This is an open letter to the leaders of the world from the Honourable Paul Hellyer, (former Deputy Prime Minister) Leader of the Canadian Action Party. The views expressed reflect 50 years of experience in business, politics and economic affairs. November 23, 1999 The World Trade Organization Year 2000 Round of Negotiations If you want a fairer, more just and prosperous world, you must reject outright any extension of the World Trade Organization (WTO) mandate to include services as proposed by the major powers. Instead, you should review the existing scope of WTO jurisdiction and remove all references to "national treatment" as a fundamental tenet of international trade and investment. If you don't, you will never be able to develop the kind of diversified economy necessary to provide interesting and challenging jobs to your brightest young people and you will not have the tax base required to finance essential public services. The "national treatment" clause The "national treatment" clause is the lever by which the transnational corporations and international banks of the five big powers are colonizing the world to an extent previously considered impossible. As soon as your country has a company with good prospects to expand globally, it will be bought by one of the transnationals which will shut the company down, make it part of the transnational's empire or move production to another country. In the event that the choice is either to shut down the company or move production elsewhere, trade agreements require countries to allow products previously made within their borders to be imported from abroad without penalty. My country, Canada, has already suffered in this way when foreign investors bought our companies and curtailed or ended production with the inevitable loss of jobs. Even if the facility purchased remains in your country, the most challenging jobs will be moved to a foreign head office. Consequently, your most creative people will be denied the opportunities they want or be forced to emigrate to the country where the head office is located. Again, Canada has experienced this tragic result. In addition, your national tax base will be eroded. Transnational corporations are ingenious at finding ways to minimize the taxes they pay in host countries. They use many devices, including the amount they charge for administration and royalty payments on patents, in order to transfer profits to a location of their choice. Meanwhile, they expect the host country to carry the major burden for the construction of infrastructure and the provision of social services. The WTO and Democracy In effect, globalization is a combination of colonization and corporatization. Corporations are usurping the power of nation states and robbing them of their ability to legislate positively on behalf of their own people. Power is shifting to the World Trade Organization which is little more than a surrogate for transnational corporations and the banks that finance corporations' global acquisitions. This development is a travesty of democracy. The World Trade Organization is now exercising de facto executive, legislative and judicial powers in much of the world. It does this in the absence of any democratic foundation and without checks and balances. It has all the characteristics of a bureaucratic dictatorship, unaccountable to any electorate. That the second millennium should end with democracy being totally undermined at the hands of countries that claim to be democratic is an unspeakable tragedy. It is a measure of the extent to which real democracy no longer exists in these countries, including Canada and the United States. Only candidates and parties with substantial financial backing from large corporations have any hope of getting elected. Once in office, they are obliged to favour corporate interests over those of rank and file electors. To accomplish this, politicians favourable to the big corporations have been selling the idea that globalization is both inevitable and good for ordinary people. They speak of "the unquestionable benefits" of globalization without providing any evidence or data to support this myth. In fact, the "benefits" accrue largely to the officers, directors and principal shareholders of transnational corporations and the people they hire to do their bidding. Nearly everyone else in the world is worse off. Economic "success" This new economic system (under which we have all been living since central banks adopted the ideas of Milton Friedman and his colleagues at the University of Chicago in 1974), is really a reversion to the boom-bust system in effect prior to the Great Depression of the 1930s. It can only be judged by its "success". A look at the data shows that neo-classical, monetarist (globalized) economics has been a monumental flop. In Canada, for example, our performance has been humiliating. From 1949 to 1973, real domestic output increased by an average of 4.9% a year; for the 25 Friedman years, growth has averaged 2.8%, a reduction of 43 percent. At the same time, both inflation and unemployment have been far higher. From 1949 to 1973, the Consumer Price Index, our inflation indicator, rose y an average of 2.86%, whereas from 1974 to 1998, it rose by 5.62% a year, on average, an increase of 97 percent. Unemployment for the earlier 25 years averaged 4.74% and for the last 25 years, 9%, almost 90% more men and women unemployed and looking for work since the monetarist counter-revolution began in 1974. Even in the great United States the comparison is dismal. The average increase in GDP was down by 38% and unemployment has been 42% higher in the monetarist era. Their federal debt soared by more than 1000 percent. It is the global statistics, however, that make one shudder. For the years 1950 to 1973, the average annual compound growth rate of per capita GDP was 2.90 percent. From 1973 to 1995, it was down to a disastrous 1.11%, more than a 50% reduction. Neo-classical monetarist economics, which is the cornerstone of a globalized system, has been a disaster for the world and especially for its poorest people. Individual and national rights And now the big powers want to extend WTO jurisdiction to health care and education because big corporations want to take over these areas. Just say no! Health care and education are too important to be put in the hands of foreign corporations for whom profits are more important than a healthy, well-educated populace looking for equality of opportunity. Agriculture is another area for concern. A few large companies want to control world food supplies. Unfortunately, they have the support of the United States and some other governments. It is profoundly important, both strategically and from a humanitarian standpoint, that this trend be stopped and some semblance of self-sufficiency in food be maintained in nation states. Y2K marks a turning point for the world and for the WTO. While the time clock moves inexorably ahead, the globalization clock must be turned back. The WTO should be stripped of its dictatorial powers. The ability of large corporations to subvert democracy should be curbed. "National treatment" should be scrapped so that each sovereign country will have the power to decide the terms and conditions on which foreign investment is welcome and the extent to which it is welcome. And each country should have the right to protect its own industries - if it is willing to accept the consequences from other countries. After all, that is how the major powers became major powers. In a just world, they should not deny the same right to their smaller and weaker neighbours. Yours sincerely, Paul Hellyer Is the WTO the second attempt to pass the MAI? The Canadian Action Party, parti action canadienne (CAP / PAC) Suite 302-99 Atlantic Avenue., Toronto Ont, M6K3J8 Telephone: 416 535 4144 E-mail: [EMAIL PROTECTED] http:\\www.canadianactionparty.ca ............................................. Bob Olsen, Toronto [EMAIL PROTECTED] .............................................
