WTO Isn't Keeping Up with the World

So once again global trade talks have hit a stone wall. Once again the Washington Post sheds tears over the latest collapse in negotiations. A July 30 Post editorial finds it “particularly dismaying” that the People’s Republic of China cast a veto on the World Trade Organization’s latest proposal to save the so-called Doha Round.

Those ungrateful Chinese! After all, “U.S. supporters of Chinese inclusion in the WTO [including the Post] argued that drawing China into a system of multilateral give-and-take would mute its nationalistic tendencies. Evidently, the Chinese see the matter differently. They, and the world, will be poorer because of it.”

Well, the Chinese are not the only ones who see matters differently from the Post.

“Don’t cry for Doha,” says the title of economist Dani Rodrik’s July 30 Weblog. He writes: “There was not a whole lot at stake to begin with for poor nations as a whole…Panicky statements about dire consequences and protectionist spirals will be more damaging than the actual effects of the collapse of the trade talks.”

Be assured: robust world trade will continue, regardless. Robert Wade, professor at the London School of Economics, explains why. In a letter published in the July 26 Economist weekly, he writes:

“There is almost no chance that the global economy would become less integrated as a result of ‘failure’ [of the Doha talks]. The producers of most goods and services in the major economies are much more integrated into complex cross-border systems than between 1914 and the 1930s, when the world economy did become less integrated.”

The WTO suffers from a much bigger failure than the current one in Geneva. The overall failure is this: the world trading system has simply not kept up with the world. That’s not an opinion; it’s a fact.

One example: today's global system, as patched together in the 20th century, ignores the radical changes in information technology since then and therefore does not outlaw the trade barriers erected by China (and other repressive countries) against the free flow of information.

I've written an account of how this particular failure troubles me personally. My article is published in the August 4 issue of America under the title “Buyer’s Remorse: Spatulas, Yahoo, and the conscience of a consumer.” Click here. It is part of my collection of evidence that the WTO has not kept up with the world as transformed by globalization.


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Media Blind Spot: Public's Trade Concerns

“For each item I name, please tell me how important it will be in your vote for president this year.” Pollsters for the Washington Post and ABC News put that request to a national sample of registered voters, and went on to name 17 “items.” Foreign trade (or a synonym, such as globalization) was not among the 17 topics.

I found that strange. The article reporting the poll results on the front page of the July 16 Post also ignored the topic. The second headline over the article said: “Economy Remains the Top Concern.” Indeed, 92% of the respondents rated “the economy” as either extremely important or very important.

In a story on its political blog, Caucus, a day earlier, July 15, the New York Times reported the results of its own poll, this one co-sponsored with CBS News. Its July 15 story, headed “Iraq Still a Dividing Line,” did not cover a question the pollsters asked of registered voters, “What do you think is the most important problem facing the country today?” The answers, available on the Times Website, ranked “economy” as the most important. Again foreign trade or an equivalent term was not on the list of choices, 24 in all, presented to voters. {The Times drew on the same poll findings for a front-page political story on July 16 devoted to the Obama candidacy and the racial divide.)

These four media giants -- The New York Times, the Washington Post, CBS News, and ABC News – have a heavy influence on the news agenda of other media, small and large, across the nation. Therefore, they have a special responsibility to report public opinion fully and accurately, especially on issues that may affect the outcome of a historic election.

On the face of it, the Post and the Times failed to do so in these two polls. Why?

The designers of these two polls may have lumped the public’s concerns about trade into the broad “economy” category. If so, that is careless, at best. The media themselves don’t cover free trade as part of their reporting on (say) “The #1 issue – the economy,” as the CNN series on this theme is called. (According to a new CNN poll, 51 percent of Americans consider foreign trade "a threat to the economy.")

By email and phone, I asked the Post and Times to explain the omission. I suggested the possibility that free trade might have been lumped into the economy category. No response.

David Sirotta, author of The Uprising: An Authorized Tour of the Populist Revolt Scaring Wall Street and Washington, describes the fair trade movement as “one of the most encouraging transpartisan developments of the last few years” – a movement “ignored by the media (and, frankly, much of the blogosphere).”

No such blindspot here. But what explains the media’s?


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You Are Not An Auto Worker, Or...

...a garment worker, or a steelworker, and so you’re not all that worried about globalization, except for its effect on others. That’s because you’re a school teacher or a nurse, or a roofer, and so you personally feel safe – after all, your job can’t be moved overseas, and you think foreign trade is no threat to you.

Don’t be so sure. Remember: you, too, are living in the global economy. You may think you are remote from its human impact, but you aren’t. Few people are.

That’s a fact. And it’s a fact that many millions of us Americans don’t quite understand. Douglas J. McCarron, president of the United Brotherhood of Carpenters, wants to make sure that his 520,000 union members are not among those uninformed millions. He wants carpenters, millers, piledrivers, and other workers in the building trades to know how they, too, are exposed to globalization’s repercussions.

So the Carpenters’ Brotherhood has joined with the Economic Policy Institute (EPI) to produce a multimedia education project in the form of a 13-minute Web presentation titled “Globalization: How Carpenters are being hurt by global trade.” For the presentation, click on the Carpenters Website: http://www.carpenters.org.

“You can’t build an office tower in China and ship it to New York or Las Vegas, but that doesn’t mean our jobs are safe,” McCarron says in the opening segment. His point is developed in detail by Jeff Faux, founder of EPI and author of The Global Class War.

Fortuitously, the same subject is treated in a recent EPI brief, “Trade, Jobs, and Wages,” by EPI staff economist L. Josh Bivens. He answers the brief’s subtitle, “Are the public’s worries about globalization justified?” with a firm Yes. His five-page paper is full of insights ignored in the current economic debate.

One is contained in these paragraphs on how job losses caused by trade deficits impact even the wages (to say nothing about working conditions) of workers in non-traded sectors:

“While job-loss caused by rising trade deficits is the most visible effect of globalization, its impact on workers is a concern to an even much larger group of workers. Even if trade flows begin to balance and there is less job loss in the future, the integration of the U.S. economy with those of its low-wage trading partners will pull down wages for many American workers, and will contribute to the ever-rising inequality of incomes in the U.S. economy.

“While global integration is usually ‘win-win’ between countries, it can still translate into steep losses for tens of millions of workers in the U.S. economy. Crucially, this wage loss is not restricted to just workers in sectors exposed to trade, but is experienced by all workers who resemble those displaced by imports in terms of education, skills, and experience…Landscapers may not get displaced by imports, but their wages do indeed suffer from job competition with import-displaced apparel workers.”

Bivens brief is a primer that should be read by national lawmakers and especially by the Presidential candidates being fed simplistic (and wrong) economic advice.


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Foreign Trade as 'Threat to the Economy'

“What do you think that foreign trade means for America? Do you see foreign trade more as an opportunity for economic growth through increased U.S. exports or a threat to the economy from foreign imports?”

In response to that question, 51 percent of Americans said that foreign trade is “a threat to the economy,” according to a CNN/Opinion Research Corporation poll toward the end of June. It was the first time in 12 CNN polls since 1992 that a majority of Americans reported a negative view of trade.

In the June poll, 41 percent – a 16-year low -- rated foreign trade as “an opportunity for economic growth.” Four percent volunteered that it was “neither”; 2 percent, “both.”

The poll listed 15 issues and asked respondents to rank them according to their importance in choosing the President in November. “The economy” was tops, with 58 percent deeming it “extremely important.”


CNN’s July 1 news report on the poll was headlined “Majority against free trade,” although the survey question referred to foreign trade. Questions about “free trade” in recent polls have been similarly negative. The CNN poll, phrased more generally, may mean that the public suspicion of free trade is morphing into something more serious.

For the results of a Pew Research Center poll on this issue in April, see “More Bad News about Globalization.”

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