Disarming Trade

Just weeks after the attacks of September 11, U.S. Trade Representative Robert Zoellick dropped jaws at a WTO meeting in Qatar by announcing the U.S. would measure countries' commitment to the "War on Terror" by how well they complied with the trade rules he was pushing.

Just about everyone on either side of the trade debate remembers the moment. Most view it as an unfortunate aberration, a rhetorical strong-arm move made by the representative of a country still reeling from its wounds in the hope of getting a specific deal off the ground.

Tony Clarke, director of the NGO Polaris Institute and winner of this year's "alternative Nobel Prize," sees it as fitting into a larger pattern. Last week, he traveled from Ottawa to Hong Kong to shine light on the connection between the neoliberal ideology promoted at the just-concluded WTO Ministerial conference and the militarization of economies great and small.

"Unfortunately we live in a world today in which we seem to break things into little components, so we have people who are very much engaged in -- and are in an uproar over -- the invasion of Iraq and the continuing war," says Clarke. "Those things are very much related to the movements that exist now against corporate globalization or neoliberalism. We have to see these things together. The global economy -- and the expansion of the global economy -- are related to the expansion of militarization in the world."

Clarke is trying to highlight those linkages and build a bridge between the world's anti-war movements and the thousands of activists all over the planet who oppose the WTO's corporate project. "We need to start to build a common movement that responds to that joint reality," he says.

The most direct link between the two realities is the "security exemption" common to every trade deal. Whatever limits on governments' the deals contain don't cover defense spending. While the exemption is logical, it's also all-too-handy as a backdoor for governments to intervene in their economies. Some have called it "military Keynesianism."

"What the WTO does is, in effect, it reduces the capacity of governments and says that governments can't subsidize in this area or that area," says Clarke. "Whether it's agriculture or industrial production of one kind or another, the rules certainly restrict what governments can and cannot do. But with the security exemption clause the governments have free range to engage in the arms trade."

Although neo-classical economists claim that "free markets" rule, the fact remains that governments pour megabucks into military research and development, and that research is often spun off to the private sector. The Internet, your non-stick frying pans and the GPS locator in your car are all products of defense-driven research. The infamous Defense Advanced Research Agency -- DARPA -- is just one arm of a multi-billion dollar government R&D system in the United States.

Military spending can also be an important ingredient in regional development. Through the 1970s, before the age of the trade treaty, Canada subsidized businesses that relocated to poorer provinces as part of a regional development strategy. The United States has done the same with military spending since the 1950s, building military infrastructure in the formerly agricultural Southern states -- states that have lagged behind the North since the end of the Civil War.

In some developing countries the military leadership is itself heavily invested in the country's leading businesses. In Indonesia, for example, military-run corporations complicated the transition from dictatorship to democracy.

As the straightjacket tightens on governments' ability to do that kind of economic planning -- "planning" is a dirty, Communistic word in neoliberal economics -- the security exemption will play an increasingly important role in countries' development strategies. The military is already an important source of employment in some of the poorer countries. The Canadian model of regional development will grow increasingly "WTO-illegal," leaving only the American model of military industrialization available to policymakers.