The Bush Gang Does It Again... Protects Big Business From Market Effects

The Awful Effects of American Protectionism: The End of Free Trade

This article is from The New Republic (TNR), which is a e-zine that can't make up its mind whether it is progressive or conservative, Republican or Democrat, intellectual or reactionary, but is occasionally worth the read to stimulate some thought.

With all the hell-in-a-hand-basket headlines coming out of Iraq, Lebanon, and Connecticut, it's easy to understand how the biggest international trade news in years occurred with barely any attention. Late last month, the World Trade Organization's (WTO) Doha Round of negotiations--coined the "development round" for its supposed commitment to making free trade beneficial for developing nations--fell apart after a dispute over agricultural subsidies. This is bad news: While optimists say the round can still be resuscitated, most observers believe it will be at least five years before multilateral talks are back on track.

It is interesting that agricultural subsidies have become a global issue. Here in the US these subsidies, originally intended to aid family and small farm operations, have been supplmenting the income and revenues of many agro-corporations and providing a form of protection from international competition... especially from South American nations that are emerging as major players in agro-business. In many ways the subsidization of larger American agro-business is an extension of the colonial policies and practices effected by the American fruit businesses that were in operation during the late 1800s and the early part of the 20th century. It seems, according to this TNR author, the protectionistic efforts now extend to the agricultural endeavors of Europe and Asia as well.

The Bush administration has been quick to point fingers at Europe, India, and Brazil, but the United States deserves much of the blame. That's because, ever since September 11, the administration has made expanding free trade a key part of its efforts against global instability and extremism. As President Bush said at a recent appearance in Miami, trade talks "have a chance to help lift millions of people out of poverty around the world. ... [O]ur government is strongly committed to a successful outcome of the Doha Round." No wonder, then, that trade observers around the world see in the collapse evidence that the United States has ceded the helm of the global free-trade push. As one columnist wrote in Singapore's Business Times, "The breakdown of the Doha Round of global trade talks is a reflection of the failure of the Bush administration to project U.S. leadership in the geo-economic arena."

I am not sure I follow the line of thinking here. The claim is that the Bush gang is pushing for free trade as a means of interrupting the underlying causes that lead to terrorism... but that the Bush administration has failed to follow through with that effort? How can that be? Dubya claims that he is for free market influences! The Republicans argue against protectionism! The preaching and lecturing coming out of the pulpits in Washington talks about decreasing the barriers to international trade as if it were a new gospel. Even our own ports are up for sale!

Nor does it help that the Doha collapse is only the latest in a string of events this year that seem to point to a surrender of free-trade leadership by Bush. First, the Dubai Ports World imbroglio, then the replacement of Trade Representative Rob Portman with an anonymous functionary. Add to this growing congressional opposition to a series of bilateral trade agreements. And the administration has been helpless to hamper the emergence of regional trading blocs outside the U.S. zone of influence--agreements that, in the absence of further WTO talks, point to a world defined less by global free trade than by a patchwork quilt of (often antagonistic) trade regimes. In other words, the lapse of American trade leadership is pointing us toward an era of greater protectionism, tensions, and global economic instability.

Could it be that other nations have read the writing on the walls and have foreseen the free trade efforts for what they are... advantageous to the US and its friends while not all that useful to those not included in the inner cuircle? Are these nations perceiving that opening their doors means opening the door to investment and control by the rich and powerful rather than there own people? Are they looking west and seeing the corporatism that is underming the bedrock of democracy, while we here at home are lulled into a slumber or distracted by the threat of terrorism so that we do not notice the efforts by the rich and powerful to take control over our lives? We are undergoing a form of corporatism and fascism here in the US that is eroding away our basic principles of freedom, liberty and the very things that have made us the greatest nation in the world.

It wasn't supposed to be this way. As Bush's first trade representative, Robert Zoellick spoke often and eloquently about the need for the United States to take the lead on free trade in order to expand opportunity and the liberal international order--even if that meant making short-term sacrifices at home. "America's trade leadership can build a coalition of countries that cherish liberty in all its aspects," he wrote in The Washington Post on September 20, 2001. "Open markets are vital for developing nations, many of them fragile democracies that rely on the international economy to overcome poverty and create opportunity; we need answers for those who ask for economic hope to counter internal threats to our common values."

We must understand that free trade agreements mean significant sacrifices at home. We have been kowtowing to big business under the flag of Republican and ultra-conservative leadership, lead by the notion that global competition can only be overcome by expanding our influence in the world through corporate expansion into other labor markets (where there are no laws against outright worker exploitation), other consumer markets (like China where there are millions of consumers just waiting to buy stuff), and corporatism can establish control over how "democracy" is spread throughout the world... But what form will this democracy take if only the rich and powerful are allowed to make decisions and pass policy? Capitalism is a tool of democracy, not the its foundation. It seems to me that far too many folks have forgotten that principle.

But the administration never seemed to believe its own rhetoric. Despite its success in winning fast-track powers (in which Congress must vote up or down on trade agreements) and signing a series of regional and bilateral trade agreements, the administration never pushed for the sort of sacrifices at home necessary to bring countries on the free-trade fringe into the fold. The steel tariffs and pork-heavy farm bill of 2002 were only the beginning. Seemingly every year, Bush proposes massive cuts in agriculture subsidies in his budget only to retreat quickly from the ire of lobbyists and farm-state congressmen. These things may not get play in the domestic media--Bush selling out to lobbying interests is a dog-bites-man story--but, internationally, they were taken as a startling retreat from his earlier promises.

The sacrifices that the Bush gang had in mind were sacrifices from the working stiffs and "regular folks," not the big businesses themselves. That is why the Bush gang lost genuine interest in promoting free trade... because the sacrifices called for were from their own financial supporters rather than the rest of us. No American has ever feared making a sacrifice in the name of making our nation safer, more endowed with liberty or more prosperous. Our nation has led the world in accomplishing tasks that were once considered impossible. But we have cast aside our focus on making our nation great, assuring its people a certain quality of life that garnered respect from the rest of the world, empowering others in the world to succeed, and replaced that focus with a latent form of facism that gives more power to corporate big shots than the person casting a vote at the ballot box.

Currently, all three branches of our government are engaged in supporting the transition to corporate facism.

Then there's Doha. While Doha was dubbed "the development round," it quickly became apparent that the United States and Europe were only willing to open their markets in exchange for massive reductions in developing-world trade barriers. Sacrifices were not in the picture, and the talks never really recovered after their temporary breakdown at Cancun in 2003. Despite efforts on both sides to revive them, this impasse continued to define the talks all the way up to this summer, when negotiators gave up in frustration. But, while American officials blamed Europe and Europe blamed the United States, the developing world saw in both a selfish, hypocritical stance that sought only to improve wealthy nations' bottom line. "They say, 'We'll cut 20, and you cut 70'--well, that's not what this round is about," said Kamal Nath, India's commerce and industry minister. Or, as the Guardian wrote, "Protectionism wins the day again."

This paragraph is the affirmation of all my previous comments. Only the poor and the middle classes are supposed to endure sacrifice while the rich and powerful continue to enjoy the process of exploitation. It won't be long before Americans wake up to these issues... and then we will have to decide whether the next revolution will occur at the ballot box or in our streets.

To be fair, Europe probably bears more blame than the United States. The Europeans rely on tariffs and quotas to support their agriculture, while the United States uses subsidies--and, according to the Congressional Budget Office, tariffs and quotas account for 90 percent of the distortions in world agriculture trade. But this is a technical point: No European leader ever bloviated about the importance of free trade in the developing world like Bush.

I am not sure that subsidies are any less malevolent than outright protections provided by tarriffs and quotas. They may be more of a passive means to accomplish the same effect, but they do accomplish they same effect.

Nor did it help that, after the 2004 elections, Bush moved Zoellick to the State Department and replaced him with Representative Rob Portman, who, just 11 months later, moved to the Office of Management and Budget and was replaced by his deputy, Susan Schwab. Few people question Schwab's intelligence or dedication, but she is hardly of Portman's--let alone Zoellick's--diplomatic mettle. A former assistant commerce secretary and academic, she has only a fraction of her predecessors' exposure or prestige. And, in trade diplomacy, those are the relevant factors. As one trade expert told The Journal of Commerce, "When the U.S. pulled Portman ... people thought, 'What kind of message is the U.S. sending to us about Doha?'" Bush may be confident in his personnel decisions, but, for the rest of the world, he seems to be relegating trade to a second-tier priority.

I think thay call this "three-card Monty" on the streets in New York City. It is a rigged shell game that tilts the odds in favor of the folks sponsoring the game... the rich and powerful. The game isn't really a game, because a game has rules that remain consistent and apply to all players... and all the players at the Bush table are not playing by the same rules.

And why do they think that? Bush is seen by many as having given up because the political consequences at home are too great. Consider: the bruising battle over the Central American Free Trade Agreement, the successful opposition to the bid by the China National Offshore Oil Corporation to buy Unocal last year, the Dubai Ports World fight this year, the near-failure of a trade deal with Oman, and the possible failure of a similar deal with Peru. All a consequence of protectionist sentiment in Congress, all instances where Bush's supposed trade leadership was hampered by domestic political concerns. With the midterm elections coming, it's a good bet that Bush doesn't want to hurt his party any more than he already has--and pushing GOP congressmen to back more free-trade efforts would hardly help. This may be no-brainer politics at home, but, to the rest of the world, it is a dismaying retreat.

Has anyone taken notice that everyone is citing the Bush administration for its failures, violation of principles and breach of office?

Without U.S. leadership on free trade and with WTO talks on a long-term hiatus, the world economy is fast-devolving into a panoply of confusing, overlapping trade blocs--what Brazilian Foreign Minister Celso Amorim calls the "law of the jungle." Schwab has indicated that her office is now focused on winning more one-on-one trade deals. The European Union is following her lead, revving up talks with several Asian nations. Such bilateral accords are fine in themselves, but, if they come to define international trade, they are worse than nothing. They create a maze of often-contradictory standards; they allow bigger economies to prey on smaller ones even more easily; and they allow blocs to emerge--like the recently signed "people's trade agreement" among Bolivia, Venezuela, and Cuba--that are potentially antagonistic to U.S. interests. An international trade regime defined by bilateral deals is also likely to exclude the worst-off countries--nations that are included in universal organizations like the WTO but are unattractive partners for one-on-one agreements. These countries, by and large, are also the ones most likely to suffer the social and political ills that Bush's foreign policy are supposed to target--and which an equitable global trade environment could help resolve.

If we're not careful, we might actually end up with what we had before, only the corporations founded and grounded in the United States will no longer be the masters of monopoly.

American protectionists may revel today in Bush's apparent unwillingness to push further on free trade. But a world defined by hostile trading blocs, vast regions of instability, and underdevelopment are in no one's interest. Bush's ultimate failure lies in his inability to make that case at home--and to prove it to the rest of the world.

Free trade agreements have been to date a tool for the rich and powerful. If, however, they were to be approached in a manner consistent with principles of liberty, freedom and justice, we might actually achieve some success that will empower workers, enable fair market policies and practices, and implement justice through the workings of the free marketplaces.

Clay Risen , a former assistant editor at The New Republic, is managing editor of Democracy: A Journal of Ideas.