Patel is a fourth-year business economics student.
By Nihar Patel
The principle culprits in Justin Levi’s column,
“Eliminating economic barriers benefits all involved”
(Daily Bruin, Viewpoint, November 15) are those who oppose and
protest against organizations such as the World Trade Organization,
and legislation like the North American Free Trade Agreement. Aside
from chalking up the dissent of these protesters to a “lack
of intelligence,” Levi’s comments display an inadequate
knowledge of the issue.
First, to the issue of the WTO. Levi is correct in saying that
it is not within the organization’s power to enact
regulation. They are, however, the only body of international
government officials that influences free trade. They do not just
sit around “discussing global economy policy” as Levi
suggests; in fact, they draft the contracts and agreements that are
ratified between nations.
What sort of agreements do they draft? The sort that in effect
legitimizes nations without child labor, environmental protection
or even minimum wage laws. A truly democratic and egalitarian trade
organization would forbid countries that do not conform to a
certain standard of labor and environmental control from
participating in free trade.
The conflicting parties in this situation are oppressed workers
and multi-national corporations. Are these workers oppressed
because of bad government? Why don’t these governments do
anything to help their impoverished? Is it because corporate
handouts perpetuate corruption? Well, if you believe that a greedy
public official in Thailand will not be bribed by a corporation and
fail to push for a minimum wage, then you are naive.
Illustration by RODERICK ROXAS/Daily Bruin There is no
regulating body to prevent corruption. From Phnom Penh to
Washington D.C., it’s called lobbying, and if it happens on
Capitol Hill, it happens all across the world. Even the WTO can be
lobbied successfully by corporations.
The free trade debate is much similar to the antitrust and labor
struggles of the early 1900s, except now the rights violations
occur on a global scale. Back then, laborers were exploited and the
people who benefited the most ““ including Rockefeller, Morgan
and Vanderbilt ““ did everything to push for deregulation.
Fair labor protests were suppressed then and they are being
suppressed now. But thanks to a government that decided to
intervene, labor unions, child labor laws and a bevy of minimum
standards were enforced. Occupational safety and worker rights
legislation was also adopted.
Levi’s analogy of Bruinia and Trojania is inappropriate.
In his column, Levi creates a scenario in which two assumably
equal-trading partners mutually benefit from free trade. The issue,
however, is not about two fictional places; rather, it is about a
superpower and a developing country, America and the Third
World.
Levi starts by making the assumption that the average worker,
who is “not struggling to survive,” benefits from any
form of free trade. But in developing nations, nobody is above
struggling to survive because there is no middle class and no
average worker. Such an assumption about the average worker might
be pertinent in examining trade between Japan and the United States
but the lack of a middle class is prevalent throughout the Third
World.
Earlier in his column, Levi even says that there are
“thousands if not millions of out-of-work laborers”
trying to feed their families. Why not use them as the example of
the people most affected by free trade instead of the average
worker? Why not use Malaysia and the United States, not Bruinia or
Trojania? The truth is, these millions remain in a system of
poverty as a direct result of free trade.
Another of the “lack of intelligence” crowd who Levi
mentions is Ralph Nader. In fact, Nader is behind a domestic and
international push for a living wage, which in this country would
be more than the minimum wage, and in other countries, is what is
required to live above the poverty line.
What’s wrong with forcing corporations to pay a wage that
raises the standard of living? This theory has worked in isolated
situations, such as in Baltimore, Maryland; why not support
anti-poverty practices universally? Corporations should pay a wage
that is based on what the labor is worth, not pennies on the
dollar.
In a later argument, Levi seems like he supports a living wage.
He uses the example of how a population can rise up by voting
corrupt officials out of office, thanks to the disposable income
they gain from the wages that benevolent corporations pay out. This
argument is also flawed. If the majority of these workers, as is
the case, are paid below what it takes to live above the poverty
line, you will have no leverage over anyone. Disposable income is
what you are left with after you pay for the necessities of
life.
If you think that sweatshop workers will spend their imaginary
disposable income on blue jeans, Ford Explorers and their free time
on social change, then I’ll buy you a first class plane
ticket to Kuala Lumpur.
I agree that with increased income comes more education. In this
country, there is a positive correlation between income and voter
registration as well. But corporations do not promote literacy or
develop schools in communities abroad. They only pretend to do it
here for reasons like public image and enforced government
regulation. Promoting literacy and education would eventually lead
to an end to the cheap, manual labor these corporations currently
rely on. That’s not only economic theory, that’s common
sense.
Which brings me to NAFTA. While both sides argue over the
economic success of the legislation, what is clear is the
significant environmental damage done because of non-existent
environmental regulations in Mexico.
Any environmentalist will tell you that free trade harms the
environment. Ask Union Carbide to tell you about the slap on the
wrist they received for the massive chemical leak in Bhopal, India
that killed thousands and left a chemical wasteland that to this
day, more than 15 years later, has not been completely cleaned
up.
Levi not only fails to address the environmental ramifications
of free trade, but even asserts that NAFTA economically empowered
the Mexican population to vote their corrupt president out of
office. Levi fails to include that this same president signed NAFTA
into law at a landmark summit with President Clinton. Did he, in
effect, knowingly oust himself?
Lionizing NAFTA as the trumpeter of democracy in Mexico shows an
ahistorical understanding of our neighbor. For more than a decade,
Mexico has developed a comparatively educated middle class. They
are the ones who voted, not the poorly educated peasants with their
disposable incomes. Decades of election fraud and assassinations of
candidates backed by the public, finally drew voters to support
someone in mass numbers. NAFTA has done little to close the income
gap in Mexico, just like it has failed to close it here.
Do the impoverished people vote proportionately in America? What
makes you think a substandard wage will make them vote in
Mexico?
Who benefits from NAFTA and the WTO? The answer is plain and
simple: companies searching to cut costs and stockholders looking
for higher capital gains. Under the auspices of words like
“growth” and “free” and other appeasing
terms, free trade is a shield for corporations looking to stretch
their bottom line.
To evaluate the success and effects of the WTO and NAFTA, broad
economic indicators are a poor barometer. Evaluating these two,
purely on economy, is putting yourself in a vacuum, which is naive,
myopic and lacks critical analysis.