WTO Partying Like It’s 1999

[Greg Palast, Morphizm]
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,” the first mass protest against globalization.

In a special investigation for Air America’s Ring of Fire, I recently gained access to several documents from inside the file cabinets of the WTO, the World Bank and other centers of globalization.

According to one marked “Ensure This Text Is Not Made Publicly Available,” the big banks, via official trade negotiators, are secretly demanding that emerging nations, starting with Brazil, open their markets to trading in derivatives, credit default swaps and other exotic — and toxic — financial products.

It’s not enough that they have brought the US and Europe to their financial knees. Now banks, under the guise of the WTO’s free trade treaty, want to expand the casino to the new big emerging powers with their trillion-greenback reserves. A derivatives crash in those markets could easily trigger a financial China Syndrome—a second meltdown from New York to Beijing to Brasília.

Here in Geneva, at the grand compound on the shore of Lake Geneva, I confronted the Director-General of the World Trade Organization, Pascal Lamy, about the secret demands of the world’s biggest financiers. I asked how, after the disaster in the US economy in 2008, the prime movers of the globe’s economy would go along with the world’s largest banks to start up still more gambling operations in Brazil and India?

Lamy insisted that, “Trade is not the problem. The problem is whether what you trade is regulated or not.”

The WTO chief did however admit that, were a nation to attempt to shutter any particular bank’s trading desk, that nation would have to pay a hefty penalty under WTO rules. “There’s a price to pay to claw back,” said Lamy, himself a banker. (Lamy was Director-General of French giant Crédit Lyonnais.)

The exposure of the secret demand on Brazil to allow banks to go double or nothing on a second crisis runs counter to the public position of US and European governments. Paul Volker, President Obama’s advisor on preventing another crisis, has called for re-regulating banks, and in particular, barring commercial banks from trading in derivatives and other risky financial instruments.

This contradiction between public position and private lobby for the banks infuriates Martin Khor, Geneva-based trade advisor to Brazil and 50 other emerging nations. Khor, known as the intellectual leader of the Seattle anti-WTO protests of 1999, told Air America, “If I were Mr. Obama or (British Prime Minister) Brown, I would tell my financial services organization, please lay off the developing countries; let’s get our own act together.”

But apparently, the banks and global-crats at the WTO want to party like it’s 1999.
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This report was funded by the Palast Investigative Fund, a 501c3 charitable trust and Ring of Fire. The Fund is offering Greg Palast’s investigative reports on DVD and his bestselling books, signed by the reporter, for the holidays. Hear the “Ring of Fire” podcast with Mike Papantonio and Greg Palast. Special thanks to Public Citizen’s GATS Watch and Oliver Shykles.