Rhetoric and Reality About Free Trade
is illuminating to observe the U.S. propaganda machine in action
here in Jamaica to see just how shallow is the facade this critique
is up against. On successive weeks during the past month, U.S. Ambassador
Sue Cobb and U.S. Deputy Chief of Mission Richard Smyth contributed
articles to Jamaicas two national newspapers (the Observer
and the Gleaner) attempting to sell the merits of free trade
and the FTAA to Jamaicans.
Jamaica, trade liberalizationbegun by a harsh dose of structural
adjustmentis in the process of overwhelming the agricultural
and manufacturing sectors under a torrent of cheap imports. Comparative
advantage here, as throughout the region, has been perilously staked
on the tourism sector (and, in the shadow economy, on drug transshipment),
while a massive debt burden (after more than two decades of intensive
adjustment, debt payments now consume nearly two-thirds of the governments
budget) and an ever-growing trade deficit (Jamaica imports more
than twice what it exports) are financed largely by more borrowing,
combined with remittances from Jamaicans abroad.
and business leaders alike have recently conceded that freer
trade presents few evident opportunities for Jamaican farmers and
manufacturers. On the other hand, it promises intensified competition
against much bigger producers, competition that is fast making productive
enterprise redundant. Productive investment continues to shrink,
with capital increasingly concentrated in retail trade (dealing
in imports), the financial sector, and expanding a servile tourism
product. Historically, massive and expanding inequities, an increasingly
atomized social ethos, persistently high unemployment, and the lack
of opportunities have all fueled a social implosion that is most
evident in Jamaicas capital city, Kingston, which now ranks
as one of the worlds most violent.
economic climate is such that the majority of Jamaicans now frame
opportunity in terms of migration: a poll last year found that roughly
two-thirds would leave immediately, if given the chance. One of
the governments key objectives for future trade negotiations
is to maintain or expand the migration options of its labor, both
skilled and unskilled.
this backdrop comes the drivel of Cobb and Smyth, preaching that
even more free trade is the answer to Jamaicas development
predicament. Cobb begins by asserting, Among the many myths
and misconceptions surrounding free trade and developing countries,
perhaps the most common is that trade hurts poorer countries and
slows development, a view that could not be farther
from the truth. Rather, she explains, free trade is
a powerful force for development. Development, according to
Cobb, is not exclusively, or even primarily, an economic concept.
Rather, it is about creating conditions that make individuals free
to realize their God-given potential. Two rhetorical steps
andpooffree trade is linked to our potential for self-actualization.
tries to dispel any fears that might be associated with globalization,
making an even more preposterous stretch than Cobb. Invoking the
great Jamaican orator, Marcus Garvey, Smyth states bluntly: Thats
globalization. Another great Jamaican icon, Bob Marley, is
said to be the Bill Gates of the music world. This is Globalization
too. Globalization, according to Smyth, is not a goal.
It is a fact, a benign or beneficial exchange between cultures.
With that, the deeply ideological assumptions and institutions structuring
Cobb and Smyth present Bushs reasoning: A
world where some live in comfort and plenty, while half the human
race lives on less than $2 a day, is neither just nor stableas
assurance that Americas goal is that every country has
a growing and stable economy where the benefits of development are
benevolence can be further seen, according to Cobb, by the fact
that U.S. imports create jobs and support families around
the world. So while decisive U.S.-support for U.S.-based multinational
Chiquita in the WTO banana dispute in the 1990s brought the looming
collapse of the banana industry here, as throughout the Caribbean
(not mentioned by either Cobb or Smyth), it is comforting to be
reminded of Americas noble, selfless motives in pursuing free
trade is then clearly shown to have a positive relationship
with economic growth in several studies by the World Bank,
since liberalization promises investment and technological innovation,
and competition improves efficiency. Both point to another
recent study (but not its source) that reveals a simple formula
for success: increasing the ratio of trade to GDP by 1 percentage
point raises income per capita by 1.5 to 2 percent, and (lest
we worry about the maldistribution associated with liberalizing
growth) this increase in average incomes is generally associated
with higher incomes for the poor. According to Cobb: The
facts are clear [though none are presented]developing countries
that adopt open trading systems see large drops in the absolute
poverty level. Smyth states, also without any evidence, that
despite some painful adjustments NAFTA was very
positive for the U.S., Canada, and Mexico.
only does the FTAA promise to bring growth and hence the means
to improve education and social services throughout the Americas,
according to Cobb and Smyth it also promises to serve as a bastion
for democracy. Cobb explains American reasoning: The U.S.
has made negotiation of the FTAA the centerpiece of our hemispheric
trade policy, because we are confident that trade liberalization
will increase the economic well-being of countries in the region
and promote political systems that are open, democratic, inclusive
and accountable. Though Smyth uses Chiles free
trading policies as a model, it somehow eludes mention that
they were established under a brutal dictatorship.
commitment to democracy is further reflected in the nature of negotiations,
according to Cobb. Although she concedes that there was a
time when trade agreements were negotiated in smoke-filled
rooms with little if any public attention, Cobb insists
that those days…are past, as the events in Seattle
taught the powers that be a lesson about the importance of
broad consultations and maintaining high level transparency.
To top it all off, assurance is given that the U.S. embassy and
USAID will help Jamaica prepare for upcoming trade negotiations
and that they are extremely pleased to be a part of the development
process in Jamaica given their excellent historic
relationship (Kissingers destabilization of Michael Manley
in the mid-1970s is not noted here).
all of the grand theorizing, universalizing assumptions, and sweeping
generalizations, not a single reference is made in either article
to how freer trade relates to actual Jamaican realities, though
it is stated that the U.S. is committed to offering smaller nations
differential treatment. But just in case Jamaicans werent
convinced by all this hollow propaganda, Smyth concludes by telling
them that they dont have a choice anyway: Free trade
is coming. The train is leaving the station…. There is no turning
back. The winners will be those who embrace the inevitable and prepare
for the opportunities and challenges of open markets in the hemisphere.
I fear for the success of the others.
is good to know that little things like scale, technology, and access
to capital dont factor into the challenge of competing in
open markets. Z
Weis is a PhD candidate at Queens University (Canada). His
research focuses on trade liberalization and agrarian restructuring