Corporate Globalization in Crisis

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.