Ian
> -----Original Message-----
> From: owner-lbo-talk at lists.panix.com
> [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Peter K.
> Sent: Saturday, April 22, 2000 9:55 PM
> To: lbo-talk at lists.panix.com
> Subject: Wallach interview
>
>
> [sorry if this has already been posted. Gotta like it when she says: "All
> these governments are basically fronts for their corporate interests, but
> they also have a mercantilist streak that looks at what's in
> their national
> interest."]
>
> http://www.foreignpolicy.com/articles/Spring2000/wallach/lori1.html
>
> Foreign Policy Spring 2000
>
> Lori's War
> by Moisés Naím
>
> Not many people have heard of Lori Wallach. But millions of people around
> the world saw the results of her work in organizing massive
> protests against
> the meeting of the World Trade Organization (WTO) last November
> in Seattle.
> In 1997, many people were similarly ignorant about the Multilateral
> Agreement on Investment-a set of rules about international investment then
> being negotiated by representatives of the world's largest
> economies in the
> Organisation for Economic Co-operation and Development. But after Wallach
> and her collaborators started their campaign against the treaty, many
> government ministers came to wish that they had never heard of it either.
>
> These are just two of the battles that the 36-year-old Wallach has won in
> the war she has been waging for more than a decade against what she
> disdainfully calls "the system of corporate-managed trade.'' While most of
> her Harvard Law classmates were making the big money at white-shoe
> investment banks and law firms, Wallach started her career working with
> Public Citizen, the public interest group founded by consumer
> advocate Ralph
> Nader. While lobbying the U.S. Congress on consumer protection issues, she
> realized that many of her legislative causes conflicted with the
> international commitments that the United States had undertaken
> as a member
> of the General Agreement on Tariffs and Trade, the international body then
> in charge of setting and enforcing the rules governing trade
> among nations.
> This realization led her to focus on reforming trade's rules and
> institutions and, eventually, to become the director of Public Citizen's
> Global Trade Watch.
>
> Wallach is widely regarded as an intelligent, well-informed, and
> media-savvy
> political organizer. She is also highly controversial. One senior WTO
> official told foreign policy that dealing with her is nearly impossible
> because "her criticisms and attacks on the WTO constitute a
> subtle blend of
> legitimate concerns, deliberate or partly deliberate misinformation, and
> populist rhetoric." Her supporters instead view her as an indispensable
> leader with a unique vision.
>
> Wallach's achievements illustrate the dilemmas and opportunities
> created by
> globalization. While she crusades against the current system of
> international trade and investment, the sharp drops in the costs of
> communication and transportation produced by technology and economic
> liberalization have dramatically increased her influence and
> effectiveness.
> Her informal, decentralized, and nonhierarchical network of committed
> activists has proven more nimble and effective than the bureaucratic,
> centralized, and unwieldy institutions that she opposes. Indeed, even as
> globalization has endowed some nations and organizations with
> unprecedented
> power, it has also allowed the emergence of leaders like Lori Wallach, who
> do more than just talk about bending the will of these powerful
> entities-they succeed in forcing them to change their ways. Recently,
> foreign policy's editor, Moisés Naím, sat down with Wallach to have the
> first of what we hope will be many dialogues with people you may not know
> but should. What follows is an edited and abbreviated version of their
> conversation, which took place on January 24, 2000.
>
> Rewriting Globalization's Rules
>
> Moises Naim: Trade usually brings disputes and frictions. It is normal in
> commercial life to have disagreements and disputes. Therefore, you need
> rules, and an entity that defines the rules and that enforces them and
> eventually resolves disputes. How would you describe the governance system
> that would ensure that these functions were carried out fairly and
> efficiently?
>
> Lori Wallach: It's not just taking the rules out; it's either
> depowering the
> WTO relative to other institutions, international ones, or empowering
> institutions such as the International Labour Organization (ILO), which
> right now is toothless and useless. Let me step back
There are two ways
> it's going to go, because it's not going to stay as it now is. One
> possibility is that there's going to be a system where the big
> institutions
> like the WTO are dramatically pruned back, and there are no international
> rules in a lot of areas and nations will be setting up those rules
> themselves. They would, for instance, set up the terms of access to their
> markets. They wouldn't be allowed to discriminate on the basis of where
> something was made, but as long as you banned child labor, you could ban
> goods made with child labor, and each country would set up those
> rules. You
> would have a lot less trade, and you would have a more fragmented system.
> That is option one. Option two is one where you would have international
> standards that would serve as a "floor" of conduct. There would be a basic
> requirement, the minimum conditions that would have to be satisfied for a
> country to gain access to another country's market. Ideally,
> those standards
> or conditions would be established and enforced through institutions other
> than just the one with the commercial interest.
>
> MN: So essentially your answer is that the WTO needs to be
> shrunk-depowered,
> you called it-with some of its powers pruned, and some of its powers
> transferred to organizations like the ILO. Are you therefore in favor of
> creating a global organization to deal with environmental issues?
>
> LW: I think that there are merits to that.
>
> MN: If Lori Wallach had her way, would she like the United States to pull
> out of the WTO?
>
> LW: Well, I speak for a whole coalition of people, where we're
> talking about
> that very question for all of their countries, not just the
> United States
> and I think that half of the people think the WTO is not fixable. From my
> perspective, it has given every indication that it is an institution that
> will break itself by its inability to bend. I hope that's not how
> it is, but
> that's how it has looked to me. Either it is going to be something that
> everyone gets out of-and half of the international activists are for that
> right now-or it's going to have to be transformed. And where the
> international activists, the network that brought you Seattle, is
> going, on
> consensus, is to say all right, Seattle was the wake-up call of all time.
> For 10 years, they should have been paying attention and they didn't. But
> okay, Seattle really woke them up. Between now and the next meeting of the
> world's trade ministers, there is a list of things the WTO must
> do-not talk
> about, like they did for five years about transparency, and nothing
> happened. Things that must be accomplished, that are concrete changes, in
> the World Trade Organization, both in its substantive rules and its own
> procedures. And if those changes aren't made at the end of those 18 months
> or so before the next ministerial, then, not only should the United States
> get out, but, in fact, all of the country-based campaigns, and
> there are 30
> of them at least, will launch campaigns either to get their
> countries out or
> to withdraw their funding. Because at that point, if they don't
> change, the
> institution will have been thoroughly proved to be unredeemable.
>
> Making Trade Work
>
> MN: Let's move from governance and institutional factors to
> actual outcomes.
> In 1994, you wrote that "some trade-for instance, bringing coffee to the
> United States or U.S. medical technology to the rest of the
> world-is useful
> and perhaps even necessary." What, then, distinguishes in your mind "good"
> trade from "bad" trade?
>
> LW: Good trade is activity that, ironically, really meets the
> theory of why
> free trade should make everyone happier. Things that you can't
> make or grow
> in any vaguely economically feasible way in one place can be traded for
> things that are not available or doable in another place.
>
> MN: So are exports of blue jeans from China to the United States
> good trade
> or bad trade?
>
> LW: Well, it's bad trade, in the sense that, ironically, what I'm for is
> comparative advantage, not absolute advantage. That is, when a country or
> region truly has an advantage in something, it should be able to
> supply the
> rest of the world with that thing.
>
> MN: What do you call absolute advantage?
>
> LW: An example of absolute advantage is when a company can make an
> arrangement with the Chinese government to have at a People's Liberation
> Army work camp a bunch of Tiananmen Square college kids who are incredibly
> smart, and literally under the gun, making blue jeans or toys, at
> no expense
> to the company, except whatever it costs for the contract with
> the People's
> Liberation Army. The profits are enormous.
>
> MN: So you would be, for example, in favor of putting high tariffs on blue
> jeans from China?
>
> LW: I wouldn't. What I would do is I would try to change the conditions
> under which those jeans are produced in China.
>
> MN: And if that's not possible in the short run?
>
> LW: Then I would keep them out.
>
> MN: With high tariffs?
>
> LW: No, I'd probably use some of the WTO's Article 20 exceptions, which
> unfortunately have never been applied because they've been interpreted in
> ways that make them useless. But for instance, there are some that have to
> do with issues of morality, and slave labor in a prison camp is
> immoral. So
> I would do it as an embargo in the same way you do it as a matter of
> national security. I wouldn't use tariffs. I would just say: Until these
> conditions change, these goods are not sellable here.
>
> Making Trade Work II
>
> MN: Let's talk also about NAFTA. You have been very critical of NAFTA, and
> you have said that the track record of NAFTA now has helped you persuade
> people to support you. What do you say to people who tell you
> that NAFTA has
> been a success, both for Mexico and for the United States, that lost
> employment to NAFTA in the United States is minimal, compared with the
> impact of technology, for example.
>
> LW: Well, I don't think anyone argues that anymore. I mean, it's
> hard to do
> that with a straight face. Even the greatest boosters of NAFTA,
> unless they
> are super-NAFTA ideologues, have basically just given up on
> trying to say it
> was a success. The Clinton administration documents call it a wash that's
> been overdramatized and didn't really do much of anything either
> in creating
> or destroying jobs. I think that's an understatement of its damage. It's
> pretty accurate about its benefits. The bottom-line answer is
> this: Show me
> the data. In 1996, when we filed a Freedom of Information Act
> (FOIA) request
> for data by the Commerce Department documenting job creation, it was the
> most amusing government document I have ever gotten under FOIA. Literally,
> there are about 800 jobs that you could see were created.
>
> MN: The framing of NAFTA as a job issue was probably wrong, and the
> evaluation of NAFTA mostly in terms of job creation or job losses is also
> wrong. NAFTA is about the economic integration of three countries.
>
> LW: Right. The question, though, is under what rules and with what
> incentives and outcomes? And although you can't show job creation in the
> United States under NAFTA, what you can show is that despite an enormous,
> long economic recovery, you only now have real wages starting to grow at
> all. And they're still below the levels of 1972. The real effect
> jobwise of
> NAFTA is on wages. It's on the quality of jobs, more than the number of
> jobs. So typically, when someone in the Clinton administration
> tries to say,
> "All right-NAFTA, we oversold it. But you know something? Even if NAFTA's
> had some downsides, the overall economy as we've managed it has created so
> many jobs, how upset can you be?" And I say, excuse me, the Labor
> Department
> says the top areas of job creation are janitorial, waiters and waitresses,
> retail clerks and cashiers. What kind of jobs are those that we are
> creating?
>
> When you talk about the recovery in Mexico, in macroeconomic
> terms there is
> growth, there are increased exports. But in terms of what the real measure
> of an economy is, which is the standard of living of the majority of the
> people there, actually Mexico has gotten it the worst under NAFTA, by far.
>
> Getting to No
>
> MN: Let's talk about Seattle. There are people who say that you or your
> coalition allies exaggerate the influence you had in derailing the Seattle
> ministerial meeting. That Seattle was, in fact, dead from the beginning
> because of a lack of preparation, due to the absence of a WTO director
> general for so long. That the agenda covered too many issues. That
> developing countries, for example, were still trying to implement some of
> the provisions coming out of the last round. That Seattle was the wrong
> place to hold the WTO ministerial. That it was a mistake to have it in the
> United States given the election-year political climate
>
> LW: And particularly, there was the issue that God had heartburn
> that day. I
> mean, these are ridiculous, post hoc, revisionist spins of people
> who lost.
> All of those "facts" are contributing factors. So let's say there's a 30
> percent karma factor that takes into account all of that stuff. I
> mean, the
> jinx of not being able to get a director general, or the choice of
> Seattle-the day Seattle was picked, the same people who are now
> saying that
> holding it in Seattle was really stupid were saying Seattle, what a great
> idea! Home of the new economy, a big export engine, a coastal
> city attached
> to the Pacific Rim. The fact is that more important than anything that
> happened in Seattle was a yearlong campaign conducted by 30 multisectoral
> coalitions like the one we have in the United States. And it was
> the No New
> Round Turnaround campaign.
>
> MN: You have put together a very odd coalition of labor, Greens,
> environmentalists, Gray Panthers, progressives . . .
>
> LW: Church groups, Tibetan monks, small businesses . . .
>
> MN: What holds that coalition together?
>
> LW: I would say two things. One, philosophically, the notion that the
> democracy deficit in the global economy is neither necessary nor
> acceptable.
> The second is that they're all directly damaged by the actual outcomes of
> the status quo, in different ways. And so you have family farmers, for
> instance, who've seen a huge increase in the volume of exports of U.S.
> agricultural commodities, in the exact same decade that farm income has
> crashed.
>
> MN: How many countries are members of this coalition?
>
> LW: Well, there are country-based campaigns, and there are basically 30 of
> them, 25 of which are really quite operational.
>
> MN: You had a year of preparation or more?
>
> LW: Yeah, it wasn't the week on the ground, it was the work that happened
> beforehand. Perhaps there was an enzymatic effect, where all of
> the work to
> that point was cooked, ultimately, by some reaction that was
> sparked by what
> was going on on the ground. But that was just the final stop. As
> soon as the
> European Union and Japan announced their agreement in 1999 to push for a
> millennium round, the ngos around the world that had been working together
> since the Uruguay Round negotiations, and that certainly had just come out
> of the campaign against the Multilateral Agreement on Investment,
> basically
> said, "Listen, we sort of thought maybe the MAI would send the
> message that
> we are not going down that road anymore." But it's like that
> shell game in a
> carnival. With the MAI, we smashed the shell that was the OECD.
> So they just
> took the pea and put it in another shell. And now it's in the WTO
> shell, and
> we're going to just have to smash that one.
>
> The Next Targets
>
> MN: What is the next shell to smash?
>
> LW: Well, I think there are two in the United States. One is a continuing
> fight to stop any further expansion of the WTO. I mean, the folks
> who wanted
> to expand the WTO's agenda have now shifted to wanting to expand the WTO's
> membership. And the biggest country that is missing, the biggest
> economy, is
> China.
>
> MN: You want to prevent China from joining the WTO?
>
> LW: No. Basically, our goal is to prevent the granting by the
> United States
> of permanent most-favored-nation trading status to China.
>
> MN: Why?
>
> LW: Because we believe that the U.S. Congress needs to have its annual
> review of China's conduct in a whole array of issues, particularly after
> eight years of the Clinton administration's constructive
> engagement strategy
> toward China, which was the notion that increasing liberalization of the
> economy would bring about liberalization in human rights, increased
> democracy, etc. This strategy has been a total bust. This year, the State
> Department in its annual human rights report noted that
> conditions in China
> have deteriorated yet further. This year, they have finally certified that
> basically every Chinese democracy activist and labor activist is either in
> jail or in exile. And so during this period when the free market would
> allegedly enhance their freedoms, we've seen the opposite. And ironically,
> during that same period, we've seen the economics of the relationship
> deteriorate as well. First, with a trade deficit that has literally
> quadrupled during that period, but also with China more and more not
> following its obligations under bilateral agreements, the intellectual
> property agreement, the insurance agreement, the auto parts agreement.
>
> MN: What would you consider to be a sensible U.S. policy toward China?
>
> LW: I would describe it as principle-based reciprocity. There would be a
> bilateral agreement between the two sovereign nations that would go to the
> terms of trade between those countries, that would include some
> basic rules
> of the road about prison labor, about basic human rights,
> political right to
> organize, freedom of religious expression, freedom of
> communications, access
> to information-the things that you really need to make a capitalistic
> society work in the long term.
>
> MN: What is a second campaign that you have in mind?
>
> LW: The second campaign we're going to run is called the "WTO:
> Fix It or Nix
> It" campaign. The WTO No New Round Turnaround campaign was
> successful. There
> was no new round, but the status quo itself is unacceptable. So the second
> part of our original campaign was the turnaround part-basically,
> to give the
> WTO, if you will, its last chance to show itself to be an international
> organization for the next century. There will be a list of specific things
> that must concretely be accomplished before the next ministerial, which we
> are discussing among all of these broad-based coalitions.
>
> MN: Do you have any other campaigns planned?
>
> LW: Well, we're still working with a coalition of African
> American ministers
> who are passionately opposed to the NAFTA for Africa bill. And so
> we're also
> working with them, to support their work, to make sure the U.S. Congress
> doesn't pass the NAFTA for Africa.
>
> MN: Are many of your criticisms of the WTO also applicable to the
> International Monetary Fund (IMF) and the World Bank?
>
> LW: Yes.
>
> MN: You would also like to see the World Bank and the IMF shrunk in their
> scope of activity, essentially transferring some of the power
> they have now
> to governments and states?
>
> LW: Yeah, well, that's one approach. I've not worked on those institutions
> very much at all. My colleagues from around the world who have are arguing
> at this point that those institutions are really not reformable and should
> just be abolished. Jim Wolfensohn has done some things as president of the
> World Bank, but when the rubber hits the road, a lot of it has just been
> basically to mollify the critics instead of to make fundamental
> changes. And
> the IMF has just been an unmitigated disaster, to the point where you have
> U.S. Treasury Secretary Larry Summers saying, hmm, maybe we should look at
> what it was meant for. It wasn't supposed to be giving out long-term loans
> with conditionalities to all of its potential poor-country
> beneficiaries, or
> to organize a one-size-fits-all solution for their economies.
>
> MN: Are you planning a march or a rally at the annual meetings of the WTO
> and the World Bank in the fall in Prague?
>
> LW: The place where an interesting set of protests will occur is at the
> April 16 meetings of the World Bank and the IMF in Washington.
>
> MN: What are you planning for that?
>
> LW: Well, nothing on the scale of Seattle. I think that there
> will be a lot
> of church-based groups, some of whom were involved in the WTO
> effort and are
> incredibly serious about debt relief. They see the World Bank and
> the IMF as
> not just failed and flawed institutions, but literally as immoral
> ones. The
> faith-based groups are planning a lot of protest events. Smaller
> scale, but
> I think quite passionate.
>
> [end]
>