In recent days, US President Obama is leading a campaign to complete the Doha Development Round at the earliest. His allies of course are very excited, and stand up behind him. They are the real beneficiaries, and so therefore have to aggressively push for free trade. Unfortunately, there is no such thing as free trade. It is a clever term coined to cover-up for an unjust and unethical trade paradigm that is economically unsound and benefits only the rich.
As I wrote in my earlier blog post, Obama is a prisoner of the corporate world. Only the mainline media refuses to acknowledge that, and for obvious reasons. As we all know, the mainline media is corporate controlled and so therefore no difficult questions have to be asked.
With economists on their side, the rich and industrialised countries are desperately trying to open up the developing countries.
This was evident when Obama led the tribe at G-20. As The Guardian says: Obama's free trade conversion is a depressingly short term manoeuvre Barack Obama backed a return to the Doha free trade talks at the G20 summit, but the deal on offer benefits only big business, the west and a handful of powerful interests in developing countries.
The Guardian (Nov 15, 2010) has a full page article today entitled: "Obama's free trade conversion is a depressingly short term manoeuvre." I am bringing the full article for you. It is time you understood how the democratically-elected leaders end up serving only the rich and the crooked. you will now see Prime Minister Manmohan Singh likely to open up for FDI in multi-brand retail. He is simply misleading the country by saying that FDI in retail will help the farmers. Actually, he is doing to oblige the US/UK, and is of course under pressure from Barack Obama as well as David Cameron.
"Obama's free trade conversion is a depressingly short term manoeuvre".
By Phillip Inman
In the dying hours of the G20 summit, US president Barack Obama backed a new round of free trade talks with a view to putting a bill before Congress next year.
What persuadid him? Was it a chat with David Cameron and Angela Merkel? The pair lobbied hard throughout the summit to revive the Doha round of talks on lowering protectionist barriers, started almost 10 years ago in the capital of Qatar.
Or was it a collective desire on the part of all the G20 leaders to deflect criticism over their almost total lack of agreement on important subjects like the prospect of a currency war?
Perhaps it was the forceful editorial in the Wall Street Journal a day before the summit urging Obama to smash trade barriers to drive growth and solve the problems of competitive currency devaluations and global imbalances between rich and poor.
Obama's last minute support appeared to wrong-foot the new top-table countries China and Brazil, which up to that moment had spent most of their time berating Washington for the Fed's decision to switch on the printing presses and inject $600bn into the US economy.
If you would believe Cameron, Merkel and the Murdoch-owned WSJ, free trade is a panacea for all the world's ills. Not only does it give African and other poor nations access to European markets, they say, it also allows capital to flow to where it will be used most efficiently. So western countries will invest in poor countries where there are readily available pools of cheap labour and resources – not to exploit them, but to raise their living standards.
Cameron and Merkel often point to the example of South Korea – how it transformed itself over a mere 30 years into a rich nation, almost all through "free" trading with the rest of the world. That same could happen in Africa, south and central America, former soviet bloc countries and neglected parts of Asia, they say.
Obama's overnight switch of tactics was designed to leave countries that artificially depressed their currency (China) and those that imposed capital controls (Brazil) flapping to find a coherent argument against the logic of globalisation.
It is another depressingly short term tactic that lacks strategic sense, unless we consider the US president has allowed himself to be captured by the interests of big business and those countries, including our own, with an ever growing need for cheaper raw materials and virgin markets. Let's face it, this is what they mean by free trade.
Obama will, no doubt, have listened to those who say protectionism awaits those who block globalisation.
It's true that China heavily restricts access to its markets to protect important industries and employment. There are few opportunities for western, or even other Asian, businesses in the fast growing cities of China's prosperous south and east. A minority stake or partnership is as much as most can expect.
While markets are opening, hence Tesco's multi-billion pound investment in China, the pace is painfully slow.
David Cameron said without progress on lowering trade barriers, the situation would reverse, with terrible consequences for everyone. He promised Chinese premier Wen Jiabao he would force Brussels to consider lowering its trade barriers on Chinese goods as a start along the Doha road. Once Beijing sees the benefits of free trade, it will come to the Doha talks with a more open mind, or at least a weaker argument against lowering some of its own barriers.
Germany is all in favour now its powerhouse economy has successfully driven down wages to a point where it is a super-competitive exporter with much to gain from lower barriers on manufactured goods.
The British also see trade as a route out of the crisis, though more on the services side. (It is noteworthy that Cameron emphasised the export potential of the creative industries as much as manufacturing in his China and G20 speeches last week).
Even president Jacob Zuma of South Africa has converted to the cause. As Cameron's new best friend, they lobbied at Seoul for a free trade area for Africa as another boost to Doha.
Yet there is little reason to accept this kind of turbo-charged capitalism if you are poor or need to defend a welfare state that needs time to undergo reform.
In the latter category, the French are classic objectors. Like most western countries France has adopted "free trade" policies when they disproportionately benefit. It knows that while some of its manufacturing is world class, much of it is woefully inefficient compared to rivals in Asia.
When unemployment is high and looks like remaining that way, the benefits of building Chinese cars in Lyon for Chinese companies will not look so great compared to the havoc it could wreak, wiping out big names like Renault and Peugeot Citroën with unmatchable levels of investment.
The Anglo-German argument has little sympathy for western nations unable to afford welfare provision or maintain jobs in a globalised world. They must cut wages, as the Germans have, or cut welfare – the preferred British route.
The argument that the poor will gain is also flawed. War on Want, among other anti-poverty campaign groups, has consistently argued that free trade is a misnomer for rampant pillaging of third world assets.
There was a campaign to gather developing nations together to fight the west and the big mining companies, manufacturers and banks that wanted a bigger slice of their cake.
But today the world is fractured again. China and Brazil have little in common with their neighbours, which fear them as much as they do the west. In Africa, Zuma wants free trade because he thinks South Africa is like Germany and in pole position to dominate the region economically, which means politically too.
For Zuma, like Merkel, free trade is something their countries are poised to exploit, with bigger banks and more sophisticated manufacturers. South Africa also has a services industry that its neighbours lack. Faced with a choice of investment from China, Europe and the US, African nations could increasingly turn to a smiling Zuma, especially if a local free trade zone makes South African goods and services cheaper. Britain, with strong South African links, would benefit.
Academic assessments agree that the Doha deal on the table will mostly benefit the world's richest countries, along with certain export sectors in powerful developing countries.
The World Bank's analysis shows that 80% of gains from the Doha round will go to high-income economies, and that China, Thailand, India, Indonesia, South Africa, Argentina and Brazil will scoop up almost all the rest.
Sub-Saharan nations and Bangladesh figure on the list of losers.Maybe Obama's mid-term election loss was the turning point. It seems to have robbed him of any fight, and handed those countries that are emerging from the financial crisis with healthy balance sheets and the political structure to compete a chance to consolidate their power.