Free trade not truly free but “imposed”

by Mario Osava

Porto Alegre (Brazil), 27 Jan 2001 (IPS) -- Free trade “is not free but imposed”, and has shifted the terms of exchange to the detriment of the developing world, affirmed South African expert Dot Keet on Saturday at the World Social Forum underway in this southern Brazilian city.

“Davos is the past, Porto Alegre is the future,” added Walden Bello, a Filipino delegate whose words sparked applause during a panel on international trade at the Forum, a first-time alternative event to the 30-year-old World Economic Forum, a gathering of pro-globalization political leaders, financiers and corporate executives being held in Davos, Switzerland.

The World Social Forum brought thousands of delegates from 123 countries to Porto Alegre beginning Thursday to take part in panels and workshops on the theme “another world is possible.” The gathering of mostly left-leaning, anti-neoliberal globalization activists runs through Tuesday, 30 January.

Two-thirds of world trade is controlled by transnational corporations, and involves exchange between them or between their subsidiaries, according to Saturday’s panel participants. African, Asian and Latin American exports have declined in recent years, while wealthy nations have seen their foreign sales grow.

The African case is the most dramatic. Its participation in international trade has dropped from 8% of the total at its peak to 2% today - completely disproportionate to its population, which is 10% of the world total, pointed out Keet, an expert from the Centre for Alternative Development Information.

Meanwhile, commodity - or raw material - prices fell 28% from the 1960s to the 1990s, hampering the economic growth of the poorest countries, said the university professor from Cape Town. The trend intensified in the early 1990s with the Uruguay Round of multilateral trade negotiations that led to the creation of the World Trade Organisation (WTO). The data indicate that the liberalisation of trade is “forced” by the rich countries, the only ones who benefit from the process, she said.

Resistance and protests are necessary to prevent the convening of a new round of international trade talks, asserted Bello, professor at the University of the Philippines and head of the Bangkok-based non-governmental organisation (NGO) Focus on the Global South.

His proposal for resolving the current situation is “de-globalization,” which he said does not mean isolation from the international economy, but rather changing the rules “imposed” by the central “monolithic and Jurassic” system, made up of the WTO, World Bank and International Monetary Fund (IMF). This centralisation is detrimental to the world’s diversity and is the same trap that led the Soviet Union to its downfall, stated Bello, who called for reinforcing that which is “local and national, and decentralising world power.”

This could be achieved by building a plural system of interactive institutions, based on broad accords, with the participation and control of civil society, he said. One example was the attempt to create a sort of Asian IMF in order to defend the region from “international speculators.” But the initiative was blocked  under pressure from the United States, stated Bello.

Francois Huwart, France’s foreign trade minister, took part in the discussion via teleconferencing in order to defend trade liberalisation “as a factor of economic growth.” Huwart also justified national policies that defend the food security and welfare of citizens of his country, which prompted jeers from the audience.

A government minister who upholds protectionist policies that obstruct agricultural imports from developing countries, especially from Latin America, deserves more than the Forum’s rejection, shouted Argentine journalist Alberto Pujals, a supporter of the socialist current of Brazil’s Party of Workers (PT).

The Free Trade Area of the Americas (FTAA) - an initiative to create a hemispheric free trade zone from Alaska to Tierra del Fuego - was also targeted for condemnation as an asymmetric arrangement. Kjeld Jakobsen, international relations secretary for the Workers’ Central, Brazil’s largest union organisation said the asymmetry was evident in the fact that the US represents three-fourths of the economy of the Americas - with an overwhelming advantage in technology and productivity - but does not permit a just trade accord for Latin American countries.  Jakobsen called for demonstrations, “like the one in Seattle,” during the upcoming FTAA negotiations in Argentina and Canada in April. In December 1999, massive street protests in that US city contributed to the WTO’s failure to launch a new round of global trade talks.

For the struggle for more equitable global trade, the Brazilian unionist proposed a new “pact” between the union movement of the developing South and that of the industrialised North, to seek greater access of products from developing countries to the markets of the wealthier nations.

Jakobsen also outlined a “Marshall Plan” for developing countries based on funds re-routed from foreign debt payments, and emphasised the need for national sovereignty over intellectual property rights. The latter would ensure, for example, that nations of the South could protect their biodiversity and what is known as “traditional knowledge,” which produce a broad range of medicines and foods. Currently, these products are being patented by companies based in the industrialised North, he said.

The unionist stressed his support for including social and environmental clauses in all trade accords as a means of protecting the rights of workers and of the general population. But he cautioned that sanctions must be discussed and that such measures in themselves are not enough, as they do not benefit the unemployed or workers in the informal sector, which in many countries already represents more than half of all employment.

Trade was always related to “war, with acts of violence like the slavery and European colonisation of past centuries,” the invasions of other countries and the destruction of biodiversity, emphasised Mark Ritchie, president of the US-based Institute for Agriculture and Trade Policy.

It is essential to establish rules, but rules that “are good for humanity,” that are not imposed by individual interests and that protect the rights of the majority. The complicated task of defining alternatives to the current system will require long debates at the annual meetings of the World Social Forum, he said. There are explosive issues that are capable of triggering new wars, such as the drug trade and water rights, which are outside the realm of global trade regulation, Ritchie pointed out.

Water shortages and climate change threaten all life on the planet and must be included in world trade negotiations, added Oded Grajew, coordinator of the Brazilian Association of Entrepreneurs for the Citizenry. A global consumers’ movement to demand “social responsibility” from corporations, and boycotting those that benefit financially from child labour or the destruction of the environment, is one way of contributing to the creation of a more equitable system of world trade, commented Grajew. – SUNS4824