The Collapse Of Cancun Harms The Poor

Ronald Bailey has a good piece in Reason on how the failure of Cancun is a blow to the Third World.

The only winners at Cancun are the vested interests such as moribund protected industries, highly subsidized rich country farmers, and anti-globalization ideologues. The real losers are hundreds of millions of poor people who would have benefited from the jobs, the higher incomes and lower prices that liberalized trade brings.

For all the talk from European Union about how America must be more sensitive to the needs of the Third World. it appears as the European countries are willing to talk the talk, but they won’t walk the walk. Their insistance that the "Singapore Rules" on financial transactions be included before agricultural trade reform despite the rule of over 100 WTO members that such talks were not germane was on of the direct causes of the collapse of the Cancun summit.

The G33 bloc of nations such as India, Kenya, South Africa, Brazil, and others also take some of the blame. They wanted the industrialized world to open their markets without them reciprocating. In the end, such protectionism is foolish, as the workers in those countries aren’t productive enough to make up for the higher cost in goods that would result from such protectionist measures. The whole point of free trade is to lower barriers on both sides so that each country gets both the benefits of a new market for trade while lowering the cost of the goods needed to compete in that market. It makes little sense for a Botswanan farmer to be able to sell his goods in Europe if the agricultural implements needed to produce enough goods for such trade to be worthwhile cost more than he makes in a decade.

Bailey fears that the collapse of this round will lead to an increasing wave of dangerous and deadly protectionism while encouraging an economic ghettoization as rich countries open their trade barriers to each other rather than to the Third World that needs the benefits of trade the most. Indeed, those are both legitimate fears. If a new round of protectionism is to be the norm, it will only guarantee more poverty and instability throughout the world. It will hamper the ability for governments to fight scourges like AIDS and terrorism. Protectionism is bad policy, but it is also profoundly immoral in an age of global concerns. To simply isolate oneself and count on meager foreign aid contributions to fight world problems is a coward’s solution. The world needs better, and until the WTO can scrap their differences and work towards a constructive solution the Third World will pay in uncountable economic retardation and human life.