Professional Documents
Culture Documents
Lacy/Symonds/Bowen Trade
Trade
## Trade Deficit Bad ##..................................................................................................................................................3
Trade Deficit High..........................................................................................................................................................4
Oil Key To The Trade Deficit.........................................................................................................................................5
Alternative energy reduces the deficit.............................................................................................................................6
Dollar collapse................................................................................................................................................................7
European Economic Collapse.........................................................................................................................................8
Foreign Direct Investment..............................................................................................................................................9
Hegemony/Soft Power..................................................................................................................................................10
Protectionism 1/3...........................................................................................................................................................11
Recession/Economic Growth 1/5..................................................................................................................................14
WTO..............................................................................................................................................................................19
AT “Liquidity”..............................................................................................................................................................20
AT “Unemployment” 1/5..............................................................................................................................................21
## Trade Deficit Good ##..............................................................................................................................................26
Trade Deficit Good 1NC (1/2)......................................................................................................................................27
Turns Case: Alternative Energy....................................................................................................................................29
Foreign Direct Investment............................................................................................................................................30
Foreign Direct Investment Good...................................................................................................................................31
Growth 1/2....................................................................................................................................................................32
Growth Good.................................................................................................................................................................34
Hegemony/Soft Power..................................................................................................................................................35
Inflation.........................................................................................................................................................................36
Liquidity Crunch...........................................................................................................................................................37
Unemployment 1/3........................................................................................................................................................38
US Poverty....................................................................................................................................................................41
AT “Competitiveness”...................................................................................................................................................42
A2: Trade deficit bad (1/2)............................................................................................................................................43
AT “Dollar Collapse......................................................................................................................................................45
AT: “Trade Deficit Reduces Growth” 1/3.....................................................................................................................46
## WTO ##....................................................................................................................................................................50
WTO INC 1/2................................................................................................................................................................51
WTO: Uniqueness 1/2...................................................................................................................................................53
WTO: Uniqueness: US Subsidy Cuts 1/4.....................................................................................................................55
WTO: Brink 1/2............................................................................................................................................................59
WTO: Link: US Key.....................................................................................................................................................61
WTO: Link: Subsidies 1/4............................................................................................................................................62
WTO: Link: Alternate Fuel Subsidies...........................................................................................................................66
WTO: Link: Fuel Standards..........................................................................................................................................67
WTO: Link: Tax Changes.............................................................................................................................................68
Doha Good – Alternative Energy..................................................................................................................................69
Doha Good – Economy 1/2...........................................................................................................................................70
Doha Good – Food Shortages 1/2.................................................................................................................................72
Doha Good – Free Trade 1/2.........................................................................................................................................74
Doha Good – AT “Hezzbola”........................................................................................................................................76
WTO Good - Poverty....................................................................................................................................................77
Doha Good – Russian Econ..........................................................................................................................................79
WTO Good – AT “Sovereignty”...................................................................................................................................80
WTO Good - Globalization...........................................................................................................................................81
WTO: Not Unique 1/6...................................................................................................................................................82
WTO: Link Turns..........................................................................................................................................................88
No Doha Impact 1/2......................................................................................................................................................89
Doha Bad – Hezbollah 1/2............................................................................................................................................91
WTO Bad: World Peace................................................................................................................................................94
WTO Bad: Human Rights 1/2.......................................................................................................................................95
WTO Bad: Environment...............................................................................................................................................97
Gonzaga Debate Institute 2008 2
Lacy/Symonds/Bowen Trade
WTO Bad: Famine........................................................................................................................................................98
## Germany ##..............................................................................................................................................................99
Germany INC 1/2........................................................................................................................................................100
Germany: Uniqueness 1/8...........................................................................................................................................102
Germany: Brink...........................................................................................................................................................111
Germany: Link 1/4......................................................................................................................................................112
Germany: Impact.........................................................................................................................................................116
Germany: Impact: Turns Case 1/2...............................................................................................................................117
Germany: Not Unique 1/5...........................................................................................................................................119
Germany: No Link......................................................................................................................................................124
Germany: Link Turn: Oil Prices 1/2...........................................................................................................................125
## Free Trade Good ##................................................................................................................................................127
Free Trade Good: War 1/3...........................................................................................................................................128
Free Trade Good: Environment 1/3............................................................................................................................131
Free Trade Good – Food Prices 1/2............................................................................................................................134
Free trade good- Global growth 1/5............................................................................................................................136
Free trade good- Heg/ Democracy..............................................................................................................................141
Free trade good- Poverty 1/5.......................................................................................................................................142
A2: Trade bad- rich poor gap......................................................................................................................................148
Free trade good- Terrorism 1/4....................................................................................................................................149
Free Trade Good: Unemployment...............................................................................................................................153
Free Trade Good: Women’s Rights.............................................................................................................................154
FTAs Bad 1/2..............................................................................................................................................................155
FTAs Good..................................................................................................................................................................157
## Free Trade Bad ##..................................................................................................................................................158
Free Trade Bad: AT “Generic Free Trade Good”........................................................................................................159
Free Trade Bad: Environment 1/4...............................................................................................................................160
Free Trade Bad: Extended Deterrence........................................................................................................................164
Free Trade Bad: Food Insecurity 1/2...........................................................................................................................165
Free Trade Bad: AT: Global growth............................................................................................................................167
Free Trade Bad: Poverty 1/2.......................................................................................................................................168
Free Trade Bad: Rural Economies 1/2........................................................................................................................170
Free Trade Bad: AT “Terrorism” 1/2...........................................................................................................................172
Free Trade Bad: Unemployment.................................................................................................................................174
Free Trade Bad: War 1/3.............................................................................................................................................175
Free Trade Bad: Warming 1/2.....................................................................................................................................179
Free Trade Bad: Women’s Rights 1/2.........................................................................................................................181
Gonzaga Debate Institute 2008 3
Lacy/Symonds/Bowen Trade
Oil imports are the biggest cause of the rising trade deficit- prices make it the highest it has
ever been
()Crustsinger, AP Economics Writer 2008,
(Martin, June 10, 2008 http://abcnews.go.com/print?id=5036397)
The trade deficit soared to the highest level in more than a year as an improvement in exports was
swamped by record-high levels of imported crude oil. The deficit with China also rose sharply.
The gap between what the nation imports and what it sells abroad rose by 7.8 percent in April to $60.9
billion, the Commerce Department reported Tuesday. It was the largest imbalance since March 2007.
The higher deficit was driven by a $4.3 billion increase in crude oil imports, which jumped to a record
$29.3 billion in April, as the average per-barrel price rose to an all-time high of $96.81.
If the price of crude had instead been at $60 per barrel, about where it was a year ago, the trade deficit
would have been $11 billion lower in April. Analysts cautioned the deficit will widen further in coming
months, given that oil is now trading above $130 per barrel.
Oil imports account for a third of the trade deficit- actions to reduce dependence mean vastly
cutting the size of the deficit
Luft, staff writer for Energy Publisher, 08. [Gal, “Oil: The Weapon of the New World Order,” energypublisher.com
June 19, 2008. Accessed 6/19/08 http://www.energypublisher.com/article.asp?id=15526]
As President Bush said in April 2004, U.S. dependence on overseas oil is a “foreign tax on the American
people.” Indeed, oil imports constitute a third of the U.S. trade deficit and are a major contributor to the
loss of jobs and investment opportunities. The transfer of wealth resulting from the cartel’s greed is reshaping
the world economy.
Flushed with petrodollars, oil producers are using their money to buy critical nodes of the West’s economies
including equity firms, banks, stock exchanges, media conglomerates, and retail chains. Altogether overseas
acquisitions from the Arab world amounted to $68 billion in 2007 and additional tens of billions of dollars
are still awaiting a place to park. Such holdings enable Arab governments to wield unprecedented influence
on the West’s economy and politics.
For energy importers the rise in oil prices means slower growth rate, inflation, loss of jobs, and
burgeoning trade deficits. The biggest casualties are the developing nations, some of whom still carry debts
which go back to the oil crises of the 1970s. The recent change of the trade patterns of the Arab oil
producers could potentially bring about the decline of the U.S. dollar as the main reserve currency, a
process that may already be on its way.
The cost of oil imports dwarf exports, keeping the trade deficit growing
BBC News, 08. [“Oil imports increase US trade gap,” BBC News, June 10, 2008. Accessed 7/2/08
http://news.bbc.co.uk/2/hi/business/7446524.stm]
The rising cost of importing foreign oil caused the US trade deficit to widen in April to $60.9bn, the
biggest for 13 months. Despite healthy export growth, the difference between US imports and exports
jumped 7.8% in April.
Crude oil imports alone increased $4.3bn to $29.3bn over the month, reflecting higher prices for fuel
on world markets. The increase wiped out the gains from strong US exports, which grew 3.3%.
Analysts warned that the cost of oil imports could rise further in coming months if crude oil continued
to climb. "This is the most important hurdle on our road to recovery," Gilles Moec, an analyst at Bank of
America, told the BBC.
Gonzaga Debate Institute 2008 6
Lacy/Symonds/Bowen Trade
Dollar collapse
US dollar holdings abroad will collapse the value of the dollar by 2010 unless Americans
stop borrowing to finance the trade deficit
Berthelsen, staff writer for Asia Times, 03. [John, “Asia fills her boots: dollar reserves skyrocket,” Asia Times, July
15, 2003. Accessed 7/2/08 http://www.atimes.com/atimes/Asian_Economy/EG15Dk01.html]
Wood tends to grow apocalyptic. "The current trend can continue for a while," he writes in his 110-page
first-half 2003 overview of the world economy, published last month. "But the longer American excesses
are financed, the more inevitable will be the ultimate collapse of the US paper-dollar standard that has
been in place ever since Richard Nixon broke with Bretton Woods by ending the dollar's link with gold in
1971. The result will be a massive devaluation against gold of Asia's hoard of dollar-exchange
reserves."
Asia does not have to follow this path, Christopher Wood of CLSA says. "Asian central banks could
abandon their mercantilist policies. They could let their currencies rise, which is what would happen
given Asia's high savings rates if market forces were allowed to prevail. This would in turn boost Asia's
consumer demand cycle. This is also what should be happening from a theoretical standpoint, as
satiated American consumers have already borrowed a lot and need to rebuild their balance sheets."
Then, turning truly apocalyptic, Wood predicts that by the end of the decade there will no longer be a
possibility that the world's central banks can control the situation, and there will be a truly massive
devaluation of the US dollar. "The view here is that the US dollar will have disintegrated by the end of
this decade. By then, the target price of gold bullion is US$3,400 an ounce." That is roughly 10 times gold's
current level. If that were to happen, Asia's holders of dollars would be forced to start selling them or
see their own reserves collapse. If they start to sell them, the price of America's paper will fall even
faster.
Hegemony/Soft Power
Protectionism 1/3
Trade deficit destroys global free trade, causes WTO collapse and poverty
The Economist, 03. [“The world economy needs both,” The Economist, Vol. 368, 9/20/2003. Accessed 7/3/08
http://proxy.foley.gonzaga.edu:2048/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=1
0888974&site=ehost-live]
But a dollar crash and global recession are not the only gloomy possibilities. Equally worrying, and
much more likely, is a surge in protectionism, especially if America's current-account deficit continues
to rise rapidly. In 1985, Congress seriously considered an import surcharge of the sort described in the
imaginary scenario above. Many American politicians are already ambivalent towards the WTO. If the
government loses a few more big trade cases, that ambivalence could turn to antipathy.
A slide into protectionism would have grave consequences. Since the end of the second world war,
America has championed the multilateral approach to freeing global trade, though with varying
enthusiasm. If it were to give up this leadership role, even temporarily, the global trading system would
be in deep trouble. The WTO is a fragile organisation, less than ten years old. It would not survive a
lengthy period of American disengagement.
The intellectual consensus in favour of free trade, particularly in poor countries, could also wither in the
face of American protectionism. Poor countries would ask why, if it was fine for America to raise barriers
against the Chinese threat, they should hold back from doing the same. Given that trade integration plays a
crucial role in economic development, the world's poorest would find it that much harder to escape from
poverty.
Protectionism 2/3
Protectionism 3/3
Causes new attacks on free trade
Griswald, associate director of the Cato Institute's Center for Trade Policy Studies, 98 (Daniel T., “America's
Maligned and Misunderstood Trade Deficit,” 4-20-1998, http://www.freetrade.org/pubs/pas/tpa-002.html)
The trade deficit has continued to haunt U.S. trade policy in the 1990s. In the debate in the fall of 1997
over renewal of fast-track trade authority, opponents of the measure cited the continuing overall U.S.
trade deficit as evidence that trade harms the U.S. economy and destroys jobs. To discredit the North
American Free Trade Agreement, and by association all free-trade agreements, opponents of fast-track
authority hammered away at the bilateral trade deficits the United States runs with both of its NAFTA
partners, Mexico and Canada.
The deficit with Mexico drew the most fire because America's bilateral balance with Mexico had been in
surplus before 1995. In September 1997 Steve Beckman, an economist for the United Auto Workers labor
union, testified before the Subcommittee on Trade of the House Ways and Means Committee that bilateral
trade deficits with Canada and Mexico had created a "trade debacle" costing the U.S. economy more than
400,000 jobs.(9)
Bilateral trade deficits continue to complicate America's commercial relations with a number of major trading
partners, chief among them Japan and China. In 1997 the United States recorded a $55.7 billion bilateral
trade deficit with Japan and a $49.7 billion deficit with China, by far our two largest bilateral imbalances.(10)
The deficit with China appears even more threatening to some trade critics because it has grown so rapidly in
recent years, more than quadrupling from $11.5 billion in 1990.(11) Our bilateral deficit with China has been
used to argue against renewal of China's Most Favored Nation status and against admitting it to the World
Trade Organization. America's bilateral trade deficit with Japan has probably been the single biggest source
of trade friction between the two countries.(12)
If the overall U.S. trade deficit rises in 1998 as predicted, it could spur a whole new round of attacks on free
trade, prompting government intervention to curb imports and spur exports.
Gonzaga Debate Institute 2008 14
Lacy/Symonds/Bowen Trade
High deficits result in a decline in the value of the dollar, causing a “hard landing” and
global recession
Trumbull, staff writer for the Christian Science Monitor, 06. [Mark, “Climbing debt casts doubt on dollar's future,”
Christian Science Monitor, July 6, 2006, USA; pg. 1]
Many economists believe the dollar will decline in value - and needs to decline - rela- tive to other
currencies. The reason: The record US trade deficit shows no signs of shrinking on its own accord. The
larger it grows, the greater the risk of a "hard landing" for America if other nations become worried
about America's ability to repay foreign creditors, who are now lending some $1.6 million per minute
to finance overall US spending.
The hard landing scenario, which could spark a global recession, remains a possibility rather than a
consensus forecast. But policymakers worldwide, from finance ministers to the International Monetary
Fund (IMF), take the threat seriously.
"The thing that's driving the international focus is the concern that the adjustment [in the dollar]
could easily be disorderly and really painful," says Charles McMillion, president of MBG Information
Services, an economic consulting firm in Washington. "This imbalance will dominate Paulson's and [Federal
Reserve Chairman Ben] Bernanke's efforts, for the rest of their terms."
Gonzaga Debate Institute 2008 15
Lacy/Symonds/Bowen Trade
High trade deficits crush American competitiveness and cause a global financial crisis
Dobbs, contributing editor for U.S. News and World Report, 04. [Lou, “Trading away prosperity,” U.S. News &
World Report; 8/30/2004, Vol. 137 Issue 6, p60. Accessed 7/3/08
http://proxy.foley.gonzaga.edu:2048/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=1
4204418&site=ehost-live]
WILL PRESIDENT BUSH OR SEN. John Kerry do anything to reverse our mounting trade deficit and the
outsourcing of American jobs? Whatever the American voters decide in November, it's critically important
that their choice of president over the next four years end the madness that will lead to an economic
and social crisis in this country. The Commerce Department recently reported a disturbing 19 percent
increase in the U.S. monthly trade deficit for June. With the nearly $56 billion gap in June, our trade
deficit is now on pace to rise to almost $600 billion by the end of the year, more than 15 percent higher
than last year's record half-trillion-dollar deficit. I've always believed that there is nothing wrong with
carrying a moderate amount of debt. But it's become all too clear that our shortsighted trade policies have
created an unsustainable deficit that could ultimately spell fiscal disaster for the United States. A trade
gap of this magnitude will only serve to limit job creation or lead to more job losses, further our decline
in global competitiveness, and increase our reliance on foreign debt. I'm obviously not in favor of costly
free-trade policies, but neither am I a "table-thumping protectionist," as I've been called. There has to be a
middle ground between the two extremes, and as our deficit continues to reach unprecedented levels, now is
the time to start a real dialogue on the issue of fair, balanced trade before this gets completely out of hand.
We are closer to that point than we think. Our current account deficit, the broadest measure of international
trade, has risen to about 5 percent of the nation's gross domestic product. That figure has significant
implications for any nation's fiscal health, even that of the world's largest economy. A four-year-old Federal
Reserve study found that industrialized nations are likely to suffer major fiscal crises when their
current account deficit rises to 5 percent of GDP. It's clear we're headed the way of crisis if we don't
adjust our thinking and policies.
Gonzaga Debate Institute 2008 16
Lacy/Symonds/Bowen Trade
Record high deficits have put us on the brink of global recession- confidence is tenuous and
collapse would mean rampant inflation
Trumbull, staff writer for the Christian Science Monitor, 06. [Mark, “Climbing debt casts doubt on dollar's future,”
Christian Science Monitor, July 6, 2006, USA; pg. 1]
What's changed is the global economic environment. America's so-called current account - a broad
measure of trade and money flows - is running a deficit in the neighborhood of $800 billion annually,
four times as big as in 1995, when measured as a share of the US economy.
"We now have record indebtedness with the rest of the world," says Paul Kasriel, an economist at the
Northern Trust Corp. Northern Trust Corp. in Chicago. "People have to have confidence that you're going to
be able to pay them back."
So far, that confidence remains intact, with the dollar as the dominant reserve currency for central
banks. It's also simple necessity: Many nations rely heavily on exports to the US.
Many economists see the magnitude of such imbalanced trade as unsustainable in the long run.
In the hard-landing scenario, foreign governments and investors might conclude that so much lending
to the US is unwise. They may seek better returns elsewhere, or worry that the US government won't
be able to meet its long-term obligations without resorting to an inflationary use of government
printing presses.
The result could be a sharp drop in the dollar, an upward spike in the cost of borrowing in the US, and
trouble for countries dependent on US trade. That's a recipe for recession.
Gonzaga Debate Institute 2008 17
Lacy/Symonds/Bowen Trade
The trade deficit is a ticking time bomb that could inflict massive global pain if detonated-
this detonation would occur if the deficit swells further still
Cooper and Maddigan, staff writers for Business Week, 04. [James and Kathleen, “Could Trade Imbalances Topple
the Greenback?” Business Week, Nov 29, 2004. Iss. 3910 pg. 31]
The ever-growing deficit in America's international trade is a bomb waiting to explode, but one with a
very long fuse. That's why for years economists and policymakers put the deficit low on their list of
worries. The lack of urgency stemmed from the glacial pace of the gap -- it has been widening for 13
years with no problems -- and from the fact that the U.S. remains the most attractive destination for
foreign funds.
Recently, however, the fuse seems to be burning a lot more quickly. Currency markets, increasingly
edgy about the deficit, are pushing down the dollar. Overseas officials and international trade
organizations have called on the U.S. to deal with the problem before it inflicts global pain. And
policymakers at the Federal Reserve took time at their Sept. 21 policy meeting to discuss the "worrisome
further widening of the U.S. trade and current-account balances." At the same time, growing economic
tensions, especially in Europe, and contradictory statements from the White House about the dollar suggest
that correcting the current-account deficit will be risky.
Trade deficits reduce the GDP by $250 billion a year- crushing economic growth
Morici, professor at the University of Maryland School of Business and former chief economist at the US
International Trade Commission, 08. [Peter, “Bernanke aggrevates trade deficit risks, Asia Times Online, June 12,
2008. Accessed 7/2/08 http://www.atimes.com/atimes/Global_Economy/JF12Dj02.html]
High and rising trade deficits tax economic growth. Each dollar spent on imports, not matched by a
dollar of exports, shifts workers into activities in non-trade competing industries such as department
stores and restaurants. Manufacturers are particularly hard hit by this subsidized competition. Through
recession and recovery, the manufacturing sector has lost 3.7 million jobs since 2000. Following the pattern
of past economic recoveries, the manufacturing sector should have regained more than 2 million of those
jobs, especially given the very strong productivity growth accomplished in technology-intensive durable
goods industries. Productivity is at least 50% higher in industries that export and compete with
imports. By reducing the demand for high-skill and technology-intensive products, and US-made goods
and services, the deficit reduces GDP by at least $250 billion a year, or about $1,750 for each worker.
Longer-term, persistent US trade deficits are a substantial drag on growth. US import-competing and
export industries spend at least three times the national average on industrial research and development, and
encourage more investments in skills and education than other sectors of the economy. By shifting
employment away from trade-competing industries, the trade deficit reduces US investments
in new methods and products, and skilled labor.
Gonzaga Debate Institute 2008 18
Lacy/Symonds/Bowen Trade
WTO
Trade deficit causes WTO collapse
The Economist, 03. [“The world economy needs both,” The Economist, Vol. 368, 9/20/2003. Accessed 7/3/08
http://proxy.foley.gonzaga.edu:2048/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=1
0888974&site=ehost-live]
But a dollar crash and global recession are not the only gloomy possibilities. Equally worrying, and
much more likely, is a surge in protectionism, especially if America's current-account deficit continues
to rise rapidly. In 1985, Congress seriously considered an import surcharge of the sort described in the
imaginary scenario above. Many American politicians are already ambivalent towards the WTO. If the
government loses a few more big trade cases, that ambivalence could turn to antipathy.
A slide into protectionism would have grave consequences. Since the end of the second world war,
America has championed the multilateral approach to freeing global trade, though with varying
enthusiasm. If it were to give up this leadership role, even temporarily, the global trading system would
be in deep trouble. The WTO is a fragile organisation, less than ten years old. It would not survive a
lengthy period of American disengagement.
The intellectual consensus in favour of free trade, particularly in poor countries, could also wither in the
face of American protectionism. Poor countries would ask why, if it was fine for America to raise
barriers against the Chinese threat, they should hold back from doing the same. Given that trade
integration plays a crucial role in economic development, the world's poorest would find it that much
harder to escape from poverty.
Gonzaga Debate Institute 2008 20
Lacy/Symonds/Bowen Trade
AT “Liquidity”
Turn- Liquidity creates instability and dangerous asset bubbles in the global economy
Li and Zhu, professor of political science, York University and Marxism research institute, Tsinghua University, 05.
[Minqi and Andong, “Neoliberalism, Global Imbalances, and Stages of Capitalist Development,” Political Economy
Research Institute Working Paper Series, August 2005. Accessed 7/9/08 from
http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_101-150/WP110.pdf]
The lower real interest rates in recent years have flooded the world with liquidity.2 But the rapid
expansion of global liquidity has not led to sustainable expansion of effective demand supported by the
increase in the real incomes of the great majority of the world population. Instead, it has led to a series
of asset bubbles, especially housing bubbles, throughout the world, with dangerous implications for the
global economy (The Economist, March 3, 2005, “Global Housing Prices: Still Want to Buy?”).
Gonzaga Debate Institute 2008 21
Lacy/Symonds/Bowen Trade
AT “Unemployment” 1/5
The rapid increase in the trade deficit has resulted in the loss of 3 million American
manufacturing jobs
Evans, chief economist for American Economics Group, 05. [Michael, “Jobs And The ‘Twin Deficits,’” Industry
Week, April 2005, p.76. Accessed 7/9/08 from EBSCOhost]
THE U.S. TRADE DEFICIT FOR GOODS ROSE TO $666 billion last year, up from $547 billion in
2003 and $483 billion in 2002. The goods trade deficit increased to an annual rate of $737 billion in the final
quarter of 2004 and is headed for $800 billion by the end of this year. Should we worry? Some
consequences are obvious enough, for example, the loss of 3 million manufacturing jobs, many of them
relatively high-paying jobs. So why are virtually all economists in favor of more free trade? A cynic would
say that’s because we economists don’t really have to work for a living. But there has to be more to it than
that. Indeed, if there really were no tangible benefits to these enormous trade deficits, steps would have been
taken to reduce them long ago.
AT “Unemployment” 2/5
No internal link- A trade deficit is a symptom, not a cause, of growth and high employment
rates
Griswold, Associate Director, 01. [Daniel T., “AMERICA'S RECORD TRADE DEFICIT: A Reflection of
Economic Strength,” USA Today, May 2001. Accessed 7/2/08 from
http://findarticles.com/p/articles/mi_m1272/is_2672_129/ai_74572239/pg_4?tag=artBody;col1]
GDP growth. During years of rising deficits, the growth of real GDP averaged 3.5% per year, compared
to 2.6% during years of shrinking deficits. In other words, the economy typically grows more than one-
third faster in years in which the trade deficit expands than in those in which it shrinks. The causation,
of course, flows from growth to the trade deficit. In a more rapidly growing economy, demand for
investment capital and imports increase. Rising incomes stoke demand for imports, and an inflow of
foreign capital provides the means to help pay for them.
Employment. The story of jobs is much the same. During years of "worsening" trade deficits, the
unemployment rate has, on average, fallen by 0.4%. During years of "improving" deficits, it has, on average,
risen by the same amount. This is not to say that a rising trade deficit causes unemployment to fall.
Causation works in the other direction: Expanding payrolls boost total domestic income, which, in
turn, raises demand for imports. Once again, the protectionists have it wrong --imports do not destroy
jobs; job creation fuels demand for imports.
Gonzaga Debate Institute 2008 23
Lacy/Symonds/Bowen Trade
AT “Unemployment” 3/5
Trade deficit steals high-wage jobs and depress the manufacturing sector
Scott, Ph.D. Economics, 1999 (Robert E., “The U.S. Trade Deficit; Are We Trading Away Our Future?,”
Economic Policy Institution, http://www.epi.org/content.cfm/webfeatures_viewpoints_tradetestimony, accessed
online 7-13-08)
Since the 1970s the U.S. moved from a trade surplus to a deficit position, as Europe and Japan began to
compete effectively with the U.S. in a range of industries. There are many ways in which trade has
injured U.S. workers since then. First, deterioration in the trade balance (the difference between
exports, which create jobs, and imports, which eliminate domestic employment) has reduced employment,
especially in manufacturing and other industries producing traded goods The trade surplus of the 1960s was
transformed into a deficit that reached 2.9% of GDP in 1998, as shown in Figure 1. This deficit will grow
rapidly in the future as a result of the continuing global financial crisis. Although financial markets are
beginning to recover throughout the world, the real economies of many developing countries and Japan
remain mired in recessions. For example, reliable private sector reports show that unemployment in Sao
Paulo, Brazil currently exceeds 20%. The growth in the trade deficit over the past two decades has
destroyed millions of high-wage, high skilled manufacturing jobs in the U.S., and pushed workers into
other sectors where wages are lower, such as restaurants and health service industries. When I appeared
before this committee last spring, I summarized EPI forecasts that the Asia Crisis would lead to the
elimination of one million jobs in the U.S., with most of the losses concentrated in the manufacturing sectors
of the economy (Scott and Rothstein 1998). These job losses have begun to materialize, despite the
continuing boom in the rest of the economy. The U.S. has lost nearly 500,000 manufacturing jobs since
March of 1998, due to the impact of the rising trade deficit. [2] The IMF recently forecast that the U.S.
current account deficit (the broadest measure of the trade balance) would reach nearly $300 billion in 1999,
exceeding 3.5 percent of GDP for the first time in the post-war era (IMF 1999). The U.S. can expect to lose
another 400,000 to 500,000 manufacturing jobs as a result, even if the economy continues to expand at its
current pace in 1999. Trade deficits also have a direct impact on wages, especially for non-college
educated workers, who make up three-quarters of the U.S. labor force. The other line in Figure 1 shows
that the average real wage for U.S. production workers peaked in 1978, declining more or less steadily
through 1996. Real wages have begun to increase in the past 3 years. However, the small upturn increased
real wages by only 4.5%, not nearly enough to offset a decline of more than 11% since the 1978, nor to return
workers to the path of steadily rising wages they experienced from 1950 through 1973. What is responsible
for the decline in U.S. wages? Trade is certainly one of the most significant causes, because it hurts workers
in several ways. First, the steady growth in our trade deficits over the past two decades has eliminated
millions of U.S. manufacturing jobs. As we showed in another recent EPI report, trade eliminated 2.4
million jobs in the U.S between 1979 and 1994 (Scott, Lee and Schmitt 1997). Growing trade deficits
eliminate good jobs and reduce average wages in the economy. Since then, many more jobs have been
lost to NAFTA and other sources of our trade problems, including China, and recently, Europe. The
second way in which trade depresses wages is through the growth in imports from low wage countries. If
the prices of these products fall, it puts downward pressure on prices in the U.S. Domestic firms are forced to
cut wages or otherwise reduce their own labor costs in response. A third way in which globalization
depresses wages is through foreign direct investment. When U.S. firms move plants to low wage countries,
as they have done at an increasing rate in recent years, it has a chilling affect on the labor market. The mere
threat of plant closure is often sufficient to extract wage cuts from workers. This tactic has also been used
with increasing frequency in the 1990s and is effective even when plants don't move. Most economists now
acknowledge that trade is responsible for 20 to 25 percent of the increase in income inequality which has
occurred in the U.S. over the past two decades. However, existing research can only explain about half of the
change in income inequality. Therefore, trade is responsible for about 40% of the explainable share of
increased income inequality. The rest is due to forces such as declining unionization, and inflation-induced
erosion in the value of the minimum wage.
Gonzaga Debate Institute 2008 24
Lacy/Symonds/Bowen Trade
AT “Unemployment” 4/5
AT “Unemployment” 5/5
B. Plan lowers oil prices- a move away from oil dependence leads to a flood of cheap oil
Maugeri PhD in international political economy. ENI SPA's group senior vice-president (director) of corporate
strategies and international relations '03
Leonardo, Oil and Gas Journal "Time to debunk mythical links between oil and politics" December 15 2003.
Proquest.com Accessed 7/2/08
Western countries have been historically unable to sustain a long-term foreign policy designed around
energy objectives, which vanish once prices drop and often conflict with broader diplomatic goals.
Moreover, history has proven -- even without taking ethics into account -- that it is impossible to exert long-
lasting control over Middle Eastern oil countries because of the unmanageable chain reactions set in motion
by exerting foreign influence in such a sensitive environment.
Yet history has also shown major oil-producing countries that they are vulnerable to future price drops
if alternative energy sources are developed in response to fears of rising energy prices. Given the full
range of contrasting forces at play in any oil scenario, the wisest approach is simply to allow it to find
its own equilibrium.
C. The high US trade deficit is the engine powering the global economy
Chandrasekhar & Ghosh, International Development Economics Associates, 08.[CP and Jayati, “Oil Prices
and the US Dollar,” networkidea.org, March 14, 2008. Accessed 7/2/08
http://www.networkideas.org/news/mar2008/news14_Oil_Prices.htm]
There is a problem in all this, however – the problem of finding an alternative engine for the global
economy, and source of demand for world exports, if the US economy stops playing this role. The
problem may not be so severe for oil-exporting countries, since they are likely to face increasing world
demand and rising prices for some time in future.
But for other countries, especially oil-importing developing countries, this combination of high oil
prices and slowing US demand may well be economically devastating. This may explain why there has
been only a marginal shift out of holding US dollar reserves. Between the first quarter of 2004 and the last
quarter of 2007, the share of dollars in global foreign exchange reserves fell slightly from 67.5 per cent to
63.7 per cent, and this is probably substantially due to the effect of the dollar devaluation itself.
Gonzaga Debate Institute 2008 28
Lacy/Symonds/Bowen Trade
B. Turn- Liquidity caused by high oil prices allows developing nations to transition to non-fossil
fuel-based economies
McKillop, Internationall Associationn of Energy Economists, 04. [Andrew, “CHEAP OIL MYTHS AND ENERGY
TRANSITION,” policypete.com, 2004. http://policypete.com/Misc/temp%20-
%20CHEAP%20OIL%20MYTH%20AND%20EN%20TRANS.htm]
Greater liquidity in the world economy, aided by higher oil, gas, gold and other real resource prices, with
relatively low interest rates can enable poorer countries to break free from their indebtedness to the
North’s financial institutions, have real freedom of economic policy choices, and avoid development
strategies entraining total dependence on fossil fuel-based economic structures and systems. Their
experience of the Neoliberal 1980s should give them reason to consider more autonomous or autarchic
domestic development as a better choice than pursuing the impossible strategy of Globalization. Victims of
this, like Argentina and a string of African countries, are there to provide concrete examples of what this
illusory policy does to the economy, the environment and to the finances of weaker countries, as well as to
general human wellbeing in those countries.
Gonzaga Debate Institute 2008 30
Lacy/Symonds/Bowen Trade
Growth 1/2
Deficit Good for economic growth
Griswold, Associate Director, Center for Trade Policy Studies, 05
(Daniel T., CATO Institute, January 11, http://www.freetrade.org/node/108 Accessed 7-2-08)
Worries persist that the record U.S. trade deficit is weighing down the nation's economy, depressing output,
and sending jobs overseas. Those worries have only increased in recent weeks as various measures of the
deficit have reached new records. On December 14, the Commerce Department announced that the monthly
trade deficit in goods and services for October had reached a record $55.5 billion,[1] and two days later the
department announced that the U.S. current account deficit for the third quarter had reached $164.1
billion,[2] also a record. The two related deficits are virtually certain to set annual records approaching $600
billion by the time the full year's trade accounts are tallied in early 2005.[3]
Concern about the impact of the trade deficit on growth is rooted in the assumption that rising imports
displace domestic production in the U.S. economy, acting as a drag on the growth of real gross
domestic product. As one wire service reported after the recent release of October's record trade deficit
number, "such a large trade deficit also threatened to be more of a drag on the domestic economy than first
thought and could see analysts trim back expectations for GDP growth this quarter."[4]
How valid is the widespread assumption that a growing trade deficit means slower economic growth? Hard
evidence of such a connection appears to be lacking. In fact, an analysis of economic data from the last
quarter century shows that a growing current account deficit (as a percent of GDP) is actually
associated with faster, not slower, economic growth, as well as rising manufacturing output and falling
unemployment.
Testing the Conventional Wisdom
In 8 of the years since 1980, the U.S. current account balance has moved in a positive direction (i.e., the
deficit has shrunk or "improved") as a share of GDP from the previous year. In 16 of those years, it has
moved in a negative direction (i.e., the deficit has grown or "worsened"). Of those years in which the
balance moved in a negative direction, 10 have seen a moderate movement of between 0.0 and 0.5
percentage points, and 6 have seen a more rapid movement of 0.7 to 1.3 percentage points.[5]
Growth 2/2
Trade deficit and large US dollar reserves in Asia are key to growth
Berthelsen, staff writer for Asia Times, 03. [John, “Asia fills her boots: dollar reserves skyrocket,” Asia Times, July
15, 2003. Accessed 7/2/08 http://www.atimes.com/atimes/Asian_Economy/EG15Dk01.html]
By the end of 2003, according to JP Morgan Chase economists in Hong Kong, the combined countries of
Asia are expected to hold an astonishing 70 percent of the world's currency reserves. In the past decade, they
estimate, Asia has added US$1.2 trillion to its US dollar reserves as it runs up whopping trade
surpluses with the rest of the world - principally the United States, whose annual trade deficit is
expected to reach US$500 billion. Credit Lyonnais Securities Asia (CLSA) in Hong Kong put the Asian
reserves even higher, at perhaps $1.5 trillion.
Is this a danger to the world economy? For many years, America's strong-dollar policy served the
world and chiefly the United States very well. Their currencies cheap against the US dollar, Asian
manufacturers profited by making relatively inexpensive exports and selling them in the United States
at a healthy profit. In a kind cat-and-rat-farm analogy, in which the cats eat the rats, are skinned for their
fur, and then are fed back to new rats, the Americans benefited by getting cheap goods that kept their
consumer-led economy roaring. The financial communities benefited from the repatriation of those
profits as the funds flowed back in a ceaseless waterfall into US stock markets, treasury and corporate
bonds, money-market funds and other financial instruments.
Gonzaga Debate Institute 2008 34
Lacy/Symonds/Bowen Trade
Growth Good
Lower global growth fuels a collapse of international trade causing great power conflicts
Rosecrance and Thompson, professors of political science at UCLA, 03. [Richard and Peter, “TRADE,
FOREIGN INVESTMENT, AND SECURITY,” UCLA Annual Review of Political Science, March 6, 2003.
P.377–98.]
It would be premature, however, to conclude that economic ties between producing nations have become too
strong to break. In many past eras, international trade and investment collapsed, leaving nations in
limbo. In some cases, military conquest followed as great powers sought to gain access to the raw
materials or markets that they had previously been able to tap through trade or factor flows. In the
past, world depressions and economic contractions generated tariffs and exchange controls that cut
international trade by large amounts. Under certain conditions, these could occur again. Yet during the
Far Eastern financial crisis of 1997–1998, although portfolio investments were withdrawn from East Asia,
FDI ties remained strong. (China, the beneficiary of great amounts of FDI, was much less affected than other
nations.) Even higher tariffs might not deter continuing factor flows, since productive investment in another
country is one means of obviating the effect of customs restrictions. Thus, while security does not depend
solely on economic linkages, FDI has been directly correlated with peaceful ties in recent years.
Hegemony/Soft Power
Inflation
Large deficits keep inflation down
Griswold, Associate Director, Center for Trade Policy Studies at Cato, 99. [Daniel T., “The U.S. Trade Deficit: A
Sign of Good Times,” testimony before the Trade Deficit Review Commission, August 19, 1999. Accessed 7/2/08
from http://www.cato.org/testimony/ct-dg081999.html]
Without a trade deficit, Americans could not import the capital we need to finance our rising level of
investment in plants and new equipment, including the latest computer technology. The same appreciating
dollar that expands the trade deficit helps keep a lid on inflation while lower import prices raise the
real wages of the vast majority of American workers.
When the underlying causes of the trade deficit are understood, it should become clear that the biggest
threat to our economy is not the deficit itself, but what politicians might do in a misguided mission to
shrink it.
Gonzaga Debate Institute 2008 37
Lacy/Symonds/Bowen Trade
Liquidity Crunch
Cutting the deficit causes massive liquidity crunch
The Economist, 02. [“The dollar and the deficit,” The Economist.com, Sept. 12, 2002. Accessed 7/2/08
http://www.economist.com/background/PrinterFriendly.cfm?Story_ID=1325394]
Eventually, however, growth in the world's economies translates into a growing demand for dollar assets.
The more money central banks print, the more dollars they like to hold in reserve to underpin their currency.
The more business is done across borders, the more dollars traders need to cover their transactions. If
the greenback is the new gold, Alan Greenspan, the Federal Reserve chairman, is the world's alchemist,
responsible for concocting enough liquidity to keep world trade bubbling along nicely. But America
can play this role only if it is happy to allow foreigners to build up a huge mass of claims on its assets-
and if foreigners are happy to go along. Some economists watch with consternation as the rest of the
world's claims on America outstrip America's claims on the rest of the world. As they point out, even a dollar
bill is an American liability, a promise of ultimate payment by the US Treasury. Can America keep making
these promises to foreigners, without eventually emptying them of value? According to Mr Davidson, the
world cannot risk America stopping. America's external deficit means an extra $500 billion is going
into circulation in the world economy each year. If America reined in its current account, international
commerce would suffer a liquidity crunch, as it did periodically under the gold standard. Hence America's
deficit is neither a "meaningless concept" nor a lamentable drain on world savings. It is an
indispensable fount of liquidity for world trade.
Unemployment 1/3
A. Reducing the trade deficit results in a weak US economy, high inflation and fewer jobs
Weidenbaum, chairman of the Weidenbaum Center on the Economy, 01. [Murray, “Dispelling the Myths About the
Global Economy,” Executive Speeches; Feb/Mar2001, Vol. 15 Issue 4, p14, 6p]
Yes, the U.S. trade deficit is at a record high. But it is part of a "virtuous circle" in our economy. The
trade deficit mainly reflects the widespread prosperity in the United States, which is substantially greater
than in most of the countries we trade with. After all, a strong economy such as ours--operating so close to
full employment and full capacity--depends on a substantial amount of imports to satisfy our demands
for goods and services. Our exports are lower primarily because the demand for imports by other
nations is much weaker.
The acid test is that our trade deficit quickly declines in the years when our economy slows down and
that deficit rises again when the economy picks up. Serious studies show that, if the United States had
deliberately tried to curb the trade deficit in the 1990s, the result would have been a weak economy
with high inflation and fewer jobs. The trade deficit is a byproduct of economic performance. It should
not become a goal of economic policy.
Unemployment 2/3
Trade deficit positively affects employment
Griswold, Associate Director, Center for Trade Policy Studies, 05
(Daniel T., CATO Institute, January 11, http://www.freetrade.org/node/108 Accessed 7-2-08)
Trade Deficits, GDP, Manufacturing, and Unemployment
By the most basic measure of economic performance, the change in real GDP, evidence points to a stronger
economy in years in which the current account deficit is rising. In those years since 1980 when the current
account deficit declined as a share of GDP, the economy grew each year by an average of 1.9 percent.
In those in which the current account deficit grew moderately, real GDP grew at an annual average of
3.0 percent. In those years in which the deficit most rapidly "deteriorated," to borrow another popular
characterization, real GDP grew by a robust annual average of 4.4 percent-a rate more than double the
growth in years when the deficit was "improving." Four of the five best years for GDP growth since
1980 have occurred in the same years when the current account deficit was growing most rapidly.
The same pattern emerges in the manufacturing sector. It has become the conventional wisdom that a
trade deficit hurts manufacturing because imports presumably displace domestic production, but the
plain evidence of the past quarter century contradicts that presumption. Manufacturing output
actually declined slightly on average in those years in which the current account deficit shrank. In
contrast, it grew by 4.1 percent in years when the current account deficit grew moderately and by a
brisk 5.3 percent when the deficit grew rapidly. In fact, five of the six years that saw a decline in
manufacturing output occurred in years in which the current account deficit was declining.
The pattern also applies in the politically sensitive area of employment. Again, the conventional wisdom
holds that a trade deficit destroys jobs by supposedly shipping them overseas. But again the evidence
suggests something quite different. In those years of an "improving" current account deficit, the
unemployment rate on average jumped by 0.8 percentage points. In years when the deficit moderately
"worsened," the unemployment rate fell by an average of 0.2 points, and in years when the deficit
grew the most rapidly, the unemployment rate fell by an even larger average of 0.7 points. Indeed, in 7
of the 8 years in which the current account deficit "improved," the unemployment rate went up; in 13
of the 16 years in which the current account deficit "worsened," the unemployment rate went down.
The year 2004 appears to fit the pattern comfortably. Through the first three quarters of the year, January
through September, the current account deficit averaged 5.5 percent of GDP, a 0.6 percentage point shift in
the negative direction from 2003.[9] That would place 2004 somewhere between a moderate and rapid
growth of the current account deficit. Befitting the pattern, economic performance through the first
three quarters of the year was also moderate to robust. Real GDP grew an average annual rate of 3.9
percent during the first three quarters.[10] Manufacturing output grew during those same three
quarters at an annual rate of 5.4 percent from the previous year,[11] while the unemployment rate was
on a pace to drop by 0.4 percentage points during the full year.[12]
Gonzaga Debate Institute 2008 40
Lacy/Symonds/Bowen Trade
Unemployment 3/3
US Poverty
Trade deficits reduce poverty
Griswold, Associate director of Center for Trade Policy Studies at Cato, 01. [Daniel, “AMERICA'S RECORD
TRADE DEFICIT: A Reflection of Economic Strength,” USA Today, May 2001. Accessed 7/2/08
http://findarticles.com/p/articles/mi_m1272/is_2672_129/ai_74572239/pg_4?tag=artBody;col1]
Poverty. Americans on the margins of poverty also appear to fare somewhat better when the trade
deficit expands. In years when the deficit grew, the poverty rate in the U.S. fell an average of 0.2%
from the year before. In years when it shrank, the poverty rate rose by an average of 0.3%. The same
expanding economy that causes the trade deficit to grow lifts a larger share of Americans out of official
poverty.
The contention that trade deficits somehow damage the U.S. economy is directly challenged by its
superior performance during times when they are rising. If trade deficits drug down growth, destroy
jobs, decimate manufacturing, and hurt the poor, why are bigger deficits associated with faster growth, a
falling unemployment rate, accelerating industrial output, and fewer people living in poverty?
Gonzaga Debate Institute 2008 42
Lacy/Symonds/Bowen Trade
AT “Competitiveness”
B. Trade deficits are not an indicator or cause of poor economic health—their authors
make mistakes in analyzing the effect of deficits globally
Fisher, chairman and chief executive of Fisher Investment, author of The Only 3 Questions that Count, 07. [Ken,
“Why Trade Deficits Aren’t Necessarily Bad,” Investment News Jan 29, 2007. Investment Strategies, pg. 60]
You don't read anywhere that you shouldn't worry about it at all. Suggest that in public, and you will be
widely ridiculed. That is always a great time for Question One. Is it true trade deficits are bad for our
economy, stock market and dollar? While we're at it, throw in Question Two: Is it possible that the trade
deficit might be something good rather than bad? If so, how?
Again, here is an investing concern bred seemingly from common-sense analysis, confirmation bias and an
inability to scale (all errors combatable via Question Three). A trade deficit seems to signal that we spend
more on imports than we garner on exports and are bleeding money. It is seen like a gigantic zero-sum
game - if you have more minuses than pluses, you lose. By that logic, a trade deficit is bad for the
economy because it's unsustainable and bankrupting. If America were a gigantic hardware store, a
sustained trade deficit could be bad. If everyone acts nuts, the money bolts out the door. You want your
hardware store to sell more stuff (nuts, bolts, drill bits) than it buys (computers, employee time) or else the
hardware store will bolt to bankruptcy.
Nonetheless, folks who think this way make several cognitive errors. First, as a general remedy, think
globally. If you do, you realize that trade deficit concerns are global nonsense.
No one worries whether Montana - or California or New York, for that matter - runs a trade deficit with the
rest of America. It's obviously impossible for the whole world to run a trade deficit or surplus; it balances.
Among developed nations, trade deficits and surpluses aren't materially more important to the overall
level of global stocks than the trade balance between Montana and New York.
Gonzaga Debate Institute 2008 44
Lacy/Symonds/Bowen Trade
AT “Dollar Collapse
Trade deficits don’t harm currency value- no economic impact to a deficit
Fisher, chairman and chief executive of Fisher Investment, author of The Only 3 Questions that Count, 07. [Ken,
“Why Trade Deficits Aren’t Necessarily Bad,” Investment News Jan 29, 2007. Investment Strategies, pg. 60]
Second, some may concede that the trade deficit hasn't done enough damage to make our growth negative or
nonexistent - but, they ask, how do we know what our growth would have been without the trade deficit? We
might have had even more growth were it not for this damaging deficit.
For example, consider the United Kingdom. Its markets have done well. Its currency has been stronger
than ours. In fact, arguably, the pound sterling has been the world's strongest major developed
currency in recent decades. Surely, this is the proof in the pudding (the Brits love their pudding) that our
trade deficits have hurt us relative to the United Kingdom.
This is very wrong. The United Kingdom actually is a litmus test for many of our own economic
conditions, because it has been in almost exactly the same economic situation in the same proportions in
terms of deficits, trade balance - everything. It ran a trade deficit since the early 1980s in almost exactly the
same size relative to its economy. Its current trade deficit (accounted for the same way as ours) is about
5.5 % of its GDP - a tiny fraction of a percent smaller than ours. And the United Kingdom's economy and
markets have been strong, just like ours. Since the United Kingdom started running a trade deficit in 1984, its
stock market has averaged the same annualized 13% return as the U.S. markets have during our deficit
streak. Coincidentally, the U.K. economy also has been healthy, with annualized GDP growth of 2.7
over that time period - just a whisker lower than ours.
Other U.K. deficits as a percent of GDP are similar to ours, but its currency is stronger. What gives? What
does that tell you about trade deficits? It tells you that they don't affect currencies. If pound sterling
has been strong, and trade deficits affect currencies, how can the United Kingdom's trade deficit, which
is comparable to ours, be good for the pound sterling but ours be bad for the dollar?
Increasing market correlation between the US and global markets in recent years mean
arguments about the negative impacts of a deficit simply aren’t true any more
Fisher, chairman and chief executive of Fisher Investment, author of The Only 3 Questions that Count, 07. [Ken,
“Why Trade Deficits Aren’t Necessarily Bad,” Investment News Jan 29, 2007. Investment Strategies, pg. 60]
Consider this: Since 1926, there have been 47 years the U.S. market has been up, and the foreign
market has been up, too. How many years has the U.S. market been down big - more than 10% - and
the foreign market positive? Three. And in the past 25 years, when have we had our big trade and
current-account deficits? Never. Many decades ago, the markets weren't as correlated, but in recent
decades, while these deficits have increased massively, the markets have treated these different
countries more similarly. When it comes to market direction, countries do a whole lot more of going the
same way than not.
Empirically, massive growth in the US economy has taken place in the presence of a large
deficit—proves there are no economic consequences
Fisher, chairman and chief executive of Fisher Investment, author of The Only 3 Questions that Count, 07. [Ken,
“Why Trade Deficits Aren’t Necessarily Bad,” Investment News Jan 29, 2007. Investment Strategies, pg. 60]
Consider our massive trade deficit and how it affects life here. Is our trade deficit, in fact, bad for U.S.
stocks and our economy? Here's where investors make another cognitive error in forgetting to scale a
big number. Our trade deficit is big, but we have a massive economy, too - the world's biggest. The
United States has run a trade deficit since 1980, continuing irregularly to get both bigger and bigger as a
percent of gross domestic product.
It currently is about 5.8%. Now, a better question: Is that trade deficit too big and bad for our economy and
stock market? Or, seeking a Question Two: Is a big trade deficit a symptom of a healthy economy and a
sound financial system and not an indicator of future financial ruin?
Yes, our trade deficit has gotten remarkably wider since 1980. Over the past 25 years, the United States
also has had one of the world's healthiest economies, growing nearly the entire time. In fact, over those
years, our economy has grown faster than almost all the developed world.
Since we've been running a trade deficit consistently starting in 1980, we've enjoyed average annualized
real GDP growth of 3% and annualized market total returns of 13%. If our trade deficit were bad per
se, our market returns should have been worse than average and our GDP growth shouldn't have been
among the world's best. As such, we have an economy that is the very harsh envy of the developed world.
The impacts of trade deficits are misinterpreted- deficits can actually bolster the economy
Griswald, associate director of the Cato Institute's Center for Trade Policy Studies, 98 (Daniel T., “America's
Maligned and Misunderstood Trade Deficit,” 4-20-1998, http://www.freetrade.org/pubs/pas/tpa-002.html)
No aspect of international trade is talked about more and understood less than America's perennial
trade deficit. Critics of free trade, and most Americans for that matter, believe the trade deficit is prima
facie evidence that American companies are failing to compete in global markets or that U.S. exporters
face "unfair" trade barriers abroad, or both. The obvious implication is that, if other nations were to
open their markets as wide as we have supposedly opened ours, or if American companies became
more competitive against foreign rivals, we could export more relative to imports, thus reducing the
trade deficit.
The popular thinking on trade deficits is simple, appealing--and wrong. Trade deficits are not
determined by the microeconomics of trade policy or industrial competitiveness. They reflect
underlying macroeconomic factors, specifically investment flows and, ultimately, the national rates of
savings and investment that determine those flows. The recent experience of the United States and its
trading partners confirms this conclusion.
Understanding the trade deficit has profound implications for our national debate about trade. We cannot
reduce the U.S. trade deficit by restricting imports to the American market or by persuading or bullying other
governments to lower barriers to their markets. We cannot reduce the trade deficit through government-
directed industrial policy, managed trade, or export subsidies aimed at boosting national "competitiveness"
(however one defines the concept). And, contrary to the headlines, trade deficits are not necessarily bad
news for the U.S. economy. They may even be good news.
Arguments about the current account deficit (i.e., foreign investment) rely on incorrect
assumptions about the implications of the deficit
Griswold, Associate director of Center for Trade Policy Studies at Cato, 01. [Daniel, “AMERICA'S RECORD
TRADE DEFICIT: A Reflection of Economic Strength,” USA Today, May 2001. Accessed 7/2/08
http://findarticles.com/p/articles/mi_m1272/is_2672_129/ai_74572239/pg_4?tag=artBody;col1]
"Foreign debt" in perspective. One consequence of annual trade deficits is that foreign investors acquire
more assets in the U.S. than Americans acquire abroad. The difference between the value of assets
Americans own abroad and those foreign investors own in the U.S. is called the net international investment
position. For most of the 20th century, the U.S.'s net international investment position was positive--that is,
Americans owned a larger stock of investment abroad than foreigners owned in the U.S. Since the late 1980s,
however, driven by a surge of foreign capital into the U.S., the nation's net international investment position
has turned negative. By the end of 1999, the gap between the current market value of foreign-owned
assets in the U.S. and that of American-owned assets abroad reached 1.44 trillion dollars, and it could
soon approach two trillion.
This change in status is often described as an ominous transformation of America from the world's
largest "creditor nation" to the world's largest "debtor nation." Yet, much of what foreigners have
invested in the U.S. cannot accurately be described as imposing any kind of "debt" on American
citizens. Almost half of the 8.65 trillion dollars in foreign-owned assets in the U.S. at the end of 1999
was equity investment in American real estate and corporations, with 2.8 trillion dollars in the form of
foreign direct investment and another 1.44 trillion in portfolio investment in corporate stock.
None of that equity investment represents debt in the sense of an obligation to repay a fixed amount
over a certain time period. When a German firm acquires an American automobile or wireless telephone
company, Japanese investors buy real estate in Hawaii, or a British pension fund adds 100,000 shares of
Microsoft to its portfolio, no American is under any legal obligation to repay anything. The foreign investor
in U.S. equities will receive only what the market determines the asset is worth at the time of resale.
Moreover, the sheer size of America's negative net international investment position is not alarming when
compared to the overall size of the U.S. economy. At the end of 1999, America's negative net international
investment position of 1.47 trillion dollars represented about 16% of that year's GDP. In other words, Americans
were producing enough every two months to buy back the difference between foreign-owned assets in the
U.S. and U.S.-owned assets abroad. America's "foreign debt" in 1999 was about four percent of the net wealth
of all U.S. households and nonprofit organizations.
Gonzaga Debate Institute 2008 49
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Gonzaga Debate Institute 2008 50
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## WTO ##
Gonzaga Debate Institute 2008 51
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Absent a reversal in position by key players, the Doha round will be wrapped up this year
Lamy, Director-general of the WTO ‘08
Pascal, WTO, Lamy: Doha Round Conclusion Will Reassure World Financial Markets 4/12/08
http://www.wto.org/english/news_e/sppl_e/sppl88_e.htm Accessed: 7/15/08
Last year I told you about the risks of a failure in the Doha Round. A sort of half empty glass. This year
I am completely convinced that we have it within our means, politically and technically, to finish the
Doha Round this year. To do so, the first step we need is for WTO Member governments to agree at
Ministerial level by the end of May on the framework for cutting agricultural tariffs, agricultural subsidies
and industrial tariffs.
This is a task that has eluded us now for far too long. The differences between negotiating positions is
not great. Technically, there is no doubt in my mind that it can be bridged. What we need, urgently, is
political input from all of the key players to allow the bridges to be built.
US committed to seeing the Doha round through, including all attendant requirements
CalTrade Report ‘08
“Hope Remains for a Successful Doha Round this Year” 1/24/08 http://www.caltradereport.com/eWebPages/front-
page-1201158924.html Accessed: 7/15/08
US Trade Representative Susan Schwab said “a lot of progress has been made very quietly over the last
six months in Geneva” in multilateral negotiations.
"We want to see that we come together, the sooner the better, to achieve closure on the Doha round in
2008," Schwab said, warning it cannot be done without a “comprehensive deal on agriculture,
manufacturing and services,” among other issues. "The single undertaking will require all these issues to
be addressed before the Doha round comes to closure," Schwab said. "We are in a critical few months.”
EU Trade Commissioner Peter Mandelson, who met recently with the USTR in Washington, DC,
concurred, saying that both the EU and the US “remain committed to the conclusion of the Doha
round of trade talks” by the end of this year.
WTO third party case against US subsidies will break the impasse of the Doha round and
increase pressure on the US to reduce subsidies.
le Roux, trade and industry correspondent for Business Day, 2007
(Mathabo Business Day Edition, December 20, “WTO launches probe into US farm subsidies.” Lexis July 7,
2008)
IN A groundbreaking move that could break the impasse in the Doha round of multilateral trade
negotiations, the World Trade Organisation (WTO) this week launched an investigation into the US's
trade-distorting agricultural subsidies, particularly of maize, but also other crops. The complaint was
brought by Canada and Brazil, but SA is among a number of prominent countries, including the European
Union, India, Japan, Australia, China, Mexico, Chile and New Zealand, which have joined the case as
third parties. It is the first time that SA will participate in the proceedings of a WTO case. In terms of WTO
rules, third-party rights have to be fully considered in the dispute. As a major maize producer with meaningful
export interest, SA's economic interest in the case is significant. The original complaint was brought at the
beginning of this year by Canada, which sought to challenge US levels of agricultural support. Reuters reports
that the WTO's probe comes hot on the heels of the US Senate passing a $286bn farm bill, following a similar
bill from the House of Representatives in July. The White House threatened to veto the bills, saying they failed
to overhaul crop subsidy rules. Canada and Brazil charged that US support since 1999 had far exceeded its
limit of $19,1bn a year. Hilton Zunckel, a trade lawyer with Floor Attorneys, said the likelihood the case
against the US could succeed was "quite good" and followed the successes Brazil had in litigating against
the US on cotton subsidies. It had been anticipated that litigation in the trade arena would increase in the
absence of progress on a meaningful reduction in agricultural subsidies. US subsidies for agricultural goods are
viewed as responsible for suppressing global prices of agricultural products and harming farmers who make do without such
support. Canada and Brazil's motivation was to push for a levelling of the playing field. But analysts believe the move could
also bring fresh impetus to multilateral trade negotiations. Global trade negotiations over the past six years have failed,
largely over the contentious issue of farm subsidies. The case will add to the general pressure on the US to reform
its stance on agricultural subsidies and could bring that country to return to the negotiating table with
more meaningful concessions on subsidies. Farming industry analysts said research showed that US exports of some
key crops would virtually cease without subsidies, which could see world prices increase by as much as 7%. "If the case
does not go their way, there will be immense political pressure on the US to reform subsidies," said
Zunckel.
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Doha is the litmus test for the WTO, failure risks total destruction – this current round is
key
Wanlin research fellow at the Centre for European Reform. ‘05
Aurore Center for European Reform “ The Doha Trade Round: What hope for Hong Kong?”
12/2/05 http://www.cer.org.uk/pdf/briefing_doha_aw_dec05.pdf Accessed: 7/7/08
The collapse of the Doha round would also call into question the future of the WTO itself, writes
Aurore Wanlin in a policy brief for the think tank the Centre for European Reform. The organisation is still
young and in need of further institutional reform. Developed countries criticise the WTO heavily for
not taking into account the economic importance of its member states. NGOs and developing countries
also accuse it of promoting economic liberalisation at the expense of development, social and
environmental goals. Doha is the WTO’s first round of negotiations. Their success would strengthen the
position of Pascal Lamy, director-general, and make internal reform easier. Doha’s failure would weaken
the organisation and boost those who wish to undermine multilateral trade.
There is a fundamental difference between the Doha and previous trade rounds: that is the emergence
of developing countries as key players, in particular the fast-growing economies of Brazil, China and India.
Cancún showed that it was no longer enough for the EU and the US to agree a deal and expect the rest of the
WTO countries to fall into line, writes research fellow Aurore Wanlin in a policy brief for the think tank the
Centre for European Reform.
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WTO talks are just barely going ahead – its entirely hinging on the US cutting subsidies
Domingo Staff Writer ‘07
Bernadette, BusinnessWorld “Doha Deal Now More Doable – WTO’s Lamy Chief” 9/20/07
Proquest.com Accessed: 7/6/08
Global trade talks are inching closer to a conclusion, with prospects of finalizing a deal now more
imminent than six months ago, the chief of the World Trade Organization (WTO) yesterday said.
But while reaching a conclusion is now more "doable," WTO Director General Pascal Lamy stressed
that negotiations were far from over.
"My feeling is that given the level of activity of negotiations in Geneva it is now doable, but saying
something is doable is not saying it's going to be done," he said on the sidelines of an international forum on
aid for trade.
With momentum building up and developed countries agreeing to "bite the bullet" on reducing farm
subsidies and tariffs, Mr. Lamy said a conclusion was possible but "we are not quite yet there."
"My diagnosis is at the political and technical level, things are converging. My own sense is that there are
more chances of final convergence today than we had six months ago," he said.
Mr. Lamy also said there was enough political will from rich and poor countries to seal a deal by year
end.
"Are things moving forward? Yes, they are. Do we have the necessary political support? Yes."
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Increase in U.S. alternative fuel competition with European countries leads to trade war
Gow, writer for The Guardian, 2008 (David, “Trade War Tensions”, April 6, 2008,
www.azbiodiesel.com/ClipsEUApril29.pdf)
European biodiesel producers triggered a fresh transatlantic trade war yesterday by urging the EU to
impose punitive duties on cheap imports from the US. Low-priced imports of biofuels, as part of the
so-called "splash and dash" trade, are putting many European producers out of business, the industry
group claims. Their American rivals immediately hit back by urging the federal government to take action
against any protective measures for the European industry. The row comes as oil prices have risen to new
highs this week, close to $120 (£60) a barrel, and world food prices have surged partly as a result of pressure
on land from biofuel production. The European Biodiesel Board (EBB) said it had lodged a complaint with
the European commission over competition from the US that was putting EU producers out of business. It
wants duties on "B99" biodiesel exports (biodiesel with 1% petroleum diesel), claiming they are unfairly
subsidised and then dumped in the EU, where they can win new subsidies. US biodiesel exports are
subsidised by up to $300 a tonne. Some trading firms have also been shipping biofuels to the US, where
they add a "splash" of mineral diesel to qualify for the subsidy and then send the fuel back to the EU.
These exports have risen dramatically since last year, causing what the EBB calls "severe injury" to
European producers. This month D1 Oils, a leading but loss-making UK producer, said it would shut all its
British refining operations as a direct result of cheap imports. D1 said the economics of the business were
now so poor that it would be lucky to make much on the disposal of its sites. Elliott Mannis, D1 Oils' chief
executive, said it was "extremely frustrating" that the company had been forced to bow out of refining
because nothing had been done to stop the deluge of B99 biodiesel from the US. "It's an unbelievable
situation and there is no end in sight," he added. Page 7 Brussels sources indicated the EBB had a strong case
on the face of it. It is understood that Peter Mandelson, the EU trade commissioner, and Susan Schwab,
the US federal trade envoy, have held talks on the issue, but failed to reach a deal. Mandelson's
spokesman said: "We've had extensive contacts with the EBB over several months. We're glad that they have
finally submitted their request and will examine it thoroughly . . . We will not tolerate unfair trade." But
Manning Feraci, vice-president of federal affairs at the National Biodiesel Board in the US, said: "It is
hypocritical for the EBB to cry foul while they benefit from a blatant trade barrier." EU biodiesel fuel
specifications were discriminatory and breached World Trade Organisation rules, he said, threatening to
lodge a counter- complaint with Schwab. The EU and US are embroiled in several high-profile and long-
standing trade wars, including over beef and poultry imports from the US, genetically modified seeds and
foods and, above all, subsidies for the rival plane-makers Airbus and Boeing. This latest row comes as the
US is stepping up biodiesel production as an antidote to dependence on imported crude, while the EU is
having second thoughts about its target of using biofuels for 10% of transport fuels by 2020 because of the
impact on food prices and land use. The commission has 45 days to examine the EBB complaint and a further
nine months to impose provisional duties - unless Mandelson and Schwab, desperately but forlornly trying to
revive the stalled Doha round of WTO talks on trade liberalisation, can cut a deal.
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Failure to cut subsidies will significantly hurt many countries economically, including the
U.S.
Markhiem, Jay Van Andel Senior Analyst in Trade Policy, Reidl, The Heritage Foundation's lead budget analyst
2007
(Daniella, Brian M., The Heritage Foundation,” Farm Subsidies, Free Trade, and the Doha Round,” February 5th,
http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm, accessed on 7/6/08
Failure to conclude the Doha agenda successfully would mean significant lost opportunities for
countries around the world to make economic gains. Numerous studies have attempted to measure these
gains under various trade-liberalization scenarios. While their results and methodologies differ, these studies
consistently show real economic gains associated with further trade liberalization:
The Institute for International Economics has calculated that moving from today's trade environment to
one characterized by perfectly free trade and investment would generate an additional $500 billion in
annual income for the U.S., or about $5,000 per household each year.[12]
A University of Michigan study concludes that reducing agriculture, manufacturing, and services trade
barriers by just one-third would add $164 billion, or about $1,477 per American household, annually
to U.S. economic activity. Completely eliminating trade barriers would boost U.S. annual income by
$497 billion.[13]
The World Bank estimates that the continued reduction of tariffs on manufactured goods, the elimination
of subsidies and non-tariff barriers, and a modest 10 percent to 15 percent reduction in global
agricultural tariffs would allow developing countries to gain nearly $350 billion in additional income
by 2015. Developed countries would stand to gain roughly $170 billion.[14]
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Failure of the most recent round of Doha risks total collapse of free trade
The Post ‘08
The Sunday Business Post. “Doha Failure Would Threaten Fair Trade” March 2nd 2008
http://archives.tcm.ie/businesspost/2008/03/02/story30886.asp Accessed: 7/8/08
The pluses and minuses from the Doha trade round may not, on the face of it, appear to amount to a
great deal. However, it is the continuation of the process of freeing trade which is important. If the
round fails, what will happen next? Will some developed countries, under pressure from lobby groups,
seek to increase barriers to trade?
Most importantly, what would it mean for international business confidence and for long-term investment
patterns if governments let the framework, which has governed world trade for the past 60 years, fall
apart?
A lot is at stake, yet it is hard not to conclude, as Peter Mandelson did, that the risk of failure is now
significant.
Russian economic downturn results in a nuclear civil war that spills over into the world
Rogov 92
Sergei, ,” USA Institute, “International Security and the Collapse of the Soviet Union, Washington Quarterly, Spring,
LN
Continued economic chaos, political turmoil, and ethnic fighting in the former USSR will quite possibly
spill over into neighboring areas, creating new sources of instability. Even major civil and interstate
wars involving nuclear weapons cannot be excluded. Obviously, this possibility would have a very
negative impact on all of Europe as well as Southwest and Northeast Asia.
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Globalization good – it raises people out of poverty, China and India prove
Forbes ‘07
“Why Globalization is good” 4/16/07 http://www.forbes.com/free_forbes/2007/0416/064.html Accessed: 7/8/08
Cut to 2007, and the numbers are in: The protesters and do-gooders are just plain wrong. It turns out
globalization is good--and not just for the rich, but especially for the poor. The booming economies of
India and China--the Elephant and the Dragon--have lifted 200 million people out of abject poverty in
the 1990s as globalization took off, the International Monetary Fund says. Tens of millions more have
catapulted themselves far ahead into the middle class.
It's remarkable what a few container ships can do to make poor people better off. Certainly more than
$2 trillion of foreign aid, which is roughly the amount (with an inflation adjustment) that the U.S. and Europe
have poured into Africa and Asia over the past half-century.
Non-unique: recent passage of the farm bill makes DOHA round conclusion unlikely
ICTSD, International Centre for Trade and Sustainable Development, 2008
(Bridges Weekly Trade News, “US FARM BILL PASSES WITH BROAD SUPPORT, CASTING A PALL ON
WORLD TRADE TALKS” May 28th, http://www.ictsd.org/weekly/08-05-28/story5.htm, Accessed on 7/12/08)
The passage of the farm bill casts a shadow on trade talks at the WTO, as US negotiators aiming to
conclude a trade deal this year must now work within the strictures of the new measure. If and when
the Doha round concludes, the negotiated agreement will be put to a vote in Congress, and, if it approves the
deal, the US will have to bring its farm payments into compliance with its WTO commitments.
Congressional leaders on agriculture largely ignored ongoing WTO negotiations as they drafted the
farm bill, saying that they will amend it if a Doha accord is finalised.
As Congress is unlikely to support a Doha agreement that conflicts with the programmes in the farm
bill that it has just passed, US trade negotiators will likely be more restricted in the positions that they
take in ongoing modalities talks. According to Public Citizen's Lori Wallach, representatives who recently
voted in favour of the farm bill will be unlikely to support any subsidy-lowering deal sent to Capitol
Hill for approval.
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WTO talks are already fractured—it would take a breakthrough to reach a consensus.
Schomberg, Staff Writer for Reuters, 2008
( William, International Herald Tribune, “Mandelson gets EU backing in Sarkozy trade fight” By William
Wednesday, July 2, < http://www.iht.com/articles/reuters/2008/07/02/europe/OUKWD-UK-EU-FRANCE-
MANDELSON.php>. Accessed on July 10 2008)
BRUSSELS: Europe's trade chief Peter Mandelson won the backing of his boss on Wednesday in a
mounting war of words with French President Nicolas Sarkozy ahead of talks to try to salvage a world
trade deal. European Commission President Jose Manuel Barroso continues to trust Mandelson, a
Commission spokeswoman said, after Sarkozy's latest criticism of the British commissioner for offering too
many concessions on agriculture in the WTO talks. "Peter Mandelson has done a great deal of difficult work
and negotiates for all 27 member states and has done excellent work," spokeswoman Pia Ahrenkilde-Hansen
said in a statement on behalf of Barroso. In a rare public row between an EU commissioner and a
European leader, Mandelson complained on Tuesday that Sarkozy was undermining his attempts to
negotiate a good deal for Europe in the WTO's long-delayed Doha round. On Wednesday, Mandelson's
spokesman said Sarkozy used "false assumptions" for claiming that a WTO deal would lead to a 20 percent
cut in EU farming output and 100,000 job losses. "The figures he is parading are not valid on the basis of
current discussions in Geneva," spokesman Peter Power said. The EU's agriculture spokesman added the
figure was "utterly incorrect" because it assumed Brussels accepted every demand of a group of 20
developing countries, which it would never do. The Commission has estimated that the latest WTO proposals
would cause a 1.1 percent drop in EU agriculture production and a 2.5 percent fall in employment in the
sector by 2014. Ministers are due to meet at the WTO from July 21. Without a breakthrough, the round
will soon be overtaken by the change at the White House, possibly delaying it by several more years.
The round was launched in 2001 to help poor countries export more and to boost the global economy but it
has lurched from crisis to crisis for most of the time since then.
The US’s insistence on subsidies hosing over any chance there was of being an agreement at
the ‘falconer’ meeting
GIN ‘08
Global Information Network, “WTO: Agricultural talks far from over, delegates say” June
24th 2008 Proquest.com Accessed: 7/6/08
He said the special session on the special safeguard mechanism held by the chairman of the agriculture talks,
Crawford Falconer, at the end of last week produced no results.
Part of the problem is that the U.S. has still not indicated that it will accept the lower domestic support
range in Falconer's latest negotiating text. The U.S. currently provides about $7.5 billion in "trade-distorting"
domestic supports.
The agriculture draft text allows the U.S. to continue such supports to the tune of between $13 billion
and $16 billion, the exact figure to be negotiated. Even the lower end of the range will allow the U.S.
room to double its subsidies to farmers.
Press reports at the end of last week quoted India's minister of commerce and industry Kamal Nath
saying: "My offer to the U.S. is that they should reduce their subsidy by just $1 and we have a deal.
[But] they say, 'forget about reducing the subsidy even by a single dollar -- we want to have a right to
double it in the next 10 years.'"
The Doha rounds are at stand still, U.S. will not back down on trade agreements
AFP, Agence France-Presse, 2008
(“WTO to meet over Doha deal” on July 21st,
http://afp.google.com/article/ALeqM5iIrkER6h9BzpmGX1ArllfRMG923g, accessed on 7/6/08)
The Doha round, aimed at a creating a new global agreement to remove barriers to trade and spur
cross-border exchanges, has been deadlocked because of disagreements between the US and Europe,
and developed and developing countries. The round of negotiations, building on previous agreements
to reduce barriers to world trade, should have been completed before the end of 2004. Lamy said at the
end of May that conditions to reach a final deal to complete the round had finally come together. Progress
had been made on three central matters, he said -- subsidies for agriculture, and customs duties on
agricultural and industrial products.
Implementing renewable energy technologies, the US will break the deadlock at Doha and
allow its successful implementation
Caldwell, Director of Policy for Agriculture, Trade & Energy in the National Security Department at American
Progress, formerly Program Director for Trade and the Environment at the National Wildlife Federation. ‘07
Jake, Center For American Progress “Doha Deal And New Farm Policy: Bold Action Needed” January 30th 2007
http://www.americanprogress.org/issues/2007/01/doha_farm_policy.html Accessed: 7/7/08
The tools needed to craft this new rural economy, detailed in my report released this month, Fueling a New Farm Economy, are within
the grasp of the 110th Congress, which this year must reauthorize our nation's farm legislation in the 2007 Farm Bill. Congress this
year has the chance to enact creative renewable energy legislation that could break the deadlock in the
Doha Round by implementing agricultural policies that create a clean and prosperous countryside in
the United States and around the world. How so? Well, for starters, the United States can reinvest a
modest portion of its current funding for agricultural commodity programs toward the further
development of new renewable energy sources. Specifically, Congress could:
Renewable energy investment revitalizes the Doha talks, reduces poverty, strengthens US
competitiveness and the multilateral trading system
Caldwell, Director of Policy for Agriculture, Trade & Energy in the National Security Department at American
Progress, formerly Program Director for Trade and the Environment at the National Wildlife Federation. ‘07
Jake, Center For American Progress “G8 and the Doha Round: Time to Act on Agriculture and Trade” June 1st 2007
http://www.americanprogress.org/issues/2007/06/g8_doha.html Accessed: 7/7/08
Encouraging agriculture to diversify into renewable energy and dedicated energy crops will improve
agricultural prices by slowing the oversupply of traditional agricultural commodities on global
markets. A sustained and consistent period of improved demand and rising prices will also allow the
United States, Europe, and Japan to meet the request of developing countries to improve their
commitments to agricultural subsidy and tariff reform, thereby opening one avenue for progress in the
stalled Doha round. International trade challenges to U.S. farm policies, such as Canada’s recent complaint regarding
U.S. agricultural support programs and the ongoing cotton subsidy dispute with Brazil, also would be defused. The result
would provide a modest foundation for rural poverty reduction around the globe, improve the
competitiveness of U.S. agriculture, and strengthen the multilateral trading system.
Cellulosic ethanol subsidies are uniquely perceived at Doha as being a good thing
Caldwell, Director of Policy for Agriculture, Trade & Energy in the National Security Department at American
Progress, formerly Program Director for Trade and the Environment at the National Wildlife Federation. ‘07
Jake, Center For American Progress “Doha Deal And New Farm Policy: Bold Action Needed” January 30th 2007
http://www.americanprogress.org/issues/2007/01/doha_farm_policy.html Accessed: 7/7/08
The Doha Round emphasis on agricultural policies and trade allows Washington to negotiate increased
international market access for competitive U.S. farmers in return for limits on our agricultural subsidy
programs that are beneficial for both domestic and international development reasons. Budgetary pressures
will likely reduce the inflation-adjusted value of the programs in any case. Additionally, these programs
need to be better targeted to family farmers, and to promoting sound environmental and energy policies
including, the next generation of cellulosic biofuels--liquid fuels sustainably produced from energy crops
such as switchgrass and agricultural wastes such as corn stalks and rice hulls.
And that's where U.S. creativity comes into the picture. Consider a vision of the world where
renewable energy extracted sustainably from crops and agricultural wastes across the planet fuels a
new farm economy that simultaneously produces food and fuel amid economically robust and
environmentally sound rural landscapes. This new way of thinking about agriculture and rural
communities worldwide offers a way past our world's unsustainable reliance on fossil fuels and our
inability to build a global trading community that enriches farmers worldwide. Once embraced, this
new vision offers humanity a viable approach to help reverse the dire effects of climate change.
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The WTO looks out only for corporations, crushing human rights in the process
Mander, Founder of the International Forum on Globalization, Barker, executive director of the International
Forum on Globalization, 2000
(Jerry, Debbi, The International Forum on Globalization, “Invisible Government the World Trade Organization:
Global Government for the New Millennium?” June, http://www.ifg.org/wto.html, accessed on 7/15/08)
THE CENTRAL OPERATING PRINCIPLE of the WTO is that global commercial interests—actually,
the inter- ests of global corporations—should always supersede all others. Any obstacles to the smooth
operation and rapid expansion of global corporate activity should be suppressed. In practice, however,
these “obstacles” are national, provincial, state and community laws and standards that are made on
behalf of labor rights, envi- ronmental protection, human rights, consumer rights, local culture, social
justice, national sovereignty, and democracy. Such standards of nations are viewed by the WTO and
global corporations as impediments to “free trade,” when they are actually national expres- sions of
democratic processes within individual coun- tries that reflect local values, cultures, and interests, as
we will see repeatedly throughout this document. The WTO’s role is to expand the freedom of movement
and rights of access for corporations, while diminish- ing the rights and options of nation-states and
citizen movements to regulate commerce for the sake of human beings and nature.
WTO is undemocratic
Global Justice Exchange, 2007
(“Top Ten Reasons to Oppose the WTO” October 28th,
http://www.globalexchange.org/campaigns/wto/OpposeWTO.html, Accessed on 7/13/08)
The WTO Is Fundamentally Undemocratic. The policies of the WTO impact all aspects of society and
the planet, but it is not a democratic, transparent institution. The WTO rules are written by and for
corporations with inside access to the negotiations. For example, the US Trade Representative gets heavy
input for negotiations from 17 "Industry Sector Advisory Committees." Citizen input by consumer,
environmental, human rights and labor organizations is consistently ignored. Even simple requests for
information are denied, and the proceedings are held in secret. Who elected this secret global
government?
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## Germany ##
Gonzaga Debate Institute 2008 100
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C. Impact:
Despite world economic decline, Germany’s robust economy has grown at its greatest level
in over a decade
BBC News, 2008 (“Euro growth better than expected,” May 15,
http://news.bbc.co.uk/2/hi/business/7402297.stm, accessed online 7-6-08)
Figures from Germany's Federal Statistics Office showed the economy grew at its fastest pace in more than
10 years during the first three months of 2008. GDP grew 1.5% in the quarter, almost double the figure
that analysts had forecast, and up from 0.3% in the final three months of 2007. The statistics office said it
showed the economy was "robust" despite wider economic problems. Germany's growth, its fastest pace
since 1996, was "sensational" said Commerzbank economist Matthias Rubisch. "The forecasts for this full year
will have to be revised upwards after this strong start." The government had forecast that 2008 growth would
be 1.7% but Mr Rubisch said this could now be above 2%,. This compares with 2.5% growth in 2007.
Meanwhile, France said that its GDP had grown by 0.6% in the first quarter of 2008, ahead of predicitions. And
it revised its 2007 growth up to 2.2%, from the 1.9% previously forecast.
The German economy is great now -with its highest ever investment in renewable energies
Seager, staff writer, 2007 (Ashley, “Green power: Germany sets shining example in providing a harvest for the
world: Thanks to tariff guarantees, Germany has 200 times as much solar energy as Britain,” The Guardian, July 23)
Hanno Renn, a Freiburg taxi driver, invested in a communal solar electricity system on a building in the German town in 1993.
"Everyone laughed and said I was wasting my money," he says. But now he has paid off his investment and earns a regular income from
the electrical company for the power he generates. "I have had the last laugh," he grins. Mr Renn is part of a revolution in
renewable energy that is sweeping Germany and bringing citizens of every kind into the fight against
global warming. While a new report from the Centre for Alternative Energy says Britain could, with
sufficient will and effort, go zero carbon in only 20 years, Germany's figures put the British government's
claims to be leading the world on climate change into perspective. Germany has 200 times as much solar
energy as Britain. It generates 12% of its electricity from various renewables, compared with 4.6% in
Britain. It has created a quarter of a million jobs in renewables - a number that is growing fast. Britain
has only 25,000, a number that represents the amount of jobs created in the industry in Germany in the past
year alone. Freiburg, a town of 200,000 people in the Black Forest, has almost as much solar photovoltaic
(PV) power as the whole of Britain. Dr Dieter Worner, director of Freiburg's environmental protection
agency, admits that such is the competition among German towns that Ulm has just overtaken Freiburg as
solar capital of the world. "But we are still expanding rapidly. It's a sporting contest," he says. Indeed, by
the time Britain starts its first eco-town in 2016, Germany will have 50 or 60 eco-cities. Small wonder
that the Labour government has quietly dropped the pledge it made six years ago to catch up with Germany
by 2010. In Germany, too, the higher production has pushed prices down sharply. A typical 3kw PV system
costs about £17,000 in Britain but less than £10,000 in Germany. Dr Worner says prices have halved in the
past seven years and will do so again in the next seven. The secret of German success is the "feed-in tariff"
(FIT). Anyone generating electricity from solar PV, wind or hydro gets a guaranteed payment of four
times the market rate - currently about 35p pence a unit - for 20 years. This reduces the payback time on such
technologies to less than 10 years and offers a return on investment of 8-9%. The cost is spread by generating
companies among all users and has added about one cent/kwh to the average bill, or an extra euros 1.50 (£1)
a month. The Germans introduced the FIT in 1999 and tweaked it in 2004, since which time things have gone
mad. FITs have now been adopted in 19 EU countries, and 47 worldwide, but not in Britain. German
renewables firms are now world beaters and the German economy has been strengthened, not
weakened, by a rush into renewables.
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Germany’s government guarantee windmills and solar generators an above market price
Ewing, 2008
(Jack, BusinessWeek, “The wind at Germany’s back; cutting edge tech and government incentives have made it a
world-beater in renewable energy,” 02-11-08,
http://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T4102709243&f
ormat=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T4102709246&cisb=22_T4102709245&tr
eeMax=true&treeWidth=0&csi=7923&docNo=3 , access 07-06-08)
To see Germany's latest cash crop, take a train across the flat plains between Hannover and Berlin or
cruise the waters off the gusty North Sea coast. In both places, you can't miss the rows of windmills marching
to the horizon, quietly generating some 7% of the nation's electricity needs--and powering an important new
industry.
Thanks to smart regulation, Germany has become a global powerhouse in green energy, producing
more electricity from wind than any other country. While the industry owes some of its success to
German expertise in fields such as aerodynamics, the biggest boost has come from the government.
The nation's energy law guarantees operators of windmills and solar generators an above-market price
for power for as long as 20 years. Other countries have similar policies, but few have applied them as
consistently as Germany. "The crucial point," says Paul Buchwitz, a Deutsche Bank fund manager
who focuses on renewable energy, is "you know how much you will get in advance."
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Germany is the largest exporter in the world – Huge growth, in a drastically declining
global economy, proves Germany is in a grand position
Landler, Staff Writer, 2007 (Mark, Germany finds new markets;
Export boom cuts its unemployment, FINANCE; Pg. 11, The International Herald Tribune, April 13)
For those seeking the elixir that has given new life to Germany's economy, a visit to this ancient university town in
the eastern part of the country would be a good place to start. Jena is booming these days, as local firms like
Jenoptik, which makes lasers and sensors, rack up orders from China, Russia, Europe and the United States. Even
the surging euro, which is near record levels against the dollar and the yen, making German exports more
expensive in many foreign markets, has not yet dented demand. ''There's no better proof that our products are
superior than to have an indirect price increase of 30 percent without losing any sales,'' said Alexander von
Witzleben, the self-confident chief of Jenoptik. Germany's transformation from Europe's sick man to its most
stalwart performer is by now well entrenched. So sanguine are German executives about their future that many
brush aside fears that a slowdown in the United States could knock their export-led recovery off track. The
American consumer may still be the main engine that drives the global economy, but Germany's advance - it has
been the world's largest exporter of goods for the last four years - is propelled by other sources. It is one more
sign that the rest of the world does not depend as much on the American economy as it once did. Von
Witzleben notes that Germany now exports more to Russia and the former Soviet satellites than it does to the
United States. It ships nearly as much to Britain as to America, and its total exports within Europe are five times
greater than its shipments to the United States. ''Germany is projecting itself into the global economy, using its
historic strengths of good quality and strong brands,'' said Nicolas Sobczak, senior European economist at
Goldman Sachs in Paris. ''The simple fact that the German labor market is turning, that you have genuine job
creation, shows that this is a genuine German renaissance, one that is independent of the U.S.'' The numbers tell the
story. Unemployment is dropping rapidly - at 9.8 percent, it has fallen below double digits for the first time since
2002 - while investor confidence is soaring. An increase in the value-added tax in January, which economists had
warned would torpedo the recovery, caused scarcely a ripple. Germany's rise has set it apart from its European
neighbors. While Italy struggles to regain its export momentum and France waits for a presidential election that
could reshape its political and economic landscape, Germany has doggedly molded itself into a globally
competitive player. The therapy was often brutal: waves of layoffs and cost-cutting during the lean years from 2002
to 2005. But having fended off steep wage increases at home and moved some manufacturing to lower-cost markets
abroad, many German companies are reaping profits. The key to Germany's success, von Witzleben of Jenoptik said,
is that it churns out what he calls global niche products: sophisticated high-technology tools that have worldwide but
narrow markets. Fast-growing developing economies, like China's, are more eager to buy such rarefied products
than to make them. Only Japan currently competes in many of these areas - and perhaps not coincidentally, the
Japanese economy is also humming. ''We are protected because the big Asian gorillas are not interested,'' von
Witzleben said. ''If I were in the business of flat-panel television screens, it would be a different story.'' Jenoptik,
which was built on the ruins of an East German state enterprise, concentrates on making lasers used in medical
devices and chip factories. It also builds sensors that steer satellites. Of its $645 million in sales, 57 percent comes
from exports. Its order book is running well ahead of last year, when it recorded a 7 percent gain over 2005.
Germany has hundreds of medium-size companies like Jenoptik, and many of them are making similar inroads
overseas. This success is proving difficult for other major European countries to replicate - for reasons of politics,
economic policy or the structure of their industries. ''Germany is pretty much out of sync with the rest of Europe,
which is muddling through,'' Sobczak, the Goldman Sachs economist, said. Europe, of course, benefits from a
resurgent Germany simply because of its size. It accounts for a fifth of the economic activity of the European Union,
and its trade within Europe is booming. Last year, German exports to Poland rose 29 percent, while imports from
Poland rose 23 percent. Such numbers have fueled the euro, which is trading at the highest levels against the dollar
since March 2005. All told, the German economy should grow about 2 percent this year, according to public and
private projections. That is less than the 2.7 percent it grew last year, when the world economy was more robust. But
it is more than respectable, economists say, given that the European Central Bank has raised interest rates seven
times since late 2005. Germany's renaissance is challenging other preconceptions about this economy - Europe's
largest and the third-biggest in the world behind the United States and Japan. While previous economic upturns have
bypassed the depressed eastern part of the country, there is evidence that in pockets, at least, Eastern Germany is
also catching the favorable winds of trade and export.
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Germany: Brink
Current subsidy criticism puts the German solar-energy on the brink of economic collapse
Mark Landler, 2008 (“Solar energy is confronting uncertain future in Germany,” The International Herald
Tribune, May 16)
Thanks to its aggressive push into renewable energies, a cloud-wreathed Germany has become an unlikely world
leader in the race to harness the sun's energy. It has by far the largest market for photovoltaic systems, which convert
sunlight into electricity, with roughly half of the world's total installed capacity. And it is the third-largest producer
of solar cells and modules, after China and Japan. Now, though, with so many solar panels on so many rooftops,
critics say Germany has too much of a good thing. Even at a time of record oil prices, solar is encountering
resistance from conservative lawmakers who want to pare back its generous state incentives. They say it is
growing at an unhealthy pace, threatening to burden consumers with too many costs in the form of higher electricity
bills. Solar-energy entrepreneurs warn that reducing these incentives would deprive Germany of its pole
position in an industry of tomorrow. They liken Germany to the United States and Japan, which were both
once solar stars but faded as their subsidies became less attractive. The debate over solar energy subsidies is a
test of how an environmentally-minded country can move from nurturing a promising alternative energy to
creating a mass-market industry that can compete, on its own footing, with conventional energy sources. It is a
tricky transition, even with a sympathetic population. ''Germany's law has basically been a turbocharger,'' said Anton
Milner, the chief executive of Q-Cells. If the proposals being floated by the Christian Democratic Union, the party
of Chancellor Angela Merkel, were adopted, he predicted, ''you'd kill the industry.''
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Decline in Crude oil directly competes with Germany’s solar energy- tanking the renewable
market
Preston, The New York Times Media Group, 2008 (Holly Hubbard, “Is solar the next investment bubble?”
The International Herald Tribune, June 28)
When Rick Hanna and his fellow energy analysts at Morningstar in Chicago sat down recently to discuss solar
energy stocks, the question on the table was this: Is solar the next Internet-style bubble? Given the volatile
state of the solar energy sector, it's a valid query. During 2007, solar stocks shot through the ceiling,
gaining on average some 200 percent in value, only to plummet during the first part of this year. First Solar,
an industry stalwart, has traded from a low of $74 on Aug. 16, 2007, to a high of $317 on May 14 of this year. If
that makes investing in solar energy sound scary, it should - though not for the same reasons investing in
Internet stocks was in 2000. The IPO hype of last year aside, solar is an industry driven by commodities, not
technology: Any declines in crude oil prices will be felt because such activity upsets the price
competitiveness of solar energy. Then there are those ongoing shortages of polysilicon, the chief raw material
used to make most solar panels.
Lack of investment from the U.S. assures Germany maintain its edge
Ewing, 2008
(Jack, BusinessWeek, “The wind at Germany’s back; cutting edge tech and government incentives have made it a
world-beater in renewable energy,” 02-11-08,
http://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T4102709243&f
ormat=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T4102709246&cisb=22_T4102709245&tr
eeMax=true&treeWidth=0&csi=7923&docNo=3 , access 07-06-08)
The challenge for Germany will be staying ahead. While the country leads in wind-generation capacity,
the U.S. market is growing faster. As sales shift to other regions, so, inevitably, will manufacturing. To
hold on to its lead, Germany will have to keep its edge in innovation. Siemens, which has 7% of the
global wind-turbine market, aims to gain share via its expertise in conventional power and its strong
relationships with utilities. And Germany's network of research institutes continues to work on renewables.
One group hopes to cheaply produce silicon impregnated with hydrogen, creating a fuel that's easy to
transport and can be used to power fuel cells, solving the problem of getting energy from remote wind and
solar farms to cities. Another outfit is working to commercialize a generator that combines elements of sun
and wind power, in which solar collectors at ground level produce hot air that rises through a chimney and
turns a power-generating turbine. Says Q-Cells CEO Anton Milner: "This industry is still in the warm-up
phase."
Germany: Impact
Germany is most important for European Union, and is the world’s largest exporter
Reguly, 2008 (Eric, “LESSONS FROM GERMANY'S ENERGY RENAISSANCE,” March 22)
Germany is using its political might to ensure it benefits mightily from the green revolution. The country is
Europe's biggest economy and the continent's (and the world's) biggest exporter. As the economic
heavyweight, it has a lot of political influence over its neighbours, said Paul Dubois, Canada's ambassador
to Germany. "This is the key country," he said. Nineteen of the European Union's 27 countries count
Germany as their main trading partner, he noted. The figure for France is only three (Germany, Spain and
Malta) and only one (Ireland) for the United Kingdom.
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German leadership key to cutting greenhouse emissions and solving climate change
Reguly, 2008 (Eric, “LESSONS FROM GERMANY'S ENERGY RENAISSANCE,” March 22)
The upshot: If Germany builds green technology such as wind turbines and solar panels, its friendly neighbours
will be sure to buy them, or so the German government believes. That translates into the things politicians and
economists like - jobs, export earnings, trade surpluses, international prestige. There's more. As Europe's most
influential country, Germany can pretty much guarantee that renewable energies will be the growth
machine of the future. How? By insisting on aggressive, EU-wide carbon reduction targets, care of Angela
Merkel, the German Chancellor who is no doubt the greenest European leader. In February, the EU vowed to
reduce greenhouse gas emissions by 20 per cent by 2020 and said it would try to raise the target to 30 per cent.
"If you take climate change seriously, we have to reduce carbon dioxide emissions by 60 to 80 per cent by
2050," Mr. Machnig said. "This is the biggest industrial change ever. This means reducing emissions [in
Germany] from 10 tonnes per capita to two to four tonnes per capita."
The strong Euro and high priced commodities have slowed Germany’s economy to a snail-
like pace
Chambers, 2008 (Madeline, “High energy prices may hurt German '09 growth-DIHK,” Reuters UK, July 7,
http://uk.reuters.com/article/oilRpt/idUKL0766527420080707, accessed online 7-7-08)
The head of Germany's DIHK chambers of industry and commerce said on Monday he was concerned that
high energy prices would contribute to slower growth in Europe's biggest economy next year. "Next year,
it is certainly the case that we will be happy if we have (growth of) 1 percent or more," Martin Wansleben told
German television. Last month, the organisation said it expected German growth to slow to between 1.0 and 1.4
percent in 2009. Wansleben also said, however, there was no need to panic for this year. "This year the order
books are still full," said Wansleben, adding the DIHK was sticking to its 2.3 percent economic growth forecast
for 2008. Last month, the chambers said the outlook for Germany had worsened since the start of the year
due to the strong euro and that rising commodity prices had dampened private consumption.
Slow growth in Germany is a tragedy - it has delegitimized its government and economic
interests in all of Europe
McNamara, 2007 (Sally, “Is Europe Doomed to Continued Economic Stagnation?” The Heritage Foundation,
August 23, http://www.heritage.org/research/europe/upload/hl_1040.pdf, accessed online 7-7-08 )
Collectively, the 27 member states of the European Union make up the world’s largest trading economy.3
However, problems abound. Gross domestic product (GDP) growth has been continually sluggish in much of
Western Europe, especially in France, Germany, Italy, and Portugal.4 As of February 2007, 22 EU member
states had unemployment levels above the U.S. average of 4.5 percent.5 The employment rate of persons aged
15 to 64 in the EU is just 63 percent compared to 72 percent in the U.S.6 Additionally, the annual growth rate
for the Euro Area has averaged just 2.1 percent per year, compared to 3.3 percent in the U.S.7 Europe suffers
from particular weaknesses. The Heritage Foundation’s 2007 Index of Economic Freedom says, “Europe suffers
from the second-worst regional score in labor freedom and is dead last in fiscal freedom from
government.… [S]trong state sectors and rigid labor markets have already prompted significant social
turmoil, not least in France.
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N/U: U.S. subsidised biodiesel threaten to destroy Europe’s domestic refining market
Treanor, Guardian Journalist and specializing in the bank sector, 2008
(Jill, Guardian UK, “US biofuels flooding European market,” 03-07-08,
http://www.guardian.co.uk/business/2008/mar/07/greenbusiness.biofuels, accessed 07-12-08)
The US is flooding Europe with subsidised biofuels that threaten to destroy Europe's domestic refining
market, the head of the biofuel company D1 Oils warned today as its shares lost a third of their value.
Admitting that some 35 jobs could be lost as a result of the cheap imports, Elliott Mannis, chief
executive, said: "The simple fact is that you can buy the subsidised American imported material
cheaper than you can buy virgin oil for processing."
Shares in D1 Oils closed 36p lower at 62p today after the company told the stockmarket of its plans to begin
consultations with employees at its Middlesbrough and Bromborough, Merseyside, sites about job losses.
"The decision to begin consultations with employees is not one we have taken lightly," Mannis said.
"Imports of heavily subsidised biodiesel fuel from the US, so-called B99, have eroded margins to the
point where we have no choice but to consider how to reduce operating costs.
"We are taking this action in order to manage the business proactively in a difficult market," he added.
Mannis said the EU was trying to negotiate change in Washington and would take the case to the World
Trade Organisation, which regulates free trade, but that changes could take months. "If you believe in free
trade, this isn't a fair market."
He feels it is unlikely that the US will end subsidies to the powerful farming lobby in an election year.
The B99 blend of biofuel receives a subsidy in the US and also tax exemption when it is imported into
the UK.
The situation is coming to a head because for the fiscal year 2008 (which runs from April 2008 to March
2009), the UK has to meet a EU target for biofuels that requires 2.5% of all fuel sold from pumps to come
from renewable sources. Mannis warns that this target will be achieved by cheap US imports rather than from
firms such as his making biodiesel.
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U.S. subsidies will fuel a wave of cheap imports that have made it impossible for European
biodiesel producers unable to compete
Perkins, 2008
(Robert, Platts Oilgram Price Report, “EU launches probe into US biodiesel imports,” 06-
13-08, pg.1 Vol.86 No.115, accessed 07-12-08)
The European Commission June 13 launched a formal anti-dumping and anti-subsidy investigation into a
surge of US biodiesel imports which are said to have hurt Europe's fast-growing biofuel industry.
European biodiesel producers submitted a formal anti-dumping complaint to the trade watchdog in Brussels
on April 29, claiming US subsidies have fueled a wave of cheap imports that have severely hit European
biodiesel producers, who are unable to compete.
"We have always said that the EU will not tolerate unfair trade practices, and will pursue vigorously any well
founded complaint," the EU's spokesman for trade Peter Power said in a statement. "The Commission will leave
no stone unturned in this investigation and will act in accordance with its findings," he added.
The US biodiesel blenders tax credit, created in 2004, provides up to $1/gal tax credit to those blending
petroleum diesel with biodiesel, whether it is sold domestically or exported.
US exports of the so-called "B99" blend biodiesel, which can contain less than 0.1% of conventional diesel and
also qualify for EU subsidy regimes, exploded by more than tenfold last year to some 1 million mt.
Without an extension, the US subsidy will expire at the end of this year, but US producers and soy growers
have been lobbying Congress hard, warning of the collapse of their own industry if the tax breaks dry up.
Imports of US B99 biodiesel, often confused with a "splash and dash" loophole that allows shipments of non-US
biodiesel to earn the US subsidy when re-exported to Europe through US ports, currently make up about 90% of
biodiesel imports, Europeans claim.
The Commission said it has seen "substantial adverse effects" on the European biodiesel industry as a result of
the subsidies. It said it would investigate the allegations and make provisional findings by March 13 2009 at the
latest, which it will then present to the 27 EU member states.
If the Commission agrees that US subsidies are distorting trade and damaging the region's biodiesel industry, it
can impose provisional countervailing duties on the US imports.
Reacting to the EU decision, US biodiesel producers called the European complaints "baseless," blaming the
woes of European biodiesel producers on high prices for rapeseed oil feedstock and the scaling back of biodiesel
subsidies in Germany and France.
"The European biodiesel industry is not being harmed by US competition," the US National Biodiesel Board said
in a statement. "High feedstock costs, changes to EU member policies and in some cases poor business practices
are the true issues facing European biodiesel producers."
The NBB said it will "vigorously defend" the interests of the US biodiesel industry, labeling the EU compliant as
a "protectionist ploy" aimed at blocking competition in the European markets.
The NBB has said it will continue to lobby for an extension of tax breaks for its industry beyond 2008, despite
the subsidies becoming the focus of a formal EU anti-dumping complaint.
The European Biodiesel Board welcomed the EU's decision and called for a "timely" imposition of
countervailing measures against US biodiesel imports into the EU. "It will be essential that countervailing
measures targeting B99 imports are imposed by the EU authorities in a reasonable time frame," the EBB said in
a statement. "In the absence of such measures, the situation of the EU biodiesel industry would become even
more critical than it is at present."
The EBB rejected US claims that European producers are simply suffering from sliding political and financial
support for first-generation biofuels in Europe, pointing out a big difference in the way US subsidies are
credited.
Indeed, the EBB estimates that US taxpayers are currently subsidizing European motorists to the tune of
$300 million/year, paying for something that is not consumed in the US. In Europe biofuels are subsidized
mainly through tax breaks when the fuel is sold at the pump. But in the US, the subsidy is available
when biodiesel is blended, regardless of whether it is sold on the domestic market or exported.
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Germany: No Link
EU supports U.S. increase in renewable energy- it will be more profitable for all and
mitigate the effects of global warming
James G. Neuger And Matthew Newman, Bloomberg News, 2007 (“Eu vows to cut emissions 20%: 2020
deadline,” National Post, March 10)
Kyoto mandates greenhouse gas cuts of 5.2% by 2012 from 1990 levels. EU leaders today were set to
pledge to boost the unilateral target of 20% by 2020 to 30% if such rich nations as the United States sign
up. The environmental campaign "will harm competitiveness if prices are much higher than elsewhere, if we
have a shortage of energy and it harms energy-intensive areas," Philippe de Buck, secretary-general of Business
Europe, the EU employers federation, said in an interview. Binding targets create "a lot of uncertainties."
Several analysts said businesses are overreacting, and portrayed clean technologies as the wave of the
future. "Once industry has accepted it and gotten busy, they'll find their businesses will become more and
more competitive in global markets," said Paul
Free trade allows economies of all types to specialize in the activities they do best, therefore
leading to a higher income for both countries
Ferguson, Jr., Former Vice Chairman of the Board of Governors of the Federal Reserve System and President
and Chief Executive Officer of TIAA-CREF, 2004
(Roger W., The Federal Reserve Board, “Free Trade: What Do Economists Really Know?”, October 7, 2004,
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2004/20041007/default.htm, accessed on July 10, 2008)
A third key benefit of free trade is that it allows economies to specialize in the activities they do best. This
notion was at the core of the classical economists' defense of free trade. By allowing England to specialize
in cloth production and Portugal in wine, for example, international commerce leads to a higher income
for both countries than if each tried to produce both goods for themselves. By the same token, no
American today would object to trade between Massachusetts and Montana, or between Alaska and
Alabama--the various U.S. states obviously have their own comparative advantages in producing a
variety of different products, and trade among them makes such specialization possible. Extending the
example of trade among states to trade among countries is not much of a stretch. Can we measure the extent
to which the specialization associated with free trade may boost incomes and welfare? Such an estimate is
obviously no simple thing to calculate. Economists frequently use so-called computable general equilibrium
models, often consisting of hundreds of equations, to address this issue. A recent analysis of the effects of
past trade liberalizations on the U.S. economy puts the gains to U.S. welfare at about 1/2 percent of GDP.5 A
separate analysis of a hypothetical 33 percent reduction in trade barriers around the world suggests it would
raise welfare by 1-1/2 percent of global GDP.6
Free trade reduces the cost of good henceforth amplifies our standard of living
Ferguson, Jr., Former Vice Chairman of the Board of Governors of the Federal Reserve System and President
and Chief Executive Officer of TIAA-CREF, 2004
(Roger W., The Federal Reserve Board, “Free Trade: What Do Economists Really Know?”, October 7, 2004,
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2004/20041007/default.htm, accessed on July 10, 2008)
A second benefit of international trade is its role in reducing the cost of goods and hence in raising our
standard of living. To anyone who has walked into a large discount store and surveyed the range of low-
priced items produced in any number of distant economies, this benefit is abundantly clear. However,
actually measuring the extent to which trade holds down consumer costs is tricky. Between 1990 and 2003,
for example, the overall consumer price index rose 41 percent, whereas prices declined for many highly
traded goods, including toys (whose prices fell 26 percent), televisions (53 percent), and clocks and lamps
(15 percent); in just the past five years, the price of telephones, calculators, and other such items has fallen 42
percent. Yet, we do not know how much of the decline in these prices can be attributed to trade, as most
traded products are manufactures and are subject to greater productivity growth (and hence steeper declines
in costs) than nontraded products such as services. A more fruitful approach may be to compare the prices of
goods that are protected from international competition with what they would be in the absence of such
barriers. A recent study by the U.S. International Trade Commission indicates that sectoral trade
liberalization would lower the price of sugar for U.S. consumers by 8 percent, of apparel by 5 percent,
and of footwear and leather products by 4 percent.4 Clearly, if international trade were curtailed for a
much broader range of goods, the cost of living for American workers would be higher and the standard
of living correspondingly lower.
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Free trade boosts productivity through opening the economy to heightened competition and
in turn receives higher rates of economic growth
Ferguson, Jr., Former Vice Chairman of the Board of Governors of the Federal Reserve System and President
and Chief Executive Officer of TIAA-CREF, 2004
(Roger W., The Federal Reserve Board, “Free Trade: What Do Economists Really Know?”, October 7, 2004,
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2004/20041007/default.htm, accessed on July 10, 2008)
In addition to promoting specialization, trade boosts productivity through a fourth channel of influence:
opening the economy to heightened competition. This effect could occur either as firms are spurred by
foreign competitors to become more efficient, or as the least productive firms are forced to close, thus
raising the average level of productivity for the economy as a whole. Again, most Americans likely
recognize the importance of competition in boosting performance--the ascendancy of Japanese automobiles,
for example, has been cited as a factor that has spurred Detroit to greater innovation and better quality. By
heightening competitive forces and thus incentives for productivity and innovation, international trade
has likely accelerated the process of "creative destruction" by which outdated and less productive
activities are replaced by new technologies and more dynamic enterprises. Academic research supports the
view that import competition has led U.S. manufacturing firms to become more capital intensive;7
trade liberalization apparently has enhanced productivity in some import-competing firms in foreign
countries as well.8 Producing for export markets may also yield dividends: Research suggests that
exporters are more productive than non-exporters in the same industry and that they grow more
rapidly as well.9 Finally, many studies suggest that countries that are more open to international trade
have enjoyed higher rates of economic growth.10 Our sad experience after adoption of the Smoot-Hawley
tariff of 1930, as well as the record of Latin America, India, and other regions that experimented with
"import-substituting industrialization," point to the deterioration in economic performance that occurs when
countries erect barriers to trade.11
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Hong Kong example proves – free trade brings prosperity and less poverty
Meadowcroft, Lecturer in Public Policy, King's College, University of London, ‘05
[John Meadowcroft, PhD, University of London, "Fair trade will lead to more misery for Africa,” originally
published: Yorkshire Post, 27 April 2005, http://www.iea.org.uk/record.jsp?type=pressArticle&ID=179
accessed: 7/7/08]
In his sermon on African poverty the Archbishop of Canterbury has added his voice to the growing chorus of
religious leaders, politicians, pop stars and even television presenters who believe that ‘fair trade’ offers a
solution to Africa’s plight. While the Archbishop and others are right to draw our attention to the fate of the
world’s poorest continent, unfortunately ‘fair trade’ will not end global poverty and
could make things worse. ‘Fair trade’ undermines economic efficiency and has the potential to increase
corruption. It involves governments or aid agencies picking winners – businesses they believe merit special
treatment in the marketplace – that are then supported even if they are uneconomic or badly run. It has the
potential to increase corruption as different businesses compete to be the one favoured by government or
agencies. Economic prosperity cannot be based upon policies that support inefficient or uneconomic
enterprises. That is the way to economic ruin. There are many myths about the causes of Africa’s malaise, but
the truth is that economic prosperity is actually relatively easy to achieve. In fact, it is so easy that Hong
Kong – a tiny former colony with almost no natural resources – has managed to achieve it; Hong Kong’s per
capita GDP is now more than $25,000, compared to the UK’s $23,000. Indeed, the example of Hong Kong is
instructive for all of us who wish to see an end to global poverty. In 1950 Hong Kong was classed as a
developing country, but in the last fifty years it has caught up with and now surpassed many of the world’s
richest nations. Hong Kong’s economic prosperity has been built upon free trade; it has one of the most open
economies in the world with few barriers to imports or exports. Its prosperity was not based upon rich people
buying ‘fair trade’ products but on participation in the global economy, initially at relatively low wage levels.
Indeed, when I was growing up in Huddersfield in the 1970s my parents were reluctant to buy goods with the
‘Made in Hong Kong’ label because they believed such products were made by exploited workers slaving in
sweatshops. Today, those ‘exploited’ workers are richer than we are! In Hong Kong, free trade has been
supported by a government that has provided an institutional framework of private property rights, the rule of
law and sound money, without burdening the economy with high taxes, over-regulation or restrictions on imports
and exports
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Free Trade and foreign investment brings higher wages and less poverty – Vietnam proves
Norberg '03
[Johan Norberg., M.A. in History of Ideas, Stockholm University, a fellow at the Swedish think tank Timbro, author of
In Defence of Global Capitalismwhich won the Sir Antony Fisher International Memorial Award by the Atlas Economic
Research Foundation; “The Noble Feat of Nike,” June 7 2003,
http://www.johannorberg.net/?page=articles&articleid=53 accessed:7-7-08]
Nike. It means victory. It also means a type of expensive gym shoe. In the minds of the anti-globalisation
movement, it stands for both at once. Nike stands for the victory of a Western footwear company
over the poor and dispossessed. Spongy, smelly, hungered after by kids across the world , Nike is the
symbol of the unacceptable triumph of global capital. A Nike is a shoe that simultaneously kicks people out of jobs
in the West, and tramples on the poor in the Third World. Sold for 100 times more than the wages of the peons who
make them, Nike shoes are hate-objects more potent, in the eyes of the protesters at this week´s G8 riots, than
McDonald´s hamburgers. If you want to be trendy these days, you don´t wear Nikes; you boycott them. So I was
interested to hear someone not only praising Nike sweatshops, but also claiming that Nike is an example of a good
and responsible business. That someone was the ruling Communist party of Vietnam.
Today Nike has almost four times more workers in Vietnam than in the United States. I travelled to Ho Chi Minh to
examine the effects of multinational corporations on poor countries. Nike being the most notorious multinational
villain, and Vietnam being a dictatorship with a documented lack of free speech, the operation is supposed to be a
classic of conscience-free capitalist oppression.
In truth the work does look tough, and the conditions grim, if we compare Vietnamese factories with what we have
back home. But that´s not the comparison these workers make. They compare the work at Nike with the way they
lived before, or the way their parents or neighbours still work. And the facts are revealing. The average pay at
a Nike factory close to Ho Chi Minh is $54 a month, almost three times the minimum wage for a
state-owned enterprise. Ten years ago, when Nike was established in Vietnam, the workers had to walk to the
factories, often for many miles. After three years on Nike wages, they could afford bicycles. Another three years
later, they could afford scooters, so they all take the scooters to work (and if you go there, beware; they haven´t
really decided on
which side of the road to drive). Today, the first workers can afford to buy a car. But when I talk to a young
Vietnamese woman, Tsi-Chi, at the factory, it is not the wages she is most happy about. Sure, she makes five times
more than she did, she
earns more than her husband, and she can now afford to build an extension to her house. But the most important
thing, she says, is that she doesn´t have to work outdoors on a farm any more. For me, a Swede with only three
months of summer, this sounds bizarre. Surely working conditions under the blue sky must be superior to those in a
sweatshop? But then I am naively Eurocentric. Farming means 10 to 14 hours a day in the burning sun or the
intensive rain, in rice fields with water up to your ankles and insects in your face. Even a Swede would prefer
working nine to five in a clean, air-conditioned factory. Furthermore, the Nike job comes with a regular
wage, with free or subsidised meals, free medical services and training and education. The
most persistent demand Nike hears from the workers is for an expansion of the factories so
that their relatives can be offered a job as well.These facts make Nike sound more like Santa Claus than
Scrooge. But corporations such as Nike don´t bring these benefits and wages because they are generous. It is not
altruism that is at work here; it is globalisation. With their investments in poor countries,
multinationals bring new machinery, better technology, new management skills and
production ideas, a larger market and the education of their workers. That is exactly what
raises productivity. And if you increase productivity - the amount a worker can produce - you
can also increase his wage. Nike is not the accidental good guy. On average, multinationals
in the least developed countries pay twice as much as domestic companies in the same line
of business. If you get to work for an American multinational in a low-income country, you
get eight times the average income. If this is exploitation, then the problem in our world is
that the poor countries aren´t sufficiently exploited.
The effect on local business is profound: ´Before I visit some foreign factory, especially like Nike, we have a
question. Why do the foreign factories here work well and produce much more?´ That was what Mr Kiet, the owner
of a local shoe factory who visited Nike to learn how he could be just as successful at attracting workers, told me:
´And I recognise that productivity does not only come from machinery but also from satisfaction of the worker. So
for the future factory we should concentrate on our working conditions.´
If I was an antiglobalist, I would stop complaining about Nike´s bad wages. If there is a problem, it is that the wages
are too high, so that they are almost luring doctors and teachers away from their important jobs. But - happily - I
don´t think even that is a realistic threat. With growing productivity it will also be possible to invest
in education and healthcare for Vietnam. Since 1990, when the Vietnamese communists
began to liberalise the economy, exports of coffee, rice, clothes and footwear have surged,
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the economy has doubled, and poverty has been halved. Nike and Coca-Cola triumphed where
American bombs failed.
They have made Vietnam capitalist. I asked the young Nike worker Tsi-Chi what her hopes were for her son´s future.
A generation ago, she would have had to put him to work on the farm from an early age. But Tsi-Chi told me she
wants to give him a good education, so that he can become a doctor. That´s one of the most impressive
developments since Vietnam´s economy was opened up. In ten years 2.2 million children have gone from child
labour to education. It would be extremely interesting to hear an antiglobalist explain to Tsi-Chi why it is important
for Westerners to boycott Nike, so that she loses her job, and has to go back into farming, and has to send her son
to work
The European Left used to listen to the Vietnamese communists when they brought only misery and starvation to
their population. Shouldn´t they listen to the Vietnamese now, when they have found a way to improve people´s
lives? The party officials have been convinced by Nike that ruthless multinational capitalists arebetter than the
state at providing workers with high wages and a good and healthy workplace. How long will it take for our own
anticapitalists to learn that lesson?
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Greater openness to trade brings the greatest benefits to the poorest economies, spurs a
positive cycle of reform, and reduces corruption
Berg and Kruger '02
[Andrew, First Deputy Managing Director of the IMF, and Anne Krueger, Deputy Division Chief of the Financial
Studies Division of the IMF's Research Department, "Lifting All Boats: Why Openness Helps Curb Poverty," Finance &
Development: A Quarterly Magazine of the IMF, September 2002, Volume 39, Number 3,
http://www.imf.org/external/pubs/ft/fandd/2002/09/berg.htm accessed: 7-7-08]
Positive spillovers Much of the evidence in favor of openness spurring growth and reducing poverty is vulnerable to
the criticism that the effect of openness has not been isolated from that of many other reforms that were often
implemented at the same time. In our view, the fact that trade openness tends to happen at the same time as other
beneficial reforms and, indeed, is associated with strong institutional environments is an econometric problem but
also a policy opportunity. First, insofar as the evidence gives us a lead, it suggests that openness is a particularly
important component of reform. Second, there is little evidence that other reforms must precede effective trade
reform, though there are many reforms that are complementary. Finally, trade openness has positive spillovers on
other aspects of reform so that, on the whole, the correlation of trade with other proreform policies speaks to the
advantages of making openness a primary part of the reform package. In our view, there are few true preconditions
—that is, conditions in the absence of which trade openness is a poor idea. Openness seems to promote growth in
the poorest countries at least as well as in others. For example, in closed economies, low initial income reduces
potential benefits from economies of scale, suppressing growth. But trade openness, by allowing access to broader
markets, helps overcome this impediment. To this extent, the poorest economies, with the smallest home markets,
may benefit the most. More broadly, there is little evidence of a "growth trap" in the sense of a situation in which
countries become too poor to take off. The growth miracles of the twentieth century occurred in countries starting
far behind the richest. Many factors can make trade reform more successful, or less so. For example, a more
egalitarian initial income distribution implies that a given amount of average growth has a larger impact on the
poverty rate, all else held equal. Certain factors, such as higher rates of education, may permit the poor to benefit
more fully fromgrowth. Of course, these are arguments not against trade reform but rather in favor of pursuing these
complementary reforms as well. The most important set of relationships, in our view, has to do with positive
spillovers from trade reform. In many cases and in many ways, trade liberalization is itself a precondition or a
complement to other sorts of reforms and thus facilitates their success. Openness provides powerful channels for
feedback on the effect of various policies on productivity and growth. For example, competition with foreign firms
can expose inefficient industrial policies. Trade raises the marginal product of other reforms, in that better
infrastructure, telephones, roads, and ports translate into better performance of the export sector. Moreover, though
less visibly, productivity for domestic goods rises as well. Trade liberalization may change the political reform
dynamic by creating constituencies for further reform. It is sometimes argued that an absence of adequate prior
institutional reform may limit the gains from openness. In our view, strong institutions are likely to be a powerful
complement to trade liberalization, but there is little or no evidence to suggest that waiting for institutional reform is
a good idea. On the contrary, there is
strong evidence that openness may encourage institutional reform and, in particular, reduce corruption. Corruption is
higher in countries where domestic firms are sheltered from foreign competition, and the estimated size of this effect
is large. Conclusion Openness is not a "magic bullet"; much else matters for growth and poverty reduction. But this
conclusion should not distract us from the importance of trade liberalization in developing countries. Trade is only
one aspect of the development process. However, the breadth of evidence on openness, growth, and poverty
reduction, and the strength of the association between openness and other important determinants of high per capita
income, such as the quality of institutions, should give long pause to anyone contemplating the adoption of a novel
(or tested and failed) development strategy that does not center on openness to trade
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Trade key to poverty reduction- no warrants to the argument that trade exacerbates
poverty
Dollar and Kraay, Development Research Group, The World Bank, 01. [David and Aart, “Trade Growth and
Poverty,” Finance and Development Quarterly, June 2001.
http://www.imf.org/external/pubs/ft/fandd/2001/09/dollar.htm]
One of the most common populist views of growing international economic integration is that it leads
to growing inequality between nations -- that is, that globalization causes divergence between rich and
poor countries -- and within nations – that is, that it benefits richer households proportionally more
than it benefits poorer ones. In the second section of this paper we have argued that the experience of
globalizers shows how greater openness to international trade has in fact contributed to narrowing the
gap between ric h and poor countries, as the globalizers have grown faster than the rich countries as a
group. In this section of the paper we turn to the effects of globalization on inequality within countries,
drawing on results from our recent paper, Dollar and Kraay (2000). In that paper we show that a wide range
of measures of international integration are not significantly associated with the share of income that
goes to the poorest quintile. In other words, there is no systematic tendency for trade to be associated
with rising inequality that might undermine its benefits for growth and poverty reduction. This
evidence mirrors the anecdotal evidence in Table 4 which documented the absence of significant patters in
changes in inequality among our globalizers.
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Lack of open markets is the root cause of Islamic extremism and tyranny
Lindsey, director of the Center for Trade Policy Studies, 03. [Brink, “The Trade Front: Combating Terrorism with
Open Markets,” freetrade.org, August 5, 2003 No. 24, pgonline. Accessed 7/5/08 http://www.freetrade.org/node/39]
The rise of Islamist extremism over recent decades is a complex historical phenomenon, and it would be
facile to try to ascribe it to any single root cause. That said, the Muslim world’s woeful deficits in economic
and political freedom surely deserve much of the blame. Widespread poverty, high unemployment, the
absence of opportunities for upward mobility, brutal and corrupt ruling elites, the stifling of dissent,
the exasperation caused by seeing spectacular successes elsewhere in the world—all stoke the rage and
despair that win new converts to Islamist extremism. And all are traceable to the failure of liberal
institutions—market competition, the rule of law, popular selfgovernment— to take root in the region.
The past quarter century has seen a dramatic, worldwide turn away from old ideologies of central planning
and top-down control and toward more market-oriented models of economic policymaking.4
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Free trade key to eradicating tyranny and terrorism in the Muslim world- the US has an urgent
interest to promote FTAs
Lindsey, director of the Center for Trade Policy Studies, 03. [Brink, “The Trade Front: Combating Terrorism with
Open Markets,” freetrade.org, August 5, 2003 No. 24, pgonline. Accessed 7/5/08 http://www.freetrade.org/node/39]
The Muslim world’s economic backwardness props up autocracy and repression. Elsewhere around the
world, in places as diverse as Chile, Mexico, South Korea, Taiwan, and Thailand, the economic dynamism
unleashed by market-based development has led to democratization and the expansion of political rights. In
most Muslim countries, however, the absence of economic freedom goes hand in hand with an absence
of political freedom. Freedom House publishes an annual index of civil freedom and political rights,
according to which countries are categorized as “free,” “partly free,” and “not free.” As of 2001–02,
Afghanistan, Algeria, Bahrain, Egypt, Iran, Iraq, Kazakhstan, Kyrgyzstan, Libya, Oman, Pakistan, Qatar,
Saudi Arabia, Somalia, Sudan, Syria, Tajikistan, Turkmenistan, Tunisia, the United Arab Emirates,
Uzbekistan, and Yemen were ranked as not free; Azerbaijan, Bangladesh, Djibouti, Indonesia, Jordan,
Kuwait, Lebanon, Malaysia, Morocco, and Turkey were classified as partly free. Freedom House found no
free countries in the Muslim world.16 The Arab countries in particular ranked lower in political freedom than
any other region in the world.17 Confronted by the grave threat of Islamist terrorism, the United States
has an enormous and urgent interest in encouraging economic and political liberalization in the
Muslim world. In much of the region, violent radicalism is currently the only available avenue for
challenging a clearly unacceptable status quo. The advance of freedom would open innumerable new
avenues—for building businesses, pursuing careers, forming and joining and supporting nonprofit
organizations, expressing viewpoints, and banding together for peaceful political change. The appeal of
radicalism— and with it the number of potential recruits for the terrorist jihad—would wane with the
emergence of constructive alternatives. But what can the United States do to foster the growth of liberal
institutions in the Muslim world? In two countries, Afghanistan and Iraq, the U.S. military has ousted
entrenched despotisms by force and is now overseeing reconstruction with large occupying forces. But what
are the options short of war for effecting “regime change”—which, defined broadly to encompass
thoroughgoing economic and political reform, is the desired objective for the region?
In other words, how can U.S. policy encourage developments in the Muslim world that will make
future wars less likely? The creative and determined use of trade policy is one option with real
promise. At the outset, though, a caveat: whether through trade policy or other diplomatic initiatives, the
United States can exercise at best only modest leverage over conditions in the Muslim world. Whether
countries in the region embrace liberal reform, whether they can find a viable path to prosperity and freedom,
is overwhelmingly up to them. Even in Afghanistan and Iraq, where U.S. will is backed by military force on
the ground, success in building institutions that provide even tolerable security for property, contract, and
political rights is by no means ensured. Elsewhere in the region, we must accept that our capacity to promote
needed changes is limited. With that disclaimer, trade policy is an option for combating terrorism that we
ignore or slight at our peril. By removing obstacles to exports from the region, by convincing Muslim
countries to open their own markets to foreign competition, we can expand economic opportunities in
the region and brighten the prospects for broader, pro-market, pro-growth reforms. And while there is no
guarantee that greater economic dynamism would lead inevitably to full-scale liberal democracy, the growth
of economic power centers outside the state-run sector would likely create momentum in turn for a wider
distribution of political power.
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Free trade sparks job creation, improving cooperation with muslim countries which is key
to the war on terror
Gresser, Director of the Progressive Policy Institute’s project on Trade and Global Markets,
04 (Edward, “Wide Trade Policy Can Address the Roots of Terrorism,” 08 Jul, http://yaleglobal.yale.edu/display.article?id=4213
7/06/08)
An easier, and at least in the immediate future more effective, response would be to return to the approach Dawood suggested
three years ago. Congress has already proposed such an idea. Last fall, Senators Max Baucus and John McCain, along with
two Democratic Representatives, introduced a bill to drop tariffs on goods from 18 Muslim countries, from North
Africa to Pakistan, Afghanistan, and Bangladesh. Presidential candidate John Kerry had suggested such an approach even
earlier, calling for “a general duty-free program for the region, [like] the Caribbean Basin Initiative and the Andean Trade
Preference Act.”
Such an approach could help spark quick investment and job creation. At minimum, it would improve a
trade regime actually tilted against US allies in the war on terror. With a duty-free zone in place,
future US Administrations would have a positive foundation to build upon as they consider carefully
how to craft deeper and more comprehensive approaches to trade relations with the Muslim world.
It’s a pity the US didn’t act on Minister Dawood’s request three years ago. But there’s still time to start now.
Free trade defeats the poverty, weak institutions, and corruption that feed terrorist
networks
Lindsey, Director of the CATO Institute’s Center for Trade Policy Studies, 03 (Brink, “The Trade
Front: Combating Terrorism with Open Markets”, Trade Policy Analysis #24, 05 Aug, http://www.freetrade.org/pubs/pas/tpa-024.pdf
7/06/08)
The new trade initiative aims to combat terrorism, and the Islamist extremism that underlies it, by
promoting economic and political
development in the Muslim world. “The Arab world has a great cultural tradition, but is largely missing out on the
economic progress of our time,” the president declared in his May 9 speech. “Across the globe, free markets and
trade have helped defeat poverty, and taught men and women the habits of liberty.”1 The hope is
that better integration of Arab countries into the global economy will initiate a virtuous circle of
increased growth and broader economic reforms and that, in turn, a freer and more prosperous
Middle East will be less susceptible to the radical Islamist movements that support and perpetrate
terrorism. The linkage of trade policy and national security has been a recurring theme with the
Bush administration since the September 11, 2001, terrorist attacks. The white paper outlining the
administration’s national security strategy made headlines last fall by endorsing preventive military action against “emerging
threats.” That document also envisioned many other fronts in the war on terrorism in addition to military action. In particular, it
drew an explicit connection between trade expansion and threat reduction: We will actively work to bring the hope of democracy,
development, free markets, and free trade to every corner of the world. The events of September 11, 2001, taught us that
weak states, like Afghanistan, can pose as great a danger to our national interests as strong states.
Poverty does not make poor people into terrorists and murderers. Yet poverty, weak institutions,
and corruption can make weak states vulnerable to terrorist networks . . . within their borders.2
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FTAs aren’t really free trade – they just handicap non-members which breaks down global
reciprocity
Bhagwati ’02 [Jagdish, Professor of Economics and Political Science at Columbia University, Economic Policy
Adviser to the Director General of the General Agreement of Tariffs and Trade, “Free trade today”, p. 106-7 7/06/08]
That brings me to the classic choice between two different forms of reciprocal trade liberalization: preferential
trade liberalization and nondiscriminatory (i.e. most-favored nation, MFN) trade liberalization. Interestingly, the
original GATT agreement embraces both. MFN is the most important rule in GATT, just as the “freedom to
associate” (i.e. to organize trade unions) is the holiest of workers’ rights at the International Labor Organization.
Equally, in Article 24, the architects of the GATT allowed for free trade areas and customs unions (the latter
going beyond the former to a common external tariff), both being preferential trade agreements (PTAs) The
GATT has also, over time, permitted developing countries a greater latitude to undertake PTAs that fall short of
free trade areas and customs unions: the latter two require a commitment to getting internal tariff barriers down
to zero, whereas the former permit permanent discrimination at levels other than zero.’8 However, as the great
economist Jacob Viner pointed out in 1950, when asked by the Carnegie Commission to write a report on
postwar commercial arrangements, free trade areas (FTAs) are not free trade. While they remove tariffs for
member countries, they also increase the handicap (for any given external tariff) that nonmembers suffer vis-à-vis
member-country producers in the markets of the member countries, implying therefore protection against them.
So, FTAs are two-faced: they free trade and they retreat into protection, simultaneously. Of course, those who are
used to sound bites and cannot think of more than two words at the same time will read free trade area as free
trade! So, since clearly the phrase FTA is calculated to confuse it with free trade, I have urged over the years, with
some success, that economists call FTAs by the phrase PTAS, which, at minimum, alerts the public and the
politicians to the fact that here we have another species.
FTA overlap causes confusion which breaks down international free trade
Bhagwati ’02 Jagdish, Professor of Economics and Political Science at Columbia University, (Economic Policy Adviser to
the Director General of the General Agreement of Tariffs and Trade, “Free trade today”, p. 112-3 7/06/08 )
Trade diversion in particular PTAs is worry enough. But today, it has only a minor part in the play. The villain is
the systemic problem posed by an explosive proliferation of PTAs. This situation was not foreseen by the
architects of GATT Article 24. Indeed, they would be aghast today at the wild horses and rogue elephants that
have marched through the door that the article (and a couple of later enabling clauses) opened to preferences. An
increasing number of PTAs of all kinds have been formed. By the last count, there were over four hundred
formed and contemplated; and the number was growing by the week. I have little doubt that if this epidemic had
been foreseen at the end of the Second World War, the architects of the GATT would have had serious
reservations about inserting Article 24 into the agreement.24 Looking at this explosion when the number of PTAs
was yet barely in three digits, I remarked that the situation was turning into a “spaghetti bowl”: a messy maze of
preferences as PTAs formed between two countries, with each having bilaterals with other and different
countries, the latter in turn bonding with yet others, each in turn having different rules of origin (as required by
the preferences sought to be given and taken, without “leaks” to nonmembers via entry into members) for
different sectors,25 and so on. I called it a spaghetti bowl because it is an unruly mass of criss-crossing strings
that, in any case, is beyond my capabilities. (Once I used this metaphor in an after-dinner speech on PTAs and
the world trading system. I noticed the chairman’s puzzlement in place of the amused grin that I expected; and
then I realized that, of course, he was an Italian for whom eating spaghetti posed no challenge.)
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FTAs are really more like coercive tools to bully other countries into accepting demands
Choudry ‘07
[Aziz, board of directors of Global Justice Ecology Project, “Not Under The Same Sky: Bilateral Free Trade Agreements (FTAs),
Agriculture and Food Sovereignty”, Pesticide Action Network Asia-Pacific, February,
http://www.panap.net/uploads/media/SR_3_inside_pages.pdf 7/06/08]
The FTA process is often more of an imposition by a larger power than a real “negotiation”. Like WTO
agreements, they are negotiated in virtual secrecy, with texts routinely unavailable for public scrutiny in either
country until it is much too late – or, in some cases, not even available for a significant period of time after the
agreement has taken effect. Smaller countries face negotiations fatigue when overstretched and underresourced
officials have to deal with agreements with multiple countries, bilaterally, regionally and multilaterally. Even
among South-South FTAs, the neoliberal nature of the agreements and the unequal power relations among stronger
and weaker countries and the sectoral interests that drive such agreements
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FTAs Good
Their evidence assumes the ideal, not the reality of free trade.
Haslam, Op-Ed in Rutland Herald, Director of the Vermont Workers' Center, a community
organization committed to fighting for workers' rights, 2002 (James, Vermont Workers’ Center,
“Free Trade Is Bad For Everybody”, August 2002,
http://www.workerscenter.org/resources/?page=james_freetrade02, July 6, 2008)
But let's be clear, the corporations that basically run our country have never really wanted "free trade".
What they have wanted is to make as much money as possible, whatever the costs. Sometimes this
means opening foreign labor and natural resource markets to corporate exploitation under the guise of
"free trade", no matter the effect on the populations at home or abroad. But in other instances, making
as much money as possible means going completely against free trade policies, for example, by having
major domestic industries such as aerospace, computer technology and pharmaceuticals, be highly subsidized
by the public while profits go to private shareholders. The editorial called for something they termed "free
trade-plus", which puts some fetters on corporations by including some sort of basic labor and
environmental standards. Others call this crazy idea - "fair trade". And fair trade is exactly what Rep.
Sanders has been fighting for. The good news is that Vermonters and millions of people around the world
are joining him in the struggle to change our economy from one focused on corporate profit, to one that
puts people first.
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Race to the bottom results: Central American Free Trade Agreement proves
Sweeney, President of the 13-million member AFL-CIO, writer for the Boston Globe, 2005
(John, Global Exchange, “A Bad Deal on Free Trade”, March 21, 2005,
http://www.globalexchange.org/campaigns/cafta/2936.html, July 6, 2008)
LAST WEEK in Guatemala, workers, teachers, and farmers were fired upon while demonstrating for human
rights. The assassination of unionist Juan Lopez and injury of 25 others by Guatemalan law enforcement
came on the day the president signed the Central American Free Trade Agreement -- an agreement that
affords many protections for business interests but thumbs its nose at workers' rights, human rights, and
environmental protections. The murder of a protester highlights why so many people throughout the
Americas oppose the trade deal. Negotiated with the United States last year, CAFTA is seen as a corporate
giveaway that sells out workers' rights and environmental standards. Under CAFTA rules,
multinational corporations will speed up their race to the bottom on wages and workplace protections.
The deal will do nothing to pull people out of poverty in Central America, and it has the potential to
plunge workers further into exploitation.
Free trade policies deteriorate the relationship between people and natural resources
George, Dalit-Adivasi activist, 2004 (Goldy M., Countercurrents, “Free Trade – A war against
Dalits & Adivasis”, November 10, 2004, http://www.countercurrents.org/dalit-george101104.htm, accessed on July
8, 2008)
Due to their emotional attachment with the forest, they always search for resembling locality. So whenever
they are victimised in the name of progress and development they settle down in a similar environment. It is
because of this past that the Adivasis and Dalits in many parts of the country are branded as encroachers.
Apparently their customary and traditional rights were either curtailed or ignored by every ruler – both by the
Colonial and National ruler. The past policies of the state had seriously disturbed the close and lively
relationship between people and natural resources – leading to the unrestricted destruction of forest
wealth, affecting their wholesome life style and stuck at their very survival. The rule of globalisation
added extra intensity on the question of natural resources. These policies were directly or indirectly related
to capture the resources throughout the world, which includes the natural resources too. One of the
greatest failures of this period was the scantiness of unified attempts from the third world to resist this move.
The segmentation of the third world and their internal fighting to established power ensured enthusiasm and
enriched the exploiter camp to manipulate the situation. Nevertheless, this reduced People’s control over
Natural Resources. People’s control over Natural Resources was further reduced with the direct
intervention of IMF, World Bank, WTO, etc. Several World Bank funded projects have already
deteriorated the condition of the forests and forest dwelling communities. The capitalistic nation foresaw
the treasure of wealth in forest, the rich biodiversity, bionetwork genealogy, natural knowledge systems,
medicinal value of herbs in Indian forests, etc. Accordingly modifying the operative formula of globalisation,
liberalisation, privatisation and open market economy were the inevitable innovation of these agencies, even
in forest-based regions. The major intention was not just to capture the resources from the indigenous people,
but also to establish an unquestionable political and social control over the world.
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Global trading system requires extended deterrence. This increases risk of major war, and
collapses U.S. heg
Layne, Professor at Naval Postgraduate School ‘97
[Christopher, Professor at Naval Postgraduate School, International Security, pages 86-124]
There is a tight linkage – too often neglected by many international relations theorists – between
security and economic interdependence. I call this the “security/interdependence” nexus. To preserve an
international environment conducive to economic interdependence, the United States must engage in an extended
deterrence strategy that undertakes to defend its allies’ vital interests by protecting them from hostile powers, threats
emanating in the periphery, and each
other. The need to rely on extended deterrence to maintain the conditions in which interdependence can take
root leads inexorably to strategic overextension. The United States must extend deterrence to secure
interdependence against threats emanating in both the core and the periphery, and the synergy between
credibility concerns and threat inflation causes the United States to expand the scope of its security
commitments. Economic interdependence therefore brings with it an increase risk of war and a decrease in
America’s relative power.
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Because of food shortages, humanity is one crop season away from mass starvation
Adams, Health Ranger, 2008 (Mike, Natural News, “Prepare for mass global starvation”, April 23, 2008,
http://www.naturalnews.com/z023091.html, accessed on July 10, 2008)
So, to repeat, the food bubble is now starting to implode. What does it all mean? It means that as these
economic and climate realities unfold, our world is facing massive starvation and food shortages. The
first place this will be felt is in poor developing nations. It is there that people live on the edge of
economic livelihood, where even a 20% rise in the price of basic food staples can put desperately-needed
calories out of reach of tens of millions of families. If something is not done to rescue these people from
their plight, they will starve to death. Wealthy nations like America, Canada, the U.K., and others will be
able to absorb the price increases, so you won't see mass starvation in North America any time soon (unless,
of course, all the honeybees die, in which case prepare to start chewing your shoelaces...), but it will lead to
significant increases in the cost of living, annoying consumers and reducing the amount of money available
for other purchases (like vacations, cars, fuel, etc.). That, of course, will put downward pressure on the
national economy. But what we're seeing right now, folks, is just a small foreshadowing of events to come in
the next couple of decades. Think about it: If these minor climate changes and foolish biofuels policies are
already unleashing alarming rises in food prices, just imagine what we'll see when Peak Oil kicks in
and global oil supplies really start to dwindle. When gasoline is $10 a gallon in the U.S., how expensive
will food be around the world? The answer, of course, is that it will be triple or quadruple the current
price. And that means many more people will starve. Fossil fuels, of course, aren't the only limiting factor
threatening future food supplies on our planet: There's also fossil water. That's water from underground
aquifers that's being pumped up to the surface to water crops, then it's lost to evaporation. Countries like
India and China are depending heavily on fossil water to irrigate their crops, and not surprisingly, the water
levels in those aquifers is dropping steadily. In a few more years (as little as five years in some cases), that
water will simply run dry, and the crops that were once irrigated to feed a nation will dry up and turn to dust.
Mass starvation will only take a few months to kick in. Think North Korea after a season of floods.
Perhaps 95% of humanity is just one crop season away from mass starvation.
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Trade Liberalization brings mass poverty, food insecurity and famines worldwide
Kenny '07
[Zoe, "The Economic Causes of World Hunger," From: Comment & Analysis, Green Left Weekly issue #728,
Release date: October 24, 2007, http://www.stwr.net/content/view/2336/37/ 7/7/08]
On October 16, events in more than 150 countries marked World Food Day, which commemorates the
founding of the UN’s Food and Agriculture Organisation, with the theme of “the
right to food”.
Despite the UN’s 1974 World Food Conference setting the ambitious goal of ending world hunger “within a
decade”, freedom from hunger remains more like a privilege than a “right”.
According to the FAO, at least 800 million people in the world go hungry every day, and the lives of at least
400 million children being blighted by malnutrition in the first few months after being born.
The FAO has declared that hunger is “the most critical manifestation of poverty”, with about 1.5 billion
people having to live on less than US$1 a day and someone dying of hunger every 3.6 seconds.
This dire situation is only set to worsen as an combination of climate change, social conflict, the global push
for biofuels and rising oil prices combine to push more people in poor countries into hunger. The persistence
of widespread hunger is a result of reliance by the FAO and most of the world’s governments on either
“market forces” or superficial quick-fixes of increasing food aid to eliminate hunger. As long as the systemic causes of
hunger and poverty are ignored any goals, no matter how well-meaning, will be bound to fail. As Cuban
President Fidel Castro noted at the UN’s 1996 World Food Summit: “Hunger, inseparable companion of the
poor, is the daughter of the
unequal distribution of wealth and of the injustices of this world. The rich do not know hunger…
“It is capitalism, neoliberalism, the laws of a savage market, external debt, underdevelopment, unequal
exchange, which are killing so many people in the world.” The worst hunger is found in rural areas of the
Third World. Small-plot farmers and cooperatives have been worst affected by global trends. International
financial institutions such as the World Bank and the International Monetary Fund have pushed for trade
liberalisation in poor countries as a condition for receiving much-needed loans. First World governments
have hypocritically forced poor countries to eliminate subsidies for farmers while maintaining billions of
dollars worth of subsidies to their own farmers. Other factors bearing down on small farmers in the Third
World have been the pressure to grow exportoriented
cash crops rather than food crops for domestic consumption, the higher costs of seeds due to genetic
patenting by Western corporations, and the slow pace of land reform. For one or all of these
reasons, increasing numbers of Third World farmers have found they are unable to
compete with the uncompetitively priced First World agricultural products dumped
onto poor countries, and are forced to sell their land leading to the mass exodus to
urban slums.
With less food produced domestically, poor countries are losing the struggle to achieve food sovereignty,
thus becoming more dependent on the corporate-dominated world market for food supplies. A drop in the
exchange rate relative to the US dollar or the euro of a poor country’s currency or a sharp increase in
world commodity prices can quickly cause such a country to descend into a food crisis.
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Free trade doesn’t lead to growth in developing nations for it only destroys the little growth
they have
BusinessWeek, 2003 (Business Week, “Where Free Trade Hurts Thirty million jobs could disappear with the
end of apparel quotas”, December 15, 2003, http://www.businessweek.com/magazine/content/03_50/b3862007.htm,
accessed July 12, 2008)
By Cambodia's modest standards, Tuch Phearom is a success story. For the past four years she has been
sewing sweaters, a job that now earns her as much as $80 per month, including overtime. The money has
helped her family build a new wooden house that sits on stilts, leaving room for the chickens, pigs, and cattle
to sleep and forage below. And her wages have allowed her father to expand the plot of land he farms to 4.5
hectares. The winds of global commerce, though, may soon blow right through Tuch's humble
prosperity. The U.S. and Europe next year are set to remove a 30-year-old regime of strict import quotas
on clothing and textiles, which could put Tuch and the 1,300 other workers at the Thai-Pore Garment
Manufacturing Co. Ltd. out on the street. The reason: Once the quotas are lifted, a handful of countries --
most notably China -- are expected to quickly dominate the clothing industry worldwide, using their low
wages, modern factories, and good infrastructure to put outfits like Thai-Pore out of business. "I'm worried
my family will have nothing," says the 24-year-old Tuch. Adds her boss, managing director Roger Tan:
"China is a major, major threat." It's not just a threat to Cambodia. From the Dominican Republic to
Bangladesh, some 30 million workers in dozens of developing countries could see their jobs suddenly
evaporate. Under a 1974 global pact called the Multi-Fiber Arrangement (MFA), 47 nations each gets a
share of the European and U.S. markets for clothing and textiles. Cambodia, for instance, this year can export
to the U.S. 1,721,232 cotton pillowcases, 72 silk dresses, 1,136,229 knit shirts, and 37,896 playsuits -- in all,
$1.4 billion worth of clothing and textiles. The original idea of the quotas was to afford some protection to
the declining textile industries of the developed countries. The reality was different: With quotas effectively
guaranteeing market access, manufacturers sprang up in such unlikely places as Jamaica and Sri Lanka,
which before the quotas had no significant textile industry.
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Not only does free trade kill economies, it exacerbates the status of the least developed
countries in the world
Wehrfritz, Newsweek's Hong Kong Bureau Chief/Asian Economics Correspondent, 2005
(George, Newsweek, “Free Trade Is Not Enough”, December 26, 2005, http://www.newsweek.com/id/51490/page/1,
accessed July 9, 2008)
Free trade can kill economies. Just ask Robert Sisilo, the Solomon Islands' permanent representative to
the World Trade Organization. If a sweeping trade package under discussion at the global body is ever
implemented, his isolated nation stands to lose a mainstay revenue source: fees for access to its territorial
waters. They are but one example of the subsidies that the WTO aims to ban in the name of free trade. The
long-term solution is obvious: the Solomon Islanders need their own fishing fleet, an indigenous canning
industry and the means to export globally. Instead of giving them fish, to cite the old empowerment cliche,
they need to be taught how to fish for themselves. Many economists argue that free trade is a magic bullet--
the quickest way to fuel growth and alleviate poverty. Yet free trade hasn't much helped the 47 least
developed countries in the world, the poorest of the poor. According to United Nations data, their share
of world trade has declined sharply since 1950, and now accounts for a meager 1 percent of global
trade volume. Collectively, the number of people living in abject poverty in those nations is expected to
rise to 471 million by 2015--up from 334 million in 2000. Even East Asia, long the poster child for export-
driven growth, owes much of its rise to government-led and -financed industrial strategies, as well as outright
protectionism. Japan still impedes imports of foreign rice, for example, while South Korea blocks a variety of
agricultural products.
The free trade polices should be scrapped, they’re not enough to end the mighty grip of
poverty that bedevil countries
Wehrfritz, Newsweek's Hong Kong Bureau Chief/Asian Economics Correspondent, 2005
(George, Newsweek, “Free Trade Is Not Enough”, December 26, 2005, http://www.newsweek.com/id/51490/page/1,
accessed July 9, 2008)
A new consensus is emerging among the developing nations of the world, expressed most forcefully at the
contentious WTO meeting in Hong Kong in December. An increasing number of voices are arguing that trade is
not enough to end poverty and reduce the massive income disparities that bedevil countries from China to
Chile. In fact, they say, what's needed is more government intervention in economies, not less. Call it a new New
Deal. And get ready to hear much more about it in 2006. In Asia in particular, states recognize the importance of
market-driven policies. Yet big government is back in vogue in the region. India aims to boost rural incomes by
creating 150 million wage jobs in the country's poorest villages. Indonesia is establishing new schemes to
compensate poor households for higher gas prices even as the country dismantles its massive fuel-subsidy
programs. Thai Prime Minister Thaksin Shinawatra has handed cash to every poor village and asked each to
specialize in making products. Asian governments demand that developed markets open more fully to their
exports, but reserve the right to shield vulnerable sectors of their domestic economies from cheap imports. This
is not old-fashioned populism. Serious thinkers have concluded that neoliberal economic policies are little help
to the world's poorest nations. Columbia University economist and Nobel laureate Joseph Stiglitz argues that
the WTO's agenda as currently constituted should be scrapped. Poverty reduction, he and others argue,
requires not just market liberalization but also massive investments in aid--less government in some areas,
more in others. Many development economists advocate aggressive programs to boost literacy, improve health
care and build infrastructure. All are vital prerequisites to globalization. In other words, poor countries need to
have stronger economic foundations before their markets can be thrown open to international
competition.
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Free trade devastates millions of families and in turn replaces high-paying jobs
Haslam, Op-Ed in Rutland Herald, Director of the Vermont Workers' Center, a community
organization committed to fighting for workers' rights, 2002 (James, Vermont Workers’ Center,
“Free Trade Is Bad For Everybody”, August 2002,
http://www.workerscenter.org/resources/?page=james_freetrade02, July 6, 2008)
What the editorial calls "interference from Congress" is basically the way our country's Constitution is meant
to work. Through our elected representatives we have some degree of democratic control on major policies.
What Bush and this paper are supporting is almost completely undemocratic. In Vermont we are fortunate to
have a representative in Washington who actually acts in the interest of the majority of Vermonters - working
people. Rep. Bernie Sanders has consistently stood up for working Vermonters, and that's a big deal.
Congressman Sanders recently released a report "The Real Cost of 'Free Trade'", which includes
statistics that promoters of free trade policies downplay, if not ignore. For instance, the net loss of jobs
as a result of these "free trade" policies from 1994-2000 totaled over 6,000 jobs in Vermont and over 3
million nationally. Ask the folks who feel free trade firsthand what they think of the North American Free
Trade Agreement. Families devastated by layoffs at Shaftsbury's Stanley Tools, Bennington's Johnson
Controls, Orleans' Ethan Allen, Newport's Bogner, St. Johnsbury's Sheftex, and Springfield's Fair-Rite
Products, Cone Blanchard, and Fellows Corporation - just to name a few. Many of these jobs were high
paying blue-collar jobs, and as they leave Vermont they are being replaced with low-wage, often part-
time service sector jobs. According to a report by the Vermont Department of Employment and Training the
three fastest growing occupational titles through 2005 will be waiters/waitresses, retail sales and cashiers. In
addition to being low-paying, these positions unfortunately also often come without any benefits. Is this
the future free trade offers Vermont? What we need are trade policies that that make sense for people
and the environment. The way they are currently crafted is solely for corporate stockholder profits. The
editorial rightfully pointed out the devastating results of "doctrinaire loyalty to the tenets of free trade" in
Russia and Argentina. But it also stated "Bush has carried out several shamefully political acts of
protectionism". Confusingly enough, it says on one hand Bush supports free trade, which is somehow good
unless left completely "free", but on the other hand Bush is wrong for handpicking corporations to protect.
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Without the right mindset, free trade will never be the solution to war
Ebeling, Ludwig von Mises Professor of Economics Hillsdale College in Hillsdale, 2002 (Richard M., Ludwig
von Mises Institute, “Can Free Trade Really Prevent War?”, March 15, 2002, http://mises.org/story/915, accessed on
July 8, 2008)
Free trade cannot prevent war when men no longer believe in peace. Free trade is premised on the idea
that human relationships should be voluntary and based on mutual consent. It is grounded on the
understanding that the material, cultural, and spiritual improvements in the circumstances and
conditions of man are best served when the members of the global community of mankind specialize
their activities in a world-encompassing social system of division of labor. It requires the conviction
that the moral condition of individual men and mankind as a whole is fostered the most when people
acquire the things of the world that they desire by peaceful exchange rather than by theft and plunder;
and when men attempt to change the way their fellow human beings think and live and act by using
the methods of reason, persuasion, and example instead of through the use of compulsion, power,
terror, and death. That is why wars still plague us. Too many men still don’t believe in peace because
they don’t believe in the prerequisites for peace and the freedom of trade that accompanies their
implementation. Just as the Second World War was about to begin, the French free-market economist, Louis
Boudin, pointed out, "The system of non-regulated international trade cannot ensure peace. It can help to
create a peaceful atmosphere, on the one condition: that men have a peaceful mental attitude. . . . Peace
within a nation requires the same condition. . . . The essential task therefore is to create a peaceful
mentality.[13] The task we face today is still the same as when Ludwig von Mises wrote the words quoted
above in 1924 and Boudin penned his words in 1939. We must continue to fight and hopefully prevail
through reason and argument against what Adam Smith referred to in 1776 as the "prejudices of the
public" (the economic ignorance of our fellow men) and the opposition of the "private interests" (those
who wish to use the power of the state to plunder others in society).[14] Until we do, free trade will not
replace and then help to prevent future wars.
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FTAs, like NAFTA, are proving harmful to women’s livelihoods. If nothing is done, there
will be substantial ramifications for women throughout the world
Citizens Trade Campaign, 2002 (Citizens Trade Campaign, “Trade Agreements Based on NAFTA Model
Have Proven Harmful to Women, Proposed New Rules Threaten Further Damage”, Published December 2002,
http://www.citizenstrade.org/womentradeexplained.php, accessed on July 12, 2008)
International trade, a dominant force in the global economy in which women live and work, inevitably
will affect women. Nine years of the North American Free Trade Agreement (NAFTA) model of trade
liberalization has proven harmful to women in all three NAFTA signatory countries. Now, new
agreements such as the Free Trade Area of the Americas (FTAA), the Central American Free Trade
Agreement (CAFTA), several bilateral agreements, and negotiations in the World Trade Organization
(WTO) stand poised to expand trade rules into new areas. By not addressing the impact on women's
lives and livelihoods, these new agreements could have significant negative ramifications for women
throughout the world. After nine years, the data shows clearly that the NAFTA model of trade liberalization
has a disproportional, negative impact on women in all three countries.
Free trade creates hardships for women around the world and makes it an impossible feat
to acquire necessary medicine
Citizens Trade Campaign, 2002 (Citizens Trade Campaign, “Trade Agreements Based on NAFTA Model
Have Proven Harmful to Women, Proposed New Rules Threaten Further Damage”, Published December 2002,
http://www.citizenstrade.org/womentradeexplained.php, accessed on July 12, 2008)
Unless future agreements include core worker's rights with enforceable protections for women workers, it is
likely that the same kinds of job loss, wage depression and human rights violations generated under
NAFTA, will expand throughout the Americas. In addition, new rules under the FTAA, CAFTA, bilateral
trade agreements, and agreements on agriculture and services within the WTO could create new hardships
for women. New rules in trade agreements could adversely affect women in the following areas: Women's
access to affordable medicines. Through new rules on intellectual property rights, agreements currently
under negotiation could make affordable medicines an impossibility for women and their families. The
language in the Singapore Free Trade Agreement, for example, backtracks on progress made in the WTO
agenda established at Doha, by further restricting the ability of governments to produce their own generic
drugs or to import them from non-patented producers. According to the United Nations, 70 percent of the
world's poor are women. Without affordable medicines, this large population of poor women would
not be able to provide care for themselves and their families.
Free trade doesn’t allow women to access vital services such as healthcare and education,
which are both necessities to life
Citizens Trade Campaign, 2002 (Citizens Trade Campaign, “Trade Agreements Based on NAFTA Model
Have Proven Harmful to Women, Proposed New Rules Threaten Further Damage”, Published December 2002,
http://www.citizenstrade.org/womentradeexplained.php, accessed on July 12, 2008)
Women's access to essential services. New rules expanding trade liberalization in the service sector could
severely limit access to vital services such as healthcare and education. Language in the FTAA's service
section as it now stands could threaten access to affordable healthcare, education and clean water by
subjecting governments to new rules which may limit their ability to regulate services trade and investment
in the public interest. The deregulation of vital services such as healthcare and education would have a
disproportional impact on women due to the fact that women are usually responsible for providing
healthcare and education for their families. Women may not be able to provide for their families if
domestic policies meant to guarantee affordability and accessibility can be challenged as barriers to
trade.
Being that worldwide, women make up the vast majority of all small farmers, it’s easy to
see why when FTA policies cause more harm than good, some thing needs to be done
Citizens Trade Campaign, 2002 (Citizens Trade Campaign, “Trade Agreements Based on NAFTA Model
Have Proven Harmful to Women, Proposed New Rules Threaten Further Damage”, Published December 2002,
http://www.citizenstrade.org/womentradeexplained.php, accessed on July 12, 2008)
Women's ability to sustain their livelihood as farmers.Worldwide women make up the vast majority of all
small farmers in developing countries. In fact, women subsistence farmers accounted for 62 percent of
total female employment in low-income countries in 1990 (Mehra, Rekha & Sarah Gammage 538).
Agricultural policies in trade agreements within the WTO, in CAFTA and the FTAA that focus solely on
tariff reduction without addressing issues of industry concentration or price pose a great risk to small
farmers. If the NAFTA model is followed, these agreements would further eliminate supports for
women small farmers while subjecting them to increased competition from cheap imports. The NAFTA
model of trade agreements has proven not to work for women. It is clear that trade negotiators must
take into account the ways in which trade agreements affect women, and that new trade agreements
not repeat the failed NAFTA model, nor should new agreements expand in reach without core labor
protections in place and clear attention to women's needs and livelihoods, including access to essential
services and medicines.f