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The WTO after ten years

 General (Read-Only Folder) -  Trade theory is rotten to the corenotify me whenever anyone posts in this discussionSubscribe  
 
From: GeoffEdward2  4/23/2005 3:13 am 
To: ALL  (1 of 1) 
 18.1 

 

The overview report confirms that WTO really is fixated on trade for the sake of trade. Chapter 1 for example, is propaganda, not genuine analysis. Even the title: “The Case for Liberalizing Trade” indicates bias. Free trade theory originated from the theory of comparative advantage, which assumes that capital is immobile across national borders. As this does not apply in the globalised world, the entire theory is falsified. Without some explanatory theory, it can only be said that trade is sometimes beneficial, sometimes disastrous.

 

The reference to “sustained growth” is nonsense. By definition growth is an accelerating condition and sustainability a steady state one. “Local self-sufficiency" is a superior organising principle.

 

The report patronises critics: “some of the criticism is well informed” (item 8).

 

The implication in item 13 that corporations are greater agents for the public good than governments is intellectually dishonest. The assertion in item 16 that trade is a pillar of economic growth is circular: growth as measured by GDP is a measure of goods and services traded in markets.

 

It is not sufficient to show that trade benefits exporting parties such as the Asian growth economies, without explaining how importing parties such as Australia, Argentina and the United States which now have towering foreign debt will discharge those debts. This is hardly a stable basis for prosperity.

 

Trade means that a country dedicates its resources and its labour force to serving the wants of another country. How is this in the interests of anyone other than the traders? Where will the resources (oil, minerals, timber, land etc) come from to support accelerating consumption in the rich importing countries? Trade means that goods flow to the countries with the most purchasing power, that is, the rich ones. This is unfair.

 

Instead of quoting only economists who lie within the neoclassical mainstream, (items 20,22), why doesn’t WTO quote authors like Rodrik, Malhotra and Chang who have shown that none of the developed countries achieved their prosperity through free trade, all developed behind protection. Why not quote experts other than economists?

 

It cannot be true that shipping goods which countries can produce by themselves across the oceans is economically efficient, when it really amounts to wasting fuel to promote brand competition between suppliers.

 

The notion that hollowing out an economy by abandoning manufacturing and focusing only on high value services, in other words by refusing to develop a diverse skilled workforce as a feeder for future economic activity, (items 27,28) is nonsense.

 

The resistance of the WTO to alternative critiques and its pursuit of an agenda that disrupts local production in countries that have little purchasing power is unsustainable and means that it is time to abolish the WTO. An organisation that is so insensitive to good theory and evidence is no doubt unable to reform itself from the inside.

 

 
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