Posts Tagged ‘WTO’

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The WTO clubs baby seals?

March 28, 2011

That’s a headline you might expect to see at FreeTradeKillsAnimals.org in the very near future. The WTO has just established three panels addressing complaints from Canada and Norway regarding the European Union’s recent decision (plus older regulations in Belgium and the Netherlands) to ban imports of seal pelts due to “the concerns expressed by EU citizens about seal products from hunts which involve shooting seals and clubbing them to death.” In non-trade-wonk language, Canada and Norway are asking the WTO to strike down the EU ban on seal products.

Canada’s request for the establishment of a panel claims that the EU regulations violate its obligations under the GATT and TBT agreements, and describes the issue thusly:

The European Union trade ban prohibits the importation and the placing on the market for sale in the European Union customs territory of any seal product except: (a) those derived from hunts traditionally conducted by Inuit and other indigenous communities, which contribute to their subsistence; and (b) those that are by-products of a hunt regulated by national law and with the sole purpose of sustainable management of marine resources. In addition, seal products for personal use may be imported but may not be placed on the market. The effect of the trade ban, in combination with the implementing measure, is to restrict virtually all trade in seal products within the European Union, and in particular with respect to seal products of Canadian origin.

If the WTO rules against the EU, it will be yet another case of a democratically established regulation intended to protect the environment being overturned in favor of an ideal of free-flowing unregulated commerce. Canada’s case will likely be that its seal-product export industry is a crucial part of the livelihoods of some of its vulnerable populations, and that the hunting of seals is done in a sustainable manner. The Canadian chapter of the Humane Society International (an organization which, is should be noted, is hardly a reliable opponent of current “free-trade” policies) anticipates these arguments:

National polling consistently shows the overwhelming majority of Canadians want the commercial seal hunt to end, oppose the Canadian government using tax dollars to promote the sealing industry and support the rights of foreign nations to prohibit trade in seal products… Canada’s seal slaughter is conducted by commercial fishermen who earn, on average, less than 5 percent of their annual income from killing seals.

It is worth noting that the U.S. banned the importation of seal products from Canada in 1972’s Marine Mammal Protection Act – yes, the same MMPA that was weakened by the famous GATT tuna-dolphin case. Furthermore, in 2005, a bipartisan resolution was introduced in the Senate calling on Canada to end the commercial hunting of seals.

In sum, Canada’s reaction to international pressure from the EU and the United States regarding its seal-hunting industry is not to eliminate or downside said industry, but instead to defend it using a minimally accountable transnational commercial institution that has historically sided with commercial interests over environmental protection or other sound regulatory measures. This is a rather telling indicator of the power of global commerce over international norms about environmental and consumer protection.

That said, environmental and animal rights organizations tend to have massive clout with American and European publics when they can show that cute furry cuddly things are in danger. And few things are cuter, furrier or cuddlier than baby seals (evidence above courtesy of Google Images). So this is also a golden opportunity for such organizations to raise a stink about the structure of the global economy; whether they are able to take advantage, and how they frame the broader issues at hand, will be very interesting to see.

Flying Whale

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Kevin Gallagher gets it right

January 7, 2011

It should be no surprise that I agree with Kevin Gallagher (Boston University/Tufts Global Development and Environment Institute), but it’s nice to see that he basically echoes what I’ve been saying over the past few posts about the China/WTO/green energy issue: “The US should not try to beat China down, but should pursue its own green jobs policy and reform the WTO, so the rules allow countries to combat climate change.”

Gallagher does seem to be a bit more optimistic about the WTO than I generally am, as he sees potential room for allowing green-energy subsidies to be exempt from WTO disciplines:

…there may be a window at the WTO for subsidies for alternative energy. Developed countries saw to it that the subsidies agreement at the WTO left room to support research and development, regional inequality and environmental protection. This window closed in 2000, but is under review in the (stalled) round of WTO talks, and could be expanded.

I didn’t know this particular tidbit about the subsidies agreement – very interesting. That said, I don’t really think the ideal course of action is to add more exceptions to misguided WTO rules, since, as they say, the exceptions prove the rule.

What I find most interesting in Gallagher’s piece, though, is this quote he pulls from Barack Obama’s The Audacity of Hope:

“Indeed, countries that have successfully developed under the current international system have at times ignored Washington’s rigid economic prescriptions by protecting nascent industries and engaging in aggressive industrial policies.”

Too bad this passage doesn’t much fit with what Obama’s apparent international economic policy has been thus far.

Flying Whale

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CGD’s nonsensical response to the China clean-energy subsidy case

January 5, 2011

It’s not entirely surprising that the folks at the Center for Global Development are about as appalled at this WTO case on Chinese clean-energy subsidies as I am. Unfortunately, the apparent logic behind David Wheeler’s indignation doesn’t make a whole lot of sense. He starts off nicely: “…it’s clear what we have to do now: Subsidize clean power, exploiting scale and learning economies to drive it to cost parity with fossil power as quickly as possible.” And then, after contrasting the Obama approach to this proposed solution, Wheeler gets nice and outraged towards the end:

Think about it: The Obama administration, having defined climate change as a global emergency, has responded to a massive Chinese drive toward cheap clean technology by demanding that they retreat! Mr. President, by the logic of your own rhetoric this is insane, because we’re out of time.

But then he reels off this killer concluding sentence:

Anything that makes renewable energy cheaper, anywhere in the world, should be welcomed without reservation. For trade in clean power technology that means no restrictions: no tariffs, no quotas, no sanctions, no limits of any kind, from now on.

It doesn’t take a genius to sort out that the WTO case against China is probably legitimate because the sort of policies that Wheeler is agitating for – the sort of policies that China is trying to implement – are likely WTO-illegal trade-distorting subsidies. (Important aside: the solution to this should not be to change these subsidies to conform to WTO rules; the solution should be to change the WTO rules!) These days, “no restrictions” on trade sure as hell means no industrial policy. So which does Wheeler really want: the smart industrial policy to promote clean energy that he seems to push for most of his article, or the ideological purity of “free trade” that CGD so frequently advocates, implicitly and explicitly? It’s got to be one or the other – it can’t be both.

Flying Whale

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USTR throws a bone to the Steelworkers

January 3, 2011

By petitioning the U.S. government to sue China at the WTO for its “unfair” clean energy subsidies, the Steelworkers gave the Obama administration the perfect opportunity to appear labor-friendly without actually having to be progressive at all, or challenge any entrenched domestic economic interests. I wrote about this impending disaster a few months ago, and late last month it came to fruition.

The United States on Wednesday accused China of illegally subsidizing the production of wind power equipment and asked for talks at the World Trade Organization, the first step in filing a trade case.

“Import substitution subsidies are particularly harmful and inherently trade distorting, which is why they are expressly prohibited under WTO rules,” Trade Representative Ron Kirk said in a statement. “These subsidies effectively operate as a barrier to U.S. exports to China.”

So not only is this an attack on efforts to move the world towards a greener economy, it’s also a broad attack on industrial policy in general (the sort of broad attack, of course, that is part of what the WTO is designed to do). Even more, it’s a political win for the centrists in the Obama administration, who can now point toward this as a supposedly pro-labor move while they simultaneously push heavy-handedly anti-labor policies like lobbying for the South Korea-U.S. Free Trade Agreement.

Great move, USW!

Flying Whale

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Steelworkers FTW WTF

October 14, 2010

I was in the middle of a busy period of life when a month ago, the Steelworkers submitted a 5,800-page petition urging the Obama administration to file a WTO case again Chinese subsidies for green technologies. I just found out about it today. I got really pissed off.

The way USW is going about this is completely backwards. They’re accusing China of engaging in “illegal practices that stimulate and protect its domestic producers of green technology, ranging from wind and solar energy products to advanced batteries and energy-efficient vehicles.” This is a double whammy. Not only does it reinforce the frame that domestic industrial policy is bad and legitimizes the use of the WTO to attack such policy (and why the hell would USW want to advance that frame?!), it also is a slap in the face for climate activists who would probably like nothing more than to see China, the world’s leading greenhouse gas emitter, invest in developing cleaner technologies.

To add insult to injury, this is all also completely hypocritical, since USW, as a founding member of the Blue-Green Alliance, would love to see massive U.S. investment in the domestic green economy. It’s a classic case of kicking away the ladder: denying developing countries the policy tools we want to be able to use ourselves.

What’s interesting is the Blue-Green Alliance statement on the USW petition. It’s decidedly lukewarm and avoids condemning China as an enemy engaging in “unfair practices.” I wonder what the politics behind the scenes here must have been like. In any case, I suspect this is a more useful position for progressives to adopt:

Today’s Section 301 petition filed by the United Steelworkers underscores the importance that the United States act quickly to take advantage of the job-creating opportunities of the clean energy economy. Every day America delays action is another day that China capitalizes on jobs created in the production of clean energy technologies that could and should be developed, manufactured, and installed in the United States.

This looks pretty different from USW’s condemnation of China using legitimate policy tools to promote their industries. There’s still the requisite vaguely nativist language, but instead of blaming China for doing what we should be doing, it puts the onus on U.S. policymakers to create our own industrial policy for the green economy – WTO legality be damned. This is a useful frame that USW has undermined: instead of thinking about what is and isn’t legal under the messed up WTO rules, we should be thinking about what policy goals we want to work towards, and if the WTO rules need to be changed to allow them, we should campaign for WTO reform.

(As an aside, interestingly, this week the Brookings/AEI green economy proposal came out, and even if it’s not something progressives can get behind, as Dani Rodrik pointed out, if this isn’t an industrial policy proposal, nothing is. And this coming from AEI!)

USW’s is exactly the kind of stance organized labor needs to not be taking in a modern world characterized by increasing interconnectedness and potentially imminent environmental catastrophe. We need a less provincial labor movement and more of a global working class consciousness in order to get anything done. Somewhere, Frances Fox Piven is saying, “I told you so.”

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WTO failing to help the world’s poor, WTO says

October 19, 2009

This is near the top of my to-read list, along with the Stiglitz Commission report on the financial crisis: a joint ILO-WTO report titled “Globalization and Informal Jobs in Developing Countries” (warning: big PDF download). According to this In These Times story, and corroborated by my quick scan of the executive summary, the report concludes that globalization has not helped the bulk of the world’s poor. The research presented here focuses on the creation of informal job sectors in developing countries which are unregulated and contribute little to overall development.

One nice tidbit:

Finally, globalization has added new sources of external economic shocks. For instance, global production chains can transmit macroeconomic and trade shocks through several countries at lightning speed, as observed in the current economic crisis. Moreover, in such circumstances developing countries run the risk of entering a vicious circle of higher rates of informality and rising vulnerability. Countries with larger informal economies experience worse outcomes following adverse shocks. Indeed, estimates suggest that countries with above-average sized informal economies are more than three times as likely to incur the adverse effects of a crisis as those with lower rates of informality.

Addressing informal labor markets is one side of the solution, but I am not convinced that this sentence must be as true as it is today: “globalization has added new sources of external economic shocks.” The aforementioned Stiglitz Commission report discusses how WTO-driven deregulation of financial services has made individual economies more exposed to global shocks. Reverse that trend, give countries more options for protecting (oops, there’s that word) their financial markets, and perhaps economic instability would not be quite so wildfire-like, consuming every country in its path in rapid succession. As long as chains of production are global, economic instability will always be global as well, but it seems to me that we’ve made things much worse than necessary by depriving individual countries of many of the appropriate tools for dealing with or forestalling such instability.

I’m sure I’ll have more intelligent things to say after I’ve actually read both of these papers.

Flying Whale

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Echoes of a bygone era

August 26, 2009

In late September, Pittsburgh will host a G20 summit to follow up on the April summit in London. The Pittsburgh police department is not messing around with this, as they have apparently requested 4,000 extra police officers from across the country to help keep control around this summit. To put that number in perspective, the entire Pittsburgh police force numbers less than 1,000.

Why the crazy paranoia? While Pittsburgh is obviously a blue-collar town with a strong labor tradition, it’s not like Seattle and located near a hotbed of radical/anarchist activity. Are the powers that be worried that the global economic meltdown is actually enraging people enough that a massive police presence will be needed to keep the peace?

The “protest culture” that the 1999 Seattle WTO Ministerial spawned has not had any relevance in the United States since 9/11 (the 2004 FTAA summit in Miami could have been a prominent exception, but it received scant national attention relative to the scale of the chaos actually happening on the ground). The organizing strategies behind the global justice movement changed to fit a new political reality. “Teamsters and turtles” wasn’t just a chant in the streets, it became a real, if usually uneasy, political coalition working against further expansion of the WTO and even more controversial bilateral and regional agreements.

But if people are really on the brink of taking the streets en masse once again, I can’t say I think this is a bad thing. I’ve long thought that there has been far too little outrage in the United States about the global economic crisis. I don’t expect Pittsburgh to be another Seattle in the sense of educating a whole new generation of activists (not even close), but any signs of life on the streets would be welcome.

(An interesting aside: according to that Times article linked above, Seattle’s chief of police during the 1999 protests regrets ordering the use of tear gas, saying it “set the tone of conflict for the rest of the week.”)

Flying Whale