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Trade and the Environment



MARCH 7, 1996

It is with great pleasure that I join my Canadian friends and colleagues in welcoming our brothers and sisters from across the continent and hemisphere to this important dialogos on our common future and I extend my thanks to Bob White, Sheila Katz and the Canadian Labour Congress for the hard work of bringing us all together.

We gather here to share what we have learned about the devastating impact of free trade on our countries, our peoples, and the environment. This is not the dominant interpretation given by our collective political leaders, who, regardless of their ideological stripe, now sing from the same free market song book. Nor is it the interpretation found in our major media, universities and thinktanks. “Their” story has had plenty of air time. But here we have heard the real story – that of the ordinary citizens and workers of our countries who are on the front line of the free trade juggernaut and who daily confront the inequities of the new economy.

I want to clarify that when I use the term free trade, I don’t just mean NAFTA, or the Canada-U.S. Free Trade Agreement, about which John Dillon has just written a powerful indictment. I believe that what Northern countries are experiencing with these trade agreements is a version of structural adjustment most Southern nations have already experienced, and it is time we understood these programs to be one.

“Their” story is that free trade and structural adjustment are the next, inevitable step in the natural evolution of the species. It may cause some hardship now, some unfortunate human displacements of a temporary nature for which they have many names – downsizing, rationalization, restructuring, dislocation. It may have to be imposed in some cases with less democracy, and a bit more force than they would like, but, in the long run, the greater good will be served by blowing the winds of free market competition across the dusty places of the earth, whose ancient traditions and cultures were on the extinction list anyway. They simply cannot see another vision.

The heart of “their” story is the myth of national competitiveness. It is the GNP, national economic growth indicators, comparative advantage, and economies of scale. They are obsessed with import/export numbers, even though such measures have very little effect on reducing unemployment rates in any of our countries. They boast when they “win” a trade dispute with another country, ignoring the fact that most of this intra-nation trade is conducted by 200 corporations who are the almost exclusive beneficiaries of expanded trade and who long ago stopped thinking in nation-state terms.

In the name of national competitiveness, these political leaders continue to disenfranchise their peoples by stripping domestic social and environmental laws to attract global investment. But “their” story is a lie. For the vast majority of their domestic policies foster the global economy which is rendering the nation-state obsolete. The 1995 United Nations World Investment Report on Transnational Corporations shows that all but 5 out of a total of 373 Foreign Direct Investment regulatory changes made to domestic laws in the last five years promote investment liberalization.

When our leaders wrap themselves in our national flags and tell us that the pain we are suffering is for the national good, they speak with breathtaking hypocrisy. They don’t want to set common social and environmental standards. That would mean that nation-states and their citizens are co-operating to bring the rule of law to international capital which they have no intention of doing.

Our leaders don’t want a common system for settling trade disputes in spite of the constant rhetoric and promises. Trade disputes between countries keep up the myth of nation-state competitiveness and allow politicians to fight for the home team. Disputes are like national tournaments, with “winners” and “losers” and “confrontations.” Trade deals that don’t include a real disputes code allow each “side” to claim victory, or at least, an on-going battle. Thus, the U.S. claims that it is successfully using NAFTA to promote its entertainment industry in Canada, and Canada claims that the same clauses of NAFTA protects Canadian culture from the U.S. industry.

Similarly, the Canadian government pledges its undying support for Canada’s universal health system; attacking it would spell the political death of any party in Canada. But it failed to obtain an exemption for the Canada Health Act in NAFTA, and now Washington asserts that private American health companies offering a similar service to a Canadian public health service should be allowed to operate in Canada.

Further, as the federal government slashes spending to health care, it makes it more unlikely that we will pass the NAFTA test that any program exemption to NAFTA challenge must be proven to be for a “public purpose.” I get the image of our politicians waving the health care flag on the front lawn of Parliament, while the corpse of public health care is carried out through the back door.

The real story, however, is that free trade is designed to knock down government regulation and programs on both sides of the border, and to use trade disputes to force all governments to comply to a market model. Canada will holler and protest about current U.S. demands that it strike down its tariffs on dairy and poultry products. But the truth is that the Canadian government wants to get rid of marketing boards and hasn’t got the political guts to do it. They’ll beat up on the Americans and tell Canadian farmers how sorry they are that they couldn’t get the U.S. to listen to reason, even as they tear down the remaining fabric of rural Canada.

The real story of free trade is not national differences; it is the commonality of the restructuring experience. In all of the Americas, the following common truths bind us:

* The export markets in all our countries have become more important than domestic markets and the needs of a nation’s own people have become secondary;

* All our countries are caught in the cruel currents of speculative international capital flows and are financing too much debt through foreign borrowing;

* The threat of capital flight keeps interest rates high and government monetary policy serving global and corporate rather than domestic and citizen concerns in all our countries;

* We are all experiencing the Walmartization of the workforce, with massive job displacement and the growth in part-time jobs with few benefits and little security;

* The industrial sectors in all our countries have become more “productive” on the backs of fewer workers, who are earning less and working harder, often under punitive conditions;

* Organized labour is everywhere under assault;

* The public service is everywhere under assault, as massive privatization of government takes place in all our countries;

* Social rights and universality are everywhere under assault as our nations move to private social security systems;

* Income disparities between those in line to benefit from this system and the rest of us are growing, in some cases, dramatically. Child poverty is growing in all our countries, and every one is developing an entrenched underclass;

* Corporate interests in all our countries are promoting deregulation of the environment, and we have documented serious deterioration everywhere as economic liberalization moves across our hemisphere. Lori Wallach’s Public Citizen has meticulously documented the ecological crime that has taken place along the Mexican-U.S. border. Sara Larrain warns of the complete destruction of Chile’s forests in the near future.

Free trade allows each country to export its problems – out of sight, out of mind. The footprint of the global economy is all over our collective lands. It leaves in its wake felled forests and stripped mines, imperiled wildlife, fouled rivers, toxic sludge, endangered indigenous peoples and diminished hope for ecological survival.

This is the real story of free trade. Competition exists, all right, but it now takes place between mighty corporate interests who have outgrown the nation-state and its laws. Governments govern, they do not rule. Now, nation-states all over the world back free trade agreements that severely restrict their own powers and give constitutional legitimacy to global capital. Their leaders come, cap in hand, regardless of their political stripe, to the Economic Forum every year at Davos, Switzerland, where they implore the world’s corporate leaders to invest in their countries on any conditions.

The real story of free trade is that transnational corporations have become economic sovereign entities whose paid lobby groups co-govern with elected politicians all over the world. Tony Clarke has termed this corporate rule.

Corporate rule is an ideology, a system under which we live, but which, by its very pervasiveness, is growing invisible to us. Corporate rule is the globalization of a doctrine. Corporate rule is the profit motive entering every part of our lives. It is the strip-mining of cultural diversity. It is the privatization of the family. It has reached into our schools for our children. It has robbed our old of dignity. It seeks to own the genetic inheritance of the Third World. It buys and sells life.

And it is at the very core of NAFTA. This is the central fact we must face as we ponder our collective future. NAFTA, like structural adjustment, is a failed model. It is built for and around global capital and investor-state rights and it will never serve the citizens of the Americas or protect our environment. Building side-deals around a model that was designed to subvert democracy is part of “their” story, not ours.

We may be appalled at Pat Buchanan’s xenophobia, racism, and immigrant-bashing. But he has figured this out. He has tapped into a very real fear deep in the hearts of many Americans who see what free trade and the global economy have done to their future. President Clinton, on the other hand, like Prime Minister Chretien and President Zedillo, doesn’t get it. He continues to spread “their” story, equating any questioning of his economic policies with a right-wing backlash. But he can’t explain away that he, the Liberal, has been bought and paid for by corporate America, where Buchanan, the arch- Conservative, is supported in his bid for the Presidency by thousands of individual working Americans.

The real story is that Pat Buchanan could not have tapped into such a rich populist vein of discontent if Bill Clinton had not embraced the neo-Liberalism of George Bush and Ronald Reagan. Pat Buchanan is not the antithesis of Bill Clinton; he is his logical consequence. And we will find his equivalent in each of our countries.

As Benjamin Barber says in his book Jihad Vs. McWorld, the anti-democratic impulse of globalization and the monoculture of the free market has led to an equally anti-democratic backlash of tribalization, fanaticism, and the politics of exclusion. Let us be very clear: neither provides an acceptable blueprint for our common future and we must reject both.

It is our urgent task to build what John Cavanaugh calls a third option, one that brings the rule of law to global capital. Martin Luther King said, “Legislation may not change the heart, but it can restrain the heartless.” Rather than competing with one another using their citizens as pawns, nation-states must come together to confront corporate rule and tax obscene corporate profits. By pooling sovereignty, nation-states must establish international standards so that there is nowhere for corporate criminals to hide.

This means that our movement must open the debate on the failed international and hemispheric institutions that continue to control our futures. The World Trade Organization unites North and South in a common struggle; for the WTO becomes not only the vehicle through which structural adjustment is delivered, consolidating the power of the International Monetary Fund and the World Bank, but it has become the global centre for administering private investment rights and corporate rule.

The WTO also supersedes international covenants on human and labour rights, social justice, and environmental co-operation and much of our work on these fronts will be rendered meaningless until we deal with its power. I personally feel that the WTO and the others are unreformable, as is NAFTA; I would start from the ground up and build new institutions founded on democratic control. I recognize and respect that there are others working hard to reform these bodies. Any common future for our movement in the Americas, however, depends on our courage to tackle this question.

Does this mean that the nation-state is not relevant? Absolutely not. I am a passionate Canadian nationalist. I love my country. And although the nation-state is far from perfect, it is the only political institution big enough to set economic, social, cultural, and environmental policy on behalf of its people as a counterweight to corporate power, but small enough to be responsive when citizens exercise their democratic choice.

But the experience of the last decade has challenged us to understand the notion of community in a different way. As the late Eugene Forsey said, “The only Canada I want to preserve is a Canada that can do something: for its own people, for the hungry two-thirds of the world, for the survival of the planet; not a phantom that can only watch helplessly as we all tumble down a steep place to destruction.” We will democratically reform nation- states in order to build a global third option, not to put up walls against the world. The touchstones of the third option are fair trade, full employment, democratic control, community, cultural diversity, popular sovereignty, environmental stewardship, public accountability, equality, social justice, and international co-operation. At its core is what we at the Council of Canadians call the Citizens’ Agenda.

Central to this agenda is the recognition that peoples around the world have the right to productive and fulfilling employment, food, shelter, education, pensions, unemployment insurance, health care, universally accessible public services, a safe and clean environment – food, water, and air, – the safekeeping of our wilderness spaces, and to develop and celebrate our diverse cultures and freely communicate our distinct experiences. This is the task of the progressive movement of the Americas – to assert these rights for all our peoples and work together to make it happen. If our governments will not recognize and defend these rights, we, together, will.

To fully understand the true nature of economic globalization and the power behind it is frightening indeed. But it is liberating, as all knowledge is. Vandana Shiva calls this challenge the emerging politics of the new millennium. We must not lose hope or be impatient. Building a collective culture of democracy is the most important task we have before us and it will take time. There are no short term solutions and no short cuts. Hope lies in the struggle itself.

Nor should we accept the prevailing propaganda of inevitability. To say we have no choice is intellectual terrorism. It is “their” story. Ours is unwritten and the pen is in our hands.

Thank you

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