rts beginner's guide to the global economy (fwd)

rosaphil (rugosa@interport.net)
Wed, 16 Jun 1999 13:33:21 -0400 (EDT)


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Date: Tue, 15 Jun 1999 22:53:22 -0700
From: Andy Zimmerman <turtle@westnet.com>
To: Richard Singer <ricinger@inch.com>
Cc: reclaimthestreets@listbot.com
Subject: rts beginner's guide to the global economy

Reclaim the Streets NYC - http://reclaimthestreetsnyc.tao.ca

The Reclaim the Streets Beginner’s Guide to the Global Economy

	June 19, 1999 marks the beginning of the G8 summit meeting in 
Cologne, Germany, and the occasion for a carnival of protest around the 
world. But what is the G8? What are the other organizations that run 
international trade and the global economy? How do they affect our lives?

G8 (the Group of Eight)

	The G8 is the group of the world’s eight most powerful nations: 
the U.S., Canada, Britain, France, Germany, Japan, Italy and Russia. 
These countries dominate the IMF, the WTO and the World Bank (see below).
	What the G8 are discussing in Cologne on June 18:
	1) The monetary and financial architecture of a global economy. 
(We can expect agreements similar to MAI — see below.)
	2) The economic and social policy for a globalized world. Job 
insecurity, lower wages, and cuts in social services, are a likely 
	3) Debt “relief.” The debt owed by the poor countries to the rich 
ones, some $200 billion in total, has been maintained for political 
reasons. But in response to popular pressure, the G8 are dividing on the 
issue of debt relief. While the U.S. is expected to stay hard-line on 
this issue, Germany and Canada are demanding some cosmetic response. 
Empty communiqués can be expected. (The creditor nations also meet 
through their own secretive organisation, the “Club of Paris.”)
	4) “Investment in education, human capital building.”
	5) Further urgent issues — the aftermath of the war in 
Yugoslavia, for example.

MAI (Multilateral Agreement on Investment)

	Work on MAI which was begun in secret by the Group of Eight in 
spring 1995. The draft texts were only discovered after an anonymous 
leak. MAI elevates the rights of corporate investors above governments, 
local communities, citizens, workers and the environment. MAI undermines 
measures passed by the Rio Earth Summit in 1992 as well as contradicting 
many other international agreements.
	MAI restricts right of countries to regulate corporate 
investment. For example, it would prevent municipal governments from 
having preferential policies of investing locally or of using only 
unionized labor, for example. It undermines existing health and safety 
laws and employees’ rights.
	MAI is explicitly designed to allow corporations to move capital 
and production facilities form one country to another. It allows 
corporations to freely sue governments who restrict their investment. MAI 
negotiators are now attempting to “harmonize” banking laws 
internationally under the Financial Services Agreement. We can expect 
mega-mergers of banks.
	Due to international mobilization against the MAI it was 
eventually shelved. Now the G8 is trying to launch MAI-type negotiations 
through the WTO to pull off an MAI-type agreement between the U.S. and 
the European Union. Because the MAI met with head-on opposition, the G8 
is playing a shell game, switching the MAI into other new venues to keep 
the public guessing. Delay and denial are tactics used by negotiators to 
hide events from activists.
	MAI was intended to be enacted in the U.S. by “fast track,” a 
procedure which allows the executive branch to bypass Congress when 
negotiating trade agreements. Congress can only vote “yes” or “no” 
without any amendments, and time for floor debates is limited. Trade 
legislation is written by the executive branch, with limits on Congress’s 
power of review. Fast track was used to create the North American Free 
Trade Association (NAFTA), bringing controversial changes to U.S. pension 

IMF (International Monetary Fund)

	The IMF acts as a global debt enforcer. In return for loans, 
debtor nations are made to adopt “structural adjustment programs,” 
slashing public spending and opening themselves to exploitation by 
multinational corporations. The strict conditions of these programs are 
written by the G8 countries. The end result of the loans is a transfer of 
wealth to the rich nations. A net transfer of $2 billion flowed from the 
Third World to the U.S. in IMF loans up to 1994.
	The IMF’s emergency credit system is corporate welfare, 
supporting bond dealers who deal in government bonds issued by debtor 
governments, and exporters like the U.S. corporation Erly, which was able 
to monopolize the Haitian rice market after the IMF ordered the removal 
of barriers on Haitian rice imports as a condition of a loan.
	A move is now afoot to give the IMF the power to force its 182 
member countries to seek IMF permission before putting restrictions on 

The World Bank

	The World Bank and IMF headquarters are across the street from 
each other in Washington, D.C. The two institutions play a “good cop – 
bad cop” game. The World Bank at least pretends to help poorer countries, 
while the IMF is essentially a debt-collection agency.
	The Group of Eight has 40% of the voting power in World Bank 
meetings. Contributions to the World Bank from G8 countries are exceeded 
by payments by the bank to corporations based in those countries — often 
for often environmentally destructive energy projects like large dams and 
oil wells.
	 According to the World Bank’s former chief economist, Lawrence 
Summers, “underpopulated countries in Africa are vastly underpolluted.” 
He argued that because few people in those countries live long enough to 
get cancer, they have a “comparative advantage” they could exploit by 
importing toxic wastes. Lawrence Summers is now awaiting confirmation of 
his appointment as Secretary to the U.S. Treasury.

WTO (World Trade Organization)

	The WTO was established by the General Agreement on Tariffs and 
Trade (GATT) in 1995. Since then most of the world’s nations have signed 
on. The organization oversees and attempts to enforce regulations agreed 
to in GATT. It also is intended to settle trade disputes between member 
countries and to review trade policy.
	The WTO has ruled against Thai government efforts to ban 
cigarette imports. It has also ruled against the U.S. ban on shrimp 
imports from India, Malaysia, Pakistan and Thailand. The U.S. ban had 
been imposed in an effort to protect sea turtles, which frequently die in 
shrimp fishing nets.
	The U.S. has taken action under WTO regulations more than any 
other country. For example, it successfully challenged European Union 
restrictions on hormone-treated meat. Rulings are made in an atmosphere 
of secrecy with little room for outside views to be heard. The WTO 
panelists who make the rulings are not vetted for conflicts of interest.
	The Third Ministerial Conference of the WTO will be held from 
November 30 to December 3 in Seattle. It is expected to expand the 
Agreement on Agriculture, which would squeeze small farmers even more, 
and to extend Trade Rights on Intellectual Property (TRIPs), forcing more 
countries to allow patents on new bio-engineered organisms.

	This guide was published by Reclaim the Streets New York City for 
the June 18 global street protest party. Anti-copyright. More information 
is available from http://reclaimthestreetsnyc.tao.ca or our hotline at 
212 539 6746.

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