1. People said the same thing about the Original Trilogy when they came out, and 2. In both cases, it's complete and utter bull.
Now, I feel that I must preface this article. And I realize that such prefaces tend to do more harm than good, but I need to say it. Racism is never all right. Racism, Sexism, Ableism, Homophobia, and all other forms of Xenophobia are one of the more horrible personality traits of the human race and it needs to stop. We've come a long way as a society in regards to that, but it does still exist.
All things considered, the races/sexes/orientations/religions/cultures are equal. They have the equal propensity to be good and bad. That's why always showing a particular group as positive role models is just as odious as always showing the same group as negative. Also, for the sake of possible commenters, there is no such thing as "reverse racism." The reverse of bigotry is acceptance. Prejudice is prejudice no matter where it comes from or towards whom it's directed. And it's disgusting in any form.
With that out of the way, how the hell does it relate to Star Wars?
If I were to simplify it, I'd say that people overreacted to what was essentially (to paraphrase Mel Brooks) a bunch of stupid accents. But simplifying only exacerbates the issue, so this article shall elaborate.
A number of I-III detractors have written them off as racist because they feel that several characters introduced in The Phantom Menace are offensive stereotypes. Never mind the fact that all of the characters in question are completely alien and like most non-human characters in fantasy and sci-fi have a host of different cultures as their inspiration. No, because two out of the three are technically villains and the third is perceived as a "bad" character despite being a hero, it counts as a negative portrayal of whatever race they remind people of the most.
Truth be told, I could kind of see how someone with those racist stereotypes on their mind (either as a victim or a perpetrator) could look at these characters extremely briefly out of context and have a knee-jerk reaction. However, I didn't notice it until someone told me, since I was actually watching the film, paying attention to the story, and seeing the characters as characters, the way it was meant to be. Also, they are clearly aliens and not at all analogous to one specific subset of human.
Let's take this one at a time.
The Nemoidians of the Trade Federation are seen as Asian stereotypes. This is odd because Asians are mostly stereotyped for positive traits that the Nemoidians do not posess. And the few truly negative parts of the classic Asian stereotype also don't fit the Nemoidians: they are not exotic or mystical, and their faces don't reflect the disgusting "Yellow Peril" image in the slightest. So where's the connection? Well, it's in the accent. The Nemodian's accents in Phantom and Clones (only Nute Gunray keeps it in Sith) do seem vaguely Asian, but nowhere near Charlie Chan standards. And besides, Lucas described it as "Transylvanian," which now that he mentions it I hear a little bit of mixed in (Grievous is the true Dracula here, though). Since the Nemoidians are greedy, easily-manipulated cowards, an accent like that must represent someone, right? Well, it does represent someone: The Nemoidians.
Let's look at this in-universe. To reiterate, the Nemoidians are greedy, easily-manipulated, and a bunch of cowards. It seems the perfect patsy race, no? It's hinted at in the films and spelled out in the Expanded Universe that the Empire is very anti-alien. Palpatine engineered it that way, by making the Seperatist leaders during the Clone Wars aliens (with the obvious exception of Dooku), offering the slimy non-humans as the bad guys for the Republic (soon to be the Empire). Now, why Palpatine was so hell-bent on human superiority when both his master (Darth Plaguis) and his first apprentice (Darth Maul) were aliens is unclear, but what is clear is that Lucas connected bigotry with one of the most evil institutions in fiction. I personally find it hard to accuse the man of racism after that.
Then there's Watto. Watto is mostly seen as anti-Semitic. As a Jew myself, I found that hard to believe. He is greedy, but he's also a gambler (a miser would never gamble). His accent sounded more Italian than Semitic (and speaking also as someone of Italian descent, this never bothered me), and this was the direction confirmed by his voice actor Andrew Secombre.
[I always have to point out that Andrew Secombre is the son of Harry "Mr. Bumble" Secombre because that's just awesome.]
"Okay," you say, "so if he isn't offending Jews he's offending Italians." Except that the pervasive negative stereotype involving Italians deals with Organized Crime, and Watto is never directly connected with the Hutts.
The problem with Watto is simple. Watto is a slave owner. No matter what they did with him, he was going to offend someone due to that little tidbit. The fact that his nose is a Tapir-like trunk just gave people an easy target. It's so pervasive that the hat Watto wears in Clones is described as Hassidic when it looks more like he's wearing a dinner plate. The strange thing is I find Watto disturbingly likable (disturbing because, you know, slave owner).
Who I'm totally not disturbed that I like is Jar Jar Binks. Yeah, you knew he was coming. I've written before on what I think about Jar Jar. Jar Jar was clearly a throwback to Charlie Chaplin and Buster Keaton. Yes, the Gungans are kind of evocative of the kind of wacky wayside tribe common in old serials (that didn't quite subscribe to equality), but they're sufficiently advanced and portrayed positively. The Ewoks were way worse in this regard, and that's not the biggest point against them.
Jar Jar and the Gungans also speaks pidgen English. While most racist stereotypes use pidgen English, not all pidgen English is racist. It's kind of truth in television that someone with limited access to a language wouldn't be the best at it, and it makes the Star Wars universe seem much bigger. I've heard the accent described as Jamaican. If you want to hear a Jamaican accent in a fantasy setting, roll a Troll in World of Warcraft because Gunganeese sounds completely different. The only possible argument you could make for Jar Jar sounding at all African American is the fact that Ahmed Best just happens to be African American. That's like calling Qui-Gon an Irish stereotype because Liam Neeson lets his natural accent slip out once or twice.
The problem lies where it always has. Jar Jar's biggest haters are the ones that take is perceived uselessness, which sets up the point about everyone being useful despite appearances, at face-value. And the sad fact is that a big part of prejudice is about painting the victim as useless. So, a funny-talking useless thing? That just has to be racist to something, thereby giving the hateboys another reason to justify their hatred. It's also seeing in yourself some of the perceived negative traits of Jar Jar, and if you happen to be part of an ethnic group put down for supposedly possessing similar traits, it's going to cause a knee-jerk.
But the important thing to remember here is context. These are not African-Americans, or Asians, or Jews, or Jamaicans, or Arabs, or anything. They are aliens. they are fantasy races in a fantasy universe with no one cultural inspiration. They are mythic archetypes that have been a part of stories since there was such a thing as a "story", and they've been filled by every ethnic group under the sun at one point or another.
One more thing before I wrap this little treatise up. You remember way back at the beginning of the article when I mentioned that the same types of arguments were being levied at IV-VI during their release? Well, I'm sure if you're a Kevin Smith fan, you remember this scene from "Chasing Amy" (extreme language warning):
Now, this is played for laughs (spoiler alert: Jason Lee lives and it was all staged), because it is such a ridiculous notion and an obvious overreaction to the classic literary and theatrical motif of the villain in dark clothing. But what people don't remember is that the exact same argument was made during the initial release of IV-VI. The difference is the Internet. The Internet didn't exist back then, so the argument didn't have a chance to spread in the same way and was rarely taken seriously. Now, with everyone having such a great megaphone for their ideas and opinions, it's harder for the masses to sort the good points from the silly ramblings. Everything seems official, because there it is written in words.
It was a laughable argument then, and it is a laughable argument now. We need to stop this mislabeling of Star Wars if we are ever to have a reasonable discussion of it again.