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The Free Market
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April 1997
Volume 15, Number 4

 

Sayonara, WTO
Jeffrey Tucker

 

The Washington Times asked the new UN head why he thinks the agency has a PR problem in the United States. "It is a leftover from the late seventies and eighties," he said, "when there was a lot of talking about getting government off the back of people." 

Right, but it's more of a living reality than a mere leftover. And what better place to begin throwing off the shackles of government than with the would-be world state. If the U.S. permanently backed out of the UN, the organization would be reduced to a glorified debating society. Without American cooperation, it's affiliate agencies--and there are hundreds--would be gutted over time. We'd be no worse for it. 

The Clinton administration takes no principled or consistent stand on whether world bodies ought to prevail over domestic sovereignty. It uses the UN when it is in the government's interest (which is not the same as the public interest); it ignores the UN when it is not. For this reason, the world body doesn't even perform what would be its only praiseworthy function: restraining the imperial ambitions of D.C. 

During the debate on the World Trade Organization, you might have thought otherwise. Every cabinet official and member of Congress swore loyalty to the ideal of free trade, claiming the WTO was the only means to that end. It was nonsense, of course, since trade thrives best when private parties are making and enforcing contracts out of their own self interest. It is this very "anarchy" of international contract that restrains the ambitions of global government. 

The secret purpose of the WTO wasn't free trade, but precisely the opposite. It wasn't to foster close trading relationships between producers and consumers the world over, but to allow government to regulate trade according to the desires of special interest groups such as environmentalists, labor unions, and favor-seeking international corporations. 

But, it turns out, even the WTO is vulnerable to shunning. If the Clinton administration doesn't like what the WTO is doing, it drops all talk of the "international rule of law" and starts a boycott. So much for the WTO. Some authority. Some rule of law. 

This was the reaction of the U.S. when the WTO prepared hearings on the Helms-Burton law, a belligerent piece of legislation that imposes sanctions on foreign governments and private parties that have trade relations with Cuba. 

This goes far beyond tariffs and erecting import barriers. Those may be economically unsound, but nobody questions that it is within Congress's purview to impose them. The Helms-Burton law, on the other hand, is directed at the trading policies foreign governments have with another foreign government. It allows these countries to be sued in U.S. courts for developing international friendships that the Clinton administration disapproves of (or, more specifically, a tiny but influential group of Cuban exiles living in Miami disapproves of). 

Obviously, Helms-Burton affects world trade in a profound way, and thereby falls within the purview of the WTO, at least according to the rules that the U.S. itself agreed to when it pushed the Gatt treaty two years ago. But when the Clinton administration saw that the WTO would rule against Helms-Burton, its trade negotiators packed their suitcases and went home. 

Some people cheered, on grounds that this helps undermine the WTO as an arbiter of international trade. The point is well taken. But it would be far better for the U.S. to take a principled and unchanging stand both for free trade and against all forms of international control on trade. 

So long as the head of the WTO remains Italy's Renato Ruggierio, whom the Clinton administration regards as a tool of the European Community, the U.S. will continue to disparage the institution that U.S. elites themselves agitated for decades to create. The U.S.'s man of choice--Mexico's former president Carlos Salinas--is on the lam, and his family is embroiled in the worst drug and murder scandal in Mexican history. 

Here's a prediction: if the U.S. ever gets its man in charge of the WTO, this agency will again be hailed as a wonderful force for the international rule of law. 

Thus are the dangers of imposing political controls on what should be an economic issue settled only by people party to the exchange. Thus also are the dangers of compromising with the ideals of a free society, which requires not world government agencies but decentralized self-government. How much better off we'd be as a nation if government, including world government, would indeed get and stay off of our backs.

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Jeffrey Tucker edits The Free Market.

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