The Marketocracy, Part Four - FTAA, GATT, Get Back

Previous installments of this soporific are The Marketocracy, Part One, The Marketocracy, Part Two - GATS Is Coming To Get You,, and
Marketocracy, Part Three - NAFTA Is Coming To Get You.

"FTAA [the Free Trade Area of the Americas] is far more than a trade document.  It's not just about fruit and cars that we sell across borders.  FTAA is an entire new multi-state government in the making, with courts and executives, unelected, with the power to bless or damn any one nation's laws which impede foreign investment, foreign sales or even foreign pollution.  FTAA is revolutionary in the sense that governments are overthrown.  And the easiest way to do that, of course, is to convince governments to overthrow themselves."

So said Greg Palast in 2003.   He is not alone.  A 2002 National League of Cities resolution declared that the FTAA trade agreements could "undermine the scope of local governmental authority under the Constitution." Opposition also came from the National League of Counties, the National Association of Attorneys General, and numerous governors, state, and local organizations.   In 2002, the Conference of Chief Justices wrote a  letter to U.S. Senators Tom Daschle and Trent Lott, stating that the proposed FTAA "does not protect adequately the traditional values of constitutional federalism" and "threatens the integrity of the courts of this country."

This isn't about trade, this isn't about business; this is about democracy.

The General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA) cover the trade of physical goods between countries. They can be used to override and usurp any country's environmental, labor, health and safety, or corporate regulatory laws by defining said laws as illegal "barriers to trade." They provide for a dispute resolution process, which thus far has routinely determined such laws to be in violation of the agreements.

Under GATT, a WTO member country can sue another member country on behalf of one of its corporations, on the grounds that a country's law has violated GATT trade rules. The case is heard by a secret tribunal appointed by the WTO.  State and local officials are denied legal representation. Not only are they denied representation, citizens are denied even the knowledge of what their trade negotiators are arguing on their behalf.

If the tribunal finds that a law or regulation of a country, state or municipality is a barrier to trade, the offending country must either rescind the law or pay the accusing country whatever amount the WTO decides the company had to forgo because of the barrier, a sum that can amount to billions of dollars. In short, practitioners of democracy at any level can be penalized for interfering with international profit-making.

Through this process, WTO tribunals have overturned EPA standards for clean-burning gasoline and regulations requiring dolphin-safe and
sea turtle-safe fish. The WTO has also effectively undermined the use of the precautionary principle, by which practices can be banned until proven safe, recently superseding European laws forbidding the use of growth hormones in beef cattle. A WTO tribunal dismissed laboratory evidence that such hormones may cause cancer because it lacked scientific certainty.  On similar grounds, the U.S., on behalf of Monsanto, recently initiated an action under GATT challenging the European Union's ban on genetically modified food.  

There is currently increasing conflict between civil society and the marketocracy.  

There are sound philosophical reasons to object to the marketocracy.  It's reasonable to challenge the benefits of unlimited, unplanned economic growth.   It's rational to demand legal protections based on distinctions between sustainable development and antisocial, unchecked growth.  Unlimited expansion is the fundamental law of oligopoly capitalism, the raison d'etre of the global corporation, the doom of the earth and of the free will of the people.  

It is further reasonable to argue against the usefulness of marketocratic development for poor countries; we would all do better with a sustainable, low-impact economy instead of the American Consume-All Model.  A flood of merchandise tends to destroy, rather than increase, human happiness.  And its production is decidedly unsustainable.  

But the crucial problems are that burning oil is causing global warming, destroying the planet's carrying capacity; neoliberal economic development policies are destroying the planet's carrying capacity; it is not possible for the earth to give 6 billion people an American life style; and civil society, which seems to know and care about these facts, is locked out of all decision-making in every forum.  There is no consent of the governed.

What can be done about the marketocracy?

Nothing can stop the drive of the free marketeers to achieve their goals.  They will always fight for increase, by lobbying, forum-shopping, screeds, campaigns, and all other devices.   Where profit is to be made they will seek to privatize the commons, be the commons land, water, or public laws (see GATS).  The U.S. government faces the same crises, and no changes in the culture or behavior of the U.S. executive or Congress are foreseen.  Therefore, solutions to the marketocracy must be sought elsewhere.  

The drive to profit is not the same as the drive to innovate.  If the profiteers can be put in service of innovators it may harness their energies somewhat.  This is necessary if insufficient.  

It's also necessary to identify the institutions where the transnational corporationss and their allies have the power to enable their programs and civil society has no power.  

The four primary institutions are the World Trade Organization, the International Monetary Fund, and the World Bank and the United Nations.   In each institution, there's no voice for the impacted, no place for consent of the governed.

THE WORLD TRADE ORGANIZATION
Problem:  Affected Civil Society and poor, indebted, or weak governments have no power.  Trade Groups and their client Nations have all the power.  Further, while civil society can, at great expense, occasionally testify at hearings, citizens have no vote or veto, no authority, recognition, or funding.  Their participation is easily overwhelmed.  

Solution 1:  Amend the WTO Charter to Create a House of Representatives of the WTO comprised of civil society delegates, with full voting rights, funding, and power, in a number sufficient to have veto power.

Solution 2:  Create or recognize a court or series of courts with states' authority and jurisdiction to adjudicate WTO treaties that harm existing law, the public interest, sovereignty, or the commons.  Russell  proposes a legal requirement of applying a best practices principle in all countries in which a TNC does business.

THE INTERNATIONAL MONETARY FUND
Problem:  Affected Civil Society and poor, indebted, or weak governments have no power.  Trade Groups and their client Nations have all the power.  Further, while civil society can, at great expense, occasionally testify at hearings, citizens have no vote or veto, no authority, recognition, or funding.  Their participation is easily overwhelmed.  

Solution:  Amend the IMF Charter to create full voting seats on the Board of Directors of the IMF, comprised of civil society delegates, in a number sufficient to have veto power.

THE WORLD BANK
Problem:  Affected Civil Society and poor, indebted, or weak governments have no power.  Trade Groups and their client Nations have all the power.  Further, while civil society can, at great expense, occasionally testify at hearings, citizens have no vote or veto, no authority, recognition, or funding.  Their participation is easily overwhelmed.  The World Bank is an artifact of the United Nations.  The issue of World Bank accountability is also one of great importance to the United Nations itself.  When a specialized agency of the UN faces accusations of complicity with genocide and crimes against humanity, it would seem only proper for the UN to undertake a rigorous review of problems arising in connection with the agency's activities.

Solution:  Amend the World Bank Charter to create full voting seats on the Board of Directors of the World Bank for civil society delegates, in a number sufficient to have veto power.

THE UNITED NATIONS
Problem:  Affected Civil Society has no power.  Trade Groups and Nations have power.
Within the United Nations are numerous Commissions, Groups, and Organizations mandated to create working papers, industry and trade treaties, and multilateral conventions, all with regulatory authority and enforcement capability.   Unfortunately the regulatory authority and enforcement capability are not in sufficient evidence.  Further, while civil society can, at great expense, testify at hearings, citizens have no vote or veto, no authority, recognition, or funding.  Their participation at the UN is easily overwhelmed.  

Solution:  Amend the UN Charter to Create a House of Representatives of the United Nations comprised of civil society delegates, with full voting rights, funding, and power.

COURT
Problem:  There is no single court of jurisdiction for many of these problems; the Law of Nations does not extend infinitely.  The Permanent International Court of Justice deals only with states, and the International Criminal Court (under the Rome statute) deals with individuals.  A trade group or corporation cannot be brought into the ICC.  While states theoretically authorize the corporations and trade groups, states have not been held legally responsible for their acts under these conventions.  Expanding the Law of Nations definition will be a lengthy, difficult, incrementally successful task.  However, there has been some progress; the prohibition of forced labor is universally accepted by states.  

Solution #1:  Establish a body of UN law covering environment, human rights, and labor specifically addressing corporations and trade groups.  Amend the charter of the ICC or the Permanent International Court of Justice to include corporations and trade groups.

Solution #2:  Establish a UN Court specifically to hear trade group and corporate violations of environment, (UN Rio Declaration, e.g.), human rights, and labor law.   Ensure that the court has district courts around the earth.

ENFORCEMENT AGENCIES
Problem:   There is no enforcement agency for these international legal decisions.

Solutions:  A United Nations Enforcement Agency; a Global authority that can be delegated to States. Other equally necessary solutions include consumers changing their demand to sustainable, humane, fair trade products; shifted finances, such as the policy changes of Citigroup and  new technologies, such as more fuel efficient vehicles, solar and wind energy, biodynamic farming, etc., which replace demand for inhumane, harmful and extractive production.

FUNDING
Problem:  There is no funding for these civil society delegations or new mandates.

Solutions:  Impose a transaction tax of 1% to 3% on international currency trades.  Account the interest due Africa, South and Central America, and Asian nations for resource extraction that enriched the European treasuries and financed the wars of colonialism; use some fraction thereof to fund these mandates.

While the suggestions above are not easy to achieve, they are probably necessary and insufficient beginnings.  They are also not intended as final conclusions.  Whatever happens, everyone concerned with the problems of sustainability, restoration, inequality, and human rights must engage in discussing the marketocracy and how to change it.  

It is not realistic to discuss whether globalization is good for economies or makes people happy.   The planet does not have the carrying capacity to support every human in an American lifestyle.  Hawking that dream is cruel denial of reality.  Economic models must change to include natural capital as a scarce and limiting factor, rather than a free good.  Economic analysis must shift from market-based definitions of the economy to include the subsidies provided by ecosystems, household labor, and human culture.  Nation-states, having been emasculated, must reclaim authority, along with civil society.  There is no other way to create the consent of the governed, and only the consent of the governed will create a just and stable world.  It is necessary to take the red pill, now.