[lbo-talk] Davies on Cancun

Eubulides paraconsistent at comcast.net
Wed Sep 17 11:09:56 PDT 2003


----- Original Message ----- From: "Shane Taylor" <s-t-t at juno.com>


> He reads it as more about the resurrection of MAI than agricultural
> subsidies.
>
> High Noon in Cancun
> by Daniel Davies
>
> http://www.crookedtimber.org/archives/000520.html
>
> Also, Jagdish Bhagwati had a piece in the Financial Times back in July on
> FTAs. He said there were about 250 now, soon to be 300. Roughly, these
> bilateral negotiations end up favoring the developed over the developing
> nations far more than the WTO. So a fall of the WTO could mean the world
> comes to resemble more, not less, of what the opponents of "corporate
> globalization" fear.
>
> -- Shane

=====================

They look like FTAs but they look even more like neo-mercantilist deals done with comprador governments being bribed to set up EPZs to facilitate intra-firm trade, Nike and the textiles industry being exhibit A on that score. Such deal making has been going on since the Reciprocal Trade Act of 1934, updated in 1949.

In a sense, the WTO would simply facilitate the lowering of the transactions costs of setting up such zones by consolidating the method and forums where the deals are cut and locking in future governments via globally binding *legal norms*, hence the common metaphor of Ulysses and the Sirens when discussing such issues. Globally binding norms serve to attempt to preclude unstable states from undoing what previous generations of comprador elites had done to screw their own citizens. Ellen Israel Rosen lays this dynamic out for all to see in her recent "Making Sweatshops: The Globalization of the US Apparel Industry" [Univ. of California Press].

If you think the number and profusion of bilateral trade treaties is bad, there are over 1,300 investment treaties in policy-space and consolidating/centralizing them in the WTO, with the Wall Street-London financial market model as the norm, is every investment bankers wet dream [as opposed to the nightmare of expropriation which is yet another part of what drives the issue].

So, from one perspective the Singapore issues and their linkage to the Agricultural subsidies disputes are about the current generation of political leaders in the global South attempting to undo the inertia that a previous generation of corrupt politicians signed onto and helping to expose the neomercantilist hypocrisy of US-EU-Japan trade policy in the process.

The larger context/problem is that to 'free marketeers', dirigisme regimes look like rent-seeking, quasi-patrimonial regimes from the supposedly cast off mercantilist past, yet these same people refuse to look upon large parts of the WTO treaty itself as the result of rent-seeking behavior; TRIPS being exhibit A par excellence. See Susan Sell's "Private Power, Public Law" for a great case study on that issue. Bhagwati is finally coming around to seeing the problem with just what the Coalition of Service Industries and others are doing and he labels them a bunch of Leninists! :-) http://www.thenation.com/doc.mhtml?i=20030922&s=greider but it is surely possible to see even older parts of the treaty as the result of the same kinds of behavior on the part of the TNCs and politicians they hire to write such stuff.

This makes circumscribing, if not eliminating, the WTO, fraught with contradictions. On the one hand demanding the elimination of subsidies and tariffs would definitely help the South and should remain issue number one and should be permanently delinked from the Singapore issues, which should be driven off the table completely. On the other hand by exposing and demanding an end to the rent seeking going on at the multilateral level over the issues of investment etc., activists may unwittingly encourage a desperate US policy of even greater bullying at the bilateral level, and neo-mercantilism would continue to cast a shadow over the global political economy. And it would seem that until we can come up with a substantive alternative financial architecture that transforms the IMF/WB into something the majority of the worlds workers/citizens actually want, Bhagwati's 'cynical bastards' will keep buying politicians and policies until they get what they want. Getting global laws to reign in/transform TNCs, far beyond the goofy stuff the UN compact would do, is something else to think about, given the recent corporate panic over the Alien Torts Claims law.....

For some excellent analyses, including Bhagwati's denouncing of the TRIPS agreement see:

http://www.asil.org/ajil/ajil021.pdf [especially the essay by Robert Howse]

For a solid review of rent seeking and the underbelly of dirigisme, see "Rents, Rent Seeking and Economic Development: Theory and Evidence from Asia" ed. by Mushtaq Khan and Jomo K.S. [Cambridge U Press].

Ian



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