New Frontiers in Free Trade: Globalization's Future and Asia's Rising Role

New Frontiers in Free Trade: Globalization's Future and Asia's Rising Role

by Razeen Sally
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ISBN-10:
1933995211
ISBN-13:
9781933995212
Pub. Date:
09/25/2008
Publisher:
Cato Institute
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Overview

New Frontiers in Free Trade: Globalization's Future and Asia's Rising Role

Razeen Sally argues forcefully that international trade policy has lost its way. Trade policy has become disconnected from 21st century business and consumer realities. The World Trade Organization and free trade agreements have outdated negotiating models and yield diminishing returns. The world's fastest growing economies are those in Asia that have embraced freer trade and global integration unilaterally, without waiting for trade negotiations. Hence, the priority should be bottom-up unilateral liberalization, with China's opening to the world economy leading the way and setting the example for others in Asia and beyond. Liberalization should now focus more on domestic regulatory barriers. The post-Doha WTO will still be important, but more as a forum for strengthening trade rules than for driving further liberalization. The biggest danger, though, is complacency and reform fatigue, which threatens to halt globalization's advance. Sally makes a vigorous case for the benefits of free trade and provides a penetrating analysis of the dangers confronting the world trading system. Inspired by the precepts of Adam Smith and David Hume, he sets out practical prescriptions for getting trade policy back on the rails as part of a refreshed agenda for freer trade and freer markets that is relevant to the rise of Asia and 21st century globalization. Informative; well-argued; and, above all, highly readable, this book is a stimulating contribution to the emerging debate on where trade policy should go in the post-Doha world.

Product Details

ISBN-13: 9781933995212
Publisher: Cato Institute
Publication date: 09/25/2008
Edition description: New Edition
Pages: 124
Product dimensions: 6.20(w) x 9.00(h) x 0.90(d)

Table of Contents

Contents

1. A Short Introduction....................1
2. Free Trade vs. Protection....................5
3. The Political Economy of Trade....................21
4. The World Trade Organization....................57
5. Preferential Trade Agreements....................73
6. Asia, China, and Unilateral Liberalization....................91
7. Conclusion: The Future of Free Trade....................115
Notes....................135
Index....................145

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New Frontiers in Free Trade: Globalization's Future and Asia's Rising Role 1 out of 5 based on 0 ratings. 1 reviews.
Willp More than 1 year ago
Trade liberalisation brings job losses and deindustrialisation. As World Bank economists have admitted, "during periods of trade liberalization ... job destruction rates can be expected to proceed at a much faster pace than job creation. Globalization could therefore be associated with higher unemployment rates." Again, the OECD has admitted that "foreign competition reduces employment in the most exposed industries" in its 30 member countries. Due to trade liberalisation, Latin America lost more than 10 million jobs during the 1990s. In Mexico, according to the World Bank, a tariff reduction of 20 percentage points reduced real wages by 5-6%. In Africa's manufacturing sector, employment decreased by 0.5% per year from 1981 to 1990 and real wages fell sharply throughout the 1980s. The share of manufacturing in the economy stagnated or declined in 18 of the 24 countries that underwent IMF and World Bank structural adjustment programmes between 1982 and 1988. In Kenya, full-scale trade liberalisation in 1993 caused huge job losses and a fall in total manufacturing employment. Overall, Kenya's manufacturing employment grew much faster in the 1970s, a decade of import-substituting industrialisation and significant government intervention in economic management, than in the 1980s and 1990s, the two 'lost decades' of structural adjustment programmes and trade liberalisation. In Zimbabwe, an increase in manufacturing output of 39%, in the decade before reforms, turned into a contraction of 14% in the first three years after reforms. Real earnings had increased by 1.2% per year in the five years before reforms but fell by 9.9% per year in the five years after reforms. Unemployment in the EU rose to 7.6% in January 2009 - a total of 18.4 million people. Unemployment rates are particularly high for young people (more than one in seven of those aged under 25) and higher for women than men. The EU admits that trade liberalisation has caused 'large-scale redundancies' and a 'decline [in] employment terms and conditions' in the EU. In central and eastern European countries (in particular, the Czech Republic, Hungary, Poland, Slovakia and Slovenia), the long-term net effect of exports and imports has been to cut manufacturing wages, suggesting that the integration of these countries into the EU via trade liberalisation has been at the expense of labour. The EU's 'Global Europe' strategy, strongly supported by Brown, aims for even more trade liberalisation and deregulation. The EU predicts that its proposed Euro-Mediterranean Free Trade Area will destroy 3.4 million industrial jobs in Egypt, Morocco, Algeria, Tunisia, Syria, Jordan and Lebanon. Egypt is expected to lose 1.5 million jobs, Morocco 790,000 and Algeria 620,000. But what is to be done? In 2005, a group of trade union representatives called on WTO members 'to put a moratorium on the present negotiations'. This equals asking capitalists not to act in their own interests! The neoliberal model of free markets and liberalised trade is crumbling in the face of global economic crisis, so we need to replace it with a new way of thinking that prioritises the economic, social, political and environmental rights of people over the profits of transnational capital.