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Corporate Globalization in Crisis

By Deborah James, AlterNet. Posted December 10, 2005.


The potential failure of the WTO meetings in Hong Kong may well spell the end of the corporate-controlled trade agreements.

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From December 13 to 18, the World Trade Organization will hold its sixth ministerial meeting in Hong Kong, China, to negotiate the fate of public services, the global food supply, and jobs and development. Representatives from 148 countries will meet to shape the future of the global economy.

Negotiations are stalled on a variety of issues, and it's possible the Ministerial may end without a consensus Declaration. WTO proponents are attempting to portray the crisis in negotiations as though the problem were the lack of European (particularly French) or Brazilian "ambition" to break through the deadlock.

But the real issue is that the WTO is in crisis because the model of corporate globalization has failed to produce economic growth, its supposed mandate. For 10 years, the WTO has helped to promote a surge in global trade -- and yet this increase in trade has failed to raise economic growth, even to the levels achieved during the pre-1980 era. It has also failed to alleviate poverty. According to the United Nations, we still live in a world where 24,000 people die worldwide every day from hunger and poverty-related diseases.

Now that the record is clear, global social movements and many governments are questioning the WTO's attack on sovereignty, democracy and the ability of poor countries to develop. Thousands of farmers, workers, environmentalists, women, people of faith, immigrants, and human rights advocates from Hong Kong, Bolivia, South Korea, Canada, South Africa, Indonesia, Europe, the Philippines, the US, and other countries, will meet in Hong Kong this December, to protest the undemocratic WTO and its destructive impact on communities, democracy, development, and the environment.

A broken model

The WTO aims to consolidate a series of policy reforms that many countries have implemented over the last 25 years, following IMF and World Bank structural adjustment programs in developing countries, and Reagan-Thatcher prescriptions in the US and Europe. Referred to as "free trade," "the Washington Consensus" or what we call "corporate globalization," the policies include privatizing public services, weakening labor laws, deregulating industry, opening up to foreign investment, shrinking the non-military government, lowering of tariffs and subsidies, and focusing on exports over production for national markets.

This time period has seen a sharp decline in economic growth worldwide .

The WTO has failed to produce economic growth because this entire model is actually geared to increase the power of corporations in the governance of the global economy. Rather than governing just trade, the WTO is better understood as a global corporate power-grab, aiming to impose a one-size-fits-all set of rules on national issues of public services, intellectual property, agriculture, industrial development, and more. Under this flawed model of corporate globalization, not only is economic growth sluggish, but economic inequality has vastly increased, diminishing prospects for development and the attainment of universal economic human rights.

Best case scenario: less than a penny a day

Not only is the WTO's record dismal, but future prospects look even dimmer. Even according to traditional economic models, new figures show much less global economic growth from the current WTO round than originally projected. In the recent study released by the World Bank, a successful outcome in the current negotiations could expect global economic gains of a mere $3 to $20 a year per person worldwide by 2015, of which more than two-thirds would go to the rich countries.

But one of the most fascinating conclusions of the study was that gains from complete trade liberalization worldwide -- a highly unlikely scenario -- would amount to a mere $287 billion in 2015. Seems like a big number, but that's a paltry 0.7 percent of global GDP projected that year.

Let's put this statistic into reality. Imagine living in a country where your annual income is a buck a day. Under complete trade liberalization, according to one of its greatest proponents, your dollar a day income would rise to a buck and 7/10ths of one penny.

That's why over 130 groups -- led by trade unions -- around the world have released a statement called "The Doha Development Round: a recipe for the massive destruction of livelihoods, mass unemployment and the degradation of work." The statement begins, "When the world's trade ministers put their signatures to the founding document of the WTO in April 1994 in Marrakech, their very first sentence establishing the WTO committed them to raising standards of living, ensuring full employment and a large and steadily growing volume of real income.


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Deborah James is the Global Economy Director of Global Exchange, and will be present at the WTO Ministerial in Hong Kong.

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Well I like niceness and honesty too...
Posted by: jezzigogs on Dec 10, 2005 4:02 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
I might be living on a different planet? ( I am in a different country)

Or maybe I should stop looking at the graphs in "The Economist"? and other geopolitical sources?

You said:

"This time period has seen a sharp decline in economic growth worldwide" .

Not true, surely. This last ten years has been the most economically productive the planet has seen, The world population has doubled almost and yet poverty is slowly declining in developing countries (relative to population)
This of course excludes Failed, Warring, Dysfunctional and Fundamentalist states (which are in decline as a percentage of total nations anyway) - mostly old sores.

You said
"The WTO has failed to produce economic growth because this entire model is actually geared to increase the power of corporations..."

It seems to me the market economy is the only thing that works for Homo S - on a village, regional, national and geographical scale. It has the potential to be fair and honest - Just because some rich bastards rip some of us off on a global scale does'nt mean it is a function of the global economy - rather it reflects human meanness, selfishness and bad home environment and education - deadly factors which have operated in our social environment for thousands of years, in societies of all types and forms.

Fact is you are not going to fix it with anti-globalisation protests. History will forget you in my opinion - as people of the world become (slowely but surely) more cultured and humane (remember keel-hauling?) and "everybody" has a mobile world wide skype phone (remember Posted Letters?)

Anyway thank you for your informative article. I dont want to get into L-R type arguments, but I really think a functional global economy is a worthwhile goal.
regards
Jeremy Brown

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Big problem
Posted by: Lincoln fan on Dec 10, 2005 5:19 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Maybe there are benefits to be gained by having a controlled global economy. But it appears to me that there are too many variables for any coalition of governments or consortium of corporations to intelligently manage it. We cannot say with certainty what caused the last depression or boom much less accurately predict the actions to take to cause global prosperity for the next century. Economists honestly disagree on simple problems of local economies. For example, does it pay to give corporations tax breaks to have them locate in a community? If so how much? In one community the answer might result in prosperity while in another community the same answer might result in disaster. If there is no known answer to simple questions how can the infinitely more complex global economy be controlled? That does not mean that we should do nothing. For the present I would recommend cautious experimentation, make a small change to see the effect before commiting to a policy. These changes should be made by agreement between governments, not corporations. In the meantime, give aid in the event of disasters and aid to stimulate local enterprise.

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» RE: Big problem Posted by: Knowmad
» RE: Big problem Posted by: Lincoln fan
we have been chasing this mirage for 20 years
Posted by: zooeyhall on Dec 10, 2005 9:39 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
"But the real issue is that the WTO is in crisis because the model of corporate globalization has failed to produce economic growth, its supposed mandate. For 10 years, the WTO has helped to promote a surge in global trade -- and yet this increase in trade has failed to raise economic growth, even to the levels achieved during the pre-1980 era. It has also failed to alleviate poverty."

This in a nutshell says it all. I am sick of listening to the corporatist and right-wing mantra that: " 'free trade', removal of 'impediments to profits', 'environmental de-regulation', lassaiz-faire, etc.,etc.,etc.' " is going to bring on an economic Nirvana. All I know is that, as a middle-class American, I have seen jobs disappear and my over-all standard of living decline.

The only people that have benefited have been the large investors and CEOs. I am tired of their propaganda and their lackeys in the media that disseminate it. I am tired of the bought-and-paid-for politicians that promote it.

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» Welcome to the club... Posted by: qrswave
The point of the article is that the WTO is run by crooks.
Posted by: Sojourner on Dec 10, 2005 9:52 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Is US government working for the people? No. Then how will a global psuedo-government like WTO work for the people, when it is run by those who do not want national governments to work for the people? It cannot.

It is exactly the same history, now on a global level, that the US experienced under the Articles of Confederation. A federal government was required because the crooks were exploiting the fact that no laws existed at that level.

The problem with the Libertarian comment at the head of this thread is that when crooks run a market, the bigger the market, the greater the injury. Markets do not need to be protected. They will emerge even under totalitarianism, but underground. Look at the US war on drugs. It is its own market, and we have crooks chasing crooks in support of the prison industry.

We need global government to regulate, not prohibit, global business.

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» Point taken. Posted by: Sojourner
» RE: Point taken. Posted by: EncinoM
» Rod from Canada Posted by: Rod from Canada
» RE: od from Canada Posted by: EncinoM
» RE: od from Canada Posted by: Falang
» RE: od from Canada Posted by: EncinoM
"UNHOLY TRINITY" /or "COSMIC ENEMA REALITY"
Posted by: roberta on Dec 10, 2005 10:42 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Lengthy, I apologize (excerpt(s) from godsmadmen dot com "Help is on the Way"):

The global institutions of the so-called "unholy trinity," the International Monetary Fund (IMF), World Bank (WB) and World Trade Organization (WTO), are NOT human.

Through the WB/IMF, the Brits loaned money to farmers in India. This was sales, basically - loan sharks, really. The farmers, who couldn’t produce enough agriculture crops to sell, were living in abject poverty. The Brits convinced the Indian farmers to take loans out from the WB/IMF, to purchase pesticides, and therefore, agriculture crops would flourish and multiply. Poof, instant prosperity and poverty disappears as all these wonderful crops sell. Unfortunately, the pesticides did NOT grow more crops and the farmers found themselves in debt with the loans to purchase the pesticides, and with no agriculture crops to sell. This was in the spring of 2005. The farmers, 2000 of them, drank the pesticides and committed suicide, to escape their plight.

It is critical that the IMF, WB, and WTO, be exposed and disempowered.

http://www.globalpolicy.org/socecon/bwi-wto/imfind.htm

Venezuelan President Hugo Chavez has been one of the greatest mouthpieces about this, and thankfully for US, he is!

The United States of America is in a deep state of denial.

The unfortunate situation in which we find ourselves, is about, how to transition into a post-petroleum society.

No one really wants to deal with this. Not even 'almost' all of the the highly well educated geophysicists in the US. There are, however, still those whose altruism gene is still working.

In other countries there are very sophisticated intellects, who are working diligently to help those of US, who get it. Its a matter of life and death, to ALL Homo-sapiens!

Bolivia is one of many countries to accept the truth and their preparation of independent self-reliance, is a bold statement indeed.

Sweden is clearly on-board. http://www.peakoil.net/

The United States wants to use the unholy trinity for global domination and the Black Gold War Lords are currently in control (Iraq hostile takeover attempt). The desperate drive to try and capitalize on the Earth's oil and fossil fuel reserves is just a thumbnail sketch of what's to come.

http://www.princeton.edu/hubbert/the-peak.html

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One Last Binge By the Ruling Elite
Posted by: birdman on Dec 10, 2005 12:08 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Not to discount the self-delusion of the owning class, and in particular their minions who write the drafts and manage the meetings and so ... but what with the world approaching peak oil (if we're not there already), the ability of the planet to engage in the unfettered movement of resources, finished products, and people all over the globe is coming to an end.

While it is always possible that the transnational corporations could resurrect the age of great sailing ships, the amount of cargo that can be transported and the amount if time it takes to get from one place to another under such a back-to-the-future scenario is nowhere near current norms, nor would it suffice to maintain the present level of economic wealth accumulation by our overlords.

Seen from a certain perspective, these WTO sessions are more about rearranging the deck chairs on the Titanic than they are about any permanent arrangement for the long-range future. To be sure, in the near term, a lot of needless human suffering will ensue, including within the developed world but especially among other populations least able to defend themselves. So we must work to minimize that harm. But over the long haul, all these dreams of world empire, economic and otherwise, are a pipe dream. All is illusion.

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World Government
Posted by: Kitty Lady Oregon on Dec 10, 2005 12:46 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
The WTO, IB, et al are nothing but an attempt by the moneyed class to rule the world by corporations. I believe this is called world fascism. WE already have this type of government in the USA.

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Strong feelings about this issue?
Posted by: Lincoln fan on Dec 10, 2005 12:53 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
It seems that the majority on this board are vehemently opposed to a corporate global economy. I suggest that anyone who has an overwhelming opinion on either side of this issue join a non-partisan grass roots effort to force both parties to represent the majority view on this or any other issue. Our government must become representative of the people. The only difference between the parties should be on how they plan to carry out the will of the majority. There are no dues, no contributions, no registration and no hassle. It will cost you four postage stamps and 30 minutes of your time. Click on do it now

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'Free Trade' is avout as 'free' as the 'free' in free enterprise system
Posted by: kmarx on Dec 10, 2005 5:21 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
This article is hard hitting and to the point! Brava to its author. Let's hope the author's predictions are on the mark. If not then this may well be what Marx really saw -- the eventual destruction of Capitalism!

If globalization is meant to be then so be it but it will only suceed if, and only if, the world evolves into it! Forcing it out of greed will never work! This will force a world where the rich get richer and the rest grow angry and take action. Humans evolved only when the situation was right for them to evolve. The same is true of globalism.

Indeed, corporations have paid a bundle to 'buy' one-sided 'free-for-all' trade agreements. I laugh when I hear fools say our nation is based on a 'free' enterprise system. How can an economic system be truly free if the financial elite 'buy and the sell' the willing politicians in order to assure them the economic practices they want? Look at outsourcing. Corporations are increasingly exporting the best jobs, the very jobs that serve as the backbone of the Middle Class, and are doing so with the blessing of both a Congress which is for sale and a president who is the best friend corporate America ever had. (The latter's 'compassion' (ha, ha) extends no further than his rich friends.)

I say it's time for a real and I mean real change in Washington!

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You could make the same argument about the U.N....
Posted by: ABetterFuture on Dec 10, 2005 9:03 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
...and I'd agree to that, too.

With a growing trade deficit, we should be reexamining policies that promote domestic growth--other than dumping more money in government, and printing more money that our unborn grandkids haven't made yet.

The U.N., like the WTO, is an unneccessary organization. More to the point, the U.N. is making itself irrelevant--i.e., member nations that call for the extermination and/or relocation of other nations. Why foot the bill for that? Because we love an old fashioned bloated, corrupt beaurocracy?

As soon as we get the WTO to kiss off, I'd like to see us adopt the same policy towards the U.N. If members are going to call for one anothers annihilation and/or mass exodus, then we should allow them to exodus themselves from our sovereign land.

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» You're misinformed. Posted by: ABetterFuture
» Quite the contrary. Posted by: ABetterFuture
GLOBALIZATION = THEFT
Posted by: Jeffersonista on Dec 11, 2005 6:38 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
The IMF and the WTO are all about given a shrinking group of people all of the worlds resources to hoard. 10 years and what do we have, FASCISM instead of democracy, poverty instead of decent humane conditions, and fewer and fewer people holding the keys to more and more of the worlds money. It is a sad comment on the current state of civilization that banks and corporations make the laws. What is the biggest most beautiful building in your city, more than likely a bank or corporation. They own you and the world and they are turning it into an open sewer.

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Regarding the WTO and Globalization
Posted by: MHW on Dec 11, 2005 10:20 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Perhaps we need to remind the American advocates of the WTO and globalization of the comment made by Herbert Hoover, no liberal "extremist," in 1928. He remarked, "Our purpose is to build in this nation a human society, not an economic system."
Herbert Hoover, August 11, 1928

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Rod from Canada
Posted by: Rod from Canada on Dec 11, 2005 10:55 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Your posting (and logic) is a joke.

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Rod from Canada
Posted by: Rod from Canada on Dec 11, 2005 10:58 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Disregard the previous post. It was meant for a specific posting earlier in the sequence.

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Ghostly Dendrite
Posted by: Ghostly Dendrite on Dec 12, 2005 6:14 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
The following is an extract posted recently by me into another news group which I have C & P'd here.

I am at something of a difficulty here. For one, I am not a television person and don’t watch it all that often, so the BBC tends not to be selected very much. I prefer to get my news from the internet mainly because the selected articles are largely reported without bias. This lack of bias tends to make them bland; a straight reporting of facts without looking at the build up of the situation or stories behind the facts, the sort of thing the British Sunday heavyweights are good at. To investigate a story on a deeper level you often have to select the brand of bias that suits you best, but bias often tends to gets in the way of the truth.

For instance, take a news item like Protests against the WTO summit in Hong Kong. Articles sourced from Google News are along the lines of; "The WTO is organising a summit in Hong Kong and certain groups are protesting because the feel disadvantaged". Alternet.org approaches the story in a completely different way.

With communism a dead duck and world globalisation looking like a derailed train that is ploughing forward under its own momentum all that is left is the middle ground.

Bolivia, one of Earth’s poorest nations seems to have stuck two fingers up at the WTO and is finding its own way out of the morass. Venezuela and Argentina are recording unparalleled economic growth by not following the ‘imposed’ policies of the WTO.

The World Bank and the IMF have collectively dropped the King’s shilling into the unsuspecting poor countries beer and the poor sods have picked up the tankard and drained it dry.
There is a saying in business that if you owe the bank ten thousand, then you have a problem but if you owe the bank ten million then the bank has a problem. I think the WB and the IMF are slowly realising the enormity of their situation.

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WTO a Supranational Corporate Construct
Posted by: auromar on Dec 15, 2005 9:37 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
It is refreshing that governments and peoples are waking up to what WTO really is all about: the control of the means of productions, trade, wages, and the patrimony of individual nations, peoples' health and wellbeing, and the plundering/degradation of the environment of the planet to amass profit to the global Corporate Ruling Class.

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