urging U.S. GATT negotiators to include provisions in the final GATT agreement which allow nations to take affirmative steps to protect the environment and to guarantee food safety. These resolutions deserve support, but they do not go far enough. The multinational corporate free trade agenda must be opposed completely by workers, consumers and citizens in both the industrialized and developing worlds. A burgeoning alliance of U.S. environmentalists, family farm organizations and consumer groups has formed to oppose the worst of the GATT proposals. Joined by the labor movement and domestic manufacturers, these groups could form a coalition capable of blocking Congressional approval of GATT and derailing the efforts to usher in a new era of unbridled multinational corporate power.