Documents menu

GATT Ravages World Economy

Letter to In These Times, by Ronald Bleier (rbleier@igc.apc.org), 13 December 1994

NOTE: I wrote the following letter to the Editor of In These Times about a comment made in an article on GATT by David Moberg. Apparently, the editors have decided not to publish my letter.
—RB

December 13, 1994

To the Editor:

Thanks to David Moberg for mentioning Sir James Goldsmith's work against GATT ("GATT trick", 12/12/94). I recently came across Goldsmith's October '94 testimony before the Senate Commerce committee which was uploaded to the internet by J. Cook, an anti-GATT activist. Goldsmith's testimony opened my eyes to more than GATT's anti-democratic and anti-environmental provisions which were bad enough.

According to Goldsmith, GATT would not only impoverish and destabilize the industrialized world but it would also "cruelly ravage" the third world. Essentially, Goldsmith argues that it is a terrible mistake to ignore the fact that in our post-industrial, post cold-war age we are opening up our industries to a new labor market of 4 billion new workers (and 6.5 billion by 2030). He argues that the GATT treaty must be fatally flawed since it would force U.S. producers to shift production and employment to the third world where 40 or more workers may receive the pay and benefits of one U.S. worker.

Nor would overseas production help third world people or economies. We already know from our experience with the maquiladoras in Mexico, the sweat shops in Haiti, Central America, Latin America, and Asia that the workers themselves do not benefit since they are typically trapped in low-wage, dead-end jobs where environmental considerations are routinely ignored and unions prohibited if not strongly discouraged. In general, the profits from these jobs do not remain in the host country but are siphoned off to private bank accounts in Switzerland, the Cayman Islands and other tax havens.

Nor will the GATT benefit farmers in the third world since it will make traditional agricultural practices uneconomical and force millions into cities, worsening an already grave world refugee and immigration crisis. We will see this happening here very soon when the tariffs on corns and other grains between the U.S. and Mexico are eliminated in the next few years by the NAFTA agreement. As tariffs are phased out, U.S. farmers, with their subsidized economies of scale and mechanization, will force millions of Mexican corn farmers off the land and into cities, further destabilizing the political situation and adding to emigration pressures.

In his testimony, Goldsmith helped to puncture the idea that somehow GATT will produce billions in new wealth. Goldsmith pointed out that forecasts of such extra wealth are by no means guaranteed even by their proponents and when such forecasts are examined closely amount to relatively tiny amounts spread over many years. Also, the greatest percentage of any extra income will go into the pockets of multinational corporations rather than to American families who will no longer have the jobs on which the extra income is to be generated.

As Goldsmith points out, this new phantom wealth will in no way balance the misery of lost industry and destroyed lives here and everywhere.

Sincerely,

Ronald Bleier

P.S. For those who would like the full text of Goldsmith's testimony, you may email me at: rbleier@igc.apc.org.