Free trade not set up for fair trade

Globalization, often referred to as “Americanization,” has spread to all corners of the world. To come close to finding a village that has not been influenced by the outside world you would have to travel deep into the Amazon Basin; even there, you will most likely be offered a Coke.

Is this phenomenon a good thing? In some ways, yes it is. Vietnam’s economy has grown significantly since Nike, North Face, and other large corporations have built factories inside their borders. Many Vietnamese have high-paying jobs (according to their standards) thanks to this new job market. On the other hand, globalization can be seen in a negative light. Yes, these new factories are creating jobs, but is it ethical for American companies to exploit the people of Vietnam for cheap labor, especially when there are more than 8 million Americans who are unemployed?

The issues surrounding globalization are controversial, but no matter how much people protest against outsourcing, companies will still go wherever they can make the biggest profit. I am not concerned so much with the process of globalization; it is inevitable. Instead, I am concerned about how it is being controlled unfairly by international institutions that are run solely by developed nations, e.g., the United States.

Globalization is the new world system that replaced the Cold War era. The driving force behind this new system is free-market capitalism. The world has become a global market open to anyone. It is just as easy to trade with someone halfway around the world as with someone in the same village. Is this principle of free trade as the organizing principle of the global trading system actually free? It is definitely not fair.

In Thomas Friedman’s book “The Lexus and the Olive Tree,” he describes the phenomenon of globalization as a winner-take-all system where the gap is widening between the “haves” and the “have nots.” For individuals and countries, the rich are getting richer, the poor poorer. Instead of leveling the playing field, globalization has made the whole world America’s playing field. The rules around opening, deregulating and privatizing a nation’s economy in order to make it competitive in this free market system benefit the powerful while more rules and structures are hurting the South. The World Bank, the International Monetary Fund, and the World Trade Organization, all powered by Western nations, are deeply biased against the development of the South.

To think they care about the development of the southern nations is simply utopian thinking. Trade-related intellectual property rights, or TRIPs, is one area where there is a double standard in the General Agreement on Tariffs and Trade and the WTO. While it pushes free trade on the South, it actually promotes monopoly in the North. TRIPs, aka biopiracy, pose a huge threat to the Third World agrarian community. A U.S. corporation or individual has the power to collect a plant found naturally in a developing country, slightly modify it or isolate a gene, patent a new plant variety and appropriate all financial benefits while the country the plant originates from does not get a cent.

The Agreement on Agriculture was an agreement negotiated by the U.S. and Great Britain in the early ’90s that also carries a double standard. Although on the surface it was intended to regulate the condition of monopolistic competition, both countries were getting a little extra in the deal for themselves. One of the provisions was a reduction in subsidies and tariffs. However, the guidelines were complex and misleading. The subsidy and tariff reduction required for each member country and the time period allotted for the reduction varied so drastically that in fact it allowed the United States to raise its simple average tariff significantly during the first years the AOA was implemented.

The WTO is not democratic – it is oligarchic. It works by a consensus arrangement managed by the U.S., Japan, the EU, Japan and Canada. The big trading powers make all the decisions that assure the hegemony of the North. Instead of supporting policies that help farmers survive, the WTO rules are driving small farmers to extinction. In an epidemic of suicides in the Warangal district of India, more than 500 farmers took their own lives in 1998. They saw no other way out from this trap.

I am disturbed by lyrics from a John Mayer song that say, “Now we see everything that’s going wrong, with the world and those who lead it, we just feel like we don’t have the means, to rise above and beat it, so we keep waiting, waiting on the world to change.” But we cannot sit back, waiting and doing nothing. The world will not change on its own. For the good of all nations, we have to put a stop to this vicious cycle now.

Erin Shedd of Lincoln is a political science major at Providence College.