[Seattle-editorial] Fwd: [Focus-on-Trade] Focus on Trade #85

[Sheri Herndon]

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>Subject: [Focus-on-Trade] Focus on Trade #85
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>FOCUS ON TRADE
>NUMBER 85, FBERUARY 2003
>
>THIS ISSUE is being cast off into space on the eve of what will
>certainly be the biggest international anti-war mobilisation we have
>known. At the latest count, there will be protests against the US war-
>mongering in 610 towns, villages and cities in every continent of the
>earth. This is not just a testament to peoples' disgust at the US' cynical
>plans to wage war on Iraq, but a sign that we are at the beginning of a
>new dawn of internationalism, radicalism and mobilisation.  The
>proposal to set 15 February as the international day of protest was
>planted in the UK and germinated at the European Social Forum,
>when more than one million took to the streets of Florence to protest
>the war. The seeds of the idea spread to Cairo and Hyderabad, and
>then onto the World Social Forum in Porto Alegre where the meeting
>of the social movements reinforced the call to the streets.  Tomorrow,
>we will see the colour and shape of our flower.
>
>At the same time, we are witnessing a tremendous and fascinating
>moment in history. Not only is something new emerging but we are
>watching - every day, with gruesome fascination -- a bitter power
>play between 'old Europe' and the 'new Empire'. This is something
>more than traditional US unilateralism: it seems to me that the US is
>exercising an unprecedented and wholly new form of antagonism and
>cynicism (but maybe others who are older and with better memories
>can correct me). In the past, US unilateralism has been arrogant and
>self-interested. Now it is that, plus more: it is destructive. It is not
>enough simply to ignore or flaunt the multilateral organs, as they did
>with Kyoto and the International Criminal Court. The US now seems
>bent on actually destroying them: NATO, the UN Security Council,
>the WTO, by raising the stakes to such impossible heights that the
>institutions collapse under the contradictions. (If it weren't for the
>terrible consequences for Iraq and the Middle East, I'd risk saying
>that Bush might be doing us a favour.)
>
>In this issue of Focus on Trade, Aileen Kwa reports on the latest
>Geneva failure, Walden Bello speculates about the new balance of
>power and we include Arundati Roy's powerful speech from the
>World Social Forum. Herbert Docena joins the Lula fan club and
>Jagdish Baghwati says that the IMF gets such a low grade, he would
>kick them out of his class (but you have to read to the end).
>
>IN THIS ISSUE
>AGRICULTURE PROPOSAL WILL INCREASE DUMPING,
>UNEMPLOYMENT AND HUNGER
>Aileen Kwa
>THE REEMERGENCE OF BALANCE-OF-POWER POLITICS
>Walden Bello
>CONFRONTING EMPIRE 
>Arundhati Roy
>OLE, OLE LULA!
>Herbert V Docena
>BHAGWATI AND BELLO SQUARE OFF ON FREE TRADE AND FREE
>MARKETS
>
>*************************************************
>
>AGRICULTURE PROPOSAL WILL INCREASE DUMPING,
>UNEMPLOYMENT AND HUNGER
>Developing countries must reject Harbinson text
>Aileen Kwa*
>
>WTO's Agriculture Committee Chair Stuart Harbinson has released his
>first draft modalities paper on agriculture, ahead of this weekend's mini-
>ministerial meeting in Japan where agriculture is expected to be high on
>the agenda. The exclusive Tokyo gathering will be attended by just 25
>trade ministers.
>
>The negotiating modalities put forward in Harbinson's paper are a
>sham. They are intended to give the green light to transnational agri-
>businesses to take over developing countries' agricultural markets.
>More dumping of cheap subsidized food can be expected and
>developing countries forced to import more food will also be importing
>unemployment. Hundreds of millions of small farmers in India, China,
>most of Africa, countries in South Asia and Southeast Asia, as well as
>Latin America will be faced with
>unemployment and poverty as domestic markets are flooded with
>cheap subsidized imports and commodity prices plunge.
>
>The proposal is clearly in line with the aims of the world agricultural
>exporters as outlined by President Bush when he introduced the US
>Farm Bill: "We want to be selling our beef and our corn and our beans to
>people around the world who need to eat".[1] The EU's policy - "to
>consolidate its position as a major world exporter"-will also be
>advanced [2]  as will  the interests of major Cairns Group exporters,
>Australia, Canada, New Zealand.
>
>The draft seems to deliberately ignore many of the proposals put
>forward by developing countries to protect their producers against
>dumping and address the problems of rural unemployment and food
>insecurity plaguing a large number of developing countries.
>
>Focus on the Global South calls on developing countries to reject the
>text because it will not rebalance the inequity in agricultural trade. At
>stake are farmers' livelihoods; access to food especially of women and
>children; and given the centrality of the rural sector in the South, also the
>long-term economic development of most developing countries.
>
>1) Dumping to Escalate:  Indirect forms of export subsidies are being
>legalized and legitimized. The present Agriculture Agreement's
>domestic support loopholes remain. Export subsidies and AMS (trade-
>distorting subsidies) will be shifted into the Green Box (supposedly non-
>trade distorting). There are no caps on the Green Box. An overall cap
>on total Green Box support, called for by developing countries, has not
>been taken up in the Harbinson text. The Green Box is where OECD
>direct payment
>programmes are housed. Such subsidies to producers provide an
>implicit support to agri-corporations, allowing them to buy food cheaply
>from Northern producers, and export food at prices so low it undercuts
>domestic producers in developing countries.
>
>2) The treatment of 'strategic products' will increase, not abate hunger
>and food insecurity
>The draft says that strategic products (the number to be determined) will
>have lower tariff cuts - 10 per cent, with a minimum of 5 per cent per tariff
>line. Most of the staple crops and livelihood crops for developing
>countries are exactly those that are being highly subsidized in the US
>and EU - corn, wheat, rice, soya, dairy products, sugar, beef. Some
>developing countries have asked for total exclusion of food security
>crops from further commitments. Instead, they are again called upon to
>reduce these tariffs. One Southern delegate said: "Some countries are
>already grappling with very low tariffs on their sensitive food security
>crops.  The required 10 per cent cut will have very negative effects".
>
>3) Rebalancing /Countervailing Mechanism Denied to the South, Tariffs
>Instead to be Slashed
>Developing countries have asked for the structural imbalance in
>agricultural trade to be redressed, via a rebalancing /countervailing
>instrument that can defend their producers from the $1 billion a day
>OECD subsidies in agriculture. Such an instrument would allow
>countries to put up tariffs on crops which are subsidized by the OECD by
>amounts proportionate to the subsidies. These proposals have been
>ignored in the Harbinson text. Instead, for developing countries, tariffs
>greater than 120 per cent are to be slashed by 40 per cent. Those
>between 20 -120 per cent decreased by 33 per cent. No linkage to
>OECD subsidies is made.
>
>4) Real Special and Differential Treatment Provisions (SDT) for the
>North! Due to the structural imbalances, the real SDT provisions will flow
>to developed countries. The SDT provisions for developing countries,
>littered throughout the text are intended to pull the wool over the eyes of
>developing countries' Ministers. Eg. best endeavour (non-mandatory)
>clause about providing more market access to developing countries'
>products;  expanding the Green Box for developing countries' to
>subsidise small farmers when they cannot afford to do so anyway.
>
>5) Special Treatment to Developed Countries on the Special Safeguard
>Provision (SSG) for another Decade. Developing countries have
>requested the use of a temporary safeguard measure for all products,
>so that in case of import surges or price drops, they are able to have
>recourse to a temporary additional tariff or quantitative restriction. The
>current Safeguard provision is available to only 30, mostly developed
>countries.  The draft says that developed countries can continue to use
>the SSG until the end, or two years past the end of the implementation
>period for tariff reductions (ie another 5-7
>years upon completion of the Doha programme). Developing countries'
>recourse of the SSG will be limited to the few "strategic products"
>(probably 2-3 per country) identified. And to crown it all, it says that this
>access to the SSG will be dependent on completion of a review to be
>conducted to make "operationally effective" the current SSG! The
>Special and Differential Treatment negotiations emerging from Doha,
>(to strengthen and make operational SDT provisions) where the
>deadlines have been missed and no political will has been shown by
>the majors, makes a mockery of this promise. 
>
>[1] Lawhon, H 2002, Brief Analysis No. 413, National Centre for Policy
>Analysis, August 15.
>[2] Commission des CE 1997 'Agenda 2000 - Volume I Communication:
>Pour une Union plus forte et plus large", DOC/97/5
>
>* Aileen Kwa is a research associate with Focus on the Global South,
>based in Geneva.
>
>*************************************************
>
>THE REEMERGENCE OF BALANCE-OF-POWER POLITICS
>By Walden Bello*
>People speak and write today about feelings of utter powerlessness to
>prevent the coming war.  So powerful is the US.  And so determined to
>strike.
>
>Impotence in the face of the supremely powerful.  With our imagination
>limited by memories of the superpower standoffs and ambiguous
>victories and defeats of the Cold War period, it is tempting to see the
>current situation as unique.
>
>et the world has been here before.  In the summer of 1940, after the fall of
>France, when Nazi Germany's determined drive to global dominance
>seemed unstoppable by any possible combination of forces.  In the
>Europe of the early 1800's, when a seemingly invincible Napoleon put
>to rout in battle after battle any military alliance its many foes could
>muster.
>
>The last few years and the coming ones have been and will be bad for
>world peace.  They are, however, rich in lessons about international
>power relations.  And the lessons are not all grim.
>Hegemony and Insecurity
>
>To be sure, the first lesson is discouraging: that unchallenged
>superpower status stimulates conflict, not peace.  This did not seem so
>clear in the immediate aftermath of the Cold War.  Then, there was
>widespread in the West an expectation that the US would use its sole
>superpower status to undergird a multilateral order that would
>institutionalize its hegemony but assure an Augustan peace globally. 
>Even some people not enamored of the United States speculated that
>with superpower rivalry gone and all other potential rivals taking
>themselves out of the competition, Washington's quest for military
>superiority and strategic advantage would slow down.  Europe, Japan,
>and China seemed ready to settle down to a condition of controlled
>competition in the economic sphere while accepting long-term
>American dominance in the security area. 
>
>In fact, as the nineties rolled on, it became clear that what the end of the
>Cold War ushered in was a volatile period more dangerous than the
>Cold War, when the superpower standoff warded off big wars, contained
>smaller wars, and gave relations among states a certain predictability. 
>The instability of the new era did not stem primarily from the emergence
>of "irrational" non-state actors that were prepared to engage in
>"asymmetric warfare" against conventionally powerful state actors,
>though many Beltway intellectuals made their names painting terrorists
>as the greatest threats to global peace and stability in the post-Cold
>War era.  It came from the transformation of the balance of power in the
>global state system.
>
>THE BALANCE OF POWER
>The balance of power among states is the subject of John
>Mearsheimer's magnum opus The Tragedy of Great Power Politics. 
>Regarded as the definitive work on the subject, the book argues
>persuasively that in all balance of power systems, great powers aim not
>so much to achieve a defensive balance against their rivals as to
>achieve a significant degree of military and political advantage over
>them.  Mearsheimer is also correct that "bipolar" systems such as the
>US-Soviet faceoff that dictated the dynamics of the Cold War period are
>more stable and less likely to break down than "multipolar" systems like
>the pre-Word War II situation, which was marked by relative equality
>among a number of powerful states.
>
>What Mearsheimer fails to tell us, however, is that the situation most
>productive of conflict, tension, and instability is one where there is one
>overwhelmingly dominant power surrounded by a number of midget
>powers--meaning today's world.  He quotes with approval Kant's
>comment that "It is the desire of every state, or of its ruler, to arrive at a
>condition of perpetual peace by conquering the whole world, if that were
>possible."  Yet he does not seem to appreciate the fact that Kant's
>insight is perhaps of greatest relevance in the post-Cold War world,
>where American military and political preponderance is unmatched. 
>
>This intellectual failure is jarring, and it stems from a primordial belief
>that Washington, unlike other great powers, is not just motivated by
>naked realpolitik but by the desire for a benign global order as well. 
>These ideological blinders prevent Mearsheimer and many other
>American intellectuals from appreciating the fact that the US has
>switched its role from that of being an  "offshore balancer" against would-
>be hegemons like Hitler and the former Soviet Union to being itself an
>aggressive power bent on achieving world hegemony.
>
>THE UNILATERALIST CONJUNCTURE
>Many critics of US power, for their part, attribute George W. Bush's
>unilateralism to the self-centered, provincial worldview of the American
>right.  This explanation confuses cause and effect.  Bush's unilateralist
>ideology is a product of a unique structural conjuncture:  the
>consolidation of the civilian-military "defense establishment" that won
>the Cold War as the dominant faction of the US elite and the
>disappearance of an effective countervailing force to US power in the
>global state system.  
>
>To mask its shift from containment to hegemony, however, the defense
>establishment needed a rationale, and the last decade saw its invoking
>a succession of actors to fill the role vacated by the Soviet Union-North
>Korea, China, Al Qaeda, the "Axis of Evil."  Paying very little respect to
>the actual state and capacity of the targeted regimes, this process was
>embarrassingly opportunistic and failed to achieve credibility even
>among a critical mass of its prime target group, the American people.
>From this perspective, the September 11 attack was a godsend that
>consolidated domestic support for the open-ended and preemptive
>unilateralist interventionism that was articulated in George W. Bush's
>historic speech on Sept. 17, 2002. 
>
>As for the multilateralist paradigm, this was never a serious alternative
>entertained by any significant faction of the US elite except perhaps for
>marginalized old liberal circles and personalities like Jimmy Carter.  Bill
>Clinton, who distrusted fellow Democrat Jimmy Carter, may have
>invoked multilateralist rhetoric but he did not hesitate to act unilaterally--
>as he did when he ordered the bombing of Serbia despite European
>objections during the Kosovo crisis.
>
>CONTAINING WASHINGTON
>That is the bad news.  The good news is that even when backed up by
>overwhelming force, unchallenged hegemony is a transient state.  As
>was the case in Napoleonic Europe, lesser powers may calculate that a
>posture of compliance or subservience may be necessary in the short-
>term, but they know that it is disastrous as a long-term strategy, for it is
>simply an invitation to more aggression.
>This is what the UN Security Council standoff over Iraq is all about.  It is
>less about Saddam's compliance and more about containing a
>hegemon that feels it has a blank cheque to intervene, topple, and
>depose anywhere in the world with the dangerous rationale of
>preventing a threat, no matter how abstract, from "reaching the American
>people."  If France and Germany at this point seem willing to go the
>distance in stubbornly blocking the US from waging war on Iraq, it is to
>discourage future US moves that might pose a more direct threat to their
>national security.  Cultural bonds or a sense of generosity for being
>liberated from Nazism 50 years ago are weak rationales when
>compared to the fear of encouraging aggressive ambitions that could
>translate into economic bullying in the short term and military blackmail
>in the long term.
>
>However the current Iraq crisis is resolved-and indeed France and
>Germany may yet capitulate under pressure-it has already accelerated
>the decline of the Atlantic Alliance of the Cold War era, a development
>captured in US Secretary of Defense Donald Rumsfeld's disdainful
>comments about recalcitrant "Old Europe."  And it marks the rebirth of
>balance of power politics, with the lesser powers moved into active
>cooperation to contain US aggression.  Joining France and Germany in
>what is emerging as this era's version of the pre-World War I Triple
>Alliance are China and Russia, with the more weighty developing
>countries like Brazil and perhaps even South Korea eventually hopping
>on board.  Though individual members may change, this coalition is
>likely to be long-term. And, unlike currently, where its real dynamics are
>clouded by the debate over the question of Saddam's alleged
>possession of weapons of mass destruction, its basis will eventually be
>more clearly articulated as the defense of national and global security
>against the American threat.
>
>GLOBAL RESISTANCE
>This reemergence of a system of containment at the level of the state
>system must be seen in the context of the advance of other movements
>of global resistance.  There are, of course, the Islamic fundamentalists,
>who have made tremendous gains among the Arab and Muslim
>masses owing to the US mailed-fist response to September 11 events
>and its alliance with Israel.  The coming war on Iraq is likely to
>drastically weaken the so-called moderate regimes in the Arab and
>Muslim world and eventually give rise to governments uncompromising
>in their resistance to US interventionism.  Not too long from now, we may
>see radical Islamic regimes in Pakistan, Saudi Arabia, and Indonesia.
>Then there is the burgeoning global movement against corporate-
>driven globalization, which has, in the last year and a half, fused with the
>anti-war movement to form a powerful anti-US front at the level of
>international civil society.  Like the Islamic fundamentalist movement,
>elements of this diverse movement are likely to assume state power in
>a number of countries in the coming years.  Indeed, they already have in
>a number of Latin American countries-in Brazil, Venezuela, and Ecuador.
>
>Islamic fundamentalism and the anti-corporate globalization movement
>will not mainly function to add diplomatic and material weight to the
>containment of the US.  What they will do is something equally important
>though, and that is to erode the legitimacy of the American enterprise
>and expose it for what it is: a naked bid for hegemony.  This is critical
>since the staying power of hegemons is ultimately based on the
>perception of their legitimacy.
>
>The next few years and decades are likely to witness ever more brazen
>efforts to reorder the world to better serve US interests.  But they will also
>consolidate an anti-US coalition of the less powerful while accelerating
>the spread of anti-US movements in global civil society.  This is not the
>unchallenged hegemony that Washington aspires for, but the classic
>dynamics of overreach, of overextension.  For if there is one
>unambiguous lesson in the history of nations, it is that empire is transient
>while resistance is permanent.
>
>*Professor of sociology and public administration at the University of the
>Philippines and executive director of Focus on the Global South, a
>Bangkok-based analysis and advocacy institute.
>
>*************************************************
>
>CONFRONTING EMPIRE 
>Arundhati Roy*
>
>I've been asked to speak about "How to confront Empire?" It's a huge
>question, and I have no easy answers.
>
>When we speak of confronting "Empire," we need to identify what
>"Empire" means. Does it mean the U.S. government (and its European
>satellites), the World Bank, the International Monetary Fund, the World
>Trade Organisation, and multinational corporations? Or is it more than
>that?
>
>In many countries, Empire has sprouted other subsidiary heads, some
>dangerous byproducts -- nationalism, religious bigotry, fascism and, of
>course, terrorism. All these march arm in arm with the project of
>corporate globalisation.
>
>Let me illustrate what I mean. India -- the world's biggest democracy -- is
>currently at the forefront of the corporate globalisation project. Its
>"market" of one billion people is being prised open by the WTO.
>Corporatisation and Privatisation are being welcomed by the
>government and the Indian elite.
>
>It is not a coincidence that the Prime Minister, the Home Minister, the
>Disinvestment Minister -- the men who signed the deal with Enron in
>India, the men who are selling the country's infrastructure to corporate
>multinationals, the men who want to privatise water, electricity, oil, coal,
>steel, health, education and telecommunication -- are all members or
>admirers of the RSS. The RSS is a right wing, ultra-nationalist Hindu
>guild, which has openly admired Hitler and his methods.
>
>The dismantling of democracy is proceeding with the speed and
>efficiency of a Structural Adjustment Programme. While the project of
>corporate globalisation rips through people's lives in India, massive
>privatisation, and labour "reforms" are pushing people off their land and
>out of their jobs. Hundreds of impoverished farmers are committing
>suicide by consuming pesticide. Reports of starvation deaths are
>coming in from all over the country.
>
>  While the elite journeys to its imaginary destination somewhere near
>the top of the world, the dispossessed are spiralling downwards into
>crime and chaos.
>
>This climate of frustration and national disillusionment is the perfect
>breeding ground, history tells us, for fascism.
>
>The two arms of the Indian government have evolved the perfect pincer
>action. While one arm is busy selling India off in chunks, the other, to
>divert attention, is orchestrating a howling, baying chorus of Hindu
>nationalism and religious fascism. It is conducting nuclear tests,
>rewriting history books, burning churches, and demolishing mosques.
>Censorship, surveillance, the suspension of civil liberties and human
>rights, the definition of who is an Indian citizen and who is not, 
>particularly
>with regard to religious minorities, is becoming common practice now.
>
>Last March, in the state of Gujarat, two thousand Muslims were
>butchered in a state-sponsored pogrom. Muslim women were specially
>targeted. They were stripped, and gang-raped, before being burned
>alive. Arsonists burned and looted shops, homes, textiles mills and
>mosques. More than a hundred and fifty thousand Muslims have been
>driven from their homes. The economic base of the Muslim community
>has been devastated.
>
>While Gujarat burned, the Indian Prime Minister was on MTV promoting
>his new poems. In January this year, the government that orchestrated
>the killing was voted back into office with a comfortable majority.
>Nobody has been punished for the genocide. Narendra Modi, architect
>of the pogrom, proud member of the RSS, has embarked on his second
>term as the Chief Minister of Gujarat. If he were Saddam Hussein, of
>course each atrocity would have been on CNN. But since he's not ? and
>since the Indian "market" is open to global investors ? the massacre is
>not even an embarrassing inconvenience.
>
>There are more than one hundred million Muslims in India. A time bomb
>is ticking in our ancient land.
>
>All this to say that it is a myth that the free market breaks down national
>barriers. The free market does not threaten national sovereignty, it
>undermines democracy.
>
>As the disparity between the rich and the poor grows, the fight to corner
>resources is intensifying. To push through their "sweetheart deals," to
>corporatise the crops we grow, the water we drink, the air we breathe,
>and the dreams we dream, corporate globalisation needs an
>international confederation of loyal, corrupt, authoritarian governments
>in poorer countries to push through unpopular reforms and quell the
>mutinies.
>
>Corporate Globalisation -- or shall we call it by its name?  Imperialism --
>needs a press that pretends to be free. It needs courts that pretend to
>dispense justice.
>
>Meanwhile, the countries of the North harden their borders and stockpile
>weapons of mass destruction. After all they have to make sure that it's
>only money, goods, patents and services that are globalised. Not the
>free movement of people. Not a respect for human rights. Not
>international treaties on racial discrimination or chemical and nuclear
>weapons or greenhouse gas emissions or climate change, or -- god
>forbid -- justice.
>
>So this -- all this -- is "empire." This loyal confederation, this obscene
>accumulation of power, this greatly increased distance between those
>who make the decisions and those who have to suffer them.
>
>Our fight, our goal, our vision of Another World must be to eliminate that
>distance.
>
>So how do we resist "Empire"?
>
>  The good news is that we're not doing too badly. There have been
>major victories. Here in Latin America you have had so many -- in
>Bolivia, you have Cochabamba; in Peru, there was the uprising in
>Arequipa; in Venezuela, President Hugo Chavez is holding on, despite
>the US government's best efforts.
>
>And the world's gaze is on the people of Argentina, who are trying to
>refashion a country from the ashes of the havoc wrought by the IMF.
>
>In India the movement against corporate globalisation is gathering
>momentum and is poised to become the only real political force to
>counter religious fascism.
>
>As for corporate globalisation's glittering ambassadors -- Enron,
>Bechtel, WorldCom, Arthur Anderson -- where were they last year, and
>where are they now?
>
>And of course here in Brazil we must ask... who was the president last
>year, and who is it now?
>
>Still... many of us have dark moments of hopelessness and despair. We
>know that under the spreading canopy of the War Against Terrorism, the
>men in suits are hard at work.
>
>While bombs rain down on us, and cruise missiles skid across the
>skies, we know that contracts are being signed, patents are being
>registered, oil pipelines are being laid, natural resources are being
>plundered, water is being privatised, and George Bush is planning to go
>to war against Iraq. If we look at this conflict as a straightforward eyeball-
>to-eyeball confrontation between "Empire" and those of us who are
>resisting it, it might seem that we are losing.
>
>But there is another way of looking at it. We, all of us gathered here,
>have, each in our own way, laid siege to "Empire." We may not have
>stopped it in its tracks -- yet -- but we have stripped it down. We have
>made it drop its mask. We have forced it into the open. It now stands
>before us on the world's stage in all its brutish, iniquitous nakedness.
>
>Empire may well go to war, but it's out in the open now -- too ugly to
>behold its own reflection. Too ugly even to rally its own people. It won't
>be long before the majority of American people become our allies. Only
>a few days ago in Washington, a quarter of a million people marched
>against the war on Iraq. Each month, the protest is gathering momentum.
>
>Before September 11, 2001 America had a secret history. Secret
>especially from its own people. But now America's secrets are history,
>and its history is public knowledge. It's street talk.
>
>Today, we know that every argument that is being used to escalate the
>war against Iraq is a lie. The most ludicrous of them being the U.S.
>government' s deep commitment to bring democracy to Iraq. Killing
>people to save them from dictatorship or ideological corruption is, of
>course, an old U.S. government sport. Here in Latin America, you know
>that better than most.
>
>Nobody doubts that Saddam Hussein is a ruthless dictator, a murderer
>(whose worst excesses were supported by the governments of the
>United States and Great Britain). There's no doubt that Iraqis would be
>better off without him.
>
>But, then, the whole world would be better off without a certain Mr. Bush.
>In fact, he is far more dangerous than Saddam Hussein. So, should we
>bomb Bush out of the White House?
>
>It's more than clear that Bush is determined to go to war against Iraq,
>regardless of the facts and regardless of international public opinion. In
>its recruitment drive for allies, the United States is prepared to invent
>facts. The charade with weapons inspectors is the U.S. government's
>offensive, insulting concession to some twisted form of international
>etiquette. It's like leaving the "doggie door" open for last minute "allies"
>or maybe the United Nations to crawl through.
>
>But, for all intents and purposes, the New War against Iraq has begun.
>
>What can we do?
>
>We can hone our memory, we can learn from our history. We can
>continue to build public opinion until it becomes a deafening roar. We
>can turn the war on Iraq into a fishbowl of the U.S. government's
>excesses. We can expose George Bush and Tony Blair  and their allies
>  for the cowardly baby killers, water poisoners, and pusillanimous long-
>distance bombers that they are. We can re-invent civil disobedience in
>a million different ways. In other words, we can come up with a million
>ways of becoming a collective pain in the ass.
>
>When George Bush says, "you're either with us, or you are with the
>terrorists," we can say "No thank you." We can let him know that the
>people of the world do not need to choose between a Malevolent
>Mickey Mouse and the Mad Mullahs.
>
>Our strategy should be not only to confront empire, but to lay siege to it.
>
>To deprive it of oxygen. To shame it. To mock it. With our art, our music,
>our literature, our stubbornness, our joy, our brilliance, our sheer
>relentlessness and our ability to tell our own stories. Stories that are
>different from the ones we're being brainwashed to believe.
>
>The corporate revolution will collapse if we refuse to buy what they are
>selling their ideas, their version of history, their wars, their 
>weapons, their
>notion of inevitability.
>
>Remember this: We be many and they be few. They need us more than
>we need them.
>
>  * Arundhati Roy is an Indian writer and commentator. She made this
>speech at a public event "Confronting Empire" at the World Social
>Forum.
>
>*************************************************
>LULA IS AN ABERRATION, OLE OLE LULA!
>By Herbert V Docena*
>
>
>PORTO ALEGRE, BRAZIL - Dashing off to catch a glimpse of the man
>everybody here calls Lula, we run into a throng of people milling around
>a TV set: Lula's already at the park addressing thousands and
>thousands of Brazilians. We're late. We race towards a taxicab and
>slam the doors shut.  "To the park, por favor," we tell the driver in broken
>Portuguese.
>It's Lula's voice booming on the cab's AM stereo. "Is that Lula?," we ask.
>The driver nods and flashes the thumbs up.
>"Bom?" Is he good?
>"Muito bom!" Very good!
>
>The driver pushes hard on the pedal. He swerves maniacally. It's as
>though he senses how much we - a group of foreigners attending the
>World Social Forum - want to see Lula in flesh.  "The driver wants to see
>Lula as badly as we want to," another companion corrects me, as the
>driver overtakes furiously.
>
>Lula, of course, is Luis Ignacio "Lula" da Silva, the new President of
>Brazil, who won a landslide 62% of the votes in last October's election -
>the biggest ever garnered by any presidential candidate in Brazilian
>political history. His name is on t-shirts that are still selling like hot-
>cakes, altrhough it's months after the election campaign. His face has
>even replaced that of Che Guevara's in some of those most sought-after
>red pins.
>
>We stop beside another cab at the intersection. The driver gestures
>towards his fellow driver to check that he's also tuned in. He gives the
>thumbs up. He's listening to Lula too. Then another cab. Another thumbs
>up.
>
>'Did you know that one of the first things Lula did when he became
>President was to tour his ministers in the favelas (slum communities) to
>tell them, "This is how Brazilians really live. Keep that in mind when you
>fulfill your duties'?," says one of my Indian fellow-travellers.
>
>"Did you know that one of the first things he did when he assumed power
>was to cancel a contract for jetfighters in order to use the money for
>schools?"
>
>Already, the (true) Lula stories are becoming mythical.
>
>We listen intently to the live broadcast. Lula's speaks in Portuguese and
>we can barely pick out the words. Pais. Problemas. Esperenca. Ah, he's
>talking about his country. He's discussing problems. And he's talking
>about hope.
>
>All the other words in between I couldn't decipher. But the things that
>couldn't be translated I could discern: There was a raw sincerity to his
>words. His voice rang with a promise that even I - a foreigner, a non-
>Brazilian - wanted to believe.
>"Ole-ole-ole-ole, Lula, Lula!" chanted the thousands, punctuating the
>President's speech, as though he had just scored the winning goal in
>the World Cup championship.
>
>BRAZILIAN ERAP?
>I thought I had seen this before.
>
>Back home, hundreds of thousands of unwashed and un-powdered
>Filipinos also gave former President Joseph "Erap" Estrada the kind of
>devotion that the unwashed and un-powdered of the Brazilians are now
>giving Lula. Like Lula, Erap rallied around the poor and vowed to fight
>for them against the ruling classes that have exploited them for so long.
>Like Lula, Erap's popularity among the masses was historically
>unprecedented. And for the true believer, Erap represented what Lula
>now symbolizes for many Brazilians: the rise of the dispossessed after
>a long period of oppression.
>
>Lula, however, in hindsight and in comparison, seems to be the real
>thing. He's really one of them: As a boy, he almost died from starvation
>and had to escape a drought in his province via a long and torturous
>journey to the city. Erap, in contrast, comes from 'old money' and has
>probably never experienced hunger.
>
>And he has really fought for them: A former metal worker, Lula spent
>most of his adult life as a trade union leader fighting the Brazilian
>dictatorship. Erap also devoted most of his life fighting on the side of the
>poor - but only in the movies. In real life, he was very cozy with
>Ferdinand Marcos the dictator.
>
>ALL NEW
>The otherwise empty road was suddenly jammed. All routes seemed to
>lead to the park. In front of us, a man proudly waves Lula's party flag -
>the red star of the workers party -- from inside his car. Stalled, we decide
>to join the crowds still sauntering towards the park to catch a glimpse of
>their President- even if his speech has already ended. This is no rent-a-
>crowd: these people have not been packed up from their communities
>and sent in a bus by their local political operators, with a bag of
>goodies.  They arrived on their own, expecting nothing, except Lula.
>
>I have not seen this before and it is all enjoyably new.
>
>Where I come from, people regard most politicians with nothing but
>disdain and contempt. In just twenty years, we have twice become so
>disgusted with our Presidents, Marcos and Estrada, that we kicked them
>out of office. But here in Brazil, in some of the conferences, just the
>mention of Lula's name by a speaker was enough to provoke the crowd
>into a sudden convulsion and a rapturous cheering of "Ole ole Lula!"
>
>In the Philippines, political leaders inspire nothing but suspicion and
>cynicism; here Lula seems to inspire trust and hope. Back home,
>elections are often a choice among the least devious devil. Here, it
>appears like there could have been no better choice.
>
>I come from a country where for the youth have grown so wary of politics
>that most won't have anything to do with it. But here, Lula's most ardent
>followers are the young: they were at Lula's rally in massive numbers -
>shirtless, holding their girlfriend's or their boyfriend's hands while
>listening raptly to Lula's every word, kissing and embracing each other
>after applauding him feverishly.
>
>I come from a country where the leader of the most organized segment
>of the Left is daring enough to call for an overthrow of the state, but not
>bold enough to come home from a comfortable exile.
>
>Here in Brazil, Lula's vision is not only bold but he is here and he has
>won. The Brazilian Left has achieved what the most organized segment
>of the Left back home had deemed unimaginable: It had wrested
>ultimate leadership of the state without having had to kill anyone - not the
>reactionary elements, not even former comrades in arms.
>
>It remains to be seen, of course, whether Lula can steer this state
>towards its revolutionary aims but he has already shown that the first
>and most important step - to take control of it and to mobilize the
>masses behind it - can be done.
>
>FREAK SHOW
>And here, perhaps, lies the reason why Lula arouses so much
>excitement even from the cynical and the hardened. He is an aberration.
>In today's order of things, his victory seems so much like just a happy
>freakish accident, unbelievable but true.
>
>In a world dominated by politicians out to serve the interests of the few
>and the powerful, in a world marked with political systems that inherently
>give undue advantage to these kinds of politicians, we could not expect
>a Lula to prevail. In a continent where the United States has routinely
>done everything to prevent leaders like Lula from coming to power and
>from doing anything but its wishes, we could not expect Lula to
>overcome. In a period when the establishment has - almost everywhere
>-- suppressed the opposition, when elites scramble over each other for
>power and when the Left self-destructs, we have not expected Lula and
>his party to show the way.
>I stood there, along with the Brazilians lining the road, waiting for Lula's
>car to pass, chanting "Ole ole Lula!"  hoping for many more political
>aberrations like Lula.
>
>* Herbert V. Docena is a research associate with Focus on the Global
>South.
>
>*************************************************
>
>BHAGWATI AND BELLO SQUARE OFF ON FREE TRADE AND FREE
>MARKETS
>
>(The debate between Walden Bello and Jagdish Baghwati was filmed
>at Stanford University for the program Uncommon Knowledge and
>moderated by the show's host, Peter Robinson.  The show has been
>airing on the Public Broadcasting System in the United States.)
>
>Peter Robinson: Today on Uncommon Knowledge: free trade-win-win
>or win-lose?  I'm Peter Robinson. Our show today: free trade in the
>balance. According to a recent study, over the last half century, nations
>that were open to free trade experienced a rate of economic
>development that was double that of those that were not. So why would
>anybody oppose free trade? And yet many, particularly in the
>developing world, do oppose free trade, believing that the rules of
>global trade are rigged in favor of the rich, developed north and against
>the poor, developing south. Who's right? And with President Bush's own
>commitment to free trade unclear, he did after all enact a new tariff on
>steel imports, where does the United States itself stand in this debate?
>
>With us today, two guests. Walden Bello is executive director of Focus
>on the Global South, a development policy program in Bangkok,
>Thailand. Jagdish Bhagwati is a professor of economics at Columbia
>University, a senior fellow at the Council on Foreign Relations, and the
>author of the book, Free Trade Today.
>
>Peter Robinson: Nobel Prize winning economist Joseph Stiglitz: "The
>trade liberalization agenda has been set by the north (that is by the rich
>countries) or more accurately by special interests in the north.
>Consequently, a disproportionate part of the gains has accrued to the
>advanced industrial nations. And in some cases the less developed
>countries have actually been worse off." Free trade making the rich
>countries richer and the poor countries poorer. Jagdish?
>
>Jagdish Bhagwati: I think even a Nobel Prize laureate can be totally
>wrong. I think it's fundamentally...
>
>Peter Robinson: Totally mistaken.
>
>Jagdish Bhagwati: Totally mistaken.
>
>Peter Robinson: Walden?
>
>Walden Bello: I think he's right on target. I think he's...
>
>Peter Robinson: Ah, marvelous, we have just what a television host
>likes to hear, a nice clean disagreement. Let's begin if we could with just
>the sort of the fundamental, in effect, the classroom principles. What's so
>special about free trade? As the argument goes, and you are one of the
>planet's leading proponents of the argument, why should nations open
>their borders to trade?
>
>Jagdish Bhagwati: Fundamentally it's a question of sharing mutually
>from exchange. If I have surplus toothpaste and you have surplus
>toothbrushes and if we exchange one of each, teeth are going to get
>whiter, right, provided we remember to brush our teeth. So
>fundamentally that's the argument. That is really the underlying logic of
>any trade transaction and I think there's empirical evidence of a very
>substantial sort in the post war period, which underlies the wisdom of
>this, including for developing countries.
>
>Peter Robinson: So it's the same argument that you'd make for the
>development of a nation's own economy. We should all simply
>specialize in the tasks that we tend to do best in which we have
>comparative advantages. And the argument is the same among nations
>as it is among individuals or among firms?
>
>Jagdish Bhagwati: Yes, but remember that the comparative
>advantages can shift with a whole lot of policies like education. If I build
>up an educated labor force in India then I can get a Silicon Valley there
>like in Bangalore and then that becomes our comparative advantage.
>So that shifts the argument a little bit further into what kinds of general
>policies also you have for your society. But fundamentally wherever you
>are at or wherever you're going to, having an open economy is really
>going to be good for you whether you're poor or rich
>
>Peter Robinson: Now do you have any disagreement with Jagdish in
>principle?
>
>Walden Bello: Well, I really would prefer to move from the theory of free
>trade to the actual practice of free trade.
>
>Peter Robinson: So you grant the principle that he just laid out?
>
>Walden Bello: I'm agnostic on that but in terms of the practice of free
>trade, what it has done really is that it has consolidated the advantages
>of a number of countries, a minority in the world economy, and this has
>created structural disadvantages for many of the late comers.
>
>Peter Robinson: Let's see what Walden makes of the conclusions of a
>1998 report on free trade by the Organization for Economic Cooperation
>and Development: over the last half century, this OECD report says, and
>especially over the last decade, the 90s are important here, "Nations
>that have been more open to trade have experienced double the
>annual growth rate of those that have been closed." The OECD report
>goes on to draw a very sharp contrast between two regions of the world.
>First, Asian nations of Korea, Taiwan, Singapore, Hong Kong, Malaysia,
>Thailand, and Indonesia, they started with closed economies, gradually
>opened them, and some three billion people in those countries have
>been lifted out of poverty. Second, African nations such as Nigeria, Cote
>d'Ivoire, and Tanzania, they start with closed economies and, by and
>large, they keep their economies closed and they remain poor. Open
>economies, look what happened in Asia. Closed economies, look what
>happened with certain countries in Africa. Now how do you handle that
>argument?
>
>Walden Bello: Well...I would say this is that this is a very simplistic
>picture that they're giving of Africa and Asia. If you look at the east Asian
>economies, these were not free trade economies, these were hard
>hitting protectionist mercantilist economies with a great deal of state
>intervention, state support, state subsidization, that in fact made them
>blockbusters on the world markets. So, if you look at what, in fact, is a
>much more accurate comparison. Compare these mercantilist,
>protectionist, integrating to the world economy, East Asian economies,
>to the Latin American countries, the African countries, and the Eastern
>European countries that were subjected to structural adjustment by the
>International Monetary Fund  -- that is, radical free market reform -- and
>it's fairly clear. The ones that, in fact, integrated into the world economy
>with a sophisticated, non-free trade, strong state intervention type of
>model, perform much better than the radical free trade economies. So
>this is why I think that this sort of statistics and this sort of picture is
>inaccurate-let me just say that there's all the world of a difference
>between a free trade economy like Haiti, and Vietnam.
>
>Peter Robinson: Now I have to say I know so little about Vietnam.
>Vietnam in other words has a strong state sector?
>
>Walden Bello: Sure.
>
>Peter Robinson: It is engaging in importing and exporting but the
>government is directing that to a large extent.
>
>Walden Bello: It's a very heavily regulated economy like China is.
>
>Peter Robinson: And it's growing at leaps and bounds.
>
>Walden Bello: It's growing by leaps and bounds, it has become...
>
>Peter Robinson: And in Haiti you have almost no functioning
>government as I make it out-almost no system of laws.
>
>Walden Bello: Right, sure.
>
>Peter Robinson: So they're open and there's no government-so your
>argument is Haiti in some sense should be a libertarian's dream?
>
>Walden Bello: They're open and dead just like Argentina is open and
>dead.
>
>Peter Robinson: Open and dead. All right, there's a nice term, open and
>dead.
>
>Jagdish Bhagwati: I think Walden is making a mistake in saying that it's
>too simplistic. It is true that one can be overly simplistic but you can
>have a lot of governmental intervention for creating infrastructure for
>helping initially to an import substitution phase for industries and so on.
>But, essentially, what the Far Eastern economies did, for instance, was
>to have a lot of intervention. It was not a libertarian hands-off
>government, but the question was what was the nature of that
>intervention? They consistently routinely made it clear to their people
>that outward orientation was the important way to go. And open
>economy in the sense that you are not fearful of world markets, not
>fearful of direct foreign investment, you use the external world to learn
>from it, to profit from it. So, you take countries like the four Far Eastern
>economies, South Korea, Taiwan, Hong Kong, and Singapore. Hong
>Kong is the most libertarian in a way, but even that has a substantial
>amount of intervention, but it's pure free trade. Singapore is almost pure
>free trade-no intervention of any kind on the trade front, which is really
>what we're talking about. South Korea and Taiwan went through a phase
>of import substitution for a while, but then they turned outward. And the
>secret of their success was that they went in for very rapid expansion of
>exports.
>
>Peter Robinson: What about Walden's example of countries that are
>open but dead-Haiti and Argentina, they're quite different countries.
>
>Jagdish Bhagwati: But you can die-I mean, you know, despite being
>open because being open helps you but it doesn't prevent you if you're
>dying of cancer. Or, you know, having fresh air might be great for you in
>terms of your general health, but it's not going to do anything if you're
>dying of cancer. So you've got civil strife for instance like in most of
>Africa, which is another of Walden's examples. Or you've got dictatorial
>governments, which are really printing money, spending it through the
>budget, having massive inflations. I mean you have inflation during the
>period in which Walden was I'm sure talking about in South America,
>which was four digits, it makes your mind boggle actually if you're an
>Asian. Now those are the things which unsettle their economies. It has
>nothing to do with being outward oriented or inward oriented.
>
>Peter Robinson: Back to an earlier question: is Walden philosophically
>opposed to free trade or not?  Other things being equal, that marvelous
>phrase that makes any argument that follows completely artificial. But
>other things being equal-so you have a country-well, you have two
>countries which are in every way identical and one of them engages in
>free trade and the other does not. In your judgment, which country is
>making the right policy decision?
>
>Walden Bello: Well this is exactly what I'm trying to say Peter, is that it's
>not accurate, it is fundamentally mistaken to say that Taiwan and Korea,
>or China, in their periods of rapid growth were free trade economies.
>What I'm trying to say here is that these were extremely protectionist
>when it came to their domestic market. I mean you know, it's only been
>in the last ten years that you have had Japanese cars come into Korea.
>I mean this is amazing. What I'm trying to say is they're not free trade
>economies, certainly they opened up, but they opened up while they at
>the same time protected their domestic markets.
>
>Peter Robinson: Let me put on the table a question for the two of you
>because what you have now is a layman who has a problem. We look
>at the experience of the so-called Asian Tigers, and Jagdish says that
>good news is taking place because they're free trade and in spite of
>occasional protectionist interventions by the government. And Walden
>is saying, no, no, no, the good news is taking place almost in spite of the
>free trade, largely driven by the protectionist interventions and other
>kinds of economic interventions of strong central governments. So the
>question is, is there some statistical approach, is there some way to-
>you're both looking at the same picture and giving opposing accounts
>of why that took place, is there some way to settle this-some objective
>way to settle it?
>
>Jagdish Bhagwati: Walden is both right and wrong. I mean, there has
>been massive protection to begin with in these systems. Certain types
>of protection, like on the car industry, on heavy industries, continued. But
>there's a great deal of literature now which shows that this is exactly the
>wrong kind of industrial policy because as long as those interventions
>were reinforcing the comparative advantage in light manufacturers,
>Korea managed to reinforce what, in fact, the market would have done
>anyway by choosing light manufacturers, just the way Japan did. When
>it started going into industrial policy and interventions for the heavy
>industry sector, ship building and a variety of things, that's when 
>it lost its
>way like most people do.
>
>Peter Robinson: Where they did not have a comparative advantage in
>the international marketplace in the first place.
>
>Jagdish Bhagwati: And there was no clear signal from the marketplace
>as to where you want to go.
>
>Peter Robinson: Right. The market wasn't screaming for ships from
>Korea.
>
>Jagdish Bhagwati: So at some stage, if you look at Japan for example,
>and industrial policy in these countries, where it does seem to be
>succeeding is where, in fact, they're trying to predict the comparative
>advantage evolution.
>
>Peter Robinson: Next topic, how badly have recent American actions
>damaged the movement toward freer trade? In recent months, President
>Bush has taken a couple of actions that bear on free trade. First he
>imposed tariffs of up to 30 percent on imported steel, which The
>Economist magazine called "America's most protectionist single action
>for two decades." And a few months after that he signed a farm bill that
>raised subsidies to American farmers by 80 percent, providing them
>something like $170 billion over the next decade. Now, it's not just in the
>United States. The overall level of subsidization of agriculture in the
>OECD countries, which is basically the industrialized countries, doubled
>from 182 billion in 1995 to 362 billion in 1998. So, the question here -- at
>least as regards agriculture and also as regards other politically
>sensitive industries- why I was talking about steel? steel-politically
>sensitive, the president imposes a tariff-the rich countries are not
>playing fair. So is Walden correct that free trade is something that the
>poorer countries ought to think twice about? That they're going to get
>ripped off by these rich countries.
>
>Jagdish Bhagwati: But you don't get ripped off. I think that's the wrong
>way to look at it. My old teacher, a great radical, Joan Robinson at
>Cambridge used to say, if you throw rocks into your harbor, that's no
>reason for me to throw rocks into my own. Essentially what she was
>saying was that it's good for me to have no restrictions-or reduced
>restrictions on trade because trade leads to gains-true. If your door is
>closed, you know, I would get less by their trade. But it doesn't mean that
>I should then close my own door because then I get doubly hurt. But I
>would simply go on to say also, to be partly on Walden's side but in a
>nuanced way, which is because today we are all sort of saying, look
>here are all the statistics which you read out. Right. And things are even
>getting worse and what is bad about the U.S. actions is that while we are
>entering a multi-lateral trade negotiations post-Doha, we have actually
>used the WTO consistent procedures to increase protection. So we are
>sending out all the wrong signals. My worry is not about this in itself,
>because they're hurting themselves and they're hurting the rest of the
>world too, but...
>
>Peter Robinson: The Americans are and the Europeans who subsidize
>agriculture are.
>
>Jagdish Bhagwati: But the real problem is that when we do things like
>that and we are supposed to be the ones who are most free trade
>oriented, the big proponents of free trade, ideologically and so on, when
>we do this it's very difficult for President Arroyo of the 
>Philippines, for the
>Prime Minister of India, who are all trying to move a little closer to free
>trade. We are never going to be at free trade, but you know, we are
>trying to liberalize here and there as the democratic processes permit,
>then you see all the people who oppose liberalization. And then you
>say look the big dog on the block is doing something which is
>hypocritical and that makes our life more difficult in the developing
>countries.
>
>Walden Bello: Well I think definitely, whatever our respected positions
>on free trade, I think Jagdish and I have a consensus on the double
>standards that, in fact, operate in the world economy. Basically what the
>United States does is that when it suits me I'll do free trade, but 
>I will also
>be unilateral. But for you guys out there, okay, you only have to bring
>your tariffs down. You guys have to practice free trade.
>
>Peter Robinson: So would Walden support free trade if he thought the
>rich countries were playing fairly? Are you opposed to free trade or is it
>simply the hypocrisy that you see in an action like this by President
>Bush-the hypocrisy that you see in the European Union by saying to the
>so-called Third World, you must engage in pure free trade while we
>subsidize our farmers and every other political group that we need to
>get elected. Is that what really annoys you? If the first world would
>behave better, would you then be more in favor of free trade?
>
>Jagdish Bhagwati: You see that reinforces the point I was making which
>is that when people like Walden pick on this sort hypocrisy or double
>standards, when intellectuals, I mean he's one of the influential
>intellectuals in the Third World, they will reinforce the lobbies, the
>industrial lobbies, and so on, which don't want to have reduced
>protection. So in that sense, it is an extremely important downside of
>what President Bush has been doing.
>
>Walden Bello: Well, I think in response to your question Peter, as I said,
>you know, I'm not really that hung up on, you know, the theory of free
>trade. I'm a pragmatist, you know. I don't oppose trade. I'm for trade but
>it all depends on what the rules are for trade and I'm for fair trade, and
>this is what I'm trying to say here. That the history of East Asia shows,
>you know, that interventions, even protectionist interventions, in fact,
>build up capacity so that at a future time these countries like Korea, were
>able to become efficient, effective, economies. So what I'm saying here
>is that we really, really need to be pragmatic about trade policy. There
>are times when you're a protectionist and that's the rational thing to do,
>there are times when you liberalize. But the important thing is the
>national interest that guides you in terms of developing your economy.
>So basically Peter I'm saying, I would put above everything else as
>somebody from the Third World, development over trade. Thus trade,
>certain trade policies assist in development, if they do, fine. If they don't,
>then I'm not going for that. And certainly the so-called structural
>adjustment free trade policies that have been imposed by the IMF and
>the World Bank, they have consistently eroded the capacity of Third
>World countries like the Philippines to be able to develop.
>
>Peter Robinson: How would you grade the IMF and the World Bank?
>Walden has several times now said that they have imposed rigid,
>liberal in the sense of small government free market regimes, or
>attempted to do so, imposed these strictures on Third World countries
>and that's caused trouble and resentment and so forth. How would you
>grade the World Bank?
>
>Walden Bello: And not only on trade but on capital.
>
>Peter Robinson: Capital, right. Monetary policy...
>
>Jagdish Bhagwati: The policies extent of the IMF extend not just to trade,
>which is very minimalist, but to pushing countries rapidly into capital
>account convetability or, as it is sometimes called, financial
>liberalization. So our financial firms can, you know, go in, you know, and
>basically operate without any restrictions but people can take their
>monies out and so on. And that was very imprudently done and there...
>
>Peter Robinson: You give them a low grade?
>Jagdish Bhagwati: I'm afraid I do. A low grade is, a low grade-no, I
>would expel them from...
>
>Peter Robinson: Ah, that bad.
>
>Jagdish Bhagwati: ...university.
>
>Peter Robinson: Because it seems to me...
>
>Walden Bello: Very significant quote!
>
>Peter Robinson: Walden is saying I'm a pragmatist; I want to know what
>works. And it strikes me, listening to Walden, that in the developing
>world it would be easier to see that free trade works if there were not this
>overlay of the western world pushing it, backing, trying to jam it down
>their throats-the IMF, the World Bank, and then President-this entire
>overlay that just makes it hard to take.
>
>Jagdish Bhagwati: I think the last few years they were going by analogy
>with
>trade as far as financial liberalization was concerned. And one 
>thing you learn
>in the classroom is that, you know, there are similarities between financial
>liberalization and trade liberalization, but they are fundamentally...
>
>Peter Robinson: Quite different.
>
>Jagdish Bhagwati: So the differences are much more important. When you're
>dealing with financial liberalization, unless you're very prudent and cautious
>and putting monitoring in place, adapt the local institutions like the banking
>procedures, debt equity ratios, you're playing with fire and then the analogy
>is playing with fire. It's good for you, you know, but on the other hand, it
>can burn down where you're living.
>
>Peter Robinson: Last topic, predictions about the future of free trade. The
>Economist magazine again: "The lesson of the early twentieth century is that
>globalization is reversible." Globalization is reversed by the First World War
>and then it's reversed by economic policy, trade policy, during the
>Depression-people become protectionist and so forth. I continue the quotation,
>"This time, the current time, global integration might stall if the risk and
>cost of doing business abroad rises, perhaps as a consequence of fears about
>security," that is the terrorist threat, "or if governments once more turn
>their backs on open trade. Either of these threats could prove decisive." So,
>the question is, this is not a question of ideology or even of principle or
>even really of past practice, but a question about the future. Has 
>the movement
>toward freer trade already crested, perhaps in the 1990s, and might we see a
>reversal in the years ahead? Walden?
>
>Walden Bello: Nothing is determined...things can, in fact, be reversed. But
>what I would say is that I think countries would like to integrate into the
>world economy, but what they're asking for are good rules, okay, that are very
>sensitive to the different places where countries are in the world 
>economy. And
>I think that if the North, if the developed countries are willing to see that
>they're not going to jam down doctrinal rules about free trade on countries,
>but instead look into the needs of these countries that, in fact, they need to
>develop, and that has to be respected so that you can't have a one shoe fits
>all type of trade regime, then I think the south countries, you know, will
>integrate...
>
>Peter Robinson: Are you optimistic that it'll actually happen that way in the
>coming three years, four years, five years?
>
>Walden Bello: Well, I'm not optimistic precisely because I think that there is
>in the North either a doctrinal view about free trade or there is this very,
>what we've already talked about, this sense that I can be unilateral if I want
>to and I can be a free trader when I want to. And this is in fact 
>what you have
>in Washington at this point. So, I would say here Peter that there's a lot of
>dissatisfaction in the South at this point because we were sold a bag of goods
>like free trade that has created enormous problems for our economy. And beyond
>that there's also the hypocrisy.
>
>Peter Robinson: Jagdish, are you an optimist on this matter?
>
>Jagdish Bhagwati: Yes, I think I am at the moment because I think it's
>fundamentally a lot of things of changed compared to the, you know, to the
>early part of the twentieth century. And the policymakers are still 
>keen in the
>developing countries, not necessarily all the intellectuals that certainly
>Walden doesn't buy into that, but I think the policymakers have 
>tried alternate
>models and are now saying look, we were too fearful of the outside world, we
>want to use it the way the far eastern economies did. Let us, like 
>the Mexicans
>looking across Rio Grande, you know. Porfirio Diaz said years ago, "Poor
>Mexico, how far from God and how near the United States." Today they turned it
>around and said, look what a wonderful thing, Mexico is next to the United
>States. It gives us opportunities.
>
>Peter Robinson: Jagdish Bhagwati and Walden Bello, for Uncommon Knowledge,
>thank you for joining us.
>
>*************************************************
>Focus-on-Trade is a regular electronic bulletin providing updates and analysis
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-- 

Be realistic and do the impossible, because if we don't do the 
impossible, we face the unthinkable.

-- Murray Bookchin