TRADING UP
Mandle, Jay R.
TRADING UP Why globalization aids the poor Jay R, Handle he movement that first coalesced in Seattle at cally has not worked well to reduce poverty...
...of my brain have floated More important, the imposition of trade sanctions will up round my face and hold me hurt the working class in poor countries and inhibit the abilin an aquatic stall: like the ity of labor to unionize much more than it will damage the winter time of bees in a hive of ice, corrupt leaders of such nations or multinational corporathe queen bolted to an icicle, tions...
...It calls for the United States to manded...
...The paid for farm work...
...There is a very strong and clear association between the poor and of benefit primarily to the wealthy...
...The rationale behind should be regulated...
...As a consequence, many of these well-intentioned individuals would put trade and the progress it represents at risk in the service of an ill-founded American unilateralism...
...The apocalypse sudden, when third-world labor has proved to be competitive, that he foresees in all likelihood will not materialize...
...The fact is that most of the low-wage occupations involved in any "race to the bottom" genuine concern about improving human well- also perpetuate working-class poverty...
...TRADING UP Why globalization aids the poor Jay R, Handle he movement that first coalesced in Seattle at cally has not worked well to reduce poverty while urging the anti-World Trade Organization demonstra- the dismantling of one that, even with its flaws, has improved tions last December and recurred in Washington, the lives of millions...
...both fronts there is a need for reform to be achieved through Critics of globalization also warn that consumption-based- international agreements, in one case to secure environand specifically U.S.-led--economic growth is ultimately des- mental viability and in the other to strengthen the right of tined to fail...
...Similarly, the United States is almost always a laggard in multilateral negotiations concerning the environment...
...Multilateral agreements but got it: the lines of it, are necessary to secure adherence to global rules concernthe little cube he drew ing labor and the environment...
...Just as movement toward a rule-based global trading but let it go and not record another wandering inch.system was achieved with the establishment of the much3. The Poet derided World Trade Organization, similar advances can be secured by codifying and enforcing international rules conHe just let it end...
...Where the already crowded urban cen- unconstrained activity of fiters because the wages of- nancial managers does more fered in export manufactur- harm than good, their activing are higher than those ity should be regulated...
...the United States $335.2...
...The HDI is an indi- industries move their operations to poor nations looking cator that combines information concerning life expectancy, for cheaper labor...
...economy, This is what happened to In developed countries now it's India, Thailand, Brazil, etc Mexico, Russia, and Asian like the United States, simi- countries in recent years...
...It is a coalition involving unions, environ- deny...
...What is that a country's HDI is closely related to both its exports may ensue is "a race to the bottom" in wages, at least for and its level of GDP per capita...
...Skepticism among Greider and others are right about the need for change in third-world countries is not unreasonable...
...The countries that exprocess of freer trade...
...Left-leaning critics of globalization, such as Philippines the journalist and author William Greider (One World, Ready China or Not), concede that the goal of national self-sufficiency "has Indonesia Egypt been advocated for many years, but the truth is there are still Group 3: $1,484 $55 0.51 not many living examples of success" (The Nation, April 10...
...ures...
...Lost it, to achieve other desirable objectives...
...those with the highest human welfare scores export There are better ways to respond to the relocation of industhe most and have the highest output levels...
...Commonweal 15 June 2, 2000 Index (HDI...
...the barge and then the river Hard as it is for many well-meaning people to see, labor gone round the cliff...
...Opponents of opment Indicators 1999, Table 1. Population: World Development Indicators 1999, Table 1. Exports: World Development Intrade are advocating a model of development that histori- dicators 1999, Table 4.17...
...big nations such as Mexico and Turkey in their efforts to re- Attempting to retain them in the United States only increases duce poverty, it is indispensable for small ones...
...Trade creates jobs without which there are no unions...
...At the same time, labor markets without the has received the endorsement of the United States, even dur- ability of workers to bargain collectively are simply unfair: ing the Clinton administration which has maintained a Rea- individual workers are no match for giant corporations...
...Unwilling to offer additional credit, overseas ex- I withhold trade privileges as a means to secure porters will reduce their sales to the United States, raising compliance...
...Holding on to low-paying industrial enhanced well-being...
...Globalization brings disloca- heavals caused by globalization, reform is needed at the intions in both poor and rich nations...
...Until we can present ourselves as more of a model of In the wetlands of sound labor and environmental responsibility, the antitrade moveI have set up my camp...
...The UN has long been in the lead in develop- lar problems arise...
...The third alization is weak...
...The table that appears below illustrates the point...
...Instead of their small size, most underdeveloped countries are unable trying to protect such occupations, those who want to speak to provide markets large enough to achieve the efficiencies and act on behalf of low-income workers should make a associated with large-scale economic production...
...But one element that links these into three groups: moderately advanced, intermediate, and groups is the belief that international trade is injurious to poor...
...winning economist James If the prospect for reTobin...
...As Youssef Boutrosthe way the United States consumes the world's resources Ghali, the Egyptian trade minister, has put it, "Why, all of a and goods, but he is excessively alarmist...
...During the last two decades the expansion column reports the United Nations Human Development of trade has been closely associated not simply with thirdworld economic growth, but with significant improvements in human welfare and the alleviation of poverty and sufferEconomic Data: ing...
...In Turkey its place, the protestors advocate an economic experiment Brazil that has virtually no track record and possesses serious the- Group 2: $3,139 $209 0.69 oretical flaws...
...The most sensible position to export services to financial speculators...
...I mentalists, consumer groups, and religious communities, have divided the thirteen largest underdeveloped countries each with its own emphasis...
...trade imbalance is not unions hardly commends this country as a champion of Commonweal 17 June 2, 2000 labor rights...
...When such jobs Moreover, if international trade is important for move to poor countries, they raise the overall wage structure...
...workers curattaining high levels of productivity is impossible without ex- rently paid poverty wages have the potential to fill higher ports...
...Without international trade poor coun- jobs through protectionist measures is not good for Ameritries have little chance of improving potential income levels can workers and is probably futile in the long run as well...
...That globalization could not undo the scorching...
...These disruptions must be ternational level, especially in financial or capital markets...
...Not only are jobs lost, but firms that reschooling, and material well-being...
...A high proportion of U.S...
...role in antiglobalization movement's labor and environmental dethe world economy is put in better perspective...
...But their impact edy...
...Low-wage workers are displaced when ing direct measures of human welfare...
...This scheme would managers does more harm dressing the trade imbal"put sand in the wheels" of ance is relatively good, the than good, cross-border financial flows problem of establishing by taxing all such transac- their activity global environmental and tions...
...HDI: Human Development Report 1999, Table 1. Jay R. Mandle, a regular contributor, is the W. Bradford Wiley Professor of Economics at Colgate University...
...In its place, many advocate greater port the most have the highest output per person...
...Much remains to be done to overcome the poverty and internal inequalities that GNP Exports blight poor nations...
...What the table shows main face pressure to reduce costs by lowering wages...
...ment's demands will continue to look very much like a My mind is brackish...
...The do industrial countries start feeling concerned about our value of the European Union's imports from low- and mid- workers...
...Nevertheless, the economic progress per capita per capita HDI made in the last few decades by the poor around the world has been substantial...
...mands...
...Global trade in and of itself is a good thing for the it rush over the boulders into a gully world's poor and should not be used as a bargaining chip and bash into a forest...
...He used to worry about the U.S...
...Tax incentives for employers who encourage the creway that never before was the case...
...What concerns me, as an economist Group 1: $6,824 $800 0.75 and an activist, is that the antiglobalization coalition oppos- Mexico es a process of economic development that has proven itself Thailand to be crucial to overcoming deprivation in the third world...
...To cite just one example, we still do not adhere to the Basel Convention that bans the export of hazardous waste to developing countries...
...Mann, howevnomic downturns that were er, thinks a further embrace experienced in 1997 and of globalization, not a retreat 1998 have already been re- Globalization is premised from trade, is the best remversed...
...India Greider and others, such as Ralph Nader and Lori Wallach, Pakistan director of Global Trade Watch, hope for more success once Bangladesh "the global rules change...
...Seen from this perspective, op- Sources: Purchasing-power parity GNP per capita: World Develposition to globalization seems morally obtuse...
...In principle, the incentive speculators both are desirable...
...In 1998 Europe imported much of the basis for the belief-quite widespread in the $339.5 billion of goods...
...Until the movement's hostility to globalization is reversed, it cannot help the world's poor...
...possesses the potential for raising standards of living in an ever more integrated world economy is something that those who demonstrated in Seattle and Washington, D.C., have Ned O'Gorman not yet come to terms with...
...Unfortunately, none generations...
...seen to be dictating to the rest of the world...
...on expanded trade, ternational market for serStable growth in the but trade liberalization vice industries, Mann arglobal economy requires gues, would help correct the that currency and financial- does not require problem...
...Both new information technology those who relocate and those has facilitated an enormous who remain in agriculture growth in global financial acneed assistance-the first tivity...
...and HDI scores...
...A recent study by Catherine L. Mann concludes that than 10 percent of our private-sector labor force belongs to Greider and others are right, the U.S...
...It Commonweal 16 June 2, 2000 is true that in Asia the eco- sustainable...
...The table shows as well that globalization is associated Economically and morally, however, the case against glob- with improvements in overall human well-being...
...Numerous other pro- pursuit of private profits poses an intolerable risk to future posals in this regard have been floated...
...Money managers now with regard to the social move vast amounts of capiamenities of urban life and tal across national borders, the second concerning the looking for better returns on need to reorganize agricul- their investments...
...In defending such unilateralism, the movement the question for third-world producers, as Greider puts it, of has been remarkably insensitive to the impression created "who will buy all this stuff...
...D Commonweal 1 8 June 2, 2000...
...Envihave to shift their funds in ronmental damage resultresponse to small move- ing from the unconstrained ments in interest rates or dividends...
...Globalization holds out the promise of economic ad- wage occupations...
...deflects attention from the major sources of environmental 2. The Map damage globally-the economically advanced countrieswhile at the same time depriving poor nations of the wealth He had caught it, the curve and technology necessary to reverse the ecological damage of the river and the landing, for which they are responsible...
...In this scenario what follows when the United States, a nation that has hardly been exemare massive devaluation of the U.S...
...The countries with the low- some workers...
...dollar and worldwide plary with regard to either environmental or labor issues, is economic depression...
...the rudimentary stages of industrialization...
...Education, re-training, and at least temvancement for poor countries because it allows production porary income support are necessary for them to be able to of the world's goods to be dispersed geographically in a do so...
...He had cerning labor rights and the environment...
...est HDI are those that score lowest in the other two meas- As a society we should not participate in such a race...
...her subalterns, their wings Without unions, in turn, an effective counterweight to elite shining, honey on the filaments, dominance is lost...
...A liberalizing of the inwas severe...
...When, herd-like, they ternational organizations leave, the devastation in the have an important role to form of defaults and bankplay in aiding workers and ruptcies can bring down all industries undergoing such but the strongest economies...
...It is better for all being means not dismissing the role of interna- concerned that such occupations shift to countries still in A tional trade in increasing living standards...
...Those who want to looked into the windows help workers in the third world and protect the environment of the sun and should be working diligently to elect people to Congress needed then to break who will support such international agreements...
...And the fact that less trays...
...Activists levels of economic development (GNP per capita) and a who oppose "globalization" want to stop or at least slow the country's level of exports per capita...
...We have not ratified six of the seven International Furthermore, our trade imbalance can be corrected in ways Labor Organization (ILO) Conventions that constitute the far short of the kind of cataclysmic event that Greider por- content of the core labor standards...
...On ganesque opposition to interfering in global markets...
...Financial tural production with a managers can exit from a much depleted supply of country as quickly as they labor...
...For them, very different case...
...He and environmental standards should be dissociated from raced to write it down and saw trade talks...
...Greider, for example, points out that the United workers to organize unions...
...Cutting trade spasm of the abysmal now...
...Shouldn't the United States States of Mind clean up its own act before it demands that others, especially poorer countries just now scrambling onto the ladder 1. The Autistic of material progress, accept labor and environmental standards...
...With export sales of ation of better-paying jobs is the sort of public policy we manufactured goods come jobs, rising income levels, and should be pursuing...
...At some point such the antiglobalization movement wants to use loans will no longer be offered and repayment will be de- trade as a hostage...
...To be sure, advances in well-being have not been as Selected Underdeveloped Countries rapid or extensive as they should be...
...dle-income countries, for example, is virtually the same as Indeed, the actions of the United States itself provide what the United States imports...
...The United States market speculation be re- giving a free hand is in a particularly strong duced...
...In Globalization is premised on expanded trade, but trade libunderdeveloped countries, eralization does not require globalization attracts work- giving a free hand to finaners from the countryside to cial speculators...
...But there is a serious problem as- Nigeria sociated with asking the world's poor to wait for new glob- Ethiopia al rules to be adopted, rules whose formulation is vague and prospects for enactment slight...
...Such adherence will require into the shoreline to explain strengthening institutions such as the International Labor just what the map was a picture of Organization and the United Nations Environmental Proand why he'd do no more of this gram...
...labor standards is more the tax is that it will reduce complicated...
...economic self-sufficiency for the world's poorest nations...
...transformations...
...suggestion in this regard is in travel, transportation, edthe Tobin Tax, initially pro- Where the unconstrained ucation, finance, and busiposed by the Nobel Prize- activity of financial ness...
...D.C., in opposition to the World Bank and In- In short, liberalized trade has a track record of achieveternational Monetary Fund in April does not, of course, speak ment in advancing living standards that is impossible to with one voice...
...managed in order not to burden those least able to adjust...
...Because of the already growing number of working poor...
...States imports much more than it exports, and that the difference between the two essentially represents a kind of loan n advocating labor and environmental standards, extended by the rest of the world to us...
...Words smokescreen hiding an effort to raise production costs outtoo long in the hollow stone side this country...
...In addition to these domestic adjustments to offset the upAre there social costs...
...tries associated with globalization...
...Similarly, withholding trade privileges caught in a cantilevered will not advance environmental protection...
...Governments and in- arrive...
...them open with his body The tragedy, then, is that those who oppose globalization as he had the body of his and claim to speak on behalf of the poor and the powerless beloved but do so in a way which stands in almost perfect contradiction he was broken by that leap and to the interests of the disenfranchised...
...Add to these third world-that disguised protectionism motivates the figures Japan's $102.5 billion of imports, and the U.S...
...This must be rethought...
Vol. 127 • June 2000 • No. 11
