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The WTO - a force for good : Comments
By Felicity McMahon, published 20/9/2007When an anti-free trade, anti-capitalist agenda is pushed the World Trade Organization often gets badly misrepresented.
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Posted by Paul.L, Thursday, 20 September 2007 11:59:14 PM
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Ginx,
You ask for evidence that the WTO is good for the poor, which I take to mean evidence that free trade is good for the poor (unless you’re arguing that the WTO does not promote free trade?) In Asia in the past 50 years several countries have emerged from poverty to relative affluence in what is historically a very short time – Japan, Singapore, Hong Kong, Taiwan, and South Korea. Many others are still poor by our standards but have progressed rapidly – Indonesia, Thailand, the Philippines. The world’s two most populous countries – India and China – are achieving economic growth rates that are lifting millions out of poverty. In ALL of these countries, openness to global markets and (in most cases) investment has been a key component of their economic success. Can you name single country that has emerged from poverty by pursuing protectionism? Research bears out the relationship between trade openness and growth. One of the most widely quoted sources is work by Dollar and Kray that showed a strong correlation between developing countries’ growth rates and their economic growth and success at poverty reduction: http://www.imf.org/external/pubs/ft/fandd/2001/09/dollar.htm One of the most passionate cases against “globaphobia” I’ve read is by former Mexican president Zedillo: “A peculiar alliance has recently come into life. Forces from the extreme left, the extreme right, environmentalist groups, trade unions of developed countries and some self-appointed representatives of civil society, are gathering around a common endeavor: to save the people of developing countries from….. -development.” http://zedillo.presidencia.gob.mx/welcome/pages/library/sp_28jan00.html A good simple summary of the case for free trade is here: http://www.ausaid.gov.au/keyaid/growth.cfm For a longer but still accessible look at what has worked and what hasn’t in the search for development I’d recommend “The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics” by William Easterly http://www.amazon.com/Elusive-Quest-Growth-Economists-Misadventures/dp/0262550423/ref=sr_1_1/103-4304650-1178252?ie=UTF8&s=books&qid=1190336192&sr=8-1 The World Trade Organisation’s membership has grown from 76 when it was created in 1995 to 151 today, almost all of the new member being poor countries. If it’s not in their interests to join, why would they bother? Posted by Rhian, Friday, 21 September 2007 11:36:43 AM
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Hi Paul,
It's nice to agree occasionally :-) I'm against "free trade" that stops countries defending themselves against others' protectionism. It's not wrong for Europe to protect food security and tourism by subsidising its picturesque villages, but countries which can't afford to subsidise their own farmers are surely within their rights to impose a corresponding protectionist tarriff on imports from countries which do. Subsidised produce is just one of a thousand areas where a price signal is actively manipluated by protectionist governments and/or monopoly-seeking market players. I'm a "fair trade" kind of guy, and I think fair trade actually needs the same openness that free trade demands. Markets consisting of informed, uncoerced actors have a tremendous power to seek efficiencies, providing that price signals reflect true costs. Only in this sense do I support free trade. The efficiency of a market is optimised by making sure all players are well-informed and by incorporating the externalities through regulation. The Doctor Pangloss types are wrong to suppose that markets always find the most efficient way of doing something all by themselves. I accept markets and governments because they *can* generate efficiencies and prevent bloodshed where they work well. But I fear them because they *do* generate inequalities and shed the blood of millions. By sentiment I'm socialist and libertarian (this is not a contradiction, whatever the US Libertarian Party claims), but in practice I'm an old-fashioned left-wing liberal who believes regulation is required for the proper functioning of markets. I'd back a socialist revolution if I believed it would be successful and bloodless, and that it would establish an economy more efficient and more fair than capitalist markets. I do believe such a thing is possible, but unlikely in the West whilst as capital is strong. I'll settle for pushing Natural Capitalism and cheering Chavez and Parecon from the sidelines :-) The WTO never suppressed political protest by itself. Member states did. If oppression by local police in a nominally democratic state is necessary for the WTO to meet, any democratic legitimacy of the WTO and of that regime is seriously undermined. Posted by xoddam, Friday, 21 September 2007 12:13:06 PM
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"Ginx,
Why would anyone ever bother to try and prove anything to you. You have never put up your own opinions and tried to defend them. 90% of your posts are 40 disparaging words or less. Then again, maybe less is best when it comes to hearing from you" Posted by Paul.L, Thursday, 20 September 2007 11:59:14 PM You've been counting the words on my posts!!? You really are a bit obsessed, aren't you? As you indicate, you are not interested in what I have to say. So; why are you bothering to have a shot? You are the type of pathetic poster with the lynch mob mentality. You just want to 'have a go', particularly if you can see others doing so. Big man eh? And what do you post? Same thing. Again and again. No! I'm wrong...; you managed a post without reference to the 'soft Left'. You're losing your touch... The time has come to ignore you after this post. Poor Paully. ______________________________ Rhian; what I said was prove when the WTO has ever benefited poor countries. You interpreted that as '...evidence that the WTO is good for the poor'. You then provide copious links to show how good free trade/globalism is. Ending with:'If it's not in their interests to join why would they bother?' Hell! I know why they bother. Because it IS in their best interests to join. But you and I will put a different interpretation on why that is. It is my belief that the WTO has greater control and influence upon the poorer countries by allowing them into the fold. They may well benefit from that. But it is done out of total self interest by the WTO, and nothing else. I don't believe for one second that the WTO has any benevolent intent. It is simply 'investing' for it's own interests. I have my view. You have yours. I will not be persuaded otherwise and neither will you. Thanks for responding though. (No need to leap in Paully; this poster can more than hold her own.) Posted by Ginx, Friday, 21 September 2007 2:09:43 PM
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Ginx, I have tried to show why I believe that the stated objectives of the WTO – freer international movement of goods, services, investment dollars etc - are good for developing countries. You haven’t disagreed with this, and you’ve also agreed that it is in the interests of developing countries to join.
Your argument seems to be – sorry if I’m misreading you – that the WTO has its own hidden self-interested agenda separate from its stated agenda, and that any benefits that accrue to developing countries from its pursuit of this self-interested agenda are incidental. Have I read you right? And if so, what do you think the real agenda is, and why do you believe this? Posted by Rhian, Friday, 21 September 2007 6:25:36 PM
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Yep, to a point the world has been opened up through free trade, but as with colonialism it has its limits because we see the former scions of free trade now acting like racketeers, as they get richer using the profits to subsidise their farmers even though protectionism was or is not part of the global fairplay that the WTO was to give.
The US is acting most like the mafia, Dubya making sure his Republicans get in once again, by budgeting 80 billion dollars of Federal Reserve Rockefeller dollars for six years more of agricultural protection. Australia once proud of its Bio-Security, now has had to allow infected New Zealand apples to our shores, as well as have our PM cheat the public to quieten down the media as suspected foot and mouth infected beef is landed at our ports. Along with the droughts no wonder our cockies are not very impressed of late? Of course with the so-called everlasting pitstock economy, even our great great grandkids will be looked after OK.....? Posted by bushbred, Friday, 21 September 2007 6:27:06 PM
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I have to agree with you on the agricultural tariifs issue. It really is one of the worst aspects of global free trade.
I take it then you are not an opponent of free trade, just an opponent of the manner in which it is currently conducted?
Police suppression of the right to protest? I am not with you on this. How is it WTO’s fault that protest has been suppressed? In fact what evidence do you have that legitimate protest has been suppressed?
Fact: The problem with the protests is the violent manner in which many protesters choose to act. Most of these events are hijacked by extremely radical groups who are more interested in the confrontation than the message.
Protectionism isn’t the answer for anyone. It stunts a country growth as well as its industries. Governments cannot create wealth for their citizens by increasing tariffs.
How do you explain the HUGE middle classes in China, India, Korea etc where none previously existed?
Ginx,
Why would anyone ever bother to try and prove anything to you. You have never put up your own opinions and tried to defend them. 90% of your posts are 40 disparaging words or less.
Then again, maybe less is best when it comes to hearing from you