World Trade Can Improve Life for All

Article excerpt

World trade can be a win/win situation for rich and poor, developed and developing countries. Will everyone benefit? No. Those industries that are inherently inefficient and are perpetuated only though protective measures such as tariffs, quotas, subsidies or other non-tariff barriers will not benefit from world trade.

The World Trade Organization is built on the premise that trade improves standards of living for all parties involved. The role of the WTO is, therefore, to increase world trade and provide a mechanism to resolve disputes over measures that restrict trade.

The NCR editorial of Dec. 10, 1999, headlined "World Trade Organization bad for our world" condemned the WTO in strong terms: "Workers, both in the United States and in China will suffer ..."; The WTO principle of unrestricted movement of goods incorporated in the North American Free Trade Agreement has "significantly lowered real wages" on both sides of the U.S-Mexican border; WTO has done "outrageous" harm; "It has taken only five years for the WTO and its promotion of globalization to upend the role of nation states"; "[T]he WTO is in fact protectionist"; and so on. All of these statements can and should be challenged.

Contrast the NCR editorial with statements made by respected voices regarding the WTO Seattle meeting.

Kofi Annan, U.N. secretary general said, (The New York Times, Nov. 29, 1999)," ... globalization should not be made a scapegoat for domestic policy failures.... Practical experience has shown that trade and investment often bring not only economic development but higher standards of human rights and environmental protection as well.... So it is hardly surprising if developing countries are suspicious of those who claim to be helping them by introducing new conditions or restriction on trade."

Former Labor Secretary Robert Reich quoted in The Nation commented, "Poor people around the world would suffer a great deal were we to put up trade barriers, but I don't see any better way to get the winners to compensate the losers than for the losers to threaten to block trade as a bargaining chip."

An editorial in The Economist (Dec. 11, 1999) summed up many opinions: "As the dust has settled and the tear gas has dispersed, a new parlor game has taken hold. People are vying to decide who won and who lost from the failure of the World Trade Organizations's meeting in Seattle last weekend. Did the protesters, the greens, trade unions or `anarchists' win? Did Bill Clinton, or Mike Moore [the head of WTO], or big business lose? As the game is played ... one group, representing more than 5 billion of the world's 6 billion people, sits bemused and befuddled, more or less ignored -- just as in Seattle. These 5 billion live in the developing countries and include the poorest of the world's poor. They are the real losers from this whole sorry episode."

The NCR editorial stated, without explanation of the reason for the WTO ruling, that "the giant sea turtles lost their protection under the Endangered Species Act when foreign commercial shrimpers protested. Venezuelan oil companies succeed in quashing the U.S. Environmental Protection Agency's air quality standards for imported gasoline."

The facts are: The WTO ruled in both cases that these regulations were discriminatory on the part of the United States and thus an unfair barrier for the following reasons.

"The U.S. banned imports of shrimp from Malaysia, Thailand, India and Pakistan on the grounds that they did not force their fishermen to use `turtle excluder devices' that enable sea turtles to escape shrimp nets. …