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I
Was Wrong About Trade
“Localization”
is Both Destructive and Unjust
by
George Monbiot
June
24, 2003
A
few years ago I would have raised at least two cheers. The US government, to
judge by the aggressive noises now being made by its trade negotiators, seems
determined to wreck one of the most intrusive and destructive of the
instruments of global governance: the World Trade Organisation. [1]
A few years ago, I would have been wrong.
The
only thing worse than a world with the wrong international trade rules is a
world with no trade rules at all. George Bush seems to be preparing to destroy
the WTO at the next world trade talks in September not because its rules are
unjust, but because they are not unjust enough. He is seeking to negotiate
individually with weaker countries, so that he can force even harsher terms of
trade upon them. He wants to replace a multilateral trading system with an
imperial one. And this puts the global justice movement in a difficult
position.
Our
problem arises from the fact that, being a diverse movement, we have hesitated
to describe precisely what we want. We have called for fair trade, but have
failed, as a body, to specify how free that trade should be, and how it should
be regulated. As a result, in the rich world at least, we have permitted the
few who do possess a clearly formulated policy to speak on our behalf. Those
people are the adherents of a doctrine called "localisation". I once
supported it myself. I now accept that I was wrong.
Localisation
insists that everything which can be produced locally should be produced
locally. All nations should protect their economies by means of trade taxes and
legal barriers. The purpose of the policy is to grant nations both economic and
political autonomy, to protect cultural distinctiveness and to prevent the
damage done to the environment by long-distance transport. Yet, when you
examine the implications, you soon discover that it is as coercive, destructive
and unjust as any of the schemes George Bush is cooking up.
My
conversion came on the day I heard a speaker demand a cessation of most forms
of international trade and then, in answering a question from the audience,
condemn the economic sanctions on Iraq. If we can accept that preventing trade
with Iraq, or, for that matter, imposing a trade embargo on Cuba, impoverishes
and in many cases threatens the lives of the people of those nations, we must
also accept that a global cessation of most kinds of trade would have the same
effect, but on a greater scale.
Trade,
at present, is an improbable means of distributing wealth between nations. It
is characterised by coercive relationships between corporations and workers,
rich nations and poor. But it is the only possible means. The money the poor
world needs has to come from somewhere, and if our movement rejects trade as
the answer, it is surely duty bound to find another.
The
localisers don't rule out all international transactions. As Colin Hines, who
wrote their manifesto and helped to draft the Green Party's policy, accepts,
"Some long-distance trade will still occur for those sectors providing
goods and services to other regions of the world that can't provide such items
from within their own borders, eg certain minerals or cash crops." [2] To earn foreign exchange from the rich world, in other
words, the poor world must export raw materials. This, of course, is precisely
the position from which the poor nations are seeking to escape.
Raw
materials will always be worth less than manufactured products. Their
production also tends to reward only those who own the primary resource. As the
workers are unskilled, wages remain low. Every worker is replaceable by any
other, so they have no power in the marketplace. The poor world, under this system,
remains trapped in both the extractive economy and - as a result - in its
subordinate relationship to the rich world.
Interestingly,
Hines's prescription also damages precisely those interests he seeks to
protect. To earn sufficient foreign exchange to import the goods they cannot
produce themselves, the poor nations would need to export more, not less, of
their natural wealth, thus increasing their contribution to climate change,
soil erosion and the loss of biodiversity. His policy also wipes out small
farmers, who would be displaced from their land by mechanised cash cropping.
A
still greater contradiction is this: that economic localisation relies entirely
upon enhanced political globalisation. Colin Hines's model invents a whole new
series of global bodies to impose localisation on nation states, whether they
like it or not. States would be forbidden, for example, to "pass laws ...
that diminish local control of industry and services". Hines, in other
words, prohibits precisely the kind of political autonomy he claims to promote.
But
above all, this doctrine is entirely unnecessary. There is a far better means
of protecting the environment while permitting the poor nations to develop, and
this is to demand global trade rules which introduce two kinds of fairness.
The
first is to permit poor nations, if they so wish, to follow the routes to
development taken by the rich. The founding myth of the dominant nations is
that they built their wealth through free trade. In truth, almost every nation
which acquired its wealth independently did so (apart from plunder and piracy)
either by protecting its new industries from competition until they were big
enough to fend for themselves or by stealing other countries' intellectual
property. [3] They discovered the virtues of free trade
and global patents regimes only once they had acquired their economic
dominance. Having done so, they now insist on world trade rules which
explicitly forbid other nations from following their own route to development.
Fair trade rules would force the rich nations to open their borders, but not,
until they had achieved a certain level of economic development, the poor.
The
second kind of fairness would involve extending the rules currently applied by
the voluntary fair trade movement to all the companies trading between nations.
To acquire a licence to trade internationally, a corporation would have to
demonstrate that its contractors were not employing slaves, using banned
pesticides or exposing their workers to asbestos. It would also have to pay the
full environmental cost of the fossil fuel it used. This would ensure that
low-value, high-volume goods, like fruit and vegetables, would no longer be
flown around the world. But it would also ensure that the poor nations which
currently export raw materials would instantly become the most favoured
locations for manufacturing: it takes a lot less fuel to ship a consignment of
aluminium saucepans around the world than it does to transport the bauxite from
which they were made.
So
let us campaign not to scrap the World Trade Organisation, but to transform it
into a Fair Trade Organisation, whose purpose is to restrain the rich while
emancipating the poor. And let us ensure that when George Bush tries to
sabotage the multilateral system in September, we know precisely which side we
are on.
George Monbiot is Honorary Professor at
the Department of Politics in Keele and Visiting Professor at the Department of
Environmental Science at the University of East London. He writes a weekly
column for the Guardian newspaper of London. His recently released book, The
Age of Consent (Flamingo Press), puts forth proposals for global democratic governance. His articles and
contact info can be found at his website: www.monbiot.com.
References:
1.
See for eg Luke Peterson, “Bush Will Trade Only with Friends,” The New
Statesman, 23rd June 2003
2.
Colin Hines. Localization: A Global Manifesto (London, Earthscan, 2000).
3.
Ha-Joon Chang. Kicking Away the Ladder: Development Strategy in Historical
Perspective (London, Anthem Press, 2002).