Posted on 04/25/2002 7:35:30 AM PDT by madeinchina
The proper way for Americans to think about "globalization" is in terms of its impact on the United States. The country is weakened if industrial capabilities and good jobs shift overseas. The mounting foreign debt that results from year after year of trade deficits is of the type that have undermined other great nations in the past. The International Monetary Fund's Chief Economist, Kenneth Rogoff, warned recently that America's current account deficit, the broadest measure of trade and investment flows between nations, is nearing a level that in other countries has led to currency collapses.
Since the dollar is the world's reserve currency, the United States has more freedom of action than is enjoyed by "normal" countries; and any threat to the dollar's status needs attention for it could endanger America's lead position in world affairs. But Washington's freedom of action can also be constrained by the interference of "global" institutions like the United Nations, the World Trade Organization, or the new International Criminal Court.
It is clear, however, that the so called "anti-globalization" protests that took place in Washington over the weekend, nominally against the World Bank and the International Monetary Fund, were not staged by those whose first concern is how to maintain the economic power and world leadership of the United States.
The weekend protests had little to do even with their proclaimed targets. Mundane problems like the moral hazard of IMF bailouts or the World Banks's history of failed projects were of little interest. There were the usual demands for writing off old Third World debts, but with the idea of running up new debts from new loans.
Saturday featured only a short, perfunctory protest at the IMF and World Bank before the demonstrators moved on to the largest event of the weekend, a "Stop the War" march to the Capitol. Much sympathy was expressed by speakers at the rally for a long list of rogue regimes which might fall victim to American "imperialism" including Iraq, Iran, Cuba, Sudan, North Korea, and Palestine. Sunday?s program was dedicated to opposing U.S. aid to Columbia meant to combat Marxist guerrillas financed by illegal drug trafficking.
It is clear that the demonstrators were not really "anti-globalists" at all. There were calls for the "international community," the U.N., and even the ICC to curtail the actions of the United States and Israel. And even the demands made on the IMF and World Bank were not to downsize, but to increase their operations in accord with the protesters' agenda of transferring wealth from the "rich countries" to the "poor countries."
Protesters joined with officials in attendance at the IMF/World Bank meeting in their criticism of U.S. trade policy. Developing countries and their advocates are pressing harder than ever to get the United States to lower its few remaining trade barriers to let in more exports from poor countries. The World Bank and developing countries, having managed to shame the world's richest nations into increasing development aid to poor countries, are setting their sights on a new goal: changing the trade and farm policies of rich countries.
Developing-country ministers at the World Bank and IMF meetings sounded very much like the demonstrators in the street. They took aim at the $300-billion-a-year subsidy that "rich" countries provide to their farmers, and the allegedly high trade barriers that Western governments erect to shut out imports from poorer countries. Those policies work to keep poor countries poor, the ministers said. They negate the benefit of the $60 billion in aid that rich countries provide to poor countries each year. "Part of allowing economic development opportunity has to be market access," said Trevor Manuel, South Africa's finance minister.
The World Bank, IMF, and WTO - partly as a response to the left-wing protests - have begun to side with poorer countries in their argument that trade liberalization has been unfair. The new WTO round, whose agenda was set in Doha, Qatar last November, promises only more trouble for American-based producers and their employees. The negotiations in the new round are to focus "on products of export interest to developing countries....The negotiations shall take fully into account the special needs and interests of developing and least-developed country participants, including through less than full reciprocity in [tariff] reduction commitments." The WTO even wants to increase "the diversification of their production and export base." This "less than full reciprocity" clause means other countries can continue to protect their home markets while dumping exports into the open U.S. market, driving American factories and workers out of an expanding number of product lines.
Yet Nicholas Stern, the World Bank's chief economist, doesn?t want to wait. "Let's make a big step on trade," he urged his colleagues at the weekend meeting, "We do not have to wait for detailed negotiations at the WTO."
A proper debate over "globalization" is needed, but not the one on which the media has focused - with its street theater and garish placards. The proper question is: how deeply can United States afford to entangle itself in "globalist" arrangements of economic interdependence and institutional constraints while still maintaining its national power and freedom of action? We cannot expect foreign bureaucrats or protest marchers to watch out for our interests. We must focus ourselves on what America needs at the dawn of the 21st century to sustain its dominant position in the world system.
What else do you need to know about the WTO?
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