FREE TRADE - ENGINE OF GROWTH OR PLUNDER?
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
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.
"DOING WHAT EACH DOES BEST"
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
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
MODERN ENCLAVES - LINKS IN THE CHAIN OF INDEPENDENCE
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.
WHO OWNS THE INVENTION OF FIRE?
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
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,
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
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
GLOBAL TRADE - THE RICH GET RICHER
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 WTO - "FIX IT OR NIX IT"
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.
"NIX" THE WHOLE SYSTEM
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
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
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
1. Arthur Dunkel's final report on GATT, cited in Pratap Chatterjee Aajkal,
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 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
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
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"
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.