The protesters who will gather at the World Trade Organization meeting in Cancun next week have a strong sense of injustice but less of a sense of what to do about it. They're right that the developing world is far too poor. The world trading system hasn't done them any favors, and there are unjustifiable rules and protections that favor the first world. But they are wrong in thinking that the drive to freer trade is in itself the problem, or will make the situation worse.
The WTO was born of noble ideals. Emerging from the General Agreement on Tariffs and Trade in 1994, the signatories sought to raise living standards and create full employment among member states. All signatories saw increasing international trade as the engine of prosperity. They all recognized the need to protect and preserve the environment. Few of the protesters would, I am sure, disagree with these aims.
These goals have not been achieved quickly and evenly, and there are still large imperfections in the way rich countries behave despite being fully signed up to the WTO. The U.S. has always been ambivalent about multinational organizations that impose requirements on America. The EU for its part often follows policies and takes positions that make sense to its leaders but conflict with the wider aims of the WTO.
The recent trans-Atlantic rows over farm products provide a handy example of how the needs of the Third World are forgotten. On both sides of the Atlantic, farm incomes and markets are strongly protected. In the European Union, fishing and farming are effectively controlled by Brussels. External tariffs and quotas keep out foreign produce. The EU uniquely worries about farmers' incomes and gives huge subsidies. No similar comprehensive combination of subsidy and tariff protects other industries or sectors. In defending this position, the EU asserts the principle of tit-for-tat, claiming the U.S. also protects its farmers, which is true if not to the same extent. The loser, inevitably, turns out to be developing countries whose economies, unlike those of the U.S. or Europe, are truly dependent on agriculture. The barriers on cotton exports to the U.S. or sugar to Europe carry a high price.
The trans-Atlantic feuding over genetically modified food also takes a steep toll. The EU prevents the introduction of GM products, claiming greater scientific study or trial are needed to prove they're safe. The U.S., which pioneered GMs, says the products are patently safe. What's more, U.S. officials argue, genetically modified crops let farmers produce more with less as well as cope with poor climate or pests.
The dispute is deeply rooted and the respective governments speak for strong bodies of opinion among their citizens. Some Europeans see the technology as a clever device that lets U.S. multinationals to patent nature and earn a royalty from the poor every time they grow something. Hence they seek to make it more difficult for the U.S. to export her grains and seeds, while questioning the morality of GM food for the Third World.
The only way forward is to offer choice along with clear labeling and information. If the EU believes organic and traditional farming is better, then it must export these ideas and offer markets for produce grown in these ways so the Third World has a chance of prosperity without GM. It is no good for the EU to rubbish GM produce, while failing to offer market access to developing countries for non-GM foods. It shouldn't prevent the U.S. from doing the same by putting trade restrictions on developing countries that do buy American crops.
Similarly, the unseemly dispute over beef gives an insight into how the poor can suffer when two giant trading blocs squabble. Europe's hostility to American beefs stems from the belief that too many hormones are used to rear American cattle. The U.S. can note the irony of the European position, considering the BSE ("Mad Cow") and foot-and-mouth outbreaks in Europe in recent years. With little sympathy or understanding on either side of the Atlantic, quality information and clear labeling offer the best hope of agreement that might open markets more, to the benefit of all.
The beef fight undermines consumer confidence in the EU in imported meat generally. It makes EU consumers less inclined to buy meat from the developing world, and gives official in the Union more excuse to erect non-tariff barriers to trade. While the WTO set out a vision of "a fair and market-oriented trading system," it's a long way from persuading the leading members to implement one. Another reason these fine goals are stymied is the existence of disagreements over "animal welfare." The Agreement on Sanitary and Phyto-Sanitary measures tried to prevent member states from using concerns about human or animal health and safety to block trade, but the treaty is not always fully implemented. I'm all in favor of high standards of animal welfare, but this must not be used to squash the poor.
It is high time the EU and U.S. negotiators realized that people are starving while they argue fine points and prevaricate over opening domestic markets. It is an affront to the conscience of the West that EU negotiators are arguing over who closed which market first rather than getting on with the task of removing barriers at home to encourage others to remove them abroad.
Few of us with any conscience are happy with a world where the extremes of riches and poverty between countries are so great. Nor do we want to go back to a world where the richer countries dominate the poorer politically and militarily. Neo-colonialism might raise the national incomes of developing countries, but would offend our sense that people everywhere should be free to choose their means of government.
This poses us with a dilemma. What are we to think when the leader of an African country such as Zimbabwe does grave economic damage to his people? What should we do when bad governments in developing countries take our aid money and spend it on weapons or on creature comforts for the powerful in their societies?
We should understand that free trade in ideas as well as products and services is the best solvent we can offer to stubborn tyrannies. We should not give up trying. Unclogging trade arteries provides contacts for oppositions within badly run states that may offer a domestic solution. The more we trade, communicate, services and ideas, the more we encourage healthy opposition and better government. If the west retreats behind its tariff and non-tariff walls and offers little to the struggling tyranny, we will have no influence without military action. Strong trade and a healthy exchange of views is a better way to encourage benign forces in blighted countries.
Obvious faults in some developing countries should not blind us to the serious justice in demands that the WTO get nearer to its founding goal of greater employment and prosperity for all through the removal of barriers. The EU's Common Agricultural Policy is an affront to the conscience of many of us in Europe who want a fairer world. We should be prepared to reform it, to open our markets to the developing countries without seeking some quid pro quo. We owe it to the struggling farmers of Africa to do so. And the U.S. should open its markets as well.
The moral case is overwhelming. The WTO should be a force for good, not an obstacle to Third World progress. Free trade is the way to advance liberty and prosperity at the same time.
