Globalization and Militarism:  The need for a human security trade agenda.
By Steven Staples, May 2000

In February last year, Defense Secretary William Cohen went to Redmond,
Washington to meet with two hundred Microsoft workers to deliver a simple
message: For all of the domestic prosperity produced by the Information Age
- symbolized by the astounding success of Microsoft - U.S. economic power
is still dependent on its military strength.

Cohen's visit was part of a campaign to win support outside of defense
circles for a resurgence in military spending during a prolonged period of
peace. "Some soldiers in the high-tech revolution do not fully understand
or appreciate the soldiers in camouflage," Cohen said. His message was not
lost on Bill Gates, Microsoft's chairman, who bought $68.9 million worth of
shares in nuclear powered warship-builder Newport News after Cohen won his
military spending increase from Congress soon after his visit to
Washington.

Cohen was correct in his argument that the United States' economic
prosperity depends is upon its military power - and billions of dollars
given to weapons corporations to maintain that power. He's also correct
that few people understand this connection given today's age of economic
globalization dominated by a single superpower.

But globalization, while creating incredible wealth for so many of the
world's elite like Bill Gates, is at the same time creating the conditions
for war and conflict, and promoting the development of weapons to fight
those wars.

Globalization, as a term, describes the creation of a single global economy
whereby the rules are written and adjudicated within international trade
bodies. The best known of these institutions is the World Trade
Organization, established in 1995 to negotiate agreements on tariffs,
subsidies, intellectual property, and other areas affecting virtually all
facets of human economic endeavor. The WTO also interprets these agreements
when members countries disagree over the rules, convening dispute panels
empowered to rule and authorize billions of dollars in trade penalties if
countries do not abide by its decisions.

Successive panel rulings have consistently struck at the heart of national
programs and policies of sovereign nations. Rulings have struck down laws
governing the promotion of culture, food safety, industrial policy, and
taxation. Furthermore, every environmental protection measure that has been
challenged before the WTO has been struck down by the dispute panels.

However, one major area of economic activity is given a blanket exception
to the WTO agreements: national security. Government policies and actions
designated by the state as essential for national security, meaning the
development, production, and trade in arms required for the provision of a
military establishment, are completely exempted from WTO agreements.

Article XXI Security Exceptions
Nothing in this agreement shall be construed to prevent any contracting
party from taking any action which it considers necessary for the
protection of its essential security interests relating to the traffic in
arms, ammunition and implements of war and to such traffic in other goods
and materials as is carried on directly or indirectly for the purpose of
supplying a military establishment. [GATT 47 Article XXI (b) (ii)]

The special protection for military industries and defense policies is
unmatched anywhere in the GATT and other trade agreements.

In the industrialized world, the security exception allows wealthy nations
to side-step agreements which prevent discriminating against foreign goods,
favoring domestic corporations, providing subsidies to industry, etc. These
countries use military spending to subsidize their corporations, achieve
regional development, and maintain their technological superiority through
military spending.

For example, in 1999 a WTO trade panel ruled against a Canadian government
program that provided subsidies to aerospace and defense corporations for
the production of civilian aircraft. Contrast this WTO ruling with the
billions of dollars the Pentagon subsidizes U.S. aerospace and defense
corporations for the production military aircraft. The subsidy for civilian
aircraft is prohibited, but subsidize military aircraft and the subsidy
cannot be challenged because of the security exception.

The emerging vision of the future being shaped by globalization is cause
for great alarm. The powerful protection to the military establishment,
contrasted with the dramatic limits to other areas of government
activities, provides an insight into the value structure of the new global
economy.

On its present course, the new global economy will be dominated by a
handful of transnational corporations, controlling monopolies in all
economic sectors and generating wealth greater than the majority of nation
states. Already, of the world's largest 100 economies, 52 are corporations
- not nations. The wealth created will flow to a global elite in developed
countries who will control the vast majority of the world's riches.

Weakened nation states will exist largely to provide internal police and
military forces to defend corporate interests. They will be unable to
provide for their citizens through public services, nor prevent the
excesses of the market such as unemployment and environmental destruction.

Armed conflict will follow two trends: brutal civil wars waged with
low-tech weaponry where civilians account for the greatest numbers killed
(e.g. Rwanda, Sudan, East Timor, Sri Lanka), or "turkey shoots" between a
technologically superior state or military alliance and a third world
country that barely mounts a defense (e.g. Iraq, Yugoslavia).

In the Third World, powerless governments will be at the mercy of
transnational corporations, The "race to the bottom" for weak environmental
and labor standards, little taxation and regulations, all in a desperate
attempt to attract foreign investment will result in a lack of human
security, economic inequality, and social strife. All of these are the
conditions for conflict and war.

Meanwhile, high-tech armed forces of industrialized countries will protect
the investments and interests of their elite. As economic interests extend
around the world, so will there be a need for military power will an equal
reach to defend those interests from challengers.

This is the relationship between the economic and military power that
Defense Secretary Cohen was speaking about in Redmond last year. The
security exception will allow the guaranteed financial support vital to
high-tech and weapons producing corporations through military spending,
while providing the military force necessary to protect US interests within
a conflict ridden and volatile global economy.

The current agenda of globalization is a step backward. The Bretton Woods
institutions, and the spirit of which they were created, were far more
advanced in their recognition of a fair and equitable economy. The framers
of that system understood that international peace depended upon an
economic system that promoted peace, unlike the current system which will
result in greater economic inequality and war.

U.S. trade policy is firmly entrenched in promoting an agenda of
globalization through the WTO and other economic institutions. It strongly
advocates an expanded World Trade Organization, as evidenced in its hosting
of the WTO ministerial in Seattle where a new round of negotiations was to
begin.

However, globalization promotes corporate interests of liberalization and
profits over the national interest of internal social equity and global
peace and stability. The economic system is unable to recognize the
requirements of human security, and is dependent upon military spending and
firepower to defend corporate interests at home and abroad.

Globalization is challenging fundamentally the power of the nation state.
International trade agreements, in fact, have less to do with regulating
trade than they do about regulating governments. The agreements build
fences around governments, limiting their ability to govern through public
policy while submitting current policy to the liberalizing pressures of WTO
trade panels.

Its here that the security exception plays two important roles in
facilitating the development of the new global economy. First, WTO
membership requires an ascension of national sovereignty to the
international body, and the security exception has convinced national
security institutions to acquiesce to the constitutionalization of the
global economic system. Given that the GATT was signed in 1947, the
security exception allowed the system to develop while not interfering in
governments' actions taken to conduct the Cold War.

Second, the security exception allows the wealthy industrial countries to
cheat the WTO rules, using military spending to subsidize corporations,
promote regional development through defense contracts, and maintain an
industrial knowledge base through weapons research and development.

However, the security exception gives a false sense of security. The role
of the nation state goes far beyond simply providing a police and military.
The state maintains its legitimacy through responsible governance in the
interest of the common good, and it is this imperative which provides for
the needs of its people.

Moreover, by pursuing a global economic system which facilitates a global
free market - an amoral social Darwinism which promotes the survival of the
fittest based on wealth, privilege, race and geography - it will guarantee
greater conflict, proliferation of arms, and exactly the instability which
is anathema to the economic interests of all nations, including the United
States.

So if globalization is not in the interest of the nation state and good
governance - why is the United States pursuing it?

To say that the conflict is between national interest and global interests
does not adequately describe the situation. More correctly, the conflict is
over the public interest vs. private, corporate interest.

Globalization clearly provides the greatest benefit to stateless
institutions such as transnational corporations. Transnational corporations
have been exercising power behind the scenes, driving globalization and
working with administrations who mistakenly believe that what's good for
Boeing is good for America.

This is true in all economic sectors which are dominated by transnationals,
and the arms industry is no exception. Defense contractors are considered
part of the national industrial base and regulated and nurtured as such by
the government. They are given subsides through military spending and are
protected from foreign competition for government contracts.

However these same corporations are normally involved in civilian as well
as defense markets, and want to pursue export markets for the defense,
commercial, and dual-use technologies they produce. They view their
interests as lying in the global economy and strive to become
transnationals, but domestic arms export regulations may prevent exports.

The Boeing corporation alone has global sales of more than $50 billion and
is the world's largest builder of commercial and military aircraft. Boeing
is the U.S.'s largest exporter, with customers in 145 countries, employees
in more than sixty countries and operations in twenty-seven U.S. states.
Worldwide, more than 200,000 people get their paycheque from Boeing.

A transnationalized arms industry presents new challenges to the nation
state. The weakened government no longer has the ability to reign in
weapons corporations, and is trapped increasingly by their private
interests: greater military spending, more state subsidies, and a
liberalization of the arms trade. The increase in military production and
proliferation of weaponry is done without consideration of their costs to
international diplomacy and peace, directly pitting the public interest of
peace and good governance against the private interest.

Several rounds of mergers in the U.S. have concentrated the weapons
industry into a few monopolistic prime manufacturers. Defense corporations
are able to greatly influence national defense and foreign policy, even
when these policies go counter to peace efforts and equitable uses of state
resources:

*  U.S. military spending is scandalously high while the education system
and other social programs languish because of lack of funding;

* Government regulations are weakened or removed altogether. For example,
export controls designed to prevent weapons from being sold to countries at
war or countries that violate human rights are narrowly interpreted or
weakly enforced;

* Foreign embassies and trade missions abroad are used to aid arms sales to
foreign governments for commercial purposes;

* Policies which provide profits to corporations are pursued despite the
costs to peace and disarmament. For example, NATO expansion and the
National Missile Defense program have serious damaged disarmament
initiatives with Russia.

The new global economy cannot be dominated by corporate interests, and must
be regulated to promote human security.

The protests in Seattle surrounding the ministerial meeting of the WTO were
simply an overt demonstration of the much broader degree of disillusionment
with the global economy. Where many people once felt that globalization was
inevitable and that there were no real alternatives, some people are
questioning the WTO agenda, and many others are outright opposing it.

The level of opposition varies. In some quarters, the WTO is completely
opposed because it is seen as an unwanted intervention into national
sovereignty, and part of a secretive alliance of governments and
industrialists who want to enforce poverty and subjugate citizens to its
will. In other quarters, the WTO is seen essentially like a large
corporation - an organization representing employers that must recognize
the rights of workers and bargain with unions as they would with employees
of a company.

Finally, there are those who have organized around the call to "fix it or
nix it," meaning remove the most egregious aspects of the WTO which affect
social programs, environmental protection, and cultural programs, while
including a recognition of how trade affects human rights giving special
consideration to the needs of developing countries. Failure to blunt the
destructive edge of the WTO will result in greater opposition to the WTO as
an institution.

Clearly, there is a role for effective multilateral institutions such as
the WTO. The arrival of the twenty-first century is not a time for
reclusion behind twentieth century national structures, but nor is it a
time to disregard the horrible lessons of the last century's disastrous
wars. The WTO must adapt to the new realities of a world that is
interconnected, interdependent, and of limited resources.

The current US administration must change its foreign and trade policy to
forge a new social contract for the emerging global economy. The crisis of
legitimacy of the WTO, and its sister organizations the International
Monetary Fund and the World Bank, provide an opportunity to reengineer
these institutions to be responsive to human needs which cannot be
addressed by the free market.

To begin, the WTO and other global institutions must adopt a human security
imperative. The United Nations Human Development Report 1999 notes that,
"Threats to human security are being exacerbated by globalization." It
calls for actions to protect cultural diversity, control global crime,
preserve the environment, promote fairer trade - especially for the poorest
countries. Under the current system, governmental powers to achieve these
goals are being limited by trade agreements and dismantled by successive
WTO trade panel rulings and IMF-imposed structural adjustment programs.

Security exceptions in trade agreements which provide blanket protection
for government actions for military security must be reinterpreted to
accord the same blanket protections to government actions necessary for
human security. Governments could be free invoke the exception for actions
required for protection of the environment, human rights, and culture.

Furthermore, new agreements would need to be subjected to a "Human Security
Impact Assessment," akin to the more common place environmental impact
assessment. A Human Security Impact Assessment would be similarly required
for World Bank projects and IMF conditions for assistance.

Following the reinterpretation of the security exception, a dismantling of
the special treatment for military economies could begin. A first step
would be to prevent countries from using military spending to subsidize
corporations. For example, current prohibitions on exports subsidies would
be expanded to include the arms industry.

The inclusion of the arms industry in existing agreements would allow
member countries with low military spending to challenge the unfair
industrial practices of the military powers. The absence of subsidies would
immediately dampen the international arms trade. Moreover, it would further
remove the impetus to pursue industrial development through an arms
industry which was exempted from the threat of WTO challenges.

Finally, new agreements should be negotiated into the WTO where
international controls are needed to prevent a "race to the bottom." The
first of such agreements would control the trade in arms. A WTO Arms Trade
Agreement would subject all arms sales to international standards where
prohibitions on arms sales could be set on member countries in conflict,
arms races, or that violate human rights.

The dispute settlement mechanism could be available to countries protesting
violations of a WTO Arms Trade Agreement. For example, if a member country
made an arms sale to a country currently under an internationally
sanctioned arms embargo, a third member country would be able to challenge
the sale before a trade panel. If the sale was ruled in violation of the
Arms Trade Agreement, the arms exporting country could face trade sanctions
equal to the value of the arms sale.

These suggestions for inserting a human security imperative into trade
agreements could form the beginning of discussions on positive alternatives
to the current globalization agenda

Charlene Barchefsky, the U.S. Trade Representative, admitted after the
protests in Seattle that, "The single greatest threat to the multilateral
trade system is the absence of public support." Today, public opinion is
moving against a global economic system that does not provide benefits
equitably, protect the environment, respect human rights, and promote peace
and development. The global economic architecture needs to be fixed right
away, or it may find itself "nixed" by those people it is supposed to help.

****
Steven Staples is the Chair of the International Network on Disarmament and
Globalization, a network of activists and researchers in more than twenty
countries who are concerned about the new global economy and the need for
peace, disarmament, and the funding of human needs. The network was
established at the Hague Appeal for Peace in 1999.

He is also the British Columbia Organizer for the Council of Canadians, a
citizens' organization dedicated to opposing corporate rule and promoting
social justice and democracy. The Council of Canadians is the largest
citizens' group in Canada, with 100,000 members.

Steve has dedicated himself to exposing the links between globalization and
militarism, and how globalization promotes war  - as well as the production
of weapons to wage it. He  speaks to audiences in the US, Canada, and
Europe, most recently the World meeting of Abolition 2000 in Tahiti, the
Hague Appeal for Peace in the Netherlands, the Association of Asian
Parliaments for Peace founding meeting in Bangladesh, the civil society
events in Seattle during the WTO, the Arms Trade Study Group of the Council
on Foreign Relations in Washington D.C., and peace conferences in Canada,
Russia, and Spain.

He has produced two video documentaries, his articles are published in the
Canadian Centre for Policy Alternatives' journal, the Monitor, and he makes
regular appearances on Canada's national news media on issues of foreign
policy and globalization.

Steve holds a Bachelor of Education with Honours in History, and lives with
his family in Vancouver, Canada.

____________________________________________________________________
International Network on Disarmament and Globalization
405-825 Granville Street, Vancouver, British Columbia V6Z 1K9 CANADA
tel: (604) 687-3223    fax: (604) 687-3277
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