Perhaps this isn’t news, but the United States is a piss-poor dancing partner. They always lead, whether you like it or not, and if they step all over your feet, they blame you. In that regard, they’re much like that popular, attractive person with whom you tried dancing at that freshman frolic back in high school, just not as drunk or sweaty.
So it is with the U.S. and Antigua. The U.S. is stepping all over Antigua’s toes, and Antigua has finally gotten tired of it and is threatening to stop dancing. The principal of the school has now stepped in, and maybe Christian Slater is getting involved... I dunno. I’m tired of the analogy. Did the Christian Slater reference date me?
As has been documented on this website, Antigua has announced plans to open up a “piracy” website on their island as a form of economic retribution for the UIGEA, which shut out a large and immensely profitable market for Antigua’s online casinos. This would not actually be piracy since piracy requires recognition of copyright laws. Antigua has been given approval to ignore copyright laws, thus making the “piracy” not actual piracy.
It was the World Trade Organization (WTO) that gave them clearance to do this after Antigua was victorious in multiple cases against the U.S. regarding the UIGEA. As if to convey beyond any doubt that Americans are a mob of children, the United States has been almost inspiringly intransigent, coming as close to literally putting their fingers in their ears and going “LA LA LA LA!” as I think is possible for an actual country.
Because the U.S. prefers reality to be whatever they say it is, they have begun a campaign of misinformation. It hasn’t been going too well, with most industry watchers rather firmly on Antigua’s side. But the U.S. persists in their attempts, and is at the very least muddying the waters, which is more success than they deserve.
The story out of the States remains as it was during the beginning of this kerfuffle back in late January: namely that Antigua has been belligerent with U.S. negotiators and has repeatedly rejected good-faith offers. Antigua, of course, denies this.
There are two primary reasons why I think that the U.S. is, for lack of a better word, lying when they say this. First, what in the history of the United States’ dealings with small nations makes anyone think that they are telling the truth? Their record on international relations is a carnival of terror that few other Western nations can match. Remember, the U.S. has already lied when they claimed to have won a case that they completely, absolutely, totally LOST. There was no question. They lost. They didn’t even bother to try to spin the story; they simply denied it wholesale!
Second, Antigua is well justified in rejecting anything other than the elimination of the UIGEA, because it violates trade agreements. There is no way that Antigua can be the bull-headed party in these negotiations, because all they want is for the U.S. to follow the trade regulations that the U.S. themselves wrote.
Just for the sake of argument, let’s posit that Antigua is indeed being as intractable as the U.S. is accusing them of being. What would that conversation look like?
Antigua: The UIGEA violates the WTO. We demand that it be revoked.
USA: No. We will give you other things.
Antigua: We don’t want other things. We want the UIGEA revoked.
USA: No. We will give you other things.
Antigua: We don’t want other things. We want the UIGEA revoked.
Even if we imagine the most inane negotiations possible, Antigua is the one with justice, such as it is, on their side. The U.S. simply cannot avoid reality, and that is coming through in their bizarre reactions to their ever-shrinking position (such as when they claimed to have won their case with the WTO immediately after actually losing their case with the WTO, and their succession of veiled threats to Antigua).
On a side note, even if the U.S. successfully bribes Antigua as they did with Canada and the UK, the trade violation remains! That point ultimately negates anything and everything the U.S. says. Just because a criminal has managed to placate any aggrieved parties doesn’t change the fact that a law was broken. As long as the UIGEA stands, the U.S. remains open to cases brought by any other countries. Will the U.S. bribe every country on Earth?
|The members of CARICOM during the meeting at which|
full support for Antigua was announced.
That said, small nations banding together against a larger nation isn’t of much note aside from recognizing that it happened, and what the events may represent from a policy standpoint — fodder for think tanks and pretty much no one else. What makes the story a whole lot more interesting is the list of member nations of CARICOM.
CARICOM is composed of three classes of nations: Members, Associates, and Observing Nations. The three classifications are related to how engaged the nation is with the overall group, and also whether the overall group allows that nation to be engaged. So for example, Observer Nations engage in at least one of the policy committees, but have not yet been accepted as full members.
Of course, Britain can’t get too upset with Montserrat, since the group of Associate Nations is composed entirely of British Territories, including the jewel in their crown: Bermuda. Indeed, the Associate classification was specifically created for the various British Territory nations that wanted to join the party, starting in the early 1990’s.
The story gets positively ridiculous when we see that Puerto Rico, a commonwealth of the very country that is causing this problem, is an Observing Member! Even more absurd, if that’s possible at this point, the U.S. Virgin Islands have been campaigning hard for the last two years to be allowed into the cooperative. That would put two segments of the United States' socio-political structure in direct opposition to the rest of the United States!
The U.S. has been battling itself over the UIGEA in the halls of congress for years (instigated by the alarmingly corrupt Bill Frist). It is now battling itself overseas. What’s next, interplanetary self-conflict? This is far more than the left hand not knowing what the right is doing. This is the left hand actively plotting to kill the right. This is bad comedy.
The CARICOM backing is doubly interesting because of the possible effects that it will have on other countries. To see what I mean, let’s look at Brazil. In 2010, Brazil threatened to appeal to the WTO for similar sanctions, totaling $238 million — over ten times Antigua’s total. (To be fair, Antigua initially requested sanctions of over $2 billion.) They haven’t made much noise since then, but CARICOM may be the poke that Brazil needs to re-enter the ring. Two members of CARICOM, Guyana and Suriname, share borders with Brazil. Another Observing Nation, Venezuela, likewise shares a border. Brazil now directly abuts a whole bunch of countries that are making official statements in defiance of the United States.
Likewise we have Mexico, the largest Observing member of CARICOM, and suddenly a major player in the U.S./Antigua dispute. Apart from Brazil, Mexico is the only other nation south of the Rio Grande that has any sway on the international stage. As such, while economic relations between the two has sometimes been contentious, Mexico and Brazil are linked in both economic ways, and also philosophical ways vis-a-vis their position in relation to the rest of the world. Whatever Mexico does, Brazil will consider closely. CARICOM’s backing may also portend a full declaration of support from Mexico itself — a nation that has had a tense relationship with the U.S. and NAFTA after the fall of the PRI dictatorship.1 Mexico weighing in as an independent entity would be even more significant an event than Brazil because of the increasingly close economic ties that connect them with the U.S.
While the potential for Mexico to enter the ring is certainly exciting, Brazil remains the most interesting rogue element. For the past year, Brazil has been vociferously arguing that the WTO doesn’t have sharp enough teeth. By that, they believe that the financial and economic tools (including sanctions and tariff limits) that the WTO enforces between nations need to be far more significant than they currently are. They are also one of the most vocal countries when it comes to stressing that the WTO needs to show more teeth to affirm that it isn’t some limp noodle of a regulatory body, and to perhaps prevent a complete collapse of the organization.
The most salient situation fueling the cynical perspective with which Brazil now finds itself in conflict is the failure of the Doha Talks. The WTO is defined by various “talks,”in which policy decisions are made. The Doha Round of talks were meant to be a significant upgrade to the previous Uruguay Talks, which were started in 1986 and laid the groundwork for what would become the WTO. These failures evinced weakness that the U.S. is likely consciously exploiting in its dealings with Antigua, relying on the belief that major nations won’t stand with the rest of the group. Brazil is thus highly motivated to escalate this situation in order to make a point about the WTO having strength enough to remain coherent, and even force the mighty United States to play nice.
|Azevedo at the United Nations Conference on Trade and|
Adding fuel to Brazil’s fire is how little love is lost between the U.S.and pretty much everything to its south. I mentioned the failed Doha Talks, which were supposed to usher in a new era of streamlined free-trade between nations. Guess which nation was the cause of the failure? I’ll give you a hint: a lot of brave, free people live there.
As one would imagine, this has turned the WTO into a bubbling pot of tension. Brazil has already stood toe-to-toe with the U.S. in a smaller case involving orange juice. If they can do that again on a larger scale, CARICOM won’t be the only ones standing in unity behind them. Indeed, all of Latin America seems ready to support a single candidate for the WTO leadership — an unprecedented show of cooperation, and an utter condemnation of the bullying these nations are facing at the hands of the U.S.
Granted, this bullying is something that the U.S. has done for decades. And indeed, it is not only the U.S. that is making trouble for the WTO. (The Doha Talks failed after India, China, and the U.S. clashed, but most agree that it was the States’ fault for putting protectionist economic policies over actual benefits for poor countries.) What is perhaps causing the sudden rise in tension and activity on the part of other nations is that it was the United States, under Ronald Reagan and his buddy Margaret Thatcher, who pushed hard for international free trade agreements. For many countries, these policies had highly negative consequences. Agreements like the WTO were the direct cause of catastrophic collapses of native industries in many small countries who were, indeed, too small to really compete — something with which the gigantic U.S. was little concerned.
The one place where they could compete, though, was in the rising tide of technological industries. Many small countries saw huge boosts compliments of the loss of borders and the cheap cost of entry. Again, the U.S. initially wrote trade laws to benefit the U.S. So when these trade laws were being used to the detriment of the U.S., they had a habit of ignoring them, or being outright aggressive. The West pushed for treaties that harmed small countries, and then when the harm may come back around, they reject the treaties. The hypocrisy is just too much to bear, and it is coloring negotiations in the Doha Talks.
This disconnect is perhaps unsurprising. It is the reason why there are many in the world who honestly feel that the entire planet should get to vote for the American President — because U.S. actions affect absolutely everyone to a great degree.3 And while the U.S. isn’t exactly a coruscating example of measured, selfless thought, there are those in government who don’t seem to have drank the Manifest Destiny Kool-Aid. Barney Frank, the same Barney Frank who was the loudest voice against the UIGEA, argued that “capitalism works better from every perspective when the economic decision makers are forced to share power with those who will be affected by those decisions.”
That is precisely the situation in which we do not find ourselves. Instead, the policy makers are utterly disconnected from the effects of their policies. They are rich, powerful, priviledged — truly the masters of the universe. And in even small cases, such as the Antigua/WTO case, when those who are affected rise up and threaten to visit these effects upon the lords above, those in power balk and fight back. In the American system, power is for the elite. Everyone else must simply get in line.
|Kim Dotcom leaving a courthouse after fighting the illegal|
raid on his house.
Megaupload was a massive file-storage service started in two other small nations: New Zealand and Hong Kong (I count Hong Kong as a separate entity from China). Like Antigua, it rode the wave of technological expansion brought about by the Internet and broadband connections. The service was being used by many for copyright infringement, but the site itself was merely a tool for storing things online. It was also a popular tool, with tens of millions of paying users. Obviously the U.S. didn’t like this, so they seized the domain, shut down the site, and worked with New Zealand authorities to arrest its founder, Kim Dotcom, on what are becoming increasingly apparent as trumped-up charges.
The case again represents the imbalance between small nations and large (and the grotesque power that special interests hold over American foreign policy), with the U.S. applying extreme pressure on New Zealand to acquiesce even in contradiction of its own laws. People there, including judges, are beginning to get angry. They are beginning to see the U.S. explicitly as the enemy. They are beginning to realize that just because corruption happens under the auspices of some official agreement, it is still corruption. This is a catastrophe. When countries follow our lead only because they are afraid of retribution, we become a parasite. It fundamentally undermines our position in the world and our ability to peacefully engage in just about anything.
How many Antigua-like cases will be necessary before the U.S. stops behaving like a spoiled child? How many losses at the WTO? How many countries must publicly declare their disgust with U.S. actions? I focus on the UIGEA because this is a gambling website, but it is only one element of a grand infection in U.S. government. It started under Reagan, and ever since, regardless of whether the president was Democrat or Republican, it has only gotten worse.
Nations are rightfully becoming frustrated. Indeed, U.S. obstinateness seems to be exacerbating these frustrations to the breaking point. Nations will seek out whatever tools they can to strike back at what they rightfully see as Goliath to their David. The small nations like Antigua succeeded in the post-Reagan era of globalization by utilizing specific tools. The U.S. then said, “No. You cannot use these tools because we don’t like them.” These small nations then looked for tools to fight this fight, and the U.S. responded with “No. You cannot use these tools because we refuse to recognize them.”
No matter the rhetoric behind which U.S. representatives try to hide, these events indicate a country that is utterly in the wrong. Moreover, the events represent the tightening noose around the neck of not only the UIGEA, but the selfish behavior of the U.S. Even if the U.S. successfully placates Antigua (quite possible), the illegality of the UIGEA remains, as does the ever-increasing anger and resentment in the hearts of other nations. My greatest concern is that the U.S. has no desire to actually bring the UIGEA case to resolution. Instead they are only interested in stalling Antigua as they execute a longer-term plan. To wit, they successfully negotiate the WTO into a form that negates Antigua’s position entirely, and thus the position of any future countries that would dare to use the WTO against the U.S. There isn’t even the faintest semblance of justice in such a scenario.
Assuming that that does not happen, the potential for larger-scale applications of the WTO’s laws, and significant economic warfare, is what gives the fight with Antigua greater magnitude. As goes Antigua, so may go dozens of other small countries. It is perhaps for this reason that the U.S. refuses to bend, and would instead willingly damage its reputation as it clod-footedly stomps all over another country — if they show weakness, it will be exploited.
Regardless of the reason, the status quo is a mess and the U.S. is only making it worse. Antigua is raising the support of all the “also ran” countries who have spent the past fifty years being abused. This is set against the backdrop of a weakened and disintegrating WTO,2 where Brazil, a possible ally of Antigua, is taking up the banner of savior. And don’t let the U.S. fool you. They also do not want the WTO to collapse, since it is of almost incalculable benefit to American corporations. Thus the U.S. must, for the time being, speak out both sides of their mouth, defending the WTO in one breath, and trying to argue against it in another. One wonders how far they are willing to go in service of this self-defeating policy.
So where do we stand? We have NAFTA, the WTO, CARICOM, Brazil, the U.S., territories of the U.S., and little Antigua all at loggerheads in a bizarre web of conflict. Saying that this fight has “sides” belies its complexity. What can be said, though, is that the only people who are satisfied with the current situation are American corporations. Everyone else is getting the short end of at least one stick. There is fundamental tension in this arrangement that cannot persist. It must break. And when it does, it’s going to be intense.
So finally, after an entire post, my title is explained. World War I was started because of a small event (the assassination of Archduke Franz Ferdinand) which took place inside of a complex network of associations and agreements made among nations all jockeying for position in a global hierarchy —precisely the arrangement in which we find ourselves now. The assassination was not the cause, but it was a spark. It was the tension, anger, and conflict that, once released, caused the disintegration of the status quo and the ushering in of a new status.
Obviously, no matter how contentious these proceedings get, they will never reach the level of actual warfare. I don’t think my analogy is off-base, though. World War I was significant because it was the expression of war that no one thought was possible. I feel that there is economic warfare that almost no one thinks is possible just waiting to become manifest. Imagine if China suddenly stopped selling to the U.S., or if the U.S. suddenly stopped buying. It would cause the collapse of the global economy. Everything would crumble.
Yes, the people who say that this could never come to pass are probably correct. But in the seminal historical work The Guns of August, author Barbara Tuchman talks about how that very belief is one of the reasons why WWI was allowed to happen: no one thought that it could. Adding credence to the comparison was another dogma of those involved in the war: free trade made war impossible. The tight economic ties among countries made the financial consequences so great as to negate even the possibility of war. Obviously, they were wrong. But what happens when the economic ties are the war?
Think about it. What do trade agreements do? They create weapons. They may not have bullets or bombs, but in a world that is economically linked on a massive scale, the economic weapons could be just as significant. This was actually the explicit purpose of agreements like the WTO. If the pressure of conflict could be released in economic warfare instead of physical warfare, so the thinking went, then the world would be a better place.
I find this hard to argue with. Someone being poor is better than someone being dead. But the end result is still suffering, and if the combatants are wildly mismatched, like the U.S. vs. almost anyone, then the suffering can be severe. We are already seeing the possible effects of these weapons in nations that produce enough food to feed everyone, but everyone is still starving. Or the strange case of quinoa. As Paola Flores from The Huffington Post reports,
“Experts fear that trend could harm food stocks in this poor nation where one in five children suffers from chronic malnutrition.This situation was not crafted with the intent of being a weapon, nor was the collateral damage to Bolivia’s poor population done on purpose, but there is suffering here nonetheless. It seems that few people understand how powerful these economic weapons are. Even the simple act of their creation caused damage! The smaller nations seem to have no clue, as evidenced by their joining of trade agreements that did not, would not, and could not ever provide a benefit. I suspect that the larger nations are more aware of the dangers. Indeed, assuming that the U.S. is keenly aware of the situation may further help explain their schizophrenic intransigence. They want to defend against the weapons while also maintaining the possibility of their use in the future.
And with quinoa now costing three times as much as rice in La Paz markets, it isn’t eaten much by Bolivians. Its consumption averages a little more than a kilogram, (2.2 pounds) per year for each Bolivian.”
Again, much like World War I, I imagine that another large country is the focus of this. In Europe in the early 1900s, it was Britain, France, and Germany playing a bizarre game of Risk, using smaller nations as pawns. Now, it is The European Union, the U.S., and China playing economic Risk, likewise using smaller nations as pawns.
Aside from the fact that I see parallels between The Guns of August and our current situation, the most unsettling thing is that the weapons being created do not appear as powerful as they actually are. They may act as a sort of “gateway weapon,” whereby countries deploy them, only to deploy more significant measures in the future. Perhaps all that is needed is some sort of demonstration that the weapons have power. Or perhaps all that is needed is an opportunity to exercise their full potential.
I feel that I should close this bit of semi-paranoid prognostication with the qualification that it is highly unlikely that such an extreme level of economic war would ever occur. What worries me is that “All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power and not truth.”4 And that power is currently contained within the great ivory towers of nations so disconnected from the rest of the world, that they believe themselves to be beyond consequence, beyond harm, indeed, beyond truth.5
Right now, someone, somewhere, in a position of power believes that, and will enter into a game of brinkmanship believing that such an extreme end could never come about. As Barbara Tuchman wrote, “war is the unfolding of miscalculations.”6 Indeed, we may already be past the point of no return. The collapse of the WTO, and indeed of the global economy, is a fait accompli. And the dawn of a new economic era to replace the one birthed by World War II is inevitable. If true, the variables that will become so apparent to historians are now clouded by noise, activity, and ignorance. Because “in the midst of war and crisis nothing is clear or as certain as it appears in hindsight.”6
The nations of World War I didn’t see it coming. Even after it came, they didn’t think it had. Stupidity, arrogance, belligerence, and greed can go a long way toward destroying an empire. And when I look out over the world’s nations, I see only one empire left.
Our Duke Ferdinand may already be dead. All that we await are the sounds of gunfire over the clear, blue waters of the mighty Danube.
1: NAFTA is an amazingly contentious agreement. At the time of its initial negotiation, a majority of people in both Canada and the U.S. were against it. Mexico was under a dictatorship, the PRI, so the positive public opinion polls were likely propaganda. Now, though, both Canada and Mexico show solid support for NAFTA, while the U.S. is about 50/50. The odd thing is that every country believes that the other two countries made out better under the agreement, which evinces an undercurrent of significant tension. Moreover, for the purposes of this article, NAFTA provides a good analog for analysis of the WTO, since both agreements cover similar ground, and the WTO was even more contentious. This situation is yet another seed of discontent that is priming nations to lash out against the U.S. when given the opportunity — an opportunity like the UIGEA.
2: An interesting point that doesn’t apply to this article specifically but should none the less be mentioned is that the WTO is causing immense conflict in other industries. The recent horse meat scandal in the United Kingdom has actually cast the WTO again into the ring because trade agreements make it very difficult for nations to regulate their food supply else face severe WTO sanctions.
“The EU has banned the non-therapeutic use of hormones in its food industry, citing many studies that indicate that hormones, particularly implants of pellets containing estradiol, could cause cancer. Following the challenge by the U.S. and Canada, citing the onerous provisions of the SPS Agreement and other WTO rules, the WTO ruled against Europe's ban.Again, these issues within the WTO may be the reason why the U.S. is stalling. They know that it is unstable and are awaiting a point of capitulation that will allow them negotiate more favorable terms. Regardless, the duplicity is almost insane, defending the WTO as necessary in one instance and condemning it in another.
“The WTO panel demanded scientific certainty that hormones cause cancer or other adverse health effects, thus eviscerating the precautionary principle as a basis for food safety regulations. This ruling has frightening implications for the ability of governments to set high standards to protect public health. It means that European consumers and governments are forced to accept imports of beef raised with hormones or be penalized with harsh trade sanctions. Public opinion in Europe is strongly demanding defiance of this WTO ruling. The U.S. and Canada have produced lists of exports important to Europe, including luxury items such as prosciutto, cheeses, and Dijon mustard, among other things, on which they intend to slap 100 percent tariffs if the EU fails to comply. These retaliatory measures will total more than $125m.”
— Debbi Barker and Jerry Mander, International Forum on Globalization
3: Humorously, if the world did vote, we wouldn’t have every election being damn-near 50/50. In the Obama/Romney election, Romney would have garnered less than 9% of the vote. http://www.npr.org/blogs/thetwo-way/2012/10/23/163473712/if-the-world-picked-u-s-president-obama-would-win-by-a-landslide
4: This quote is popularly attributed to Nietzsche, but is one of those “kinda’ sorta’” quotes that appears to be a combination of things written by him. It is certainly in line with Nietzsche’s thinking, and he oft repeated that “there is no truth, only interpretation.”
5: I know that I’m harping on this point, but how else to explain the U.S. claiming to win a case that they lost?
6: Also from The Guns of August.