[Congressional Record Volume 145, Number 155 (Friday, November 5, 1999)]
[Extensions of Remarks]
[Pages E2276-E2277]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    CONCERN WITH THE NEXT ROUND OF THE WTO AND TRADE LIBERALIZATION

                                 ______
                                 

                       HON. ENI F.H. FALEOMAVAEGA

                           of american samoa

                    in the house of representatives

                       Thursday, November 4, 1999

  Mr. FALEOMAVAEGA. Mr. Speaker, the prospect of a ``Millennium Round'' 
of trade liberalization is inspiring heated debate both within the 
United States and the international community. While further 
liberalization could bring new opportunities for growth, there is much 
evidence that the costs of free trade have thus far outweighed the 
benefits for the majority of the world's people.
  Mr. Speaker, if the United States is to maintain its commitment to 
strengthening democracy domestically and abroad, and to improving the 
quality of life for all its citizens, it is imperative that a thorough 
review of WTO policies and procedures be undertaken. Too many questions 
remain about the effects of trade liberalization--as illustrated by our 
Nation's mixed experience with NAFTA--and the United States should not 
rush blindly into a new round of WTO negotiations.
  On this timely subject, Mr. Speaker, I recommend to our colleagues 
and the Nation an excellent article authored by Nora Connor, a Research 
Associate with the highly-regarded Council on Hemispheric Affairs 
(COHA), which is based in Washington.

             WTO Faces Internal Discord, Public Opposition

       With the World Trade Organizations ministerial meetings 
     just days away, trade officials are still arguing over the 
     basic agenda for the Seattle event. An October meeting in 
     Lausanne clarified differences among participants, but saw 
     little progress toward resolving them. Though certain items 
     were to be given priority for a possible ``Millennium Round'' 
     of trade talks, consensus has proven elusive. WTO member 
     countries remain divided on issues such as the impact of the 
     organization on environmental and labor issues, as well as 
     the prioritization of specific agenda items.
       In addition, WTO representatives will be facing raucous 
     public opposition to a new round of trade talks. Numerous 
     national and international groups have denounced the effects 
     of previous free trade measures. These groups have planned 
     large-scale protests to coincide with the ministerial, acting 
     on behalf of labor rights, the environment, sustainable 
     development, consumer rights,

[[Page E2277]]

     women's and children's issues, and the strengthening of 
     democracy.
       Trade experts in many nations insist that a broad agenda 
     addressing the liberalization of previously untreated sectors 
     (including services and agriculture) is the only way to 
     ensure that the new round can move forward. Proponents of a 
     broad agenda assert that any delay in trade liberalization 
     would result in missed opportunities for huge gains in global 
     trade and income, and could open the way for protectionist 
     ``backsliding.'' Advocates of further liberalization also 
     insist that the process must move forward if developing 
     countries are to benefit from increased market access, 
     greater consumer choice and increased opportunity to attract 
     foreign investment.
       Many anti-WTO protesters preparing to clog the streets of 
     downtown Seattle say they categorically oppose any new round 
     of trade talks. A petition outlining objections to a new 
     round and calling for an exhaustive review of existing WTO 
     agreements has been signed by over seven hundred groups 
     worldwide. The signatories claim that trade liberalization 
     has done little to benefit the world's poor. They also view 
     the WTO as a threat to democracy, insisting that WTO policies 
     have undermined elected governments' ability to prioritize 
     national development, public health and safety issues, as 
     well as interfered with consumer rights. These concerns are 
     attracting widening publicity, and though they have been 
     dismissed as instances of ``anxiety'' by U.S. Trade 
     representative Charlene Barshefsky, and as ``attacks by 
     extremists dedicated to spreading anarchy and defeating 
     capitalism,'' by Financial Times contributor Guy de 
     Jonquieres, popular opposition to the WTO could prove a 
     significant barrier to further liberalization, particularly 
     as the U.S. presidential race intensifies.
       Despite their opponents' accusations to the contrary, free 
     trade advocates insist that they too have the best interests 
     of the world's population at heart. WTO director-general Mike 
     Moore has summed up the position of free trade supporters in 
     saying that ``the WTO is about raising living standards . . . 
     if living standards rise, environmental standards rise, 
     families are better off and children normally have a better 
     education.'' Moore's position is a prime example of the 
     ``rising tide lifts all boats'' line: what is good for the 
     economy is good for people. Macroeconomic indicators both 
     support and contradict this thesis, depending on one's point 
     of view. In many developing areas, including Latin America, 
     foreign investment is up, and inflation is down. The 
     Financial Times reported last month that global income has 
     grown dramatically as a result of trade liberalization. The 
     rising-tide rationale is also being applied to the next round 
     of negotiations, with experts insisting that the poorest 
     countries also will benefit from the removal of agricultural 
     trade barriers. Yet others suggest that conditions are 
     worsening in the majority of developing regions. In Latin 
     America overall economic growth has been ragged with less 
     than 3% annually, according to the United Nations Commission 
     on Trade and Development (UNCTAD), with some countries 
     showing negative growth, job creation has slowed, and 
     unemployment has remained fairly stable. Perhaps most 
     telling, gaps in income distribution have sharply widened, 
     suggesting that the free-market system contains inherent 
     structural inequalities preventing some ``boats'' from rising 
     despite general increases in trade, investment, and economic 
     growth.
       In addition, WTO policies continue to force developing 
     countries to compete largely on the basis of their only truly 
     competitive advantage: cheap labor. This presents a problem, 
     as it has historically, in that labor is performed by workers 
     who are also humans with a need to consume. Countries that 
     must lower labor costs as a means to greater efficiency and 
     greater competitiveness must essentially manipulate their 
     populations in the service of ``the market.'' UNCTAD reports 
     that Latin American workers experienced declines in real 
     wages of 20-30% since the Uruguay Round was implemented 
     beginning in 1990. It seems clear that all workers have not 
     benefited from new trade patterns. Perversely, however, 
     shrinking wages can contribute to the appearance of economic 
     growth in the form of increased ``efficiency.'' Similarly, 
     the rapid increase of temporary and ill-paid service jobs in 
     countries like the U.S. is hailed as improved flexibility in 
     the labor market--even though it may undermine job security 
     for countless workers, and even though significant decreases 
     in wages can adversely affect consumption.
       Traditionally, the WTO has argued that labor and 
     environmental matters--as well as the burden of ensuring 
     equitable distribution of resources and profits--are best 
     left to natural forces in member states, as they are not, 
     classically speaking, trade-related. Yet the trade 
     organization consistently has undermined member nations' 
     attempts to regulate labor and environmental protection, with 
     its dispute panel by categorizing many reforms as ``non-
     tariff barriers to trade,'' which may invite retaliatory 
     sanctions. Issues that might be most effectively pursued by 
     means of international cooperation, are instead reduced to 
     bargaining chips. Developing countries, for example, suffer 
     from environmental degradation just as developed countries 
     do--sometimes even disproportionately, due to, for example, 
     having to allow toxic materials to be dumped or incinerated 
     in third-world countries, out of financial desperation. Yet 
     efforts to enact environmental protection measures are often 
     misguidedly opposed by poorer nations which cannot afford to 
     implement similar measures, or lack the infrastructure to do 
     so. Poorer countries perhaps naively believe that developed 
     countries invoke stricter environmental measures as a ploy to 
     protect their own domestic industries against overseas low 
     cost competition. Labor issues have met a similar fate under 
     free trade, with workers in neighboring countries often 
     pitted against one another, rather than pooling their 
     leverage in order to raise standards across the board.
       Supporters of free trade explain the suffering connected 
     with trade liberalization by insisting that such sectors are 
     experiencing the temporary hardships tied to a certain stage 
     in a process of industrialization or development. Once these 
     nations modernize their industries and stabilize their 
     markets in order to become more competitive, the script 
     reads, living standards will improve. But this attitude 
     belies the supposed concern with the plight of the world's 
     most poverty-stricken, implying that those who are suffering 
     in the ``early stages'' of a country's development will just 
     have to take one for the team. If the poor must wait for the 
     day when free trade will deliver on all of its promises and 
     bring about real improvements in poverty levels and standards 
     of living, as its proponents claim it can do, it seems 
     reasonable to ask that the WTO pause to assess the impact of 
     its policies on those whose destinies are far from assured.

     

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