In an open world of choices, a region, a country, a company and an individual need to develop unique competence which nobody else on planet can do better than you. 

A defensible position is one where you and you alone is the most efficient producer.
 

WTO Trade Talks
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WTO's Threat to the Environment

As the protest event in Seattle last week showed, globalization had also given power to interest groups. Over a 1000 environmental groups all over the world linked up to organize the protests in Seattle. Some 50,000 protesters, among them labor leaders, farmers, environmentalists, animal rights activists, patriot militias, communists, chief executives, teachers students and social workers, came from all over the world and protested violently at the WTO meeting. 

They complain that free trade caused job losses, they say no to genetically modified food. The pollution of the environment, threat to wildlife and disruption of rural culture and farm life are too big a price to pay. The violence and anarchy on the streets of Seattle disrupted the trade talks, embarrassed this quiet US city and made all, trade negotiators, world leaders and city security personnel sleepless in Seattle. 

Why are people so angry?

This beautiful Pacific City is known to the world for two of America’s anchor export industries; Boeing and Microsoft. Recently Seattle-originated fancy coffee Starbucks has also made its global debut, and popularly received. The Hollywood movie “Sleepless in Seattle” featuring Hom Hanks and Meg Ryan made Seattle stands out on the world map. But the world’s image of Seattle took a drastic turn last week. A “mad river of people floods the streets of Seattle.” 

First, they were peaceful and then turned so violent that a curfew has to be imposed in the downtown area to restore order. The Los Angeles Times described the mob as,”not since the days of the Vietnam War and the Civil rights movement has the entire downtown core of a major American city been seized by popular uprising; rarely has so diverse an array of groups liked elbows against a common enemy, in this case the faceless forces of globalization.”

Why are the protesters so angry? What are the protesters angry about? Are they protesting against Free Trade or are they protesting against the WTO? What is that one issue that could unite such a diverse array of people from different parts of the world? And turn them violent. 

How should we trade?

The demonstrators felt that the rules of the game for trade are written by governments with the lobby of big businesses, sideling the common man’s interests.  As trade and investment races through the world aided by electronic networks, the concerns for their damages are mounting. 

Rapid globalization is giving rise to a new world order; jobs go to where they are most efficiently done, causing loss of jobs in localities, which can not changed in time. The profit maximization ethos mindlessly exploits the environment to its fullest, such as intensive farming using chemicals, causing water pollution and depletion of topsoil. Quick profit has no regard for the world’s wildlife; such as shrimp fishing using nets that turtles can’t escape. Opening of agriculture markets destroys the rural economy and threatens traditional lifestyle. 

They wanted the WTO to rethink, include their views and highlighted the need to reform the WTO’s procedures and values. Admittedly, the world has been excited, maybe carried away, with the promise of globalization, and the WTO has been too insular, displayed too little sensitivity for issues like workers rights and the environment and that its secretive procedures undermine public trust.  Many of the demonstrators charged that the WTO tilts in favor of corporations, and much of its business is done behind closed doors. 

The WTO is a government to government organization and the agreements of the WTO are between governments. Many critics complain that decisions on standards or new regulations are often announced without dialogues with environmental or other groups. Many of the left-of-center demonstrators described the “WTO as nothing less than a cabal of the world’s elite that they said worked intimately with corporations to make pro-business decisions while keeping the public in the dark.” 

The Seattle message is: Free Trade is fine, but we must be heard. Their concerns of job losses, farm life destroyed, sea turtles endangered, air pollution are concerns merit attention. The protesters are saying, “globalization can not be taken for granted, no matter how much prosperity it promises.”

Please slow down

Nobody could deny the benefits of trade and investment brought by globalization. Up till the financial crisis, Asia as a whole and Malaysia in particular have been the biggest beneficiary of world trade and foreign investment. Economies with lower cost of production attracted multi nationals to set up shop, created jobs for the locals, transferred skills and brought market for the products manufactured there. 

Globalization is also a tool to modernize home economies. When governments fail to reform inefficiencies in the system, they invite competition from outside, hoping to bust vested interest and bring good practices from beyond. Thus achieved higher efficiency and productivity of resources. Consumers benefit by better and cheaper products. All these are well and good if change can proceed at an acceptable pace, where people are retrained, environmental balance is taken care of. 

Judging by the protests all over the world, the rate of globalization may be going too rapid; causing massive disruptions to domestic institutions, threatening traditional cultures and ways. In Asia, global financial markets exposed vulnerable national banking systems ran by close government and business collaboration.  When imports become better and cheaper, especially in agriculture produce, farmers suffered. Australian citrus and Malaysian vegetable farmers have protested against imports. 

When work become mobile and travel to places where they can be done most efficiently, prosperity of local towns suffered. Like US cities losing jobs to software engineers in Bengalore or Manila. Critics charge that globalization has pushed up the Dow Jones Index, and awarded CEOs of multinational companies with obscene pay packages, but millions of people are falling through the cracks. Can we slow down the opening up, especially now the global economy has a real time electronic network wrap around it?
 

Can WTO be world government?

The protesters want to be co-opted into the rule making process. But that begs the question: is WTO the right vehicle to set the rules –labor and environmental rules. Realistically can WTO achieve these goals? 

In reality, every country and company that has improved its labor, legal and environmental standards has done so because of more global trade, more integration, more Internet – not less. These have proven to be the best tools to improve global governance. 

Companies are also paying attention to the environment. Who are the top environmental advisers to DuPont today? It is Paul Gilding, the former head of Greenpeace. Businesses have learnt that they can not ignore their raison d^tre, they are there to serve consumers. When DuPont wanted to put a chemical factory in a city, it knew it just had to persuade the local neighbors.

New York Times columnist Thomas Friedman observed, “Now we have 6 billion neighbor. Du Ponts knows hat in a world without walls if it wants to put up a chemical plant in a country every environmentalist is watching. And if that factory makes even a tiny spill, those environmentalists will put it on the World Wide Web and soil DuPont’s name from one end of the earth to the other.” 

Farms preserve our soul?

A huge point of contention among Europeans, Japanese and South Koreans is  farm produce. When imports from large agricultural countries squeezed local farmers out of the market, as in the case of rice farmers in Japan and grain farmers in Europe, they destroyed the rural economy and farm life.

Apart from producing food, farming and rural life are important to society. They support the urban centers; farms preserve the community’s connection with the land, its link with the past; a kind of soul and spiritual anchors for rapidly industrializing societies. Farm life and rural economy must be carefully preserved and integrated. 

These considerations thus make opening up a country a tricky balancing act. How fast to open, which sectors to open to achieve optimal benefits. This has to be a joint exercise between labor, businesses and governments, debated and decided in the open.. Malaysia as a trading nation has benefited from open markets. When the effects of open trade fully kicks in, our own local businesses and farmers will be greatly affected. There is limit the government can continue with subsidies and protectionism. 

The protests in Seattle are sending us a strong message to Kuala Lumpur. In an open world of choices, a region, a country, a company and an individual need to develop unique competence which nobody else on planet can do better than you. A defensible position is one where you and you alone is the most efficient producer.

The gains of globalization are real and must be encouraged. Its spread around the world is also unstoppable. We can only adjust by changing our own paradigms, and we must begin debating them openly today.
 

Kuala Lumpur, December 6, 1999

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