A WORLD TO WIN    #26   (2000)


For 50 years, the multilateral institutions that have monitored and regulated the functioning of the post-World War II international capitalist economy worked discreetly in the shadows. The International Monetary Fund (IMF), the World Bank and the recently created World Trade Organisation (WTO) met in comfort and quiet, yet their decisions regularly sent shock waves around the world. Even a slight movement in interest rates or exchange rates could set in motion gigantic forces that jolted whole economies and shattered the lives of millions. Yet all this took place out of the sight of the people whose lives were so dramatically affected.

In the last year this situation has changed. The increasingly rapacious attacks of the imperialist countries on the economies of the oppressed nations and peoples, along with serious crises, such as in Russia and East Asia, have awakened a cry of resistance, including from a new generation of youth in the imperialist citadels themselves. Mass protests have rocked recent meetings of the lords of finance capital and cast a spotlight on their criminal deeds.

The counter-attack has been rapid and loud. Globalisation is good for you, lectures US President Bill Clinton. However bitter-tasting it may be, it is, as he proclaimed in his 2000 "State of the Union" address, "the central reality of our time"; taking the medicine of free trade and the free market is said to be the only way to growth and prosperity.

In fact, whether globalisation and the promotion of increased trade is "good for you" depends very much on who "you" are; while it has been excellent for a few wealthy owners, for the masses everywhere, particularly in the poorest countries, the last decade of imperialist globalisation has been one long nightmare. This article will examine the argument that the promotion of "free trade" brings growth and prosperity, in particular the idea that the only way the oppressed nations can achieve growth is by hooking on to the "locomotive" of the imperialist economies, and it will look at the role of the World Trade Organisation in this process.


At the heart of the conventional argument that trade liberalisation will give rise to widespread benefits and promote economic growth in the oppressed countries is the idea of developing economic specialisation, based on the concept that each country should do more of what it does best (called "comparative advantage" in bourgeois economic theory). The different countries will then trade what they each produce most efficiently, unrestricted by "unfair" tariffs and other protectionist practices, to the general benefit of all, with the most efficient sectors in each country in turn stimulating growth in other sectors.

The global reality concealed behind these egalitarian phrases is that a handful of multinational corporations in the imperialist countries own and control the vast majority of the world's productive forces and trade, whilst the oppressed nations serve essentially as sources of cheap labour and raw materials. In this situation, "doing more of what each does best" means that the oppressed nations should consolidate even further their subordinate role in the global imperialist division of labour.
Consider the impact for the oppressed nations of WTO-style trade liberalisation policies in the area of agriculture. These policies are aimed at strengthening integration into the global market place, reducing tariffs on agricultural products, encouraging specialisation and production for export and easing restrictions on massive investment flows. The result is the increased penetration of global markets by Western agribusiness corporations, greater trade in food products and, most especially, the ruin of so-called inefficient production units, which basically means small and medium-sized farmers, particularly those growing food for local markets. Some farmers shift to producing for export, others are driven off their farms; every week around the world one million people migrate to the cities. Removing trade barriers to open the floodgates to cheap US grain, for instance, has a particularly ruinous effect on the oppressed countries, where a much greater percentage of the labour force is dependent on agriculture. (While spending on food in the US accounts for only 0.5 per cent of its Gross Domestic Product (GDP), the corresponding figure in Tanzania is 18 per cent, amplifying the effect of rapid changes in the foodstuffs market.)1

Take the case of a single country, the Ivory Coast, long hailed as a development model for Africa. Based on capitalist trade logic, agriculture there shifted from local food production to export-oriented cocoa production, until the country came to grow almost one-half of the world's total crop. When the government price stabilisation programme was eliminated, as part of the global process of reducing trade barriers, this, combined with the general trend towards lower raw material prices, led to a 40 per cent fall in the prices the country's small farmers received. Many went under. For the big multinationals, however, this was a welcomed opportunity. Led by the US giant Cargill, they launched a storm of mergers and acquisitions. When the dust settled, the number of big cocoa companies had fallen from 50 to 10, and now it is the companies that set the prices, not the government's stabilisation programme.2

This is typical of the trade-led economic development model. First, removing trade barriers and encouraging specialisation inexorably leads to the concentration of production in ever larger units, internally and internationally; in other words, trade fuels the growth of the big global monopoly corporations. The brisker pace of world trade has in fact been accompanied by an unprecedented wave of corporate mergers and acquisitions in sector after sector.

Indeed, "free trade" is itself a hollow watchword today - this is the era of imperialism, where big monopolies bestride the globe and dominate every major sphere of economic life. The 500 top multinational corporations, most of them based in the US, control 70 per cent of all cross-border trade, and 60 per cent of trade in agricultural products is controlled by US agribusiness firms.3 In practice, expanding trade strengthens the ability of those able to take advantage of world-wide production and marketing networks by stripping away the mechanisms different countries have set up to protect the smaller home-grown industries and agriculture. Bringing small enterprises in particular in the Third World into more direct unfettered rivalry with the Western-based giants is a guarantee that the larger firms will gobble up the smaller ones and extend their penetration and domination of the oppressed countries.

Second, whether a country produces mainly raw materials, like the Ivory Coast, or has a few export-oriented enclaves of industrial production, like parts of East Asia, the dynamics of trade-led development generally strengthen the dependence of the oppressed countries on the global market-place, the imperialist countries and the big multinationals. The growth of the multinationals goes hand in hand with the deepening dependence of the oppressed countries. These countries become increasingly vulnerable to sudden changes in the prices of one or a few products or even to calculated imperialist blackmail, should the imperialist powers decide to use their domination to bring a recalcitrant comprador regime in the Third World to heel. This is exactly what they have done to the Saddam Hussein regime in Iraq, by closing off the Iraqi oil tap.

This situation is especially alarming with regard to food security. When, as in the Ivory Coast, substantial numbers of farmers are ruined or shift production to export-oriented cash crops, the country becomes more dependent on food imports. Unlike the imperialist countries, however, where the more highly developed and balanced character of the economy means that fluctuations in the global market-place can be absorbed more easily, in these countries changes in the global market can spell disaster and make it difficult, if not impossible, to pay the food bill. The result is increasing debt and poverty, and the looming spectre of famine.4


Proponents of free trade argue that, however wrenching it may be, this kind of development nonetheless puts the country on the path to modernisation, that these modern enclaves will pull ahead other sectors in the economy. But there is a qualitative difference in the impact this kind of development has in the oppressed countries compared with what has taken place in the imperialist countries. In the semi-feudal and backward conditions that generally characterise the former countries, the development of larger, more modern agricultural farms is not linked to the development of an integrated national economy. The big modern enclaves of agricultural production (such as the banana plantations in Central America; see the accompanying "Banana Wars" article) are almost exclusively oriented for export, to serve foreign, mainly imperialist, markets. In addition, they are built on, and conditioned by, larger areas of semi-feudal agricultural production. The attractiveness of cheaper inputs, like labour, in the oppressed nations is dependent on the perpetuation of these semi-feudal conditions. For instance, Central American banana plantation workers are lowly paid in part because much of the cost of maintaining and reproducing future generations of these workers is based on semi-feudal subsistence agriculture. Developing commodity production in these imperialist-sponsored "modern" enclaves does not set the oppressed nation's economy on a path that will lead to the kind of relatively more integrated and balanced development seen in the capitalist countries. Instead, it binds the country even more firmly to imperialism, with these modern enclaves functioning as an integral but subordinate part of the world imperialist market, links chaining the country to imperialism, while semi-feudal relations are simultaneously propped up in large sections of the economy.

The same basic dynamics characterise trade-led growth in sectors besides agriculture, such the high-tech sector in India's Bangalore. Globalisation advocates like to tout Bangalore as proof of the "success" of the trade-led model, India's "Silicon Valley" - yet, is it a harbinger of the coming modernisation of India? Not at all. The tens of thousands of software engineers working there are overwhelmingly linked to, and serve, giant Western corporations, rather than the all-round development of the Indian economy. Moreover, their labour greatly depends on the existence of the same kind of impoverished semi-feudal conditions that underpin the development of the modern agricultural enclaves described above.

Consider what goes into a situation where, as one Swiss computer executive boasted, it is possible to buy three Indian programmers for the cost of one Western programmer. While the globally-minded Swiss computer executive is a happy man, his hiring of the Bangalore computer programmer needs to be situated in the context of average wages there, which are not one-third of those in the West, but more like one-thirtieth (GDP per capita in the Indian state of Karnataka, where Bangladore is located, is roughly US $1 per day). The computer programmer's ability to work is ultimately linked to his family's ability to hire even lower-paid labour, thereby "freeing" the programmer to obtain an education and later to work. Virtually every computer programmer in India has domestic servants to cook, clean, shop and do childcare. In other words, as in the case of agriculture, the functioning of this modern hi-tech enclave not only serves imperialism, but makes use of, and props up, the more exploitative conditions of semi-feudal servitude in the broader Indian economy.
Liberal critics of globalisation often point to the poorer areas of the world and complain that they are being "left out" of the process of globalisation. While it is true that certain areas, such as sub-Saharan Africa, are largely written out of imperialist investment plans, it is also true that the impoverishment of the oppressed countries does not mainly result from their being "left out" of the imperialist economy, but more fundamentally reflects the very way that they are integrated into it. Expanding trade does not change this dynamic, but heightens the distorted, uneven and fragmented character of the economies of the oppressed nations. But this is hardly surprising - after all, when Western corporations like Compaq and Microsoft set up operations in places like Bangalore, their goal is profits, not development.


WTO-sponsored trade liberalisation strengthens the commodity system throughout the world and extends its embrace to include new fields of human activity. Everything has a price, everything is now up for sale on the global market-place. At the cutting edge of this ugly trend is the recently intensified reinforcement of "intellectual property rights", including such examples as:
• One US company has attempted to patent the DNA of a Guatemalan woman who is thought to have immunity to cancer, to be used in marketing a medicine.
• The US multinational, W.R. Grace Corporation, has patented the use of a key part of the neem tree (azadirachtin), even though Indian farmers and doctors have used neem tree products for centuries in home remedies. This raises the spectre that they would have to begin paying the US company for the right to continue this age-old practice that their own ancestors developed!
• In 1997, over a million Indian small farmers and peasants rallied against a similar threat, that large agribusiness corporations were going to patent seeds indigenous to the Third World countries and then force the peasant farmers to pay for the very seeds that they themselves had used and developed over the centuries, as well as against the threat of "terminator technology". This refers to a genetic engineering technique used to create sterile plants with infertile seeds, so that farmers would be forced to purchase seed every growing season, instead of using the age-old practice of saving seed from one harvest in order to plant the next.

The expansion of intellectual property rights under the WTO is thus legitimising obvious cases of the private appropriation of the collective labour and knowledge of the masses, in what has come to be called "patent piracy". Indeed, intellectual property rights bear the unmistakable stamp of the workings of the fundamental contradiction of capitalism, between private appropriation and socialised production: a complex division of labour has arisen under capitalism that combines mass labour with the machine system, in a profoundly socialised production process, yet the fruits of this process are appropriated privately, by a small class of owners, the bourgeoisie.

With regard to ideas, no knowledge, from the invention of fire to the present, has ever been essentially an individual product but has always involved a complex interaction of individual effort, collective understanding and social interaction. With the development of capitalism, the production process, including the production of knowledge, was turned into a qualitatively more socialised act, and this is even more the case today. The production of a new computer software programme, for instance an operating system like Microsoft Windows, can involve the co-ordinated effort of thousands of software engineers. It is most definitely not the result of the "genius" of one or two owners like Bill Gates. Furthermore, the "graphical user interface" (GUI) upon which Windows is based, was pioneered not by Microsoft, but by countless other software developers, relying directly on the accumulated experience of an even larger number of users. As Lenin summarised in Imperialism, The Highest Stage of Capitalism, highlighting the immense concentration of technical progress and invention by the giant multinational "trusts", as they were then called: "…the development of capitalism has arrived at a stage when commodity production still 'reigns' and continues to be regarded as the basis of economic life, [but] it has in reality been undermined and the bulk of the profits go to the 'geniuses' of financial manipulation. At the basis of these manipulations and swindles lies socialised production; but the immense progress of mankind which achieved this socialisation, goes to benefit...the speculators."

The protection of intellectual property rights reflects and reinforces the basic social divisions marking the world, including between the class of owners and the class of labourers, as noted by Lenin above, as well as between the imperialist and oppressed nations. With regard to the latter, intellectual property rights are an effort to safeguard the imperialist countries' monopoly of science and technology, to reinforce their position as the "brains" of the global economic system. In this way, for example, the multinationals ensure that they can relocate production processes to the oppressed nations, so as to benefit from lower wages and production costs, whilst not risking their control of the technical know-how involved in the process. Of the 3.5 million patents held world-wide, only 200,000 of these, about 6 per cent, are held in the Third World, whereas multinational corporations directly hold 85 per cent of all patents. WTO policies will only reinforce this uneven and oppressive division of labour, wherein the imperialist countries seek to further centralise their control over the nerve centres of the world's economic activities.

The list of areas targeted by the WTO for trade liberalisation is extensive. Services like health care are a top priority: US "negotiating objectives" in Seattle included "encouraging more privatisation" and "allowing majority foreign ownership of health care facilities". Patent protection, an application of intellectual property rights, has already been indicted as being responsible, in part, for the criminal situation in the Third World, particularly southern Africa, with regards to AIDS victims. The exorbitant prices the pharmaceutical multinationals demand for their patent-protected AIDS medicines make treatment prohibitively expensive. This means that millions of Africans have died and are continuing to die without treatment and many thousands of HIV-infected mothers are transmitting the disease in childbirth, which can often be prevented by the proper drugs.5

The expansion of WTO regulations will also result in further degradation of the environment. It shifts the burden of proof with regard to health risks, rejecting the "precautionary principle" that the burden should be on the multinationals to prove their products are harmless, instead requiring consumers to prove that they are harmful. This logic underpinned the recent decision to require the European Union to accept hormone-treated US beef, even though an EU panel had found that some of the hormones could cause cancer. The WTO will also reinforce the existing policy of treating concerns like people's health as "externalities": since they do not directly enter into the commodity-producing process under the ownership and control of the corporation, and are thus "external" to it, such concerns do not figure into "free trade" considerations. The anarchic process of trade-driven globalisation is fuelling the rise of sprawling, heavily polluted megacities in the Third World, like Mexico City and New Delhi, where it is estimated that one-third of the children are afflicted with allergic bronchitis - an "externality" for which of course no capitalist bears any responsibility, according to the rules of the "free market" system.6


Who actually benefits from expanded trade? While a full examination of this issue is beyond the scope of this article, a few facts are telling:
• Global inequality has widened since the dawn of capitalism, along with the general rise in trade: the average standard of living in the richest countries was only about three times higher than in the poorest countries in 1800; in 1900 it was about six times higher; and by 2000 it was about 20 times higher.
•57 per cent of the world's population receive only 6 per cent of the world's income, living on less than US $2 per day.
• In the period 1980 to 1996, as trade expanded at an unusually brisk pace, 59 countries experienced an actual decline in GDP per capita.7
• Within the imperialist countries, polarisation is also increasing. In 1995, four out of five male employees in the US earned 11 per cent less per hour in real terms than they did in 1973, and for the poorest third of the working population the fall was 25 per cent. During that same period, per capita GDP rose by a full third in real terms and the richest 1 per cent doubled their wealth. World-wide, wages as a share of national wealth have fallen, while the portion going to interest and corporate profits has risen.8

This correlation of trade expansion with the rise in polarisation globally and within countries is no mere coincidence. Over 150 years ago, Marx pointed out that the working of capital tends to produce the accumulation of impoverishment and misery at one pole and great wealth at the other. Bourgeois trade experts even expected this trend. The Organisation for Economic Co-operation and Development (OECD) estimated that Europe, the US and Japan would be the "big winners" from the new trade system, receiving two-thirds of the benefits, while The Economist Intelligence Unit (April 1995) agreed that sub-Saharan Africa would be "worse off". The Wall Street Journal (15 August 1994) acknowledged that the African countries would be driven "further into the trench" of starvation, debt and poverty.9


The popular slogan of "Fix it or Nix it" refers to the thinking that the WTO should be either reformed or dumped. Many WTO critics argue that whatever happens, trade will continue to expand, so the only real choice is to make sure that this takes place under conditions that are as "fair" as possible for the world's poor. Many of their arguments focus on the way the WTO is organised, exposing how it is "rigged" against the poor countries, enabling the richer countries to more easily bully them into submission. While the US trade delegation in Seattle, for instance, consisted of hundreds of corporate and legal experts, many of the poorer countries had trouble fielding any delegation at all, and thirty countries cannot even afford to maintain a representative at the WTO's Geneva headquarters.

It is also undoubtedly the case that despite all the WTO's talk of a "level playing field", the imperialist countries use their dominance to maintain double standards. While presenting themselves as fighters for free trade against national protectionism, they are the biggest practitioners of protectionism when it comes to sectors they consider vital to their economies. In 1996, combined US and EU domestic support for their farmers, who constitute less than 3 per cent of their total population, amounted to US$110 billion (about US$29,000 per farmer in the developed countries). In contrast, India's domestic support to its hundreds of millions of farmers worked out to a negative $23.7 billion. In other words, India, through levies of various kinds on its agricultural products, taxes its farmers rather than subsidises them. The list of features characteristic of an uneven playing field, structurally biased in favour of the imperialist countries, could go on and on.

The point is that a serious look at the organisational structure of the WTO shows that it is indeed dominated by the imperialist countries - "the game is rigged". But is it true that if somehow the structure and policies of the WTO could be "unrigged", if the heavy hand of the imperialists could be lifted and trade regulations made more equal, trade could be made to function more fairly?

It is crucial to understand that even the most egalitarian trade rules under imperialism will inevitably work to the ultimate advantage of the imperialist countries and the giant monopoly corporations. Insofar as there is any equality under bourgeois law, it treats unequal things equally, as Anatole France, the French radical, sardonically pointed out over a century ago, when he quipped that the law, in its majestic equality, forbids the poor man and the rich man alike from sleeping under the bridges at night. Just so, even the most egalitarian liberalisation in the area of investment, for example, would only mean that US corporations and Bangladeshi, Ecuadoran, Algerian and other oppressed country corporations would all have the right to purchase and exploit land, banks, hospitals, and the like in each other's countries - and just who is going to be dining on whom is only too apparent.

What else could it mean to treat even-handedly a world that has been so sharply divided for generations into imperialist and oppressed countries? At the very core of the WTO's functioning is the principle, common to every capitalist society, that all commodities are exchanged at their "equal value" (for instance, grain increasingly trades at one "global price"), thus covering over the fundamentally unequal position of the producers themselves (a grain farmer in the US produces up to 1000 times as much as their counterpart in the Third World). This inevitably allows bigger, more powerful capital - imperialist capital - to gobble up smaller capitals and further expand its sphere of operations.

One example of the way that this principle is applied by the WTO is its basic enforcement arm, the dispute settlement system. As the ultimate sanction, WTO rules allow for retaliatory tariffs in the case of unfair trade practices by one country against another. So to punish an unfair trade practice, large imperialist countries like the US and small neo-colonial regimes like Peru or Sri Lanka each have the right to use retaliatory tariffs against the other's products! The oppressed country will of course find it nearly impossible to make even the tiniest impact on US exports.


The imperialist countries and their ruling classes have, through decades of global domination, accumulated vastly greater forces of production in their own lands, they control the purse strings of global finance and, ultimately, they control far superior military forces to ensure that any basic challenges to their mastery will be suppressed. Under these conditions, further trade liberalisation under the WTO baton will lead to the intensification of global competition, the growth of the multinational corporations and the heightened dependence of the oppressed nations. In every nation, the global monopolies will pit the proletarians in their enterprises against each other, using intensified exploitation in one area to batter down wages and working conditions in others, in their never-ending pursuit of profit.

In such a situation, it is important to cast away illusions that one or another adjustment in the WTO could make for "fair trade", to go beyond trying to pressure the WTO and the other multilateral institutions and to target them squarely as representatives of a global imperialist system that itself must be fought and defeated. Capitalist trade is no more eternal than capitalism itself, and like all empires, it will pass into the pages of history. Arguing that the only "realistic" option is to try to reform imperialist institutions, like the WTO, is no more "realistic" than arguing that under the Roman Empire the slaves should have focused their struggle on getting the Roman Senate to improve the laws governing slavery. Slave Rome was overthrown, and so too will be the wage-slave US and the other imperialist powers. What is needed is not calls to reform the unreformable institutions, but to stand with the revolts of the modern slaves and work to put an end to the system of wage-slavery itself.

This revolutionary perspective is far more grounded in reality than the notion that the imperialist countries and their multinational corporations, which have for over a century now plundered the Third World nations and exploited their own proletarians, will suddenly have a change of heart and develop a soft spot for their victims. The oppressed nations are not poor because their economies are insufficiently linked to the imperialist "engines of growth"; they are poor because they are tightly bound to the imperialist engines of plunder. Breaking free of this network of dependency and oppression requires breaking free of imperialism and the embrace of the global market. And the way to do this has already been forged.

Mao Tsetung and the Chinese people showed how this could be done by making revolution, ripping the lifelines of the economy out of the hands of the imperialists and their comprador agents. Agriculture was collectivised and made the central focus of the economy - "take grain as the key link", Mao declared. Instead of "doing more of what they did best" within the existing imperialist division of labour, the Chinese revolutionaries did what was best for the masses - they rejected the conventional wisdom of the specialisation and development of a few sectors for export to the global market and pursued all-round development, emphasising planned proportional growth between different sectors, so as to build a self-reliant economy that could stand up against imperialist invasion or blackmail and serve world revolution. The uneven, distorted character of the Chinese economy, a heritage of semi-colonial development, was reorganised to put people's needs first, in particular the needs of the peasants who formed the bulk of China's population. There were no enclaves like those in today's Guangzhou region of China, where a handful of capitalists benefit from the enslavement of hundreds of thousands of workers, mainly women, in modern sweatshops controlled directly by the imperialists. What was built instead was an economic system where the living conditions of the basic masses steadily improved. Revolution could do this only because it put political power in the hands of the masses.

As people's wars advance and more countries break free of imperialism, a new kind of trade will develop, in a way never before seen in history. Trade amongst countries where the masses hold power will reflect the planned, co-ordinated efforts of the people to use the products of their labour to advance revolution and "put right" a world that has been disfigured and scarred by the workings of imperialism. Instead of forging chains of dependence and subordinating some sections of the world to others, as now, trade will instead be used as a tool to help break down dependence, to serve the self-reliant efforts of the people and to strengthen the bonds of mutual solidarity between the labourers of every country. Instead of enshrining and expanding "free trade" - i.e. the law of the jungle - as the WTO does, in order to hide and reinforce the continuing plunder of the oppressed nations by the imperialist powers, trade will be organised in order to prioritise all-round development in those areas of the world that have been hit hardest by imperialism, as part of the effort of the proletariat in power to consciously combat the unequal and distorting legacy of imperialism and hasten the advance to world communism.

Those who hate WTO-sponsored globalisation and everything it stands for need to ask the question: what is in truth the "central reality of our time"? Is it, as Clinton imperiously proclaimed, globalisation and free trade, or is it the power of the masses when they rise up in revolution?


1. Arthur Dunkel's final report on GATT, cited in Pratap Chatterjee Aajkal, GATT, 1993.
2. "Bitter Cocoa", Libération, Paris, 13 April 2000.
3. Larry Elliott and Dan Atkinson, The Age of Insecurity, Verso, London, 1999, p 223.
4. Obviously other factors are also involved. For instance, in the mid-1990s, 12 of the 16 IMF structural adjustment programmes in Africa led to cuts in education spending. This is in countries where millions of adults, particularly women, lack basic literacy skills, and despite the fact that bourgeois experts widely hold that education is the single most important factor favouring development. In one of these countries, Ethiopia, up to 50 million people face the spectre of famine. ("The IMF on Trial", Guardian, London, 15 April 1999).
5. Here, in the area of health care, is another tragic example of the limitations of this formal equality - masking real inequality - with which WTO policy treats the imperialist and oppressed nations. While public health systems are key components of health care delivery in all the rich countries (with the exception of the US, where private health insurance plays this role), in South Asia only 20 per cent of drugs are dispensed through the public health care system, while 80 per cent are purchased directly by individuals. What will be the effect of the seemingly egalitarian WTO enforcement of patent protection and the consequent support for global drugs prices? Not only will it become more difficult for South Asians to buy medicines because of their much lower incomes, but, in addition, unlike in the West, most of them have to pay directly out of their own pockets. Seemingly "equal" trade policies have a profoundly unequal impact. Even fewer South Asians will be able to afford live-saving medicines, while drug company profits are at an all-time high.
6. The Global Trap, Hans-Peter Martin and Harald Schuman, p. 27.
7. Martin Khor, Rethinking Liberalisation and Reforming the WTO, The Third World Network Internet site, 28 January 2000.
8. The Global Trap, pp. 117-18.
9. Percy Barnevick, head of Asea Brown Boveri (ABB), the Swedish mechanical engineering giant, voiced his fear that: "If companies do not rise to the challenge of poverty and unemployment, the tensions between the haves and have-nots will lead to a marked rise in violence and terrorism." The Global Trap, p. 231.

The "Banana War"

The so-called "banana war" illustrates some of the workings of the World Trade Organisation (WTO), what is at stake and whose interests it serves. This conflict pitted the US and its multinational banana producers against the European Union (EU) and its own banana production scheme. The WTO ruled against the EU, opening its markets and ultimately its former colonies further to the US banana-producing multinationals.

First, a quick look at the banana industry: the "dollar banana" accounts for 80 per cent of the fruit eaten in the imperialist countries, and is controlled by 3 companies, Dole, Del Monte and Chiquita. "Dollar banana" production tends to be concentrated in large plantations in more industrial conditions, with greater reliance on techniques like chemical treatment. The industrial plantations in Central America apply more than ten times as much chemical treatment as the average for intensive agriculture in the imperialist countries. According to the New Internationalist magazine, one of these chemicals, used to kill a parasitic nematode worm that plagues bananas, resulted in the mass sterilisation of tens of thousands of plantation workers from Central America and the Caribbean to the Philippines and West Africa.

Chiquita is a direct descendant of the United Fruit Company. Latin Americans used to call this company "el pulpo", because like "an octopus" its tentacles stretched into every corner of life. In 1949 United Fruit owned 3.5 million acres of land in Central America and the Caribbean, but its heart was in Guatemala, where it owned every mile of railroad. In 1954, when the Guatemalan government of Jacobo Arbenz threatened to nationalise almost 200,000 hectares of its land, United Fruit promoted a US-backed coup. Military juntas continued to reign for several decades, and were behind the infamous "dirty war" there, which killed and "disappeared" tens of thousands of dissidents, most of them poor Indians. These puppet regimes repressed any challenges to US domination, including from foreign or native rivals and the workers in the fields, guaranteeing a situation of low wages, cheap transport and unrivalled domination.

Today, like Nike (the US manufacturer of shoes and sports equipment), Chiquita has tried to distance itself from the slave-like conditions existing on the banana plantations by operating through a network of smaller companies that are formally independent but practically dependent on it (for example, the smaller "independent" producers sell all their fruit to a single multinational year after year). Carl Lindner, head of American Financial Group, which owns Chiquita Brands International, made a half-million dollar donation to Clinton's US Presidential campaign shortly before the US issued its complaint against the EU banana scheme. While of course Clinton is not a simple stooge of the banana lobby, the US government, like other imperialist governments, protects the interests of its own multinationals.

The only rival to the "dollar banana" is the "euro banana", which depends on the complex system of quotas, licenses and tariffs set up by the Lomé Convention of 1975. This granted preferential EU status for bananas from 42 former European colonies in the African, Caribbean and Pacific areas. "Euro bananas" tend to be produced on smaller farms and co-operatives. France still unapologetically treats its banana-producing former colonies as part of its empire; for instance, Martinique and Guadeloupe are officially still part of France itself, as was Algeria before its war of national liberation. While the European powers claimed the banana regime was to provide support for these poor, often newly independent countries as they made a transition to self-reliance, in practice most financial support never reaches the producers, but instead is siphoned off by traders and retailers in the European countries themselves. More than 90 per cent of what consumers in the imperialist countries pay for bananas remains in those countries, with the largest chunk (34 per cent) going to the large supermarket chains, with only 5 per cent going to the producers. Moreover, the countries' preferential status has ultimately worked against restructuring them in a more diversified manner. The result is that in many of these countries there are more people dependent on banana production than in the countries of their "dollar banana" rivals.

It was these two groups of predators, each with their own strengths and weaknesses, that confronted each other in the recent banana war. While the war touched on a variety of issues, at its heart was the ability of these imperialists to exercise their Mafia-style "protection" over their former colonies.

The information in this article was based on: the New Internationalist, October 1999; "Secret life of a banana", Guardian, UK, 10 November 1999; and Larry Elliott and Dan Atkinson, The Age of Insecurity, Verso, London, 1999.