Trade Agreements & Democracy

Prime Minister all about Democracy

Jean Chretien, Prime Minister of Canada, spoke at the Inauguration of the 30th General Assembly of the Organization of American States, which was Held in Windsor, Ontario in June 2000. The following is an extensive excerpt from his inauguration speech:

In the past decade, we have seen the consolidation of democracy and the growth of free markets. Together, we have embraced shared values and common goals. Strengthening democracy. Protecting human rights. Enhancing human security. And, above all, giving all of our peoples the chance to realize their full potential...As friends and partners, we showcased our common will to make the needs of our people the primary object of our work together [at a conference in Berlin]. And this unshakable commitment will be at centre stage next spring in Québec City, when I will welcome you to the first Summit of the Americas of the new century ... For Canada, La Gran Familia means more than trade and commerce. It also means encouraging full and equal participation by all our citizens in the economic and political life of our countries. I am not suggesting that we should be guided by simple idealism. Our motivation and our objectives must be practical. They must produce concrete benefits for our people ... For democracy to take deeper root, all citizens must be heard. Our actions should empower groups whose voices have, too often, not been heard. It is only by engaging all of our citizens, by ensuring that their voices are heard, that we will gain the confidence we need to achieve our goals. Only by debating openly will we convince the doubters and galvanize our nations behind us as we move ahead." (http://www.summit-americas.org/)

These are inspiring words, and hold the promise for a concerted effort on the part of Canada's government to include all of its citizens in the formation of Canada's public policy. In this light, it came as a great surprise to me to hear that a man so apparently dedicated to democracy chided federal MP Svend Robinson (NDP, British Columbia) on holding meetings for people who opposed Canada's position regarding the Free Trade Area of the Americas (FTAA) summit. Specifically, Chretien was concerned that training in non-violent civil disobedience techniques was on the table at Robinson's meetings. As Chretien put it, "I think that it is irresponsible for a member of Parliament to encourage civil disobedience when he has a chance to talk about it here in the House of Commons."

Robinson clearly sees things differently. "Canadians," he announced, "are entitled to be civilly disobedient if they are being ignored and if democracy is being trampled on." (http://www.agrnews.org) For Robinson to argue that citizens are being "ignored" and that their "democracy is being trampled on," he must be coming from a different point of view than the Prime Minister who so boldly charted a course for democracy in his delivery to the OAS. From where do two widely divergent points of view manage to spring?

Democratic institutions

This disagreement strikes close to the heart of the debate surrounding trade agreements and democracy. What, exactly, do we mean when we talk about democracy? Mike Moore, Directer-General of the World Trade Organization (WTO), made the following declaration in a news release during the Seattle WTO protests: "There's a bit of a contradiction with people outside saying we are not democratic, when inside over 120 Ministers all elected by the people or appointed by elected Presidents, decide what we will do." (WTO Press Release, 29 November 1999). This identification of democracy with democractic institutions is echoed by the words of Chretien himself. After the Quebec summit, Chretien announced, "I'd like to point out that all the heads of state were elected democratically. There will always be people who are opposed to what we are doing, but look at the progress that democracy has made today" (The Globe & Mail, "Clock now ticking on free trade deal", April 23, 2001). Chretien was referring to the much-vaunted "democracy clause" which would insist that only countries that had "democractic institutions" would be allowed to participate in the Summit of the Americas process. Or, as he put it in his closing words, "Our efforts to strengthen democracy and promote prosperity must be accompanied by measures that expand and encourage participation by all citizens in the social, political and economic lives of their nations and of our region" (Ottawa Citizen, "Leaders commit $56B to free trade" April 23, 2001).

Against the dramatic backdrop of an army of over 6000 police officers attacking a huge group of almost entirely peaceful protesters (somewhere between 30,000 and 60,000) with pepper spray, tear gas, high pressure hoses, nightsticks and rubber bullets, this definition of democracy seems misplaced. Is it truly sufficient to have political parties and elections to have a democracy? Is a democracy a country that has political parties and elections, or is it a country in which citizens have a real opportunity to participate in the formation of public policy? Chretien's words that "This summit, like the two that came before it, is the instrument that we have chosen, as democratically elected representatives, to respond to the calls of our citizens" (Ottawa Citizen, "Latin leaders win Bush's early attention" April 21, 2001) rings hollow outside the "Wall of Shame."

Furthermore, there seems to be a real contradiction between the insistence of trade bodies that they are democratic and their equally vehement insistence that they are not systems of governance. Ultimately, these trade bodies can't have it both ways. If they want the power to "discipline" governments for failure to comply with trade rules, then they are taking on a supragovernmental role by definition. The defence that governments have the right to pursue their own domestic policies becomes a farce when those same governments are forced to pay other governments and even individual corporations in order to exercise that right. The abovementioned quote from Mike Moore was in response to complaints from the NGOs that were gathered outside and calling the WTO a de facto world government. Please allow me to quote further from that press release:

A decade and a half ago the Uruguay Round [of GATT talks, the conclusion of which ordered the creation of the WTO,] was launched in the face of public apathy. No one can say that about Seattle, that's a deliverable. We have gone from apathy to anxiety and even anger, not just from the demonstrators in the streets, but from peole around the world who feel that for too long they have been locked out of the benefits of growth, and from those who fear for their security in a time of uncertainty and change ...First, let's be clear about what the WTO does not do. The WTO is not a world government, a global policeman, or an agent for corporate interests. It has no authority to tell countries what trade policies - or any other policies - they should adopt. It does not overrule national laws. It does not force countries to kill turtles or lower wages or employ children in factories. Put simply, the WTO is not a supranational government - and no one has any intention of making it one (WTO Press Release, 29 November 1999).

Once again, a trade body with wide powers to challenge and discipline governments that violate trade rules sounds suspiciously like a meta-tier of government, no matter how you spin it. How could a non-governmental entity have jurisdiction over governments? Moore tries to resolve the contradiction by claiming that the agreements reached by the WTO are brought back to Member governments for ratification, such that the agreements themselves are simultaneously democratic and non-governmental. That is, the trade organization makes the rules in consultation with elected representatives of member countries, but it is up to countries themselves, through their elected governments, to ratify those agreements and agree to uphold them.

A test of our democracy

With this in mind, I must ask the following three questions in the clearest language possible:

  1. Has Canada's government made Canada's trade policy agenda openly available to Canadians who are interested in knowing their own trade policy?

  2. Do Canadians support Canada's trade policy agenda, and do they want our government to pursue further trade and investment liberalization in the manner in which it has been pursued up until now?

  3. If it turns out that a majority if Canadians are opposed to NAFTA/WTO-style trade and investment liberalization, or would at least like to see it opened for debate, then will the Canadian government respect and honour the will of its citizens and open its international trade policy agenda to reflect this will, or will the Canadian government simply try even harder to convince the public that its agenda is the correct one?

This would seem to be a good litmus test of the democractic impulse in a government. These are admittedly tricky questions, but the way that they are answered may reveal a lot about the Canadian government's regard for the sovereignty and judgment of Canada's citizens. At the very least, these questions underscore the debate that is close to the heart of trade and investment agreements.

Certainly, the government of Canada makes a determined claim on the term democracy. As Prime Minister Jean Chretien announced after the recent FTAA summit in Quebec, "We want to make sure that each citizen has an equal opportunity to live in dignity, to fulfill their full potential and to contribute to the development of society. This applies especially to those in our societies who have too often been marginalized or left out." Chretien even lauded the peaceful majority of protesters for coming. "I know most of the people who are coming have a message to transmit. There has been a lot of publicity around their point of view and that's good" (National Post, "PM defends heavy security in Quebec", April 20, 2001). Of course, this was after he had said in an interview: "They [protesters] say to themselves: Let's go spend the weekend in Quebec. We are going to have fun. We are going to protest, and blah, blah, blah" (National Post, "McDonough chides PM for saying protesters like to party" April 17, 2001).

How do we reconcile the feel-good pro-democracy rhetoric with Chretien's brazen contempt towards the protesters, and the obvious skepticism of the government towards the legitimacy of contradictory views on trade and investment liberalization? Neither the protesters - citizens, all - nor the organizations that represented some of them, were allowed any contact with the summit leaders or access to the draft that was on the table. By contrast, transnational corporations had the opportunity, through partial sponsorship of the summit, to buy private access to those same leaders to discuss the terms of the FTAA. Indeed, after a year of asking, Canadians still have not seen a draft of the FTAA, and so have had to rely on third party reports and educated guesses as to its contents. One can only assume that the government is afraid of the FTAA draft falling into the wrong hands, those apparently being the hands of Canadian citizens. On April 10, International Trade Minister Pierre Pettigrew finally announced that the draft of the FTAA will be made public, but not until it has been translated into French and Portuguese (Ottawa Citizen, "Pettigrew 'stalls' release of trade text" April 10, 2001). It was clear that this would not be done until after the summit, but after the summit is over, it all feels like too little, too late.

Further, it seems that Pettigrew's most progressive ideas get trumped by his own government. On being challenged about the notorious "Chapter 11" provision in NAFTA that allows corporations to sue corporations directly, Pettigrew has stated in the past that Canada would not allow a similar provision in FTAA. Chretien, however, thinks that "this clause has worked reasonably well" (National Post, "PM, Bush and fox talk energy" April 23, 2001). Chretien further stated that, "In the next four years, when we'll negotiate the FTAA, this clause will have to be looked into again, no doubt about it. It could lead to some change. Some companies have used it against us, but when you look at the number of cases and the amount of money that are mentioned, when you have $1.3 billion of trade every day with the United States, these few cases that have been used in seven years (of Chapter 11) are very marginal.'' After this announcement, Pettigrew changed his tune, publicly seeking "clarification" rather than renegotiation of the Chapter 11 provision (Toronto Star, "Chretien, Pettigrew deny free-trade rift" April 23, 2001).

Is free trade open to debate?

Kindly allow me to repeat the last sentence I quoted above from Chretien's inaugural speech to the OAS in Windsor: "Only by debating openly will we convince the doubters and galvanize our nations behind us as we move ahead." Of all the inspiring rhetoric, Chretien's last sentence is the most revealing, because it encapsulates and integrates the two themes running through the government's handling of these trade issues. They are: 1) The benefits of trade and investment liberalization are not open for debate; and 2) People who are skeptical simply don't understand the benefits of trade and investment liberalization.

In the words of Liberal MP Stan Keyes in a letter he wrote to me, "The Liberal government is committed to promoting and protecting Canadian interests while working to establish a fair international trading system. This means we will continue to work within the World Trade Organization (WTO) to promote the implementation of trade rules that are fair and protect Canadian interests." The only conclusion that I can draw from this is that the "Liberal government" has made up its mind and is not about to change it just because some Canadians disagree. US President George W. Bush reflected the same premise whe he said, "I'm here to learn and to listen from voices to those inside this hall and to those outside this hall who want to join us in constructive dialogue" (Toronto Star, "Violence won't stop trade pact, Bush says" April 22, 2001). Of course, corporations were the only non-governmental organizations that were allowed to attend the summit, which may reveal a lot about what Bush means when he refers to "those who want to join us in constructive dialogue." Specifically, people who try to debate the benefits of trade and investment liberalization are not being "constructive."

The trade liberalization-equals-growth premise is trumpeted by Chretien, who announced that "The creation of a free-trade area is not an end in itself. It is a means; a tool for growth that will allow us to promote closer, more dynamic economic relations among the nations of the Americas. In time, it will assure a higher standard of living and a better quality of life for all peoples of the hemisphere" (The Globe & Mail, "Chretien condemns summit violence", April 21, 2001). Is the endless repetition of this claim a fulfillment of Chretien's promise to "debat[e] openly" in order to "convince the doubters?"

Perhaps some Canadians are simply confused with all the changes that globalism has wrought, and just need to have it explained to them so that they, too, can see its benefits. U.S. President George W. Bush is fairly upbeat in this regard. "Sure there are going to be some who complain. That's what happens in a democracy, but the overall benefits have been great for our three countries," he said. "It's a positive example for the doubters to look at, for the skeptics to see that wealth can be spread throughout our hemisphere. They're welcome to express their opinions but it's not going to change my opinion about the benefits of free trade." Presumably, the relentless boasting of our leaders represents the "positive example" which can change the minds of the "doubters."

The editorial board of the Ottawa Citizen is more blunt. They write that "the FTAA's 900-page current draft, which consists mainly of 'bracketed text' listing different countries' preferred options, will only sow confusion among the public [italics mine]. Even without brackets, trade deals are a highly specialized literature that can be hard for the uninitiated to understand and easy for the unscrupulous to distort" (Ottawa Citizen, "Trade winds and drafts" April 10, 2001). At the risk of sounding irresponsible, I suspect that Maude Barlow and the 100,000 member Council of Canadians would make it onto the editorial board's list of "the unscrupulous." This kind of contempt for the capacity of ordinary people to take an interest in - and understand - esoteric trade agreements is profoundly anti-democratic. It implies - no, it explicitly states - that we require experts to decide what's good for us and are only required to ratify the decisions of those experts from time to time. Apparently Pierre Pettigrew, who has worked as an international business consultant with Samson Bélair/Deloitte & Touche ("more than 100 of The Financial Post's Top 500 industrial companies entrust us with a full range of accounting, auditing, tax, management consulting, and specialized financial and business advisory services"), qualifies as one of the experts to whom we should entrust our best interests. Clearly, all of the language about "democracy" refers to a special type of democracy in which the public "participate" by listening to the experts and doing as they are told. Protesters are welcome to make as much "blah blah blah" as they want, provided that their voices are easily ignored.

Hemispheric "democracy"

In this kind of thinking, a country like Colombia - where $1.3 billion worth of US-trained and funded paramilitary death squads assassinate politicians, peasant organizers and outspoken critics - has elections, and so qualifies as a "democracy" whereas Cuba, which has a dictator in power but encourages its citizens to become educated and participate in social policy planning (as long as the planning is consistent with the principles of the "revolution" - and let's be honest; how is Cuba's insistence that its citizens accept the government's terms for debate much different than our own government's insistence of the same thing?) is a menace to our way of life. In fact, Cuba's political system is in many ways more democratic than most of the OAS member states. Contrary to popular belief, Cuba has elections the candidates for which are nominated in public meetings and run independently of parties. The catch is that there is only one political party - the Communist Party. This is, of course, unacceptable to the United States, which beats Cuba in democracy by having two political parties, and so Cuba has been ostracized politically and economically ever since the revolution. However, Cuba's is a special case in the Americas, because the socioeconomic indicators for Cuba put the trade enthusiasts to shame. Murray Dobbin drives this point home in a National Post article:

The one country that was not invited to Quebec City was Cuba -- because it is judged "undemocratic." The performance indicators, however, put the judges' qualifications in doubt. According to UNICEF (1999) infant mortality in Cuba is 7 per 1000 live births, tied for the best in the hemisphere except for Canada. In Brazil it's 37, Mexico, 29 and Bolivia, 69. Cuba boasts a primary schooling rate of 100%, a secondary school graduation rate of 98.8% and a literacy rate of 96%, second only to Canada and Uruguay. Ninety-five percent of the population have access to electricity, and 95.3% to clean drinking water. Life expectancy at birth is 76 years. In the United States it has declined to 72. Cuba embarrasses everyone in its international solidarity: 15,600 third-world students have graduated from Cuban universities, and 11,000 students are currently enrolled. Cuba's renowned Latin American Medical School is training people from 24 countries and 63 indigenous ethnic groups, and 2,000 new students enroll every year. All of this is done at no charge and in spite of the vicious U.S. boycott. ("Democracy and the Quebec Summit" The National Post, April 30, 2001.)

Somehow, Cuba has managed to do what no other poor country in the Americas was able to do: provide for the needs of its citizens in a meaningful way. It was able to do this, not through trade and investment liberalization, but through direct state involvement in the provision of basic services, an activity that was also pursued by every modern industrialized state but is nonetheless anathema to free trade advocates. There are many legitimate arguments regarding political repression in Cuba, and it would be unwise to romanticize a country that actively represses the "wrong" kinds of arguments, but you can't take away Cuba's ability to create a healthy, well educated society with few resources and no international support. Further, next to some of the "democratic" countries in the OAS, like Haiti, Chile, El Salvador, Guatemala, and Nicaragua, Cuba's historic human rights violations seem like misdemeanors by comparison. Why is it that the one third world country in the Americas that refuses to play by US rules of is the one country that has pulled its citizens out of abject poverty? This certainly throws some doubt on the liberalization equals prosperity mantra, but the effects of liberalization will be discussed in detail in Part II of this series.

Chretien tirelessly promotes the complementary goals of trade liberalization and democracy. George W. Bush, however, more blatantly identifies democracy/prosperity as an inevitable outgrowth of economic liberalization, rather than a concurrent path. He claims that "Free and open trade creates new jobs and new income. It lifts the lives of all our people. It spurs the process of economic and legal reform and open trade reinforces the habit of liberty that sustains democracy" (National Post, "PM, Bush and fox talk energy" April 23, 2001). This is the same 'free markets and free speech' argument that the US government has publicly promoted for the last 20 years. In this view, trade liberalization leads to economic liberalization, which leads to growth, prosperity, and then democracy.

To clear away the rhetoric and get to the guts of the trade equals prosperity mantra, let us now turn to one of free trade's non-governmental advocates, John O'Sullivan, Editor-in-Chief of United Press International, who has encapsulated the Bush vision better than Bush himself could have done.

Mr. Bush, the GOP, private business and most economists favour free trade as simple, unqualified and indeed free as possible. The theory underlying this vision, adumbrated by the distinguished legal theorist John McGinnis in both the Chicago and Harvard law journals, is that of "jurisdictional competition." Simply put, genuinely free trade forces nations that have chosen different systems of tax, welfare and regulation to compete with each other. Businesses and taxpayers vote with their feet by moving from one "jurisdiction" (i.e., country) to another. And under jurisdictional competition -- a kind of international economic mimicry of U.S. federalism -- that system "wins" which attracts the most businesses and high-earners and so creates the most prosperity and jobs. Generally speaking, the winners in this marketplace of governments tend to be low-tax, lightly regulated economies with workfare rather than welfare (National Post, "Which FTAA vision will prevail" April 24, 2001).

Keeping in mind that I will look into the principles and mechanisms of trade liberalization in more detail next week, let me finish by saying that whether or not trade liberalization does what its proponents claim, in a democracy it should be up to the citizens to discuss, argue, debate, challenge, and finally develop the public and trade policies that the country ultimately develops. Clearly, that is not the case, and "public apathy" cannot be used as an excuse. When citizens in Canada try to open up a dialogue with the Canadian government regarding these issues, we are given a feel-good summary of the government's plans. When we try to challenge those plans, we are told why our ideas are mistaken. When we try to escalate our challenge to civil disobedience, we are sprayed, gassed, clubbed and arrested indiscriminately.

Elections do not make a democracy. A government that actively seeks and responds to the participation of its citizens is a democracy. Until that happens, no amount of "democracy clauses" is going to change the imbalance of power.

Ryan McGreal
Friday, May 5, 2001

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