WTO protesters are right
Free trade implies that the market goes to the lowest bidder.
China is the lowest cost producer of many manufactured items, which is why Wal Mart, the world’s biggest retailer, imports $20 billion worth of goods from China annually.
International capital and machines are mobile. When it is no longer cheapest to produce in one country the machines are put in containers and moved to the next country.
Jobs disappear, and a government which invested in infrastructure to support new industry may find the industry is gone three years later.
Such are the business rules in even the most powerful countries. In the US, presidential hopefuls Hillary Clinton and Barack Obama are pledging to renegotiate the North American Free Trade Agreement, because so many of the people they want to vote for them lost their jobs due to NAFTA (which was passed by President Bill Clinton).
Nor may all be well in the countries to which jobs are moved. China has become a manufacturing powerhouse, but perhaps at the world’s expense in environmental terms.
Wal Mart shareholders are happy with the pennies they save per imported item, but the factories producing them in China, and the country’s generation of power for these factories, are causing some of the world’s worst pollution. (Some athletes say they will not take part in the country’s Olympic Games because the air is so bad.) In the 1990s, world trade negotiators pulled agriculture and food into their agreements. But the fact that they have been trying to negotiate their current free trade agreement since 2001 indicates how nervous governments around the world are about turning farming and food production over to the lowest bidder.
Many believe it goes against common sense — which is that every country develop efficient and well organised agriculture in order to ensure the citizens are fed, rather than depend on importing another country’s food.
The danger is that rogue traders and multinational companies in less well regulated countries will use the land for producing export crops rather than feed their local populations.
It is happening already, but a new free trade agreement would add greatly to imports from countries which cannot even feed their own populations.
Already, in Indonesia, small growers of palm nuts for palm oil are having their livelihood destroyed by people establishing plantations to export palm oil as a biofuel, who are at the same time adding to global environmental problems by destroying the country’s rainforest.
When Haiti lowered its barriers against rice imports, under US pressure, local farmers were put out of business, because their small-scale production couldn’t compete against imports from large-scale US producers.
The very same thing is happening in Turkey, after the US — working legally through the World Trade Organisation — forced Turkey to lower barriers against imports. India exports rice, while leaving much of its own population undernourished.
Such countries could now reap the whirlwind, after the global price of the price of rice doubled in three months.
Already, rising food prices have triggered riots in many countries, particularly in Africa.
But such trends can only accelerate if the world trade in agricultural commodities is further freed up.
If only in protest at such a vital commodity as food being relegated to the trade status of nuts and bolts, Irish farmers are right to protest against the World Trade Organisation bid to dismantle barriers to trade in agricultural produce.
