By Danny Roberts, ContributorTHE current debate over the government's decision to hike the tariffs on some non-agricultural imports, including cement, has brought to the fore some critical issues for consideration here in Jamaica, as well as the Caribbean.
The debate is interesting from a regional perspective primarily because of the common history we share, and the need for us to define a unified set of philosophical guidelines which will enable us to view with some amount of providence a path to our own manifest destiny.
One thing, however, is certain, and that is the region cannot afford to drop from its collective memory the historical lessons of market excesses which have shaped our collective experiences, and helped to define the nature and characteristics of our dependent economies. Since the sixteenth century the region has been integrated into the world economy through trade and investment. Plunder and conquest were the acceptable routes to expand spheres of influence for Western powers, whose imperial economies were to benefit from the extraction of wealth from the periphery. The history of Caribbean labour is therefore best characterised as a history of exploitation, and the epic struggles through slavery, apprenticeship, and colonialism has clearly been a struggle to free ourselves from the shackles of oppression and the dehumanising effects of colonialism. Western powers have evidently learnt from the experiences of mercantilism and the rise of industrial capitalism, for the overt techniques of oppression have given ways to subtler forms of control through the international financial system and new trading arrangements.
Strong nation-states of the mercantilist era, such as Britain, Spain and Portugal and the United States in later years, after breaking away from British colonial rule because of the harshness of their imperial policies have, today, been substituted by a new generation of transnational corporations, to continue the mercantilist process.
In fact, after the mercantilist war of 1812 a US statesman, Henry Clay, quoted a British leader as saying that: "Nations knew, as well as ourselves, what we meant by 'free trade' was nothing more nor less than, by means of the great advantage we enjoyed, to get a monopoly of all their markets for our manufacturers, and to prevent them, one and all, from ever becoming manufacturing nations."
The present model of free market capitalism was authored by the British economist Adam Smith back in 1776. He argued that maximum efficiency could only be achieved through the removal of government intervention, and that there should be no restrictions or tariffs imposed on goods traded so as to maximise the wealth of nations. Adam Smith, himself, had reasons to criticise the predatory practices of mercantilism, which discouraged exportation in order to undersell the market to their own advantage.
The Great Depression signalled the end of this economic model and the development of a new-found theory by economist John Maynard Keynes, which recognised government's intervention as critical to providing more equitable development. In fact, the Bretton Woods Institutions, modelled off Keynesian doctrine, never contemplated that such loans for reconstruction and development should be tied to direct interference in national economic policies.
The prescriptions under these structural adjustment policies, instituted by the World Bank and the IMF, have forced cut in social expenditures and reduced government spending, causing increased poverty and dependency, and setting up a spiralling race to the bottom.
THE ESSENCE OF GLOBLISATION
But one sometimes wonders whether the lessons of the past have truly been learnt by us here in the Caribbean. The government's announcement, for example, to increase the Common External Tariffs on cement and other non-agricultural products from 15 per cent to 50 per cent, has been opposed by many, who came out in defence of capitalism and the free market.
The free market for them, of course, is not exogenous, it is simply defined around the centrality of their own interest, or in other cases motivated by turgid political ambitions, which, quite expectedly, have caused the issue to be subject to gross misrepresentation or be put with the typical touch of exaggeration. The truth is, however, that the danger courted by this romantic flirtation with the unfettered market is a certain route to a dystopian view of our societies, certainly in a few years when we wake up to the realities of the FTAA.
The essence of globalisation is about neo-colonialism. The WTO not colonial empires will now be the midwife through which trade and commercial considerations will take precedence over human and trade unions rights, consumer protection and environmental interests; our democracy and independence will be undermined; and the sovereign powers of governments will be made impotent.
Even while these remain its core functions, the WTO has been forced to build into its agreements provisions which give developing countries special rights. The special provisions does allow for the protection of industries in the developing countries to enable them to integrate into the global economy.
Anthony Bryan, in an article on 'So many windmills the Caribbean's Globalisation Backlash', noted that "Today, in order to join the world economy, developing nations are presented with a large menu of admission requirements and regulations, and the rapid implementation of institutional reforms that the developed world took several generations to accomplish."
Courtney Blackman, former Governor of the Central Bank of Barbados, was quoted recently as saying that "The existing free market system has give rise to outrageous income inequalities in both developed and developing countries, and has proven incapable of delivering public goods such as health care, education and housing in an acceptable manner." Again, we will only understand the gravaminous effects of Mr. Blackman's statement when the Americans extend their imperial reach south in another year or two.
A REGIONAL WORLD VIEW
While some remain content with defending self-interest and others content with reciting classic economic theories in the even tenor of their provincial lives, former US President Bill Clinton, on American Perspective last month, challenged all Americans to develop a world view. American citizens can well afford not to, but for us in Jamaica and the rest of the region, we can ill afford to be trapped by the exigencies of our own interests. Indeed, a world view is what we must embrace, a view informed by our collective experience, and not those of the Americans, which quite often is reflected by a fabricated collective illusion which would want us to remain 'cocooned in grotesque embryonic pods'.
It is, in a sense that world view, seeing through the prisms of Caribbean reality, which caused us to join forces with the G20 countries to turn off the lights on the developed world in Cancun.
The fast-tracking of the 'Singapore issues' by the United States and the European Union, at the expense of the development agenda signed off at Doha, clearly defined the opposing perspectives of this world view. Through collaboration, not competition, the developing world was able to signal their clear intention that the Doha Declaration must be resolved.
While trade is been pushed by the developed countries and issues of government procurement, trade facilitation and competition policy stand in the way of their global domination, the farmers in Jamaica and elsewhere in the Caribbean, the hardware merchants, the trade unions, manufacturers and civil society must insist that no further discussions be held on the 'Singapore issues' until the critical elements of sustainable development debt relief, democracy, decent employment, poverty alleviation and environmental protection be considered.
The supreme irony, of course, is that while the government of Jamaica is acting in conformity with WTO regulations, and in the spirit of Cancun, to protect the country's interests and the jobs of workers; opposition groups and armchair theoreticians are espousing all kinds of esotericism, which are, in effect, antithetical to the very notion of free trade and fair trade. Indeed, it is no over-simplification to speak of a gigantic contradiction in applauding the failure of Cancun, on the one hand, and opposing the introduction of the CET on cement and other non-agricultural goods, on the other hand.
The tariff rate increase is two years late, and it must happen soon. Interestingly, Barbados and Trinidad have increased their bound rates on non-agricultural goods to 60 per cent, with no major uproar from interest groups. Only last month, the WTO Trade Policy Review of Guyana noted that that country has taken important steps to liberalise its trade and investment regime, although it has "a tariff in the WTO at a ceiling of 50 per cent for non-agricultural products."
The danger for us seems to be the willingness of too many Jamaicans to embrace the gospel according to the 'Washington consensus', or, as is the case with the CET increase, to argue positions as representing the interest of free trade which the proponents of free trade have already themselves concede. Our energies are being wasted inwards when there is a need for us to support the growing call for the widening of the agenda of the WTO to incorporate, as a matter of priority, those critical issues to achieve development and higher living standards. We simply cannot appear to be buying into this notion of free trade as the essence of human liberty and the route to economic prosperity, lest we fall victim to a 'world' of fabricated collective illusion, which Richard Moore metaphorically describes as 'matrix reality'.
When labour is exploited because workers are denied their right to union representation, or exposed to health and safety risks, or child labour or forced labour is used to produce goods, or predatory trade practices are developed by dumping goods into our country, it is somewhat mystifying how all this can be applauded, or justified in the name of benefiting consumers.
The fact is workers are themselves consumers, and if we allow unfair trade practices to undermine our manufacturing sector, and cause loss of jobs, then obviously demand will fall. The evidence is there to show that dumping is merely to gain market access, not to protect consumers by providing cheaper goods and services. Those who believe that there are sustainable benefits to be derived through dumped goods which do material injury to our labour force are, in a word, supremely nave.
I do believe that the workers at Caribbean Cement Company, the farmers and workers in the manufacturing sectors in St. Lucia, Barbados, Trinidad, Antigua and other Caribbean islands have struggled too long for unfair trade practices and the absence of core labour standards in exporting countries to thwart our efforts at promoting local economic development and policies that move our communities, countries and region towards greater self-reliance.
STARK REALITY
The stark reality of a global economy with the growing prospect of the immiseration of more than half the population should not escape Jamaica's attention about the worrying trends of globalisation. We continue to see the shadows on the walls of the cave and believe that to be true reality. We are failing to see that around the world inequality is increasing while the world is further globalising. Half the world lives on less than US$2 per day, nearly one billion people entered the 21st century unable to read or write, and less than one per cent of the arms budget could put every child in school.
Even while we seek to provide the moorings to weather the tempest of globalisation, the United States and Europe are busily trying to push through the issues of government procurement, competition policy and trade facilitation. We seem not to realise what is in store for us as a people if ever the US and EU were to get their way in respect of these issues. Take, for example, the trade and competition policy. This seeks to interfere with a government's right to protect vulnerable groups in its society if some foreign investor sees this as adversely affecting their ability to make a profit.
In August of this year, organisations and movements from some 15 Central and Latin America countries met in San Salvador to declare their strong opposition to the privatisation of water. The Declaration of San Salvador for the Defence and Right to Water, declared their "total rejection of the privatisation of water resources and public water services in [our] countries and in the region, and denounce that these processes are being encouraged, financed and promoted by multinational corporations, international financial institutions, multilateral trade organisms and governments." A female writer in a recent publication pointedly asked the WTO: What do you want with my water?
Bolivians protest actions have forced their government to return the privately owned water supply to the public domain because of increased water rates. But if the present GATS provisions were ever to remain in its existing form, the action by the Bolivian government would result in them having to compensate the US-based multinational, Bechtel Enterprise Holdings for lost business opportunities. The experience in Latin America with its several bilateral arrangements with the US and Canada have not brought the desired benefits to these economies. With the expansion of regional trade the situation is expected to be worse.
Bob Naiman from the Centre for Economic and Policy Research in an article on 'Free Trade and Economic Development', noted that "The FTAA is certain to have provisions that will further restrict the ability of Latin American countries to build their domestic economies: requirements to observe patents and copyrights held by US corporations, prohibitions of government imposing 'performance requirements' on US corporations, and provisions allowing US corporations to sue Latin American governments."
Those who think this is simply about an increase in CET rates better wake up to the reality of the new world order which will be imposed upon us while we carry on side shows. Any failure to give local industries a chance to compete fairly in the global marketplace will, of course, stymie internally-driven economic development. Increasing trade with the United States will not benefit countries like Jamaica which are heavily indebted to the multilateral lending agencies. Our export earnings will simply be used for debt repayment and the further subordination of our geo-economic space to transnational capital.
This is why we do not have the luxury of speaking about limited government because they must protect us from market forces. In fact, governments do seek to override markets for a number of reasons, notably among them are to stabilise, promote growth, limit detrimental side effects, temper inequalities and cultivate civic virtues.
The governments of the US and Europe are protecting their main industries on agricultural products, a position which have had devastating effects of the economies of the Caribbean region. NAFTA demanded the lifting of subsidies in Mexico and elimination of tariffs, although the US provided seasonal protectionist bans to protect its crops.
We have every reason to believe that this pattern will be adopted by the FTAA.
Brazil seems very much to understand what is at stake. Their President, Luiz Inacia da Silva, a former trade unionist, is off on a five-nation tour of Africa to drum up support to pressure Europe to remove subsidies off its farming products. But as long as those subsidies remain, we better find ways of protecting our own economies, which are far more vulnerability to the shocks and vicissitudes of global competition.
While we are busy opposing the CET rate increase because of some sterile economic arguments about the vices of monopolies we need to grasp a wider world view. In an article captioned: 'There is no level playing field, free trade not always benign', appearing in Third World Economic in June 2002, Chakravarthi Raghavan eloquently argued that free trade produces winners and losers, and that such trade is "impoverishing and marginalising the developing world." He further noted the " rising corporate power that is corrupting and influencing, not transparently, governments and international institutions to further corporate monopolies and oligopolies at public and consumer expense."
CONCLUSION
In the end, regional integration, according to Prime Minister P J Patterson, cannot proceed, or in fact succeed, unless we ensure a strong, vibrant and competitive economic base. We must find ways to ensure that provisions under the special and differential treatment for developing countries are fully utilised. The literatures are replete with an abundance of caution against opening up our economies to a flood of cheap imports. The government has a moral obligation to act in defence of the economy. But we are not arguing for protectionism, we are arguing for a level playing-field to prevent the stark unequal wealth concentration, extreme poverty and social unrests.
We have been this way before and cannot falter or turn back. If we are to remain on the side of economic and social development, then we must take counsel in H.G. Wells' truly spoken words that "Human history is becoming more and more a race between education and catastrophe."
Danny Roberts holds a BA (Hons) and MPhil (Govt) from the University of the West Indies, Mona. He is Vice President of the National Workers Union and President of the Union of Clerical Administrative & Supervisory Employees (UCASE). He is also a part-time lecturer in Industrial Relations in the Department of Management Studies, UWI, Mona.
