Ethics Articles

Articles: Globalization


>> = Important Articles; ** = Major Articles


Big-Hearted Globalism: Protestors would bank on globalization if they knew the facts (NRO, 020508)

“Ironic Reversal” (Weekly Standard, 031121)

Trade and the Environment (Greenpeace Website)





Big-Hearted Globalism: Protestors would bank on globalization if they knew the facts (NRO, 020508)


It’s all too easy, when the anti-globalization crowd hits town, to get distracted by the cheap street-theater and ignore the fact that these self-anointed “champions of the poor” have it exactly backward when they claim a global economy brings more poverty.


They did provide a colorful diversion for those of us in Washington recently as they poured out their frustrations on the World Bank and the International Monetary Fund (IMF). But if they want to help the poor, they should be chanting slogans in favor of globalization.


Not that there is nothing wrong with the World Bank and the IMF. There is plenty, starting with their remarkable lack of success in helping poor nations grow economically. For instance, in Sub-Saharan Africa, 17 countries saw a decline in real per capita GNP between 1970 and 1999, despite receiving well over $100 billion in World Bank assistance.


But the protesters shouldn’t blame globalization for this failure. It’s the refusal of poor countries to adopt pro-globalization policies and embrace economic freedom that condemns their citizens to poverty.


A recent World Bank study found that, during the 1990s, developing countries with more open economies grew at over 4% annually, while developing countries with more closed economies shrank. This suggests that poor countries should embrace globalization if they want to court wealth.


UCLA researchers Richard Roll and John Talbott bolster this conclusion with a recent study showing that the amount of real income per capita a nation enjoys depends almost entirely on its economic, legal, and political institutions. They examined more than 130 countries and how each performed between 1995 and 1999, and found that the presence of strong property rights, political rights, civil liberties, press freedom, and low government expenditures — hallmarks of a “globalized” economy — meant higher incomes.


Roll and Talbott’s work is backed up by the “Index of Economic Freedom,” an annual survey that measures economic freedom in 161 countries by ranking their economies on a scale from 1 (“free”) to 5 (“repressed”). “Free” countries in the 2002 Index had a per capita income of $23,325; “repressed” countries had a per capita income of $3,829.


Why this dramatic difference? Roll and Talbott explain:


Economic participants cannot save in a world of inflationary government-sponsored counterfeiting. They cannot compete with state-sponsored monopolies. They cannot trade efficiently with the existence of high tariffs and phony official exchange rates. They cannot easily overcome burdensome regulation and corruption. They cannot capitalize future profits in a world devoid of property rights. And they cannot prosper without economic and personal freedoms.


Fifty years ago Hong Kong, South Korea and Singapore were about as poor as many developing countries are today. What a difference globalization makes: Real income per capita in Hong Kong in 1999 was 7.3 times larger than it was in 1960; in Korea, 9.6 times larger; in Singapore, 9.8 times larger. Meanwhile, real per capita income over the same time period in sub-Saharan African countries — where globalization and economic freedom are virtually unheard of — was only 1.2 times larger.


Some may ask: “But what about the concerns of the protesters — environmental degradation and labor standards?” Experience demonstrates that economic freedom and globalization, by leading to higher per capita incomes, enable countries to improve their labor and environmental standards.


For instance, as the income of a country increases, so does its ability to make investments and implement measures that raise labor standards. The World Bank’s 2001 “World Development Indicators” shows that in countries with per capita incomes above $5,000, the number of children working between the ages of 10 and 14 was less than 1%, while in countries with per capita incomes between $0 and $1,000, the percent of children working between those ages was 21.7%.


Richer countries also tend to have more sustainable environmental policies than poor ones. The Environmental Sustainability Index (ESI), a project of the World Economic Forum and several other groups, assigns the health of a country’s environment a single number ranging from 0 to 100, with 0 meaning low sustainability and 100 meaning high sustainability. Almost without exception, one finds that wealthier economies have higher levels of environmental sustainability.


If protestors truly want to see the poor become wealthier, increase environmental protection, and raise labor standards, they should back globalization. They could urge the Senate to pass Trade Promotion Authority, write the White House to object to high tariffs on steel and textiles, or encourage poor nations to embrace economic freedom.


Unfortunately, they’re more likely constructing a new cast of giant puppets for the next round of protests.


— Brett D. Schaefer is the Jay Kingham fellow in international regulatory affairs in the Center for International Trade and Economics (CITE) at The Heritage Foundation.




“Ironic Reversal” (Weekly Standard, 031121)


The antiglobalization forces are trying to protect developing countries from free trade. Do these countries want protection?


ONE RECENT SUNNY DAY, Martin Lemke, a 28-year-old from San Francisco, stood in front of a Gap clothing store on busy Collins Avenue in South Beach, Miami, and shed all of his clothes, save for a pair of boxer briefs. Lemke’s striptease, you understand, was a political act--he’s a member of the “Gapatistas,” a San Francisco-based antiglobalization group--and he bared his soul, among other things, in order to protest the meeting in Miami this week of trade ministers from 34 different countries. (The “Gapatistas” normally conduct their strip-protests from the top of a 5 and 1/2 foot Redwood stump in California.)


You’ve got to admire the gumption of people like Martin Lemke. And you’ve got to wonder what motivates them to make such fools of themselves. For his part, Lemke told the Miami Herald, he strips because “The Gap is a poster child for free trade, which really means corporate trade.” And, don’t forget, “What we really need is trade that’s free from exploitation, free from the degradation of the planet, people, and spirit.”


Lemke is only one of thousands of people, perhaps tens of thousands, who traveled to Miami this week in order to protest the adoption of a Free Trade of the Americas agreement, which would create a free-trade zone stretching from the Arctic Circle to Tierra Del Fuego. But it’s worth remembering that the people on whose behalf the marchers claim to be speaking--those “exploited” and “degraded” as a result of an increasingly interconnected world--have voices of their own. Which,

when asked, they use to give full-throated support for globalization.


A recent poll by the Pew Global Attitudes Project, for example, showed that sizable majorities of respondents in the developing world thought free trade was a good thing. Ninety-five percent of Nigerians, for example, say “growing trade” and “business ties” with other countries are good for Nigeria. When Pew asked Ukrainians whether they thought free trade was a good thing, 93 percent of those surveyed said yes, it is. And when you ask the Vietnamese whether they feel free trade is good or bad for their country, a whopping 98 percent say that it’s good.


What’s more, the same positive attitudes applies to international financial institutions like the IMF and the World Bank. Seventy-three percent of Guatemalans view the WTO, the IMF, and the World Bank favorably. Eighty-one percent of Filipinos think those organizations are “good” for the Philippines; in the Ivory Coast, the number is 87 percent.


WHEN YOU ASK anti-globalization activists about these numbers, they grow defensive. Matti Kohonen, a member of one of Europe’s foremost antiglobalization groups, Attac, says that Attac favors some aspects of globalization, too. “On trade issues,” he says, “We do not say that countries should stop trading with each other, or that increased trade as such is a problem.”


“I don’t think anyone would argue against the ideal propounded by globalization,” says Helena Kotkowska, another member of Attac. “I think the fear is that the tendency of globalization so far suggests that it will be the corporations, multinationals, and financial institutions that will profit, rather than anyone else.”


Those surveyed by the Global Attitudes Project have the same fears. While overall support for free trade and other aspects of globalization was strong among those surveyed, many, for example, thought that working conditions and the availability of good-paying jobs had worsened over the last five years.


Still, you don’t see many Uzbeks stripping in front of the Gap these days. So what explains the fact that the people who are angriest about globalization live in rich countries like the United States?


Jagdish Bhagwati, the Columbia economist, thinks he knows the answer. He says that over the last 50 years we’ve seen an “ironic reversal” in the way people around the world view global markets. When postwar lending institutions like the IMF and World Bank were first created, Bhagwati argues, they were viewed by elites in recently de-colonized countries such as India as tools of neo-imperialism. “Integration into the world economy was thought to lead to disintegration of the national economy,” says Bhagwati.


But now that attitude has reversed: Those most excited about globalization tend to live in peripheral economies, and those protesting it live in central ones.


The “Gapatistas” are aware of the “ironic reversal,” however dimly. They targeted the Gap store in South Beach, you see, because the neighborhood was known for its “progressive reputation.”


“It’s an upscale, smaller area, and it’s more homey,” one Gapatista said. “In areas like that, the reaction is generally sympathetic.”


It’s enough to make you wonder what the reaction might be in Nigeria.


Matthew Continetti is an editorial assistant at The Weekly Standard.




Trade and the Environment (Greenpeace Website)


The World Trade Organisation (WTO) promotes free trade for the gain of private interests, over and above our health and the environment. It is fatally flawed and is moving the world in the wrong direction - away from peace, security and sustainability. By stalling on issues that are crucial to poorer countries, the WTO faces a crisis of legitimacy.


Greenpeace volunteers dressed as Uncle Sam dump GE maize on other volunteers representing consumers in straitjackets, suffocating their demand for the right to say no GE food.


· The WTO is secretive, non-transparent and undemocratic. Meetings are by invitation only, are hidden from public view and are closed to direct public input.


· The WTO puts trade on the highest pedestal - before our health and the environment.


· This is because the WTO is driven by narrow corporate interests, like genetic engineering companies and the agri-business.


· These companies are behind the US attempt to use the WTO as a tool to force feed the world genetically engineered (GE) food.


· The WTO threatens crucial environmental agreements, like the first legally binding global agreement that allows countries to reject genetically modified organisms, the Biosafety Protocol.


· So-called “free” trade is speeding up the use of natural resources such as water, forests, fisheries, and minerals, much faster than they can be regenerated.


· In essence, the WTO is a tool of rich and powerful countries. Poorer countries are losing out to the interests of the industrialised world.


Freeing people from forced trade


Greenpeace opposes the current form of globalisation that is increasing corporate power.


We demand that the World Trade Organisation (WTO) adopts a policy of trade that truly works for all and that preserves and restores the environment.


We support global environmental standards. Trade must not take priority. Governments must work to achieve sustainable development. This means integrating three things: environmental, social and economic priorities.


We campaign to bring the concerns of citizens all over the world to the decision-makers at the WTO.


We are calling on consumers to join us and demand a GE free world.


What is the WTO?


The World Trade Organisation (WTO) is one of the most powerful institutions in the world. It oversees the global trade in goods and services. There are currently 146 member countries of the WTO.


Rainbow Warrior sails into Doha to challenge the WTO to force the US to commit to the Kyoto Protocol on climate change.


The WTO’s primary aim is to serve the private sector rather than governments: ‘Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters and importers conduct their business.’


This view of the world deletes important elements such as the environment, the hundreds of millions of poor people who produce for themselves (not for markets) as well as many other broader social and human rights issues.


When the WTO was set up in 1995, the majority of developing countries were not at the table and were barely consulted. As a result, the WTO essentially protects multinational corporations based in the North and acts as a tool of rich and powerful countries - notably the US, the EU, Japan and Canada.


Although the majority of other WTO members are developing countries from Africa, Asia/Pacific and Latin America, many of them have little to say in decisions that are taken at WTO meetings. Smaller countries are blocked from entering meetings and don’t have enough to offer from an economic standpoint to have any real power.


Not surprisingly, even though the WTO is a fairly new institution, there has been public scepticism and concern about how it functions since the beginning. Find out more about previous WTO meetings.


The WTO came into existence after a long series of negotiations that took place between countries from 1986 to 1994. It is made up of a series of agreements and incorporates the old General Agreement on Tariffs and Trade (GATT), a set of global rules that governed trade in goods.


But while the GATT only focused on trade in goods, the WTO’s rules were extended to embrace many other topics, including intellectual property, investment, services, telecommunications and financial services (banking).


And the WTO wants to extend its powers and the powers of the corporations driving it, still further in the fifth round of WTO trade talks to be held in Cancun, Mexico from 10-14 September, 2003.


Why is the WTO a problem?


The WTO is a tool of the rich and powerful. By placing trade above all other goals, it threatens our health and the environment. Its more powerful members use arm-twisting tactics to push developing countries into making bad deals. And it’s being used by corporate interests and the US to force-feed the world genetically engineered food.


Figures on stilts, dressed as managers of DuPont, Monsanto, Bayer and Syngenta, the world’s largest agro-multinational, tag patent clips on plants and seeds around a three-meter globe.


The World Trade Organisation (WTO) essentially protects multinational corporations based in the North and acts as a tool of rich and powerful countries - notably the US, the EU, Japan and Canada.


Although the majority of other WTO members are developing countries from Africa, Asia/Pacific and Latin America, many of them have little say in decisions that are taken at WTO meetings. They don’t have enough to offer from an economic standpoint to have any real power.


Many of these countries are not even invited to key meetings, which are invitation-only (although no one knows exactly how these invitations are handed out, since this is done in a completely non-transparent way). Find out more about the secretive and undemocratic nature of the WTO and how decisions are taken.


It is strongly influenced by narrow corporate interests


Corporations are driven by the bottom line - profit. Environmental, social and development concerns are distant priorities, and tend to be a corporate focus only when they bring commercial advantage. Given this narrow agenda, the trend of powerful business lobbies influencing government positions at the WTO is worrying.


It is not just in the case of genetically engineered food, where you can see a corporate lobby group influencing government positions. In fact, this is the norm.


The US has also blocked an agreement at the WTO that promised developing countries access to vital medicines - even though WTO member countries already agreed to this in Doha in 2001. The reason is that the agreement on the table threatens to cost its pharmaceutical companies lost revenues in the billions.


And it is not just the US: the European Union (EU) is under great pressure from the agricultural industry to maintain its huge subsidy programme.


The EU is also looking to expand markets for its huge drinking water companies under the WTO agreement on services. Even though freshwater resources are drying up, the EU has been pushing a corporate agenda, not one that works for the environment and development.


The list goes on and on. Where WTO agreements can bring profit to big industry groups, those groups go to work on their governments to make sure that the most advantageous agreement is negotiated for them.


The upcoming trade meeting in Cancun may be yet another example of this. One of the issues that governments will be discussing is a possible new investment agreement. This could end up becoming a “corporate bill of rights” without including provisions on corporate accountability and corporate social responsibility. Such an agreement would pave the way for corporations in wealthy countries to extend their control and reach, while further increasing the gap between rich and poor countries.


What is free trade?


The act of opening up economies is known as “free trade” or “trade liberalisation.” It usually benefits the larger, wealthier countries whose big companies are looking to expand and sell their goods abroad. In the one sector where developing countries have the most to gain - agricultural goods - wealthier countries maintain the highest level of “protection” of their own markets.


Globalisation has made the world a much smaller place. Global trade refers to the act of buying and selling goods and services between countries. Today these goods and services can travel further and faster so that - for instance - products from all over the world can be found at your corner shop. This can be anything from fruits and vegetables, to cars, banking services, clothing, and bottled water.


The scale and pace of this kind of trade has only increased over time, and has become a very powerful tool. International trade is considered a prime driver of how well a country develops, and affects very much how well the economies of different countries are doing.


Free Trade - who is paying the price


The act of opening up economies is known as “free trade” or “trade liberalisation.” Trade liberalisation means opening up markets by bringing down trade barriers such as tariffs. Doing this allows goods and services from everywhere to compete with domestic products and services.


But in practice the set-up of global trade rules and the way these are administered by the World Trade Organisation, works best for those countries who are already rich, and increases the gap between them and poorer countries who are already struggling to compete.


When trade is a weapon - tariffs and subsidies


Part of the problem is that trade is not always equal. It is not just a tool - it can also be a weapon. When countries put restrictions, such as tariffs, on goods from other countries, imported goods become more expensive and less competitive than goods from their own country.


Another thing that can be done is subsidising domestic businesses. This means that governments give money or other forms of support to local or domestic businesses, to make sure that they are cheaper over imported products and services. This can allow unsuccessful and inefficient businesses to do well, since they receive all kinds of government support. And while these businesses continue to grow, smaller or local producers, especially in many poorer countries - those that need support the most - are being destroyed.


Any measure like this is called “protectionist,” since it has the effect of closing off a country’s markets to goods from other countries. Many wealthy countries in Europe, as well as the US and Japan use these tactics to support their own domestic economies, making it impossible for smaller, or less developed countries to gain a foothold in the global marketplace.


As they go about protecting and closing off their own markets, many of these very same countries are creating double standards, by forcing other countries to open up their markets.


How does the WTO affect you?


Global trade affects many aspects of life. It can impact everything from the environment to your health and the well-being of people around the world. At the next WTO meeting in Cancun, it is not just trade that is on the agenda but environment and human health. The results will affect everyone.


Why you should care about the WTO and its rules on trade


Governments attending the WTO meeting in Cancun, Mexico from 10-14 September, 2003 will be discussing how to make sure that poorer countries have access to medicines and vaccines. They will discuss the relationship between trade rules and environmental agreements, which could end up making trade rules more important than protecting the environment. View the slideshow


If you care about the environment...


...then you will be concerned that the WTO puts trade on the highest pedestal - before the environment


As countries compete to trade more, production and the use of natural resources is spiralling in one direction - up. Resources are being used up faster than they can be replenished. The oceans are being emptied of fish, ancient forests are being destroyed, and river basins are being sold off one by one to private drinking water companies.


Huge oil, gas, mining, pharmaceutical and agri-business multinationals keep expanding their operations at all costs, creating more and more pollution. Their sole goal - to make money, not to take care of our planet and health, now or for future generations.


In addition to this, the WTO is now threatening crucial environmental agreements, for example the first legally binding global agreement that allows countries to reject GMOs, the Biosafety Protocol. The Protocol is being undermined by trade rules and its provisions considered trade barriers.


Trade rules must not be allowed to take priority over environmental protection.


If you don’t want to eat genetically engineered (GE) food…


…then you will want to stop the US from using the WTO as a weapon to force-feed the world GE food.


We have a right to know what we are eating and to say no to GE food. But from field to fork, the food we eat and the seeds we plant in our fields are being targeted by the GE industry. It is attempting a corporate take-over of the entire food chain.


Countries should not be bullied into accepting GE food, GE seeds or GE crops. Governments must feel free to use the strictest possible standards to regulate genetically modified organisms (GMOs). Science has not proved that GMOs are safe to eat or safe for the environment.


The EU has just adopted the world’s strictest rules on GMOs. But backed by the GE industry, the US is using the WTO to challenge the EU’s current regulations on GMOs. The ultimate goal - to force GE food on the EU and the rest of the world. What happens now will determine whether many countries and consumers will be forced to eat GE food. Find out more.


If you don’t think GE crops should be forced on farmers…


…then you will be concerned by the GE contamination of Mexican maize.


Mexico is the centre of origin of maize diversity and home to many traditional maize varieties in the world. Mexican farmers who fought hard to protect their valuable crop found themselves under threat from GE maize. It was imported from the US and contaminated their crops. As a result, maize, one of the world’s most important staple foods is under threat.


This case demonstrates that genetic engineering is a giant experiment with nature that cannot be controlled. Genetic pollution cannot be contained and will not disappear by itself - it will spread. Maize for example, sheds large quantities of pollen that can be carried by bees or the wind.


The Biosafety Protocol recognizes the right of countries to reject GMOs based on the ‘precautionary principle.’ This comon sense rule means that as long as there are doubts about the environmental safety of GMOs, then countries can reject them. Precaution should come before profit. This is especially important in of centres of diversity of staple foods like maize. But the Biosafety Protocol and precautionary principle are being threatened by the WTO.


If you think everyone has the right to be free of poverty…


…then you will feel outraged that the WTO works against poorer nations.


The WTO has failed to deliver on agreements to give developing countries access to life-saving medicines.


Governments tried to present the WTO meeting held in Doha in November 2001 as a “development” round that would deliver economic benefits to developing countries in Africa, Asia, the South Pacific and Latin America. They promised developing countries greater access to life-saving medicines, as well as greater access to markets for their agricultural goods (anything from produce to cotton, coffee and other crops that form a big part of some developing country economies).


But the promises made in Doha have not been kept. Developing countries have seen no sign of the medicines - the US is blocking the agreement. This underlines the fact that the WTO is in essence a tool of rich and powerful countries - notably the US, the EU, Japan and Canada - and the powerful corporate lobbies that pull their strings.


If you want corporations to be held accountable for their actions…


…then you will be against the WTO extending its power and the power of the corporations driving it, into new areas.


A new investment agreement tabled for discussion at the WTO will extend both the power of the WTO and the corporations that drive it. These corporations will not be held accountable for their actions.