China in WTO

[Seth Ackerman]

One thought I keep having in reading the coverage of China's WTO entry is
how little the final negotiating issues had to do with *trade* and how much
they had to do with *capital mobility*. AT&T's freedom to purchase a 50
percent stake in China's telecom shares does not strike me as a classical
instance of comparative advantage at work.

The conventional rap on WTO is that it's a litmus test for one's views on
trade: "Hell No, We Won't Trade!" read a typically shoddy US News & World
Report headline about the upcoming Seattle protests. That doesn't seem an
accurate characterization of the issue at all. (True, FDI is somewhat
different than portfolio investment, but the fact remains.) 

In fact, the only pure trade issue among the major sticking points seemed to
be textiles -- where it was the Americans who wanted protection, not the
Chinese!

Isn't even Jagdish Bhagwati ambivalent about the benefits of capital
mobility? Not to mention David Ricardo!

Seth