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THE WORLD TRADE ORGANIZATION ‘MILLENNIUM Buc' TRADE ORGANIZATION THE WoRLD ‘MILLENNIUM Buc' Instead of shaping their trade policies around the interests of transnationals, governments should co-operate in developing an alternative system that's both humane and sustainable. Part 2 of 2 Let us not forget that those who are in difficulty today are also those who most dramatically benefited from globalisation yesterday, and may again tomorrow.* — European Union Foreign Trade Commissioner, Sir Leon Brittan he financial crisis of the past few years has demonstrated the alarming instability of the deregulated global economy. Unprecedented suffering has been inflicted upon millions of ordinary people in the hardest-hit countries. The United Nations International Labor Organization (ILO) estimates that 20 million work- ers became unemployed between July 1997 and September 1998 alone; and this was even before Russia and Brazil were heavily impacted by the crisis.” In June 1999, the World Bank estimated that up to 200 million people had been thrown into "abject poverty" due to the financial meltdown. This raised the number of people living in poverty to over 1.5 billion worldwide.* Despite some recovery, the aftermath of the crisis continues to increase social problems around the world. The EU, however, refuses to reconsider the current model of economic globalisation. It has callously blamed the governments of the affected countries for catalysing the crisis through poor financial management, and vehemently denies any link with trade and investment liberalisation. Clearly, the EU hopes to avoid a debate about the pitfalls of the high-speed deregulation of recent years, given its lofty ambitions for the strengthening of such policies within the WTO. Its continued promotion of international trade and invest- ment liberalisation, despite increasing social misery and environmental destruction, is indefensible. Contrary to the promised ‘trickle-down effect’ of economic growth based on internation - al trade, the global gap between rich and poor continues to widen. UNCTAD's 1997 Trade and Development Report concludes that globalisation in its current form is respon- sible for a dramatic increase in global inequality. In 1965, the average personal income in G7 countries was 20 times that in the seven poorest countries in the world. In 1995, the difference was 39 times greater. Income inequalities and polarisation are also growing within countries: the share of wealth pocketed by the top 20 per cent of the population as increased in most nations since the early 1980s. Women, in particular, pay a high toll for the neoliberal restructuring of societies, suffering specifically from the resulting higher unemployment rates, lower-quality jobs, reduced salaries and the dismantling of the wel- fare state.” UNCTAD (the United Nations Conference on Trade And Development) blames the high-speed liberalisation of market forces for these developments, and considers the cur- rent situation inevitable until the economy is refitted with regulations. The EU, on the other hand, argues that further liberalisation and expanded trade is the solution, despite the fact that more than one quarter of global production is currently exported—in comparison with only seven per cent in 1950. Many smaller countries in the South already depend upon international trade for up to 40 per cent of their gross domestic product, placing them in an extremely vulnerable posi- tion. Growing inequalities are becoming strikingly prominent, even within affluent Northern economies which generally profit most from corporate-led globalisation. Although EU studies admit that the turbulent present is "the time when unskilled work- ers will be at risk of losing their jobs", the EU continues to reiterate its increasingly hol- low claim that economic globalisation brings benefits that will eventually trickle down to all in European societies.*! by Corporate Europe Observatory © 1999 Prinseneiland 329 1013 LP Amsterdam The Netherlands Tel/fax: +31 30 236 4422 E-mail: ceo@xs4all.nl Website: www.xs4all.nl/~ceo by Corporate Europe Observatory © 1999 Prinseneiland 329 1013 LP Amsterdam The Netherlands Tel/fax: +31 30 236 4422 E-mail: ceo@xs4all.nl Website: www.xs4all.nl/~ceo NEXUS - 21 GLOBALISATION IN CRISIS: THE EU'S INDIFFERENCE FEBRUARY — MARCH 2000