I agree that the world trading system is not close to free trade or fully integrated world market. Is free trade not a utopia?
I do not know what is meant by 'higher vertically integrated labour coefficient', but theThird World exports do not necessarily involve wage repression. What is important for the Third World businesses is the incremental contribution (incremental sales less incremental direct costs). In a growing market, both the Third World capitalist and workers may gain in terms profits, wages and employment. Much would depend on the business cycle, industry segement, level of unionisation etc.
I agree that FDI is not responsible for union busting in the developed world. The Third World would appear to be a net exporter of capital to the developed capitalism, though it would be difficult to prove it.
Ulhas
----- Original Message ----- From: Rakesh Bhandari <bhandari at phoenix.Princeton.EDU> To: <lbo-talk at lists.panix.com> Sent: Friday, January 14, 2000 10:27 PM Subject: Re: US denies Cambodia full quota of garment imports
> Ulhas noted:
>
> At any rate, how the world trading system really works--with its quotas,
> anti dumping laws, multilateral and bilateral deals, intra firm trading by
> oligopolistic transnational corporations, regional trading pacts--seems
> quite complex. It surely is nothing close to free trade or an integrated
> world market.
>
> Even the GATT/WTO tarriff reduction efforts have been coupled with a
surge
> in aribtrarily applied anti dumping measures, vitiating a real movement to
> free trade. It seems that all we are taught is the Ricardian defense of
> free trade based on comparative advantage which only holds on the basis of
> several arbitrary assumptions (see Michael Hudson, Trade, Development and
> Foreign Debt for a critique). Yet, the world trading system as it is is
> bewilderingly complex.
>
>
> >I am not sure if low wages by themselves are pertinent to the debate
about
> >labour standards. I think it's about low wage ratesdue to prison labour,
> >slave
> >labour, child labour, lack of collective bargaining rights,
discrimination
> >at work
> >place etc.,which confer an advantage unacceptable to contemporary
> >capitalism.
>
>
> Again, in the developed countries protection is not only being fought for
> in the idiom of anti dumping, anti predatory pricing theories (are the
> latter actually credible?). the fight now is over the advancement of this
> kind of social protection. The problems include at least:
>
> *arbitrary application of quotas on certain third world countries
>
> *hypocritical applications since the developed countries have not realised
> such reforms despite their much higher state of development
>
> *given much higher verticially integrated labor coefficients, third world
> captialists may find it impossible to compete on a basis other than wage
> repression; that's simply the real world dilemma. And to ban such
> imports--as in the case of the Harkin Bill, see latest Journal of Economic
> Issues for a study of the effect on Bangladeshi children-- would have
> specific detrimental effects in terms of employment, effective demand,
hard
> currency shortages on the penalized countries that need to be considered
> honestly--something Faux, Palley and others won't do.
>
> *continued exaggeration based on misuderstanding of the absolute
> disavantage in unit costs of third world of how responsible such third
> world exports or FDI in the third world (which is quite small as a
> percentage of the total) is for union busting, stagnant wages, speed ups
in
> the developed countries--leading to an unjustifiable prioritizing of the
> struggle for such social protection, tarriffs, or exclusion of China from
> the WTO--as Hoffa is doing now.
>
> Yours, Rakesh
>