Anti-trade Riots are Result of Coalition between Protectionists and Power-mongers
IPN Opinion article
Wall Street Journal Europe
The protests in Seattle against the WTO are motivated by two things: protectionism and power. The protectionists, including a large contingent of Jimmy Hoffa's AFL-CIO, want to impose restrictions on trade in order to prevent jobs being lost to people in developing countries. The power mongers, amongst them environmentalists and consumer activists, such as Ralph Nader, want more say in determining the outcome of the WTO negotiations. The irony is that free trade creates jobs in both developing and developed countries, enables economies to grow more quickly, and results in improvements in both working conditions and the environment.
Environmental and consumer activists claim that trade harms the environment and reduces consumer choice. Huh? Where have these people been for the past fifty years? The idea that trade reduces consumer choice is simply daft, ranking alongside the communist dictum 'freedom through planning' as one of the twentieth century's greatest fallacies. As we know from Friedrich Hayek and from the bitter experience of billions, central planning is the road to serfdom, not freedom. Likewise, a restriction on free and voluntary trade between individuals is by definition a restriction on choice. As regards the claim that trade damages the environment, evidence from across the world shows precisely the opposite. Trade results in improved allocation of resources, thereby benefiting the environment. To give a coarse example, growing bananas in Honduras consumes fewer resources than growing them in greenhouses in Alberta. In addition, trade results in economic growth, which stimulates the development of better, more efficient technologies, which in turn are less harmful to the environment.
Perhaps sensing that these arguments in favour of trade might be persuasive -- and thereby give the lie to the claim that they care about consumers and the environment -- the activists have shifted their focus to such things as biotech crops/GM foods. In Europe, groups such as Greenpeace have successfully persuaded consumers that GM foods are bad for their health and have convinced regulators of the need to mandate labelling of GM crops and to ban imports of beef produced using the GM growth promoter, bovine somatotropin (BST). However, similar campaigns in the US have so far been unsuccessful. Perhaps the US public is more open to rational argument than the European public, or perhaps it has had enough of the specious claims made by groups such as Greenpeace. Whatever the cause, the result has been that these groups have been seeking to impose their views on society by other means, which in this case means calling for restrictions on trade.
There is no scientific justification for imposing labelling requirements on GM foods. Purveyors of food in Europe moved swiftly to source non-GM crops and to develop labels denoting their products GM-free, thereby ensuring that consumers were free to choose. A mandate requiring that labels state when a product contains GM ingredients imposes unnecessary costs on manufacturers and panders to the scaremongers who claim, without any scientific justification, that GM foods are unsafe.
Likewise, there is no scientific justification for banning imports of BST beef. It is no different from beef produced without BST, except that it is cheaper and requires fewer inputs per pound. Under WTO rules, such labelling requirements and such import bans are illegal and for good reason. If any country could impose regulations on the production methods employed in manufacturing a good (be it by mandatory labelling or an outright ban), there would be an open season in protectionism and the entire trading system would break down, with dire consequences for humanity. But that is precisely what many of the environmental and consumer groups want and it would be the ultimate expression of their malignant power.
The labour unions, realising their arguments will be bolstered if they enfranchise other groups, have been quick to cotton on to these new arguments. It cannot be coincidence that the AFL-CIO organised a march into Seattle on the same day as the protest against the WTO. Many of those marching with the AFL-CIO have echoed the calls for labour and environmental standards to be included in WTO trade rules. They use the same slogans, such as 'fair trade, not free trade' and 'people before profits'. Some of the aggressive anti-trade protesters in downtown Seattle on Tuesday and Wednesday looked suspiciously like AFL-CIO members. An AFL-CIO banner somehow ended up adorning an overturned garbage can outside the main convention centre despite the fact that the AFL-CIO march went nowhere near there.
Some alliances go beyond this tacit approach. In November 1996 I attended the inaugural meeting of the WTO in Singapore and was invited to a dinner given by a senior lobbyist for the US textiles industry. To my left was a member of the ILO delegation, and next to him an academic who has been calling for labour standards to be imposed on trade. Three years later, we are beginning to reap the rotten fruits of this alliance.
This unholy coalition of protectionists and power mongers must be resisted. There are voices of reason in industry and amongst non-governmental organisations. Barun Mitra, Director of the Julian Simon Centre in New Delhi, India, told me that 'Only with freer trade will the economies of the developing world grow and thereby make it possible to improve labour and environmental standards. Attempting to impose such standards through trade restrictions will achieve the opposite of what is intended, keeping us mired in poverty, which is by far the most damaging thing for people's health and the environment.' Mr Mitra points out that trade in genetically engineered crops can be of enormous benefits to people in developing countries, offering higher yields and improved vitamin content.. Francis Smith of Consumer Alert echoed this sentiment: launching a global coalition of pro-trade grass-roots organisations called International Consumers for Civil Society, she called for 'open trade for global prosperity'. What better slogan could there be for those attending the Seattle meeting of the WTO?