TCS Daily

Fear the Turtle

By Alan Oxley - December 13, 2005 12:00 AM

HONG KONG -- As 11,000 delegates, journalists and NGOs arrive in Hong Kong for the WTO conference, there are some eerie parallels with the mood in Seattle on the eve of the disastrous WTO meeting in 1999.

Hong Kong is the right place to hold a conference which aims to promote free trade. It is now one of the most prosperous cities in Asia, and that is because of free trade.

Hong Kong did not start out on the best footing. British merchants, Jardine and Matheson, drew the British Government into using gunboat diplomacy in the 1860's to force a reluctant Chinese Imperial Court to provide the merchants permanent and protected facilities for trade in Hong Kong. That was the beginning of Hong Kong. Half of their trade was grubby -- importing opium to China from India.

Hong Kong's real global moment came when Mao Tse-Tung seized control of China in 1949 and imposed a communist economy. Hong Kong was flooded with refugees and there were fears for its economic and political survival. An enlightened British administration set up Hong Kong's economic model as an avowedly free market, in sharp contrast to the bleak welfare state economy imposed after World War II by the Atlee Government on Britain.

It worked. With plentiful cheap labor and the advantage of becoming China's trade gateway to the world, Hong Kong's early growth flourished on two of the great drivers of growth in poor countries in the twentieth century -- manufacturing of garment and textiles and cheap labor. As prosperity developed and wage costs rose, Hong Kong's economy redirected away from manufacture of garments and textiles to electronic manufacturing and now is almost entirely a services economy.

Hong Kong is an outstanding East Asian example of how to build growth with open markets. Hong Kong has been promoting it self as "The Global City". Let us hope officials from low-growth economies in Africa and Latin America pay attention as they arrive here.

They may not because the news in the Hong Kong papers is not about growth, but about the prospect of protests. "Fortress Wan Chai (the conference area) prepares for worst", headlines the South China Morning Post, Hong Kong's leading daily newspaper.

In the lead-up to the Seattle WTO conference, the city authorities promoted Seattle's well grounded claim to be America's most trade dependent city. But the news focus before the meeting, like in Hong Kong now, was on the protests.

The Mayor of Seattle mishandled the protests. Activists persuaded the Mayor to allow a peaceful protest at the conference centre to enable a dialogue. They deceived him and took control of several blocks of the city. It took the authorities three days to regain control of the streets. Seattle was remembered for "the battle" not Seattle's role in global trade.

Has Donald Tsang, the boss of Hong Kong made a similar mistake? The South China Morning Post quoted him Saturday saying "by allowing the protestors to get near the convention venue and voice their views, it would help reduce hostility and the chance of confrontation".

Did anyone brief Donald Tsang about what happened at Seattle? The Mexican Government was briefed and it kept the demonstrators 10 kilometers from the WTO conference venue in Cancun in 2003. Even then a Korean protestor from the fishing industry suicidally impaled himself on the barricade. (This was apparently a tasteless protest stunt. He had tried it a two previous international meetings. At Cancun he made a grotesque mistake and lost his life.)

There's another omen. Fresh from the success of creating mayhem in Korea during the APEC Summit last moth, 1200 Korean rice farmers are assembling in Hong Kong to try the same thing. Donald Tsang must be aware of that. Hong Kong is a member of APEC.

There's also the same anti-globalization madness. Animal rights activists dressed as turtles campaigned against the WTO in Seattle. The same edition of the South China Morning Post reports that Connie Bragas-Regelado, Chairwoman of Migrante International, has accused the WTO of "institutionalizing the export of cheap labor". She claims the WTO makes conditions worse for migrants in host countries and is deepening the jobless situation in nations sending them. The Post helpfully informs us Connie is a former domestic helper.

Hong Kong, like many other cities around the work has tens of thousands of Filipino workers. Remittances sent home by Filipinos working in foreign countries are the greatest source of export earnings for the Philippines. Other countries that also depend on remittance of foreign workers like Mexico and India don't see it like Connie does. They complain the WTO does not make it easier to for people to work in foreign countries.

Connie may have her trade economics wrong, but what she does grasp, like those dressed up as turtles in Seattle 5 years ago, is that the WTO has become a giant public policy Christmas tree on to which any international public policy gripe can be hung.

The Hong Kong police seem better prepared than their counterparts in Seattle. But they haven't handled mass disturbances for a long time. Police forces get out of practice. Let us hope that Hong Kong does not, like Seattle, have its reputation as a great trading city overshadowed by events that make it another icon in the history of anti-globalization protest.

Alan Oxley is in Hong Kong as Chairman of World Growth a new free market NGO.

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