Tuesday, April 3

Fuzzy Wuzzy school of globalization

Sometimes Sebastian Mallaby writes as if he's been hit on the head by a soccer ball one too many times. But when he's on his game he is to globalization what Rush Limbaugh is to the American Right: a smart and engaging polemicist who should have been a teacher but stooped to the left-handed path of political commentary. In his April 2 Washington Post essay, Free Trade: Pause or Fast Forward? Mr Mallaby is not on his game.

Not to titter at a demagogue when he talks himself into a corner but Mallaby needs to straighten out his reasoning on whether a government's stand against patently unfair trade practice constitutes protectionism.

Mallaby stopped short of calling the US trade sanction on Chinese paper (which I discussed in yesterday's post) "protectionism;" he terms it "unilateralism." He's making a fuzzy distinction because he knows that if there are no holds barred in trade, forget about economic sanctions against repressive governments or governments that look the other way about illegal practices that end up in the global trade mart.

Examples of the latter -- both wafting largely from China -- are the use of animal fur in clothing marketed as fake fur and the wholesale destruction of forests in China and regions that border China. An example of the former includes using economic sanctions to punish Sudan's government for the Darfur genocide -- Mr Mallaby's pet project.

Not long ago I mentioned that Mallaby had blown a gasket about China's development policies in Africa, but he avoided mentioning China's trade policy on Africa, which amounts to reducing emerging industrial economies to bazaar ones. China is not just "dumping" cheap products in Africa; the government is actively engaged in stripping African societies of their manufacturing capacity and replacing it with African middleman who simply buy and resell China's products.

Sebastian Mallaby is in danger of representing for the Fuzzy Wuzzy school of globalization. Few of them have the nerve to come out and say what they really want: the United States military under the control of a global government centered in Europe. So they pick around the edges: making fun of US sovereignty, calling for free trade when it suits them and howling for the US to lead with sanctions when globalization's excesses endanger their interests (e.g., social dumping initiatives), and telling Americans we'll be even more unpopular if we act against 'global opinion.'

Mallaby argues that the United States has to be careful not to offend on trade issues, in case countries the world over flood the WTO with litigation against the US.
[...] a series of verdicts against the United States could stoke protectionism. Congress will yap about unelected foreign judges trampling U.S. sovereignty.
He goes on to warn that if the US undermines WTO legitimacy the results could be dire, with the world reverting to constant fights over trade. (As if there are no fights today.)

What does Mr Mallaby really want? He wants to restart the Doha round. But Doha needs to be scrapped in favor of discussions that concentrate more on trade issues and less on the pie-in-the-sky idea of using trade as welfare for developing nations. Until reality is restored, nations will continue with what they've been doing since Doha collapsed: signing bilateral trade deals. Of course these circumvent the WTO multilateralist approach.

The question is how far multilateralism can be applied to trade when there are vast disparities between how fairly nations represent in the act of trading. How far should we take the concept of fairness? At what point is a level of unfairness actionable; i.e., provoking sanctions against a foreign government or strong internal actions?

Well, it's very unfair for China to use trade deals with Sudan to help prop Omar Hassan al-Bashir's genocidal government. It's very unfair for China to use Burma's aid dependence on China to strip what's left of Burma's forests for China's trade purposes.

It's outrageously unfair for the United States to turn a blind eye to China's fascist method of increasing their global trade. And it skates close to criminal when US trade policy supports and encourages China's tyranny over their own citizens while making it impossible for American workers to compete with China's government.

The bottom line is that the WTO is not about fairness in all matters and it shouldn't be; it's a trade organization. By the same argument WTO cannot be the arbiter of issues that relate only in part to trade.

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