Greenspan on Seattle

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Thu Jan 20 11:14:22 PST 2000

Michael Pollak quite helpfully sheds much light on the quota system and multifiber agreement.

It does seem that the imperialist countries are using the threat of 'social protection' to undermine their one big concession (termination of MFA) to secure the liberalisations for their capital, services, exports the WTO would secure on their behalf. Yet it is strange battle for the AFL-CIO to the extent that given the massive (perhaps defensive) automation of textiles and garments--to the limited extent their production remains within the US--such social protection will really be to the advantage of machines, not workers, no? So perhaps the threat of social protection (of machines) is really only a bargaining chip to 'motivate' other countries to accede to more of the WTO liberalisations--to lower their trade barriers as Sweeney puts his truly favored solution to the US trade imbalance.

>John Whalley

Thanks for the cite, haven't looked it up yet. Still catching up to Stiglitz and O'Connor while trying to keep abreast of the excellent LBO discussion on Bradley's health plan from which I am learning quite a bit.

(It might even encourage diversity, no? Since
>multinationals would increase their permitted imports by spreading out
>their investment?)

That would include various countries' mncs all spreading out to different low wage export platforms to maximize the quantity of such low wage intensive goods that they can sell in various protected markets. However, there seems to have been relocation from Japan and East Asia where wages have increased (sometimes dramatically) of such unskilled labor intensive production to China, where the wages are indeed keep low at the point of bayonet--as Max accurately put it.

So the trade surplus of China's to the US has seemed to grow though there have been commensurate reductions in the region. If China is not successful in winning open OECD markets, then perhaps MNC's will begin spreading out again--though perhaps with diseconomies from the deconcentration of production. So in this way it is easy to understand the coincidence of interest of MNC's and the Chinese state in securing WTO entry.

But true enough I don't think these low wage, unskilled ilaobr ntensive jobs (textiles, garments, shoes, toys) are coming 'home' en masse even if China is kept out. So on the face of it this is a bizarre battle for the EPI, Hoffa, and Sweeney to be fighting.

>Least Developed Countries, like Bangladesh, don't have quotas, so they can
>be well represented in Old Navy. But for China and India, the new third
>world powerhouses, apparel and textile quotas are a huge issue, no?
>Wasn't that the key issue on our side in our bilateral pre-WTO
>negotiations just end with China -- that we refused for 12 years to open
>up our apparel markets to them unless they opened up everything else to

Yet India often complains that China has had greater access to the US market (better bilateral agreements over the quotas) due to the geopolitical deals the US had made with China for their cooperation in challenging "Soviet imperialism" at the height of the Cold War

>BTW, Whalley's notes in passing that in the 1960's, 60% of the world's
>apparel and textile imports came from the Asian tigers. It was a trade
>that also made up 50% of their exports at the time.

This would have included Japan. Again the unusual openness of the OECD, the US in particular, to such tiger exports seems to have been a consequence of the Cold War, an attempt to keep state socialism at bay in east and south east asia (the UK has been cutting over the last 10 years the share it accepts in particular I believe). How the world trading system was affected by the Cold War and to what extent that imprint remains on the system are interesting questions indeed.

Yet we have that arbitrary divide between economics and politics that makes social scientists averse to such comprehensive assessment. One of the many things I like about Peter Gowan's book is his attempt to analyze the interpenetration of economics and politics--that's what I liked about the David Spiro's book too.

The Multifibre
>Agreement seems to have been instituted just as they were transitioning to
>more capital intensive exports -- and just in time to prevent anyone else
>from following same path.

Yes, many have cried foul that the MFA hits just where the comparative advantage is, the consequence being that adjustment is put disproportionately on the least wide shoulders. But this is anti social system at all its levels.

Yours, Rakesh

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