TCS Daily

Indulging in Prosperity

By Alan Oxley - July 13, 2004 12:00 AM

The attraction to criticisms of globalization by politicians and commentators in East Asia has always been puzzling. If any region in the world has prospered from globalization, it is East Asia. Complaints that ideas from the West might be uncritically applied in non-Western societies are understandable. What is not is supposition that debates incontrovertibly rooted in Western societies are valid in Asia.

Criticism about negotiation of a Free Trade Agreement (FTA) between Thailand and the US is a case in point. This week's global AIDS conference has brought a traveling caravan of delegates, journalists and lobbyists from across the globe to Bangkok for a few days. Within this three ring circus of international politicking, there is a rump of the North American anti-globalization debate.

A standard feature in that debate for international NGOs is the critique of globalization and free trade. Tuning the issue to the local climate, claims have been made that Thailand will suffer from an FTA with the United States, specifically because the US will seek to dictate what intellectual property law in Thailand should contain and generally because the US will dictate patterns of economic growth to Thailand.

It is easy to believe that the US calls the shots in world trade. It is the world's most powerful country. And when noble laureate Professor Joseph Stiglitz says, as he did this week in an op/ed in the International Herald Tribune, that the US is forcing FTAs on developing countries to advance its own policies, this sadly adds authority to the claims, which are in fact wrong.

The Bush Administration has completed FTAs with Singapore, Chile, Morocco, the Central American countries and Australia. All of these countries asked the US for FTAs. Why? Because they knew that the commitment to open their market which these agreements would entail would encourage growth in their own economies.

Why would NGOs oppose these agreements? Because they subscribe to the mantra that free trade is bad.

It plainly is not. Free trade has opened up world markets over the last 50 years. Open markets in Europe, Japan and the United States created opportunities for developing countries which elected to develop competitive industries to export to those markets. Economies in East Asia did so while most of the rest of the developing countries in the world did not. This is a key reason standards of living in East Asia have risen faster than anywhere else for the last 30 years, no more clearly than in Thailand.

Meantime, organized labor and NGOs in North America and Europe have campaigned against free trade. The practical effect on policy in the West has been slight. Free market policies have not been reversed. But NGOs have set about with campaigns against the World Trade Organization and in other international conferences to encourage developing countries not to open their markets like industrialized countries.

Thailand's Prime Minister Thaksin Shinawatra has initiated an FTA with the US. He is quintessentially a big business figure and disliked in some circles in Thailand for that. He understands that business in Thailand must be geared to continue to compete in the global economy. Whether or not people like his business background, there is a reality: Thailand and other ASEAN economies face an enormous challenge. If they do not continue to develop their economies and introduce laws that encourage investment, growth will tail off, and with that prosperity and jobs.

NGOs in the West argue that there are things more important than growth. Having achieved prosperity, society can afford lower growth. Not every one agrees. But this is an argument rich countries can at least afford to have. What developing country can afford the luxury of toying with economic policies that consciously are anti-growth? When representatives from developing country NGOs, like Waldon Bellow of Focus on Global South, echo the arguments of his industrialized country partners, whose interest is he advancing?

International NGOs have encouraged developing countries, particularly in Africa, to slow down the negotiations in the World Trade Organization. Delaying the WTO only harms the economic interests of developing. Countries like Chile and Singapore are not willing to sit back and let other countries dictate their pace of economic development. This is the principal reason they negotiated an FTA with the United States. It makes sense for Thailand to act in the same vein.


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