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Friday, June 23, 2006

John Feffer, "Militarization in the Age of Globalization," Foreign Policy in Focus, November 6, 2001.

...every trade accord treats military subsidies as different from all other subsidies. This is known as the "national security exception." Included in the original General Agreement on Tariffs and Trade (GATT) in 1947 and every trade accord since, this provision allows states to subsidize production, promote sales, and impose trade embargoes they deem necessary for the maintenance of national security. So, according to free trade rules, if the U.S. subsidizes the production for export of a Boeing 747, other countries can file grievances through the World Trade Organization (WTO). But the U.S. can subsidize the production of a Boeing F-15 fighter jet that is sold overseas, and no country will call foul.

In some cases, this security exception channels money from the civilian to the military sector. The Canadian government subsidized civilian passenger jets produced by Bombardier Aerospace until other countries protested through the WTO. So Canada switched to subsidizing Bombardier's military production....

Structural adjustment programs--another key component of globalization--permit a similar security exception to their free market focus. Acting on the advice and pressure of the International Monetary Fund, governments have slashed government budgets and privatized government industries. But defense budgets have largely remained off limits to the dictates of the international financial institutions (IFIs). Although many governments have privatized military production and even military operations, they maintain indirect subsidies (through tax relief or export guarantees) and have arranged continued access to civilian infrastructure for military purposes.

...[With] the deregulation of weapons markets and the privatization of militaries... Weapons can end up anywhere; terrorists can raise funds in deregulated financial markets and unregulated black markets; private armies can rival state militaries. State subsidies for military production, protected by the security exception, have only increased the number of weapons available. In this new era, international institutions should permit government subsidies, investments, and taxes that scale down arms production, redirect funds from the military to the civilian sector, and otherwise dismantle the economic motor of globalized militarism....
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