Column: Reconsidering the WTO

The formation and negotiations of trade policy are changing, and these recent changes have many progressive thinkers reconsidering globalization. Many now propose that the World Trade Organization, which once seemed destructive, may be the necessary catalyst of social justice in a new global society.

Whereas the emphasis on trade negotiations and economic development has historically been on altering the policies of developing nations--lowering their trade barriers via the World Bank and International Monetary Fund's structural adjustment policies--recent events demonstrate that the focus is now on changing the policies of the world's economic superpowers: the United States and European Union. Liberalizing trade in poor countries while allowing protectionism in developed nations has finally been recognized by international policy makers as a double standard that cripples developing economies. But while the West constantly pays lip-service to the development of the South, now that it is compelled to change its debilitating policies in order to promote development, it is balking.

The European Union refused to come to a fair compromise with a coalition of developing nations regarding European agricultural subsidies at the Cancun WTO talks, ultimately causing a breakdown of negotiations.

This round of the Doha Development Initiative marked a drastic change in WTO strategy: developed nations were finally called to be accountable to their commitment to fair trade and international development by eliminating subsidies that have incapacitated African, Caribbean, South American and Asian industries in such areas as the production of cotton, sugar, dairy products and cereals. Through this the WTO demonstrated that it has become serious about fair trade--and as it confirmed last week, the failure at Cancun has not weakened its resolve.

In retaliation to the steel tariffs, the European Union has threatened to impose their own tariffs on U.S. exports such as Carolinian textiles, Florida orange juice and Harley Davidson motorcycles (produced in Michigan) in an effort to depress these key electoral states' economies to oust Bush in the next election (a rather hypocritical move given the EU's refusal to negotiate their own barriers to trade). Thus if the steel tariffs remain in place (which is yet to be seen), it will be at the cost of other U.S. industries and jobs.

Protectionism does not protect U.S. jobs or strengthen the economy: it actually prevents new jobs from being created by tying up inefficient resources. The U.S. Intentional Trade Commission has estimated that the steel tariffs will cost Americans over $680 million in economic costs associated with the tariffs. While former U.S. industries may move abroad, new industries replace them - while the manufacturing sector lost 1.9 million jobs in the 1980s, 20.4 million jobs were created in other industries in the same decade.

Yet this invisible force economists call "creative destruction"--new, more efficient industries replacing failed ones --is nearly invisible to the American public and media, whereas unemployment numbers (which rise due to a temporary reallocation of labor) are much more perceptible, serving as political fodder for special interest groups and the politicians who seek to woo them.

When powerful political bodies such as the U.S government and European Union engage in these political games it is not only at the cost of their citizens, but also, and much more devastatingly, at the cost of the world's poor. The inability for industries to emerge and remain viable within these states has obvious implications as to their incapability to become solid competitors in the world market. These protectionist policies further enshrine these nations and their people in the grinding and exhausting poverty from which hard work and effort provides no relief.

Many progressive thinkers are now asserting that globalization can work in the best interests of both wealthy and poor nations. The Democratic Party Leadership has adopted "progressive internationalism," views written by a coalition of progressive and liberal organizations and think tanks that embraces free trade and calls for a strengthening of the WTO to enforce fair trade issues.

The liberal Fabian Society has come out with a similar philosophy, "progressive globalization," which states that globalization can be a force for social justice if regulated on an international scale, forcing corporations and capitalist markets to submit to progressive ideals.

Whereas these ideas once may have seemed absurd, the WTO of recent months has demonstrated this kind of leadership as well as its potential to become such an organization. Its multilateral, democratic approach (allocating one vote per nation) empowers economically weaker nations and serves as a much preferred strategy than the bilateral talks the Bush Administration seems to favor, in which it clearly dominates.

Instead of opposing the WTO, those who seek a just economic system should support it. With increasing influence, the WTO can pressure governments to play the free trade/protectionism game so that the outcome will be the win-win scenario of fair trade. But the success of these negotiations hinges on the WTO's strength as an organization. Its ability to regulate and hold governments accountable will depend as much on world opinion as the member states themselves.

A respected and authoritative WTO would be able to set international regulations in regards to labor and environmental practices, enforcing these practices to stave off the "race to the bottom" that developing nations often participate in by lowering standards of worker and environmental rights to attract foreign manufacturing jobs.

International institutions have proven to be powerful in creating a global society with increasing progressive policies in regards to security, human rights and social development-- it is now time that our international system does the same for trade and economic development.

Ali Manning is a Trinity junior. Her column usually appears every third Monday.