INTERNATIONAL TRADE
I. INTRODUCTION TO TRADE
Trade in spices, silk and gold shaped ancient history. A search for new trading routes brought the Vikings and Columbus to America. In modern times, the trading nations of the world have worked to agree on sets of rules to govern the flow of goods and services across their borders. World trade has increased at a mind-boggling rate since World War II. With increased trade, communi-cations and migration, the nations and people of the world are becoming more and more interconnected; trade is one of the driving engines of this globalization.
League policy states a belief that this inter-connectedness brings many benefits- new cultures, new products, and, as we build relationships with other nations, more peace in the world. Trade makes available things we cannot produce and, by allowing us to sell the things we do best, may reduce prices and increase incomes. It is important to remember that trade is much more than shoes from China or fruit from Israel. Besides goods, nations trade currency, investments, jobs, services and information.
Exports account for about 11% of US production. The US has specific individual trading agreements with individual nations and regional trading agreements such as the National Free Trade Area of the Americas (NAFTA), which covers North America. It also participates in global trading policy, most notably in the World Trading Organization, or WTO. At the time the LWVUS trade policy was written in 1973, the WTO did not exist, but a global treaty called GATT (General Agreement on Tariffs and Trade) was already in place, and its goal was to slowly bring all nations into trading relationships.
LWVCA Voter April 2001 Insert: International Trade
II. OHIO'S TRADE EXPERIENCE
Nancy Forbriger
Ohio ranks seventh in the country for exported goods, with exports totaling $24.9 billion in 1999. The NAFTA countries, Canada and Mexico, receive 60.5% of Ohio's exports, Canada being by far our major overall recipient. Europe takes 20% of our exports, with France and the United Kingdom as major recipients on the continent.
Machinery is Ohio's leading export. We ship 5% of the U.S.A. total in that category. Three products ( machinery, motor vehicles and electrical machinery ( account for $15 billion in exports, 3/5 of the state total. While there was a slight increase in Ohio exports overall in 1999, motor vehicles declined 8 per cent. The value of output from all sectors of Ohio economy in 1997 was $662.1 billion. Exported goods were 3.8% of that total.
The Ohio Department of Development is active in promoting overseas contacts primarily to encourage plant locations in Ohio. Japan has been a major target. This spring, Gov. Taft will head development delegations to Brazil, Argentina and Chile and he will travel to Germany in the fall.
The Greater Cincinnati area, including Northern KY, had $6.78 Billion in exports in 1999; almost 2/3 of the volume in the category of industrial machinery, computers and transportation equip-ment. Europe was the major recipient, France being the leading importer of our goods there. Asia ranks second, NAFTA countries third.
Our area has 1500 exporting companies. 80% of our foreign trade is done by smaller companies (under 200 employees.)
The Cincinnati Chamber of Commerce offers free training on the basics of getting into international exporting for area businesses. They also are part of Ohio trade mission trips and send their own trade delegations overseas to encourage location of businesses in this area and to promote local products.
III. SOME CONCERNS ABOUT TRADE
Sherrie Heyse, Betty Roosa, Ray Woodruff
Point of Growing Trade: Effects of trade? Good or Bad? Is increase in consumption good or bad? Is increased wealth desirable? Are the environmental issues of great concern?
Human Rights: The ground rules and practices of international trade being established under the leadership of largely industry-dominated inter-national organizations may cause a gradual inter-national erosion of human rights: freedom of speech, religion, reproductive rights, movement and choice of employment. Other rights, which some might also include are right to education, health care, assemblage and organization.
Labor Rights: Throughout the world, poor workers suffer horrific workplace conditions including forced labor, abusive child labor, sweatshops, etc. The fear is that, by buying these trade goods, we are promoting these immoral conditions. But the hope for trade is that, through economic growth, these conditions - based on poverty - will abate; penalizing nations may only restrict that needed economic growth.
Environment: Issues include air and water pollution, sustainable development, species protection, and protection of biologically rare or fragile areas. International organizations now handling trade issues are concerned with main-taining or increasing their profits, the security of their operations, and the smooth operation of their business. Less developed countries want to avoid the expense of restricting environmental damage; they point out that the industrialized nations got rich by exploiting natural resources, and now it is their turn. Can the environment survive the rate of consumption found in the US? (a billion cars in China?) How can some institutional means be found so that the world's environmental needs, both current and future, are represented effectively in the decision-making processes concerning trade?
Genetically Modified Organisms-GMO: As it operates currently, the World Trade Organization can, on behalf of industries producing genetically modified organisms, hear complaints made by their governments. The action of the WTO's courts can authorize those governments to sanction other governments that choose to restrict or prohibit the sale of GMO. Does any nation have the right to force another nation to accept GMO against its wishes or to penalize it with sanctions for non-compliance?
Sovereignty-World Trade Organization-WTO: How is the WTO perceived to work in areas of a nation's sovereignty? How can Non-governmental agencies affect the decisions of the WTO?
Governance: Should the powers of the WTO be modified, weakened or strengthened? Should WTO powers be balanced by powers of other international organizations?
Proprietary Concerns: Some governments have a broad definition of intellectual property and enact protective laws that often result in high or prohibitive prices. Other governments disagree, and feel that in the public interest, they have a right and duty to regulate those monopolies that sometimes result from protective laws.
Protection: Should the United States and other nations be able to protect new, weak or strategic industries?
Education: It is important to educate the population of the United States to perform the kinds of jobs that increase our ability to produce trade products and make people employable in times of unemployment.
IV. WHAT IS THE WTO?
Rina Saperstein
The World Trade Organization is the only global organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's nations. The stated goal is to help producers of goods and services, exporters and importers conduct their business. The WTO was founded in Uruguay in 1994; currently 138 countries are members.
Membership and participation are entirely voluntary. When nations join the WTO they agree to be bound by its voluminous rules. All current members must agree to accept the new nation, which must work out trade problems with each member individually before it joins. This was recently the case with China.
WTO Functions: The WTO administers trade agreements, provides a forum for trade negotiations, handles trade disputes, monitors national trade policies, provides technical assistance and training for developing countries, and cooperates with other international organizations.
The WTO rules prohibit discrimination against foreign products and bar import restrictions. All nations within the WTO offer each other permanent normal trading relations, which means they must treat all trading partners equally.
This does not mean that trade rules between each country are absolutely equal. There are special provisions for developing nations, and nations can opt in or out of various sectors of the agreements.
Governance: Many decisions are made by consensus. A majority vote is possible, but has not been used. The WTO agreements are ratified in each country's Parliament or Congress. The top decision making body is the Ministerial Conference which meets at least once every two years, most recently in 1999 in Seattle, and next in Qatar in 2001. Ongoing negotiations continue between ministerials. Director-General is New Zealander Michael Moore.
Negotiations: In a negotiation round, all the countries negotiate one-on-one with each other in secrecy. Once these negotiations are complete, the WTO chooses the most advantageous deal, and this one must be extended to all nations. Developing countries complain that they do not have the expertise to negotiate on equal terms- they may have only one Ambassador in Geneva up against highly specialized trade lawyers. The developed nations and WTO are supposed to provide technical support to even out the playing field, but it is unclear whether this has occurred.
Disputes: The WTO authorizes one country to challenge another country's laws or regulations, if it believes these regulations are a barrier to trade. The challenges are decided by dispute resolution panels, which are made up of three trade experts who rule in secrecy. The trade experts are selected from a list of former trade negotiators and officials. Critics complain that the panelists do not have environmental or scientific expertise, but instead have a narrow vision of commerce above all other concerns. Only the government involved in the disputes can present arguments- no press and no citizen, environmental or interest groups. Critics call for more transparency and for the ability of nongovernmental organizations (NGOs) and other nations to present briefs.
Non-Compliance: If a law is found to violate the WTO rules, the dispute panel asks the "offending" country to modify its law. If the country does not modify the law, the dispute panel authorizes the "offended" country to impose trade sanctions such as tariffs, quotas and financial penalties until the "offender" complies. Alternately, the offender may pay financial compensation to the offended country. So the "offender" has the option of non-compliance but may pay a heavy penalty for doing so.
For example, Europe's policy of refusing hormone-treated beef from the US was found to violate trade laws. Europe refused to drop the law. The US was thereby authorized to place $168 million in retaliatory trade sanctions each year that Europe maintains its ban. These sanctions have taken the form of 100% tariffs on a variety of goods such as mustard and cheese that are of high value to European producers.
Appeal: Parties penalized in a dispute may appeal. Appeals are limited to challenges to the legal interpretation of the dispute resolution panel. Again, though, no one but the governments and the appeal panel can participate.
Policy review: Outside of disputes, the WTO has a rolling mechanism to scrutinize individual participating nations' compliance with their trade obligations and to provide guidance and technical support. Nations are reviewed every 2-6 years depending on the size of their market.
This dispute, sanction and appeal process is truly unique among international organizations; no other treaty or international body has as much active enforcement power as the WTO.
Agreements within the WTO (and some of the issues around them) include:
GATT: General Agreement on Tariffs and Trade, negotiated in 1947, and predating the WTO, the GATT is the WTO's core. It is a series of agreements that establishes rules for the movement of goods and services across borders, primarily by requiring reciprocal obligations to reduce tariffs. The GATT contains some of the most important principles of the WTO including National Treatment, Most-Favored Nation, and Elimination of Quantitative Restrictions (see concepts.)
GATS - General Agreement on Trade in Services: Similar, but newer than the GATT, this is a trade treaty being negotiated to cover much of the new economy: banking, telecommunications, insurance, data management, tourism, transport and more. GATS includes extended rules covering health care, education, water provision and other services traditionally under the purview of domestic governments.
TRIPS - Agreement on Trade Related Intellectual Property Rights: WTO treaty bringing copyrights, trademarks, patents and biotechnology issues, using US patenting laws as a model. Intellectual property is a prime export of the US. We export billions of dollars in music, movies, software and medicines and we lose billions to bootlegging. Controversy surrounds the idea of patenting plants and animals, genetic materials, and seeds which are found in nature. There are also issues around the enforcement of patents on medicines for AIDS and other diseases, which makes medicines unaffordable for dying people in developing nations.
SPS - Agreement on the Application of Sanitary and Phytosanitary Standards: Covers many aspects of food safety from pesticides and biological contaminants to food inspection, product labeling, genetic modification, animal and plant health. The SPS designates the Codex Alimentarus, a set of food safety standards under the UN Food and Agriculture Organization and the World Health Organization, as one of many international standards that can be used. Critics complain that industry representatives dominate the Codex.
TBT: Agreement on Technical Barriers to Trade This agreement covers customs and other trade procedures, but also ensures that nations do not have regulations that are non-tariff barriers that interfere with trade liberalization. TBT places the burden of proof on a nation if challenged to prove that its standards are necessary and the least trade restrictive way to achieve national goals.
TRIMS - Agreement on Trade-Related Investment Measures: Sets forth limitations on what govern-ments can do to regulate foreign investment related to trade in goods. For example this agreement eliminates government requirements that foreign companies use local materials or labor, which used to be a very common way of assuring that foreign investment meant local jobs. Some governments want to expand this agreement to a generalized multilateral investment agreement (MIA), introducing a revised version of the Multilateral Agreement on Investment (MAI), which failed due to public protest.
Agreement on Agriculture: This agreement affects domestic supports that a nation may give its farmers, a country's ability to maintain emergency food stocks, etc. The US is considered to be very protectionist over agriculture, which is the prime economic activity of developing nations. We provide subsidies to our farms, restrict imports, and give away food commodities in our develop-ment aid programs. (There are many more agreements not listed in this paper.)
What are the Benefits of the WTO?
Just as we need a UN, there is a place for a worldwide body to govern trade. The WTO website lists these benefits:
 The WTO promotes peace because countries have an incentive to cooperate with trading partners and because the WTO provides a constructive and fair outlet for dealing with disputes.
Rules make life easier and more predictable and treat smaller countries more fairly; businesses have greater certainty and clarity about trading conditions.
Freer trade cuts the costs of living so food and clothing are cheaper; consumers have more choice and a broader range of goods to choose from.
Trade raises national incomes and personal incomes. (WTO says some redistribution of wealth may be necessary.)
Trade stimulates economic growth, which can create jobs.
What are some concerns?
The general concern about the WTO is not that it exists or is powerful but that it is MORE powerful than many other equally important organizations. The WTO is also accused of pursuing a corporate agenda which values commerce above other aspects of the public good. Some feel that an emphasis on international trade also saps the strength, independence and capacity of local communities and local production. Finally, the WTO has been accused of a lack of transparency, openness and responsiveness to people whose lives are deeply affected by trade policy.
Critics also say that the uneven distribution of power and resources between nations makes it impossible and unfair to compete evenly. The WTO offers technical support and less restrictive requirements for developing nations, but it's unclear whether this is enough to solve the disparity of power. Critics give this example: Imagine the world as a basketball court. The WTO sets the height of the basket and the rules of the game so they are the same with everyone. But if you put wimpy ole me on the court with Michael Jordan, he'll always win.
What do critics want?
Some say the WTO is the best chance for peace and improved standards of living but that it needs time to work out some of its processes- that it could improve its decision-making and appeal processes, for example. Some argue for reforming the WTO by including labor and environmental standards and making its proceedings more transparent and democratic. Some say the WTO is not the problem; rather other international bodies need similar or greater enforcement powers to balance the emphasis on trade.
Others want to reframe the WTO agenda to help close economic and power gaps between developed and developing countries and between multinationals and local communities. Others want to keep the WTO focused on trade in goods and prevent its expansion into areas like property rights, public goods, water etc. Then there is a group that feels that the WTO is inherently destructive because it follows an agenda of non-sustainable consumption, privatization and deregulation; they feel it should be scrapped entirely.
V. TRADE OUTSIDE THE WTO
Bilateral and Regional Agreements:
At the same time the US is pursuing global trade through the WTO, it also has a full trading system with various bilateral and tri-lateral partners, including treaties such as NAFTA (North American Free Trade Agreement), which operate outside the WTO framework. The US is currently beginning negotiations on the Free Trade Area of the Americas (FTAA), a plan to extend NAFTA to central and South America and the Caribbean. The US also has a system of preferences negotiated with individual nations for specific goods.
Trade economists dispute whether bilateral and regional agreements are a first step or an impediment to free trade in the sense of global, multinational treaties such as the GATT. After all, if we agree to special agreements within our regions, than we may be restricting that same trade if it comes from outside the region.
International Agreements and Organizations
Within the United Nations (UN), the UN Conference on Trade and Development (UNCTAD, founded 1964) is responsible for codifying principles of international trade and establishing agreements that stabilize commodity prices. The UN has several other bodies that cover trade issues. These include the UN World Food Programme, the UN World Food Council, the Food and Agriculture Organization, the UN Development Programme, the UN Development Fund for Women, and the UN Environment Programme. The UN Children's Fund works on child labor issues. The WTO and the UNCTAD cooperate in a joint venture, the International Trade Center, which provides export promotion and marketing assistance, training and consulting to developing countries.
There are also a number of international bodies outside the UN who are concerned with trade issues. These include the World Bank and International Monetary Fund which cover a variety of economic issues (see below), and the International Labor Organization (see below). Organizations covering international commerce in particular sectors include the World Customs Organization, the World Intellectual Property Organization, the International Maritime Organ-ization (administering shipping issues) the International Telecommunication Union, Inter-national Civil Aviation Organization, etc.
Much of the world's aid to developing nations focuses on assisting in building nations' capacity to produce export goods to build wealth and gain foreign currency. These programs are administered by organizations like the International Develop-ment Association. In the US, a prime development agency is US Agency for International Development (USAID).
Finally, international trade is affected by a variety of multilateral agreements, such as the Law of the Sea (fishing and transport outside national borders), and Multilateral Environmental Agree-ments (MEAs), such as the Agreement on Trade in Endangered Species.
VI. CONCEPTS AND TERMS
General concepts encapsulated within WTO agreements include:
Core Labor Standards: A set of recognized basic standards stated by the International Labor Organization. They include: freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labor; the abolition of child labor; and the elimination of discrimination in employment and occupation. The WTO Singapore ministerial called on WTO signatories to uphold these core labor standards. Critics com-plain that this obligation has been forgotten.
Harmonization: A move to make standards similar between countries. This helps trade because a company does not have to produce different goods to meet regulations in different countries. For example, countries might move to standardize measurements for tool and die manufacturers or computer disc sizes. There are two basic types of harmonization: under one type, we agree on a joint standard between nations and drop individual different standards; under the other type, we just agree to accept as equal the goods produced under another nation's standards. For example, we can declare that Australian beef may be accepted as USDA inspected, even though USDA inspectors never saw it, because we accept their inspection system as equivalent to our own. This may be problematic because the two countries actually have very different standards for meat inspection.
Least Trade-Restrictive Measures: Under the GATT, trading partners may protect national health and environment but must use the least trade-restrictive measures to do so, even if these are not the preferred methods. Critics complain that this GATT policy requires nations to value and protect trade and commerce above all other community values.
National Treatment: Requires that governments treat foreign corporations "no less favorably" than domestic companies. For example, "Buy American" policies, popular during the last recession, would violate "national treatment" and would be considered a form of protectionism. Nations are free to treat foreign corporations MORE favorably, and this occurs in some developing countries seeking international investment.
MFN- Most Favored Nation: Article I of GATT says that any favorable treatment granted to products from one country shall be accorded to all other contracting parties. This means we treat all trading partners the same ( all signatories are "most favored nations." We cannot, for example, favor Israel over Syria just because of US foreign policy or history.
Generally, this seems fair; however, critics complain that this removes the ability to effectively use trade as a carrot or a whip. How can we isolate rogue nations (For example a boycott helped bring down apartheid in South Africa), or reward countries that are moving toward more environmentally sustainable practices?
Europe prefers to purchase bananas from the small Caribbean islands; they see this as development assistance for their former colonies. The US, protecting the interest of US investors in banana plantations in Central America, has disputed this practice under MFN principles. The WTO agreed with the US and sanctioned the EU.
PNTR: Permanent Normal Trading Relations: In the US, MFN is an old term that has been replaced by the more accurate (and less politicized) Permanent Normal Trading Relations. These nations are not especially favored- rather they receive trading benefits on par with all other trading partners.
Quota: A limit on the quantity of a particular type of goods that may be imported into a country. For example, while the US generally favors free trade, we still have quotas on types of textiles and clothing products that can be brought into this country.
Sanctions: Financial penalties issued to punish nations who do not comply with the rules they agreed to under the WTO (their trading "obligations.") Sanctions may take the form of permitted tariffs.
Tariff: a tax levied on goods imported into a country, generally intended to raise the price of imports relative to domestic goods. The goal of most trade treaties since the 1940s has been to reduce or eliminate tariffs. Many tariffs have been substantially eliminated.
Trade Barrier: Tariffs and quotas are considered barriers to trade. There are also many "non-tariff" barriers- these are laws, regulations and conditions that have the effect of blocking trade. For example, domestic regulations concerning food quality and inspection may block other nations from selling food within the US. This may be justifiable, but it would still be considered a trade barrier. Another example might be customs procedures that make it difficult to import perishable goods before they rot. Corruption or lack of transparency (see below) might also be a trade barrier.
Trade Liberalization: a move toward freer trade by breaking down tariffs, quotas and barriers to trade.
Transparency: There are two linked trade meanings of this term. Under GATT, nations are asked to be more transparent( that is, make their rules and regulations understandable and public so that businesses who wish to import can do so with a basic understanding of the rules. WTO member nations promise to pursue transparency in their trade rules.
In another context, transparency means that discussions that may affect nations and peoples should be open to public view and comment, similar to "Sunshine Laws" in the US. Many of the criticisms of the WTO call for more transparency in its dispute process, which is conducted completely in private with no outside observers.
Other Important Terms
Adjustment Assistance: In the US, this is direct aid to workers and industries whose jobs are lost due to trade (or sometimes other types of upheaval). Generally this has taken the form of grants for retraining for other jobs as well as extended unemployment compensation payments. NAFTA, for example, had adjustment assistance built in, but this has not been very successful. A policy of liberalizing trade should take adjustment into account.
Biopiracy: a process of patenting indigenous knowledge or plants of another country, thereby providing exclusive marketing and development rights to the multinational corporation who files a patent, even though indigenous people may have been using that process for generations. Some critics complain that this is promoted by the TRIPS agreement and a recent WTO settlement against India; others would say this is a good example of a need for a international understanding on patents.
Comparative Advantage: Widely accepted theory by economist David Ricardo. It states that when each partner specializes in producing the things they do best and uses the earnings from these activities to buy from others, all sides produce a larger joint output and achieve a higher standard of living with less waste of resources. This is the rationale for expanding trade.
Dumping: A practice of selling goods under cost to undermine the competition. The US anti-dumping laws are a source of frustration for our trading partners, who see them as protectionist and unfair barriers to trade. The US, however, upholds its practice of protecting some domestic industries against dumping.
Eco-Labeling/Green Procurement: Eco-labeling enables consumers to identify and choose to purchase environmentally friendly products such as "dolphin-free" tuna, "sustainably harvested" lumber or "organic" vegetables. In Green Procurement, local/ national governments use their purchasing power to buy sustainably produced goods. Both have had trouble under WTO rules that prohibit different treatment of products based on the way the product was produced.
Embargo: A ban on trading with a nation to punish its government or to force it to comply with policy objectives. Embargoes are the antithesis of free trade; embargoes use food and medicine as a weapon. The US has used embargoes as a foreign policy tool against Iraq, Cuba and North Korea.
Fast Track: In the US, special negotiating authority for the president: Congress gives advance directives on its priorities, but then agrees to a simple yes/no vote on the final treaty. Presidents claim that Fast Track is needed because trading partners don't want to negotiate a deal that can be torn apart in Congress. However, over 300 trade deals were negotiated by the last administration without Fast Track authority.
FDI- Foreign Direct Investment: When companies directly invest in companies in other countries by buying stock or purchasing capital equipment such as factories and machines; the investor gains managerial control. Over $300 billion in foreign direct investment is generated annually.
FTAA- Free Trade Area of the Americas: A plan to extend NAFTA to central and South America and the Caribbean so that the whole region liberalizes trade. This treaty will be a pressing issue for the Bush administration.
Globalization: increased inter-dependency of nations in economy, culture, technology, arts and people.
GDP- Gross Domestic Product: Monetary value of goods produced in a country (does not include some services and unpaid labor). Our Gross National Product (GNP) includes GDP plus all the goods produced by our citizens in other countries.
GMO- Genetically Modified Organism: Products of biotechnology such as special seeds, cloned animals, and modified foods.
Invasive Species: As goods move between nations, pests, insects and disease may move in to destroy ecosystems in an area where they have no predators. Dutch elm disease and zebra mussels came to this country through the movement of trade goods. This is not a reason to stop trading, but might suggest preventive care.
MNC/TNC - Multinational Corporation/ Trans-national Corporation: Large businesses that, while based in one country, have ownership, subsidiaries, facilities, employees and interests throughout the world. From our area Procter and Gamble, Chiquita and Toyota may all be considered to be TNCs. A large proportion of trade is conducted just between the subsidiaries of multinationals.
MEA- Multilateral Environmental Agreements: Environmental Treaties such as the Convention on Biological Diversity, the Montreal Protocol on Substances that Deplete the Ozone Layer and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Generally these are voluntary agreements; no body has the power to enforce their provisions. The Montreal Protocol and CITES authorize trade sanctions but do not have policies to fully administrate them. Trade may be affected by these agreements when countries complying with the MEA ban certain products or processes. A main concern is whether WTO or the MEA is more powerful if the two come into conflict.
Maquiladora: A foreign-owned assembly plant in a special export zone (most commonly in Mexico, but the term is now used elsewhere). The maquiladora acts as a subsidiary, selling its goods exclusively back to the US parent company.
NAFTA - North American Free Trade Agreement: A 1994 treaty between Mexico, the US and Canada assuring free movement of goods between the three nations. There is widespread disagreement on the short-term results of the treaty; some economists say employment, trade and wealth have grown rapidly; others say wages have stagnated and the environment has suffered.
NGO - Non Governmental Organization: These are groups, such as the League of Women Voters, that have a strong interest in protecting some type of public good. Sometimes they speak against their own governments when those governments are not active in protecting the public or the environment. Critics believe the NGOs have no right, no true constituency and no role; supporters believe they provide an important balance to powerful multinationals. Also called CSOs- civil society organizations.
Precautionary Principle: "Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures." As nations trade, they must reconcile different ideas about what is safe and scientific. Europeans are generally more cautious, while the US and most developing nations will tolerate more risk. Europeans use the precautionary principle to ban hormone fed beef because there is public concern there about long-term effects; the US says there is not enough scientific evidence that the hormones pose a health risk and that this ban is mere protectionism. The WTO sided with the US.
Protectionism: A national attitude of protecting domestic industries and limiting imports of goods and services.
Sovereignty: A nation's control of its own internal policies including its right to enforce its own laws on foreign businesses operating in or selling to that country. All international treaties limit countries' freedom in some way, but nations generally accept this loss of sovereignty because the benefits outweigh the constraints.
Trade Deficit/Trade Surplus: A reflection of the export/import balance. A trade deficit occurs when a nation receives more goods and services and investments from foreigners than it supplies to them. There is a great deal of controversy discussing which, if either, is a favorable position to be in.
Uruguay Round: Trade negotiations are generally named for the place in which the treaty was completed. The Uruguay Round was the negotiation that founded the WTO and gave it the authority to enforce GATT agreements.
USTR - US Trade Representative: The US Official charged with negotiating trade. Robert Zoellick is the current USTR, appointed by President Bush. US policy has traditionally been a mix of protectionism and liberalism depending on US advantage. For example, though we generally support free trade, the USTR is currently negotiating to protect the US steel industry from outside competition.
Other International Organizations
EU- European Union: the nations of Europe have joined together to act as one nation in terms of trading policy, currency and migration.
IMF - International Monetary Fund: An international organization that makes loans to countries that have short-term foreign exchange and monetary problems. These loans are conditioned upon the willingness of the borrowing country to adopt IMF-approved economic policies.
ILO - International Labour Organization: an international body founded in 1919. Its principles state: "Whereas the ILO was founded in the conviction that social justice is essential to universal and lasting peace; Whereas economic growth is essential but not sufficient to ensure equity, social progress and the eradication of poverty, confirming the need for the ILO to promote strong social policies, justice and democratic institutions." There are 8 ILO conventions, espousing the core labor standards. The US has signed only 2 of the conventions. ILO has no enforcement power but acts through providing technical support and moral suasion. Countries who become signatories to conventions, have a moral obligation to live up to the terms.
ISO - International Standards Organization: An international body that comes up with standards for everything from electrical currency to quality assurance to eco-labeling.
TABD - Transatlantic Business Dialogue: a partnership of trade negotiators, businesses and government officials for Europe and the US that meet to plan trade. Harmonization is an important part of the TABD agenda. There is also a TACD, transatlantic consumer dialogue, but it has not received as much attention or power.
UN - United Nations: An international body established after WWII to maintain international peace and security and to achieve cooperation in international economic, social, cultural and humanitarian problems.
World Bank: Formally named the International Bank for Reconstruction and Development (IBRD), the bank makes loans for development throughout the world. Nations may purchase shares based on market size (US owns approx. 15.6%, considerably less than the 24% we are entitled to own. This gives us veto power ( the maximum power for the minimum investment.)
VII. BIBLIOGRAPHY
Cecilia Kloecker
One World, Ready or Not, Greider, William, 0-684-81141-3, Simon & Schuster, 1997, emphasizes the costs of global trade.
The Lexus and the Olive Tree, Friedman, Thomas L., Anchor Books, Apr, 2000, emphasizes the benefits of global trade.
Globaphobia: Confronting Fears about Open Trade, Burtless, Gary, et al, Brookings Institution, 1998, emphasizes the benefits of global trade.
The Case Against the Global Economy and For a Turn Toward the Local, Mander, Jerry, & Goldsmith, Edward (edited by), Sierra Club Books, 1996, emphasizes the costs of global trade.
Vanishing Borders: Protecting the Planet in the Age of Globalization, French, Hillary, Norton World Watch, 2000.
Hunger 1998: Hunger in a Global Economy, Bread for the World, order via web (http://www.bread.org) or by contacting BFW at 50 F Street, NW, Suite 500, Washington, DC 20001 (202-639-9400).
Are There Trade-Offs when Americans Trade? Susan A. Aaronson, Close Up Foundation, 1996, primer on trade and everyday lives.
Foreign Affairs Magazine
Great Decisions, A study course of the Foreign Policy Association, 800-477-5836, www.fpa.org
League of Women Voters' National Voter, Jan/Feb 2000 and March/April 2001 issues.
On Web:
www.lwv.org League of Women Voters' trade update section has links to many more sites. League of Women Voters' trade update section has links to many more sites.
*LWVUS has also established a listserv for members interested in exploring trade policy issues and/or in sharing ideas of ways in which to engage in the update process. To join the discussion, go to the Members Only section of www.LWV.org, click on Online Grassroots Network, and select the lwv-trade list.
VIII. SOURCES:
Ohio and Cincinnati Trade:
Office of Trade and Economic Analysis, International Trade Administration, Dept. of Commerce
Ohio Exports: 1999: Executive Summary, Ohio Dept. of Development.
Greater Cincinnati Chamber of Commerce: Penny Rushing, Ren‚ Thomas
Intro, WTO, Other Trade Orgs, Glossary:
LWV US Trade Position (LWVUS Impact on Issues 2000-2002), and LWVUS Voter
World Trade Organization website (www.wto.org)
International Labor Organization website (http://www.ilo.org)
Economic Policy Institute website (http://www.epinet.org)
Public Citizen Global Trade Watch website (http://www.tradewatch.org)
Hunger 1998: Hunger in a Global Economy (Bread for the World)
12 Myths of International Trade, June 1999: Joint Economic Committee Staff Report, Office of US Senator Connie Mack.
ABCs of the UN, United Nations Assn of the USA
LWV Washington State Voter (materials on trade), 2000.
LWV District of Columbia (materials on trade), 2000/2001
Foreign Policy Institute, Great Decisions 2001
Invisible Government: The World Trade Organzation: Global Government for the New Millenium? International Forum on Globalization, co-authors Debi Barker & Jerry Mander, 1999
The Political Economy of the World Trading System, From GATT to WTO, Hoekman, Bernard M. and Michel M. Kostecki, Oxford University Press, 1997 (sections only.)
International Relations Committee
April 2001
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