Isn't it Ironic?
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On January 16th, President Bush used the occasion of a speech at the Organization of American States' headquarters in (naturally) Washington to deliver a stinging rebuke to Argentina's efforts to pull out of its desperate economic crisis. "We expect that Argentina will not just continue, but deepen its free market reforms," the President said. "They have no right to look out for themselves. Just because we've conspired to destroy their economy, and have helped removed most of the wealth from their country, doesn't mean we're done with them yet."
Or words to that effect.
Pointedly, Bush, in his speech, extended an invitation to the countries of Central America to go ahead and create a regional free trade agreement with the United States, without waiting for a hemisphere-wide Free Trade Area of the Americas. The logic, apparently, is that the tinier economies of Central American countries are in no position to stand up to the U.S., and that with them on board, larger countries like Brazil and Argentina won't want to be left out. It may not have genuinely occurred to these ideologues that some countries -- after watching what has happened to Argentina, the economy of the Latin American country that has most devoutly embraced such "reforms," and which was once the closest thing to a developed country south of the Rio Grande -- may not want in on the deal. Including Argentina itself.
And it's not as though Argentina has fully jettisoned the last decade-plus of IMF-enforced neo-liberalism. On the contrary; one of the reasons the current crisis has been so destructive to ordinary Argentineans is that there is so little state or private infrastructure left in place to cushion the damage.
Even if the new Peronist leaders wanted to (and could afford to) reinstate more of it, it would take time. And Argentina has plenty of role models for trying to mitigate, if not outright avoid, the impact of truly free-market policies. As the World Trade Organization ruled, yet again, this week, the United States is doing it, too.
The ruling, last Monday, is the costliest yet for the United States in a WTO- litigated challenge. In the case, the WTO's dispute panel ruled that a tax break the U.S. government gives to U.S.-based corporations for export sales violated free trade rules. Ironically, because the break also applied to sales of unfinished goods to subsidiaries, it also served as an incentive to move manufacturing jobs overseas.
The break is worth many billions of dollars a year to U.S.-based corporations. Again, ironically (there's always lots of irony in free trade discussions), the two official co-hosts of the 1999 WTO meetings in Seattle, Boeing's Phil Condit and Microsoft's Bill Gates, run companies that are among the biggest losers in the WTO's ruling. According to its annual reports, the law's benefits for Boeing amounted to $130 million in 1998, $230 million in 1999, and $291 million in 2000. In case you're counting, that's $650 million in corporate welfare to one company, in three years. Naturally, the ruling does not mean Boeing will have to pay the money back.
The WTO ruling doesn't automatically strike down the U.S. law; but it does authorize the European Union (which filed the original complaint) to seek up to a whopping $4 billion a year in trade sanctions unless Congress changes the law to comply with the ruling. Ironically (that word again), Congress already did so once, after a previous unfavorable WTO ruling on the same program -- but didn't change it enough to satisfy the WTO, leaving the subsidy effectively in place.
Undoubtedly, politicians, CEOs, and even some ordinary citizens will take offense at all this. What business is it of some unaccountable corporate lawyers in Geneva, they'll say, if the U.S. government passes a law it deems in the best interests of its people, and that law only applies within its borders?
This, as it happens, is precisely the point the critics of institutions like the WTO and IMF have been making for years. The quick and easy answer is that it's no more their business than the domestic environmental or worker safety laws that have also been gutted.
In the real world, there's been an unspoken compromise. National sovereignty is something that will be respected if you're big enough. The U.S. has qualified; Argentina hasn't. Some Central American countries (like, Nicaragua) certainly haven't.
As George Bush and his underlings wag their fingers at Argentina's new leaders for having the temerity to try to rebuild its economy, they ought to reflect that in similar situations, they'd pursue the same policies.
In fact, they already do.