<nettime> Susan George: State sovereignity under threat

[Konfrontatie <konfront@xs4all.nl>]

Le Monde Diplomatique

STATE SOVEREIGNTY UNDER THREAT
Globalising designs of the WTO

The Atlantic Alliance's intervention in Kosovo is a spectacular example of
the erosion of state sovereignty, helped along by globalisation and the
"right to interfere". This evolution is spreading to a growing number of
spheres first and foremost the economy. However, the principle of
sovereignty is not breaking down with any degree of uniformity: the social
and environmental spheres remain relatively unaffected, while a higher
economic order is emerging only too clearly founded on the primacy of the
markets and guarded by irresponsible and complicit international
organisations, led by the World Trade Organisation. 
  
Despite the victory against the Multilateral Agreement on Investment (MAI) 
- thanks to France's withdrawal from the negotiations in October 1998 -
questions remain. Why were governments ready to sign this scandalous
treaty and renounce huge areas of their sovereignty, without any
discernible advantage in exchange? The only explanation seems to be, as
Marx and Engels put it, that "modern state power is merely the executive
committee charged with managing the affairs of the bourgeoisie" (1). 

This "bourgeoisie", now embodied in huge transnational industrial and
financial corporations, makes itself heard loud and clear by "state power" 
via multiple lobbies. Among these, the International Chamber of Commerce
(ICC) has a special place, claiming, as it does, to be "the only
representative body that speaks with authority on behalf of enterprises
from all sectors in every part of the world" (2). It makes its demands
known directly to heads of state. 

All matters concerning Europe and trade, including negotiations at the
World Trade Organisation (WTO) are handled by the outgoing European
commissioner, Sir Leon Brittan, who appears not to have noticed his
resignation and still speaks for all the governments of the European
Union. These governments have accepted their individual loss of
sovereignty in trade as in other areas because they consider that the
advantages of cooperation outweigh the drawbacks of limiting their room
for manoeuvre. But cooperating is one thing. Choosing the ultra-liberal
heir presumptive of Margaret Thatcher as spokesman is quite another. In
the case of the WTO, we risk witnessing a contest of
sovereignty-stripping, making the prospect of a social and political
Europe recede. 

Sir Leon is after exactly the same thing as the ICC - a world ruled by
free trade. Their views on the big WTO ministerial meeting in Seattle next
November are interchangeable both in form and content (3). For the time
being, our "sovereign" European governments have fallen behind them with
gusto, making them look suspiciously like Marx and Engels perfect
executive committee. 

The Brittan/ICC tandem believe that agriculture must be further
liberalised, which will put the future of rural communities in danger. The
poorest risk losing control over their peoples food security. The
Agreement on Intellectual Property - going under the banner of Trips (the
Trade-related Aspects of Intellectual Property Rights) and including
patenting of life - is also up for discussion in Seattle. 

Less well known than these two important dossiers is the General Agreement
on Trade in Services (Gats), which is also on the agenda. Here, Sir Leon
and the ICC seek the "breaking down of domestic regulatory barriers across
a wide range of services" in order to "expand the number and improve the
quality of countries' commitments on market access and national treatment" 
(4). Services should be open to foreign investment worldwide, it being
understood that the agreement will include "commercial presence" and "the
movement of natural persons" in order to furnish the said service. We may
ask what is wrong with that? Here are some fine prospects for our own
firms. But do governments have any idea of the huge losses of sovereignty
they are likely to undergo? 

"Services", which are about to fall under the yoke of the WTO, represent
thousands of billions of dollars worth of commercial transactions. This
seemingly innocent terms take in almost every imaginable human activity: 
distribution, wholesale, retail and franchising; construction,
architecture, decoration, maintenance; civil, mechanical and other types
of engineering; financial services, banking and insurance; research and
development; real estate services, rental, credit and hire-purchase; 
communications, postal services, telecommunications and audio visual,
information technologies; tourism and travel, hotels and restaurants; 
environmental services including road construction and maintenance,
rubbish collection, sewage disposal, water delivery, protection of the
landscape and urban planning; recreational, cultural and sports services,
including entertainment, libraries, archives and museums; publishing,
printing, advertising; transportation by every imaginable conveyance
including space-travel; and also education (primary, secondary, tertiary
and adult) and human and animal health. In all this covers over 160
sub-sectors and activities (5). 
  
Privatising health

The countries of the European Union have a maximum of a few dozen civil
servants working on these questions, for which the European Commission is
in any event setting the parameters. In contrast, the US is devoting the
talents of several hundred specialists to these issues and whetting its
knives for full liberalisation of services in all branches. 

The US Special Trade Representative (USTR), Charlene Barshevky, instigated
Washington s successful battles over bananas, genetically manipulated
organisms and hormone-fed beef. Naturally she is working hand in hand with
American business interests. She asked them to list their demands for
Seattle - a request to which the Coalition of Service Industries responded
with a detailed 31-page document (6). 

Not all of the dozens of service sectors listed above have yet got
themselves organised to extract maximum concessions via the WTO. Nor are
all the areas cited objects of potential US aggression - at least not yet. 
The European health sector has, however, been singled out as a special
target of liberalisation. Expenses are exploding due to an increase in
their aged populations, the demographic segment that uses health care
services most intensively. The coalition is sure that it "can make much
progress in the negotiations to allow the opportunity for US business to
expand into foreign health care markets". 

Until now, unfortunately, "health care services in many foreign countries
have largely been the responsibility of the public sector ... [making] it
difficult for US private sector health care providers to market in foreign
countries." But the WTO offers a way out. Among the "barriers" Barshevsky
is expected to help demolish are "restricting licensing of health care
professionals" and "excessive privacy and confidentiality regulations." 

Her "negotiating objectives" include "encouraging more privatisation" and
"promoting pro-competitive regulative reform". The coalition also wants
"market access and national treatment allowing provisions of all health
care services cross-border" as well as "allowing majority foreign
ownership of health care facilities". To sew the deal up, health care
should also be included in the WTO public procurement rules so that
foreign firms can bid on all government contracts in this area (7). If an
agreement on health services including all these provisions is actually
tabled and signed at the WTO, we can kiss goodbye our public health-care
systems in Europe. 

In addition to this already-approved agenda, the ICC, Sir Leon and our own
governments have many additional goals. They start with the elimination of
remaining industrial tariffs, a classic demand. Then there is "trade
facilitation", meant to "harmonise, modernise and simplify" bureaucratic,
obsolete customs procedures, which, translated, means many fewer controls
and inspections. Next comes government procurement which represents
upwards of 15% of any nation's GNP. These markets must be opened up to
suppliers from anywhere in the world according to the sacred principle of
national treatment. Brittan and the ICC also seek a legal agreement on
competition policy that requires developing a legal framework of binding
international rules. 

Enemies of the MAI can rest assured: an agreement on investment has not
been forgotten. Since the agreement was defeated at the OECD, Sir Leon has
been trumpeting everywhere that he was always in favour of the WTO as a
forum for negotiating a "comprehensive framework of international rules". 
Finally, the WTO should take up the environmental question because there
are disparities and sometimes clashes between its rules and the content of
Multilateral Environmental Agreements (MEA) concerning climate change, the
ozone layer, biodiversity, toxic wastes, endangered species, etc. A
question to our governments: why sign MEAs if it is to call them into
question at the WTO? 

This concern for the environment is touching, since up to now the
tribunal-panels of the WTO have decided all disputes with environmental or
public health implications with no regard whatsoever for either. The icing
on the environmental cake is the Forest Products Agreement that is under
way. This would eliminate all barriers to trade in forest-derived products
and remove all obstacles to forest exploitation. Barshevsky was formerly a
lobbyist for the Canadian timber industry; now she is being advised by the
largest US transnational wood and paper products companies (8). 

This assortment of measures - the Seattle "built-in" agenda plus all the
new subjects - has already been christened the Millennium Round by Sir
Leon. He sees it as already approved, as do the ICC and the G-7
governments. He insists on a "single undertaking", meaning that "all
participants have to accept the whole outcome of the negotiations rather
than pick and choose". 

Sir Leon wants to have a multitude of issues on the WTO agenda negotiated
at once: "Issues which are difficult for some but important for others
cannot be blocked in isolation but must be weighed up as part of the
overall calculation of advantage which each WTO member needs to make on
the outcome ... it is this ability to make political calculations on the
overall balance of advantage which enables trade-offs to occur between
different issues" (9).

If this huge programme is hard to manage even for developed countries, it
is quite beyond the reach of developing countries, which will be even more
heavily penalised than they are already. Many of them do not even have
permanent representation to the WTO; some share an embassy. Even the large
countries of the South lack the necessary numbers of qualified personnel
to stay on top of complex, simultaneous negotiations on a wide variety of
subjects. The declaration of the French prime minister, Lionel Jospin,
according to which the WTO is "a more democratic venue" than the OECD
because the countries of the South are included, takes no account of these
realities. In fact, the "Quad" (the US, EU, Canada and Japan) will
continue to impose its will and the US, with its plethora of highly
professional personnel, will have the most influence of all.

"Don't worry, everything's under control", our national civil servants,
concerned with state sovereignty, will no doubt reply. But what we will
really need in Europe is a kind of "combativeness index" on a scale from
one to ten to register what our governments are prepared to defend, since
it is obvious they will not be able to defend all the interests of their
peoples. So, national negotiator, what will it be? Public health or small
farmers? Hormone-fed beef or forest destruction? Audio-visual property
rights or respect for the Lomé Agreement, now forbidden by the "banana
decision"? In this globalised world, you have to know what you are really
willing to fight for.

Governments need to make up their minds fast, because this whole agreement
should be sewn up within three years. Why the rush? Quite simple:
"Multilateral rule-making has to adapt itself to the faster pace of change
in a global marketplace in order to keep the rules aligned with
rapidly-evolving business realities and requirements" (10). And as we all
know, the requirements of business supersede those of citizens - so full
steam ahead for January 2003.

This prospect of "overall calculation of advantage" and "trade-offs" has
not, so far, given rise to any public debate. Yet such a debate is badly
needed because civil society has no desire to be governed by the
"executive committee" of the transnationals, and is massively opposed to
any extension of the powers of the WTO. Civil society wants to participate
in a full evaluation of this organisation (11). The real urgency lies in
taking time to examine the present and likely future impact of the WTO and
its overweening ambitions. Otherwise, sovereign states will have little
left to say or do.

Susan George is president of the Observatoire de la mondialisation
(Globalisation Observatory), Paris; associate director of the
Transnational Institute, Amsterdam

   1.In the Communist Party manifesto.

   2.ICC statement on behalf of world business to the heads of state
     and government attending the Cologne summit, 18-20 June 1999,
     Paris, Business and the Global Economy, 11 May 1999; see also
     ICC, World Business Priorities for the Second Ministerial
     Conference of the World Trade Organisation, doc. 103/202, 3
     April 1998.

   3.Compare the ICC documents in note 2 with those of the European
     Commission [i.e. Sir Leon Brittan], note for the 113 Committee,
     26 April 1999, EU Trade Ministers' Informal Meeting, Berlin 9-10
     May 1999; and Sir Leon Brittan, The Contribution of the WTO
     Millennium Round to Globalisation: and EU View, speech
     delivered to the Herbert Batliner Symposium, "Europe in the Era
     of Globalisation, Economic Order and Economic Law", Vienna,
     29 April 1999. 

   4.ICC, Business and the Global Economy, op.cit. 

   5.The author thanks the personnel of the WTO for sending her the
     Schedule of Specific Commitments, European Communities and
     their Member States, GATS/SC 31 and following, 14 April 1994. 

   6.Coalition of Service Industries, Services 2000, USTR Register
     Submission, Response to Federal Register Notice of 19 August
     1998 [FR Doc 98-22279]. 

   7.Services 2000, op.cit. pp.14-16. 

   8.For more information, contact Mark Vallianatos:  MVallianatos@foe.org 

   9.Sir Leon Brittan, The Contribution of the WTO Millennium Round to
     Globalisation, op. cit. 

  10.ICC, Business and the Global Economy, op. cit. p.5. 

  11.Statement from members of international civil society opposing
     the Millennium Round, signed mid-May by over 600 organisations from 75
     countries. 


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