IUF-A/P Globalisation Seminar II: Globalisation and the Future of Agri-Food Workers
November 16-18, 1998, Ahmedabad, India
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1. Introduction

Only three years after its creation, the World Trade
Organisation (WTO) has had a dramatic and
far-reaching impact on our lives. Rising
unemployment and declining living standards brought
about by the rush towards `zero' tariffs and subsidies,
destructive competition inflicted by Transnational
Corporations (TNCs) under `free market access', the
reversal or revision of domestic laws and regulations
to bring them into line with new international
standards, and the undemocratic rulings on trade
disputes involving everything from bananas to
telephone directories, is proof enough that the WTO
is capable of turning all our fears of GATT into a
reality.

This paper will focus on four aspects of the WTO's
impact on the world food system and the role of
agri-food Transnational Corporations (TNCs):

   (I) The reality of the WTO's agenda for `free
   trade', `free competition' and a `level
   playing-field' in agriculture is based on greater
   inequality, the monopolisation and centralisation
   of control of the agri-food industry by TNCs, and
   massive dumping of agri-food exports by the
   major industrialised countries.

   (ii) The harmonisation of national and
   sub-national laws and regulations to conform
   with the new global standards devised by private
   industry and imposed by the WTO. The result is
   the systematic destruction of efforts to protect
   the collective rights, health, and livelihood of
   working people and our capacity to exercise
   democratic controls over capital.

   (iii) Like the proposed Multilateral Agreement on
   Investment (MAI) in the OECD, the plan to
   include a Multilateral Investment Agreement
   (MIA) in the WTO will create a global charter for
   the rights of TNCs and further consolidate their
   power.

   (iv) Rather than signaling a decline in the power
   of the state, the WTO agenda requires a more
   powerful state to act against attempts by mass
   movements and organised labour to impose
   democratic controls on capital. Ultimately the
   aim of the neoliberal globalisation project is to
   lock the state into the networks of power of
   TNCs.

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2. `Leveling' Agriculture by 2000

Free marketeers claim that the liberalisation of
agricultural trade under the WTO Agreement on
Agriculture seeks to reduce tariffs and other trade
barriers by the year 2000, creating a `level
playing-field' and opening up markets to `free and fair
competition.'

The reality is that the WTO is fostering greater
inequality and increasing the monopolisation and
centralisation of power in the hands of a few TNCs
which dominate the agri-food industry. While the
developing countries in the South are forced to
abolish tariffs and other agricultural trade barriers by
the year 2000, the major industrialised countries such
as the US, the EU and Japan will maintain
significantly higher tariff levels even after these
reductions.

The US, EU and Japan maintain high tariff levels on a
wide range of agri-foods. Here are some examples:

     US
           sugar                       244%
           peanuts                    168%
           milk                        83 %

     EU
           beef                         388%
           wheat                       352%
           barley                       361%

     Japan
           wheat                       388%
           wheat products            352%
           barley products            361%

So the 36 per cent tariff reductions required by the
WTO will still leave producers in these countries with
high tariffs.1

In contrast, countries like India must reduce import
tariffs, and a range of non-tariff import restrictions
which were not converted to equivalent tariffs during
GATT negotiations must be eliminated completely,
leaving totally free access to agricultural imports by
2000.2

Second, competition is far from `free and fair.' The
WTO allows certain kinds of subsidies to continue,
particularly export subsidies through export credits
and direct income provision to farmers. These
subsidies are common in the major industrialised
countries, but developing countries tend to rely on
less expensive measures such as tariffs. WTO
obligations require the abolition of tariffs, but permit
export subsidies like the US government's export
credit scheme and direct income transfers under its
Export Enhancement Program (EEP). For example,
through the WTO the US recently secured the
opening up of the poultry, pork and beef market in
Taiwan, leading to protests by thousands of farmers
in Taiwan, who also face the opening up of the rice
and meat market under WTO tariff reductions. A
similar victory for `free trade' under the WTO was
achieved in South Korea. Yet US poultry, pork and
beef exports to Taiwan and Korea receive more than
US$1 billion in export subsidies under the EEP.

The continued use of export subsidies and other
forms of domestic support for big agribusiness in the
US and the EU allows massive dumping of
underpriced agri-food products in developing
countries. At the same time access to markets in the
South is secured through the Structural Adjustment
Programs (SAPs) imposed by the IMF and World
Bank which have forced small farmers and peasants
away from food self-sufficiency and sustainable
agriculture.

More than anything else this reveals the logic of
agricultural restructuring under the WTO. The
systematic destruction of local capacity for food
self-sufficiency and sustainable agriculture through
the consolidation of the power of agri-food TNCs. The
conversion of land use to non-traditional agri-exports
creates a paradoxical situation of increased
dependency on TNCs for access to markets and
distribution, and inputs - including seed - while
importing heavily subsidised agricultural products that
are the same as the traditional crops originally
displaced.

For example, in the Philippines the government's
promotion of cash crop exports to replace rice and
corn involved the conversion of 2.5 million hectares of
land used to grow rice and 2.5 million hectares of
corn to livestock production. This was linked to the US
Department of Agriculture's support for Cargill's plan
to become a major exporter of corn to the Philippines,
making the Philippines a "regular corn importer" by
the year 2000.3

(Cargill's former senior vice president drafted the US
proposal on agriculture in the Uruguay Round of
GATT which set in motion these policies.) The export
subsidies paid to a US corn farmer was 100 times the
average income of a corn farmer in Mindanao. It is
because of this heavy subsidisation that the OECD
predicted that "US corn exports would undercut
Philippines corn prices by 20 per cent by the year
2000."4

Having converted to livestock production, this sector
is now being `opened up.' Heavily subsidised US pork
and poultry exporters have gained greater access to
the Philippines, reducing the share of Filipino
producers of pork from 82 per dent to 45 per cent of
the market and poultry from 94 per cent to 49 per
cent.5

The recent WTO ruling in favour of the US against
import controls on pork and poultry in the Philippines
will open this market up even further.

Of course this renders the logic of agricultural
restructuring proposed by governments meaningless.
It is not a transition from traditional to industrialised
agriculture and cash crops. Rather, it is a series of
unpredictable, dramatic and often contradictory
transformations forced from above, determined by the
strategies of TNCs involved in destructive
competition. Ultimately, only the logic of capitalist
agribusiness profits will prevail, and instability and
uncertainty for farmers and agri-food workers will
continue to rise.

In addition, the dependency on non-traditional
agro-exports for small farmers' and agricultural
workers' livelihood traps them in a vicious cycle of
needing to gain access to overseas markets - which
requires further compliance with multilateral trade and
investment agreements by national governments and
even greater dependency of TNCs which have
monopolised control over inputs, markets and
increasing control over seed.

The relationship between this vicious cycle and the
WTO regime is crucial. The WTO relies on the threat
of trade sanctions, and these sanctions are only
effective if the national and sub-national economies of
countries are dependent on exports. Democratic
systems of food self-sufficiency and sustainable
agriculture would prevent the threat of sanctions from
having their full effect, and would thereby weaken the
ability of the WTO to exercise leverage over national
governments to allow unrestrained exploitation by
TNCs.

Finally, having described the extent to which the WTO
benefits US interests, we should not be misled into
believing that the growing US domination of the world
food system is based on the abundance of food in
that country. There is of course tremendous waste of
food in the US. At the same time more than 30 million
people in the US face severe hunger, four million of
whom are in the state of California which is a major
agri-food exporter. In addition, subsidised exports
have not benefitted the vast majority of farmers. The
increasing concentration and centralisation of
agricultural production has seen the rise of factory
farms and the decline of family farms. Over 50 per
cent production comes from only 2 per cent of farms,
while 9 per cent of production comes from 73 per
cent of farms.6

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3. The Rules of the Game

Much of the power of the WTO lies in its threat of
sanctions against those countries failing to abide by
its "rules and disciplines", and is expressed through
the WTO's dispute settlement mechanism. Here too
there are crucial inequalities:

(I) The tribunals appointed for WTO trade dispute
settlements are compromised of `experts' who have
already had previous experience working on the GATT
trade agreements and who support trade
liberalisation. Proposed tribunal members with
expertise in health and environmental protection,
workers' health and safety, labour standards, and so
on, are excluded if they do not support trade
liberalisation.

(ii) The WTO dispute settlement system is dominated
by the governments of the major industrialised
countries, acting on behalf of private business in their
own countries. Out of 113 complaints to the WTO so
far, developed countries account for 82 of the
complaints.

The ruling against the EU's "trade and aid" banana
import scheme for Caribbean exporters by the WTO
in September 1997, reveals the extent of TNC
domination. The complaint against the EU was filed
by Ecuador, Guatemala, Honduras, Mexico and the
United States, even though the United States is not
an exporter of bananas. The US government filed the
case on behalf of the US-based TNC, Chiquita, which
dominates the Latin American banana industry.
Chiquita, in continuing to exercise its monopolistic
power and control, claimed that this was a victory for
`free trade.'7

Riding high on its WTO victories against "trade
barriers" in Japan and South Korea (health and safety
inspection of agricultural imports and the shelf-life of
agricultural products), Hungary (export subsidy
scheme), the Philippines (pork and poultry import
controls), the EU (banana imports), and many others,
the US Trade Representative, Charlene Barshefsky,
testified to the Senate Committee on Agriculture,
Nutrition and Forestry, in May that: "We will continue
to use the WTO consultation and dispute settlement
procedures, as well as our domestic laws, to remove
these barriers."8

Barshefsky asserted that in the mid-term review of
the WTO Agreement on Agriculture next year, the US
government will demand the removal of import
restrictions on genetically engineered foods, the
further removal of health and safety inspections of
food imports, the abolition of State Trading
Enterprises (including wheat and grain boards), and
will ensure that US companies benefit the most from
China's planned entry into the WTO. While opposition
from other countries on all of these issues is
expected, the US government's approach to the WTO
is clear: "... the solution is to be very, very aggressive
in using all of the tools at our disposal to crack open
what is clearly a world of opportunity."9

(iii) The reference to "domestic laws" reflects another
serious imbalance in the WTO. Despite the fact that
under the GATT/WTO agreements unilateral trade
sanctions are no longer permitted, the US
government still uses Article 301 and Special 301 of
its Trade Act to impose unilateral trade sanctions on
other countries. What the US government cannot get
through the WTO it will get through direct sanctions
using its own laws, despite the fact that this violates
the multilateral agreements under GATT/WTO.

There are no exceptions when it comes to those
countries with less bargaining power in the WTO. For
example, the Indian government recently requested
that import restrictions be phased out gradually due to
Balance of Payments (BoP) problems. There is a
provision in GATT that enables a country to impose
quota restrictions on imports if it faces BoP problems
to prevent an excessive outflow of foreign exchange.
But industrialised countries have effectively withdrawn
this provision by preventing its application. When a
number of developing countries represented in the
WTO BoP Committee supported the Indian
government's proposal, the IMF intervened to support
the industrialized countries' position. The IMF claimed
that since India has US$22.5 billion in foreign
currency reserves, it does not have a BoP problem.
But these `reserves' are calculated to include
short-term capital flows and portfolio investments
which do not reflect the real situation of India's BoP
crisis.10

Nonetheless the WTO ruled against India's request.

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4. Harmonised Destruction

Under the WTO, national and sub-national laws and
regulations must be "harmonised" with international
standards. Although these international standards are
supposed to be a basis for local laws and regulations,
any local standards which exceed these international
standards are labeled unfair trade barriers. Since the
definition of new international standards under the
WTO is determined by private industry, there is an
inevitable downward harmonisation.

This harmonised destruction is most evident in the
implementation of the WTO Agreement on Sanitary
and Phytosanitary Standards (SPS) and the
Agreement on Trade-Related Intellectual Property
Rights (TRIPs). The SPS Agreement concerns
harmonisation of health and hygiene inspection of
imports and TRIPs deals with the harmonisation of
copyright and related rights, industrial designs,
trademarks, geographical indications, patents, plant
varieties protection, and integrated circuits.

It is important to note that the inclusion of these two
issues under the WTO means that they have been
identified as potential trade barriers, and
`harmonisation' is about removing these barriers. The
removal of these barriers means an increase in the
scope and power of TNCs. It is for this reason that
TNCs are directly involved both in WTO negotiations
on harmonised standards, and in defining these
standards, especially through Codex and the
International Standardization Organisation (ISO).

The international standards on which the WTO
enforces the SPS Agreement is based on the
standards devised by Codex. Codex is an international
standard-setting body established by the World Health
Organisation (WHO) in 1962 and is made up of
government representatives and official advisors from
private business. US-based agrifood TNCs participate
in Codex meetings and determine the position taken
by governments. As a result, Codex standards are
extremely lax, allowing the use of hazardous
chemicals which are otherwise banned in many
countries. For example, Codex permits DDT residues
in milk, meat and grains and permits the use of
several hazardous pesticides which are banned by
many governments and rated as highly dangerous by
the WHO. In the near future new international
(sub)standards on agrochemicals in the WTO will be
based on Codex standards.11

Monsanto is one of the TNCs which has a powerful
influence in Codex. The US won its case against the
EU's ban on imports of beef raised using growth
hormones despite extensive scientific evidence to
show the effects of growth hormone residues in beef
on human health. The reason is that the WTO
decision was based on Codex, and the growth
hormone concerned is a product of Monsanto.

A similar ruling was made by the WTO on October
27, when it concluded that Japan's measures for
health inspection and quarantine of imported
agricultural products (particularly fruit) violate the SPS
Agreement. Only six months prior to this, US Trade
Representative Barshefsky testified to the Senate
Committee on Agriculture, Nutrition and Forestry, that
US will continue to attack food health and safety
inspections as trade barriers, arguing that: "We must
guard against the increasing use of SPS barriers as
the `trade barrier of choice'."

The importance of the SPS Agreement in supporting
the expansion of US agribusiness into overseas
markets is clear:

   "Our ability to invoke an agreed set of international
   principles and rules on protecting plant, animal,
   and human health - which we did not have three
   years ago - is a key tool for influencing the
   decisions of many of our trading partners on these
   issues. Armed with this Agreement, the
   Administration has made progress in removing
   unjustified trade barriers and opening the door to
   increased agricultural and food exports."12

Legitimate restrictions and controls to protect public
health, the environment, and workers' health and
safety are irrelevant as long as the goal is the
maximisation of corporate profit. This corporate power
is further consolidated by the privatisation of the
definition, monitoring and enforcement of international
social, environmental, health and labour standards.

This privatisation is clearly demonstrated by the
WTO's use of the standards developed by ISO, a
private industry organisation with members in 110
countries. The ISO is even more unaccountable than
Codex since it is purely a business association. In
addition, the monitoring and enforcement of ISO
standards is undertaken by private companies. In
1987, the ISO produced ISO 9000 which has already
been used extensively for union-busting in many
countries around the world. (See attached brief.)
More recently it developed ISO 14000 on
environmental management in the workplace which
will replace government occupational safety and
health regulations and governmental inspection
agencies in a number of countries.

By shifting the definition, monitoring and enforcement
of standards from the government to the private
sector, these standards are effectively privatised. A
similar trend is apparent with workers' rights, with the
development of a private sector standard on `Social
Accountability' called SA 8000.

The other major area in which the harmonised
destruction of the collective rights and livelihood of
working people is evident is in the international
legalisation of biopiracy - the theft of nature and
traditional knowledge through patent rights under the
WTO TRIPs Agreement. Intellectual property rights
under WTO are like land use rights under the World
Bank. Rights are established in a legal system so that
they can be legally - and more efficiently -
appropriated by capitalists.

The patent on Indian basmati rice by the US
company, Rice Tec, gives us a clear sign of what the
future holds under TRIPs. Rice Tec now holds 20
claims under the patent (11 on plant, five on grain,
three on breeding methods and one on the seed). It
has already started selling `Texmati' and `Kasmati'
rice as authentic basmati.13

But replacing exports from India is only the first step.
The next step is to seek financial compensation from
Indian farmers who use the name basmati rice, then
to monopolise control of seed and through the use of
biotechnology ensure that seeds cannot be
reproduced through harvest but must be bought from
Rice Tec. Having stolen basmati rice from farmers
and their communities in India, Rice Tec is now trying
to steal jasmine rice in Thailand.

In December 1997, a mass movement of farmers,
fisherfolk, indigenous peoples, and community
organisations protested against the destruction of
community systems by "the rampant pirating and
monopolisation of biodiversity and related knowledge
through the extension of intellectual property rights to
life forms." They announced the `Thammasat
Resolution', which asserts the need to protect
community/collective rights and the exclude of
biodiversity-related knowledge from any intellectual
property rights system, including TRIPs in the
WTO.14

Although TRIPs under the WTO is supposed to
`protect' rights, it cannot be used to stop this biopiracy
because under the WTO regime farmers and their
communities are not legal entities and community
rights - including rights over traditional knowledge are
not recognised. Only governments and corporations
can make claims on patent rights. However, if the
Thai government does try to patent jasmine rice, then
the US government will take Thailand to the WTO for
imposing a trade barrier. Already, the bill drafted by
the Thai government to protect the knowledge of
traditional healers and medicinal resources from
patent by foreign pharmaceutical companies has been
stalled by the US threat of trade sanctions and the
claim that it violates the "national treatment"
provisions of the WTO.15

In addition, the US government has amended its own
trade laws to impose unilateral trade sanctions on any
country where failure to adhere to TRIPs conflicts
with the interests of US companies, even if the WTO
rules that these countries are abiding by the TRIPs
Agreement.

Just like structural adjustment under the IMF,
harmonisation under the WTO has targeted food
self-sufficiency/food security and food safety as
barriers to capitalist accumulation. We should be
clear that the WTO is fundamentally opposed to a
sustainable agriculture which guarantees food
security, fairer redistribution, and ecological
protection, precisely because such practices restrict
the profit-maximisation drive and expansion of
agri-food TNCs. Given this situation it makes no
sense to demand the addition of food security clauses
or social clauses in the multilateral agreements under
the WTO. If food security, environmental or social
clauses were to be included in these agreements,
then it could only mean that the definition of what this
means has been redefined and commercialised.
Moreover, this does not resolve the real problem, that
it is authoritarian and democratic governments alike
which are adhering to this and redirecting state power
more comprehensively in favour of TNCs and against
working people.

As a report by Global Trade Watch concludes:
"...[H]armonisation moves decision-making away from
accessible, accountable state and national
governance fora to international bodies that are
largely inaccessible to citizens and generally operate
without accountability to those who must live with
their decisions."16

In this sense harmonisation not only brings national
laws and regulations into line with multilateral trade
rules, it also detaches them from democratic
pressures on national governments, locking them into
a set of obligations and rules which are constantly
redefining standards in accordance with the interests
of private industry, especially TNCs.

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5. The WTO and the `Rights' of Transnational
Capital

Although mass protest movements around the world
have succeeded in stalling the proposed Multilateral
Agreement on Investment (MAI) in the OECD, the
same agreement, called the Multilateral Investment
Agreement (MIA), is likely to be adopted in the WTO.

In fact, the EU proposal for the MAI in the OECD was
originally based on a proposal to have an MIA in the
WTO, a move backed by the US, Japan and Canada.
The plan was to push it through the OECD first, then
install it in the WTO. The reason was that they feared
that an MAI in the WTO would be weaker because of
bargaining with other WTO members and the possible
trade-offs involved.17

But now they have returned to the original plan. In
1996 a WTO working group was set up to begin a
"study process" of including investment rights in the
WTO. As we have seen in the past, the move from a
study process to new agreements is always rapid,
especially if the major industrialised powers want it.
The Japanese government has argued strongly for
the MIA, claiming that "investment-friendly" policies
are far more important than "development-friendly"
policies. As such the protection of investor rights and
guaranteed "national treatment" must be included in
the mandate of the WTO and related agencies.

A closed process of bargaining and concessions is
likely to see the core of the MIA in place, with come
concessions around the edges, but the main objective
will be achieved: "national treatment" for foreign
companies and treatment "no less favorable than to
domestic investors" will be guaranteed.18

The MIA will also prevent governments from giving
preference to domestic investors when privatising
industry or services.19

Concurrently, the IMF and World Bank are stepping
up privatisation programs, especially in countries like
China.

Like the MAI, the MIA will constitute an international
charter for the rights and freedoms of TNCs.20

The added significance of an MIA in the WTO is that
it is linked to the trade agreements under the GATT,
and as such it is enforceable through the threat of
trade sanctions. This means that developing countries
would have to give up their right to regulate
transnational corporations (TNCs) under the threat of
sanctions being placed on their exports.

The proposed MIA will include all kinds of
investments, including portfolio investments. So the
rights and freedoms of mutual funds, hedge funds,
pension funds, banks, securities companies and
insurance companies would be protected from
government regulation despite the fact it is these
same companies which brought about the Asian
economic crisis.21

A new right of TNCs has been institutionalised which
will have a far-reaching impact: the right of private
companies to sue governments of other countries for
passing laws which affect actual or potential business
activities. Under NAFTA corporations have `private
legal standing' to sue governments directly for
damages under `investor-to-state' dispute resolution
mechanisms. Damages are based on the claimed
"expropriation" of assets or policies or laws which are
"tantamount to expropriation." As such companies can
seek compensation for both actual and future
earnings losses, as well as for the cost incurred in
repairing the company's public image as a result of
the case.

In 1997 the US chemicals giant, Ethyl Corp, used this
NAFTA provision to sue the Canadian government for
a ban imposed on MMT, a gasoline additive produced
by Ethyl which is toxic and hazardous to public health.
Ethyl claimed that the ban "expropriated" its assets in
Canada and that "legislative debate itself constituted
an expropriation of its assets because public criticism
of MMT damaged the company's reputation."22

Ethyl sued the Canadian government for US$250
million. The lawsuit was supported by US trade
officials who saw this as a positive step towards
forcing the compliance of national laws with
international standards (harmonisation).23

A year later, in June 1998, the Canadian government
reversed environmental legislation banning MMT, and
paid Ethyl Corp US$13 million to settle the case.24

Related to this is attack on the right to public debate,
more than 13 states in the US have passed legislation
criminalising public criticism of any "perishable food
product or commodity" as unsafe for human
consumption. In particular, criticism of genetically
engineered foods as unsafe and potentially hazardous
to human health is illegal.25

There is a danger that this US legislation - like other
US laws protecting private business interests - will be
globalised under the OECD's MAI and the WTO's
MIA. If this happens, current public campaigning on
the issue of biohazards in the agro-food industry and
the genetic engineering crisis created by global
agri-business will be criminalised.

What the Ethyl/NAFTA case shows is that
governments will no longer be able to draft and
implement legislation which protects environmental,
health and social standards without risk of
investor-to-state complaints. Several TNCs can file
individual complaints over the same issue, multiplying
the pressure - and potential payment in damages - on
the government. Investor-state complaints legitimate
another weapon for TNCs, threatening that any public
debate, including parliamentary debates over the
products or activities of a company, will be illegal and
subject to a lawsuit by the company concerned.
Ultimately, private corporations will have the right to
assert that their profits have a legitimate international
legal status over and above any public concerns.

Provisions for `investor-to-state' complaints and the
private legal standing of corporations under NAFTA
have already been included in the MAI proposed in
the OECD, and it is very likely that under the WTO's
MIA there will be a similar set of corporate rights.

In just three years the WTO has come to symbolise
the instability, uncertainty, inequality, imbalances and
destructiveness of the globalisation process, as it
seeks to secure the monopolisation and centralisation
of control under TNCs and the commercialisation of
all social life. To achieve these ends the WTO
`locks-in' the state through the harmonisation of
national legislation with the new international trade
and investment rules. With an MIA in the WTO,
states will be further locked in to the regime of rights
protection for transnational capital.

6. The WTO Against Democracy: `Locking In' the
State

There are three important dimensions of this process
of locking in the state:

(I) What is presented as unanimous agreement on
the rationality and common sense of free trade is in
fact based on the threat of sanctions by the WTO or
restrictions on access to multilateral loans and
`development' aid by the World Bank and IMF.
Similarly, what appear as voluntary and openly
negotiated agreements are in fact bargained through
a process of threats, coercion, concessions and
business deals that are the exclusive domain of
technocrats and private business.

The multilateral agreements under the WTO are
bargained through secret dealings and trade-offs, and
are subject to struggles between local and global
capitalists, and conflict between the regional trading
blocs centred around the EU, US and Japan. This is
completely disarticulated from democratic processes
which express the interests of the mass of the
working people who will be most affected by its
outcomes. However, it is not merely the absence of
democracy in the WTO that is the problem, but its
hostility to democracy.

(ii)The state in developing countries is not a victim of
this process, and does not become powerless as a
result. There is a contradictory process of ensuring
that the state is "effective" in repressing social and
labour movements and all forms of opposition from
below, while restricting state power so that it cannot
act against the interests of transnational capital. As
such, "entrenching property and mobility rights for
corporations undermines labour and other groups, not
by weakening the state, but by diminishing the
political space from which to impose democratic
priorities on capital."26

Precisely because TNCs are employing flexible
strategies of indirect control rather than ownership (to
reduce direct exposure to political risk and social
unrest), they require more state intervention to
regulate these relationships and support flexibility. As
such `locking-in' the state is about redefining state
power and embedding it in the new networks of power
of transnational capital. Furthermore, the state is
transformed into a corporate entity itself, an actor in
the global economy that can be subordinated to
corporate regulation.

(iii) The process of `locking-in' states into the
neoliberal globalisation project overlaps between
different agencies and is designed to place external
pressure on different fronts, creating vulnerability
where it does not exist, and providing incentives which
are soon diminished by other measures.

It is important to recognise that this is not a smoothly
coordinated strategy but involves contradictory
policies and practices which generate even further
uncertainty. But any crisis that arises out of
contradictory policy recommendations and demands
from different agencies serves the overall project of
neoliberalism. `Crises' more easily allow neoliberal
solutions to be imposed immediately as `emergency'
measures - with immense social costs. The recent
experience of the response of the World Bank and the
IMF to Indonesia's financial crisis (now a depression)
clearly demonstrates this.

Proponents of free trade present the WTO as both a
necessary and inevitable outcome of globalisation.
However we should recall that the WTO is as much a
product of the neoliberal globalisation project as it is a
powerful mechanism for the enforcement of this
project. It is not inevitable, and it is certainly not
natural. Moreover, we have seen that the WTO is
fundamentally hostile towards democracy.

If we accept this reality, then the widespread
grassroots pressure on national governments to
withdraw from the WTO, and the mass movements
worldwide calling for the abolition of the WTO,
present us with the basis for a long-term strategy for
opposing the harmonised destruction of the world
food system. As part of this strategy we must be clear
that the defence of the collective rights and interests
of agri-food workers and small farmers and their
communities can only be achieved through organising
and through democracy, not through attempts to work
with or reform agencies like the WTO. For it is
democracy against the global capitalist system and
TNCs that will eventually bring an end to neoliberal
projects like the WTO and restore our egalitarian
goals.

---

Notes

1 . Bhagirath Lal Das, "The Diktats in the WTO",
Third World Economics, 170, October 1-15 1997.
2 . Bhagirath Lal Das, "The Diktats in the WTO",
Third World Economics, 170, October 1-15 1997.
3 . Allen D. Mariano, "Stifling agriculture's progress",
7 (45), Farm Views and News, 1994, p.2; Kevin
Watkins, "Of myths and perils: Agricultural
liberalisation in the Philippines", FOCUS-on-APEC, 4,
May 1996; Kevin Watkins, "Free trade and farm
fallacies: From the Uruguay Round to the World Food
Summit," The Ecologist, 26, 1996, pp.244-55.
4 . Philip McMichael, "Global food politics", Monthly
Review (Special Issue: Hungry for Profit: Agriculture,
Food, and Ecology), 50 (3), July-August 1998, p.97.
5 . WTO News, 1 (3), March 3, 1998, p.1.
6 . Philip McMichael, "Global food politics", Monthly
Review (Special Issue: Hungry for Profit: Agriculture,
Food, and Ecology), 50 (3), July-August 1998, p.103.
7 . "World Trade Organisation spells potential ruin for
thousands of small farmers", One World News
Service, September 11, 1997.
8 . Testimony of Ambassador Charlene Barshefsky
US Trade Representative Senate Committee on
Agriculture, Nutrition and Forestry, Washington, May
7 1998.
9 . Testimony of Ambassador Charlene Barshefsky
US Trade Representative Senate Committee on
Agriculture, Nutrition and Forestry, Washington, May
7 1998.
10 . Bhagirath Lal Das, "The Diktats in the WTO",
Third World Economics, 170, October 1-15 1997.
11 .Lori M.Wallach, Director, Public Citizen's Global
Trade Watch, "International `Harmonization' of Social,
Economic and Environmental Standards", n.d.,
http://www.harmonizationalert.org/harmbk.htm
12 . Testimony of Ambassador Charlene Barshefsky
US Trade Representative Senate Committee on
Agriculture, Nutrition and Forestry, Washington, May
7 1998.
13 . Down to Earth, 7 (5), July 31 1998.
14 . The Thammasat Resolution and Thammasat
Action Plan, Thailand, December 1-6, 1997.
15 . Chakravarthi Raghavan, "US tries to block Thai
moves on traditional knowledge", Third World
Resurgence, 84, August 1997.
16 . Lori M.Wallach, Director, Public Citizen's Global
Trade Watch, "International `Harmonization' of Social,
Economic and Environmental Standards", n.d.,
http://www.harmonizationalert.org/harmbk.htm
17 . Jane Kelsey, "A charter of rights and freedoms
for Transnational Corporations", The Big Picture, 10,
May 1997, p.1.
18 . Chakravarthi Raghavan, "IC's pushing for
investment negotiations at WTO", Third World
Economics, 189, 16-31 July 1998.
19 . Jane Kelsey, "A charter of rights and freedoms
for Transnational Corporations", The Big Picture, 10,
May 1997, p.1.
20 . Jane Kelsey, "A charter of rights and freedoms
for Transnational Corporations", The Big Picture, 10,
May 1997, p.1.
21 . Chakravarthi Raghavan, "IC's pushing for
investment negotiations at WTO", Third World
Economics, 189, 16-31 July 1998.
22 . "Ethyl Corp sues Canada under NAFTA,
illustrating what could happen under OECD-MAI
rules", Third World Economics, 163, June 16-30,
1997.
23 . "Ethyl Corp sues Canada under NAFTA,
illustrating what could happen under OECD-MAI
rules", Third World Economics, 163, June 16-30,
1997.
24 . "Canada withdraws environmental law after
NAFTA challenge", Friends of the Earth News
Release, June 20, 1998.
25 . Ronald K.L. Collins, "Veggie Libel: Agribusiness
seeks to stifle speech", Multinational Monitor, May
1998, pp.12-14.
26 . Chris Roberts and Gregory Albo, "The World
Economy and the MAI", in Bruce Campbell and
Andrew Jackson (eds) Dismantling Democracy:
Critical Essays on the MAI. Ottawa: Canadian Centre
for Policy Alternatives/Lorimer, 1998 (forthcoming).