Free Trade, Globalization, and the Environment

Free Trade, Globalization, and the Environment

In 1992, many of the nations of Western and Central Europe created the European Union (EU)An economic and political confederation of independent European nations that choose to utilize a common currency and follow other agreed-upon measures designed to reduce trade barriers between those members and promote trade and diplomacy., a confederacy that incrementally grew in its authority to regulate commercial and other international affairs. The United States, Canada, and Mexico responded by forming the North American Free Trade Agreement (NAFTA)A trade agreement between Canada, the United States, and Mexico that eliminates trade barriers, such as tariffs, between each nation. in 1993. NAFTA had been a leading priority of Republicans and was supported by the incoming Republican President George H. W. Bush. The agreement sought the complete elimination of trade barriers between the three nations. NAFTA angered many Democrats but was still supported by Clinton, who hoped to appear as a moderate and win the support of business leaders.

Environmentalists feared that NAFTA would reduce the effectiveness of protective legislation by encouraging corporations to relocate to Mexico. Labor unions and many individual Americans feared that it would also result in a loss of American jobs for the same reason. NAFTA was unpopular among most voters, partially because some politicians disingenuously equated its limited goals with the European Union. Unlike NAFTA, the EU sought to coordinate most governmental functions and even foresaw joint armies and a common currency. A decade later, the goal of a common currency was achieved when EU member nations adopted the euro as their medium of exchange. However, NAFTA has not expanded to include such collectivist policies but continues to arouse controversy among diverse groups of voters.

Although few nations beyond Europe expressed interest in creating a common currency, major summits were held seeking to reduce global trade restrictions. Many of these summits took place under the auspices of the General Agreement on Trade and Tariffs (GATT), which was signed by two dozen nations shortly after World War II. After four decades of GATT summits, GATT itself was replaced by the World Trade Organization (WTO)An organization that seeks to reduce trade barriers between nations, it replaced the Global Agreement on Trades and Tariffs in 1995. in 1995. The WTO is an international agency headquartered in Geneva that seeks to encourage free trade and reduce government restrictions regarding international commerce. The WTO is charged with promoting trade and economic development in ways that also protect the economies of member nations. However, many in the United States and around the world have criticized the WTO as a tool of wealthy corporations in developed nations that seek to practice new forms of economic imperialism.

These protests against globalization reached a crescendo in November of 1999 when an estimated 50,000 protesters disrupted the WTO summit in Seattle. A large number of these protesters were college students who joined a diverse movement of citizens who believed that the WTO was fueled by a corporate agenda. Many of the protesters were environmentalists who feared that the WTO would make decisions that would reduce standards and enforcement of environmental protection. Many also believed that developing industries in developing nations would be crushed by international competition. Labor unions were also present in Seattle, fearing globalization would permit corporations in developed nations with higher standards of living to lower wages and benefits or simply relocate their operations abroad. Others feared that unregulated markets would lead to the elimination of smaller companies and promote the growth of multinational corporations they believed operated like cartels.

Figure 14.8

An estimated 50,000 protesters demonstrated against the 1999 WTO summit held in Seattle. Many of these protesters are dressed as sea turtles due to their belief that globalization doomed many endangered species. The novelty of blue collar union members marching alongside environmental activists in opposition to the WTO led many to refer to the protesters as “teamsters and turtles.”

Many Americans viewed the protesters as lacking a positive agenda of their own, opposing globalization but lacking their own alternative. Others believed the protesters were motivated by a misguided and naïve belief in some utopian alternative to Capitalist development. The protesters responded that they had specific solutions and lacked only access to power, rallying behind a brief document circulated by students at the University of Washington and other Seattle-based colleges called the Declaration for Global Democracy. Together, the protesters rallied behind the document’s final exhortation of “No Globalization without Representation.” The five points of this declaration provided a bit more substance but still appeared vague to the document’s critics. They protested the WTO’s undemocratic structure and nontransparent methods. The document also challenged world leaders to ensure that human advancement rather than material acquisition would become the standard by which they measured the efficacy of global trade policies.

The students and their supporters also rallied behind something they called sustainable development, a standard that included human rights, worker safety and compensation, environmental protection, and reversal of global inequity. However, the popular image of the 1999 protests does not reflect the progressive tone of these goals. Similar to the labor protests of the late nineteenth century, the message of the protesters soon became moot when a handful of individuals became violent. In response, the police responded with what many considered to be excessive force. Erroneous reports that the protesters had attacked police created or solidified existing negative images of the protesters. The same was true of sensational reports of bystanders being assaulted. Although some news outlets printed retractions, the image of the anti-WTO meeting being dominated by radicals persisted and colored the view of many Americans toward those who protested against globalization.

This concern for maintaining free trade without harming the economies of member nations led to the derailment of several free-trade initiatives within developing countries in the early 2000s. This is especially true in areas such as agriculture, where millions of families depend on agriculture for their livelihood. American grain is often produced much more efficiently due to mechanization. It is also heavily subsidized by the federal government. As a result, many nations fear that the complete elimination of trade restrictions will result in their farmers being forced to compete with inexpensive American grain. While many point out that this development would provide relief for many impoverished urban dwellers, others fear that the competition would destroy the agricultural base of developing nations. If this happened, they argue, the result would be long-term dependency on foreign grain. The WTO launched a major series of conferences in Doha, Qatar, in 2001. The organization continues to meet in related conferences around the globe in hopes of resolving issues regarding agricultural subsidies and other global trade issues.

The WTO and other organizations dedicated to reducing trade barriers have also been derailed by environmental concerns. Environmentalists have shown that certain refrigerants and aerosol sprays deplete the layers of ozone gas in the earth’s atmosphere. These ozone layers absorb most of the potentially damaging ultraviolet light that radiates from the sun. Scientists demonstrated that chemical compounds in some refrigerants used in air-conditioning systems were especially dangerous as they neutralized the ability of ozone gas to block ultraviolet rays. As a result, laws were passed in the United States and other nations mandating the use of different refrigerants and regulating the chemicals used in producing aerosol sprays and other manufactured goods. The global nature of environmental concerns such as ozone depletion led to a series of UN initiatives such as the Kyoto Protocol. The result of a global summit on reducing greenhouse gases led by Vice President Al Gore, the Kyoto Protocol produced a binding treaty requiring developed nations to reduce their emission of greenhouse gases. As of 2011, the Unites States is the only developed nation that has not signed the treaty.