Even though it sounded quite incredible to some participants of last weeks meeting, the Solomon Islands are indeed one of 149 member states of the WTO, and this since 26 July 1996.
Why do I mention this, and what does it imply? The libertarians in PIS certainly like the efforts of the WTO to enable free trade. Personally, I see the triumvirate of World Bank, IMF and WTO way more critical. For one thing, the structural changes imposed by those organisations ruined the economy of quite some countries, especially in South America, Asia and Africa. That this happened, is not even denied by the WTO, it is just seen as unfortunate.
The major critique against this institutional axis of evil is its entire lack of democratic control. By signing agreements with the WTO governments lose their sovereignty about areas like environmental and energy politics, their autonomy about social systems and education.
The issue of the dependency from the WTO will become into the international focus soon, when Bolivia has its new constitution, which will reorganise land ownership and reverse privatisation - just, of course, if Bolivia's new president Evo Morales stays in power for long enough.
Michel Chossudovsky was written some books elucidating the mechanics of WTO, IMF and WB, and is well worth reading if you're interested in finding out how democracy is undermined by this triumvirate.
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6 comments:
Hello Jeremy, you are right that I should have substantianted my argument a bit more, and probably should have exemplified the IMHO detrimental effect of the WTO's influence on policy making. I was unfortunately in quite a hurry while posting, and sounded thus quite polemic.
I'm not opposed to international treaties in general, and the ones you mention certainly serve a reasonable purpose. However, I cannot see that South America, Asia and Africa are know the engines of economic growth, and taking a press release from the IMF means certainly referring to a biased source. Economic growth is not indicator for the state of democracy nor the standard of living, and I hope to find some time to make this a bit clearer with Argentina's situation.
Yet, most international treaties have little to no impact on local policies and economy, unlike the membership in the WTO, and the grievance procedures in breaking those contracts is more severe than other treaties.
Take the US for example. They haven't signed Kyoto, they don't accept the international war crime tribunal, they not only develop biological/chemical weapons, but also use them, and their latest deal with India explicitly breaches the nuclear nonproliferation treat. Reaction? Zero.
However, if you'd ask a voter if he'd support accepting the International War Crime Tribunal, most likely he would. If the same voter is a farmer, who know has to compete with pineapples coming from the Phillipines, because the WTO has forced Australia to alleviate its quarantaine regulations to allow 'free trade', he might wonder why Howard hasn't done anything to prevent this (the case about pineapple from the Phillipines is yet undecided, so this case is still hypothetic).
As mentioned, I will try to dig up some more compelling examples, though I'm quite happy that you took the bait and challenged my provocation.
I can't think of any countries that have followed Bretton Woods prescriptions and can be described 'engines of world growth'. You could say that the post-1997 recovery of South Korea, Indoensia and Thailand owes something to the IMF's shock therapy, but that's about it.
Those Asian economies that could be described as the 'engine' of world growth - Japan, the four Tigers (NIEs) and now China (notwithstanding WTO entry) - have conspicuously not followed IMF/WTO prescriptions.
I'm not knocking free trade, it's obviously a formula for wealth maximisation among developed economies. But it simply doesn't have a track record for dragging third world economies out of poverty. To the contrary, its uncritical application has left a trail of human misery which leads back before the 20thC. See e.g. 'Late Victorian Holocausts' by Mike Davis, arguing that externally-imposed laissez-faire policies destroyed the economies of India and China during the 19th century, creating a large chunk of what we now call the Third World.
sorry I shouldn't have used the term 'Bretton Woods', you're right that it connotes the post-WW2 currency management system.
I was referring to the development management role that the Bretton Woods bodies (IMF and WTO) have appropriated since the 1970's, e.g. the linking of IMF/WTO loans to structural adjustment programs.
As I said, China has not grown by conforming to the Washington Consensus; it has relied on tools antithetical to free trade orthodoxy, e.g. a currency peg, technology theft, forced partnerships with local companies etc. What effect WTO entry will have on China's growth, it's too early too say.
that CNN page has been removed, so I haven't fixed the link
sorry that should be World Bank, not WTO.
and taking a press release from the IMF means certainly referring to a biased source.
Sorry, but it's a typical response from strong ideologes to attack the source of any information which doesn't agree with their ideology and uncriticaly accept any information which does, regardless of it's source.
Well, I think the source is vitally important in this case. Yes, you referred to an article in The Age, and I did in fact read it, and that's why I'm calling it biased. Nevertheless, it is quite obvious that the article hasn't been researched by The Age, but has been either literally taken from an IMF press release or is a slightly overworked version of one.
The sources I base my critique on are quite numerous, I mentioned Chossudovsky already, who did some excellent research on the effects of the structural changes imposed by IMF/WTO/WB. A different perspective is offered by 'Confessions of an economic hitman' by John Perkins. Of course, you can doubt the legitimacy of those sources as well, and refer me back to material published by IMF/WTO praising themselves.
As mentioned, I'm not opposed to international treaties as such, and it's quite obvious that breaching a WTO agreement doesn't lead to invasion. Military intervention is always the last resort, this mechanism is nicely described in 'Confession of an economic hitman'.
Nevertheless, it seems unlikely to me that will reach an easy agreement on this, so I will try to do my best to present a case study here in the blog.
Before we exult too much over China's growth model, this recent Foreign Policy article is worth a look
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