Monday, February 14, 2011

1995: GATT & the Ecology of Commerce

"Free" trade agreements continue to be controversial, and provoke splits in both parties' coalitions. Meanwhile, the long run is getting shorter every day, and sustainability continues to be our only option.
Just as the December issue went to press, the lame-duck 103rd Congress ratified the odious GATT treaty. Sold under the comforting rubric of "free trade," the GATT treaty is anything but. Like NAFTA before it, the agreement is more like an interlocking set of protectionist measures, mostly forced on the poorer nations by the richer ones on a take-it or-leave it basis.
With profound contempt for the democratic process, the GATT agreement was negotiated behind closed doors by the Reagan, Bush and Clinton administrations, then rammed through Congress on a "fast-track" basis, with a minimum of debate and no amendments allowed.

The real tragedy of GATT and NAFTA is that with input from labor and environmental groups and indigenous populations, they could have been genuine free trade agreements, and formed a basis for global cooperation and economic justice. The agreements between the richer and poorer nations in the European Community provide a useful model for what might have been. Opponents of our bogus free trade pacts are not opposed to the principle of free trade, just to the shameless corporate giveaways we've seen in the last year.

Combined with the serious attitude problem to be found in the 104th Congress (about to take power as this issue goes to press), the GATT agreement presents major impediments to any attempt to save the planet. Both developments promise a further concentration of economic power, even further removed from any sort of popular control.

Curiously, though, in the midst of all this nastiness, I believe there may be some slight grounds for optimism. A vital new book, "The Ecology of Commerce," by Paul Hawken (Harper Collins, 1993), presents a powerful vision of a sustainable economy. Hawken describes a way for capitalism to0 evolve into a system that works with nature, rather than against it.

At present, the harmful effects of various technologies like burning fossil fuels or manufacturing pesticides, are passed on to society at large, and are not included in the price of gasoline or pesticide. Thus we have private profits but socialized losses. What Hawken proposes is to gradually phase in a series of "green taxes" on harmful, toxic and wasteful technologies. This would make apparent the true costs of the products and technologies we buy.

For every year the green taxes are increased, both corporate and individual income taxes would be decreased correspondingly. That way no one is out any more cash, but incentives are created for the use of sustainable technologies. As the true costs of nuclear power or coal-burning plants are reflected in their prices, rather than being subsidized by the taxpayers, more clean and efficient technologies like solar, biomass and windpower become more logical in economic as well as environmental terms.

You may recall that the Clinton administration proposed a modest BTU tax in its first hundred days, but quickly retreated in the face of opposition from industry. The task at hand is to convince both industry and politicians that sustainability is really our only option in the long run. The limits to our rapid depletion of natural resources will be reached sooner rather than later, and there is no time to lose.

There have been eight GATT agreements in the last fifty years. It's time to get to work on the ninth. Mr. Hawken's book offers an intriguing blueprint for improvement.

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