Commentary

WTO Critics Trade Away Truth for a Sound Bite

By Daniel Griswold
January 2, 2000
The band of anti-trade groups that coalesced in Seattle to disrupt the recent World Trade Organization meeting have taken their message on the road, repeating their list of complaints against trade expansion at a recent news conference. The anti-globalization protestors have dominated the debate lately with banners, chants and 20-second sound bites, but their wild claims about the WTO wither under scrutiny.

First, the WTO poses no threat to U.S. sovereignty or democracy. The WTO has no powers to impose anything on anybody. It is nothing but a contractual arrangement between 135 sovereign nations to mediate trade disputes according to rules agreed upon by consensus. A member that flouts a WTO ruling can face trade sanctions, but sovereign nations possessed the power to impose sanctions long before the WTO existed, America’s infamous Section 301 trade law is a prime example. In fact, sanctions have been imposed in only a handful of cases, and even then, the target nation can simply ignore the WTO ruling (as the European Union has done in the beef hormone dispute).

The large majority of negotiators who came to Seattle, including America’s own, represented elected governments of various stripes. In the 1996 presidential election, Green Party candidate Ralph Nader and his anti-trade platform received a mere 684,874 votes-fewer than 1 percent of the almost 100 million votes cast. Yet Nader’s shock troops in the streets of Seattle held the winning candidate’s chief trade representative and secretary of state hostage in their hotel rooms for a day. The disruption and damage left in the wake of the protests were more the marks of mob rule than of democracy.

Second, the WTO encourages higher environmental standards through trade expansion. There is no legal or economic conflict between freer trade and environmental standards. By promoting economic growth, trade enables less-developed countries to adopt higher environmental standards and helps create an educated middle class to support them.

Article XX of the WTO charter specifically allows trade restrictions necessary to protect the life and health of plants, animals and people. It does require that the same standards applied to imported goods be applied to those produced domestically and that environmental standards be based on some minimum scientific standard. Only a handful of the tens of thousands of environmental regulations in force in the United States and the rest of the world, has been challenged in the WTO.

The anti-trade agitators claim the WTO has weakened environmental protection in the United States, but the claim is nonsense. U.S. environmental laws are among the strictest in the world and our environment is among the cleanest. In the last decade, atmospheric concentrations of sulfur dioxide and carbon monoxide have fallen by nearly 40 percent. The number of “bad air days” in major U.S. cities has dropped by two-thirds. Discharge of toxic water pollutants is down dramatically. The number of trees growing in the United States has been rising steadily for the last 50 years. All this environmental progress comes during a time of expanding American engagement in the global economy.

Third, trade expansion improves working conditions. The protestors in Seattle claim solidarity with the world’s poorest workers, but the demonstrators received zero sympathy from the elected governments of poor countries. Since the 1980s, those countries have been shifting en masse from the failed policies of import substitution and hostility to foreign investment. They have discovered through hard experience that the path to prosperity is through free markets at home and openness to the global economy.

Less-developed countries rightly understand that sanctions of the kind endorsed by President Clinton will only punish poor countries for being poor. The greatest progress against poverty and poor working conditions has been in countries that have moved decisively toward domestic and trade liberalization. In East Asia during the 1990s, the number of people living in absolute poverty has fallen by almost 200 million. In contrast, the most economically closed region in the world, Sub-Saharan Africa, has seen poverty increase.

Finally, the WTO serves America’s national interest. Multinational agreements on trade encourage nations to lower barriers to trade and to keep them down. That opens markets abroad for U.S. exporters and helps to keep our own market open for the benefit of U.S. consumers and for businesses that import capital equipment, intermediate inputs and raw materials. International trade invigorates our economy with greater competition, spurring domestic companies to offer new and better products at lower prices.

Anti-trade activists claim that trade destroys jobs and lowers wages, but since creation of the WTO, the ongoing U.S. expansion has only gained steam. Today real wages are rising across the board, unemployment is at a 30-year low, inflation is dormant and industrial production and manufacturing output are at record levels. This unprecedented economic prosperity comes at a time when Americans are trading more than ever with people in the rest of the world.

The anti-trade activists may have won the battle in Seattle, but if we allow them to win their war against economic liberty and trade expansion, America, in the end, will be the loser.

Daniel T. Griswold is associate director the Center for Trade Policy Studies at the Cato Institute. He is co-author of the Cato study “Seattle and Beyond: A WTO Agenda for the New Millennium.”