10-25 - Globalization and Development Development Part III Trade Re-Colonization and Corporations Shelley White African World Perspectives

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Unformatted text preview: Globalization and Development Development Part III: Trade, Re-Colonization, and Corporations Shelley White African World Perspectives October 18, 2007 Questions from last class? Questions Global Trade Global What is Free Trade? What Free Trade between nations that is unrestricted Trade unrestricted Types of restrictions/protections: Tariffs (taxes on imported good) Non-tariff barriers (i.e.): Quotas – limits on how much we’ll buy Subsidies – Government assistance to boost Subsidies national industries (tax cuts, etc.) national Import bans on products Import Regulations for health and safety, labor rights, etc. Regulations Trade: A Central Feature of Globalization Globalization “Economic globalization constitutes Economic integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flow of workers and humanity generally, and flows of technology.” -Jagdish Bhagwati, 2004, In Defense of Globalization In WTO: What is it? WTO: Established in 1995 at the Uruguay Round meeting of the Established GATT, with 125 countries; Today, has 134 member countries – 40 are African nations countries Became a full-fledged international organization (located in Became Geneva) with legislative, judicial & enforcement powers GATT became one of 20 agreements included in the WTO – agreements are binding for all member states agreements Structure (different from WB/IMF) is one country, one vote Principles: Liberalization: Free trade without restrictions Non-Discrimination: Treat all countries the same in trade Harmonization: make standards and regulations the same Harmonization: worldwide to ease burden on transnational business worldwide …WTO sets up the global rules of trade WTO . WTO: Some of the Problems WTO: Trade trumps all: (Race to the bottom & global corporate privilege) (Race Trade “Restrictions” that WTO has ruled against: labor rights laws, Restrictions” environmental regulations (against dumping toxins), public safety regulations (like restricting genetically modified foods & asbestos), and public interest regulations (like labeling dolphin-safe tuna) and US and EU trade representatives draft policies and strong-arm US countries into agreement countries Member nations cannot pass laws responding to local Member interest/need that conflict with the WTO interest/need GATS (General Agreement on Trade in Services) requires GATS privatization of public services – health, education, etc. privatization TRIPS (Trade Related Aspects of Intellectual Property Rights) TRIPS allows corps to patent life forms (seeds), medications, etc. allows Non-Democratic: Push for Privatization: Legalized Theft: WTO: Some of the Problems, Cont. Non-Transparent & Uneven: (The African Group of the UN submitted multiple proposals to counter the WTO’s system of justice during early negotiations) justice Dispute Settlement Body staffed by trade experts appointed Dispute internally; settlement arrived at through non-public hearings internally; Entry barriers – Initiating a case takes tremendous resources, so Entry rich nations are better able to participate rich 1995 – 2003: Developed countries brought 63% of cases; 1995 Least Developed Countries brought none Least In 95% of cases where a developed country sued a In developing country, the former won developing Weak retaliation – Even if an African nation won a case, Weak sanctions would be ineffective because of uneven trade investment (think of the effect of Tanzania sanctioning the US versus the US sanctioning Tanzania) versus African Growth and Opportunity Act (AGOA) (AGOA) Negotiations initiated by President Clinton; signed into law Negotiations by President Bush in 2000 by Sub-Saharan African nations deemed eligible by US Sub-Saharan President President Eligible African nations receive better trade preferences with Eligible the US (i.e. the US will import more African goods with lower barriers – tariffs, quotas, etc.) barriers But, Conditions (short list): Must become member of the WTO Must sign bilateral investment treaties Must reduce corporate and import taxes Must comply with IMF, World Bank obligations What motivated the United States to create AGOA? AGOA: Has it helped? AGOA: Nigeria (oil products), South Africa (diverse goods), and Nigeria Angola (transportation equipment, agro & mfg goods) are the largest exporters to the US & export more than they import largest Many countries, however, import more than they export Many (Uganda, Tanzania, Ghana, Kenya, Rwanda, Mali, etc.) (Uganda, Countries with single export product particularly at risk: Lesotho: 99% of exports in textile and apparel Until Sept 2004, had special protections for textile industry As of July 2005: “More than 10 clothing factories have shut down As operations in Lesotho since the beginning of this year; at least 10,000 workers - about 25 percent of Lesotho's clothing workforce - lost their jobs. ‘If each worker had four dependants, at least 40,000 lives have already been directly affected by the closure of the factories,’” (UNDP-Lesotho Economist) closure AGOA: Positive Trade Balance (for African nation; Negative for U.S.) (for AGOA: Negative Trade Balance AGOA: (for African nation; Positive for U.S.) WTO/AGOA: Do as we say, not as we do Do 2003: West African cotton-producing countries filed a 2003: formal complaint with the WTO for damages to their cotton industries cotton Malian President Amadou Toumani Toure testified Malian before US Congress June 23, 2003: before While African nations are pushed to reduce all trade barriers, While 2001 subsidies were $700 million in Europe, $2.3 billion in the U.S. and $1.2 billion in China U.S. Subsidies allow US corporations to sell products for less than Subsidies the cost of production: “when the price of cotton was 35 cents a pound, in late 2002, the production cost was, on average, 47 cents a pound in Western and Central Africa against 73 cents a pound in the United States.” (President Toure, 2003) pound Synergy Synergy There is great synergy among the institutions of There synergy contemporary economic globalization that provides for global corporate privilege global WB, IMF, WTO, AGOA (and others) all work WB, together toward the same result: Force countries to privatize state-owned industries Force (creating new markets for foreign investors) (creating Reduce restrictions on foreign investment (in other Reduce words, reduce potential losses for incoming businesses, even if their gain means social losses: less tax income; less investment in local economy; less labor, health, environmental protections) less Global Corporate Privilege Global Transnational Corporations (TNCs) are gaining increasing Transnational influence globally: influence Corporations are larger than ever and are influencing global Corporations policy – 51 of the world’s largest 100 economies are corporations policy WB, IMF and WTO push privatization – opens new markets for WB, TNCs, especially in developing countries TNCs, National recipient governments are disempowered – can’t create National regulations to protect national interest or welfare regulations Who benefits when regulations on corporations are Who minimized? minimized? Is the track record of corporate conduct in Africa promising? Compare Maddy’s experiences with LAMCO in Yepeka to the Compare accounts of DeBeers and other diamond companies in Angola and Sierra Leone… and Race to the Bottom and Worse Race Cost Aversion – cut and run when facing potential cost Cost increases (i.e. HIV/AIDS – corporations “shift the burden” through short term contracts, illegal health screenings, shift to mechanical labor, decreased benefits, move to country with less burden) labor, Exploitation – modern-day slavery documented within the Exploitation diamond, chocolate, rubber industries… diamond, Complicity/Facilitation in Conflict – arming factions, providing Complicity/Facilitation transportation, allowing killings (Shell Oil and Chevron in Nigeria; DeBeers, Oryx, AMF in Sierra Leone, Angola; private security corps) DeBeers, Environmental “Ripping” – extraction of raw materials still at a Environmental premium in Africa, monocropping still encouraged – neither allows environment to replenish itself allows “Dumping” – exporting excess goods (often agro goods) into Dumping” markets – drives down cost of locally-grown goods; sabotage markets Intellectual Responses to Globalization Intellectual “For Africa, globalization represents an old problem in For new contexts: the hegemony of northern processes, practices, and perspectives.” (Magubane, p.175) practices, Three major intellectual responses: Globalization needs to be re-engineered for more Globalization even advantage (Claude Ake, Samir Amin) even Globalization is full of opportunities for Africa to Globalization exploit (Achille Mbembe) exploit Global economic integration is necessary but also a Global commitment to pan-Africanism (Nelson Mandela, Thabo Mbeki) Thabo The Role of the State The “While the state’s interest in generating revenue from these While resources coincides with that of the TNCs, the latter’s interest in maximizing profits conflicts with the welfare of the citizens” (Sunday Dare) citizens” “Globalisation makes well-organized States if anything Globalisation more necessary, not less. But even the best-organized States are not finding globalisation easy to manage. That is because globalisation challenges their ability to perform their historic function of providing security to their citizens, in all three of its aspects – physical security, economic security and psychological security” (K. Annan, p. 241) security What role should the nation state play? What role can it play? What A Different Kind of Synergy Different Powerful social movements of citizens and states Powerful have countered the forces of globalization: have Every meeting of the WTO since 1999 has been disrupted or Every shut down: shut 2003 Cancun WTO meeting – Group of 21 (representing half of 2003 world population) successfully rejected EU/US proposals world WB/IMF have been under greater public scrutiny, demanding WB/IMF change and debt relief: change 50 Years Is Enough successfully pushed WB to eliminate user fees 50 successfully Global Debt Relief movement led to HIPC and MDRI programs Sweat-free communities (Maine) and campuses (175 USAS) Fair Trade movement – 41% yearly increase in certified sales Other Vehicles for Development & Trade Other African Economic Union Est. 2001 from the former African Economic Community and Est. Organization of African Unity Organization Aims to secure Africa's democracy, human rights, and Aims sustainable economy, with a focus on ending intra-African conflict and creating an effective common market conflict Est. 1964, the ADB’s mission is to promote economic and social Est. development through loans, equity investments and technical assistance to national governments and public entities. (SACU) - links the trade among Botswana, Lesotho, Namibia, South Africa, and Swaziland) South African Development Bank Regional agreements (i.e. Southern African Customs Union Other Vehicles, Cont. Other Fair Trade Organized social movement promoting standards for Organized international labor, environmentalism, and social policy Promotes more equitable and sustainable system of production Promotes and trade through linking low-income producers with consumer markets and through educating consumers markets Extension of small loans and other financial services to poor Extension individuals without typical credit eligibility (i.e. no collateral, credit history, steady employment) history, Advanced by NGOs and banks Gained international attention with 2006 Nobel Peace Prize Gained award to Grameen Bank and Muhammad Yunes of Bangladesh award Microfinance ...
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This note was uploaded on 04/23/2009 for the course SC 039 taught by Professor Magubane during the Fall '07 term at BC.

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