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Op-eds & Speeches

San Francisco Chronicle

November 29, 1999

A Better Economy the World Over

By Thomas M.T. Niles

Past sessions of the World Trade Organization attracted little attention, but tomorrow's opening session promises to be different. Thousands of trade unionists, environmentalists and representatives of other groups plan to demonstrate and take part in civil disobedience, aimed against the WTO.

 Why this unprecedented interest in the relatively arcane area of trade negotiations?

 To begin with, trade is seen as an agent of "globalization," and there is growing recognition that globalization is fundamentally changing the ways in which we live and work. In reality, the process of global economic integration has been underway for centuries. The difference today is that extraordinary advances in information technology are accelerating the process.

 Ironically, these same advances have enabled the dissemination of inaccurate information, baseless fears and outright myths about the negative consequences of globalization. Thus, while people increasingly are coming to understand that their lives are directly influenced by developments abroad, they are being encouraged to fear and resist these developments and to assume that they and their governments have lost control over their economic future to unaccountable forces and "anonymous" organizations such as the WTO.

 Of course, economic inequities and other serious problems persist on the planet. But opponents of the WTO are eager to blame it and the process of trade liberalization it symbolizes for all the ills of the world. They want to stop the process of trade liberalization, some claiming that trade costs jobs and exploits workers and "ordinary" people, others asserting that trade is environmentally unfriendly. In fact, the reverse is the case.

 It is true that more than ever before Americans are affected by developments in the world economy. With $527 billion in sales abroad last year, the U.S. is the world's largest exporter of manufactured products. It is also the world's largest exporter and importer of services, a sector that in 1998 was responsible for 2.9 million net new U.S. jobs. In short, the American economy has benefited enormously from growth in foreign trade.

 And trade has been the principal element in world economic growth. Since 1960, tariffs worldwide have fallen 90 percent while global trade has grown 1500 percent. Worldwide, economic production has quadrupled and per capita income more than doubled in this period.

 As for environmental and other standards, these are best served by prosperity. Nothing in WTO trade rules prevents countries from passing tough laws protecting health, safety, or the environment, or regulating labor standards. The only thing WTO rules ask is that these regulations not discriminate against products and services from other countries, and that regulations do not become disguised excuses for protectionism.

 In the end, we have to recognize that continued globalization is inevitable, driven by technology and based on existing economic realities. Governments can step back from the process of international cooperation and allow matters to take their course, or they can continue to develop global rules within which globalization and economic growth will be shaped. The WTO, which has no power independent of the governments that belong to it, is where a vital part of this rule-making process must take place.

 Let the demonstrators come to Seattle and make their case. There is no doubt in my mind, however, that governments will recognize that trade and economic growth go hand in hand, and that such growth is essential to a rising standard of living, strong environmental protection, high labor standards, and consumer safeguards.

Thomas M.T. Niles is president of the U.S. Council for International Business and a former ambassador to Canada and Greece. 



Copyright 1999 The Chronicle Publishing Co.