Was Wrong About Trade
25 June, 2003
A few years ago I would have raised at least two cheers. The US government,
to judge by the aggressive noises now being made by its trade negotiators,
seems determined to wreck one of the most intrusive and destructive
of the instruments of global governance: the World Trade Organization.
A few years ago, I would have been wrong. The only thing worse than
a world with the wrong international trade rules is a world with no
trade rules at all. George Bush seems to be preparing to destroy the
WTO at the next world trade talks in September not because its rules
are unjust, but because they are not unjust enough. He is seeking to
negotiate individually with weaker countries so that he can force even
harsher terms of trade upon them. He wants to replace a multilateral
trading system with an imperial one. And this puts the global justice
movement in a difficult position.
Our problem arises from the
fact that, being a diverse movement, we have hesitated to describe precisely
what we want. We have called for fair trade, but have failed, as a body,
to specify how free that trade should be, and how it should be regulated.
As a result, in the rich world at least, we have permitted the few who
do possess a clearly formulated policy to speak on our behalf. Those
people are the adherents of a doctrine called "localization".
I once supported it myself. I now accept that I was wrong.
Localization insists that
everything which can be produced locally should be produced locally.
All nations should protect their economies by means of trade taxes and
legal barriers. The purpose of the policy is to grant nations both economic
and political autonomy, to protect cultural distinctiveness and to prevent
the damage done to the environment by long-distance transport. Yet,
when you examine the implications, you soon discover that it is as coercive,
destructive and unjust as any of the schemes George Bush is cooking
My conversion came on the
day I heard a speaker demand a cessation of most forms of international
trade and then, in answering a question from the audience, condemn the
economic sanctions on Iraq. If we can accept that preventing trade with
Iraq or, for that matter, imposing a trade embargo on Cuba, impoverishes
and in many cases threatens the lives of the people of those nations,
we must also accept that a global cessation of most kinds of trade would
have the same effect, but on a greater scale.
Trade, at present, is an
improbable means of distributing wealth between nations. It is characterized
by coercive relationships between corporations and workers, rich nations
and poor. But it is the only possible means. The money the poor world
needs has to come from somewhere, and if our movement rejects trade
as the answer it is surely duty-bound to find another.
The localizers don't rule
out all international transactions. As Colin Hines, who wrote their
manifesto and helped to draft the Green party's policy, accepts, "Some
long-distance trade will still occur for those sectors providing goods
and services to other regions of the world that can't provide such items
from within their own borders, e.g. certain minerals or cash crops".
To earn foreign exchange from the rich world, in other words, the poor
world must export raw materials. This, of course, is precisely the position
from which the poor nations are seeking to escape.
Raw materials will always
be worth less than manufactured products. Their production also tends
to reward only those who own the primary resource. As the workers are
unskilled, wages remain low. Every worker is replaceable by any other,
so they have no power in the marketplace. The poor world, under this
system, remains trapped in both the extractive economy and - as a result
- in its subordinate relationship to the rich world.
Interestingly, Hines's prescription
also damages precisely those interests he seeks to protect. To earn
sufficient foreign exchange to import the goods they cannot produce
themselves, the poor nations would need to export more, not less, of
their natural wealth, thus increasing their contribution to climate
change, soil erosion and the loss of biodiversity. His policy also wipes
out small farmers, who would be displaced from their land by mechanized
A still greater contradiction
is this: that economic localization relies entirely upon enhanced political
globalization. Colin Hines's model invents a whole new series of global
bodies to impose localization on nation states, whether they like it
or not. States would be forbidden, for example, to "pass laws that
diminish local control of industry and services". Hines, in other
words, prohibits precisely the kind of political autonomy he claims
But above all, this doctrine
is entirely unnecessary. There is a far better means of protecting the
environment while permitting the poor nations to develop, and this is
to demand global trade rules which introduce two kinds of fairness.
The first is to permit poor
nations, if they so wish, to follow the routes to development taken
by the rich. The founding myth of the dominant nations is that they
built their wealth through free trade. In truth, almost every nation
which acquired its wealth independently did so (apart from by plunder
and piracy) either by protecting its new industries from competition
until they were big enough to fend for themselves, or by stealing other
countries' intellectual property. They discovered the virtues of free
trade and global patents regimes only once they had acquired their economic
dominance. Having done so, they now insist on world trade rules that
explicitly forbid other nations from following their own route to development.
Fair trade rules would force the rich nations to open their borders,
but not, until they have achieved a certain level of economic development,
the poor ones.
The second kind of fairness
would involve extending the rules currently applied by the voluntary
fair trade movement to all the companies trading between nations. To
acquire a licence to trade internationally, a corporation would have
to demonstrate that its contractors were not employing slaves, using
banned pesticides or exposing their workers to asbestos. It would also
have to pay the full environmental cost of the fossil fuel it used.
This would ensure that low-value, high-volume goods, such as fruit and
vegetables, would no longer be flown around the world. But it would
also ensure that the poor nations which currently export raw materials
would instantly become the most favored locations for manufacturing:
it takes a lot less fuel to ship a consignment of aluminum saucepans
than it does to transport the bauxite from which they were made.
So let us campaign not to
scrap the World Trade Organization., but to transform it into a Fair
Trade Organization., whose purpose is to restrain the rich while emancipating
the poor. And let us ensure that when George Bush tries to sabotage
the multilateral system in September, we know precisely which side we
· George Monbiot's
book 'The Age of Consent: a Manifesto for a New World Order' is published
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