US needs new thinking on global trade
By Robert Kuttner, 11/12/2001
HE ADMINISTRATION is trying to move a global trade agenda that
was blocked two years ago in Seattle by protesters in the
streets and skepticism in the Third World. This time, the
World Trade Organization talks have been moved to the Persian
Gulf state of Qatar, a despotic oil emirate where protesters,
foreign and domestic, are simply not permitted.
But it remains to be seen whether the current talks will
produce what the US government considers progress and whether
such progress is really in the national or the global interest.
At the Qatar meetings, one big issue dividing the Americans
from developing countries is access to cheap drugs. Poor
countries cannot afford the huge markups pharmaceutical
companies charge for a few cents worth of chemicals. If they
pay the price, their people do without.
India and Brazil have defied American conceptions of
intellectual property by producing cheap generic versions of
drugs that are patented in the United States. But most of the
world considers life-saving drugs to be social goods essential
for public health, not proprietary commodities.
The Third World essentially dared the drug industry and its
government allies to deny cheap drugs to suffering people, and
the industry backed down. US Trade Representative Robert
Zoellick and the industry hope to mollify poor countries by
selling them drugs at deep discount but preserving the patent
system. This bargain, even if it papers over the current
dispute, is probably unsustainable. Either drugs are social
goods or they aren't.
A second issue dividing the United States from much of the
world is America's right to levy antidumping duties on exports
deemed (by Americans) to be selling in US markets below costs.
Congress has insisted that US trade negotiators not give up
this right, but the developing world considers discounted
exports to be part of their development strategy and the US
stance hypocritical.
At Seattle, the United States promoted a grand bargain in
which the Third World became more respectful of intellectual
property and more open to flows of private capital and
commerce, while the United States and Europe gave up some of
their own protectionist measures. At the time, it was said
that the nation-state was becoming an anachronism and that
freer trade was the natural handmaiden of both prosperity and
democracy.
Now, however, the nation-state suddenly looks like an
essential source of security, and we are painfully learning
that much of the world doubts whether the US-led recipe for
prosperity is really in their interest. A new report by the
Economic Policy Institute documents that in the free-trade era
since 1980, world growth has dramatically slowed and world
inequality has widened.
Freer trade benefits elites around the globe, but not
necessarily ordinary people. A lot of the absence of global
support for America in the current crisis reflects resentment
at America's efforts to impose its economic system, whatever
the human costs.
In our own hemisphere, Argentina scrupulously followed US
advice and embraced an austerity program to reassure
international investors. It was rewarded by economic free-
fall. Investors fled, and Argentina is now about to default on
its debt. The US-dominated IMF and World Bank, which hastily
bent the rules to bail out America's newest ally, Pakistan,
are shedding no tears for Argentina. The rest of the world
notices these hypocrisies.
In East Asia, currency speculators, newly liberated by a model
imposed by the United States and the International Monetary
Fund, wrecked several economies in 1998. Some, like Indonesia,
are predominantly Muslim. They had no particular prior
sympathy for Islamist radicals but, not surprisingly, have
little charity for the United States.
In the Middle East, Islamic fundamentalism is energized by
resentment at American alliance with corrupt regimes that
bring huge gaps between wealth and poverty. Free commerce and
democratization are said to march hand in hand. But the
location of this year's trade talks in despotic Qatar vividly
underscores that when push comes to shove, commerce trumps
democracy.
Supposedly, the post-Sept. 11 world has thrown globalization
protesters into disarray. Some American commentators have
depicted them as little better than bin Laden. Trade
Ambassador Zoellick has even demanded that Congress grant the
president new trade liberalization authority as part of the
war on terrorism.
But this rationale has it exactly backwards. Dictating rules
of global commence to benefit US business is not winning
friends or improving lives. America's new global challenges
suggest a very different approach to global trade, less
beholden to private investors and more respectful of human
needs both in America and in the Third World.
Robert Kuttner's is co-editor of The American Prospect. His
column appears regularly in the Globe.
This story ran on page A15 of the Boston Globe on 11/12/2001.
© Copyright 2001 Globe Newspaper Company.
This archive was generated by hypermail 2.1.2 : 11-07-02 MET DST