From Old Economics to New Economics- Radical ... - Bruce Nixon

• Changing the TRIPS regime to allow generic production in Southern countries of lifesaving
drugs and totally banning the patenting of life forms and seed variables.
• Abolishing the TRIMS regime, thus allowing governments to discriminate in favour
of local suppliers.
• Regulating financial institutions in source countries.
• Encouraging – or even requiring, as originally envisaged by Keynes – countries to
implement targeted capital controls to discourage short-term speculative flows and
encourage longer-term investments supportive of sustainable development.
What about the regulation of TNCs In this regard, the 2005 UNDP Human Development
Report effectively covers the changes needed in market access and removal of subsidies.
First we need strict international competition controls. At all levels (local, national and
global) no player should control more than 5 per cent of a market (and less than 1 per cent is
preferable). For example, currently four UK supermarkets control 75 per cent of food sales
between them; five international trading companies control 90 per cent of world grain trade.
Second, TNCs should be obliged by international law to pay fair wages, provide
internationally agreed benefits, and allow the right to organize, and also to pay fair levels of
tax in the countries in which they operate. Importantly TNCs should be obliged to ensure that
all these apply right back through their supply chain.
Third, similar obligations should apply to international environmental regulations.
Fourth, as well as abolishing TRIMS, all inward investment in a country or a locality should
have strict requirements on the investor to ensure value-added benefits accrue to the workers
and local community. This needs to cover a requirement for a certain percentage of local
procurement, local employment requirements and local training requirements. All the work by
nef (the new economics foundation) in local economies shows that such measures are vital to
structuring thriving local economies. Too often, whether in ex-shipbuilding communities in
the north-east of England or export processing zones in Mexico, companies are attracted in by
tax breaks and when they leave again (attracted by an even better deal elsewhere) there has
been close to zero value added to the local economy.
6.2. Global governance
How would such as system be overseen in terms of governance, however
As a first step the WTO needs major reform to:
• Apply the above rules and take out of its remit TRIPS, TRIMS and the ‘Singapore’
issues. 37
• Provide large-scale technical support to Southern governments to allow them to
participate on equal terms.
• Democratize the WTO processes and stamp out the behind-the-scenes threats and
arm-twisting, carried out by the ‘powerful nations’.
Second, we need major new (and more democratic) global governance bodies, such as:
• A body to regulate international competition and ensure corporate compliance to
agreed global environmental and social standards.
• An environment agency to protect and manage the global environment
37 The four ‘Singapore issues’ are (i) investment protection, (ii) competition policy, (iii) transparency in
government procurement and (iv) trade facilitation.
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