Is free trade truly free? Who will pay the cost of globalization and its promise of open markets?
The rush to open the world to free trade is slowly degrading and suppressing environmental, labor and consumer laws and threatening the country's home rule, according to consumer advocate Ralph Nader.
Taking a break from his presidential campaign Oct. 26, Nader spoke at the University of Cincinnati at the invitation of the UC Skeptics, a student group. A crowd of 800 packed the hall.
Wearing his trademark slightly rumpled gray suit, Nader focused exclusively on the down side of the World Trade Organization (WTO).
The WTO began in 1995 as a forum for establishing standards to promote global free trade.
The problem, Nader said, is the WTO puts global trade first, which often benefits corporations at the expense of environmental and other standards.
"What is going on is not easy to understand by reading a daily newspaper," he said.
The press hasn't noticed the WTO's major shortcomings, according to Nader.
To start, each member nation has one vote, no matter its population. Second, reporters aren't allowed access or given transcripts of WTO court hearings, where trade disputes between nations are resolved.
"No watchdog watches how the WTO works," Nader said.
Before the WTO, if U.S. environmental laws prohibited selling tuna caught with nets that also catch dolphins, the U.S. could stop Mexico from selling that kind of tuna here. But the WTO generally regards such laws as restrictive barriers. Under the WTO, corporations don't have to fight to get their products into new places; countries must fight to keep them out and to keep their laws intact. And there's no independent appeal of the WTO's decisions.
"What we're seeing is a slow-motion coup d'état," Nader said.
In the race to spread global free trade, politicians, CEOs and editorial writers forgot something, according to Nader: Free trade is only possible with free countries. In China, police help corporations keep workers in line, working for 30 cents an hour. Police jail union organizers, so companies have almost total control over work hours and conditions.
"These are not market-determined costs," Nader said.
So far the U.S. has lost all five of its trade disputes under the WTO, said Nader, who questions the logic of allowing developing nations to export their lower standards to more advanced nations. For example, you can't buy products made with U.S. child labor here, but you can buy products made with foreign child labor.
"Why the double standard?" Nader said.
The U.S. can fight outside the lines when it wants to, according to Nader. For example, U.S. trucks are allowed to carry 85,000 pounds, while Mexican trucks can carry 170,000 pounds. Under the North American Free Trade Agreement (NAFTA), the U.S./Mexican border relaxed greatly, eventually allowing Mexican trucks to drive into the United States. But the Clinton administration, fearing a public backlash about safety concerns, is violating the agreement by keeping Mexican trucks out. The dispute is in the WTO's courts.
NAFTA also hurt Mexico by letting huge American food companies compete with small Mexican family farms, many of which went out of business. Meanwhile, U.S. companies had easy access to lots of cheap labor. Ford closed U.S. plants and moved them to Mexico, where it can pay $69 for a 70-hour week — a wage that would barely cover three hours of U.S. union labor.
"How do you compete with that?" Nader said.
NAFTA has allowed U.S. companies to suppress further regulations by threatening to leave the country, he said.
Nader recasts a metaphor used in Reaganomics, the claim that a growing economy lifts all boats.
"Now they say a growing economy lifts all yachts," he said.
Nader doesn't believe the WTO can be reformed from the inside. If the U.S. pulled out, things would change, he said.
Nader challenged young people to be involved.
"There's no escape from our civic responsibilities," he said. "Freedom is participation in power."
For more information, visit the Web site for Public Citizen, the watchdog group founded by Nader, at www.citizen.org.
BURNING QUESTIONS is our weekly attempt to afflict the comfortable.