By J. Yanqui Zaza
Once again, Liberian President Ellen Johnson Sirleaf’s government is boasting that Liberia has accomplished a milestone-Liberia’s admission to the World Trade Organization (WTO). Liberia’s admission into the WTO comes after the Sirleaf government has signed many flawed big-business-concessionary agreements since her ascendency to the presidency in 2006. Predictably, many Liberians, aware of the cozy relationship between President Sirleaf and big business, are asking whether Liberia will benefit from its WTO membership. Why should this matter to Liberia when the country cannot export a significant value of commodities and, or services?
Most importantly, wouldn’t, investors, awarded with flawed concessionary agreement, delay or fight against amending the agreements, since legal recourse is available within the WTO? Even worst, wouldn’t Firestone, Mittal Steel, etc., violate current labor laws, environment laws, etc., if experts at the WTO perceived the laws as anti-business?
For President Sirleaf and representatives of the World Trade Organization, Liberia’s admission to the World Trade Organization is a victory FrontpageAfrica, 8/23/2015). Mr. Joakin Reiter, Deputy Secretary of WTO stated, “…major benefit of the WTO is that it provides government with a power instrument for domestic reforms to accelerate growth, modernize, strengthen institutional capacity and enshrine the rule of law.” Also, WTO will create a platform to reform international market, said Dr. Cheidu Osakwe, Director of Accession Division, WTO.
Before I share my view on Liberia’s WTO membership, let me define what are trade and WTO. The Webster dictionary says: “trade is to engage in buying and selling for profit.” Adam Davidson of the NY Times magazine says, “Trade is central to every key economic issue we face. Whether it is the subject of income inequality, financial stability, the future of work, it all comes down to a discussion of trade.” In Liberia, trade includes Firestone selling latex to its Parent, Bridgestone of Japan; Liberia acquiescing to the World Bank’s loan with strings attached; or a merchant using a “Letter of Credit” from a local bank to import rice/medical drugs on credit from a foreign country.
WTO”…is a 142 member governments who try to sort out trade problems they face with each other…” or with companies operating within their countries. “WTO agreements…are essentially contracts, binding governments to keep their trade policies within agreed limits.” Alternatively, “…it is a way to settle differences between governments or between companies and governments through some neutral procedure based on an agreed legal foundation.”
However, Global Exchange, an international organization, says otherwise and has published eleven points explaining why WTO is against the poor. Here are two of the eleven points: 1) “WTO is seeking to privatize or sell essential public services such as education, health care, energy and water…radio airwaves or schools… 2) “…many important decisions get made in a process whereby poor countries’ negotiators are not even invited to closed door meetings…” (http://www.globalexchange.org/resources/wto/oppose)
Will Liberia benefit according to President Sirleaf? The heading below, of an article called “How big business in the …U.S. and the WTO crushed India’s subsidies for Solar system,” might give us some understanding. The heading of the article says: “Four hundred million Indians—one quarter of India’s population—have no electricity, but as far as the United States and the World Trade Organization (WTO) are concerned, they can keep sitting in the dark.” http://www.counterpunch.org/2015/08/28/how-the-us-and-the-wto-crushed-indias-subsidies-for-solar-energy/
Several economists such as Mr. Gojko Barjamovic, an expert in ancient languages and culture at Harvard University agreed with some of Global Exchange’s points, especially the widening of the gap of income inequality. In their study, they included economic activities between 1890 B.C. and 1860 B.C. for one community in the town of Kanesh, what is now called Iraq. Among the parallels with todays’ economic activities, governments did enforce regulations and reprimanded wrongdoers. Another parallel was a privileged few gained enormous wealth. However, unlike today, the wealthy did redistribute a high percentage of their earnings, which was used to build public educational system, network of public libraries, public parks, etc., the economists reported.
The wealthy are not only reluctant to contribute a portion of their wealth to finance social programs, but have created a complex monetary system to generate additional wealth. Or as Adam Davidson of the New York Magazine stated that the rich has engineered “…basic architecture of a new global financial system in which “economic calculus,” not military and political power… would determine where money flows…”
WTO is part of that the “economic calculus” to shield and generate more wealth from flawed concessionary agreements, of course in collaboration with its sister-organizations (The World Bank and International Monetary Funds). The “economic calculus” begins with international companies providing the money that World Bank uses to loan to poor countries. Thereafter, the World Bank/IMF identifies which multinational companies (Mittal Steel or Bridgestone; parent of Liberian Firestone Rubber Plantation) will manage natural resources. So, indirectly, Liberia did borrow from Firestone.
If the adage is true that “He who pays the piper calls the tune,” then poor countries are not only indirectly under the control of the World Bank, but also are under the indirect control of international companies. WTO, with legal provisions, comes in to seal the financial relationship after the money-lending connection between the poor countries and the World Bank, and big business, by extension. As a member, investors can now file lawsuits within the WTO, even if local courts have given a ruling on the same issue. For example, the three-panel judges can determine whether amending any of the flawed concessionary agreements is good for business or not. In view of the get rich quick mentality, investors will not only fight against amending the flawed concessionary agreements, but might file lawsuits at the WTO to coerce countries such as Liberia to relax its environmental laws or allow Mittal steel to pollute the rivers in Liberia. That is why a country such as Liberia was lured into the WTO, even though its exports are miniscule to pose any challenge to the importation of goods and services.