Rocky Mountain News (Denver)

November 16, 2001

World trade a great tool for world peace

By Richard D. McCormick, Special to the News

Some years ago an American newspaperman coined the term Afghanistanism, for the way some editorial writers examined issues in remote corners of the globe while ignoring local concerns.

His point was widely heeded, as many American writers -- and readers -- focused more on Main Street and less on faraway feuds and feudalism.

Then, on Sept. 11, we discovered that we needed not less but more Afghanistanism.

In a world shrunk by the jet and the Internet, there's no such thing as a faraway place or isolated issue.

Fortunately, a dedicated corps of diplomats, academics and international organizations never turned away from studying worldwide problems -- and solutions. On Wednesday they watched with great optimism as trade ministers from 140 countries took a bold step toward solving many of those problems, agreeing to launch a new round of world trade negotiations.

After years of false starts, including a disastrous failure two years ago in Seattle, the World Trade Organization is launching new talks aimed at opening more of the world's doors to trade.

The WTO action is terrific news.

First, the agreement will provide a much-needed boost to business confidence. There's growing evidence of a worldwide recession, as consumers and businesses pull back in fear of terrorism, uncertainty about its economic fallout, and the realization that there is no New Economy. The promise of more open markets should give investors and employers new optimism.

And although this is only the beginning of a trade round that could take several years, it's a major milestone. It signals the possibility of important new markets for exports, lower prices for imports, new opportunities for entrepreneurs, and thousands of new jobs.

What's especially encouraging is that, this time, the developing countries were heard throughout the negotiations. These countries especially need greater access to world markets.

Trade negotiations are about removing regulations, trimming tariffs and coordinating commerce. But their effect goes far beyond that.

Fifty years ago, people in Hong Kong, Singapore, Taiwan and South Korea lived in typical developing-country poverty. But as their peers isolated themselves, these four deregulated their domestic economies and entered the world trading system. Today their standard of living matches ours.

World trade not only creates jobs, it creates better jobs. The Organization for Economic Cooperation and Development says foreign firms pay more than the average wage in every country in which they operate.

But doesn't increasing world trade mean "the big get bigger"? No. The oil, mining, auto and computer industries are less concentrated than 20 years ago. Rather than a handful, there are actually more than 60,000 multinational corporations -- quite a few of them from developing countries.

Price increases for globally-traded products -- like cars, computers and stereos -- are smaller than those for local products and services, like houses and haircuts. In the OECD countries between 1980 and 1995, prices for consumer products increased overall by 175 percent. But prices for internationally-traded goods and services rose by only 40 percent.

World trade raises local standards of living and increases worldwide interaction. Both are keys to eliminating the poverty, despair and isolation that are the roots of terrorism and war.

It may sound corny and simplistic, but the facts support my view that world trade is a tremendous tool for world peace.

Let's have more Afghanistanism!

 Richard D. McCormick is president of the International Chamber of Commerce, a trade promotion and facilitation group with headquarters in Paris. He is the former chairman and chief executive officer of U S West, now Qwest Communications. He lives in Denver.

Copyright 2001, Rocky Mountain News. All Rights Reserved.