Borba100 at Borba100 at
Thu Nov 25 06:24:51 MST 1999



In the face of global economic and social devastation, is an (official)
"Audit" really required as put forth in the "Statement From Members of
International Civil Society" to ascertain what is happening? Some of the NGO
critics --including the trade unions-- involved in the dialogue with the WTO
argue that there are both "positive" and "negative" impacts of trade
liberalisation. This position is ambiguous: the devastating impacts of
"globalisation" are already known and documented, the NGO community has
already produced a wealth of critical analysis and research. Moreover, the
audit proposal accepts the legitimacy of the WTO, it presupposes that there
are mistakes and "lets talk and put this system on hold" for a few years
"while we re-evaluate".

Do we need an Audit to ascertain "whether or not" the World is in crisis? And
by whom will this Audit be performed and for whom? The key "partner NGOs"
have already positioned themselves to undertake the relevant commissioned
background studies. Many of the organisations which signed and endorsed the
"Statement" were unaware that the Audit was part of the "Dialogue" with the
WTO and Western governments. And these research contracts performed "sector
by sector" in a "politically correct" fashion according to pre-established
guidelines set by the funding agencies will take several years to complete.

The conduct of an Audit has already been accepted by the European Union in
its consultations with the NGOs. Former European Commissioner Sir Leon
Brittan, on behalf of the European Union had in fact proposed in 1998, "the
commissioning of a study on the impact of the new Round on sustainable
development" (European Commission, op. cit). In other words, the Audit is
also part of the official agenda of the Seattle Round. In the meantime, while
the Audit is being conducted, economic, social and environmental destruction
will continue unabated.


What happens to the World system does not depend solely on the results of the
Millenium Round. We must understand that in many developing countries, many
of the clauses of the Millenium Round are already a "fait accompli". The are
part of the "conditionalities" contained in ad hoc loan agreements with the
IMF and the World Bank. Under the structural adjustment programme as well as
in the context of the IMF sponsored "bailout agreements" (eg. Indonesia,
Thailand, Korea, Brazil), developing countries have already committed
themselves to many of the propositions contained in the Millenium Round.

Moreover, the hands of Third World delegates to Seattle are tied, the vote of
most of the trade ministers from developing countries at the Seattle
Ministerial Conference is controlled by Western creditors. It is unlikely
that much opposition will be voiced from the official delegations from
developing countries.

Many developing countries have accepted in the context of agreements signed
with the Bretton Woods instititions to liberalise trade, deregulate capital
movements, privatise State public utilities, dismantle social programmes and
provide "national treatment" to foreign investors in a large number of
economic activities including services, banking, procurement, etc. These
provisions are often coupled with a "bankruptcy programme" under the
supervision of the World Bank with a view to "triggering" the liquidation of
competing national enterprises. An "enabling free market environment" is
implanted (without recourse to WTO clauses pertaining to "effective access to
markets"), national producers are brutally displaced and destroyed, countries
are casually recolonised...

Wall Street bankers and the heads of the World's largest business
conglomerates are indelibly behind this process. They interface regularly
with IMF, World Bank and WTO officials in closed sessions as well as in
numerous international venues. Moreover, participating in these meetings and
consultations are the representatives of powerful global business lobbies
including the International Chamber of Commerce (ICC), The Trans Atlantic
Business Dialogue (TABD) (which brings together in its annual venues the
leaders of the largest Western business conglomerates with politicians and
WTO officials), the United States Council for International Business (USCIB),
the Davos World Economic Forum, the Institute of International Finance
representing the World's largest banks and financial institutions, etc. Other
"semi-secret" organisations --which play an important role in shaping the
institutions of the New World Order-- include the Trilateral Commission, the
Bildebergers and the Council on Foreign Relations.


To top it off, "perfect timing": the deregulation of the US banking system
was approved by the US Senate barely six weeks before the Millennium Round
meetings in Seattle. The new legislation favours an unprecedented
concentration of global financial power. In the wake of lengthy negotiations
which concluded in the early hours of October 22nd, all regulatory restraints
on Wall Street's powerful banking conglomerates were revoked "with a stroke
of the pen". Under the new rules ratified by the US Senate and approved by
President Clinton, commercial banks, brokerage firms, hedge funds,
institutional investors, pension funds and insurance companies can freely
invest in each others businesses as well as fully integrate their financial
operations. The legislation has repealed the Glass-Steagall Act of 1933, a
pillar of President Roosevelt's "New Deal" which was put in place in response
to the climate of corruption, financial manipulation and "insider trading"
which led to more than 5,000 bank failures in the years following the 1929
Wall Street crash.10

In other words, a handful of financial conglomerates will gain effective
control over the entire US financial services industry. Coincidentally these
same Wall Street financial giants are also the main beneficiaries of
financial services' deregulation under the General Agreement on Trade in
Services (GATS) which provides "national treatment" to Wall Street's giants
in banking, insurance, brokerage services, actuarial services, etc. The GATS
is almost "tailor-made" to meet the standards set under the new US financial
services legislation. The financial giants oversee the real economy
Worldwide, they are creditors and shareholders of high tech manufacturing,
the defence industry, major oil and mining consortia, etc. Moreover, as
underwriters of the public debt, they also have a stranglehold on national
governments and politicians. Ultimately, they also call the shots on trade
reform in Seattle.

Moreover, the clauses of the defunct MAI which was to provide "national
treatment" to foreign banks and MNCs (leading to the dislocation of
municipalities and local governments) is also in the process of becoming a
"fait accompli". The financial conglomerates are now fully integrated with
the insurance companies. In turn, the latter oversee and control the
multinational health care providers which are actively lobbying in Seattle
for the deregulation of public health care under the GATS. The institutions
of the Welfare State are to be scrapped. The struggles of the entire post-war
period are to be erased.

The Worldwide scramble to appropriate wealth through "financial manipulation"
is the driving force behind this restructuring of the global financial
architecture of which the new US banking legislation and the "Seattle Round"
are an integral part. In concert with the WTO, the US legislation favours the
elimination of remaining barriers to the free movement of finance capital. In
practice it empowers Wall Street's key players including Merrill Lynch,
Citigroup, J. P, Morgan, Deutsche Bank-Bankers Trust, etc. to develop a
hegemonic position in global banking overshadowing and ultimately
destabilising financial systems in Asia, Latin America and Eastern
Europe...and this process is ongoing irrespective of the actual outcome of
the Millenium Round.


In turn, financial deregulation in the US allows speculative trade to prosper
Worldwide in a totally permissive environment. In turn, the Millenium Round
by calling for the deregulation of capital movements will provide greater
legitimacy to speculative trade thereby empowering Wall Street to extend its
global financial domain.

Institutional control over the channels of speculative trade provides the US
and EU financial giants with the tools to manipulate currency and stock
markets and impair the role of central banks. The ultimate objective is to
take control over the reigns of monetary policy and oversee financial markets
all over the World. In the 1997 Asian crisis alone, more than 100 billion
dollars were confiscated in a matter of months from the vaults of Asia's
central banks; similar speculative assaults were carried out in Russia in
1998 and in Brazil in 1999. Derivative and option trade including the "short
selling" of national currencies were behind these assaults leading to massive
debt default and financial collapse. Well documented, the IMF played a key
role in facilitating the speculative onslaught on behalf of Western and
Japanese financial institutions.

In a cruel irony, the use of these deadly speculative instruments was
formally legitimised in the Fifth Protocol of the General Agreement on Trade
in Services (GATS) in the immediate wake of the Asian crisis. Totally
disregarding the impending dangers, the GATS protocol negotiations coincided
chronologically (October 1997) with the climactic meltdown of stock markets
all over the World.


And War is also part of the Millennium Round. What happens to countries which
refuse to deregulate trade and foreign investment and provide "national
treatment" to Western banks and MNCs? The Western military-intelligence
apparatus and its various bureaucracies routinely interface with the
financial establishment. The IMF, the World Bank and the WTO --which "police"
country level economic reforms-- also collaborate with NATO in its various
"peacekeeping" endeavours, not to mention the financing of "post-conflict"
reconstruction under the auspices of the Bretton Woods institutions...

At the dawn of the Third Millennium, War and the "Free Market" go hand in
hand. War does not require a multilateral investment treaty (ie. an MAI)
entrenched in international law: "War is the MAI of last resort." War
physically destroys what has not been dismantled through deregulation,
privatisation and the imposition of "free market" reforms. Outright
colonisation through war and the installation of Western protectorates is
tantamount to providing "national treatment" to Western banks and MNCs in all
sectors of activity. "Missile diplomacy" replicates and emulates the "gunboat
diplomacy" used to enforce "free trade" in the 19th Century. The US Cushing
Mission to China in 1844 (in the wake of the Opium Wars) had forewarned the
Chinese imperial government "that refusal to grant American demands might be
regarded as an invitation to war."11

The "Seattle Round" purports to "peacefully" recolonise countries through the
manipulation of market forces, --ie. through the "invisible hand". It
nonetheless constitutes a form of warfare. More generally, the dangers of war
must be understood. War and globalisation are not separate issues. The
citizens' campaign against the WTO must be integrated with the anti-war
movement against the bombing of sovereign countries by the US and its
European allies.


The WTO, created from a "technical agreement" (Final Act of the Uruguay
Round), provides entrenched "legal" rights to banks and global corporations.
In turn the 1994 Marrakesh Agreement sets up procedures --including
manipulative Dispute Settlements-- which are now conveniently embodied in
international law but which blatantly violate the rights of citizens all over
the World.

Under WTO rules, the banks and MNCs can legitimately manipulate market forces
to their advantage leading to the outright recolonisation of national
economies. In other words, the WTO articles provide legitimacy to global
banks and MNCs in their quest to destabilise institutions, drive national
producers into bankruptcy and ultimately take control of entire countries.

Moreover, the Agreement formally instates a "triangular division of
authority" between the WTO, and its sister organisations the IMF and the
World Bank in a system of "global surveillance" of developing countries'
economic and social policies. This means that enforcement of IMF-World Bank
policy prescriptions will no longer hinge upon ad hoc country-level loan
agreements (which are not "legally binding" documents). All the main clauses
of the IMF's deadly "economic medicine" will eventually become permanently
entrenched under the Seattle Millenium Round. Countries will not only be
"bonded" by external debt, they will be permanently "enslaved" by an
international body controlled by the World's largest business syndicates.

These WTO articles will set the foundations for "policing" countries (and
enforcing "conditionalities") according to international law.

In other words, we must act in relation to the original "iniquity" and
"illegality" of the Final Act of the Uruguay Round which creates the WTO as a
"totalitarian" organisation. There can be no other alternative but to reject
the WTO as an international institution, to imprint the WTO as an illegal
organisation. In other words, the entire process must be rejected outright.
And this means that citizens' movements around the World must pressure their
governments to withdraw without delay and cancel their membership with the
WTO. Legal proceedings must also be initiated in national courts against the
governments of member countries, underscoring the blatant violation of
domestic laws and national constitutions.

In other words, the citizens' platform in Seattle and around the World must
be geared towards disarming this economic system and dismantling its
institutions. We cannot postpone our struggle and "wait a few years" in the
context of an "Audit" and meanwhile the World is consumed and destroyed. We
must act now. We must question the legitimacy of a system which ultimately
destroys people's lives.

We must challenge politicians and international officials, we must unmask
their insidious links to powerful financial interests and eventually we must
overhaul and transform State institutions removing them from the clutch of
the finacial establishment. In turn, we must "democratise" the economic
system and its management structure, challenge the blatant concentration of
ownership and private wealth, disarm financial markets, freeze speculative
trade, arrest the laundering of dirty money, dismantle the system of offshore
banking, redistribute income and wealth, restore the rights of direct
producers, rebuild the Welfare State.

Concurrently, we must also build the conditions for a lasting World peace.

The military-industrial and security apparatus which sustains these financial
interests must eventually be dismantled, which also means that we must
abolish NATO and phase out the arms industry.

We must combat the "media lies" and "global falsehoods" which uphold the WTO
and the powerful business interests which it supports. We must combat the
"false consensus" of Washington and Wall Street which ordains the "free
market system " as the only possible choice on the fated road to a "global
prosperity". This consensus is now shared by all political parties including
Social Democrats.

To achieve these objectives we must restore a meaningful freedom of the
press. The global media giants fabricate the news and overtly distorts the
course of World events. In turn, we must break the "false consciousness"
which pervades our societies, prevents critical debate and masks the truth.
Ultimately , it precludes a collective understanding of the workings of an
economic system which destroys people's lives. The only promise of the "free
market" is a World of landless farmers, shuttered factories, jobless workers
and gutted social programmes with "bitter economic medicine" under the WTO
and the IMF constituting the only prescription. We must restore the truth, we
must reinstate sovereignty to our countries and to the people of our

The struggle must be broad-based and democratic encompassing all sectors of
society at all levels, in all countries, uniting in a major thrust workers,
farmers, independent producers, small businesses, professionals, artists,
civil servants, members of the clergy, students and intellectuals. People
must be united across sectors, "single issue" groups must join hands in a
common and collective understanding on how this economic system destroys and
impoverishes. The "globalisation" of this struggle is fundamental, requiring
a degree of solidarity and internationalism unprecedented in World history.
The global economic system feeds on social divisiveness between and within
countries. Beyond Seattle, unity of purpose and Worldwide coordination among
diverse groups and social movements is crucial. A major thrust is required
which brings together social movements in all major regions of the world in a
common pursuit and commitment to the elimination of poverty and a lasting
World peace.


1. The latter frequently position snipers at key positions. See Paul
Richmond, "An Assessment of the Police, What to expect during the Seattle
Ministerial Conference",, September 1999.

2. WTO Press Release, Ruggiero Announces Enhanced WTO Plan for Cooperation
With NGOs, 17 July 1998.

3. European Commission Press Release, "Commission and NGOs hold dialogue on
the Millennium Round", Brussels, 17 November 1998.

4. Ibid.

5. Ibid.

6. See AFL-CIO, Make the Global economy Work for Working familiies,, Ocotber 1999.

7. Ibid.

8. Financial Times, London, 17 November 1999).

9. Quoted in Financial Times, op cit.

10. See Martin McLaughlin, "Clinton Republicans agree to Deregulation of US

Banking System", World Socialist website, 1 November 1999.

11. Quoted in Michel Chossudovsky, Towards Capitalist Restoration, Chinese
socialism after Mao, Macmillan, London, 1986, p. 134).

© Copyright by Michel Chossudovsky, Ottawa, 1999. All rights reserved.
Permission is granted to post this text on noncommercial community internet
sites, provided the essay remains intact and the copyright note is displayed.
To publish this text in printed and/or other forms contact the author at
chossudovsky at, fax: 1-514-4256224.

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