PROTECT THE LOCAL, GLOBALLY -EUROPE*S ALTERNATIVE TO GLOBALISATION
Colin Hines, April 29th, 1999.
This paper covers three areas:
* The role of Green MEPs in a fundamental rethink for Europe
* A Protect the Local Globally Future for Europe-What It Entails and Why
It Might Come
About
* An Alternative MAI
1) QUESTIONS TO GREEN MEPS
1) Do you think the present employment policies of EU governments with
their emphasis on retraining, flexible labour practices and the need to
be internationally competitive can significantly dent the 20 million
jobless total?
2) Given the need to compete with countries with lower social and
environmental standards and public expenditure levels is there any
possibility of a European governments being able to return to some form
of Euro-keynsianism to fund jobs in social sectors and infrastructural
and environmental renewal?
3) Should the deflationary public expenditure cuts needed for EMU be
passively accepted as the price of being able to huddle behind European
ramparts in the hope of dodging currency speculators, and of being
internationally competitive?
4) If the answers to the above are no, isn*t it time that the European
people and their politicians took back control of their economies for
the benefit of the majority both in this continent and, through its
example, world-wide?
5) What part can MEPs take in initiating a debate on the need for such a
process?
ONE POSSIBLE WAY OUT- A *PROTECT THE LOCAL, GLOBALLY APPROACH FOR
EUROPE* AS PART OF AN INTERNATIONALIST CAMPAIGN TO PROVIDE GLOBAL
BASIC NEEDS SUSTAINABLY:
BUT FIRST A FUNDAMENTAL MINDWRENCH IS NECESSARY CONSISTING OF THE
ACCEPTANCE THAT:
1) THE FREE MARKET IS BAD FOR EUROPE
2) ATTEMPTING TO BE INCREASINGLY INTERNATIONALLY COMPETITIVE
IS STUPID, AS IT IS SOCIALLY, ECONOMICALLY AND ENVIRONMENTALLY
CORROSIVE
3) THE END GOAL OF ALL EUROPEAN POLICY SHOULD BE TO PROTECT AND IMPROVE
THE LOCAL ECONOMY BOTH HERE AND GLOBALLY
A First Step for MEPs
To step back and consider what are the fundamental roadblocks to
achieving their goals.
If they can be agreed on, then the next step is to consider the policies
which might remove such roadblocks, and what power structures have to be
overcome using what alliances.
Most individuals and groups working for political and social change tend
to want similar basic demands. They want more money and resources for
their specific concerns, better laws and regulations to achieve them,
and a decentralisation of political power so that local economies can
gain control over their activities. When the first two are campaigned
for they inevitably run up against a roadblock marked *international
competitiveness*. This is used as the reason why more funds can*t be
allocated to whatever project is requesting it, since it will raise for
example the tax base, and hence deter domestic or potential incoming
business and investment. The regulation requests invariably falter under
the opposite pull of deregulation, the purpose for which is again to
make countries or areas more competitive.
Fuelling this downward spiral of increased subjugation of domestic,
economic and social needs to international competitiveness are the
processes of structural adjustment and foreign direct investment. The
decentralisation of political power to enhance local needs on the other
hand works against *comparative advantage*, (the holy grail of free
market theories,) i.e. the necessity to prioritise the politics of every
economy to provide the cheapest exports. As is well know, the
beneficiaries, TNCs and capital, governments and elites, thus
ruthlessly oppose such efforts. Governments who don*t bow the knee are
threatened with discipline from the World Bank, IMF, or international
currency speculators.
Those fighting local battles against this process are sometimes
successful and produce small shining beacons highlighting a different
future. Most activists however increasingly face defeat in the face of
financial rectitude, deregulation and threatened flights of capital and
business. Those campaigning for political parties suffer the same fate
as their previously left groupings scuttle to the right.
What is required is for activists fighting their issue specific
campaigns, and endlessly calling for similar and unfulfilled demands, to
raise their eyes from their *in trays*. Whilst continuing to demand
their campaign specific solutions they should consider in addition
thinking about what are the fundamental changes they could add to these
demands and campaign for together, in order to finally achieve their
specific end goals. These changes must result in providing the
political and economic context which will allow those small scale
successes, plus those at present unsuccessful demands, to not only be
achieved in a few cases, but to become the norm.
The *PROTECT THE LOCAL, GLOBALLY* SEVEN POINT PLAN to protect, improve,
rebuild and diversify economies world-wide to maximise local self
reliance:
Relevance to Europe
What is required is an end goal for Europe of stronger and more diverse
local economies with high environmental, social and democratic
standards. Such radical proposals are crucial to reverse the present
destructive trend whereby the centralisation of power in Brussels
undermines national democracy and gives big business an enormous
advantage over social movements. The latter being strong at the local
and national level, but relatively weak at the European level.
Perhaps most fundamental is the necessity for an implicit rejection of
the priority to be internationally competitive which increases the
economic dominance of TNCs. Unless more people wake up and start
questioning this TNC led European agenda, such moves will increasingly
be the shape of things to come. The Single Currency and all its likely
adverse effects is merely one of the more recent examples of this trend.
Such social and environmentally threatening processes are of course not
restricted to Europe. Globalisation*s tentacles are ensuring a worsening
inequality and environment and the inhibition of social and green
campaigns world-wide.
INTERNATIONAL COMPETITIVENESS-THE OVERARCHING PROBLEM
At present all European Union policies, as well as those of the rest of
the world, have at their heart the need to be internationally
competitive. Thus the push for the single market with its reductions in
national trade barriers and its burgeoning transport infrastructure has
as it goal the increased competitive advantage of each country and the
Union as a whole compared with the rest of the world*s trading blocks.
International Trade rules, policed by the World Trade Organisation
(WTO)and to the advantage of international corporations, are one of the
major engines of this process. At a regional level trade agreements
further the same aim. The single currency, a structural adjustment
policy for Europe, requires massive curbs on taxation and public
expenditure to keep inflation low and reduce trading costs within
Europe. Its purpose is also to ensure that once again the countries of
the EU will be better able to compete with the likes of North America
and Japan. Yet this emphasis is resulting in increasing inequality in
Europe and worldwide, as well as curbs in social expenditure and
increased environmental deterioration.
*PROTECT THE LOCAL, GLOBALLY* -THE OVERARCHING SOLUTION
If MEPs are serious about bringing about fundamental changes to tackle
social and environmental ills and unemployment, and tame the market in
the process, then they should take a leaf out of our opponents. They
clearly have a simple solution- free trade. It has an intellectual
neatness, a clear set of follow-on policies to achieve that goal. It has
the added advantage of furthering the ends of the powerful, but is
superficially seductive enough when repeated ad nauseum to convince
nearly everyone that there is no alternative.
Until an alternative is advanced we will flounder on that unanswerable
rock.
Seven Point Proposal for a *Protect the Local, Globally* Policy for
Europe :
First, two points of clarification. *Protect the Local, Globally* is
neither anti-trade nor autarkic (ie total self-sufficiency). Its goal
is maximum local trade, within diversified sustainable local economies,
and minimum long-distance trade; local is used here to mean a part of a
country, and 'regional' a geographic grouping of countries.
*Gradual reintroduction of trade barriers both around regional
groupings of countries such as trade blocs and between its individual
countries, which at the same time make feasible policies to control TNCs
and capital :
* *Site here to sell here* raft of legislation to ground business
* *Invest here to prosper here* raft of legislation to ground capital
* Competition laws to limit market shares and ensure the positive
aspects of local competition
* Maximum feasible devolution of political power and democratic
accountability
* Introduction of resource taxes to both help fund this transition and
help protect the environment
* Change the end goal of aid and trade rules to ensure maximum local
self reliance, and social and environmental protection.
What Could Make This Happen?
A possible set of developments resulting in the rise of a *PROTECT THE
LOCAL* movement in Europe.
The political support for this approach grows building on the fightback
against:
- financial and job insecurity, increasingly amongst the previously
secure middle classes;
- the concerns by local business and capital about the resulting
decline in consumer demand;
- the adverse effects of structural adjustment programmes of the single
currency;
- the awareness of political activists and NGOs that they will never
reach their end goals whilst countries are forced to be internationally
competitive;
- contacts with people in other parts of the world developing their
*Protect* policies ensures that *Protect the Local, Europe* has an
internationalist agenda;
- the realisation by politicians that embracing *Protect Europe* was the
only way to get elected, whilst ensuring the squeezing out the rise of
the extreme right as it proposed populist scapegoating in the face of
rising insecurity.
Why Europe is the Key
Europe is a large enough block to force through such radical changes on
TNCs, currency speculators and the like. Capital and big business is
hardly going to flounce out of a politically stable grouping of 350
million relatively affluent consumers. Were the European MEPs, the
environment and social movements jointly to demand such *Protect the
Local, Globally* changes as the precondition for achieving their issue
specific end goals, then they might regain the successes that have been
increasingly eluding them over recent years. Such measures would also
enable a rebuilding of Europe*s local economies and jobs base and could,
heavens above, even unite the majority into being pro- European!
Finally and perhaps most importantly, should such a debate begin for
example in Europe, it would be replicated in all regions of the world
and allow for similar policies to be introduced globally. The divide
which will dominate politics for the rest of this century and into the
next is that between globalisers and localisers. Tackling the conflicts
between the local and the global will need fundamental change and
require the active participation of all politicians and concerned
citizens. Insecurity on a scale not seen since the 1930s must be dealt
with effectively; if not history could repeat itself. One only needs to
remember Mussolini's chilling pragmatism: "Fascism was.... not a
doctrine worked out beforehand in detailed elaboration; it was born of
the need for action."
3) A *PROTECT THE LOCAL, GLOBALLY* ALTERNATIVE TO THE MAI
-THE ALTERNATIVE INVESTMENT CODE
The intention of such a code is NOT to ensure the unimpeded
international flow of capital and investment, but to have as its basic
aim the regrounding of capital locally to fund the diversification of
local, sustainable economies which have at their core the right to
livelihood. The right to livelihood is a key human rights goal in this
alternative investment code. Other rights such as private property
rights are contingent on fulfilment of this most basic human right.
Tony Clarke and Maude Barlow in their groundbreaking book *MAI and the
Threat to Canadian Sovereignty* pointed out that: *...the UN Charter of
Economic Rights and Duties of States provided quite a different
framework for establishing a set of global investment rules. It was
based on the assumption that nation-states acting on behalf of all their
citizens and the public at large, had the political sovereignty to
regulate foreign investment. The Charter granted member nations the
authority to supervise the operations of transnational corporations in
their territories by establishing performance requirements.
These performance requirements were to be based on the national
development needs of the people of each country. While nation states
were also granted the powers to *nationalize, expropriate or transfer
ownership of foreign property*, the charter called for the payment of
fair compensation for expropriation.
Although changes in the global economy over the past twenty years or so
would require that modifications be made, the UN Charter on the Economic
Rights and Duties of States contains many of the elements for modern,
alternative approach to global investment rules.*
Bearing this in mind a fundamental rethink of the MAI could result in an
agreement along the lines of this:
ALTERNATIVE INVESTMENT CODE: KEY PROVISIONS
PURPOSE; The Alternative Investment Code (AIC) seeks to strengthen
democratic control of capital and stimulate investments that benefit
local communities.
NATIONAL TREATMENT: Investments that increase local employment with
decent wages, enhance protection of the environment and otherwise
improve the quality of life in communities and regions within states
which are parties to the AIC are encouraged. States are urged to give
favourable treatment to domestic investors who further these goals and
are prohibited from treating foreign investors as favourably as domestic
investors.
MOST FAVOURED NATION STATUS: Provided it is not at the expense of
domestic investors, states shall give preferential treatment to
investors from other states which respect human rights, treat workers
fairly, and protect the environment.
PERFORMANCE REQUIREMENTS: States may impose requirements on investors
which further the goals of this code such as the following:
a) to achieve a given level or percentage of domestic content, whilst at
the same times ensuring that monopolies do not develop;
b) to give preference to goods produced locally;
c) to stipulate a minimum level of local equity participation;
d) to hire a given level of local personnel and respect labour and
environmental standards;
e) to protect enterprises which serve community needs from unfair
foreign competition;
STANDSTILL AND ROLLBACK: No state party to the AIC can pass laws or
adopt regulations that diminish local control of capital or that divert
investors from giving priority to meeting local needs.
Existing laws and regulations that give preferential treatment to
foreign investors or encourage absentee ownership of community-based
enterprises must be rolled back over the next decade.
DISPUTE RESOLUTION: Citizen groups and community institutions are given
standing to sue investors for violations of this investment code. All
judicial and quasi-judicial procedures such as arbitration shall be
fully transparent and open to public observation.
INVESTMENT PROTECTION: Workers and communities play a vital role in the
creation of corporate assets, and that role must be recognised and
protected. Thus, expropriation of such assets to serve vital community
needs is permitted and must take into account the interest of workers
and communities in those assets. Similarly, restrictions may be placed
on excessive repatriation of profits by foreign investors, and capital
may not be transferred without indemnification of worker and community
interest in such capital.
COLIN HINES IS AN ASSOCIATE OF THE INTERNATIONAL FORUM ON GLOBALISATION,
CO-AUTHOR WITH TIM LANG OF 'THE NEW PROTECTIONISM' AND AUTHOR OF A
FORTHCOMING BOOK 'LOCALISATION- A MILLENIUM MANIFESTO'(EARTHSCAN)
Colin Hines,
Protect the Local, Globally, 11 Park House Gardens,
East Twickenham,
Middlesex, TW1 2DF. UK.