NEXT PAGE -->
|
| * * * COMPANIES & PRODUCTS * * * |
|---|
Updated Daily!
| * * * IN-HOUSE RESOURCES * * * |
|---|
November 4, 1999
THE WTO TURNS BACK THE CLOCK
The World Trade Organization (WTO) has effectively canceled the three mainstays of modern environmental protection: (1) pollution prevention using bans, (2) the precautionary principle, and (3) the right-to-know through labeling. In effect the WTO has erased 30 years of work by environmental activists and thinkers, forcing us back to an earlier era of "end of pipe" pollution regulations based on risk assessment.
Starting in the mid-1960s, the U.S. Congress created a pollution control system based on risk assessments and "end of pipe" regulations. As evidence of harm accumulated (a process sometimes called "lining up the dead bodies"), the government conducted risk assessments to decide how much toxic pollution was acceptable. Corporations then added filters and scrubbers to reduce their harmful discharges to "acceptable" levels.
Large corporations learned to live with this system; they even turned it into a competitive advantage. As the number of regulations multiplied, large polluters hired staffs of lawyers and engineers who did nothing but worry about the regulations. Small corporations could not afford to hire specialists to formally participate in rule-making procedures, compliance disputes and lawsuits. For small firms, compliance became a paperwork nightmare and a burdensome expense. Big firms learned to thrive under the rules.
Under the end-of-pipe, risk-based regulatory system, regulations were always a compromise between what the scientific data indicated and what the corporate polluters were willing to accept. Regulatory officials would propose a numerical standard based on risk assessments, the corporate experts would challenge the proposal, and ultimately a regulation would emerge that was a compromise between the two positions. On the face of it, such a system could never fully protect public health or the environment.
Large corporations had one additional advantage in these regulatory negotiations: they were sitting across the table from a government bureaucrat who was underpaid and often overworked. After the regulatory negotiations were finished, the corporation might offer the government official a well-paid position as "Vice-President for Environmental Compliance." Knowing that the future might bring such a job offer, regulatory officials were inclined to play ball with the polluters. In fact, government officials went to work for the polluters so frequently that the practice earned a special name: the revolving door.
In sum, large corporations learned how to make the regulatory system work for them. But the system never worked well to protect the environment. In fact, during three decades of environmental protection based on risk assessments and end-of-pipe regulations, the entire planet became contaminated with low levels of industrial poisons. Persistent organic pollutants like DDT, PCBs, and synthetic compounds of lead and mercury found their way to the deepest parts of the oceans, to the highest mountaintops and to the most inaccessible reaches of the poles. No place on Earth remained pristine. As these exotic poisons entered food chains, they collected in the bodies of the largest predators, chief among them humans. As a result, even today if human breast milk were bottled and offered for sale it would be subject to ban by the U.S. Food and Drug Administration as unfit for human consumption. (Breast milk is still by far the best nourishment for an infant; despite the presence of low levels of industrial poisons, breast milk is still far healthier for a baby than any alternative.)
During this period, the incidence of childhood cancers increased at the rate of about 1% per year. Immune system disorders in children, such as asthma, increased even more rapidly. Many observers of the regulatory dance began to believe that bathing our children in industrial poisons was not such a good idea, so new principles of environmental protection were invented:
1) In the early 1960s, true pollution prevention was born. The U.S. banned above-ground nuclear weapons tests to eliminate radioactive fallout. By the mid-1970s, the atomic fallout precedent was being applied to banning DDT, PCBs, leaded gasoline and several other dangerous toxicants. Bans are the essence of pollution prevention. But bans leave no wiggle room for the polluters.
2) The precautionary principle. In 1976, the U.S. Congress voted against a proposal to create a supersonic transport airplane (the SST). Based on evidence suggesting that the SST might harm the upper atmosphere and might lay down a swath of "sonic booms" everywhere it flew, Congress took precautionary action and voted down the SST proposal.
The precautionary principle moves the burden of proof of safety onto the proponents of a new project, a new technology or a new chemical. The public does not have to "line up the dead bodies." Instead the polluters have to convince the public and the government that the number of dead bodies in future will be acceptably small. In simplest terms, the precautionary principle says, "Better safe than sorry," the complete opposite of risk-based regulations.
Corporate polluters resent this innovative approach because now they must bear the burden of proof of safety. Their hands are tied unless they can convince the public and the government that their next innovation will be acceptably safe.
3) Eco-labeling. Labels on cans of tuna fish now say "dolphin-safe." Many products in the grocery store now say "organically grown." Paper says "recycled." Labels that say "Made in Burma" signal that this product may have been made with slave labor. Such labels represent a market-based approach -- empowering people with information so they can vote with their dollars to protect the things they value. In essence, eco-labeling says people have a right to know the effects of their purchases on the natural environment, on their health, and on society. However, an informed citizenry can threaten corporate dominance.
Thus all 3 of these modern principles are unsatisfactory from the viewpoint of large corporations because they shift the advantage to the public in protecting health and environment. They impose societal values on the economy.
To get rid of these troublesome new principles of environmental protection and to force the world back to end-of-pipe regulatory controls based on risk assessments, corporations have now created the WTO. In only five years of operation the WTO has gone a long way toward declaring each of these three principles illegal. Now, according to current WTO rules, the only legal system for pollution control is the old end-of-pipe system based on risk assessment.
WTO principles that undermine modern environmental protection include these:
1) WTO rules say that the method of production cannot be used as a basis for discriminating against a product. The WTO has formally established this principle in several decisions. When the U.S. refused to allow the importation of tuna fish caught in nets that needlessly killed millions of dolphins, Mexico took it to the GATT (the predecessor of the WTO) and won. The ruling said it was not legal to discriminate against canned tuna based on the methods by which the tuna was produced. Since then, the WTO has reaffirmed this principle several times.
As Ralph Nader's Public Citizen has written, "The ability to distinguish among production methods is essential to environmental protection and environmentally sensitive economic policies... Trade rules that forbid the differentiation between products based on production methods make it impossible for governments to design effective environmental policies."[1,pg.23] The WTO has effectively tied governments' hands -- a corporate polluter's dream.
2) Restrictions on goods must be the least-trade-restrictive possible and the restrictions must be "necessary." To prove that a regulation is "necessary," a country must prove that there is a world-wide scientific consensus on the danger, and a WTO tribunal of corporate lawyers must agree that the proposed regulation is a reasonable response to the danger. Furthermore, any regulation must be the "least trade restrictive" regulation possible. Obviously, this puts an almost-insurmountable burden of proof on any government that wants to protect its citizens and its environment from harm. Thus the WTO has shifted the burden of proof back onto the public. The dead bodies must be lined up once again.
The effect of these rules is that a product cannot be banned. It can be regulated using risk assessment but it cannot be banned. This was first established when the European Union (EU) tried to ban the import of U.S. meat which has been treated with hormones, some of which are carcinogenic. The Europeans said there was evidence that certain hormones can cause cancer (which is true) and they said they wanted to set a "zero risk" standard for their citizens for this hazard.
The Clinton/Gore administration challenged the European ban before a WTO tribunal. The WTO ruled that the Europeans did not have a scientific risk assessment that showed convincingly that a zero risk standard was warranted. That opened the door to ending all bans.
Now France wants to ban asbestos, but is being challenged by Canada on several grounds; one is that there is no worldwide scientific consensus that a ban is warranted. Denmark has announced its intention to ban 200 lead compounds, but the Clinton/Gore administration is challenging this as illegal because there are less trade-restrictive ways to achieve the same public health objective, Mr. Gore says. The European Union has said it wants to ban lead, mercury and cadmium in electronic devices, but the Clinton/Gore administration is challenging this before the WTO. Mr. Gore's position is that bans are illegal restraints on trade and that regulations based on risk assessment are the only legal way to control environmental hazards. There is ample precedent for this position in WTO decisions.
3) Labeling -- even voluntary labeling -- is on the way out. The European Union has now passed a law requiring food containing genetically modified organisms to be labeled as such. The Clinton/Gore administration has said formally that this is an illegal restraint of trade because there is no difference between normal food and genetically modified food. (But if there were no significant differences, the U.S. Patent Office could not legally issue patents for genetically modified foods -- and such patents are now routinely issued.)
When the EU refused to allow hormone-treated meat from the U.S. to be sold in Europe, their fallback position was that they might allow the sale of hormone-treated meat if it were clearly labeled. The Clinton/Gore administration says this would illegally discriminate against U.S. meat by labeling it according to its method of production.
The Clinton/Gore administration officially argues that even "country of origin" labels are WTO-illegal because they allow consumers to discriminate against certain countries (like Burma with its propensity for slave labor). The WTO has not yet ruled that "eco-labels" are illegal, but the hand-writing on the wall is very clear. It appears to be only a matter of time before the modern era of environmental protection is fully rolled back.
It also appears that the only way to protect the environment in future will be to dismantle the WTO.
THE WTO AND FREE TRADE--PART 2
In the U.S. (though not in Europe), a liberal is a person "who believes in a society that taxes the well-off and uses the proceeds to help the poor and unlucky."[1] In the U.S., liberalism is the political philosophy that expresses those ideas.
On the other hand, the "liberalization" of an economy (or "neo-liberal" economic policy[2]) has nothing to do with liberalism or being a liberal in the U.S. sense of that term. Liberalization means (according to the big Merriam-Webster dictionary) "to free from official control." That is what "neo-liberal" economics is about -- removing societal controls from markets. The goal of "liberalization" today is "global free trade."
Global free trade is a utopian goal, meaning that it embodies an impossible ideal: to remove all restrictions from markets. Free trade is utopian because it runs counter to the way humans have always behaved. When humans develop markets, they impose all kinds of restrictions on those markets.
U.S. history provides an excellent example of typical market restrictions and interventions. From the beginning, the U.S. developed its industrial base behind a wall of high tariffs (taxes on imported goods) to protect weak domestic industries against competition from Europe. Starting in the 18th century the federal government subsidized the construction of roads and later railroads. The western territories were taken from their original inhabitants with help from a host of government subsidies -- the government conducted land surveys; organized citizen militias and paid bounties for Indian scalps; promoted mineral exploration; and encouraged settlement by offering free land. Like every other country on Earth, the U.S. has always restricted and shaped market activity to promote its own particular societal goals.
Now supposedly things are going to change. For the past 25 years, a bi-partisan financial and political elite has made it a key goal to impose "free trade" on the U.S. and on the rest of the world -- to try to force every country in the world to remove restrictions from their markets. ("Structural adjustment" is the name for this activity when it is imposed on countries outside the U.S. by organizations like the World Bank and the International Monetary Fund.) After 25 years of evangelical effort, the utopian goal of "global free trade" has become a kind of civil religion in the U.S. People who favor international trade but not "global free trade" are stigmatized by the NEW YORK TIMES and the WALL STREET JOURNAL as "isolationists" or worse. Both major political parties are dominated by global free trade advocates -- Al Gore, Bill Bradley, George W. Bush, and Steve Forbes are all avid believers in global free trade. No choice here.
As we will see, the main proponents and beneficiaries of free trade are transnational corporations such as Gerber Foods, Chiquita, Kodak, Monsanto, Microsoft, the asbestos manufacturers, the lead industry, the major magazine publishers, and so on. Slowly, starting in the early 1970s, it dawned on the executives of these transnationals that the gospel of "free trade" -- if widely accepted -- could give them relief from the main factors that were causing their profits to stagnate. Those factors were (and still are):
(1) insufficient consumer demand for their products;
(2) the high cost of labor;
(3) the high cost and scarcity of raw materials;
(4) societal standards requiring openness and public accountability;
(5) laws respecting the rights of workers;
(6) legal protections for the natural environment.
As we will see, free trade doctrine and law now provide relief from each of these problems.
In carrying out their "global free trade" campaign over the past 25 years, the corporations didn't act alone. They funded other institutions that developed the rationale for global free trade and then spread the word -- new strategic organizations like the Business Roundtable, think tanks like the Heritage Foundation and the Cato Institute, private philanthropies like the Olin and Richardson Foundations, universities (mainly University of Chicago with help from scholars based elsewhere), and publications like NATIONAL REVIEW. Together these organizations developed a vision that emphasized maximum freedom -- a version of 19th century libertarianism expressed in the language of individual liberty but implemented as freedom from market restrictions, libertarianism for corporations. The new libertarian gospel successfully blended "global free trade" with the promise that U.S. institutions -- because of their inherent superiority -- are destined to spread worldwide. This gave "global free trade" a patriotic coloring AND made its future seem inevitable and irresistible.
Armed with the utopian vision, corporate lawyers began patiently re-working a group of existing international organizations, among them the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade (GATT). But they needed something new. They needed an agency with legal standing equivalent to that of the United Nations but one that wouldn't have to conduct its business in a fishbowl and wouldn't be subject to fickle popular controls. So over a decade they morphed an existing institution -- the GATT -- into a new agency with the needed characteristics. They called it the World Trade Organization (WTO) and it sprang to life in January, 1995. The WTO now has legal standing equivalent to the United Nations, but it operates largely in secret. It holds its meetings at undisclosed locations and times in Geneva, Switzerland, and makes decisions behind closed doors based on pleadings, evidence, and expert testimony that are confidential. Non-governmental organizations cannot submit documents to the proceedings, nor witness deliberations. WTO decisions are binding, world-wide.
WTO judges are trade bureaucrats, usually corporate lawyers. There are no rules preventing them from having conflicts of interest in the matters they decide. There is no appeal to any outside organization; WTO rulings can only be appealed to another panel within the WTO itself. The WTO enforces its own rules by imposing sanctions against rule-breakers. Any country that breaks the rules repeatedly will find itself shunned, locked out of world commerce, without anyone to buy from or sell to at competitive prices. The WTO has no army but it has real power. (Of course the military apparatus of the developed countries, especially the U.S., is the ultimate enforcer of WTO decisions, though it is definitely not considered polite to mention this.) At present, the WTO is the closest thing we have to a world government but it is explicitly designed to serve the interests and needs of transnational corporations, not of people.
The WTO was created by international treaty; 134 nations have now signed on. Representatives of the 134 nations are meeting in Seattle, Washington November 29-Dec. 3 to discuss ways to expand the WTO's power even further. But there is now almost 5 years of WTO history to scrutinize and based on this history, representatives of labor, human rights, environment and community development organizations will journey to Seattle for a peaceful "Protest of the Century" to express their displeasure with the WTO. They want the WTO opened up to public examination before any consideration is given to expanding the WTO's power. (To learn more about protest-related activities, telephone 1-877-786-7986.)
The WTO serves the needs of corporations very effectively. To begin with, those who can afford to lodge a complaint with the WTO almost always win. Of 22 cases brought before the WTO in the last 5 years, 19 have been settled in favor of the party bringing the challenge. This means that big companies that can get their government to go to bat for them have a major advantage over small companies and small nations.
Example: The current accepted approach to environmental protection is called "pollution prevention" or "clean production." Pollution prevention is the highest stated goal of U.S. Environmental Protection Agency. It means not creating dangerous pollution in the first place -- often by banning dangerous substances. For example, the U.S. has banned lead from gasoline and DDT from farming because the U.S. concluded in the 1970s that there was no safe way to "manage" such substances after they were created.
Now the WTO has declared such product bans illegal. WTO rules forbid banning toxic substances -- the WTO only allows toxics to be regulated using risk assessment. Thus the WTO is an effective hammer for breaking apart the modern structure of environmental protection and returning the world to older "end of pipe" pollution controls. Large corporations had little difficulty meeting "end of pipe" regulations defined by "risk assessments." Under this older system, corporate experts and lawyers could usually battle regulatory officials to a standstill. Furthermore, the "end of pipe" system favored large corporations over small ones because big companies could afford the experts and lawyers to make the system work for them. Bans are a different kettle of fish -- once a ban is enacted, there is no "wiggle room" for corporate experts and lawyers. Product bans affect large and small businesses alike, removing the advantage that large corporations enjoyed under the "end of pipe" system.
Now the European Union has announced its intention to ban electronic products that contain lead, mercury, cadmium, hexavalent chromium and halogenated flame retardants by the year 2004.[3,pgs.30-32;4] The EU also intends to require that 5% of the plastics in electronic components must be recycled, and further the EU intends to make electronics manufacturers responsible for their products from cradle to grave -- the manufacturer retains responsibility for ultimate disposal. (Such approaches are being used successfully in Germany today.)
Acting on behalf of the American Electronics Association (IBM, Motorola, Microsoft, Raytheon, etc.) the Clinton/Gore administration immediately filed an aggressive challenge to the EU's proposal. The EU proposal is WTO-illegal for many reasons, the U.S. says. And the U.S. is almost certainly right.
If the U.S. wins the electronics dispute, which seems very likely, Congress will not have to raise these issues because the EU's attempt to impose pollution prevention on the electronics industry will have been declared illegal by bureaucrats in Geneva, Switzerland, and their decision will override U.S. (and European Union) law.
Thus the WTO is an excellent vehicle for ridding the world of product bans for pollution prevention. The electronics giants don't even have to fight this battle themselves -- the free trade enthusiasts within the U.S. government, led by environmentalist Al Gore, are fighting it for them. For corporations, "global free trade" as embodied in the WTO is a dream come true.
And this is just the beginning. More next week.
NEXT PAGE -->
|
| * * * COMPANIES & PRODUCTS * * * |
|---|
| * * * IN-HOUSE RESOURCES * * * |
|---|