President Obama’s basic choice on trade

As the Obama administration wrestles with shaping its policy on the World Trade Organization (WTO), the old questions about fairness and equal treatment pop up once again.

Fairness? (I can hear the loud objections.) Why sidetrack the WTO into controversies about fairness and equal treatment?

It may come as a surprise to some that the WTO is already committed to equal treatment. That commitment is so basic that it is expressed in two principles that the WTO calls “the foundation of the multilateral trading system.”

These two principles, both formulating “trade without discrimination,” are:

“1. Most-favored-nation (MFN): treating other people equally….Grant someone a special favor (such as a lower customs duty rate for one of their products), and you have to do the same for all other WTO members.”

“2. National treatment: treating foreigners and locals equally. Imported and locally produced goods should be treated equally….The same should apply to foreign and domestic services, and to foreign and domestic trademarks, copyrights, and patents.”

Those two principles, here quoted from an official document, “Understanding the WTO,"are written into all three key WTO agreements, the General Agreement on Tariffs and Trade (GATT), the General Agreement Trade in Services (GATS), and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Why does equality of treatment have such a fundamental role in the WTO as in the trading system as a whole?

Because it is fair to those whose rights and interests it is designed to protect – the business people and firms engaged in international commerce. The laws of individual countries were not – and are not -- adequate to offer that protection. After World War II, policymakers of leading nations agreed to correct that particular gap, and created the first versions of GATT the agreement and GATT the organization, both focused on business.

Even at the beginning, some leaders recognized that the focus on business was one-sided and needed to be corrected to include the rights and interests of workers and their organizations. Those efforts failed then, and have failed ever since.

The challenging trade issues now facing the Obama administration can be reduced to three statements:

1. The world trade and investment system does not protect the rights and interests of workers and worker organizations as it does the rights and interests of business and business firms.

2. That imbalance is unfair, and is increasingly recognized as unacceptable -- a trend that partly accounts for the widespread disenchantment with globalization.

3. The challenge is to decide what actions, short range to long range, are necessary to correct that imbalance.

Adopting a WTO agreement on Trade-Related Aspects of International Labor Standards (TRAILS) would be a historic achievement, but not a cure-all. Biased ideas toward work, workers, and worker organizations are imbeded in our culture. Curing them requires a multi-faceted approach.
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This crisis should not go to waste

“Anonymous” makes the following comment about my previous post (below), titled “Oust U.S. financial oligarchy: economist”

“I'm so not listening to economists these days, Bob. Let's hear from people who are breaking out new mobilization ideas - the grass-roots cannot be rallied with what this-or-that economist says. Get the agit-prop, resistance-inspiring and activists' victories stories out there, before this moment passes!”

My view: Let a thousand flowers bloom. Including those among economists.


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