Growing Concerns Over World Trade Organization

August 19, 1999

Mark Weisbrot
Boston Globe, August 19, 1999

Knight-Ridder/Tribune Media Services, August 17, 1999
San Diego Union Tribune,
August 19, 1999

In just a few months thousands of environmentalists, steel workers, longshoremen, AIDS activists, farmers and others will descend on Seattle in a “mobilization against globalization.” They will hold marches, protests, teach-ins, and conferences.

The occasion? The World Trade Organization is holding a meeting of ministers from its 134 member countries to talk about launching a new round of trade talks.

The opposition’s plans have already attracted more press attention than the official meeting. This suggests there is something big at stake here. There is. In fact, something big happened more than four and a half years ago, when the WTO came into existence, and our own membership was ratified by Congress. But the consequences of this action are only now beginning to be understood outside of narrow policy circles.

The new bureaucracy of the WTO was given the authority to determine whether national laws on such matters as environmental protection and food safety violate international trade rules.

In other words, the burden of proof has shifted: for example, if our Environmental Protection Agency wants to regulate the content of gasoline in order to reduce pollution, it must be careful not to infringe upon the rights of foreign producers.

This principle was actually tested when Venezuela, on behalf of its gasoline producers, challenged EPA regulations on gasoline quality at the WTO. In 1997 the WTO ruled in their favor. The EPA subsequently changed its regulations, weakening its ability to enforce federal air quality standards.

Another WTO ruling last year undermined our Endangered Species Act. We have attempted to protect endangered sea turtles from extinction by requiring that shrimp fishing boats install devices that allow the turtles to escape the nets. The law applied to all shrimp sold in the United States, but the WTO ruled that this was unfair to other countries.

This is a good example of how the trade principles embodied in the WTO erode environmental standards. We have these standards because the public has decided that certain protections of our natural environment are important. We are willing to pay a higher price for certain consumer goods, for example, in order to achieve these goals. But what happens when other countries – and very often this means our own corporations producing in other countries – do not make the same choice?

If we cannot apply our standards to foreign-produced goods that are sold in the United States, these goods will simply drive American-made goods out of the market and defeat the purpose of the environmental legislation.

The WTO’s critics argue that it is time to stop and assess the record of the last four and a half years, before creating any new rules. But the Clinton administration is having none of this: It’s full speed ahead, not a moment to lose.

The administration might have an argument if it could be shown that we risk missing out on some great windfall. But the gains to the United States from the last round of the GATT (the General Agreement on Tariffs and Trade, the WTO’s predecessor) have been estimated at less than $700 million a year. This is less than one-third the cost of one B-2 bomber.

Against these meager gains we must consider the impact of trade on the distribution of income. As trade has expanded over the last quarter-century, the median real wage in the United States has actually fallen.

There is no longer any doubt among economists that these two trends – increasing trade and falling real wages – are related. It’s not hard to see why: Without any standards for labor or human rights, increasing trade creates a “race to the bottom” for wages and working conditions in the same way that it undermines environmental standards.

The broad-based challenge to the WTO reflects a growing awareness that the decisions of these powerful institutions – including the International Monetary Fund, the World Bank, and others – have a considerable impact on our lives and livelihoods. And unlike national governments, they don’t have to care what any angry voters might think.

You don’t need a conspiracy theory to see that this unaccountability is deliberate. All the more reason to stop and look at what the WTO has done, before expanding its power.

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