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The Honolulu Advertiser
Posted on: Tuesday, September 23, 2003

COMMENTARY
Will the WTO 'job' China?

By Tom Plate

There is nothing like having a job. Your life has structure (maybe even meaning), you can put food on the table, and you may even have enough money left over for a movie, dinner or vacation.

There is also nothing quite like not having a job. You have nowhere to go and nothing to do, you can't look your family in the eye, and you can't afford those little extras.

Though the overall picture is not yet terrifying, developed economies report little job growth. The largest, the United States, has had to endure seven straight months of employment decline. One now sees job-loss fear in the eyes of people in successful Singapore, for decades accustomed to near-invisible unemployment. One sees the fear in Hong Kong — once a near-nirvana of jobs.

"Jobless syndrome" was at the heart of the cacophony at Cancun, Mexico, where the ministers of the World Trade Organization recently had a big meeting that dramatically fell apart.

The point of global free trade is to generate more jobs and more wealth for all nations. But the conference broke up like a bad marriage, with more finger-pointing than consensus. The killer issue was farm subsidies: import taxes or tax-relief benefits that governments hand farmers to protect their home-grown produce from being under-priced by imported produce. Such protectionism is particularly rampant in France, Japan and the United States.

The point of subsidies is to protect existing jobs; the ambition of globalization is to create new jobs. The worldwide economy is now in equipoise between the conservatism of protectionism and the liberalism of globalization.

Some high-profile jobs were on the line, too. After all, the leaders of the rich countries don't want to lose their jobs. And so the U.S. delegation resisted lowering tariffs on various imports so farmers and ranchers would not lose their jobs in market openings. If they did, they might not vote for the re-election of President Bush, and so he would lose his job. Ditto Japan (rice farmers and the ruling Liberal Democratic Party are two peas in a pod) — and many others.

In the poor countries, the politicians' goal is to keep their jobs by creating new jobs, not saving existing ones, those being in short supply anyway. But the poor can't gain unless the rich give up something. And that didn't happen. The rich were in no such mood.

That's why the Cancun collapse highlighted two serious problems. The first is the ethical issue of our increasingly interlaced global village. Is it morally right for rich countries to maintain (if not increase) their level of wealth if the poor are left behind? Is a resource-distribution system that doesn't benefit those who are the least well-off in any sense moral — or in the final analysis even functional?

The second issue concerns China. At Cancun, Beijing positioned itself at the center of the so-labeled G22, a new group of "emerging" economies that includes, notably, India. The G22 balked at the measly concessions on agricultural issues offered by the rich. But China has based much of its recent economic policy on its commitment to globalization, and meeting the requirements of WTO membership has caused unnerving levels of social dislocation and unemployment on the mainland.

Having made the epochal decision just a few years ago to buy into the WTO, the Chinese may now be wondering exactly what they have bought into. The Cancun collapse had to be especially unsettling to the leaders of the most populous nation. If the WTO experiment proves a failure, they could lose their jobs. In China, it's happened before.

Tom Plate, whose column appears regularly in The Honolulu Advertiser, is a UCLA professor and founder of the nonprofit Asia Pacific Media Network. Reach him at tplate@ucla.edu.