SANE Views

Vol.4 No.12, 18 October 2004

Green Arguments Against Free Trade

The following is a short account of green arguments against free trade from the draft of a book "Babylon and Beyond: A guide to the economics of anti-capitalism, anti-globalism and radical green movements" by Derek Wall. Derek teaches political economy at Goldsmiths College and is a member of the Green Party.

4. Small is Beautiful: Green localism.
A few years ago I was eating at a St. Paul, Minnesota, restaurant. After lunch, I picked up a toothpick wrapped in plastic. On the plastic was printed the word Japan. Japan has little wood and no oil; nevertheless, it has become efficient enough in our global economy to bring little pieces of wood and barrels of oil to Japan, to wrap the one in the other, and send the manufactured product to Minnesota. This toothpick may have travelled 50,000 miles. But never fear, we are now retaliating in kind. A Hibbing, Minnesota, factory now produces one billion disposable chopsticks a year for sale in Japan. In my mind's eye, I see two ships passing one another in the northern Pacific. One carries little pieces of Minnesota wood bound for Japan; the other carries little pieces of Japanese wood bound for Minnesota.

Such is the logic of free trade. (Morris 1996: 222) Agreements have been made to circumvent National Governments. One of the most significant of these is the "General Agreement on Trade in Services" (GATS). These services include the commercial aspects of the public services of education, water and health, all potentially very profitable areas. Economic rationalism's aim is to conduct all human activity on the model of buying and selling without constraint in a market place. The market controls all human interaction, not society or society's needs, and the individual, not the community, is the key social unit. Competition not cooperation rules in a deregulated economic environment, whether in financial or service areas. (Clare McCarty July 2003, Australian Green Party election candidate http://www.sa.greens.org.au/speeches/cm_030712.htm )

'I am not a trade barrier', shouts the dolphin on an anti-WTO flag carried by green activists at Seattle. Green Parties, green direct action networks like Earth First! environmental pressure groups and animal liberationists have all opposed globalisation on ecological and social grounds. The International Forum on Globalisation (IFG), a body established by Edward Goldsmith, editor of the Ecologist magazine, did much of the intellectual groundwork for the wider mobilisation against free trade. Goldsmith, a pioneer of green thought since the late 1960s, has developed a devastating critique of economic growth, free trade and conventional development strategies. Caroline Lucas, a leading member of the UK Party in Green Alternatives to Globalisation, written with the late Mike Woodin, attacks capitalism from a localist slant as ecocidal, exploitative and centralised (Woodin and Lucas 2004). U.S. presidential candidate Ralph Nader has been another important green critic of neo-liberalism (Nader 2002). Green Parties worldwide advocate reduced trade. Other authors who advocate a green localist approach including Colin Hines (2000), Amory Starr (Starr 2000) and Jerry Mander (Goldsmith and Mander 1996).

Greens are seen as a movement of the white middle classes, post-material political luxury of the relatively wealthy. However, many green anti-capitalists are active in peasant and radical farmers' movements. At WTO agenda setting talks in Cancun, Mexico in 2003, Kyung-Hae Lee, committed suicide to protest at the damage free trade did to the 120,000 Korean farmers he represented (Guardian, 16 September, 2003). Mr Lee, found that his revenue from beef farming fell by three quarters after Korea imported cheap, agribusiness farmed meat. Jo Bove in France leads a militant anti-capitalist farmers union, Confederation Paysanne (Herman and Kuper 2003). Radical farmers in the Indian anti-globalisation movement number millions. From Mexico to Korea, farmers and peasants claim that neo-liberalism will flood their countries with cheap crops, privatise land and increase pollution. The Indian ecofeminist Vandana Shiva, arrested on several WTO actions, provides a strong link between radical greens and angry farmers. The subsistence perspective she puts forward in books like Staying Alive (1988), argues that peasants, particularly women, carry out the real economic activity. Globalisation favours huge agribusinesses and threatens every small producer on the planet.

Bad Trade
Greens have increasingly turned their attention to trade. Economists have argued that trade is beneficial because of gains from comparative advantage, competitive pressure, economics of scale and technology transfer. Competitive pressure means that by opening a country up to trade, domestic producers lose any monopoly status they had and are forced to become more efficient. Comparative advantage, a notion developed by Adam Smith and refined by Ricardo, occurs when countries specialize in the goods or services they are best at producing and exchange them for others.

Economies of scale occur when increased production by a firm leads to lower average costs. A firm with a national market, typically might sell to 30 million consumers, with a continental market of 300 million, with a global market perhaps more than a billion. Increased production allows expensive machinery to be used more efficiently, bulk buying of parts and raw materials can be enhanced and specialised staff recruited. These and a host of other savings lower costs. Trade also should create development via technology transfer from richer skilled nations to the rest of the planet. Greens are sceptical. Woodin and Lucas note that comparative advantage may lead to the exploitation of producers with less market power. Indeed falling agricultural prices have tended to mean that countries, usually in the south of the globe, become poorer when they specialize and trade. Competition usually leads to a race to the bottom with companies forced to cut wages, working conditions and environmental protection to minimise costs. Korten has noted how competition may ultimately lead to a contradictory state of monopoly as global corporations emerge and eliminate domestic firms (2001: 206-207). They can then raise prices, punish consumers but are less interested in using their margins to benefit workers or the environment.

WTO rules on patents are aimed at preventing poorer countries from copying products from Europe and North America, so they actually prevent technology transfer. Most notoriously patent controls, relaxed only after huge international protest, were used to prevent South Africa developing cheap versions of the anti-AIDS/HIV drugs it needed. Technological transfers can, on the other hand, spread toxic or socially disabling practices from one part of the globe. Economies of scale may be significant but diseconomies can also occur. Schumacher noted: I was brought up on the theory of 'economies of scale' - that with industries and firms, just as with nations, there is an irresistible trend, dictated by modern technology, for units to become ever bigger [Yet] Small scale organisation allows for greater flexibility and human communication, in short decentralised economic activity allows for 'the convenience, humanity, and manageability of smallness' (1978: 62-63).

Trade, when successful in conventional terms, accelerates economic activity that damages the environment: By now, it should be clear that our environment is becoming ever less capable of sustaining the growing impact of our economic activities. Everywhere our forest are over logged, our agricultural lands over cropped, our grasslands overgrazed, our wetlands over drained, our groundwater's overtapped, our seas over fished, and nearly all our terrestrial and marine environment is over polluted with chemical and radioactive poisons [.] In such conditions, there can only be one way of maintaining the habitability of our planet, and that is to set out to reduce the impact.

Unfortunately, the overriding goal of just about every government in the world is to maximise this impact through economic globalization. (Mander and Goldsmith 1996:79)