Globalisation: New issues for the new millennium Guyana the wider world by Dr Clive Thomas Stabroek News December 31, 2000 Ambitious coverage Last week we saw how the built-in agenda items of the WTO expands its influence over matters directly and indirectly related to trade. In this article we shall see that the WTO's success so far, has led to an even more ambitious attempt to cover matters whose relation to trade, one would never have thought could possibly become items of international agreement. In the New Year we shall evaluate all that I have described in this series over the past few weeks. We shall see that what is at work is the progressive narrowing of areas of economic policy that falls within the competence and authority of national governments like ours. Make no mistake about it. The same forces that are driving towards global free trade, are also driving towards the minimum role for governments in economic matters. Trade and social clauses Since the WTO has come into existence new agenda items have been added. The mere labelling of these gives us an indication of what is in store for us. One important new agenda item is the proposal by the developed economies that trade should be linked to social clauses. This means for example, that all goods and services traded internationally should be produced by workers enjoying "similar" social conditions of work. Thus, if trade unions are not recognised, child labour is used, forced labour is involved in production, or women are discriminated against in employment, then the product should not be certified as acceptable for international trade. At a certain level the intent behind these social clauses appears to be noble and in keeping with modern social norms and standards. To the extent that this is indeed so, one should welcome the embrace of these issues in international agreements. The fear of the developing countries, however, is two-fold. On the one hand they argue, these social standards that will be attached to trade are defined from the perspective of the rich developed countries. As a consequence they will be biased against poor developing countries, who literally cannot afford the social standards existing in the rich countries. On the other hand, as globalisation has proceeded, the one distinct advantage that developing countries seem to enjoy is "cheap labour". How cheap labour really is, is open to dispute, since low wages and low productivity go hand-in-hand. The fear is though, that this is a tactic by the rich developed countries to undermine the labour cost advantage of the developing countries and to deny them the benefits of expanding global trade. Environment and trade Another contentious new agenda item is environment and trade. This is almost as complex as the relation of social clauses to trade. Attempts to foster international agreement on environmental matters have foundered amidst acrimony. More often than not, the United States is the villain of the piece. This is because, as the richest, most polluted and polluting economy on earth, the US is reluctant to lose any of its present economic advantages through stricter environmental standards. Competition and industrial policy Two other new agenda items show the dramatically widening net of WTO involvement. The first is competition policy. The developed countries have proposed agreements on competition policy as it affects trade, as a means of preventing monopoly and other non-competitive considerations impeding the prospects of their exports. The second is industrial policy. Here the concern is to ensure that common standards apply to industrial policy, so that firms compete on a level playing field. E-commerce The list of course does not end there. Items like e-commerce have been added to the agenda. At the moment, e-commerce is probably the most subsidized global activity. Under pressure from the United States, countries have agreed to a "moratorium" on imposing taxes on cross-border e-commerce, which they are entitled to do, and which they in fact do for all other cross-broader transactions. The irony of this is that this exception to the free trade rule of equal treatment for all traded goods and services, sits comfortably with the free trade ideologues. The reason, of course, is that it serves their financial benefit. New Year In the New Year we shall begin to evaluate the edifice under which global trade works. We shall see that much of it is based on cynical manipulation and double- standards. It is clear that the rich countries support free-trade and the WTO because they see that it helps not only in preserving their present global leadership through market access, but it serves as well as a means of handicapping those competitors who will inevitably arise from among the poor impoverished South. To all my readers, I wish you a Happy New Year. One in which more good sense, more social justice, and more interest is taken in the construction of this "brave new world". So far, active participation in this project is by a tiny minority of the world's population. Follow the goings-on in Guyana in Guyana Today