The following article was submitted by Gregory H. Pejic, a CFACT student who recently returned from the WTO Ministerial meeting, held in December in Hong Kong. Pejic attended the meeting as a press representative for CFACT’s “Just the Facts” radio show, a daily news commentary that airs on over 125 radio stations nationwide. He covered events inside the Convention Center – including press conferences given by the Office of the United States Trade Representative (USTR), ceremonial events for the WTO, and various meetings of WTO delegates – as well as outside the Hong Kong Convention Center, covering the NGO demonstrations and antics of anti-WTO protesters.
Mr. Pejic has been following developments surrounding the WTO negotiations ever since he first participated in a CFACT sponsored trip tothe WTO Ministerial meeting in Cancun, Mexico in 2003. He is currently completing his final year of graduate school at Pepperdine University where he will receive his Masters in Public Policy this spring.
“The surest path to greater wealth is greater trade”.
– President George W. Bush in his speech before the United Nations, September 14, 2005
The World Trade Organization recently held its 6th Ministerial Conference in Hong Kong in December in an effort to complete the pending Doha Development Agenda (DDA). The DDA was an agreement which was hammered out in Doha, Qatar in 2001 where trade ministers agreed to adopt some 50 decisions clarifying the obligations of developing country member governments with respect to issues such as agriculture, subsidies, textiles and trade-related investment measures, among others. The WTO, of course, has as its mission the advancement of free trade and serves as a forum for nations to negotiate trade agreements and settle trade disputes. This latest trade round, which began one month after the terror strikes on America, seeks to address trade liberalization for developing countries in an effort to demonstrate a global commitment to open markets and free trade. Agriculture issues, such as tariffs in the developing world and subsidies in the US and EU, have been a fundamental source of conflict in recent years. The December conference in Hong Kong proved to be no exception.
 Pepperdine’s Gregory Pejic reports on WTO conference for CFACT’s “Just the Facts” radio commentary..  Gregory Pejic with Ambassador Susan Schwab, Deputy U.S. Trade Negotiator  Protest scenes from around the conference center  Protest scenes from around the conference center  Protest scenes from around the conference center  “Freedom to Trade” demonstration to symbolize breaking down walls of trade barriers.  > (Left to Right): Gregory Pejic, Alan Oxley (chairman of World Growth), Barun Mitra (Liberty Institute) |
Also present, as has been the case ever since the Seattle WTO meeting in 1999, were large numbers of anti-globalization protestors. The protests in the streets of Hong Kong Island were numerous and grew in intensity as the week-long meeting came to an end. Protesters consisted mainly of migrant farmers in developing Asia as well as young westerners who opposed the type of trade liberalization being fostered by the WTO. As usual, these groups thought of interesting ways to gain media attention. For instance, a group of Korean farmers gained notoriety by collectively jumping in Victoria Harbor and swimming to the Convention Center in a dynamic yet failed effort to be heard by the WTO delegates. These groups often clashed with Hong Kong’s riot police, resulting in pepper spray, fires, and flying projectiles.
While anti-globalization protesters and non-governmental organizations (NGOs) such as Greenpeace, Doctors Without Borders, Friends of the Earth, and Oxfam received significant media attention for their collective effort to thwart negotiations in the Hong Kong Convention Center, pro-trade organizations from the opposite perspective also made their voices heard. These groups included the newly formed research organization World Growth and the Global Freedom to Trade (F2T) Coalition.
These pro-trade NGOs also conducted unique demonstrations, but were clearly more peaceful. The F2T Coalition, for instance, built a wall dressed in chains to symbolize barriers to trade, which they maintain confines many to poverty. The group concluded its presentation by breaking the chains and tearing down the wall to symbolize its motto: “Free trade frees people.” Barun Mitra, director of India’s Liberty Institute (a member of F2T) stated, “India stands to gain hugely from liberalization in trade and services. The success of our IT sector demonstrates the huge economic gains that can be had from free trade.” Andrew Shuen of Hong Kong’s Lion Rock Institute, another member of the F2T Coalition, also added, “50 years ago Hong Kong was an impoverished fishing village. Today, it is Asia’s richest city. This amazing transformation has been made possible through unilateral free trade.”
A new pro-trade NGO likewise made an impact inside the halls of the convention center. World Growth, co-founded by Alan Oxley and Henrik Rasmussen, held a variety of meetings including: “Getting the WTO Back on Track” and “Prioritizing China at the WTO.” Oxley, a former Chairman of the GATT Council, opined that anti-trade voices “object to the idea of free trade and have resentment towards the prosperity which the free market system has generated. Their aim is to demonize and weaken the WTO.” The WTO was established for the primary purpose of facilitating international trade, he maintained, and anti-trade NGOs disingenuously attempt to incorporate other issues into the WTO such as the environment, labor, and medicine in an effort to discredit the purpose of the WTO.
The new U.S. Trade Representative (USTR), former Congressman Rob Portman, earned much respect overseas for his negotiating skills, which often took him late into the night. Nevertheless, Portman will have trouble convincing his former colleagues in Congress to go along with the deal as it now stands. Portman’s achievements, however modest and lacking from the initial goals of abolishing all western farm subsidies, will have to overcome a hurdle of little political opposition in the United States. He committed the U.S. to accelerating reductions in cotton subsidies, allowing duty-free imports such as sugar and textiles from developing nations, and reworking U.S. food aid programs. Chairman of the Senate Committee on Finance, Chuck Grassley (R-IA), stated “Without market access for U.S. farmers, manufacturers, and service providers, there won’t be a final agreement in the round.” Portman, however, predicted that by the time the final agreement comes to Congress for approval, it will include new export opportunities for American farmers and companies. Even generally anti-trade and specifically anti-technology NGOs such as the Institute for Agriculture and Trade Policy have condemned the final Hong Kong deal as a purely face-saving exercise, lacking in real change or progress. After the failures in Seattle and Cancun, trade ministers have conceded substantial development in exchange for positive media.
Deputy USTR Susan Schwab said, “We’ve laid the groundwork for what could be, what we hope will be, what we anticipate will be a highly successful negotiation with successes in, among other areas, market access, in agriculture, in services, and in manufactured goods.”
The only way to significantly reduce global poverty is to increase growth in developing countries. Massive trade barriers such as tariffs and subsidies impede growth and it is the anti-trade NGOs that seek to sustain the status quo in terms of trade walls. Unfortunately, the WTO has been successfully lobbied by these groups to regulate and manage trade rather than promote trade liberalization as it was originally mandated.
With the DDA scheduled to conclude by the end of 2006, it appears that no serious achievements will be made in time. The EU’s failure to make any serious concessions regarding its agricultural protections removes it from being a serious leader in the cause of trade liberalization for the remainder of the round. Leaders in developing nations have also failed by continuing both strong regional and international trade barriers, a policy that will only hurt their countries and their peoples.
Hong Kong resulted in a lackluster 2013 deadline for developed countries to end agriculture subsidies, an agreement that European leaders are already denouncing. Moreover, this settlement doesn’t even address the main hindrance to economic growth: tariffs in the developing world. There is a moral imperative to eliminating barriers to trade. Only the economically well off in both the developing and developed world gain from trade barriers. As Adam Smith rightly observed, voluntary trade is a morally sound practice whether it is local, national, or international. It grants people the opportunity to specialize in the production of goods and services for which they are most qualified to produce. Trade liberalization, if it should ever come to be realized, will benefit the poor by lowering costs of consumer goods, augmenting opportunities for employment, and providing greater freedom for entrepreneurs.