ILRIC330BhagwatiTruth - The Truth About Trade. Jagdish...

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The Truth About Trade. Jagdish Bhagwati. Wall Street Journal, Jan 18, 2005. Yesterday, the director general of the World Trade Organization, Supachai Panitchpakdi, released a report by a small expert group consisting of eight members (of which I was one). He had commissioned the group in June 2003 to offer an analysis of the WTO's working in the past and a blueprint of where we ought to take the institution in the future. The timing of the report could not be more appropriate: 2005 is the 10th anniversary of the WTO. At the same time, the Doha Round of multilateral trade negotiations under WTO auspices is at a critical juncture. Besides, Dr. Supachai's successor in September will need all the guidance he can get if he is to provide the leadership that the institution needs. With critiques and controversies plaguing the WTO from Seattle to Cancun, it has become necessary to separate the wheat from the chaff. The latter mostly relates to the mistaken rejections of the advantages of freer trade; the former to the legitimate concerns about the WTO's functioning. The Chaff: Assaults on Freer Trade Sadly, the critics who are most off the mark, and indeed off the wall, are to be found among the well-meaning NGOs. Enormously rich charities have now turned to agitating about trade issues with much energy but little understanding, prompting the witticism -- when Oxfam agitators at the WTO meeting in Cancun in 2002 were parading with G-8 masks -- that these were a bunch of dummies masquerading as another bunch of dummies. Oxfam's annual spending is over $350 million; that of Action Aid nearly $140 million: These are now very big businesses. They are under the same pressure to diversify into new areas of public policy (regardless of expertise) as they pursue fund-raising opportunities as are the corporations keen to diversify into new industries as they reach out for profits. These charities have unfortunately signed on to several fallacies about trade that do serious harm to the cause of the poor nations. Thus, they regularly allege that poor countries suffer from systematic rich-country "hypocrisy" leading to "double standards" in trade policy, with rich countries having more trade barriers than poor ones. The facts, however, are exactly the opposite for the most part. There is greater tariff protection on manufactures in the poor countries: This has followed from the fact that the poor countries, not the rich ones, have long been given
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This note was uploaded on 05/19/2008 for the course ILRIC 4330 taught by Professor Turnerl during the Spring '06 term at Cornell University (Engineering School).

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ILRIC330BhagwatiTruth - The Truth About Trade. Jagdish...

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