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Europe Observer - Issue 9
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retaliation
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Post-Seattle
Retaliation The unexpected outcome of the WTO Summit in Seattle has shocked business into intensifying their counter-offensive against their critics. Ironically, they are borrowing heavily from NGO tactics that have proven successful in the backlash against economic globalisation. With help from the PR industry, lobby groups have become increasingly successful in mimicking "grassroots campaigning", particularly in the US. Corporations and their lobby groups have also engaged in a cyberwar over the global economy in recent years and industry-run websites extolling the virtues of trade liberalisation have mushroomed.
This counter-offensive is organised through a diverse web of lobby groups and with the invaluable help of the PR industry. In this way, business in North America and Europe is scrambling to regain the upper hand in the quest for economic globalisation. Campaigning with new momentum for global free trade, corporate lobby groups are determined to divide their critics and discredit them. Ironically, in doing so, they are borrowing heavily from NGO tactics that have proven successful in the backlash against economic globalisation. Corporations and their lobby groups have engaged in a cyberwar over the global economy in recent years and industry-run websites extolling the virtues of trade liberalisation have mushroomed. With help from the PR industry, lobby groups have also become increasingly successful in mimicking "grassroots campaigning". These "astroturf" exercises give the impression of popular support for the corporate trade agenda and have played a significant role in post-Seattle trade battles, particularly in the United States. The US Full-Steam Counter-Offensive Since its humiliation in Seattle, US business has engaged in a multifaceted, multi-million dollar counter-campaign that involves individual corporations, lobby groups like the Business Roundtable and the US Chamber of Commerce, corporate- sponsored think- tanks and of course the ever-faithful PR industry. Powerful neo- liberal think-tanks like the Council on Foreign Relations and the Institute for International Economics had already started to develop a strategic response to the backlash against their political agenda before Seattle. [3] After Seattle, a new neo-liberal trade think-tank was founded "to educate the public about the rapid changes associated with globalisation". Among the first activities hosted by the Washington DC-based Cordell Hull Institute was a seminar entitled "After Seattle: Restoring Momentum in the WTO". [4] The title concealed the underlying motive of the strategy session, which was to discuss how opposition to the WTO could most effectively be undermined. Among the questions discussed by the participants was: "How can we de-legitimise NGOs?" Tactics proposed included approaching charitable foundations and asking them to cut off funding for WTO-critical organisations. [5] The PR industry was also quick to jump to assistance after Seattle, undoubtedly sniffing out major new market opportunities arising from what some saw as the launch of a corporate Waterloo. Only a few months after the WTO debacle, the Washington DC- based PR company Black, Kelly, Scruggs & Healy sent its corporate clients a "Guide to the Seattle Meltdown: A Compendium of Activists at the WTO Ministerial." [6] In an accompanying letter, the PR firm's Managing Director warned against the "potential ability of the emerging coalition of these groups to seriously impact broader, longer-term corporate interests." Painting a grim picture of the future of corporate interests was a common feature of the PR industry's first analyses of Seattle. Take for instance the conclusions of an essay on how activist groups made use of the Internet to mobilise for Seattle, written by Wes Pedersen of the Public Affairs Council. "Countering the growing influence of these cyber-powered anti-American, anti- corporate international organisations," wrote Pedersen, "is one of the greatest challenges US corporate and government Public Affairs practitioners will face in this new millennium." [7] Control Risk Group, the "international business risk consultancy", also joined the choir of scare-mongers, saying that "governments have been too soft on crimes involving direct political action", and singled out US President Bill Clinton who "rewarded the window-kicking hooligans in Seattle by declaring that their message needed to be heard". [8] The PR industry eventually moved beyond this heavy-handed rhetoric, refining its analysis and developing effective new counter- strategies, many of which are deeply problematic from a democratic point of view. In an analysis of the lessons the PR industry should learn from Seattle, Public Relations Management (PRM) asked itself how "a ragtag band of non-elected, supposedly poorly funded NGOs … pulled off this successful public relations coup?" [9] The answer: loose and flexible network structures and a fast-flowing exchange of information through the Internet, which enables net-warriors to operate like swarms of bees and defeat much more powerful opponents. In these "netwars", hierarchically- organised corporations and business groupings are at a serious disadvantage, says PRM. [10] In its post-Seattle recommendations, PR giant Edelman came to a similar conclusion: "Corporations need to change to win", and to do so "they need to adopt strategies and tactics that are similar to NGOs". [11] One important lesson is "to communicate in human terms rather than economic or scientific terms as well as incorporate grassroots efforts." [12] Post- Seattle corporate campaigning in the US shows that the strategic advice of the PR industry has by no means fallen on deaf ears. The China Trade Battle The biggest post-Seattle trade battle in the US was catalysed by the Clinton administration's proposal to grant Permanent Normal Trade Relations (PNTR) to China. The essence of the proposed law was to eliminate the annual parliamentary review of US- China trade relations and to provide unlimited access to the US markets for goods produced in China, all of which was claimed necessary to ease China's entry into the WTO. [13] For US corporations this proposal is appealing, not so much to ensure a foothold in Chinese consumer markets, but rather to guarantee unconditional access to US markets for goods US corporations produce in China under commercially ideal, but often socially and environmentally deplorable conditions. [14] In addition to this, they felt a need to secure a symbolic victory for the corporate globalisation agenda. Shortly after Seattle, neo-liberal guru Fred Bergsten issued a warning that disastrous consequences would result from losing the PNTR debate. "If Seattle "victors" are permitted to carry the day on China, the global liberalisation program of the past half century will be at serious risk", wrote Bergsten, who heads the powerful corporate-sponsored think-tank Institute for International Economics. [15] Bergsten's warning clearly reflected the mood among US corporate interests: the China PNTR bill was a "must-win". It was no easy task to convince Congress to support the legislation, and a serious obstacle was the fact that the trade unions and NGOs who overwhelmingly opposed the bill had the public on their side. An April 2000 poll showed that 79 percent of US voters opposed PNTR with China. [16] In the six months after Seattle, the business lobby carried out what was likely the most expensive corporate political campaign in history. More than US$113 million was spent on lobbying, political donations, advertising and astroturf "grassroots" activities to persuade Congress to vote for PNTR. [17] The lobbying machinery that was set into place was phenomenal. During the first half of 2000, the US Chamber of Commerce, the Business Roundtable, the American Farm Bureau Federation and other prominent members of the pro-PNTR coalition spent over $30 million on lobbyists employed to massage the minds of US Congress members. Motorola and Boeing, corporations with major commercial interests in China, spent more than $7 million between them. The effectiveness of these efforts was further boosted by "a seamless interplay between the White House and corporate PNTR lobbying efforts", according to Public Citizen, one of the many NGOs campaigning against permanent trade status with China. [18] In order to manoeuvre the China PNTR bill through Congress, President Clinton staffed a "China War Room" with 150 people who worked in tandem with the corporate campaigners. A staggering $68 million was paid in the form of "donations" to members of Congress and their parties during the run-up to the vote on the China PNTR bill. One Congress member reported that he was offered $200,000 to vote in favour of it. Meanwhile, members of Congress were threatened that their failure to support the bill would mean the loss of future funding. Aside from this direct pressure on Congress via lobbying and donations, business invested in a tremendously costly effort to manufacture the impression that the China PNTR bill enjoyed widespread public support. Advertisements on national and local television, on the radio and in newspapers were designed to simulate public support and thereby influence members of Congress. Two major corporate lobby groups, the Business Roundtable and the US Chamber of Commerce, spent more than $12 million on such exercises, and individual corporations like Motorola, Exxon-Mobil and Microsoft spent millions of dollars on their own ads in favour of the China PNTR bill. A typical television spot featured a US worker telling viewers that: "I work in America, and trade with China works for me." These misleading advertisements were part of the corporate strategy to avoid the inconvenient fact that US trade unions overwhelmingly opposed PNTR. In addition to advertising, a massive astroturf operation, designed by specialized PR firms, was launched in order to create an impression of local grassroots activity in favour of PNTR. [19] Corporate lobby groups recruited and trained managers and employees, and then flew them to Washington DC to perform as pro-PNTR supporters. These phony "grassroots" teams also visited members of Congress in their home states, armed with glossy "local" propaganda that had in fact been produced by Washington DC PR firms. Retired staff members from pro-PNTR corporations were sent CD-ROMs and computer disks with sample letters that they were urged to send to Congress leaders and local newspapers. Hundreds of college kids were hired for pro-PNTR "rallies", and free ten- minute telephone calling cards with pro- PNTR slogans were handed out in front of metro stations by temporary workers in the guise of "activists". The Business Roundtable employed no less than 80 full-time field organisers for their PNTR campaign, an impressive reflection of the magnitude of these local astroturf efforts. [20] After a political battle which lasted several months, and during which business employed a whole toy box of corporate power games at record costs, the final vote in May 2000 resulted in the House of Representatives approving the PNTR bill. 237 members of Congress voted for permanent trade status with China and 197 against, in stark contrast with public opinion which remained consistently hostile. [21] Part of the explanation for the success of the corporate campaign was the overwhelming financial resources that were thrown into the battle, dwarfing the campaign budgets of labour and environment groups. But no less remarkable was the degree to which the corporate lobby implemented the advice of the PR industry and adopted strategies that had brought success to NGOs in the past. The Post-Seattle Cyberwar The most urgent post-Seattle recommendation by the PR industry was to establish a solid presence on the internet to gain a more equal footing in cyberspace debate on the global economy. During the PNTR battle, the corporate lobby group Business Roundtable launched a flashy "educational" website full of pro-free trade material. [22] Now there are a burgeoning number of industry websites with a far more confrontational approach. Www.truthabouttrade.com is a website run by US agribusiness and aimed primarily at demonising critics of economic globalisation. According to this site "the environmental radicals who rioted in Seattle were using misstatements of fact, flawed science, outright lies, and brute force to impose an anti- trade, anti-growth agenda that threatens the very livelihood of American farmers and farm economy". [23] Declaring that "They got away with it once, but we will not let them do it again", the site provides what it calls "a "Who's Who" of anti- trade environmental and anti-agriculture groups." [24] This far from accurate overview is completed with a list of "HUGE East Coast foundations" said to fund the WTO-critical organisations, and a complex diagram linking activist groups and funders. Www.truthabouttrade.com is part of a growing array of websites aggressively lashing out at opponents of the corporate agenda, whether they are fair trade groups or environment or consumer protection organisations. Www.NoMoreScares.com attacks "those who profit from fear" for publicising what the site calls "irresponsible and groundless health scares". [25] Among those lambasted and ridiculed are activists who oppose bovine growth hormones, hormone-disrupting chemicals, and genetically modified food. The very similar www.earthfiends.org is a spoof site attacking Friends of the Earth (FoE), a leading activist group in campaigns against the WTO and genetically modified food. The site is designed to mirror the Friends of the Earth US website, and parodies FoE with statements like "We continue to fight for our jobs and for the causes of paranoid maniacs the world over", and "Changing the World Because We Scare". [26] European Business Response to Critics Strategies of European corporations for dealing with what they refer to as "globaphobia" has differed from those of US business until now. They have tended to favour behind-the-scenes lobbying activity, afraid to risk an open confrontation with critics which might backfire and strengthen the position of WTO critics. This is possible because business enjoys very cosy working relations with the European Commission. Corporate lobby groups like the European Roundtable of Industrialists (ERT), the European Services Forum (ESF) and the European employers' organisation UNICE have instead intensified their behind-the- scenes lobbying and left the public counter-campaigning to officials like European Trade Commissioner Pascal Lamy. He has lamented this fact, saying that "NGOs have been very successful in depicting business as "nasty multinationals". This has affected business support for free trade. Instead of actively lobbying for a new round and taking a clear trade policy stance, business has in many cases decided to withdraw from the debate." [27] This may be partly due to the fact that in Europe, the corporate trade agenda faces no immediate threats. While there are strong WTO-critical NGOs and grassroots campaigns throughout Europe, the backlash has not translated into the established political system, which continues to stubbornly support continued global deregulation. However, there are now signs that EU corporations are beginning to adopt a strategy along the lines of US business campaigns to discredit their NGO critics (see box).
Putting the Brakes on NGOs Demands for "accountability" and "rules" to control NGO behavior have ironically become a standard feature in the corporate reaction to the backlash against economic globalisation. Only a few weeks after Seattle, two European business lobbies "invited" NGOs to "adopt a code of conduct". The two groups, Eurocommerce and the Free Trade Association, claimed that this would help NGOs "to strengthen their position in the expanding dialogue with international institutions", such as the WTO. They insisted that NGOs must respect the "democratic legitimacy of governments within the WTO" and should guarantee "absolute transparency" concerning their membership and finances. [29] The proposed code never got off the ground, maybe because it was designed to cover "all NGO's, including the business community". Most business lobby groups would never accept full disclosure of the kind of information proposed. This demand for a code of conduct for NGOs resurfaced repeatedly during the post-Seattle trade debate. It popped up, for example, in the report "NGO Rights and Responsibilities - A New Deal for Global Governance", released in June 2000 by the UK-based Foreign Policy Centre (FPC), a think-tank linked to the New Labour party. Referring to recent anti-globalisation demonstrations in London and Seattle, the FPC argues for a code of conduct for NGOs to "make the protesters accountable". [30] The New Deal proposed by the FPC was for NGOs to agree to "minimum standards of accountability" and in return "be rewarded with a place at the negotiating table". [31] The proposal included an "independent verification" of NGO behavior by a new "regulatory body". In order to be certified by this regulatory body, NGOs would be judged on "transparency, accountability, internal democracy and "helpful knowledge", a measure of its expertise". Despite the carefully chosen wording, the intention is clear: the marginalisation of grassroots activist groups that do not work with traditional hierarchical organisational structures. PR Industry Discovers Seattle Goldmine The perceived NGO threat to the free-trade agenda has presented the PR industry with the chance to exploit a goldmine of corporate insecurity. In the aftermath of the Seattle protests, lucrative new commercial opportunities have opened up for the booming Brussels- based PR firms. Burson-Marsteller, Hill & Knowlton and dozens of other firms and consultancies specialized in intelligence gathering, lobbying, media strategies and other "communication" services are helping business to overcome the post-Seattle crisis in the corporate trade policy agenda. A look inside the European Voice, a magazine widely read in Brussels corridors of power, reveals several pages of advertisements by consultancy firms, many of which explicitly stress their services for WTO issues and NGO relations. Edelman Europe, for example, advertises "direct communications for corporations and associations on WTO public affairs" and boasts "we work on the highest profile EU and international trade issues for multinational companies and trade associations". The identity of the clients, or which specific issues they have helped out with, is concealed by the usual veil of secrecy. Dialogue and Cooptation One of the most novel services offered by the PR industry is "NGO dialogue". As Edelman PR puts it, "governments and corporations will only succeed by establishing working relationships with NGOs that are not adversarial". [32] However, there is some risk involved as many corporations have discovered, luring NGOs into dialogue is a potential minefield. Despite this, in post-Seattle trade policy making, corporate lobby groups in the EU have had NGO dialogues served to them on a platter. Even during the run-up to Seattle, the European Commission (EC) had set up a controversial process of "dialogues with civil society". [33] Interested "NGOs", defined as both business lobby groups and those pursuing non- profit causes, were offered the chance to meet with EC civil servants to discuss trade policy. For business, this was a win-win situation. While the fundamental nature of the EU's international trade agenda was not up for discussion and groups like UNICE and the European Services Forum (ESF) also had ongoing parallel processes of cooperation with the EC, business had a golden opportunity to identify globalisation critics. This enabled them to set up an "early warning system" to analyse new developments. Many activist groups quickly discovered that the "dialogue" was nothing more than an attempt at window-dressing, and the number of participating NGOs plummeted. These EC dialogues on WTO issues are a prime example of how to undermine public debate on a controversial issue. Moreover, the EC and business have consciously used the process to divide WTO-critics into the categories of more and less radical, to the extent that some moderate environmental groups are now engaging in partnerships with the EC and business and have abandoned their opposition to the Millennium Round. Little wonder that Andre Driessen of the Dutch Employers' Federation suggested at a PR industry conference that: "NGO-industry dialogue is a powerful tool to further the cause of international trade and economic development". [34] The Escalating Counter-Offensive As movements questioning the social and environmental impacts of globalisation continue to swell, the corporate counter- offensive will no doubt also gain in intensity in the years to come. Addressing an audience of CEOs from North America, Europe and Japan almost exactly one year after Seattle, Dean O'Hare of the US Coalition of Service Industries called upon business to further deepen its pro- free trade propaganda war: "Private sector leaders must make this message a part of everything they do. It must be part of our business strategies and marketing efforts. We must constantly advance the arguments in support of trade liberalisation in all our communications with our customers, our employees, and with our government representatives." [35] However intimidating statements like these may sound to NGOs and grassroots movements, they should be seen as an inspiring indication of the extent to which anti-trade campaigning has put business on the defensive. Indeed, the aggressive force-feeding of the free-trade agenda may very well backfire on industry, with such bombardments of propaganda likely to strengthen public mistrust of corporate motivation. Despite massive lobbying budgets and public relations campaigns designed by the world's leading PR firms, business is still facing the unsolved - and possibly unsolvable - challenge of convincing the public that their agenda of global economic deregulation is good for everyone.
NOTES 1: The Multilateral Agreement on Investment, or the MAI, was a controversial investment treaty negotiated in the Organization for Economic Cooperation and Development (OECD) between 1995 and the end of 1998, at which point public outrage brought about its demise. | Back to Text | 2: 'Katz: Activists use Internet to slow trade liberalization. US business leader sees free-trade threat', Journal of Commerce, 12 October 1998. | Back to Text | 3: The theme of the Council on Foreign Relations' 1999 General Meeting was "The Backlash against Globalization" (4 October 1999 in Washington DC). | Back to Text | 4: Its board includes former secretary of state Lawrence Eagleburger and other rightwing heavyweights from politics, academia and business, "unified by their support of free trade, open markets and an integrated world economy". Source: "Trading on a Hot Topic", Washington Post, 25 April 2000. According to Cordell Hull Institute director Hugh Corbet:" the not so well-educated don't understand and so this ignorance can be exploited by people who are wanting protection, special treatment, and it's the job of leaders to resist that kind of thing". Source: "Spinning Free Trade: The Battle for Public Opinion", Making Contact, 5 July 2000, National Radio Project: www.radioproject.org/transcripts/0027.html | Back to Text | 5: 'WTO Transparency', e-mail from Bruce Silverglade to the TACD Food Working Group, 5 April 2000. | Back to Text | 6: This guide by Black, Kelly, Scruggs & Healy, cover letter dated 14 January 2000, was leaked to activists and posted on the "N30" anti-WTO e-mail list. The report appears to be the result of a few hours of visiting websites of a fairly random selection of groups that campaigned against the WTO Millennium Round. | Back to Text | 7: From an article by Wes Pedersen, Communications Director of the Public Affairs Council in the PAC newsletter Impact, quoted in O'Dwyers Inside News of PR, 7 February 2000. | Back to Text | 8: Ibid. | Back to Text | 9: 'PR Lessons from the Battle in Seattle: An introduction to how the Internet has fundamentally changed PR', Public Relations 101, Public Relations Management Ltd., December 1999. | Back to Text | 10: Ibid. | Back to Text | 11: Quote from Steve Lombardo, President and Chief Executive Officer of Strategy One, Edelman's research arm. "Edelman Worldwide's Survey Reveals the Consumer and Media to Be Key Elements in the War Between NGOs and Big Business", PRNewswire, 12 July 2000. | Back to Text | 12: Ibid. | Back to Text | 13: While the bill was presented as being part of preparing for China's membership of the WTO, the annual renewal of Normal Trade Relations (NTR) was in fact no obstacle. | Back to Text | 14: US corporations have over the last ten years invested heavily in production facilities in China, due to the attractive combination of skilled, low-wage government-controlled labor and weak environmental regulations. | Back to Text | 15: 'Coming on the heels of the failure at Seattle, it would clearly signal that anti-globalization forces will dominate American foreign economic policy for the foreseeable future', Bergsten stressed. C. Fred Bergsten, "The Next Trade Policy Battle", International Economics Policy Brief, January 2000. | Back to Text | 16: 'Spinning Free Trade: The Battle for Public Opinion', Making Contact, 5 July 2000, National Radio Project: http://www.radioproject.org/transcripts/0027.html | Back to Text | 17: 'Purchasing Power: the Corporate-White House Alliance to Pass the China Trade Bill Over the Will of the American People', Public Citizen's Global Trade Watch, October 2000. | Back to Text | 18: Ibid, page 24. | Back to Text | 19: Ibid, page 20. | Back to Text | 20: 'Spinning Free Trade: The Battle for Public Opinion'. Making Contact, July 5 2000, National Radio Project: http://www.radioproject.org/transcripts/0027.html | Back to Text | 21: 73 Democrats and 164 Republicans voted for the bill. | Back to Text | 22: http://www.gotrade.org/tradeducation.html | Back to Text | 23: http://www.truthabouttrade.com/MissionStatement.asp | Back to Text | 24: http://www.truthabouttrade.com/WhoTheyAre.asp | Back to Text | 25: National Center for Public Policy Research, a rightwing think- tank. http://www.nomorescares.com/about/default.htm | Back to Text | 26: http://www.earthfiends.org/publications/publications.html | Back to Text | 27: Pascal Lamy at the conference 'A Vision for Europe's Trade Policy' (May 29 2000): http://www.ceps.be/Events/Webnotes/290500.htm | Back to Text | 28: 'Nichtregierungsorganisationen - Herausforderungen fu die Wirtschaftsverbande', BDI Aussenwirtschaftspolitik, September 5th 2000. | Back to Text | 29: Agence Europe, Brussels, 21 December 1999. | Back to Text | 30: 'Make the protesters accountable', Michael Edwards, Financial Times, 19 June 2000. Michael Edwards, Director of the Ford Foundation, authored the report 'NGO Rights and Responsibilities - A New Deal for Global Governance', published by the Foreign Policy Centre, www.fpc.org.uk | Back to Text | 31: 'Pressure groups warned on public scrutiny', Financial Times, 19 June 2000. | Back to Text | 32: 'Edelman Worldwide's Survey Reveals the Consumer and Media to Be Key Elements in the War Between NGOs and Big Business', PRNewswire, 12 July 2000. | Back to Text | 33: Corporate Europe Observer Issue 4, July 1999; http://www.xs4all.nl/~ceo/observer4/index.html | Back to Text | 34: Andre Driessen, Senior Advisor on International Affairs, VNO- NCW (Dutch Employers' Federation) at the conference 'Finding Common Ground: Industry and NGOs in Dialogue and Partnership', Brussels, 29 June 2000. Organized by GPC Market Access. | Back to Text | 35:
'Achieving Services Trade Liberalization', Dean R. O'Hare (Chief Executive
Officer, Chubb Corporation and Chairman of the US Coalition of Service
Industries (CSI) at the European Services Forum Conference on "The
GATS 2000 Negotiations, New Opportunities for Trade Liberalization",
Brussels, November 27, 2000. http://www.esf.be | Back to Text |
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he
spectacular failure of the WTO Summit in Seattle at the end of 1999
may have been a major victory for critics of neo-liberal globalisation,
but it also marked the start of a large-scale corporate counter-offensive.
Corporate leaders had already been aware of the backlash against corporate-led
globalisation for a couple of years, having been forewarned by the
derailment of the negotiations for a Multilateral Agreement on Investment
(MAI) by activists around the world in 1998.