WTO: WAR BY OTHER MEANS
Why those who oppose war should also oppose the WTO
A FEW DAYS AFTER SEPTEMBER 11, 2001, US President George W. Bush said, "The terrorists attacked the World Trade Center and we will defeat them by expanding and encouraging world trade." US Trade Representative Robert Zoellick, the US official on top of negotiations at the World Trade Organization (WTO) echoed the President's line, saying that in the "war against terror," "free trade" should be one powerful weapon.
The following year, Bush released his administration's National Security Strategy for the United States, a piece of document which articulates US' foreign policy objectives and sets out guidelines for using force. It is explicit: the overarching goal of US foreign policy should be to preserve its economic and military ascendancy in the world. To ensure that it stays on as the world's sole superpower, the US should do everything in its power to actively prevent the emergence of any rival.
To this end, the document declares, "We will actively work to bring the hope of democracy, development, free markets, and free trade to every corner of the world." The Strategy claims to have unearthed a "single sustainable model for national success" - that based on "free" trade and "free" markets - and takes it upon the US to spread and implement this model around the world.(1)
No less than the US President himself and his government believe that the question of trade cannot be divorced from the question of war.(2) The links between both are unambiguously and inextricably enshrined in US foreign policy. And yet, some of the very people who grapple with the costs and consequences of war seem to think that they do not have to wrestle with the question of trade and those preoccupied with questions of trade seem to think that trade has nothing to do with war. There are those who are not convinced that the "war against terror" is in fact a "war for trade."
The very people starting and waging this war are not among them.
Force for a purpose
In 1989, with the collapse of the Berlin Wall signaling the implosion of the Soviet Union, the United States suddenly found itself with no enemy at which to aim its massive military power. But instead of a significant reduction in the US' military might, the succeeding years have been marked by a further increase in its reliance on coercion as an instrument of statecraft. This heightened militarization of US foreign policy was further given impetus by the 9-11 attacks which was effectively seized at to launch an endless "war against terror.(3)"
As the undisputed superpower, the US has assumed for itself the role of the world's global policeman, with military bases scattered around the world and troops ready to be deployed at a moment's notice. The US, however, is not a disinterested and neutral policeman objectively using its massive firepower to enforce justice and fairness in the world. It uses force for a purpose.
If there's any doubt as to what this purpose is, President George W. Bush himself has made it abundantly clear. "The first question," President Bush said during a presidential debate, "is what's in the best interest of the United States. (4)" In the 1950s, former Secretary of State George Kennan said that the US has only 6% of the world's population but over 50% of its resources. The task therefore, according to Kennan, is to maintain that disparity.
All these years, the idea of "free" trade has been crucial for preserving that inequity. Opening up markets abroad for US corporations to sell their products has been a pillar of US national security for more than a century, an overarching goal that has gripped US elites through the decades, and a foreign policy consensus that has bonded them together. Professor Andrew Bacevich, a serving military officer who believes in the righteousness of the US anti-communist crusade during the Cold War, argues in his recently launched book American Empire: The Realities and Consequences of US Diplomacy that the goal of entering markets abroad is the key to most adequately explaining and understanding US foreign policy posture through the years. It may not explain everything but it explains a great deal.
"The Big Idea guiding US strategy," Bacevich contends, "is openness: the removal of barriers to the movement of goods, capital, people, and ideas, thereby fostering an integrated international order conducive to American interests, governed by American norms, regulated by American power, and above all, satisfying the expectations of the American people for ever-greater abundance.(5) " This Big Idea has consistently and unfailingly guided US elites - whether they be Republicans or Democrats, globalists or nationalists, unilateralists or multilateralists - despite their attempts to differentiate their foreign policy agenda from their rivals with rhetorical flourishes. US elites, says Bacevich, have all this time been "different drummers" playing to the "same drum" of "openness."
The hidden hand and the hidden fist
Two underlying reasons, argues Bacevich, ensure that this Big Idea stays relevant and useful today. The first is cultural: in a country and in an age when the ideas of individual freedom, consumerism, and multiculturalism hold sway, there is no more shared "national" myth that glues the American polity together. The only way to defuse class tension and to mobilize citizens towards a "national" purpose is to appeal to their need for consumption and self-actualization. Hence, continuing economic growth and abundance becomes absolutely necessary to keep the polity from falling apart.
The problem is, continuing economic growth can no longer be assured by merely relying on the domestic American market alone. Thus, the need to pry open markets abroad for selling what can no longer be consumed at home. This is not just the Marxist theory of overproduction reformulated; a succession of US officials spout this argument themselves. Former State Secretary Warren Christopher himself said, "We've passed the point where we can sustain the prosperity on sales just within the United States." Former State Secretary Madeleine Albright admitted that "Our own prosperity depends on having partners that are open to our exports, investments, and ideas." Without access to foreign markets, says former Commerce Secretary and dean of Yale School of Management Jeffrey Garten, "The country can no longer generate enough growth, jobs, profits, and savings from domestic sources.(6) "
In other words, the US can only survive intact and reign on as the world's sole superpower, as envisaged in its National Security Strategy, by ensuring its economic ascendancy over the rest of the world. But it can do only do this by guaranteeing continuing prosperity at home, which, in turn, necessitates "openness'' abroad. "Trade," former US Treasury Secretary Lawrence Summers once remarked, "is the pursuit of peace by other means."
Hence, though they may have different and sometimes conflicting constituencies, in no way can the US' drive for free markets be divorced from its national security imperatives. On the one hand, the US' economic hegemony is crucial for preserving its strategic or military dominance. But this strategic hegemony, in turn, is to be deployed for protecting its economic superiority.
Thomas Friedman, star foreign affairs columnist of the New York Times, captured this side of the relationship best when he said, "The hidden hand of the market will never work without a hidden fist. McDonalds cannot flourish without McDonnell-Douglas, the builder of the F-15 warplane. And the hidden fist that keeps the world safe for Sillicon Valley's technologies is called the United States Army, Air Force, Navy, and Marine Corps."
Former State Secretary Madeleine Albright perhaps summed up the tactic by which the US pursues its strategy of "openness" when she once said, "We will go multilateral if we can and unilateral if we must."
As an institution, the WTO - in tandem with the International Monetary Fund (IMF) and the World Bank (WB) with which it seeks to achieve "policy coherence"- embodies the dynamics and the confluence between the twin, intertwined, mutually reinforcing economic and military drives animating US foreign policy.
The US worked hardest to sell it as a multilateral organization in which poor countries are said have the same power as the big ones. But C. Fred Bergsten, director of the Institute of International Economics and Washington's leading academic proponent for "free" trade, perhaps best encapsulated the WTO's true reason for being when he told the US Senate: "We can now use the full weight of the international machinery to go after those trade barriers, reduce them, get them eliminated.(7) "
The WTO was born to keep the peace at home by opening up markets abroad.
The 'Security Exception'
On the one hand, the WTO is a useful instrument for unbolting markets. On the other hand, the WTO locks in and protects the US' overwhelming military superiority.
Very few people are aware that the WTO enshrines the so-called "security exception" in Article XXI of the General Agreement on Tariffs and Trade.(8) This provision allows member-countries to do things that "it considers necessary for the protection of its essential security interestsc relating to the traffic in arms, ammunition, and implements of war and such traffic in other goods and materials as is carried out directly for the purpose of supplying a military establishment (or) taken in time of war or other emergency in international relations.(9) "
While, on paper, the WTO advocates banning subsidies to all other sectors of the economy such as to farmers, it allows governments to subsidize their weapons and defense-related industries. While the trade body bans governments from shielding their domestic infant industries, they are free to protect their military-corporate complex. In other words, this "security exception" secures and fortifies the very industry that the US needs to preserve and assert its undisputed military supremacy as the world's lone superpower.
To preserve its strategic edge over the rest of the world, the US can't not protect its military- corporate complex. It would be unimaginable to see the US allowing its defense industry to face the ravages of global free market competition. But in protecting this very industry through the "security exception," the US is fostering militarization, or excessive military spending and excessive reliance on military force, around the world.
This happens in several ways. First, the US government's subsidies on weapons drive down their production cost, thereby increasing their supply, driving down their prices, and making them more freely available. The end result of defense industry protection is guns galore in the free market. A country that could only have afforded 10 guns can now - thanks to the invisible hand - buy 100 guns.
In a world wracked by instability, where nonproliferation treaties are not respected, where violators of international law dominate with impunity, and where one superpower employs overwhelming force to advance unilateral concerns, each country will have reason to believe they need more.
Multinational weapons corporations, with their swollen marketing budgets, could then pound on this feeling of vulnerability in order to sell their products. Having sold bomb X to country A, for example, a bomb-maker then goes to its rival country B which, seeing the amount country A bought, will buy even more quantities of bomb X. But country A sees this too so it will turn to the arms dealer again and order more bombs. Country B sees this again and buys morec Cheaper bombs in a world of insecurity plus aggressive marketing equal an endless arms race.
Security uber alles
Now add to this lethal cycle the WTO prohibition against giving subsidies to anyone but the bomb-makers. If a government wants to spend its money and judiciously observe WTO rules at the same time, it can't give money to its farmers because it violates the rule against subsidizing agriculture. Neither can it allocate the money to start-up or protect domestic industries. With the "security exception" giving them absolute freedom only in the realm of "national security," governments may then just end up just putting its money where its guns are - employing people not to plant rice but to make bombs.(10)
Combine the widespread availability of cheap bombs and fighter planes with the fact that the WTO recognizes few other legitimate choices for government spending other than for "national security" expenses and the end result is an otherwise disproportionate share of military spending in the national budget.
But since every dollar spent on bullets is a dollar not spent on books, this militarization is consequently laying the ground for the conditions that breed wars. As Dwight David Eisenhower, the US President who warned against the menace of the military-industrial complex, said, "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed."
The pile-up of bombs and arsenal eventually becomes a mounting pressure to justify every dollar paid for them. With the need to justify bloated military spending comes the incentive to exaggerate threats and to resort to military solutions for conflicts that could otherwise be solved by diplomatic or political negotiations
Opting for military solutions, in turn, leads to a greater demand for bullets, which could then mean less money to spend on books, which in turn could lead to more wars. An endless arms race - spurred on by the most powerful's need to protect its military advantage - leads to a vicious cycle.
The exception that proves the rule
Although all member-countries can invoke the "security exception," it's clear who benefits. The United States' military spending alone is bigger than that of the next 27 countries combined. These military expenditures are funneled to giant multinational corporations in the form of billion-dollar contracts and subsidies. On its own, the US accounts for close to half of the world's total arms exports. One of the four columns of the US economy stands on war: the manufacture of militarily oriented products constitutes one-fourth of its Gross Domestic Product (GNP).
But it's not just the defense industry that profits. Because countries are given the power to interpret "essential security interests," the exception provides an easily exploited escape clause by which governments can give out hidden subsidies to protect their already giant non-defense related industries. The trick is to claim that these industries are essential for their security.
Former Soviet Premier Nikita Kruschev once joked that buttons are unquestionably military items because they are used for holding up soldiers' pants. It has been suggested - and not as a joke - that the shoe industry must be protected because certainly, the infantry needs shoes to fight a war.
Seriously though, it is fact that Boeing's C-17 Globemaster, a military transport plane the production of which is protected by the exception is already being sold to private cargo companies. Less directly, Boeing's profits from its military production side, derived thanks to subsidies, can be channeled to its commercial aircraft side when this division is in the red. Aside from Boeing, which is one of the WTO's most ardent supporters, other corporations whose products are not primarily military in nature such as General Electric, AT&T, General Motors have long been recipients of billion-dollar defense contracts and research grants. The US Defense Department spends a lot of money funding research and development (R&D) expenses in other sectors such as agriculture, biochemistry, pharmaceuticals, and the like.
These contracts and grants allow these giant corporations to build capacity and to retain their technological edge over their competitors. If we add the products of all the non-defense related corporations who receive defense contracts and R&D grants to the 25% share of purely military products in the US' GNP, then the significance of the "security exception" for protecting the entire US economy becomes even more pronounced.
In other words, the "security exception" allows the US to practice a kind of hidden industrial policy which is rhetorically derided by the very free market ideology which it forces upon the rest of the world but which allows it to serve not only its strategic but also its economic interests as well.
This thinly-veiled industrial policy permits the US to nurture its industries in order to preserve its economic advantage over its rivals to the detriment of the struggling domestic industries of developing countries whose domestic markets are, in turn, being pried open by the WTO for the US' protected corporations.
The "security exception" gives the WTO away. Article XXI is one little known but very telling exception that proves the rule. It confirms that the WTO is, for all intents and purposes, not about free trade. It proves that defenders of the WTO are not really the rigid ideologues that they have been portrayed to be. It turns out that for them, governments do have a legitimate role too. But as the exception shows, that role is not to feed the people, educate them, or give them jobs. That role is to strengthen the military and to support industries.
As with other multilateral agencies, the WTO has been used by the US as a multilateral cover to legitimize its unilateral pursuit of its interests. In practice, the US has utilized the WTO for managing trade rivalries among the big economic powers, for entrenching its technological edge over the rest of the world, and for enforcing free trade on developing countries even as it practices brazen protectionism at home.(11) Where it serves the US' interests, free trade will be invoked; where it does not, exceptions can always come in handy.
War by other means
If trade is the pursuit of peace at home by other means, it is a peace that has at times come with a terrible price.
For one, the impact of implementing the Big Idea of 'openness' - as advanced by its multilateral facade - has been little different from the impact of war. The ravages of 'openness'' are in a sense indistinguishable from the ravages of war. How different in terms of losses and destruction was Argentina - which faithfully and slavishly followed all the prescriptions for "freeing" the market - in the wake of its economic collapse in 1991 from a country that has just been showered with bombs? Is the death of an AIDS victim - who could have survived had he taken cheap medicine made inaccessible by WTO rules - any different from the death of an Iraqi hit by a cruise missile?
Nobel Prize for Economics winner Joseph Stiglitz, in his scathing critique of the IMF, likened the methods of those who preach and enforce the idea of 'openness' to those of modern high-technology antiseptic warfare. Indeed, as Stiglitz points out, how different are the IMF economists that decide a country's economic policies from the comfort of their five-star hotels from the fighter pilots who drop bombs 50,000 feet from the ground?
In many countries, the Big Idea has destroyed jobs and livelihood where it has been applied, widened inequality, and led to the further deterioration of living standards of masses of people around the world. The whole set of ideas underpinning the case for opening markets for corporations, which George Soros calls "market fundamentalism," has been imposed since the 80s with few successes and many outstanding failures.(12)
These failures and the conditions of poverty and inequality that they engender in turn become the fuel for actual civil wars. The World Bank itself recognizes that most civil wars are ultimately economically rooted.(13) The Oslo-based Peace Research Institute found out that among the characteristics shared by countries wracked by internal conflicts are poverty, a high incidence of external debt, and a history of severe IMF intervention.(14) There is also an emerging case to be made for the idea that the IMF policies imposed on many countries in the Middle East and in the rest of the South combined with the US' support for tyrants and dictators provided the conditions of frustration and repression that gave birth to "terrorists.(15) "
'Openness' by brute force
If the US can't open markets with consent, it will do so by brute force. As Albright made clear, when it must, the US will. When the strategy of 'openness' is threatened or when it can only be advanced without an available multilateral facade, the US does not shirk from launching covert destabilization plots, CIA-organized coups, other forms of military interventions, and at the extreme, outright invasion.
This is what it did, in 1953 when the landholdings of the American corporation United Fruit Company were threatened by the land reform program of the democratically elected Guatemalan government; at the same year, in Iran, when the government nationalized its oil industry; in 1964 in Brazil, when the President put a limit on the profits that multinationals can remit home; during the 1990s when the Zapatistas were causing problems for the implementation of the North American Free Trade Agreement - just to cite a few examples from a storied past.(16)
But perhaps the best illustration of how the path to "openness" is often the same path to war would be the recent invasion of Iraq. With no weapons of mass destruction found, it has become undeniably clear that the supposed threat Iraq posed to the US was but a convenient camouflage for hiding the US' economic motives for going to war.(17) Naomi Klein, best-selling author of No Logo, best described the invasion as a kind of "privatization in disguise."
After the rain of bombs, Iraq has become a fertile ground for US businesses to thrive on. Contracts worth over a hundred billion dollars are to be given away for American corporations to rebuild what the Americans themselves destroyed. US businesses will take over and profit from the formerly state-owned educational system, water and electricity services, as well as the transportation and communication system. And just to be sure Iraq and its Arab neighbors become ripe for the picking, the US has launched plans for the Middle East Free Trade Area (MEFTA). (18)
In other words, the invasion of Iraq, as the pursuit of 'openness' by brute force, is the pursuit of peace by less than peaceful means. As Klein puts it, Iraq shows how the US can easily switch from "Free Trade Lite, which wrestles market access through backroom bullying, to Free Trade Supercharged, which seizes new markets on the battlefields of pre-emptive wars.(19)"
Trade, or the opening up of markets abroad for US corporations, is a cornerstone of US national security and, hence, a pillar of its foreign policy. Thus, it would be a mistake to believe that the US' "free" trade agenda, as advanced in the WTO and other multilateral institutions, does not figure in calculations of power and considerations of realpolitik. The US' seeks "openness" not for its own sake but to buttress its economic superiority, which in turn would reinforce its strategic dominance, and which in turn would be useful for defending its economic superiority.
It is a quest that leads to war. First, the US' protection of the military-corporate complex increases militarization around the world. Second, the economic consequences of "openness" are the fuel of civil wars and inter-societal conflicts. The loss and destruction suffered by those that are subject to "openness" by themselves are little different from the loss and destruction caused by wars. Finally, the drive for open markets and the effort to keep them open often necessitate the use of force through military intervention and invasions.
Having assumed for itself the role of the world's policeman and enforcer of rules, the US as the world's sole superpower is now in the best position to use violence according to its best interests. But since what is in the best interest of the US may not often be in the best interest of the rest of the world, it is an arrangement that is certain to lead to more instability and conflict. For if trade or "openness" is the pursuit of peace by other means, it is a quest that may only continue to lead to more wars.