Really Bad Trade News Obscured by Distractingly Bad News on Other Fronts

“The poor and the marginalized are most commonly denied justice and would benefit most from the fair application of the rule of law and human rights. Yet despite the increasing discourse on the indivisibility of human rights, in reality economic, social and cultural rights are neglected, reducing human rights to a theoretical construct for the vast majority of the world’s population. It is no mere coincidence that, in the Iraq war, the protection of oil wells appears to have been given greater priority than the protection of hospitals.”

Amnesty International Annual Report, May 2004

On May 29, supposed Al Qaeda terrorists took Western hostages in Saudi Arabia and killed more than a score of them. This confirmed the skeptics’ view that Bush’s war on terrorism has made the world more dangerous, rather than safer.

Coinciding with ongoing bad news from Iraq, where Bush concedes turf and prestige to the “terrorists”, “insurgents” or whatever you want to call “those people,” Amnesty International blamed the United States for the sustained erosion of human rights and international law the worst in 50 years. “The global security agenda promulgated by the U.S. Administration is bankrupt of vision and bereft of principle,” the report declared. “Sacrificing human rights in the name of security at home, turning a blind eye to abuses abroad and using preemptive military force when and where it chooses have neither increased security nor ensured liberty.”

Instead of bringing liberty and security to Iraq, Bush’s war on terrorism has resulted in the systematic use of torture at Abu Ghraib prison the tip of the proverbial iceberg of US torture use in Iraq and Afghanistan. Bush heavies tried to distract the public from the daily dirge from Baghdad with alarmist messages at home. Attorney General John Ashcroft issued yet another dire terrorist warning, while forgetting to inform the Department of Homeland Security about the impending but as always, vague — threat. And the ubiquitous “breaking news” screams of new developments in the Kobe Bryant, Michael Jackson and Scott Peterson trials. Weapons of mass distraction obscure truly important news.

Unfortunately, no major newspaper or TV news show offered prime space to the UNCTAD (United Nations Conference on Trade and Development) biannual report. This document calls into question the entire “globalization” or “free market” system. Increased international trade, it concludes, has not led to reduction in poverty in the world’s poorest countries. Indeed, during this boom of world trade poverty has increased, as has the income gap between rich and poor.

The study found little linkage to show that trade had enlarged the income of the poorest in the world’s 50 least developed countries. UNCTAD officials confirmed that trade had helped integrate some poor countries into the world economy; but their negative trade balances had grown more distressing as a result of the neo-liberal trade policies.

So opening up markets does not spread benefits? Why does it take a panel of experts to state what observant people already knew: world trade investment–without tariffs, taxes or government regulation harms the world’s 3 billion plus neediest people and helps the wealthiest.

Data to back this conclusion comes from a recent report from the UN Economic Commission for Latin America and the Caribbean. The report’s authors estimate that 227 million Latin American and Caribbean citizens live below the limits of poverty. In the first years of 21st Century, this region recorded an unemployment rate of 10.3 percent almost akin to the depression of the 1930s.

Interamerican Bank President Enrique Iglesias confirms that 44 percent of Latin America’s population lives below poverty levels. The region, he concedes, experiences a ghastly wealth distribution gap, severe unemployment and “social exclusion influenced by ethnic and racial factors.”

Conversely, on the editorial and business pages of the New York Times and Wall St. Journal, financial experts debate whether former NYSE head Richard Grasso merited his $188.5 million “compensation package” after being forced to leave his post prematurely and whether CEOs should get $10 or $20 million bonuses for laying off thousands of low-paid workers. Celebrities, whose contributions to world culture we need not debate, regularly accept or reject deals for hundreds of millions of dollars. One basketball player “earns” millions of dollars by endorsing shoes, which may sell for $100 or more. Half the world’s population does not earn that much in six months; hundreds of millions don’t make $100 a year.

In Africa, Asia and Latin America hundreds of millions somehow manage to stay alive on less than a dollar a day. A cow on a US government subsidized dairy farm receives more than a child in a Nicaraguan slum.

Welcome to the supposedly reasonable and democratic world of free trade. In this system, the neediest receive “tests” to qualify for loans that will ultimately make the wealthiest even wealthier. IMF and World Bank economists routinely demand that poor governments invest in “export opportunities.” They advise leaders of poor third world countries to drop all the “nonsense of self sufficiency” and cultivate crops for export flowers instead of corn, macadamia nuts instead of beans. IMF officials typically withhold loans until begging governments agree to follow their harsh rules. For example, to qualify for an IMF loan, the Jamaican government in the mid 1970s had to prove it had cut subsidies to the poor, devalued the currency, making the poor even poorer, and reduced spending on social services to those who most needed them. “Don t worry,” crooned the IMF salesmen, “private capital will soon rush in to create jobs and fuel overall economic growth.”

Countries that followed such counsel now find themselves hosts of low-wage-low-cost textile plants. Honduras, for example has become a Wal-mart super supplier, but does not receive super dividends. Little of the “invested” capital actually stays in the country and the jobs pay typically less than the amount required to sustain a human being. Honduran workers earn approximately 70 cents an hourafter getting a big raise.

Agriculture in much of the third world has also dissipated as a result of “integrating” third world countries in the global economy. Indeed, countries once self-sufficient have become importers. Under the free trade model, food-processing plants in Watsonville, California, moved to Irapuato Mexico to take advantage of much lower wages and to avoid paying benefits. In turn, Irapuato farmers began to cultivate strawberries and broccoli instead of corn and beans. The people of Irapuato now rely on imports of US corn and beans to satisfy their needs. In other areas of Mexico, farmers could not compete with the super-subsidized US agri-business giants and simply abandoned their land. The drum beat to lift tariffs and subsidies on agriculture in Latin America goes on, while the US government lavishes agri-business with hundreds of billions of dollars.

The Nicaraguan government — next to Haiti, the poorest country in the Hemisphere — signed the Central America Free Trade Agreement (CAFTA) in late May. This may signal the end of farming there. How can small corn farmers compete against the US giants who use taxpayers’ financial support to manipulate prices in order to capture weaker markets?

In addition, Nicaraguan corn, like that grown in Mexico, has both religious and biological importance. The genetically altered corn offered by the US companies quickly pollutes and destroys whatever native strains farmers may have protected.

This aspect of globalization worries environmentalists, just as the increase in poverty worries serious economists and all humans whose hearts continue to retain that empathy valve for human suffering.

Ashley Seager, writing in the May 28 Guardian, extrapolates from the most recent Amnesty report that “the number of people in the least developed countries living in absolute poverty, or less than $1 a day, would rise to 471 million in 2015 from 334 million now,” should trends continue.

Think of the oft-repeated promises (lies) by government officials and “experts”. Free trade is rational and good and NAFTA, CAFTA, FTAA and other such free market treaties will create jobs, bring healthy development and create stability. Right! And the US went to war in Iraq to stop Saddam Hussein from using and sharing his weapons of mass destruction with terrorists and to bring democracy, liberty and stability to the Middle East! Alexander Solzhenitsyn wrote about the USSR that “force feeding with lies is now the most agonizing aspect of existence in our country.”

The free trade lies have obfuscated the dire facts of life: instead of improving the condition of the poor majority in the world, the free market has made them worse. It’s time for fair trade.

SAUL LANDAU directs the Digital Media Arts program at Cal Poly Pomona University. His new book is The Business of America.


SAUL LANDAU’s A BUSH AND BOTOX WORLD was published by CounterPunch / AK Press.