For Immediate Release
Bush’s Stubborn, Ideological Defense of Market-uber-alles Global Economic Deregulation Model Threatens Summit’s Prospects
To Address Crisis, World Leaders Must Roll Back Radical WTO Financial Service Deregulation Requirements, not Push WTO Doha Round’s Further Financial Sector Deregulation
WASHINGTON - Remedying the financial crisis will require significant
changes to existing World Trade Organization (WTO) rules that lock in
domestically and export worldwide the extreme financial services
deregulatory agenda favored by the world's banking and insurance giants
that fostered the crisis, Public Citizen said.
"President Bush's insistence that further deregulation
and liberalization is the solution to addressing the financial crisis
spawned by radical financial services deregulation is the sort of
backwards, ideological approach that could squander the prospects that
Saturday's summit produces any remedies for the crisis," said Lori
Wallach, director of Public Citizen's Global Trade Watch division.
Calls by many other world leaders for new global
financial services regulation have been accompanied by a seeming total
lack of awareness that most of the world's countries are bound to
expansive WTO financial services deregulation requirements to stay out
of the business of regulating financial services. More than 100
countries signed the 1997 WTO Financial Services Agreement.
Despite the pervasive role of the WTO in worldwide
financial service deregulation, in the lead up to this Saturday's G-20
Global Financial Crisis Summit in Washington, D.C., the only comments
regarding adherence to global trade rules have been of the red herring
variety: panicky warnings about the perils of countries raising tariffs
to block imports in response to dire economic conditions - something no
country has proposed.
In contrast, in recent weeks, the Bush administration
and governments worldwide have taken various measures to counter the
crisis. These measures contradict the fundamental precepts of the
current globalization model - and in some cases violate the rules
implementing this model, such as those of the WTO. Plus, many of the
most basic national and international remedies now being proposed to
fix the mess and avoid future meltdowns occupy policy space that
governments ceded to the WTO a decade ago.
"Altering the WTO financial services rules is critical
for creating domestic policy space to address the crisis," Wallach
said. "However, even in the face of this crisis, the United States and
the European Union are pushing for further financial services
liberalization in the ongoing WTO Doha Round, the conclusion of which
they are now pushing as a cure to the crisis, even as they find that
flaunting the existing WTO terms is the necessary course of action."
As part of its original WTO commitments, the United
States agreed to conform a broad array of financial services -
including banking, insurance and other financials services - to comply
with WTO rules.
"Unless the radical financial services deregulation
agenda that has been aggressively promoted and entrenched by the WTO,
World Bank and International Monetary Fund is understood as a source of
the current crisis, reform proposals will not address the crisis' root
causes," Wallach said.
For more information about the WTO's role in the crisis, read our memo to reporters, Elimination of WTO's Radical Financial Service Deregulation Requirements Must Be Addressed at Nov. 15 Summit.