World

Trading Insults

International activists gear up for a confrontation in Seattle with the gurus of globalization

Tom Fennell November 29 1999
World

Trading Insults

International activists gear up for a confrontation in Seattle with the gurus of globalization

Tom Fennell November 29 1999

Trading Insults

World

International activists gear up for a confrontation in Seattle with the gurus of globalization

Tom Fennell

As chief gardener early this century, Archie Wells spent hours tending the elegant gardens on the Duke ofWellingtons estate near London. But he yearned for property of his own. In 1911, he left to homestead just east of Swift Current, Sask., where he tilled the soil and built a small home sheltered in a deep prairie coulee. Today, his grandson, Stewart Wells, 45, works the same land and from the windows of his home can still see Archie’s old wooden house. He often wonders if he will be the last in his family to farm, and he believes the answer could hinge on the outcome of the World Trade Organization negotiations that begin next week in Seattle. Canada wants the WTO to ban all agricultural subsidies, but without such aid, Wells believes the family farm is doomed. “The

WTO’s decisions hit directly at farmers,” says Wells. “People are being forced off the land.”

Wells is not alone in his opposition to the WTO, which regulates the trillions of dollars in trade between its 134 member countries. Nearly 60,000 protesters, including several thousand from Canada, are expected to descend on Seatde to try to disrupt the WTO’s proceedings, which will initiate a three-year round of discussions aimed at expanding global trade. The demonstrators’ seemingly impossible goal: to stop the relentless progress of economic globalization, which they claim is being driven by a WTO agenda dominated by the interests of multinational corporations. Negotiators involved with the WTO insist they will not be deterred by the demonstrators, who predict their massive rally will be the largest protest against globalization ever staged by international citizens’ organizations. Steven Staples, an organizer with the nationalist Council of Canadians in Vancouver, is planning a 30-bus contingent to cross the border. “People are concerned about what the WTO is going to do with our education and health-care systems,” says Staples. “People want to do something about it.” Even as Staples was organizing his fleet of buses, free traders around the world were preparing to celebrate their greatest victory yet. After 13 years of painfully slow negotiations, U.S.

and Chinese officials finally reached an agreement designed to allow China into the WTO. The bilateral deal, which gives China greater access to U.S. markets in exchange for lowering its own tariffs, was hammered out last week between U.S. Trade Representative Charlene Barshefsky and Chinas Minister of Foreign Trade and Economic Co-operation Shi Guangsheng—and gives a major boost to reformers like Premier Zhu Rongji, who twice intervened to save the talks.

Beijing must now negotiate bilateral agreements with other key WTO countries before it can enter the organization. This week, another major step is expected in Toronto. Shi and International Trade Minister Pierre Pettigrew are scheduled to address the annual meeting of the Canada-China Business Council, and officials from both countries are completing a pact that is virtually identical to the American deal. They hope it will be signed during the Chinese ministers visit. “Very little remains to be negotiated,” Pettigrew told Macleans. “It’s great news for the world and our businessmen.”

Pettigrew will then move on to Seattle, where he plans to support an agenda that deeply angers Canadian nationalists. Ottawa intends to push especially hard in two controversial areas: international trade in services and ending agricultural subsidies.

Canada provides far less than other developed countries in so-called producer subsidies to its farmers. In 1998, wheat farmers received the equivalent of $207 per tonne in the European Union, $89 in the United States and just under $ 12 in Canada. Despite a good crop on much of the prairie this year, an increasing number of Canadian farmers are being pushed into bankruptcy in the face of falling grain prices. At the same time, they complain the government has already drastically cut farm subsidies, and to erase them altogether would be a disaster. “People are being forced off the land,” says Wells. “It’s being done in the interest of the WTO’s corporate agenda.”

Pettigrew and many economists, however, believe it is subsidies that are actually hurting farmers. The problem, they argue, is that the payments cause farmers to overproduce, driving down prices. Without the handouts, they say, prices would stabilize. But attempts to convince the powerful European agricultural lobby to cut subsidies have met deaf ears. “Progress has been very painful in agriculture,” says Gordon Ritchie, a trade expert who helped negotiate the Canada-U.S. Free Trade Agreement, “because of the disproportionate political strength of the farming communities in Europe and the United States.”

Ottawa will also throw its weight behind attempts by WTO members to open up international trade in services, which includes such industries as engineering, advertising and consulting. But critics including Maude Barlow, national

Getting into China

This week, Canadian officials hope to sign a trade agreement with China governing its entry into the World Trade Organization. International Trade Minister Pierre Pettigrew says it will closely parallel last week’s breakthrough dead with the United Key elements of that pact from a Canadian point of view:

TELECOMMUNICATIONS:

Foreign companies can own up to 49 per cent of Chinese telecom firms upon China’s entry into the WTO, and 50 per cent after two years. Outsiders can invest in Internet companies.

FINANCE: Foreign banks

can offer services in local currency to Chinese businesses after two years, and to all citizens after five years. Foreigners can own 33 per cent of Chinese financial service firms, 49 per cent after three years. Insurers will gain access to all of China.

MANUFACTURING: Foreign firms can distribute and sell products directly to Chinese consumers. AGRICULTURE: China will drop export subsidies and slash tariffs on farm products to 14.5 per cent from 31.5 percent

chairwoman of the Council of Canadians, say that in doing so Pettigrew is threatening Canada’s health and education systems by exposing them to foreign involvement.

Barlow argues that once private companies in Canada begin to deliver health or education services, the WTO will insist that “equal treatment” must apply and foreign firms would be allowed in. The door may have been partially opened in Alberta last week when Premier Ralph Klein said he hoped to cut patient waiting lists by allowing treatment in private clinics. “Any area you open up for introduction in the WTO,” says Barlow, “means you must allow foreign corporations in that sector the right to come in. It is the biggest threat we have ever faced.”

Pettigrew insists the government can still protect specific areas of the economy under an expanded WTO agreement. And he says categorically that Canada will not sign a deal that opens the country’s education and health-care system to foreign firms. “Let me be crystal clear,” said Pettigrew. “Canada will not take up health and public education. We simply won’t.” He says whether a country allows foreign firms into critical areas of the economy is done on a purely voluntary basis. “Some countries,” he argues, “will voluntarily open up their health and education systems. But it will be their choice.”

As that debate rages, many free-traders are salivating at the imminent inclusion of China in the world trading system. The Bank of Montreal is just one of dozens of companies that are ready to step in. “We will benefit,” said Soren Christensen, the bank’s senior vice-president for international banking, “because we will now be able to make loans to our foreign clients in the local currency.” While this may seem a routine matter, the impact of that and many other WTO provisions will dramatically boost China’s economy over the long run—and the possibilities for entrepreneurship among its 1.3 billion people. For better or for worse, the WTO is bound to change lives all over the world—from Szechuan to Swift Current. EJ