Global Turn Around!

Due date: 
1 April, 2010
Delivery date: 
2 April, 2010

A call to unite and confront the converging global crises of our times, replace the trade and investment pacts and related  juggernauts of the corporate-driven global economy,  and start building a sustainable economic future together.

We are living in extraordinary, even unprecedented times. Perhaps, never before in recorded history has there been such a convergence of crises and forces that threaten the future of both humanity and the planet.

The financial meltdown has triggered a global economic crisis with spiraling unemployment and poverty. This, in turn, is occurring in the midst of a global climate crisis that is heating the planet with unimaginable consequences. Meanwhile, the convergence of these global economic and climate crises is further compounded by the prospects of a worldwide food crisis and the spectre of mass hunger and starvation. What’s more, this triple crisis may soon be exacerbated by an emerging energy crisis as worldwide demand for oil outstrips supply, coupled with a deepening social crisis as corresponding asymmetries between class, gender and race intensify. Furthermore, the inability of governments to cope with these multiple crises will undoubtedly generate increasing political unrest.

More than at any other moment in living memory, the time has come for civil society associations and mass social movements to unite in a common cause to turn around the dominant agenda and model of economic globalization.

 

Global Economic Governance

In many ways, the driving forces behind these convergent multiple crises can be traced not only to the global economy and prevailing system of industrial capitalism, but to its governing institutions and their neo liberal model of economic globalization. For over a half century, the Bretton Woods institutions --- the World Trade Organization [and its predecessor, the GATT], the World Bank, the International Monetary Fund --- and the few industrialized countries that control these institutions, have managed and governed the global economy primarily in the interests of the economically powerful. Indeed, their agenda of maximizing profits through uneven and unlimited economic growth, has benefited transnational corporations at the enormous expense of both peoples and the environment. More recently, it has become increasingly evident that this system of global economic governance --- based on the neo-liberal model of extreme deregulation and privatization coupled with the granting of new powers to corporations and the rolling back social and environmental rights ---has not only failed. It is also a root cause of the global crises at hand.

Yet, so far, most countries, especially the industrialized powers, have steadfastly refused to call for fundamental changes in this global governing system or its neo liberal model. Although the G-8, which is composed of the major industrialized countries of the global north, has expanded to include the major economies emerging in the global south through the G-20, both the G-8 and the G-20 largely support and protect the status quo concerning the global economy. More recently, in response to the world financial and economic crisis, the UN General Assembly which represents the world’s 192 nation states, issued a communiqué based on the Stiglitz Commission Report calling for some significant changes in the system of global economic governance. However, these reform initiatives were effectively blocked and then marginalized by certain industrial powers involved in the more exclusive process of the G-8 and the G-20.

 

Neo-liberal Trade Mechanisms

One of the main delivery mechanisms of this system of global economic governance has been the WTO and various regional and bilateral ‘free trade’ pacts. The main objective of these neo-liberal trade and investment regimes has been to establish a global market place by and for large transnational corporations to set up operations as well as sell their products in countries around the world, unfettered by the intervention and regulation of domestic governments in the public interest.  In effect, these ‘free trade’ pacts serve to establish new rights and powers for foreign investors to control natural resources, essential services and more. They also require countries to open their markets for the dumping of food products that destroy local agriculture and food security. And, these pacts compel national and local governments to eliminate critical social and environmental protections. 

As a consequence, the capacity of governments, especially in developing countries, to govern and manage their own economies to serve the needs of their peoples and the environment, have been severely restricted by ‘trade’ rules mainly designed in the interests of global for-profit corporations. This happens because these ‘trade’ rules undermine the ability of governments to enact non-trade policies and laws designed to preserve and protect essential services, natural resources, food sovereignty, access to medicines, and public health and safety --- to name a few. As a result, these neo-liberal trade and investment regimes have also become a driving force spreading and expanding the multiple crises facing humanity and the planet.

 

Economic & Climate Crisis

It was the WTO, for example, that played a major role in generating the global financial meltdown with its rules requiring countries to liberalize and deregulate financial services, thereby precipitating the current economic crisis. Under the WTO’s General Agreement on Trade in Services [GATS], many governments were required to simply eliminate their laws providing important financial safeguards, allow the entry of foreign banks and other financial service providers, and permit trading in (risky) new financial products and services. As a result, governments deprived of their right to regulate securities by the GATS, allowed derivatives based on US sub-prime mortgages to be sold and bought worldwide, thereby precipitating and accelerating the current crisis. Outrageously, the very banks represented in the GATS Financial Leaders Group, which exported this model of financial service liberalization worldwide, have been the major recipients of tax payer funded bailouts.

Similarly, this neo-liberal trade and globalization agenda has been a key factor intensifying and expanding the global climate crisis. The carbon emissions generated by this export-oriented model of production and consumption are unsustainable in terms of global warming. In addition to industrial production processes, the shipment and transportation of goods is one of the main emitters of greenhouse gas emissions responsible for the heating of the planet. According to the United Nations, the shipping of long distance cargo across oceans alone amounts to 7 percent of carbon sourcing on the planet. Meanwhile, some key environmental policies and regulatory actions by governments to reduce carbon emissions or promote alternative renewable energy sources are subject to attack as illegal trade barriers under the WTO and bilateral trade rules, which must be eliminated or subjected to economic penalties.    

 

Food & Social Crisis

By the same token, export-oriented agricultural production in developing countries is intensifying rather than alleviating a looming worldwide food and hunger crisis. According to the Food and Agriculture Organization, world hunger rates will see their largest increase ever in 2009, to the point where one out of every six people on the planet faces starvation and malnourishment. Under WTO trade rules, large agribusiness operations subsidized by the big industrial powers are allowed to dump commodities into overseas markets, in the name of providing food for the global supermarket. Moreover, with trade rules designed to increase trade volume rather than promote food security, and with many developing countries under enormous pressure to earn hard currency in order to service their debts to global financial institutions, crops produced from the best agricultural lands in developing countries are exported mainly to rich industrialized countries. At the same time, peasants in the global South are driven off their land, swelling the ranks of the unemployed in cities, instead of producing food for their own people.

Meanwhile, underlying these trade-driven dimensions of the multiple crises is an ongoing social crisis that continues to fester and deepen, both South and North, as an inherent result of neo-liberal globalization. After several decades of liberalized trade in industrial goods, there has been an overall decrease in wages and working conditions across the globe. Workers in the South and the North are now compelled to increasingly compete with one another in a race to the bottom that only enriches transnational corporations who view workers as just another component in their global supply chains. Governed by global and bilateral trade regimes, developing countries are now forbidden to make use of industrial policies and strategies once used by the wealthy nations to harness foreign investment for their development needs. Instead, countries are compelled to compete with each other for foreign direct investment by lowering their social and environmental standards, thus accelerating the race to the bottom on a worldwide scale. 

 

False Solutions

In effect, the current global trade and investment system is at the centre of the storm of multiple crises converging upon the world today. No lasting solutions to these crises can be found without changing the neo-liberal model and the panoply of related policies being implemented by the WTO, regional and bilateral trade regimes. Yet, instead of calling for this kind of fundamental change, most governments around the world are promoting false solutions, such as the conclusion of the Doha Round of the WTO along with the implementation of more bilateral and bi-regional trade agreements. Yet, these trade deals will only exacerbate the crises.

Liberalizing and deregulating financial services will not secure peoples credit, loans and mortgages but rather allow banks and insurance companies to use depositors’ money for risky ventures. Lowering tariffs further will not help feed people who are hungry simply because this will destroy the livelihoods of many more farmers in the South and the North to serve the interests of agribusiness enterprises and further increase their power and control over the food system. Lowering industrial tariffs and eliminating technical standards will also not lead to the creation of new jobs in the North and the South but instead enhance the downward spiral of social and labor conditions, especially for women and poor communities.

In order to resolve the financial, climate, and food crises of our times, governments must have the policy space and flexibility needed to regulate and --- in many instances re-regulate --- their economies to serve the common good of their peoples and the environment.  As long as binding commercial rules primarily designed to ensure the short-term profits and strategic interests of transnational corporations remain in place through the WTO, regional and bilateral trade pacts, governments will be handcuffed in their ability to resolve these challenges, both domestically and internationally. 

 

Call to Action

As we mobilize resistance to yet another WTO ministerial meeting designed to promote the extension of the WTO’s powers in late November 2009 --- exactly ten years after the ‘Battle of Seattle’ and just days before the crucial UN Climate Summit in Copenhagen --- let us join in a common cause. To overcome the current global and systemic crises that now engulf the planet, we must collectively call for the building of a new economic order --- one that puts the satisfaction of basic human needs and the implementation of all social, economic, cultural, political and human rights at the centre of its program priorities --- and one that is based on models of production and consumption that respect the natural resource limits of the planet, an equitable distribution of these resources among people, and the use of clean, safe and renewable energy resources. As a major first step towards a new economic order, we insist that the neoliberal model of global trade be scrapped and replaced by an alternative multilateral trade model --- one that is just, sustainable and participatory.
We, therefore, call on social movements, labor unions and civil society organizations the world over to work with us in the coming months to resist and replace the neoliberal trade and globalization regime that is causing and intensifying the global crises:

• by organizing actions and mobilizing our members to prevent the conclusion of the Doha Round of the WTO before and after its ministerial meeting in Geneva;


• by promoting and establishing a moratorium on bilateral and bi-regional free trade negotiations in particular countries and regions;

• by taking action to ensure that the WTO and its neoliberal model of trade are delegitimized as false solutions leading up to the Climate Summit in Copenhagen.

As subjects of history, it’s time to demand a global turn around now before it’s too late!