Cancun and Trade Wars

In homing in on Cancun the anti-globalist left shows once more that the workers’ movement is being distracted by a sideshow while the capitalists get on with the real business of exploiting our labour and ruling our lives. The WTO is the UN of trade, and like the UN its purpose is to create the impression that capitalism can be reformed by global democratic institutions. Those who promote either reforming the WTO, or abolishing it, in the name of democracy, are fixated on managing the market. We say that the market cannot be managed. The only way to make trade fair is to overthrow capitalism, and we must start now.

Chasing after global shadows

The protests at Cancun called for the abolition of the WTO because the WTO is dominated by the US and EU and imposes ‘unfair’ trading conditions on the ‘developing’ countries. For example EU farmers spend $2 a day on every cow when half the world’s people live on less. Guardian journalist George Monbiot writing on Cancun rejects the call to abolish the WTO. He says countries cannot retreat from trade to self-sufficiency without increased poverty and harm to the environment. No, say the Greens, local production can be sustainable. Replies Monbiot, only global trade can be sustainable. Yet both Monbiot and the Greens promote equally unworkable and ultimately identical utopias of fair trade.

On the one hand Monbiot’s would-be multilateral world government has been wiped out by S 11. The US ignored the UN to invade Iraq and still rejects its demands to take over the rebuilding of that country. The US rejects trade liberalisation by giving its rich beef, grain and cotton farmers yet more protection. The US and EU are fighting to see who can be the most protectionist. So where is the prospect of the poor countries ganging up and forcing the rich countries to open up their markets? Trade wars in which the powerful nations dominate the weak nations are just one symptom of imperialism. The WTO is a weapon of imperialism, just as is the UN. When is suits them they use it, when it doesn’t they don’t. Right now the imperialists are embarking on trade wars with their rivals and poor countries don’t figure in this war except as victims of super-exploitation and oppression.

Monbiot’s dream requires that poor countries stand up to the rich and reform the WTO. But the poor countries are also pressured to sell off all their resources to the big multinationals to repay debt. ‘Neo-liberal globalisation’ is all about forcing poor countries to open up so that their assets can be owned and controlled by big business. So how can they resist further trade deals to earn foreign exchange to pay off debt unless they go all the way and reject the debt?

Maybe they can take a lead from Venezuela and refuse to make any further concessions on the sale of national assets until the rich countries open up to trade. But despite Chevez’ tough talk, and surviving two attempted coups, he is making deals to pay off Venezuela’s debt. None of his populist buddies, like Lula in Argentina, or Kirchner in Argentina, dare cut their ties with imperialism. Even his idol, Fidel Castro, is busy selling off Cuba’s resources to capitalist corporations.

Chasing local movements

Aziz Choudry (a founder member of the NZ anti-globalist group ARENA) writing in “Neoliberal Globalisation” (Green Paper #4 puts the case for the WTO rejectionists against the Monbiot-type WTO reformists.

“Can we seriously talk about humanizing or adding a “social dimension” to the exploitation and misery inflicted by market capitalism?” He says the attempts by the International Labour Organisation (ILO) and Greens to insert “social” and “green” clauses in the WTO are merely smokescreens to hide its real purpose. He quotes Canadian union activist Dave Bleakney who says that a ‘social clause’ is like “fighting for guarantees that you have the right to be present at your execution”. Good point.

“We need to align our struggles for alternatives to neo-liberalism with the older struggles for self-determination, against all forms of imperialism and colonialism. We must de-legitimise transnational corporations and international institutions like the WTO, World Bank, the IMF and International Development Bank, and the other institutions and processes which advance neoliberal globalisation globally, regionally and nationally.”

So to reject the WTO we must also reject the IMF, WB and all the multilateral institutions that are the weapons of imperialism in the ‘developing world’. This leaves no option but for the poor countries to go it alone. Choudry answers Monbiot charge that this would lead to stagnation and ecocide by pointing to two examples of the strategy from below that can survive the collapse of the WTO.

The first is the Solidarity Economy championed by the Zapatistas of Chiapas in southern Mexico. The rebellion of the Zapatistas in 1994 was against NAFTA (North American Free Trade Agreement between US, Mexico and Canada) and the robbing of the traditional lands of the indigenous peoples of Mexico. While this was a brave attempt to resist privatisation and to promote self-reliance the Zapatistas remain marginalised and their example has failed to take root elsewhere.

The second example is that of the actions of the Argentine piqueteros (unemployed) who in December 2001 formed popular assemblies with employed and self-employed workers to occupy factories and fight the collapse of the economy.

Again, this popular and progressive social movement has yet to become a successful model to replace neo-liberal globalisation when the current Kirchner government is doing a deal with the IMF to repay $20 Billion in debt and at the same time repressing the workers movement.

Fair trade means ending capitalism

While these examples are the beginnings of social movements against neo-liberalism, in themselves they are incapable of defeating imperialism and replacing capitalism with a just society. They are limited by the type of analysis that sees ‘neo-liberal globalisation’ as something that can be resisted and reversed without challenging capitalist society (see article on Social Re-Forum Aotearoa). But there can be no ‘fair’ trade in commodities that already contain the expropriated labour of producers. There can be no ‘peace and justice’ in communities that remain dominated by global capitalism.

The rural-based movements such as the Zapatistas in Mexico or the FARC in Colombia, can be contained by imperialism because they do not link up with the mass workers movements of the employed and unemployed such as in Argentina.

But, even as in Argentina, mass workers movements that are not armed and mobilised to take power cannot defeat imperialism in their own countries. They remain hostages to the WTO, WB, IMF, UN peacekeeping forces, and open military repression. Only a united, armed working class and its class allies can win the war against imperialism (see article on Chile).

As S 11 proved to us all, ‘neo-liberal globalisation’ is nothing more than imperialism in crisis, forced to enter into trade wars and to re-colonise poor countries to privatise assets and super-exploit their labour. And when this is resisted as in Iraq, imperialism escalates trade wars into hot wars with military invasions. The WTO, like the UN, is nothing but a weapon to impose imperialism’s crisis on the poor. If it collapses imperialism will use more direct methods.

Trade wars can only be stopped by workers’ revolutions which overthrow imperialism and its client comprador capitalist agents, and replace the market with socialist plans.

The alternative to trade wars under the domination of global capitalism is the building of socialist economies based on workers production and exchange, that spread from national bases to regional bases in Latin America, Asia and Africa, and then to a global socialist economy that includes Europe and North America.

It is not enough to back the revolt of the poor countries leaders against the rich countries in the imperialist WTO. It is necessary to overthrow these leaders too, along with the whole system of capitalist production and exchange, to expropriate the means of production and exchange and to put in place a World Socialist Trade Organisation.

It will take more than Zapatistas and Piqueteros to make revolution. For that we need an organised and armed working class in every country that can lead all the oppressed and exploited in the struggle for socialism and defend it from every imperialist act of war, repression and counter-revolution.

Victory at Cancun? Think Again

The collapse of the World Trade Organisation talks at Cancun was an important even in international affairs, comparable to the crisis in the United Nations over the United States invasion of Iraq. Like the UN, the WTO is being weakened by the breakdown of multilateralism as an instrument of US and European imperialism.

As their economies become increasingly crisis-ridden, the main imperialist powers are competing head to head to gain market share and cut the cost of raw materials in the semi-colonial economies.

The UN debacle was all about the failure of the Franco-German leaders to win a deal with the US that would give them a share of Iraq’s oil and of strategic influence in the Middle East and Central Asia. For a crisis-ridden US economy, Franco-German cooperation was simply too expensive . At Cancun, the US and the Europeans were on the same side, united in their opposition to cutting agricultural subsidies and united in seeking greater access for their multinational companies to Third World economies. But the refusal of either the US or the Europeans to cut a deal with the Third World nations represented by the ‘G 22’ group reflected the decreased commitment of imperialism to multilateralism. The US seemed almost to relish the collapse of talks, with Bush boasting that he would ‘aggressively pursue bilateral deals’ in the aftermath of the talks. Both the US and the Europeans are also moving to consolidate regional trade blocs.

Anti-globalisation gurus like Britain’s George Monbiot and New Zealand’s Jane Kelsey have hailed Cancun as ‘empowering’ and a ‘victory’ for the poor countries. In fact, bi-lateral deals and regional trade blocs will speed up globalisation by cutting through the red tape and the compromises of the WTO. Globalisation will become more political and military as well as economic, as both the US and the Europeans tie ‘security issues’ to trade. It is likely that the US, Europe and the East Asian economies will form fully-fledged rival economic blocs that will confront each other in ‘contested’ zones like the Middle East and Central Asia. Cancun coincided with the beginning of an aggressive campaign by the US to force Japan and China to raise their ‘undervalued’ currencies and thereby make US products more attractive in their domestic markets and help to cut the US’s massive trade deficit.

Economic nationalists like Kelsey hope that the end of the WTO might lead to globalisation bypassing pockets of the semi-colonial world. Kelsey argues that semi-colonial countries and regions like South America should attempt to ‘delink’ themselves from imperialism and build up their own indigenous capitalisms.

The economic nationalists dream of a return to the 1950s and 60s, when nations like Brazil, Argentina, and to an extent New Zealand used high tariffs and state subsidies to create a sheltered domestic economy, and to fund indigenous industrial development. But the ‘independence’ of the 50s and 60s was illusory. Sheltered semi-colonial economies were underwritten by the post-war economic boom in the imperialist countries.

Kelsey forgets that New Zealand’s 1960s ‘national capitalism’ was funded by massive agricultural exports to Britain. When the long boom unraveled in the 70s and Britain joined the European Community, New Zealand’s economy went into a tailspin. Today New Zealand could only experience a new era of national capitalist development if one of the main imperialist powers simultaneously opened its doors to New Zealand agricultural exports and accepted the re-imposition of 60s-style tariffs on goods coming into New Zealand. In the era of globalization, when the economy is largely owned by global corporates, such an arrangement is unimaginable, unless you are Israel.

As a media pundit, Kelsey can afford to square the circle and ignore the absurdities of economic nationalism. Would-be economic nationalists in power do not have the same option. One of Kelsey’s idols is Brazilian President Lula de Silva, whose Trade Minister led the ‘G 22’ at Cancun. After the talks failed, Lula was cast by many on the left as a hero who stood up to the bullying West. In fact, Lula was desperate to strike a deal with the big boys, but found that they would not budge an inch from their demand for the further opening of poor economies to Western multinationals.

Why was Lula so keen for a deal at Cancun? Lula is an advocate of the sort of ‘national capitalism’ Kelsey advocates, a leader who constantly urges his restive working class and peasant followers to cooperate with ‘progressive’ Brazilian capitalists by avoiding strikes and land occupations. Lula wants workers and bosses to cooperate to build Brazilian capitalism, but he also wants access to imperialist economies for the exports Brazilian capitalists produce. At Cancun Lula found that the circle could not be squared. The imperialists were not interested in opening their markets to him, or even reigning in their own subsidy regimes. And the imperialists were not prepared to tolerate the meagre protections poor economies still enjoy, let alone consider the expansive new protections needed by economic nationalists! Jane Kelsey doesn’t know a victory from a defeat.

Clark and Cancun

The collapse of the talks at Cancun has created panic amongst New Zealand’s capitalist class and political elites, which had seen the World Trade Organisation as the best route to free trade with the United States. Now Clark has no option but to jump into Bush’s pocket.

In an editorial banged out a few hours after the talks were abandoned, the New Zealand Herald urged the Labour government to ‘do all it can’ to ‘improve ties’ with the United States.

A day later parliament debated Cancun, and opposition MPs rounded on Labour, accusing it of lacking a ‘Plan B’ to cover for the failure of its multilateralist strategy. ACT leader Richard Prebble took over where the Herald left off, demanding that the government immediately invite US nuke ships back to New Zealand ports. National leader Bill English played the same tune, accusing Helen Clark of ‘disloyalty’ over the war in Iraq.

When her turn came to speak Clark made a very vigorous defence of her government, pointing to Labour’s close cooperation with the US in the War of Terror. Clark recited her party’s record of collaboration with Bush’s wars, citing ‘the SAS in Afghanistan, frigates, Orions and Hercules in the Gulf, engineers in Iraq, and stabilisation teams in Bahrain’.

Clark’s speech was notable for several reasons. In the past she has often insisted that issues of trade and issues of ‘security’ are unrelated, and that Kiwi contributions to the War of Terror are unrelated to any quest for better trade terms with the US. After Cancun that rhetoric has gone out the window.

Clark also used her speech to link explicitly the New Zealand contribution to the occupation force in Iraq and the war against the Taleban and Al Qaeda. In the run-up to the invasion of Iraq, Clark followed the French and Germans by making a distinction between the invasion of Afghanistan, which she strongly supported, and a unilateral US invasion of Iraq, to which she preferred a Franco-German occupation under the banner of the United Nations.

Clark has tried to appease local anger at Bush’s war by making a distinction between a legitimate ‘War on Terror’ and a ‘regrettable’ invasion of Iraq. Clark has tried to walk a tightrope: on the one hand she has wanted to hose down anti-Bush anger felt by the Kiwi workers who voted for her, and on the other she has tried not to offend Bush and the US money barons on whose favour Kiwi capitalism ultimately depends. Cancun has pushed Clark off the tightrope, forcing her to side unequivocally with Bush and push the Pentagon’s discredited line that post-Saddam Iraq is the latest front in some sort of global war against the ‘enemies of freedom’.

Clark also followed Bush’s lead by denouncing the ‘G 22’ nations as the villains behind the Cancun collapse. In the leadup to the talks Clark and her Trade Minister Jim Sutton thought that they could piggyback on the G22’s criticism of the agriculture subsidies and protected markets of the US and the EU. But the G 22 emerged as a breakaway from the pro-free trade ‘Cairns Group’ because poor Cairns Group countries felt that they were being dominated by wealthier members like Australia and New Zealand.

Now, sensing blood, National and ACT MPs are pointing out that New Zealand is the only Cairns Group country not to either have joined G 22 or else to have a realistic chance of a bilateral trade deal with the US. New Zealand’s place ‘out in the cold’ reflects its peculiar economic status as a small advanced semi-colony of the US. New Zealand capitalism is too wealthy to share the immediate perspectives of G 22 countries like Brazil, but too small and too moribund to have a realistic chance of playing with big boys like Australia.

Clark’s commitment to multilateralism, in the UN as well as the WTO, made sense for a ruling class which is too weak to hold its own in the hurly burly of international unilateralism. But it is Clark’s multilateralism which now threatens New Zealand’s business and political elites with international isolation in the brave new twenty- first century world of unilateral wars and feuding trade blocs.

In her speech to parliament Clark defended the ban on nuke ships, and insisted that the WTO represented the best route to a free trade deal with the US. Anything else less would have been a humiliating climbdown. It is likely that behind the scenes Labour is reformulating its trade strategy. New moves will be made to try to win entry to trade negotiations between Australia and the US. Expect new military, diplomatic, and domestic policy gifts to the US, if not a lifting of the ban on nuke ships or an opening of the gates to GE food. Clark will also likely try to use the upcoming Apec meeting to push for a US-backed Asia Pacific trade bloc as a sort of cheap alternative to the global new trade order Clark saw in the WTO.

But why is Labour so obsessed with a free trade deal with the US? A section of New Zealand’s capitalist class would benefit from a deal, but these people are mostly hostile to Labour. A free trade deal would not benefit the Kiwi working class, which still represents Labour’s electoral base. Writing in the New Zealand Herald in the aftermath of Cancun, political analyst Guyon Espiner noted that open-slather GE imports, a deregulated drug market, the weakening of existing labour and environmental legislation, and nuke ship visits would all have to be part and parcel of a deal with the US. So how can Labour keep the workers onside?

The truth is that Labour has no option but to go for free trade deals. And its survival depends on selling it to its supporters. When Labour was forced to abandon its economic nationalism and dismantle the protected economy in the 1980s, it lost the historic base in NZ manufacturing that sustained the post-war compromise of capital and labour. Today Labour is unable to fund even the very modest set of reforms it promised its core supporters who put it into office in the 1999 and 2002 elections.

Student fees are rising, hospital queues are long, and Maori wait impatiently for the closing of the gaps. Like the ‘knowledge economy’ hulabaloo, the free trade deal with the US is a mirage conjured by Labour to try to disguise the fact that there is no economic base for even the minimal reform programme laid out in 1999 and 2002.

This leaves Clark in the same position as Tony Blair and all the other right wing social democrats of trying to justify their economic retreat to neo-liberalism by the benefits of globalization. Clark and co need a free trade deal as the economic miracle that will dramatically boost the government’s tax base and make social democracy possible again. At the beginning of the twenty first century, social democratic ideology looks a lot like cargo cultism. 
From Class Struggle, 52, September-October 2003

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