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Rhetoric and Reality About Free Trade
It is illuminating to observe the U.S. propaganda machine in action here in Jamaica to see just how shallow is the facade this critique is up against. On successive weeks during the past month, U.S. Ambassador Sue Cobb and U.S. Deputy Chief of Mission Richard Smyth contributed articles to Jamaicas two national newspapers (the Observer and the Gleaner) attempting to sell the merits of free trade and the FTAA to Jamaicans.
In Jamaica, trade liberalizationbegun by a harsh dose of structural adjustmentis in the process of overwhelming the agricultural and manufacturing sectors under a torrent of cheap imports. Comparative advantage here, as throughout the region, has been perilously staked on the tourism sector (and, in the shadow economy, on drug transshipment), while a massive debt burden (after more than two decades of intensive adjustment, debt payments now consume nearly two-thirds of the governments budget) and an ever-growing trade deficit (Jamaica imports more than twice what it exports) are financed largely by more borrowing, combined with remittances from Jamaicans abroad.
Government and business leaders alike have recently conceded that freer trade presents few evident opportunities for Jamaican farmers and manufacturers. On the other hand, it promises intensified competition against much bigger producers, competition that is fast making productive enterprise redundant. Productive investment continues to shrink, with capital increasingly concentrated in retail trade (dealing in imports), the financial sector, and expanding a servile tourism product. Historically, massive and expanding inequities, an increasingly atomized social ethos, persistently high unemployment, and the lack of opportunities have all fueled a social implosion that is most evident in Jamaicas capital city, Kingston, which now ranks as one of the worlds most violent.
The economic climate is such that the majority of Jamaicans now frame opportunity in terms of migration: a poll last year found that roughly two-thirds would leave immediately, if given the chance. One of the governments key objectives for future trade negotiations is to maintain or expand the migration options of its labor, both skilled and unskilled.
Against this backdrop comes the drivel of Cobb and Smyth, preaching that even more free trade is the answer to Jamaicas development predicament. Cobb begins by asserting, Among the many myths and misconceptions surrounding free trade and developing countries, perhaps the most common is that trade hurts poorer countries and slows development, a view that could not be farther from the truth. Rather, she explains, free trade is a powerful force for development. Development, according to Cobb, is not exclusively, or even primarily, an economic concept. Rather, it is about creating conditions that make individuals free to realize their God-given potential. Two rhetorical steps andpooffree trade is linked to our potential for self-actualization.
Smyth tries to dispel any fears that might be associated with globalization, making an even more preposterous stretch than Cobb. Invoking the great Jamaican orator, Marcus Garvey, Smyth states bluntly: Thats globalization. Another great Jamaican icon, Bob Marley, is said to be the Bill Gates of the music world. This is Globalization too. Globalization, according to Smyth, is not a goal. It is a fact, a benign or beneficial exchange between cultures. With that, the deeply ideological assumptions and institutions structuring globalization vanish.
Both Cobb and Smyth present Bushs reasoning: A world where some live in comfort and plenty, while half the human race lives on less than $2 a day, is neither just nor stableas assurance that Americas goal is that every country has a growing and stable economy where the benefits of development are widely shared.
U.S. benevolence can be further seen, according to Cobb, by the fact that U.S. imports create jobs and support families around the world. So while decisive U.S.-support for U.S.-based multinational Chiquita in the WTO banana dispute in the 1990s brought the looming collapse of the banana industry here, as throughout the Caribbean (not mentioned by either Cobb or Smyth), it is comforting to be reminded of Americas noble, selfless motives in pursuing free trade.
Free trade is then clearly shown to have a positive relationship with economic growth in several studies by the World Bank, since liberalization promises investment and technological innovation, and competition improves efficiency. Both point to another recent study (but not its source) that reveals a simple formula for success: increasing the ratio of trade to GDP by 1 percentage point raises income per capita by 1.5 to 2 percent, and (lest we worry about the maldistribution associated with liberalizing growth) this increase in average incomes is generally associated with higher incomes for the poor. According to Cobb: The facts are clear [though none are presented]developing countries that adopt open trading systems see large drops in the absolute poverty level. Smyth states, also without any evidence, that despite some painful adjustments NAFTA was very positive for the U.S., Canada, and Mexico.
Not only does the FTAA promise to bring growth and hence the means to improve education and social services throughout the Americas, according to Cobb and Smyth it also promises to serve as a bastion for democracy. Cobb explains American reasoning: The U.S. has made negotiation of the FTAA the centerpiece of our hemispheric trade policy, because we are confident that trade liberalization will increase the economic well-being of countries in the region and promote political systems that are open, democratic, inclusive and accountable. Though Smyth uses Chiles free trading policies as a model, it somehow eludes mention that they were established under a brutal dictatorship.
The commitment to democracy is further reflected in the nature of negotiations, according to Cobb. Although she concedes that there was a time when trade agreements were negotiated in smoke-filled rooms with little if any public attention, Cobb insists that those days...are past, as the events in Seattle taught the powers that be a lesson about the importance of broad consultations and maintaining high level transparency. To top it all off, assurance is given that the U.S. embassy and USAID will help Jamaica prepare for upcoming trade negotiations and that they are extremely pleased to be a part of the development process in Jamaica given their excellent historic relationship (Kissingers destabilization of Michael Manley in the mid-1970s is not noted here).
Amidst all of the grand theorizing, universalizing assumptions, and sweeping generalizations, not a single reference is made in either article to how freer trade relates to actual Jamaican realities, though it is stated that the U.S. is committed to offering smaller nations differential treatment. But just in case Jamaicans werent convinced by all this hollow propaganda, Smyth concludes by telling them that they dont have a choice anyway: Free trade is coming. The train is leaving the station.... There is no turning back. The winners will be those who embrace the inevitable and prepare for the opportunities and challenges of open markets in the hemisphere. I fear for the success of the others.
It is good to know that little things like scale, technology, and access to capital dont factor into the challenge of competing in open markets. Z
Tony Weis is a PhD candidate at Queens University (Canada). His research focuses on trade liberalization and agrarian restructuring in Jamaica.