Wednesday, December 21, 2005

Why We Need the WTO

Thou protest too much

You cant help but feel for those who lose their traditional ways of life through free trade, so right on schedule, along with the trade talks come the anti-free trade protests. It can be said, and is said by the protestors, that material wealth over sustaining tradition is not a good thing. However, the world does indeed have many poor, those who starve, without access to water, and who die of treatable desease because the world does not distribute its resources in the most efficient manner. It is self-evident that trade is how things get distributed.

The World Trade Organization (WTO), despite its shortcomings - all institutions as do all people have shortcomings, it is part of our human condition - provides a necessary role to helping the world's poor. This necessary role is providing a check on abuse of sovereign power. The nation-state, and the political processes which determine how the nation-state behaves, are by definition ruled by special interests who control how the rules of the game are played. Free trade is just that, free. State power is just that, coercive.

This is true whether the state is a dictatorship, a benign kingdom, a democracy. The state picks winners and losers through its trade policies, granting favors to some (the well-informed and well-connected) to the detriment of everyone else. The WTO provides a forum for those hurt through the political distortions of trade to bring grievances. Without this check on political power the endgame would be less beneficial, and less hopeful, to all.

The trade problem is not the WTO's "fault". The best way to protest is to use your own economic resources to freely buy things (or avoid things) which support (or destroy) the values you believe in. This is the way resources are distributed and the way the poor get rich, or at least enough to eat.

Compared to 200 years ago most people are living longer, healthier lives. (Whether or not this translates to more honest, caring, happy and spiritually rewarding lives is a different question). This has been through 'globalization' (the overused emotion-triggering phrase for trade). Trade is how cultures, languages, societies and inventions were created in the first place. Why stop now?

There has been much written about the World Bank's downward estimate of how many poor will be lifted out of poverty from the Doha round of trade talks. If you read the fine print, this downward estimate is due to the Bank thinking that trade will not be liberalized as much as it had thought. "Modern" countries wont cut their farm subsidies and barriers and "modernizing" countries wont open their protectionist borders to products from abroad in misguided attempts to protect domestic industry. These dogmatic, political special-interest group, barriers to trade is what is harming the world's poor and this is what should be protested.

Lastly the political maneuvorings around trade are is wrong to trade opening of this barrier for that. If a country (USA leadership anyone?) would unilaterally open its borders to trade the cheaper goods would benefit both the manufacturors and the consumers within that country, as well as set the example to its trading partners. It is for politician self-interest that countries do not open borders unilaterally. Again, this is what should be protested, not trade itself.