I Was Wrong About Trade

A few years ago I would have raised at least two cheers. The US government, to judge by the aggressivenoises now being made by its trade negotiators, seems determined to wreck one of the most intrusive anddestructive of the instruments of global governance: the World Trade Organisation.[1] A few years ago, I wouldhave been wrong.

The only thing worse than a world with the wrong international trade rules is a world with no trade rulesat all. George Bush seems to be preparing to destroy the WTO at the next world trade talks in September notbecause its rules are unjust, but because they are not unjust enough. He is seeking to negotiate individuallywith weaker countries, so that he can force even harsher terms of trade upon them. He wants to replace amultilateral trading system with an imperial one. And this puts the global justice movement in a difficultposition.

Our problem arises from the fact that, being a diverse movement, we have hesitated to describe preciselywhat we want. We have called for fair trade, but have failed, as a body, to specify how free that trade shouldbe, and how it should be regulated. As a result, in the rich world at least, we have permitted the few who dopossess a clearly formulated policy to speak on our behalf. Those people are the adherents of a doctrinecalled "localisation". I once supported it myself. I now accept that I was wrong.

Localisation insists that everything which can be produced locally should be produced locally. All nationsshould protect their economies by means of trade taxes and legal barriers. The purpose of the policy is togrant nations both economic and political autonomy, to protect cultural distinctiveness and to prevent thedamage done to the environment by long-distance transport. Yet, when you examine the implications, you soondiscover that it is as coercive, destructive and injust as any of the schemes George Bush is cooking up.

My conversion came on the day I heard a speaker demand a cessation of most forms of international trade andthen, in answering a question from the audience, condemn the economic sanctions on Iraq. If we can accept thatpreventing trade with Iraq, or, for that matter, imposing a trade embargo on Cuba, impoverishes and in manycases threatens the lives of the people of those nations, we must also accept that a global cessation of mostkinds 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 characterised bycoercive relationships between corporations and workers, rich nations and poor. But it is the only possiblemeans. The money the poor world needs has to come from somewhere, and if our movement rejects trade as theanswer, it is surely duty bound to find another.

The localisers don't rule out all international transactions. As Colin Hines, who wrote their manifesto andhelped to draft the Green Party's policy, accepts, "Some long-distance trade will still occur for thosesectors providing goods and services to other regions of the world that can't provide such items from withintheir own borders, eg certain minerals or cash crops." [2] 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 fromwhich the poor nations are seeking to escape.

Raw materials will always be worth less than manufactured products. Their production also tends to rewardonly those who own the primary resource. As the workers are unskilled, wages remain low. Every worker isreplaceable by any other, so they have no power in the marketplace. The poor world, under this system, remainstrapped 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 earnsufficient foreign exchange to import the goods they cannot produce themselves, the poor nations would need toexport more, not less, of their natural wealth, thus increasing their contribution to climate change, soilerosion and the loss of biodiversity. His policy also wipes out small farmers, who would be displaced fromtheir land by mechanised cash cropping.

A still greater contradiction is this: that economic localisation relies entirely upon enhanced politicalglobalisation. Colin Hines's model invents a whole new series of global bodies to impose localisation onnation 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 thekind of political autonomy he claims to promote.

But above all, this doctrine is entirely unnecessary. There is a far better means of protecting theenvironment while permitting the poor nations to develop, and this is to demand global trade rules whichintroduce two kinds of fairness.

The first is to permit poor nations, if they so wish, to follow the routes to development taken by therich. 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 plunder and piracy) either byprotecting its new industries from competition until they were big enough to fend for themselves or bystealing other countries' intellectual property.[3] They discovered the virtues of free trade and globalpatents regimes only once they had acquired their economic dominance. Having done so, they now insist on worldtrade rules which explicitly forbid other nations from following their own route to development. Fair traderules would force the rich nations to open their borders, but not, until they had achieved a certain level ofeconomic development, the poor.

The second kind of fairness would involve extending the rules currently applied by the voluntary fair trademovement to all the companies trading between nations. To acquire a licence to trade internationally, acorporation would have to demonstrate that its contractors were not employing slaves, using banned pesticidesor exposing their workers to asbestos. It would also have to pay the full environmental cost of the fossilfuel it used. This would ensure that low-value, high-volume goods, like fruit and vegetables, would no longerbe flown around the world. But it would also ensure that the poor nations which currently export raw materialswould instantly become the most favoured locations for manufacturing: it takes a lot less fuel to ship aconsignment of aluminium saucepans around the world than it does to transport the bauxite from which they weremade.

So let us campaign not to scrap the World Trade Organisation, but to transform it into a Fair TradeOrganisation, whose purpose is to restrain the rich while emancipating the poor. And let us ensure that whenGeorge Bush tries to sabotage the multilateral system in September, we know precisely which side we are on.

References:

1. See for eg Luke Peterson, 23rd June 2003. Bush Will Trade Only with Friends. New Statesman.

2. Colin Hines, 2000. Localization: A Global Manifesto. Earthscan, London.

3. Ha-Joon Chang, 2002. Kicking Away the Ladder: Development Strategy in Historical Perspective.Anthem Press, London.

George Monbiot's book The Age of Consent: aManifesto for a New World Order, is published by Flamingo.