International Trade Rules
Jun. 20th, 2002 09:35 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
purpletigronThe subject of `International Trade Rules' probably makes most people glaze over and fall asleep. Yesterday, my volunteer research with Friends of the Earth consisted of observing the mass lobby of the UK Parliament, co-ordinated by the Trade Justice Movement to raise trade issues, and it was anything but boring. Over 12, 000 people from around the UK massed outside the Houses of Parliament, and either waited for their MPs to be brought out to them in pedal-cycle rickshaws, or went into the building to lobby their MPs there. I was with the Cardiff constituents, whose four MPs had co-ordinated to book a meeting room for an hour to hold our discussions.
The nub of the issues appears to be: Can world trade rules be established and enforced which give everyone a reasonable opportunity to work themselves into prosperity? Despite the apparent dichotomies between `free trade' (which logically means, unregulated trade) and "fair trade" (which stems from the idea of "a fair day's pay for a fair day's work"), and `globalization' and `anti-globalization' (although, there was much support for `the right kinds' of global culture amongst the people I met at the Trade Justice Mass Lobby), there is actually a broad consensus that some kind of international trade rules are required; only a tiny minority believe in either completely unregulated trade, or complete national insularity. However, from there the discussion rapidly disintegrates, depending upon the different ends which people are seeking, and their opinion as to how international trade relates to those ends.
There is a broad consensus that it is desirable to eradicate true poverty - to give every person on the planet a fair opportunity at `life, liberty, and the pursuit of happiness' - with individual opinion ranging from "It would be nice, but we live in the real world, child.", through "Everyone will benefit in a world full of prosperous consumers.", to "These fundamental human rights must come before all other considerations." It is also broadly accepted that trade is a major mechanism to enable people to escape poverty. It seems to me that the key dichotomy is then the differences in emphases between those who `believe in' trade and money, and those who `believe in' happiness and escape from poverty. Both these philosophies can place great value on both trade, and freedom from poverty; the fundamental point of disagreement is, whethertrade has an absolute power to bring freedom.
Do we know enough about the economics of world trade to be able to examine these hypotheses? The Trade Justice Movement is calling for world trade to be directed and regulated for the purpose of the alleviation of poverty, and argues that the current trends in world trade will cause greatly increased suffering. The `free trade lobby' is calling for regulation of trade to be kept to an absolute minimum, and argues that attempts to manipulate markets are bound to fail, potentially disastrously.
The current World Trade Organization is a nominally democratic body, which superseded the General Agreement on Tariffs and Trade (GATT), and which has real powers to enforce the agreed trade rules upon its large number of nation state members. The WTO was founded on the principle that `trade liberalisation' a.k.a. the minimisation of restrictions on world trade, is a fundamental good. The General Agreement on Trade in Services (GATS) is set to bring `liberalisation' to services (this appears to include water, despite claims to the contrary).
Therefore, two untested and unproven assumptions are dominating the global discussion of world trade: (1) That the liberalisation of trade in goods and services will inevitably and efficiently reduce world poverty, and the alternative will be disastrous; and (2) That well regulated trade can be made to efficiently reduce world poverty, and the alternative will be disastrous. We live in a crucial time, when many official world organisations, including national governments, and international trade and finance bodies such as the WTO, the World Bank and the International Monetary Fund (IMF) are working with a full commitment to Hypothesis (1), whilst a growing number of individual citizens and non-governmental organizations are becoming vociferously convinced that Hypothesis (2) is correct. Corporations in the three main trading blocs, the USA, the EU and Japan, are now trading in such basic services as water and staple crop seed.
Meanwhile, a estimated 800 million people have insufficient food, and perhaps as many as 4.5 billion people are lacking at least one of the fundamentals of freedom: clean air, clean water, nutritious food, shelter, basic medical provision (including contraception), self-determination, basic education, and an acceptable way of making a living.
It seems to me that those of us with the power to affect world trade - through our purchasing decisions, our influence on our elected representatives, our professional contacts, and so on - have an obligation to carefully examine and debate the issues. Do we have enough information to reach firm conclusions on whether or not regulation of trade can bring about significant permanent reductions in world poverty? If we do not have enough information to reach firm conclusions, what kinds of compromises in trade regulation can and should be made, to best insure against increasing world poverty? And then, I think that we all have an obligation to use the mechanisms within our power to influence world trade in the ways which we each consider to be for the best. It is easy to spend time and energy in accusing those with more money and power than ourselves of greed, or to spend money making charitable contributions out of compassion and feelings of guilt. But those in poverty need the best help which we can give, as soon as we can give it. You have just been reading my thoughts as to what this need might mean in my life.
The nub of the issues appears to be: Can world trade rules be established and enforced which give everyone a reasonable opportunity to work themselves into prosperity? Despite the apparent dichotomies between `free trade' (which logically means, unregulated trade) and "fair trade" (which stems from the idea of "a fair day's pay for a fair day's work"), and `globalization' and `anti-globalization' (although, there was much support for `the right kinds' of global culture amongst the people I met at the Trade Justice Mass Lobby), there is actually a broad consensus that some kind of international trade rules are required; only a tiny minority believe in either completely unregulated trade, or complete national insularity. However, from there the discussion rapidly disintegrates, depending upon the different ends which people are seeking, and their opinion as to how international trade relates to those ends.
There is a broad consensus that it is desirable to eradicate true poverty - to give every person on the planet a fair opportunity at `life, liberty, and the pursuit of happiness' - with individual opinion ranging from "It would be nice, but we live in the real world, child.", through "Everyone will benefit in a world full of prosperous consumers.", to "These fundamental human rights must come before all other considerations." It is also broadly accepted that trade is a major mechanism to enable people to escape poverty. It seems to me that the key dichotomy is then the differences in emphases between those who `believe in' trade and money, and those who `believe in' happiness and escape from poverty. Both these philosophies can place great value on both trade, and freedom from poverty; the fundamental point of disagreement is, whethertrade has an absolute power to bring freedom.
Do we know enough about the economics of world trade to be able to examine these hypotheses? The Trade Justice Movement is calling for world trade to be directed and regulated for the purpose of the alleviation of poverty, and argues that the current trends in world trade will cause greatly increased suffering. The `free trade lobby' is calling for regulation of trade to be kept to an absolute minimum, and argues that attempts to manipulate markets are bound to fail, potentially disastrously.
The current World Trade Organization is a nominally democratic body, which superseded the General Agreement on Tariffs and Trade (GATT), and which has real powers to enforce the agreed trade rules upon its large number of nation state members. The WTO was founded on the principle that `trade liberalisation' a.k.a. the minimisation of restrictions on world trade, is a fundamental good. The General Agreement on Trade in Services (GATS) is set to bring `liberalisation' to services (this appears to include water, despite claims to the contrary).
Therefore, two untested and unproven assumptions are dominating the global discussion of world trade: (1) That the liberalisation of trade in goods and services will inevitably and efficiently reduce world poverty, and the alternative will be disastrous; and (2) That well regulated trade can be made to efficiently reduce world poverty, and the alternative will be disastrous. We live in a crucial time, when many official world organisations, including national governments, and international trade and finance bodies such as the WTO, the World Bank and the International Monetary Fund (IMF) are working with a full commitment to Hypothesis (1), whilst a growing number of individual citizens and non-governmental organizations are becoming vociferously convinced that Hypothesis (2) is correct. Corporations in the three main trading blocs, the USA, the EU and Japan, are now trading in such basic services as water and staple crop seed.
Meanwhile, a estimated 800 million people have insufficient food, and perhaps as many as 4.5 billion people are lacking at least one of the fundamentals of freedom: clean air, clean water, nutritious food, shelter, basic medical provision (including contraception), self-determination, basic education, and an acceptable way of making a living.
It seems to me that those of us with the power to affect world trade - through our purchasing decisions, our influence on our elected representatives, our professional contacts, and so on - have an obligation to carefully examine and debate the issues. Do we have enough information to reach firm conclusions on whether or not regulation of trade can bring about significant permanent reductions in world poverty? If we do not have enough information to reach firm conclusions, what kinds of compromises in trade regulation can and should be made, to best insure against increasing world poverty? And then, I think that we all have an obligation to use the mechanisms within our power to influence world trade in the ways which we each consider to be for the best. It is easy to spend time and energy in accusing those with more money and power than ourselves of greed, or to spend money making charitable contributions out of compassion and feelings of guilt. But those in poverty need the best help which we can give, as soon as we can give it. You have just been reading my thoughts as to what this need might mean in my life.
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no subject
Date: 2002-06-20 07:25 am (UTC)I'm still pondering the issues, but a thought just occurred to me...
The whole free trade thing grew up from experiences in the 19th and 20th century that seemed to show that trade barriers just messed up both countries' economies, while free trade made both sides wealthy.
That's all well and good, and seemed to finally bury the 'if we trade with them we giving them all our money' attitude that destroyed several national economies in earlier centuries.
But now we have something else. Its not so much the national governments that are setting the conditions for trade, as large international companies, and they seem not to have learnt this lesson. They'd rather control something than let it find its own, optimum state, which might be better for more people, but could be worse for the specific company.
So companies need to have more liberal trading practices, emulating the national econmoies of the early 20th century that they now dwarf. Quite how WTC can do this, since it operates at the national level, is unclear to me.
Of course it should be noted that I know nothing about economics!
no subject
Date: 2002-06-21 02:31 am (UTC)Thank you! (gentle readers,
The whole free trade thing grew up from experiences in the 19th and 20th century that seemed to show that trade barriers just messed up both countries' economies, while free trade made both sides wealthy.
(
It's not so much the national governments that are setting the conditions for trade, as large international companies, and they seem not to have learnt this lesson. They'd rather control something than let it find its own, optimum state, which might be better for more people, but could be worse for the specific company.
I do agree that `multinationals' (which make up almost exactly half of the 100 largest world economies (http://www.corporations.org/system/top100.html)) have a huge and perhaps, underappreciated, influence on international trade. Also, under many national legal systems, companies are legally obliged to take protectionist actions, for example to protect their trade marks etc. and to maximise profits to their shareholders.
Could this lead to a repeat of the trade disasters to which
Of course it should be noted that I know nothing about economics!
Me neither :-) As mentioned in an earlier journal entry (http://www.livejournal.com/talkread.bml?journal=purpletigron&itemid=3673&nc=4), I am trying to obtain a copy of "Hidden Order: The Economics of Everyday Life" (http://www.daviddfriedman.com/Academic/Hidden_Order/Hidden_Order_Contents.html) by David D. Friedman (http://www.daviddfriedman.com/), but I after a month of searching, my local bookshop has just reported that it currently has no UK distributor. I must away, reluctantly, to Amazon, therefore...