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Greetings! Comrades and Friends, once again we gather together to voice our strong opposition to this cruel and inhumane world order imposed on us by imperialist globalization. I want to thank you for giving me this opportunity to speak.

I believe that the strength of our opposition comes from the fact that our position represents the true welfare of the overwhelming majority of the world's people. However, in order to show that this is indeed the case, we need to expose all the lies hidden behind the doctrine of neoliberalism. These lies are being dressed up in beautiful clothes by the propaganda machine controlled by large multinational corporations and their imperialist governments. I am here to do a small part of the job of exposing some of these lies-lies that hide behind the "Free Trade doctrine."

I have three points to make: First, I will talk about the lies hidden behind the neoliberal "free trade doctrine." The second point is that there is no free trade under imperialist globalization. The last point is that there is no fair trade either.

The lies behind the neoliberal "free trade doctrine"

When David Ricardo advocated free trade, he used some hypothetical data of two countries to show that when they trade freely according to each of their comparative advantages, both countries would gain. The background of Ricardo's free trade theory was the following. By the 1830s, Britain had pretty much finished its industrialization. When peasants became workers and moved into cities, the higher food demand raised food prices. In England at that time, the "Corn Law" restricted food imports. The supporters of the "Corn Law" were those who belonged to the landlord class, because they benefited from higher rents due to the high price of grain. The new bourgeoisie, on the other hand, lobbied for abolishing the "Corn Law" and allowing the imports of grain. They foresaw that an increase in food supply from imports would lower the grain price. Cheaper grain would mean lower wages and thus higher profits. David Ricardo was their spokesperson for free trade.

The "Corn Law" was eventually abolished, not so much because of Ricardo's theory, but rather because the bourgeoisie, by that time, was a class on the rise and the landed class was a class on the decline. Like any other political struggle, the trade policy of a country will be decided by the relative strengths of the contesting classes. Of course, I need to qualify this statement by adding that this is only true when there is no outside intervention. Therefore, a trade policy, free or not free, would only benefit certain classes in a country. The abolishment of the "Corn Law" benefited the bourgeoisie and hurt the landlords. The working class in England certainly did not benefit from the cheaper imported food, because their wages were then lowered accordingly.

In today's world, with few exceptions, the ruling class of less developed (and developed) countries stands to benefit from the regime of trade and investment under imperialist globalization. In fact, in the Third World countries the ruling class's ability to rule often depends on the economic, political and military backing of the imperialist countries. In the next few days, when WTO negotiations begin and when the ministers of these countries put their signatures on the WTO agreement, they only represent the interest of their own class and they do not in any way represent the interests of the people in their countries.

Another myth of the "free trade doctrine" is that, according to Ricardo's theory of comparative advantage, if each country concentrates on producing what it has comparative advantages on and exports these products and in turn imports products that it does not have comparative advantages from another country, then both countries would benefit from this trade. Therefore, no restriction should be placed on trade. However, if we put his theory to a historical test, reality proves just the opposite. Industrialization first began in England, and by the beginning of the 19th century, its industrial development was ahead of all other countries, including both the United States and Germany. If the logic of Ricardo's comparative advantage had been followed, neither Germany nor the United States should have made any attempt to industrialize. The United States clearly had a comparative advantage in agricultural production; thus, it should export food and other agricultural products to England and import all industrial products from England. If this free trade policy had been followed, England would have been able to acquire all the raw material and food it needed and United States would have remained a country without industrialization.

Instead of following this free trade policy, both the United States and Germany used high tariffs and other trade barriers to restrict imports of industrial products. When industries in their countries were protected from the competition of superior British products, rapid industrialization followed. After several decades, they gradually reduced import restrictions but only after their industries were able to compete with British imports.

The imperialist countries today, which are most advanced in manufacturing and information technology, are telling us that we should open our doors completely and let their multinational companies in to occupy our markets and that this in the end would benefit us. They know that without any protection, our industries cannot compete and we will be forever dependent on imports. Thus, we would remain controlled economically, politically, and militarily by them. Therefore, we need to be clear that the "free trade doctrine" is merely an ideological tool used by the ruling class in imperialist countries to its own advantages.

There is no free trade under imperialist globalization

So, do we have free trade? The answer is a definite NO.

After World War II, the United States replaced Britain as the leader of imperialist countries. The U.S. led other Western countries as the promoter of "free trade" under the General Agreement on Tariffs and Trade (GATT). However, trade was only "free" when it benefited imperialist powers, especially the United States.

As soon as the imperialist countries had trouble competing against the textile products from developing countries, they imposed quotas on textile imports. As early as 1962, imperialist countries began import control on cotton textile, and in 1974, there was the Multi-Fabre Arrangement (MFA), which expanded the import quotas from cotton to include other fibers. Imposing on import quotas was against the GATT rules, which these countries set themselves, yet not only was there not any objection from the GATT; the GATT actually administered the MFA. The MFA was supposed to be a temporary quota system against textile exporting countries to give the textile industry in imperialist countries "temporary" protection, but a quarter of a century later, it is yet to be phased out.

Agricultural products were not included in the first seven rounds of GATT negotiations, because the U.S. and the European Economic Community both wanted to protect their agriculture. The United States first set import quotas on its dairy products. Then in 1951, the U.S. Congress amended Section 22 of the Agricultural Adjustment Act of 1933 and established the right for the US to set import quotas and that "no international agreement (existing or entered into by the U.S. in the future) should constrain the application of this section." (Braga and Vasconcellos, 259)

Similarly, the European Economic Community protected its members through tariff reduction within the common market and imposed import controls on agricultural products from outside its area. Yet, at the eighth round of GATT negotiations, imperialist powers decided to "free" agricultural products in international trade, simply because by that time the policies of subsidizing agriculture in both the United States and the European Union (the European Economic Community before 1992) produced huge amounts of surpluses and these subsidies became too fiscally burdensome for them. Both the U.S. and EU still had to find markets to dump these surpluses. Thus, it became the right time for them to work together to pry open the markets of less developed countries. The policy of including agriculture in the WTO is simply to further expand markets for the world's largest agribusiness in Third World countries. The "free trade" in agriculture will further threaten the very survival of our farm production and increase our dependence on imported food.

Even before the 7th round of GATT negotiations began in 1973, the crisis of the international capitalist system worsened. During the 1970s, the competition for markets reached a new high and imperialist countries began to set up many non-tariff trade barriers to protect their own markets. As the crisis of the world capitalist system further intensified in the 1980s, an all out trade war among the imperialist countries was about to happen. The United States began unilaterally imposing trade sanctions and retaliations of different kinds against European countries, Japan, the newly industrializing countries and other less developed countries. These sanctions and retaliations were based on the U.S. domestic laws and were all against the GATT rules. For example, the Most Favored Nation (MFN) rule under the GATT meant that if a country grants lower tariffs to one country, it must extend this favorable treatment to all countries. However, the United States twisted the MFN rule around, and it has unilaterally decided which countries to which it grants the MFN status and which countries to which it denies it. It was under this intensified protectionism that the U.S., European countries, and Japan agreed to begin the 8th round GATT negotiations in order to avoid an all out trade war. The fact that the 8th Round GATT negotiations lasted eight long years and almost broke down a few times, tells us the intensity of the contradictions among the imperialist countries themselves.

The establishment of the World Trade Organization in 1995 did not resolve the trade disputes among the imperialist countries. The United States, the strongest among all imperialist powers, has continued to flex its muscles in trade disputes. The European Union and Japan are not ready to back down from the pressure. The WTO has not helped resolve the trade disputes among these imperialist powers and court cases against one another have piled up in the WTO. Even when the WTO makes a ruling, the imperialist powers can choose to ignore it. In the meantime, measures such as anti-dumping, voluntary export restraint and selective MFN status continue to block trade.

However, as far as opening up markets in less developed countries, these imperialist powers stand united to impose the most unfair and most devastating trading rules and call them "free trade."

I think we all understand that we are not just talking about international trade. The international regime of capital accumulation is much broader and encompassing than just trade. It is a regime tightly controlled by the largest multinational corporations and backed by the economic, political, and military power of the United States and its allies. The giant multinational corporations want their government representatives to use the WTO as a vehicle to set rules for moving their capital freely across borders, to guarantee their total freedom for operating in Third World countries, to enforce their own patent laws wherever they operate, and to take freedom away from Third World countries in setting their own economic policies.

To be sure, the WTO is not the only vehicle that the largest multinational corporations and their representative governments use to assure their controls over developing countries. The International Monetary Fund, the World Bank and other international financial institutions are all there to facilitate this international regime of capital accumulation. Then, there are also all these regional agreements and forums, such NAFTA and APEC, to promote the ideology of international capital accumulation under the name of "free trade."

Under such an international regime of capital accumulation, how could there be free trade?

There cannot be any "fair trade" under this totally unfair regime of international accumulation of capital.

As far as "fair trade" is concerned, it is a matter slightly different from "free trade" and it is also a bit more complicated. As far as people who advocate the abolishment of sweatshop working conditions, child labor and people who want to put "fair trade" marks on products from Third World countries are concerned, I think we should commend them for their efforts and goodwill for the work they have been doing. They have used the media to expose the miserable working conditions, low wages, and child labor under which many of the products consumed by consumers in the imperialist countries are produced.

However, we need to make it clear that "fair trade" can never be accomplished by these marginal and piecemeal changes here and there. Like I said earlier, we are not just talking about trade; there exists a well-planned and well-controlled international regime of capital accumulation. Even if the working conditions and wages in the sweatshops of exporting industries did improve a little, the tiny bit of gain has been totally wiped out by the current crisis of capitalism that started in Asia in 1997. This crisis has spread to many other developing countries and brought devastation to most people in these countries. After many economies collapsed, international institutions, such as the IMF, helped the monopoly capital drain every bit of surplus from these countries. Even the World Bank has estimated that in the last three years, another 200 million people (an underestimated number) have fallen into extreme poverty.

Aside from the "fair trade" groups mentioned above, there are many other advocates of "fair trade" who merely use "fair trade" as a cover for trade retaliation. These "fair traders" cry bloody murder when certain industries in the U.S., countries in the European Union, and Japan have trouble competing with cheaper imports. They claim that the developing countries are being unfair because these countries use cheap labor, so countries with high labor costs can not compete. They have used anti-dumping, voluntary export restraints and other measures to restrict imports from developing countries. Let us see who is really being unfair.

As much as 40% of total world trade today is, in fact, trade carried out by giant multinational corporations (MNCs) between their parent company and their subsidiaries (or among the subsidiaries of the same multinational corporation). Multinational corporations choose the locations of production by comparing the advantages of cheap and unprotected labor, lax environmental laws (and lack of enforcement of such laws), cheap raw materials, and market access. These giant multinational corporations then demand that their governments represent them in regulating international trade and investments in such a way that they can move their capital, goods and services freely without any restrictions. When the subsidiaries of these multinational corporations make use of cheaper labor in Third World countries to produce their products and then sell them back to countries where they are based, we do not hear them complain that their own subsidiaries are being unfair. For the 40% of the world trade that the MNCs have total control of, there is no issue of "fair trade." "Fair trade" only becomes an issue for the part of world trades over which large U.S.-, EU- and Japan-based MNCs do not yet have total control.

Who is being unfair anyway?

When large MNCs have had trouble competing with imports from Third World countries, they've charged us with being unfair, because we use cheap labor. I thought cheap labor was, to borrow their language, our "comparative advantage." What we should do is to charge them for being unfair by using their comparative advantages, such as the most advanced technology and the largest quantities of capital. Moreover, the imperialist countries are the ones that write the unfair rules on international trade and investment. Imperialist countries also have tight control over international financial institutions, such as the IMF, in order to impose policies, which benefit their own monopoly capital over sovereign nations. So, who has the power and who is being unfair?

There is no free trade or fair trade under imperialist globalization. The "free trade doctrine" is merely a myth used as an ideology of control. Therefore, we need to reject all lies hiding behind the neoliberal "free trade doctrine." We need to take back our power to set our own trade policies. These trade policies will be based on the long-term welfare of our people. #

Braga, Carlos Alberto Primo and Geraldo M Vasconcellos, "Agricultural Trade: the GATT and LDCs," in Global Protectionism, 1992