Lori's Foes Fight Back

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Lori's Foes Fight BackAuthor(s): Maria Livanos Cattaui and Gene GrossmanSource: Foreign Policy, No. 119 (Summer, 2000), pp. 165-167Published by: Washingtonpost.Newsweek Interactive, LLCStable URL: http://www.jstor.org/stable/1149553 .

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LETTERtters

LETTERS LORI'S FOES FIGHT BACK

To the Editor: Lori Wallach is as good a mythmaker as any in Tinseltown ("Lori's War," Spring 2000). Nonetheless, she and her associates should under- stand that they cannot dictate to national governments, nor does their noisemaking ability qualify them to interfere with the World Trade Organization's (wTo) negotiating process. Wallach claims that multi- national corporations are the real power behind the multilateral trading system-without adducing a shred of evidence. Her assertion is an old chestnut that would have been long buried but for its populist appeal.

Sovereign member states alone negotiate and sign WTO agree- ments. Business has no standing in the organization, nor does it participate directly in negotiations. Like trade unions and other groups, we make recommendations, but no more than that. However, we do believe-and with good reason-that because business is the main source of the world's wealth and technological progress, our views deserve careful consideration.

The most pernicious inference that Wallach seems to draw is that the WTO system does not allow countries to make their own environ- mental, labor, education, and health rules-whether trade-related or not. This is false. The WTO only requires that such measures not discriminate against members.

Wallach and her associates want to shrink the wTo, "depower" it, or even break it up if it does not conform to their ideas. Their arro- gance is breathtaking. By her own admission, Public Citizen has 150,000 members who influence the group through their checkbooks and other unspecified ways. These few people, representative of nobody but themselves, want to halt the progressive liberalization of world trade that in the last half century has brought unprecedented global prosperity. Does she want us to fall back into the protectionist trap after all the tragic lessons of the first half of the 20th century?

Wallach suggests that individual countries set terms of access to their own markets, without recourse to the wTo. Nations would not be allowed to discriminate based on a product's origin, but she does not specify who would enforce that rule. Even she admits, with masterly understatement, that this would mean "less trade and a more fragmented system."

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Her other option is a set of minimum conditions a country must satisfy to gain access to another country's markets, all of them enforce- able by institutions outside the WTO-protectionism a la carte. Either way, the door is open for arbitrary trade restrictions and inevitable retaliations. Under the Wallach regime, the world trading system would retreat from the rule of law and equity. That would be going back to the law of the jungle. Is that what Lori Wallach really wants?

-Maria Livanos Cattaui Secretary General

International Chamber of Commerce Paris, France

To the Editor: I read with interest your interview of Lori Wallach. Her goals-to alleviate poverty, to protect the environment, and to promote human rights- could hardly be questioned. But will her approach achieve them?

Does it help poor workers in Mexico to deny them access to the U.S. market, where there is demand for their goods? Does it help the desti- tute Indian child to deny her the possibility of bringing extra food to the table, without ensuring that her family can provide for her nutri- tional and health needs and that there is a reasonable school for her to attend? Does it help the U.S. poor to raise the cost of clothing and foodstuffs, which accounts for a hefty portion of their budgets? And does it help the environment to keep China in abject poverty until it meets our standards for an acceptably democratic society?

Despite repeated and pointed questioning, Wallach refused to describe what would be a desirable system of world trade. This is not surprising, given her inability to grasp the notion of comparative advantage. As we teach in any international economics course, each party to a trade should perform those tasks in which it is relatively more productive, even if one side is absolutely more productive in all activities. But Wallach would have us import only things we "can't make or grow in any vaguely economi- cally feasible way. . ." I can build my own house and grow my own food in a vaguely feasible way, but were I to do so, I wouldn't have much time left for my students. Similarly, when U.S. workers sew clothing, their valuable time and effort are diverted from other, more productive uses.

The problems Wallach points to are real, and more international cooperation is needed to address them effectively. But we should

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not use trade sanctions to force our social standards on developing countries. Instead, we must find cooperative solutions that do not pass on the costs of our ideals to those we pretend to help.

-Gene Grossman Jacob Viner Professor of International Economics

Princeton University Princeton, N.J.

PRIVATIZATION GENDER GAP

To the Editor: William Megginson acknowledges that privatization is more than an economic policy ("Think Again: Privatization," Spring 2000). However, its social consequences must be better understood-partic- ularly its disparate impact on women.

My research in Bulgaria, Poland, Russia, and Ukraine reveals that the privatization of state-owned enterprises has intensified gender discrimination in the workplace: Despite generally higher education and more transferable skills, women are subject to widespread discrimination in hiring, firing, payment of wages, and benefits. Because of their precarious economic situation, women in the private sector are vulnerable to frequent sexual harassment and substandard working conditions, while their rights as company shareholders are blatantly violated. Dramatic cutbacks in welfare have worsened mat- ters, leaving some women and children in abject poverty.

Like globalization, privatization's success is measured by production output, labor-market flexibility, concentration of private ownership, and efficiency-not by economic opportunities for the public, fair labor practices, and equal or relative distribution of share ownership. Because of intense pressure to develop the private sector, neither governments nor business leaders strictly enforce antidiscrimination laws, nor do they seem to care about the gender disparities resulting from their policies. In short, while privatization did not cause sex discrimination in the workplace, it has reinforced pre-existing gender biases, leaving women's economic and labor rights unprotected.

-Anne Zollner Women, Law, & Development International

Washington, D.C.

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Documents

Lori's Foes Fight Back