"FADING FAITH IN FREE TRADE"

The following is a summary of an article appearing in "America" (July 5-12, 2004) by Robert A. Senser [former U.S. Foreign Service employee; editor of bulletin"Human Rights for Workers"]

Some economists are now having second thoughts about free trade policies. Of particular concern are the protection of human rights, worker health and safety standards and environmental protection.

One economist, Joseph E. Stiglitz, [2001 Nobel prize, chairman Council of Economic Advisors in 1st Clinton administration, senior VP World Bank] says, "At the end of the Cold War, the U.S., as the sole superpower, had an opportunity and a responsibility to reshape the global economic order based on principles like social justice. . . . But we lacked a vision. The financial and commercial sector in the U.S. did have a vision. They might not believe in the government having an active role, except when it advanced their interest. The active role they pushed for was to gain market access. . . . As a result we got some very unbalanced trade agreements."

Stiglitz (and economist Jagdish Baghwati) take issue with two particular sore points.

1. Protection of intellectual properties [i.e. patents and copyrights] - "stronger intellectual property rights typically make some better off (the drug companies) and many worse off (those who might otherwise have been able to purchase the drugs."
[Stiglitz] and "Pharmaceutical and software companies muscled their way into the [World Trade Organization] and turned it into a royalty-collection agency . . ." [Bhagwati]

2. Bhagwati, on the question of whether capital should have an unrestricted freedom to flow from one country to another, says this is in the interest of Wall Street "which it equates with the good of the world."

Paul C. Roberts [Asst. Secty of Treasury in Reagan administration] fears present policies on movement of capital threaten to turn the U.S into a third world economy in 20 years. Unfettered movement of capital means factories and machinery can be moved abroad to populous, labor-surplus countries like China and India.

Author Senser says it is ironic that owners of capital (investments and property real and intellectual) receive beneficial protection under trade policies while jobs, not "owned", do not.