A 2007 Valedictory

The problem with globalisation is that it cannot globalise politics.

This propos, from a November presentation by Joseph Stiglitz, is self-evident: capital flows unconstrained (mostly) internationally but political economy – and this scribe chooses to define that as the socially judicial art of satisfying unlimited wants with limited resources – remains a national concept whose essence frequently changes at borders.

Thus trade treaties are asymmetric and reflect, more than anything, the existing balance of negotiating power. Even after the often hailed GATT/WTO Uruguay round OECD tariffs for goods from poorer nations are 4 times higher than those from OECD members. No area is more illustrative of this than agriculture where, not only are there high tariffs, but OECD countries subsidise 48% of total farming production. That political attachment to subsidies - recognised, hidden or (especially) re-defined - explains in large part the demise of Doha last summer. Piss-taking has its limits.

Nonetheless, between WTO rules, IMF conditionally and a lop-sided market-economy dogma advocated by the developed there remains an aggregate force that presses down upon developing nations and undermines local culture, social justice, environmental protection and access to developed country intellectual property – most notoriously HIV/Aids medicines.

This is not a moralistic bash-the-North piece. It is an argument that their national politics are myopically getting in the way of a greater (including their own) economic, political and social stability. Examples abound but nowhere, probably, is it more media-obvious than in the havoc being relentlessly wrought upon the environment by capital. Love of sovereignty can have significant negative externalities.

Expecting the scales to drop from the eyes of the developed ahead of future trade discussions, as Mr Stiglitz’s presentation appeared to implicitly hope, is futile. Not much of value has ever been given away by power; and negotiation, rightly, is here to stay. And on this count there is encouragement to be found in Doha’s very failure: it showed that the pivot in the balance of such negotiations can move Southward - 'take it or leave' does not always work. Still, pleasing at it may be, that trend is not yet strong enough to yet help the very poorest.

Happy New Year.

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  1. "Cassandra" // 1/01/2008 03:57:00 PM

    As an Agricultural Economist, I can say that there are ample reasons why agriculture is "different", and deserves special treatment. Not that subsidies are the best route or method. While this needn't torpedo trade accomodation,the specialness of agriculture more than justifies the intent to preserve food security. land-use planning, and other things that the French (for example) know only too-well. Having said that, the rent-seeking in EU & US agriculture - and hence trade protection - runs deep. Tobacco, cotton, sugar-beets, cut flowers, are just a start, and so there is plenty of run to cut the bullshit from the rhetoric.

    On the other hand, I am certain I do not want to be eating Chinese-farmed bay scallops (from the Yangtze delta?) arriving upon our doorstep under the banner of free trade, nor am I entirely comfortable with US factory-farmed chicken, and other overly intensive forms GM monoculture.

    I'm not entirely sure of my point, but wish you a happy new year al the same....

  2. RJH Adams // 1/01/2008 06:24:00 PM


    Suspect OECD subsidies more about job than food security...

    Happy 2008 to you to and the family - salud (mind the Chinese scallops), amor y pesetas.


    PS/Agri economist? The attractions of a vignoble begins to make more sense to me. Are you familiar with Mondavi's foray in l'Herault? Probably nothing a faked Midi accent can't overcome...

  3. Anonymous // 1/01/2008 06:49:00 PM


    Currently, not enough ink in the well for the details, but the manner in which the CAP (both present and older versions) distributes its largesse in the olive oil sector makes a mockery of any claim to higher societal aims underlying the agricultural subsidy system.

    Send proof-of-purchase for your free rant.


    Among the more direct extranational effects of the subsidy would be the apparent demise of the Turkish olive oil export sector. Producers who won't/can't sell at world prices, domestic consumers who won't/can't buy at Turkish prices, and a government that will not allow exporters duty free access to even enough EU oil to maintain their market share beyond their borders.
    Can't figure out why farm aids don't just fall under a generalized guaranteed income subsidy regime and end of story.

    Whatever... Best to all.

  4. RJH Adams // 1/01/2008 07:42:00 PM


    I'd say write to Mandy if I thought it wouldn't be an utter waste of your time.

    I wrote this with the experience of my own land in mind - both on sugar but more particularly offshore finance and tax competition. The latter is clearly an opportunity for a resource-poor but politically stable and anti-fraud compliant nation with no issues of criminalty or money laundering such as have emerged in London, Paris and Frankfurt (to cite but 3 in the North).

    Yet it had to repell attack out of nowhere from the OECD (with its own offshore industry) of what might best be called a schoolboyish constructed 'blacklist' and insinuation campaign. Nothing to do with high domestic tax brackets, I'm sure.

    Still, that's nowt compared to what's happening in the least developed nations (especially on the issue of their own food security in the face of subsidised OECD imports).

    Should anyone, then, be suprised at the political backlash to that; or the unilateralism of the type so amply demonstrated by the OECD (with its lists and Mandy-spin come trade talk time) and its short-sighted advocates like now departed US permanent rep to the UN, John Bolton?

    Not that I have strong feelings on this.

    Health, love and cash in 2008 to you (I translated, helpfully, the spanish for you. Possibly incorrectly).


  5. Anonymous // 1/02/2008 10:20:00 AM

    'I translated'... Not to worry, we accept hand-drawn facsimiles for any of the above.


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