Free Traders Need to Tell It Like It Is

February 4, 2002 • Commentary
By Tomas Larsson

Some critics argue that the World Trade Organization needs more “democratising” to allay distrust and suspicion of the WTO. They’re wrong. The organization doesn’t need “democratising.” It needs some influential friends who are willing to speak openly about the benefits of free trade.

Recall that “fast track” authority almost didn’t pass recently in the U.S. House. It squeaked by with one vote. That’s not good news with the recession and the war. And it shows how weak congressional support for free trade is. The real friends of free trade and the WTO need to step up to the plate — now.

However, the governments of member countries often want the WTO to appear more powerful than it is. For instance, the WTO makes for a convenient scapegoat when national governments are suffering the economic consequences of their own political failings: rising unemployment, widening economic inequality, and the like. It is easy to avoid honest but unpopular political arguments. One need only complain about how one’s hands are tied by the big bad WTO.

When, late in his administration, President Bill Clinton decided to veto a bill that would have imposed new quotas on foreign steel imports, he did not make the case that the law should be vetoed because it was bad for Americans (who would have to pay higher prices for their cars). Nor did he claim that the deal would be bad for the many crisis‐​prone countries for which export restrictions could easily turn recession into depression. Instead, Clinton stressed the fact that the bill would breach WTO law.

The sponsors of “A Citizen’s Guide to the World Trade Organization,” a 1999 brochure published by the Working Group on the WTO/MAI, include the Teamsters, the United Steelworkers of America, the environmentalist Friends of the Earth, and consumer rights activist Ralph Nader’s group Public Citizen. On the cover the WTO is represented as an enormous dinosaur, “GATTzilla,” a creature that totes a barrel of DDT under one arm, crushes the U.S. Congress underfoot, and gobbles up the earth. Free trade — symbolized by the WTO — is thus presented as a mortal threat to the environment and democracy.

That demagogy meshes well with the anti‐​capitalist ideology of less respectable groups. For example, the British National Party, the extreme right‐​wing nationalist party in Britain, seeks to revive British industry by excluding imports. Sweden’s neo‐​Nazi National Socialist Front calls for the reinstatement of Sweden’s traditional industries, “through a redirection of trade policy in favor of the greatest possible self‐​sufficiency and a reversion to ecological agriculture.” That’s right on key with the rallying cry of the Seattle protests that trade should be “local not global.”

But this is not a movement only of Naderites and nationalist fringes. The critics of the WTO and free trade have many friends in the establishment. The demands of unions and environmentalists helped make it politically possible — in the name of “globalization with a human face” — for an intermittently pro‐​trade Clinton administration to stop imports from countries with inferior safeguards for workers and the environment. Whether world leaders will be less squishy on such matters now that President Bush is in the saddle remains to be seen. One hopeful sign was the suggestion of Pascal Lamy, the European Commission’s trade czar. He has said that the EU should rethink its stance on trade before undertaking a new WTO round, particularly when it comes to labor standards and the like. Lamy was hinting that the protectionist agenda might be growing less tenable, or at least more debatable.

In past years the WTO, and its predecessor, the General Agreement on Tariffs and Trade (GATT), have been able to deliberate and act in silence. But no longer. In Seattle and Genoa thousands of activists demonstrated and exerted other kinds of pressure to promote their “alternative” agenda. While the actions of the brick throwers may speak for but a tiny minority, the opinions of those brick throwers speak for many.

Real pro‐​trade politicians and opinion leaders can rescue free trade from the WTO trap by aggressively advocating unilateral liberalization — the action whereby a country dismantles its trade barriers on its own initiative. What is needed is not more logrolling by elitist associations like the WTO, but an open, straightforward trade policy that is not so easy for the protectionists and demagogues to smear.

About the Author
Tomas Larsson is the author of “The Race to the Top: The Real Story of Globalization,” recently published by the Cato Institute.