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University of Technology Sydney **We aren't endorsed by this school
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BA TP1103
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Economics
Date
Nov 5, 2023
Pages
11
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Friends of the Earth Brisbane Submission to the Senate Enquiry on the GATS and AUSFTA Overview Write brief sum of all topics that will be addressed. Firstly thank-you for extending the call for public submissions. The original call for submissions was made over the Australian Christmas and summer holiday period in late November with the deadline being in mid-January. Therefore we would like to thank-you the Senate Inquiry for extending the deadline. We feel that it is very important to allow public participation in negotiations of the US-Australia Free Trade Agreement as such an agreement will have direct consequences on the Australian public. Friends of the Earth Brisbane believes that the GATS and AUSFTA agreements represent a fundamentally negative policy direction, and even if executed "successfully" within the stated aims will have deleterious effects on the Australian nation. We therefore recommend that these policy directions are not pursued; to whit, that we do not conclude an FTA with the US and we withdraw from GATS by whatever means expedient. The reason that we make this recommendation rests on our understanding that these policies embody an economic theory, that of neo-liberalism. This belief is confirmed in statements by key officials in DFAT, for instance, who have stated explicitly that both the Government and, by and large, the public service, are committed to and operate comfortably under this theory. Friends of the Earth Brisbane repudiates this theory and calls on the Political Parties and civil service to abandon it and the policy directions it underpins, including the GATS and the AUSFTA. Our basis for doing so rests on four things: 1. Criticisms of the claims made by the theory, 2. Analysis of the Politics of Trade Liberalisation 3. The low likelihood of a successful implementation of the theory, and the likelihood instead of disequitable liberalisation in the favourable interests of the most economically powerful entities, 4. A prediction of likely outcomes from a successful implementation of the theory as, in this case, Free Trade agreements, 5. Observation of actual political and economic events, specifically the shambolic outcomes of the disputes (under FTA's, the WTO and the IMF/World Bank adjustment programs) between nations and corporations who perceive their interests to be compromised by otherwise legitimate expressions of the public good. 1. Criticisms of the Theory In order to meaningfully critique a theory, one must not test its internal consistency so much as its relationship to one's broader perception of reality. It is thus salient to present those views of global economic and political reality held by the Trade, Environment and Sustainability collective of Friends of the Earth Brisbane that bear 1
on the current discussion. It is because we hold these opinions, in apparent contradiction to the main political parties and DFAT, that we disagree with the policy of Free Trade and Free Trade Agreements, such as GATS and the AUSFTA. We hold 1. That citizens have a prior right to control over productive capacity, which may only be suspended on condition of informed and explicit consent. 2. That, to be effective, regulatory systems need to be of a similar scale and extent to that which is being regulated. 3. That development, specifically industrial development, has never historically occurred in the absence of active governmental or social institutions, but has in fact happened in the absence of Foreign Direct Investment and even greatly aggregated capital. 4. That the current global environmental impact of economic activity (both resource consumption and pollution) is highly disequitable and wholly unsustainable. 5. That ecological, social and labour inputs, including passive and ambient inputs (eg uncontaminated land or air) into production are not equivalent to other inputs or "factors of production" and that a management system that fails to reflect this will fail to achieve our aspirations in their regard. 6. That considered globally, factor inefficiency is and has been irrelevant as a cause of global poverty for at least the last 50 years. Similarly, it is not a failure or shortfall of production that results in economic depressions. In general, it is the absence of a social mechanism able to ensure the equitable distribution of wealth that is responsible for both these things. In specific, in the context of a modern economy, economic depression and consequent personal hardship are the result of a lack of purchasing power, created in part by a debt-based money supply. In nations where such skills still exist, hardship results from the lack of agrarian reform and other colonialist economic structures (for instance, legal control of seed supply by non-local entities under TRIPS) that deny people access to the means of self-sufficiency. This is evidenced, among so many other things, by massive hunger in the context of a global oversupply of food, and, in the first world, by worsening wealth gaps and a failure to realise social leisure in the context of massive material overproduction achieved by a scant quarter of the working population. It is further our opinion that this situation - the global overproduction of goods and the absence of mechanisms to distribute them - is largely the result of the pursuit of factor efficiency through the means of economic colonialism in part carried out under a doctrine of free trade, most notably in the period of 1860 to 1914, and from the 1970's to the present. 7. That the doctrine of comparitive advantage, which argues that nations of disequal economic power will both benefit from mutual and equitable access to each other's 2
markets, by virtue of increased factor efficiency is irrelevant for the following reasons: The theory assumes no cross-border capital mobility, which is now manifestly false, except where it is prevented by regulation, The reality of current trade agreements is that disequal economic power precludes the negotiation of mutual and equitable market access, As in point 6 above, increased factor efficiency is irrelevant to the provision of human wellbeing: the main problem is the absence of an inclusive mechanism of distribution. 8. That global markets are subject to intense competition characterised by an oversupply of goods and a shortage of purchasing power. 9. That a free trade policy, far from being a "regulation of international trade", consists of the re-organisation of economic institutions to integrate local markets and economic opportunities into a global market, referred to as "harmonisation", thus exposing previously stable local economies to global market forces, and a series of strictures limiting the regulation of economic activity or political intervention in the markets so liberalised 10. That neo-liberal or neo-classical economics is based on a politically specific assumption, that of economic actors as "autonomous, rational, calculating and selfish", and, in doing so, it "eliminates economic power from the [theoretical] system". (Johnston et al Engineering and Society ). In other words, that neo-liberalism is a mask for a certain view of people and how they ought to behave, and the reality that they do not do so, especially with regards to forming aggregates, such as the corporation, and therefore wielding economic power. This in turn obscures the view that the policy of free trade is, in the words of the Columbia History of the World, "most likely to benefit the nation with a long industrial and commercial lead over other nations". 11. That the GDP is a spurious indicator of the wellbeing delivered by the economy to the people, owing to the widely criticised flaws of ignoring key eco-social costs and benefits and counting negative economic activity as positive. Furthermore, even slightly modified indicators, for instance the Australia Institute's Genuine Progress Indicator, show a clear decline in economic wellbeing from the mid 1970's until now, which apparently coincides with the abandonment of Keynsian policies by governments around the world, in favour of neo-liberal policies. In support of these views, we would refer the committee to Ian Inkster's Technology in History , Michael Rowbothom's Grip of Death , Barry Jones' Sleepers, Wake! , Aileen Kwa's Power Politics in the WTO , Johnston's et al Engineering and Society , The Columbia History of the World and the latest Friends of the Earth Brisbane's newsletter articles on the liberalisation of food irradiation and the WTO protests in Sydney last November. 3
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