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Current Trade Deficit:    
Trade as a Means of Wealth Redistribution to the Third World
William R. Hawkins
Wednesday, September 04, 2002
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William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.

From August 26 through September 4, over 4,000 official delegates and over 3,000 activists from 'non-government organizations'(NGOs) will meet at the United Nations Sustainable Development Summit in Johannesburg, South Africa. They will be joined at the end of the conference by the heads of state from 100 countries. It is being billed as the largest event the U.N. has ever staged, meant to tackle the largest problem the modern world has ever faced: economic development. Yet the entire venture can be summed up in one word: redistribution.

That is one good reason for President George Bush not to attend, though the United States has sent a delegation to participate in the discussions.  The United States will, however, be talked about much more than listened to.

America's wealth makes it a target. The halls are filled with the all-too-familiar refrain of self-righteous delegates from failed states and guilt-ridden intellectuals from Western NGOs that the U.S. with only five percent of the world's population uses 25 percent of the world's resources. No mention is made that the U.S. also produces more than 25 percent of the world's output, which is what makes it the world's leading civilization. Furthermore, the U.S. has held this lead position for over a century. America's captains of industry turned the country east of the Mississippi River into the world's manufacturing hub at the same time its cattle kings and prairie farming communities turned the lands west of the 'great muddy' into the world's largest breadbasket.

The rest of the world could learn to do the same, but U.N. meetings like the current one showcase the two ideological maladies that not only cripple real development but threaten to make the 21st century a time of great violence and strife.  

The first is the notion that it is unfair for the U.S. and other developed countries to have so much while the Third World has so little. The gap can only be closed by shifting industry from the West to the developing countries. U.N. Millennium Development Goals demand that the industrialize countries 'address the least developed countries' special needs. This includes tariff- and quota-free access for their exports; enhanced debt relief for heavily indebted poor countries; cancellation of official bilateral debt; and more generous official development assistance for countries committed to poverty reduction.'

The first item on the U.N. priority list, 'free trade' will continue to be the most effective tool of income redistribution. It will expedite the further movement of factories out of the U.S. into 'export platforms' overseas. The arena for this plundering of the Western economies will not be the U.N. but the World Trade Organization, whose Doha Round talks are committed to this end.

Since transnational corporations, including many nominally American firms, will be the ones moving the factories and engaging in the expanded international commerce, they favor this version of 'free trade' and their partisans have been talking up the U.N. and WTO agenda.

For example, Pete DuPont -- a vocal free trader at the National Center for Policy Analysis (and former Republican governor of Delaware), wrote in a column on the Johannesburg summit "Among the policies of industrialized countries that stifle economic progress in developing countries, few are more pernicious than trade barriers in the form of discriminatory tariffs and duties placed upon goods entering the country and subsidies and tax breaks favoring producers in developed countries." Third World states have an obligation to help producers expand in their lands, but Western states have apparently lost the right to put their people first.

The other element supporting redistribution is the environmental movement which is a very large presence at the U.N. summit. That the conference is about 'sustainable' development is a testimony to Green influences, as the term refers to keeping economic growth within limits set by the environmentalists.

If the world will run into resource of ecological limits in the near future, then whatever the 'sustainable' level of output is should be used in an equitable manner to provide the greatest good to the greatest number. "Only in this way can the immeasurable riches provided to us by nature be preserved and passed on to our descendants. The current unsustainable patterns of production and consumption must be changed in the interest of our future welfare and that of our descendants." says the U.N. Millennium Declaration, "Responsibility for managing worldwide economic and social development, as well as threats to international peace and security, must be shared among the nations of the world and should be exercised multilaterally. As the most universal and most representative organization in the world, the United Nations must play the central role."

Moving industry from the West to the Third World will not only even out wealth it is alleged, but improve the environment as it will give planners the chance to design more 'responsible' systems of production and transportation emphasizing renewable energy sources and mass transit (there is a vocal movement to keep the Third World on bicycles and out of automobiles). The Third World represents to idealists the chance to start over and create societies more to their liking.

Of course, the real world is not likely to follow the utopians. One of the great lures of American industry to the Third World is that environmental standards are so much less restrictive, thus keeping down the cost of production. It is not the Western nations who are exporting "brown clouds" to the Third World. It's the Third World that's exporting brown clouds to the rest of the world. China, for example, relies primarily on coal -- which it has in abundance,  making the air quality over its coastal cities among the worst on the planet. And it is the Third World states which have dug in their heels against any attempt to tie trade to environmental standards because they know their higher tolerance for pollution is a competitive advantage in world markets.

Even more dangerous are the implications of a world with limited resources and fixed (or only slowly growing) output. A zero-sum world, where the only way for one people to gain is to take wealth away from some other people, is not conducive to peace. Indeed, it would very much approximate the 'state of nature' described by Thomas Hobbes in the 17th century as "a war of all against all." There is already a growing literature about potential conflicts over water, oil and arable land, but in the modern world it is technology and industry which determine who will have the weapons needed to prevail in such conflicts. If the future of the world is to be one of endless conflict over the distribution of wealth, then the United States cannot afford to let is material power base be diminished.

Whether the redistribution of the world's wealth-producing assets are orchestrated by international organizations or transnational corporations, it must be resisted by U.S. officials whose duty is to protect the prosperity and security of the American people.

William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.