From Geneva, a special investigative Report for Air America Radio’s Ring of Fire on the 10th Anniversary of the Battle in Seattle.
Updated: Nov. 30, 2009
World Trade Organization Risks Financial ‘China Syndrome’
The Generalissimo of Globalization
GENEVA — Apparently, one meltdown isn’t enough for the World Trade Organization. They meet today in Geneva on the tenth anniversary of the “Battle in Seattle,” when tens of thousands of people from around the world protested the organization’s practices.
This report was funded by the Palast Investigative Fund, a 501c3 charitable trust and Ring of Fire.
The Fund is offering Palast’s investigative reports on DVD and his bestselling books, signed by the reporter, for the holidays at: www.gregpalast.com/store
Hear the “Ring of Fire” podcast with Mike Papantonio and Greg Palast.
Special thanks to Public Citizen’s GATS Watch and Oliver Shykles.
Transcript via Democracy Now!
PROTESTERS: Shut it down. WTO has got to go!
GREG PALAST: They’re chanting, WTO has got to go. It’s November 1999. Ten years ago this week, tens of thousands of protesters took to the streets for the Battle of Seattle. Their goal, to shut down the World Trade Organization, the WTO, the official international enforcer of the New World Order’s Free Trade regime.
1999 was the year of globalization. Enron’s Ken Lay was the Elvis of the new free market. The stock market hit an all-time high and could never go down. Investment bank Goldman Sachs created a new market for something called derivatives and US Treasury Secretary Robert Rubin had just de-regulated America’s banks. Rubin would resign and for a fee of $100 million, join Citigroup, the bank deregulation had allowed to grow into the safest financial institution in America, simply too big to fail.
The protesters in Seattle, said Thomas Friedman, were nothing more than “ridiculous … flat-earth yuppies looking for their 60’s fix.” History was over.
This is Greg Palast for Air America’s Ring of Fire and Democracy Now! Ten years after Seattle, history, hardly over, is repeating itself here.
Welcome to Switzerland: land of milkmaids and fondue….and this is Geneva, home of dictators numbered bank accounts … and the World Trade Organization.”
This week, on the 10th Anniversary of the Battle in Seattle, the WTO is meeting once again, here, to finish what the protesters halted: a push for a new free trade treaty, and in this gilded, elaborate building, we’re meeting with the man the protesters would call “the generalissimo of globalization,” the Director-General of the World Trade Organization, Pascal Lamy, the World Trade chieftain, who was also Director-General of French bank giant Credit Lyonais, assures me that the WTO is not a secret society of corporate plot-hatchers.
PASCAL LAMY: It wasn’t created as some dark cabal of multinationals secretly cooking plots against the people. We do things in the open–look at our website–governments negotiate in the open.
GREG PALAST: But we got our hands on a document you certainly won’t find on the WTO website; something very confidential: a secret demand of the European Union and USA, leaning on emerging nations to open their borders to trade in financial derivatives and exotic, even toxic, financial products.
I read to Lamy, the confidential document which begins with praise for free markets in derivatives and more, what the WTO calls “liberalization.”
GREG PALAST: Liberalization, is of benefit for all members, including developing and least developing countries. Given whats just happened after the financial crisis, isn’t that kind of insane?”
PASCAL LAMY: All depends what you mean by liberalization; which by the way, a very ambiguous English word.
GREG PALAST: But there was nothing ambiguous about the 2008 meltdown. By the end of 2008 we saw the world on its knees so that when you have a housing market in California die, you end up losing Iceland, you end up with auto plants closing in the UK, because the barriers did not stop the disease from spreading very, very rapidly.
PASCAL LAMY: Interdependence is a reality, and this is interdependence has a lot of good sides, about freedom, about human rights, about technology, about media, about political civil liberties, its a huge plus for fundamental values for at least part of the human population. So openness, interdependence is not something that we should rewrite. Stepping back, closing, going back to the middle ages will not work.
GREG PALAST: People don’t associate human rights and derivatives trading, human rights and mortgage securitization gone bad.
PASCAL LAMY: They should they should.
GREG PALAST: Lamy says don’t blame open trade for the spread of the bank crisis, blame a lack of regulation.
PASCAL LAMY: The cause of the crisis is not openness ….the cause of the crisis is a lack of proper regulation.
GREG PALAST: Then the banker likens derivatives to a mad cow.
PASCAL LAMY: A sick cow in today’s world don’t cross borders, because this is regulated. Financial activities are exactly the same. Except that, in this case, toxic financial products could cross borders without any problem.
GREG PALAST: But under WTO rules, there’s a catch– If a nation dares close it’s borders to mad toxic assets, that nation will have to pay a huge price:
PASCAL LAMY: There is a price to pay to claw back, remember
GREG PALAST: What is the price I don’t understand.
PASCAL LAMY: Well, if you claw back, if you close a market which you had opened then the benefits which you’ve gotten in other markets for the price of opening your market will be rebalanced.
GREG PALAST: Re-balanced is the fancy WTO term for massive penalties.
Let’s talk banks and bananas….
MUSIC: Day-O! Come Mr. Tally-man, tally me bananas!
GREG PALAST: The President of Ecuador told me he’d like to get out of the globalization jungle. But if Ecuador dares to bar US banks,
MUSIC: “Hide the deadly black tarantula”
GREG PALAST: The WTO will let the USA stick a tariff onto every banana imported from Ecuador.
MUSIC: “Come Mr. Tally-man, tally me banana”
GREG PALAST:If the US tallies those bananas, Ecuador’s economy will go splat!
MUSIC: “Daylight come and we want go home.”
GREG PALAST: There are no banana boats here on Lake Geneva, but, down the shore from the elegant WTO are the modest offices of the defender of 51 banana exporting and other poor nations.
We’re here at the South Centre to meet Martin Khor, who’s from Malaysia, is stunned that the US and Europe, watching their own banks collapse from financial speculation would force the Third World to open their borders to these same failed practices.
GREG PALAST: Well down the street at the World Trade Organization, Pascal Lamy says he’s pushing hard to open up trade in financial services. What’s wrong with that, why not let big hedge funds in with their credit default swaps and their derivatives?
MARTIN KHOR: Because we have seen how Wall Street has been devastated and how Main Street as been devastated by this so-called new financial instruments with huge leverage, with devastating consequences with booms and collapses and if the United States is unable to regulate these financial instruments how do you expect small countries to regulate, if we open up ourselves to these same weapons of mass financial destruction.
GREG PALAST: Khor, an intellectual leader of the protesters in Seattle, remembers how his warnings were dismissed ten years ago.
MARTIN KHOR: At that time, it was seen at least by the powers to be, that these huge financial institutions could do no wrong, they were the masters of the universe and they should spread their wings all over the world, especially to the developing world because they can bring money and power and new financial instruments and revolutionize the financial sectors in developing countries.
GREG PALAST: He is concerned these masters of the universe have learned nothing from the decades disasters..
MARTIN KHOR: If I were Mr. Obama or Mr. Brown, I would tell my financial services organizations,“ Please, lay off the developing countries. Let’s get our own act together, lets learn the lessons ourselves of where we have gone wrong and reinvent finance before we tell the rest of the world’s to continue, to replicate a model that has been found to be dysfunctional and does not work anymore”.
GREG PALAST: When the WTO meets today, will they listen to him or party like it is 1999?
Obama, Harper and Copenhagen Pts 1-2
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