A report from the World Bank estimates that perhaps 40,000 children under the age of 5 will die and some 10 million more people will be condemned to poverty due to slowing global commerce.
The diminution of trade is being accompanied by falls in many basic commodities that provide income for some of the poorer countries, while energy costs are rising in relative terms.
With so many things going wrong in economies around the world, now is the time to push forward aggressively toward more free trade and open markets to restore economic growth and confidence.
The most obvious forum to initiate such steps is the present WTO meeting in Doha, Qatar.
A deepening of trade liberalization is the best way for emerging market economies to experience an improvement in living standards. This means that poorer countries must be allowed a larger share of the gains from the multilateral liberalization associated with the WTO.
First, there should be an end to the hypocrisy of spokesmen for developed economies that are nothing more than poseurs for free trade.
Among the most grievous offenders are the US and the EU whose policies of subsidies and protection for agriculture do so much harm to poor farmers in the rest of the world. Similarly, restraints on global trade in textiles do grievous harm to producers in emerging market economies.
While mouthing the glories of laissez faire capitalism, protectionist schemes are wantonly invoked to protect private interest that exercise powerful political influence. Although trade barriers imposed by OECD countries are quite low on average, high tariffs are imposed on products such as agriculture and textiles that are important sources of export earnings for emerging market economies.
Tariff barriers on commodities like rice and sugar are largely to blame for the least developed countries having a share of world trade equal to about 0.4 percent. And this result comes despite the fact that classifications by the UN indicate that there are almost 50 "least developed" countries, twice the number in that category 30 years before.
Subsidies paid by rich countries to their farmers amounted to about 37 percent of farm receipts in 1998. Global subsidy payments to farmers are worth at least US$327 billion each year. This means that agricultural subsidies exceed the value of foreign aid offered to poorer countries by a factor of six. With so much spent by these countries each year, the distortion effects upon the global agricultural sector are enormous.
These and similar actions inflict enormous damage on emerging market economies and undermine the credibility of the developing world. It also sullies the name of globalization, leaving it open to derisive condemnation as a farce being foisted off onto an unsuspecting world. Contrary to the mantra of anti-globalist forces, more, not less, globalization would better serve less-developed countries.
Even when goods and capital are allowed to move freely, there are severe restraints on labor mobility. This places a disproportionate burden on poorer countries since labor is often their most abundant resource. By globalizing labor markets, there would be immediate and real gains to citizens of poorer countries who may see globalization as being to their advantage.
Japan, Europe, and the US should open their markets to imports of textiles,agriculture, and steel. At the same time, there should fewer situations allowing the invocation of anti-dumping claims that are often a thinly-veiled attempt to restrict competition.
One fly in the ointment to promote expanded global trade is the insistence by the EU that the WTO undertake negotiations on environmental rules as part of the draft agenda for future negotiations. EU officials have concocted a moral disguise that would deflect negotiations on reducing state supports for farmers.
Most developing countries see negotiations on work standards and environment as stealth protectionism that reduces their ability to compete. The benefits of trade should not be sacrificed on the altar to special-interest groups who either demand explicit protections or implicit ones hidden behind their own chosen social policies.
Of course, US officials are not immune to assuaging domestic constituencies by insisting on inclusion of labor and environmental provisions. Final approval of a US-Jordan free trade area last week was delayed for a year due to environmental and labor provisions. While leaders of developed economies must move towards more free trade, their counterparts in less-developed economies must focus on growth-oriented policies. They need to take steps to reduce trade restrictions while allowing a freer flow of capital so that emerging market economies can experience sustained development.
A precondition for enjoying gains from trade liberalization is good corporate and political governance. Many poor countries suffer from faulty policies that lead to self-imposed limits in accessing global financial markets or that frighten off domestic and foreign investors.
Many emerging market economies, particularly those with the worst performance, are locked in populist daydreams where redistributing income and wealth is their response to poverty. Such leaders seem impervious to the salutary lessons from the experience in East Asia where a commitment to growth-oriented policies led to sharp declines in poverty.
Those countries that are suffering the most do so because their leaders keep them out of the economic mainstream. Much of the misery of the so-called Third World reflects poor governance.
However, misbehavior knows no borders. Japan and the EU have signaled their opposition to liberalizing farm trade at global trade talks of the WTO. Proposals include a thinly-veiled form of protectionism to allow restricting imports on the basis of "implied" damage to the environment without requiring supportive scientific evidence.
In pursuing this general course of action, they deserve the same criticism raised against the Bush Administration when its stand was seen to be against the interests of the global community. In this case, opposing expanded trade willfully ignores the damage caused by government interventions in the agriculture sector.
Christopher Lingle is Global Strategist for eConoLytics.com and a member of the Korea Times' economic editorial board.
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