Trade - Symonds

Gonzaga Debate Institute 2008 1
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
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
## Trade Deficit Bad ##

Trade Deficit High

The US trade deficit is at a record high now
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]
HOW DID THE DEFICIT GET SO BAD? For more than a decade, the global economy has become
increasingly dependent on U.S. growth, while the U.S. has become more dependent on foreign capital
to finance its demand. This cycle snowballed the deficit in the U.S. current account -- the broadest
measure of international trade and financial flows -- to a record 5.7% of gross domestic product, a
level exceeded only by the emerging nations Hungary, Bulgaria, and the Czech Republic. Foreign
money now finances three-fourths of U.S. net investment (chart).
Oil Key To The Trade Deficit
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.
Alternative energy reduces the deficit

Alternative energies reduce oil imports which account for over 34 billion dollars of the trade
deficit- their implementation drastically cuts the size of the overall deficit
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]
Petroleum products accounted for $34.5 billion of the monthly trade gap, on a seasonally adjusted basis,
up from $30.2 billion in March. Since December 2001, net petroleum imports have increased $30.0
billion, as the average price of a barrel of imported oil has risen from $15.46 to $96.81, and monthly
imports have increased from 353 million to 388 million barrels.
Retuning conventional gasoline engines and transmissions, hybrid systems, lighter weight vehicles, nuclear
power, and other alternative energy sources could substantially reduce US dependence on foreign oil.
These solutions require national leadership, but both Republican and Democratic Party leaders have failed to
champion policies that would reduce dependence on Middle East oil.
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.
Economic collapse results

Romilly Greenhill and Ann Pettifor, New Economic Foundation, The United States as a HIPC, April 2002,
http://www.jubileeresearch.org/analysis/reports/J+USA7.htm
As Fred Bergsten, Director of the Institute for International Economics in Washington, has noted, ‘at almost any
time, markets could decide that the deficits and debt are unsustainable and sell dollars, driving the exchange rate
down sharply….[this] would produce increases in US price levels and higher interest rates and almost certainly a
fall in the stock market as well.’37
European Economic Collapse
U.S. trade deficit will cause a European economic collapse

Feldstein, chair Council of Economic Advisers, 2006
(Mark, 8-2-06, “Europe has to face the threat of America's trade deficit”, The Financial Times,
http://www.nber.org/feldstein/ft080206.html , July 13, 2008)
The inevitable decline of the US trade deficit will pose a big challenge for the economies of Europe.
Shrinking America's $800bn annual trade imbalance requires a decline of US imports and a rise in its
exports. When US imports decline, European exports will fall; and when a lower dollar makes American
exports more competitive, US shipments to Europe will rise and American products will replace European goods
in global markets.
This fall in the demand for European products will cause a slowdown in Europe's already weak growth.
With lower demand, European companies will invest less and hire fewer workers. The resulting slowdown in
incomes will hurt consumer spending and have second-round effects on business investment. This cumulative
process could be enough to send some European economies into recession.
Foreign Direct Investment
Trade deficit bad- lower FDI, decreases economic growth

Mandel, Staff writer for Business Week, 03. [Michael, “Why a Falling Dollar Won't Help It'll scare off foreign
investors -- and do zilch to boost inefficient industries,” Business Week, Oct 6, 2003. , Iss. 3852; pg. 126. Accessed
7/7/08 from Proquest]
But a falling dollar could have serious negative consequences without actually fixing the problems that
are causing the trade deficit to widen. For starters, a weaker currency could scare off foreign investors,
depressing the stock market and sending interest rates soaring. In the short run, it will also force
consumers to pay more for imports and drain off money they could have used for something else, thus
dampening growth. What's more, currency manipulations will do nothing to fix the fundamental problem:
Much of U.S. manufacturing has simply not been innovating and boosting productivity fast enough to
compete effectively in the global marketplace.
Consider first the impact of a falling dollar on foreign investors. The U.S. depends on an enormous
flow of capital into the country to fund everything from business investment to home construction to the
government budget gap. Over the last year, for example, the U.S. has absorbed roughly $800 billion in
foreign capital, with most of that going into corporate bonds, Treasury debt, and mortgage-backed securities.
Any drop in the dollar big enough to cut the trade deficit significantly -- say, 15% -- would also greatly
reduce or eliminate the returns for European or Asian investors who put their money into U.S. securities.
Moreover, the prospect of further declines in the dollar would encourage foreign investors to start
pulling out their funds from the U.S. stock and bond markets. The outcome could be a spike in interest
rates, much greater difficulty in raising money, and a squeeze on domestic growth.
FDI is the single greatest way to prevent conflict

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.]
Trade interdependence does not always reduce hostility between states. It depends on whether the
trade represents vulnerability or sensitivity interdependence. Portfolio investment also does not represent
a tie that binds politically. Even more important, foreign direct investment (FDI) represents a link that is
costly (and timeconsuming) to break. Thus, FDI links between countries are more likely to reduce conflict
than trading links. Evidence shows that symmetrical FDI is the most stable guarantor of low conflict
between countries. One factor generating conflict may be that scarce factors of production are in political
command. Abundant factors, now more generally in power among developed states, may be partly
responsible for the diminishment of conflict among these states in recent years.
Hegemony/Soft Power
It destroys hegemony: It overstretches military funding and undermines US industry-

China proves
Hawkins, 2003 (William R. Hawkins, Senior Fellow for National Security Studies at the U.S. Business and
Industry Council, “Trade Deficit Provides China With More Than Economic Advantages,” July 18,
http://www.americaneconomicalert.org/view_art.asp?Prod_ID=864, accessed 7-15-08)
China is able to use the profits from its successful trade policy to maintain its advantage. Its trade
surplus gives it the dollar reserves its needs for financial intervention. Between 1997 and March, 2003, its
dollar reserves grew from $140 billion to $316 billion. It can invest these funds in U.S. Treasury debt, which
is being issued at a brisk pace due to the expanding Federal budget deficit. The budget deficit is largely the
result of the American recession, which in turn is perpetuated by the trade deficit with China and
elsewhere. Thus the "twin deficits" (trade and budget) work together for Beijing's benefit. And when
China is involved, the dangers are not just commercial. Beijing's strategy to undermine American
industry while building up its own manufacturing base also works to shift the balance of power in Asia.
So does undermining U.S. finances with the "twin deficits" and beating down neighboring states in
trade battles. In the seminal Chinese treatise on modern strategy Unrestricted War by People's Liberation
Army Colonels Qiao Liang and Wang Xiangsui published in 1999, the ongoing financial crisis is compared
to military conflict: "Economic prosperity that once excited the constant admiration of the Western world
changed to a depression, like the leaves of a tree that are blown away in a single night by the autumn wind.
After just one round of fighting, the economies of a number of countries had fallen back ten years. What is
more, such a defeat on the economic front precipitates a near collapse of the social and political order. The
casualties resulting from the constant chaos are no less than those resulting from a regional war." It is also
argued in Unrestricted War that to attack another country's economy, the aggressor "must adjust its own
financial strategy, use currency revaluation or devaluation as primary, and combine means such as getting the
upper hand in public opinion and changing the rules sufficiently to make financial turbulence and economic
crisis appear in the targeted country or area, weakening its overall power, including its military strength." As
the weak American economy contributes to rising budget deficits, it becomes more difficult to provide the
funds to modernize or expand the overstretched U.S. military, or to pay for overseas combat
operations, or to finance national building in places like Iraq and Afghanistan.
Trade deficit devours US soft & economic power

Setser et al, 2005 (Brad, “How Scary Is the Deficit?” Council on Foreign Affairs (WTO Special Edition),
December, http://www.foreignaffairs.org/20051201faresponse84710/brad-setser/how-scary-is-the-deficit.html, 7-15-
08)
There is little doubt that U.S. external debt and the current account deficit are eroding the appeal of
the U.S. approach to economic policy, an important element of U.S. "soft power." Asian policymakers,
in particular, view U.S. economic policy not as a model but as a problem: the United States' "exorbitant
privilege" -- Charles de Gaulle's term for Washington's ability to finance deficits by printing dollars -- comes
at their expense. The United States has a particularly delicate relationship with China, which is
currently the single biggest buyer of U.S. debt. To date, disagreements on other issues have not
prompted China to slow its accumulation of dollar reserves, but that is not to say that it could not
happen in the future. The ability to send a "sell" order that roils markets may not give China a veto over
U.S. foreign policy, but it surely does increase the cost of any U.S. policy that China opposes. Even if China
never plays its financial card, the unbalanced economic relationship between the United States and
China could add to the political tensions likely to accompany China's rise. Economic power usually
flows to creditors, not debtors. While the United States roams the world looking to sweep up any spare
savings to finance its huge deficits, China roams the world looking for new places to invest its surplus
savings -- including in oil and gas resources and in states that Washington has judged pariahs. This is a far
cry from the early days of the Cold War, when the United States used its surplus savings to finance the
reconstruction of its allies, cementing political alliances with strong economic ties.
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.
Economic depression results

Tabb, professor of political science and sociology at the Graduate Center of the City University of New York,1999
(William K., “Are New Trade Wars Looming?” Monthly Review, November 1999)
I have agreed to talk on the question "Are New Trade Wars Looming?" The answer is yes, but I must also
tell you that I think this is the wrong question. What we are really interested in is why trade wars occur and
where the economic philosophy we call protectionism comes from. A major cause of the worldwide war
and depression that crippled much of the first half of the twentieth century was imperialism and the
rivalry of nations for trade, commodities, raw materials, and labor - this produced protectionism. I want
to suggest the special importance of finance capital in this process, both earlier in the twentieth century and
now. Rather than worrying about trade wars, we should concentrate on the power of capital's control over our
political economy, especially the role of international financiers.
Protectionism comes close to the end of the story, not the beginning. To say trade wars are bad and to be
avoided ignores the more crucial matter of the difficulties that create the conditions out of which trade wars
become likely, if not inevitable. The end of the First World War found the global economy with excess
capacities stimulated by the needs of wartime, a peace which redrew the map of Europe (creating small, new
states that attempted to protect their autonomy), and a situation in which established powers (that had
experienced differential productivity growth) gained or lost economic capacity as a result of war, and
disordered exchange rates produced disequilibria that proved difficult to set right. Any stability that existed
in the 1920s depended on a particular balance of international capital flows. When the Fed raised
interest rates in the United States, this balance was disrupted, and the prevalent view since the end of
the First World War (that the United States neither understood nor was very interested in the global
financial fragility of the period) was confirmed. The Great Depression can be understood as the outcome
of an inability to produce a financial regime capable of sustaining economic growth and stability. The
same troubling processes are underway in our own time.
Protectionism 2/3
Trade deficit risks American protectionism & financial crisis

Quinlan and Chandler, 2001 (Joseph P. Quinlan and Marc Chandler, “The U.S. Trade Deficit: A Dangerous
Obsession” Council on Foreign Affairs, May/June, http://www.foreignaffairs.org/20010501faessay4770/joseph-
quinlan-marc-chandler/the-u-s-trade-deficit-a-dangerous-obsession.html, accessed online 7-15-08)
Every U.S. president over the past quarter-century has confronted an annual trade deficit. But the cavernous
trade gap inherited by President George W. Bush dwarfs those faced by his predecessors. America's current-
account deficit (which measures the cross-border exchange of goods, services, and investment income) averaged
more than $1 billion a day last year, reaching a record 4.4 percent of GDP. Many economists worry that the
huge trade deficit, which must be financed by foreign investors, could lead to a full-blown financial crisis
if and when those investors become unwilling to fund the imbalance. Something as benign as stronger
economic growth in another country, for instance, could attract a larger share of the world's savings,
leading to higher U.S. interest rates, a weaker dollar, and a grimmer economic outlook for the United
States and the world. Economists offer various explanations for the persistent U.S. trade deficit. Some argue
that America buys more from the world than it sells because its companies are growing less competitive. Others
blame the "unfair" trade restrictions and labor policies of other countries. Still others point to the underlying
strength of the dollar, which makes American goods and services more expensive for foreign buyers. Whatever
the proper explanation, a simple and important fact is absent from the debate: the trade balance is no longer a
valid scorecard for America's global sales and competitiveness. Given a choice, U.S. firms prefer to sell goods
and services abroad through their foreign affiliates instead of exporting them from the United States. In 1998,
U.S. foreign-affiliate sales topped a staggering $2.4 trillion, while U.S. exports -- the common but spurious
yardstick of U.S. global sales -- totaled just $933 billion, or less than 40 percent of affiliate sales. How U.S.
firms compete in world markets, in other words, goes well beyond trade. Still, trade erroneously remains the
standard benchmark of global competitiveness. More worrisome, it is the most important factor shaping U.S.
international economic policy. Overblown concern about the swollen trade deficit, combined with a slowing
economy and the expectation of rising unemployment, could ignite a new round of trade protectionism in
Washington, which could spark similar responses around the globe. The greatest danger on America's
trade front, therefore, is not the size of the deficit but the nation's obsession with it.
High trade deficits cause an upswing in protectionism

There are challenges facing the global economy and the longer that the U.S. current-account deficit--
and hence its reliance on foreign capital--continues to grow, the greater the risk that a shock to
America's financial markets will send the dollar crashing. 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. A slide into protectionism
would have grave consequences. Intellectual consensus in favour of free trade, particularly in poor
countries, could wither in the face of American protectionism. The best outcome the world economy can
hope for in the next few years is a fairly sluggish performance by America's economy, combined with faster
growth elsewhere. A few more years of below-average growth but no serious recession would help America
to work off its excessive debt and increase its savings rate. The trend remains towards ever bigger American
imbalances and continued reliance abroad on American economic growth. Reversing that trend will take
political leadership as well as a large dollop of luck. The country's dramatic shift into budget deficits may
have underwritten the American, and thus the global, economy in the short term, but it risks making the
medium-term problem much worse. The policy recipe that is best for world economy is determined structural
reforms coupled with a sensible (read looser) macroeconomic policy.
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.
Recession/Economic Growth 1/5
Trade deficit wrecks global economic growth

Bergsten, director of the Institute for International Economics, 04. [Fred, “The risks ahead for the world economy,”
The Economist, 9/11/2004, Vol. 372, Issue 8392 pg online. Accessed 7/9/08 from Ebscohost]
FIVE major risks threaten the world economy. Three centre on the United States: renewed sharp
increases in the current-account deficit leading to a crash of the dollar; a budget profile that is out of
control; and an outbreak of trade protectionism. A fourth relates to China, which faces a possible hard
landing from its recent overheating. The fifth is that oil prices could rise to $60-70 per barrel even without a
major political or terrorist disruption, and much higher with one.
Most of these risks reinforce each other. A further oil shock, a dollar collapse and a soaring American
budget deficit would all generate much higher inflation and interest rates. A sharp dollar decline would
increase the likelihood of further oil price rises. Larger budget deficits will produce larger American
trade deficits, and thus more protectionism and dollar vulnerability. Realisation of any one of the five
risks could substantially reduce world growth. If two or three, let alone all five, were to occur in
combination then they would radically reverse the global outlook.
There is still time to head off each of these risks. Decisions made in America immediately after this year's
elections will be pivotal. China, the new growth locomotive, is key to resolving the global trade imbalances
and must play a central role in future. Action by a number of other countries will be essential to maintain
global growth and to avoid deeper oil shocks and new trade restrictions.
The most alarming new prospect is another sharp deterioration in America's current-account deficit. It
has already reached an annual rate of $600 billion, well above 5% of the economy. New projections by my
colleague Catherine Mann (see chart 1) suggest it will now be rising again by a full percentage point of GDP
per year, as actually occurred in 1997-2000. On such a trajectory, the deficit would exceed $1 trillion per
year by 2010.
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 - relative 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."
Continued trade deficit will trigger U.S. recession

Shostak, adjunct scholar of the Mises Institute, 2006 (Frank, “Does the widening US trade deficit pose a threat to
the economy?” Ludwig von Mises Institute, Feb 2, http://mises.org/story/2029, accessed online 7-16-08)
Most economists are extremely alarmed about the effect of the expanding deficit on the current account. In
2004 the deficit stood at $668 billion, or 5.7% of the gross domestic product (GDP). For 2005 we have
estimated that the deficit was around $788 billion, or 6.3% of GDP. As a result of the ballooning deficit, the
value of US net external liabilities, expressed at historical cost, jumped to $5.1 trillion in 2005 from $4.3
trillion in 2004. As a percentage of GDP, net external liabilities climbed to 41% in 2005 from 37% in the
previous year and 4.9% in 1980. It is held that this increase in foreign debt cannot go on forever. If the
Americans do not begin reducing their trade deficit, there will come a time when foreigners will
become less willing to hold dollar denominated assets. This in turn will weaken the US dollar.
Consequently, once this happens the United States will be forced to increase interest rates (maybe
sharply) to continue to attract foreign investments. Higher interest rates in turn will plunge the
economy into recession. In short, given the size of the current account deficit it is held that the US dollar has
to plunge in a big way against most currencies, and it is not possible to avoid a painful adjustment as a result
of this. It would appear that the trade deficit is a major economic problem that must be urgently
addressed in order to avoid serious economic disaster.
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
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.
Deficit bad- global recession

Of course these scenarios are flights of economic fancy, but they make two serious points. First, the world's
reliance on America as its only engine is increasingly risky. Second, moving away from a one-engined
world will not be painless. In America, in particular, the economy is likely to remain weak for the next
few years. That may sound depressing, but sluggish growth for another half-decade is much better than
a dollar crash, a deep recession or a stampede into protectionism.
A sudden dollar crash precipitated by a big shock in America's financial markets may not be likely, but
it is certainly possible. The longer that America's current-account deficit--and hence its reliance on
foreign capital--continues to grow, the greater the risk that a shock to America's financial markets will
send the dollar crashing. This would probably push the world economy into recession. Spiking interest
rates would deflate American consumer spending. A soaring euro would darken Europe's economic outlook.
If the euro rose far and fast enough, it might even put European monetary union at risk. And poor countries
would be hit by a double whammy: a sharp drop in export earnings as the rich world plunged into recession,
and a sharp rise in interest rates as investors abandoned risky assets.
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.
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.
Trade deficit causes confidence crises

Morici, professor, University of Maryland School of Business, 07. [Peter, “US Stock Prices and the Trade Deficit,”
Nov 9, 2007 finfacts.com. Accessed 7/2/08 from
http://www.finfacts.com/irelandbusinessnews/publish/printer_1000article_1011753.shtml]
Wall Street and American capitalism are suffering a crisis of confidence. Stock markets are in turmoil,
because US banks are taking record losses from foolish bets on subprime mortgages, the dollar is
tanking against the euro and some other currencies, and oil prices are rocketing. The US trade deficit
is at the center of this mess. Since December 2001, the trade deficit has more than doubled, and for the
last 38 months, it has remained above $50 billion. This gap must be covered by foreigners investing in US
businesses or foreigners buying US bonds, collateralized debt obligations, or other paper assets. The
foreign appetite to invest in controlling interest of US enterprises is no more than $10 billion a month,
especially when the US economy is growing at less than 4 percent and China and India are cracking along
around 10 percent. Hence, Americans have been borrowing more than $40 billion a month, and have
amassed a $6 trillion foreign debt to finance these trade deficits.
Foreign central banks, led by China, Japan, India, South Korea, and Brazil have been major takers of US
paper, because private foreign lenders simply are not willing to soak up all this debt. The recent failings of
mortgage bankers, investment and commercial banks, bond rating agencies, and even private equity--
Cerberus owns the biggest loser in the subprime debacle, General Motors Acceptance Corporation--are
causing private investors, and some central banks, to sell off American paper and send the dollar and stock
prices south. The sinking dollar against the euro and the pound does help boost US exports, because
American and European businesses, from Airbus and Boeing to French and Wisconsin cheese, compete for
global markets. However, the monthly trade deficit remains close to $58 billion a month, because
petroleum, consumer goods from China and automotive products account for about 98 percent of the
trade deficit.
Undermines the economy many ways

Kusumi, 2003
(John, 3-23-03, “Globalization: Now identified as 'boomernomics'”, Association for Asian Research,
http://www.asianresearch.org/articles/1253.html, 7-13-08)
A myth circulates in the establishment, that trade deficits can be safely ignored. Trade deficits were
shrugged off by the architects of Boomernomics. This was a mistake. Upon closer analysis, trade deficits
hurt the economy, dollar-for-dollar. The economic damage of these deficits was not evident at that time.
Boomernomics encouraged larger trade deficits, which followed suit by growing. In the 1980s, our deficits
with China were under $4 billion. They have grown to $86 billion, and total trade deficits have grown to
$350 billion. They do hurt. They are a problem. Several other economic measures are hurt by trade
deficits, including employment, wages, cost of living, value of the dollar, and prospective inflation. The
effect is seen in our troubled economy, right now. The economy is now saying "TILT," and one reason is
Boomernomics, with its built-in encouragement of trade deficits. Trade deficits have never received as much
attention as we used to heap on federal budget deficits. They have been shrouded in the myth, as above. For
the management of a sound economy, the myth is a dangerous misunderstanding. It is time to wake up, grow
up, and face up to trade deficits. For a short definition, a trade deficit is when "we are getting poorer, and
somebody else is getting richer." There is a $350 billion hole in our economy. Even more economic activity
is curtailed, because there is a multiplier effect as money recirculates. Spent in a trade deficit, money
recirculates and multiplies in somebody else's economy, not ours. In sound economics, we should be
striving for balanced trade, bringing trade deficits down to $0. Trade deficits are truly a bogeyman to
our economy.
WTO
Trade deficit causes WTO collapse
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.
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?”).
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.
Trade deficit leads to loss of jobs and inflation of the dollar

Weller, Senior Fellow at American Progress and an Associate Professor of Public Policy at the University of
Massachusetts Boston. 2006
(Christian E., February 10, Public Citizen, http://www.americanprogress.org/experts/WellerChristian.html)
On February 10th, the U.S. Census Bureau released data showing that the U.S.trade deficit reached a record-high
$726 billion, or 5.8 percent of total U.S. gross domestic product (GDP), in 2005. This is an 18 percent increase
over the U.S. trade deficit in 2004.
This ballooning trade deficit is worrying for many reasons, especially coming on the heels of continuing
news reports about plummeting U.S. manufacturing jobs. A rising trade deficit leads to the loss of jobs in
traded sectors – particularly good jobs in the manufacturing sector. A decade of rising trade deficits has
contributed to the loss of over 3.2 million U.S. manufacturing jobs between 1998 and 2005. Trade
agreements like NAFTA and the recently passed CAFTA exacerbate the situation, speeding up the rate at
which U.S. jobs can be shipped overseas.
Regarding the big-picture economic situation for the United States, the Center for American Progress’
Senior Economist Christian Weller says:
“Large trade deficits are troublesome since they can jeopardize an economy’s long-term health. Trade
deficits in excess of 4 to 5 percent of GDP raise worries about economic instabilities that can lead to rapid
inflation, a sharp drop in the dollar, higher interest rates and falling standards of living… The U.S.
government is a particularly large borrower on world markets. It has turned from a creditor to a debtor
over just a few years. From March 2001 to September 2005, foreign lenders financed 81 percent of new
treasury issues. The fear is that eventually investors will bring their money elsewhere, thus forcing higher
interest rates and potentially causing a sharp decline in the dollar, higher inflation, and declining
economic growth.”
Weller also notes several important issues with the recently released figures, including:
▪ Even if the petroleum related deficit had stayed the same, the overall deficit would have reached record
levels. So, don’t blame oil for this problem.
▪ Another part of the story is the loss of U.S. competitiveness. The biggest indicator is the sharp increase
in the trade deficit in advanced technology products. It grew by 20.4 percent, somewhat faster than the
overall trade deficit, which increased by 17.5 percent. The biggest challenges are in information and
communications technology and electronics – areas especially prone to the recent high-tech off-shoring crisis.
Despite the out-of-control trade deficit, the Bush administration keeps pushing with NAFTA-style deals that will
only make matters worse. While negotiations continue this week to potentially add on the labor rights-free
countries of Colombia and Ecuador to make an Andean Free Trade Agreement (AFTA), there is a very good
chance that Congress could vote this Spring a bilateral U.S.-Peru deal.
The Peru pact is the exact same failed NAFTA and CAFTA model – guaranteed to cost more jobs in middle-class
America and give corporations more rights. After the painful 1-vote margin on the CAFTA vote, if we speak up
loudly now, we can assure that this agreement is tanked. Call Congress today to help beat back further NAFTA
expansion.
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.
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.
Trade deficit creates lower wages and unemployment

Crutsinger, 2008 (Martin, 4-11-08, “Increase in Trade Deficit Raises Concern”, The Washington Post,
http://money.netscape.cnn.com/pf/story.jsp?floc=FF-APO-
1311&idq=/ff/story/0001%2F20080411%2F0026934589.htm&sc=1311, 7-13-08)
The Commerce Department reported Thursday that the deficit between what the U.S. imports and what it
sells abroad rose 5.7 percent to $62.3 billion in February, the highest level since November.
Imports of goods and services shot up 3.1 percent to an all-time high of $213.7 billion, reflecting a big surge
in imports of foreign cars. Exports also set a record, rising by 2 percent to $151.4 billion, reflecting strong
gains in the sale of American-made heavy machinery, computers and farm goods.
Critics claimed that the sharp rise in the trade deficit showed the continued failure of President Bush's
policies emphasizing negotiating free trade agreements as a way to promote U.S. jobs by boosting
exports.
With businesses cutting 80,000 jobs last month, the most in five years, and the country likely in a
recession, the debate over trade is expected to intensify in this election year. Republicans contend Bush's
policies reflect the reality of the new global economy, while Democrats argue that the president has
contributed to the loss of more than 3 million manufacturing jobs since he took office.
``Wages are falling and the middle class is shrinking because of trade deficits,'' James Hoffa, president of
the International Brotherhood of Teamsters, said Thursday at the end of a three-day convoy across
Pennsylvania aimed at highlighting the failings of Bush's trade policies.
Deficit leads to out sourcing

Sanders,U.S. Senator, 2007
(Bernie, May 17,BuzzFlash, http://www.buzzflash.com/articles/alerts/244, accessed 7-5-08)
WASHINGTON, May 17 - Senator Bernie Sanders voiced concern about the course of international trade
negotiations between some in Congress and the White House. He joined a key block of senators at a press
conference on Capitol Hill, where Sanders said:
"Any football team with a losing record year after year, will fire its head coach and develop a new strategy for
success. But, when it comes to our trade policy, when we keep losing more manufacturing and information
technology jobs and when our trade deficits continue to break records, nothing changes. The more our trade
deficit expands; the more companies that ship our jobs abroad; the more bad trade deals we get.
"Year after year after year, we have seen the results of unfettered free trade. And, year after year after
year we keep losing. Our overall trade deficit last year was over $763 billion, including a $232 billion trade
deficit with China. In fact, we have had over 30 consecutive years of trade deficits since Congress first
granted Fast Track authority to the Executive Branch in 1975.
"Over the past six years, we have lost over three million manufacturing jobs. According to the Economic Policy
Institute, our trade deficit with China since the passage of PNTR in 2000 led to the loss of 1.8 million U.S.
jobs; and our trade deficits with Mexico and Canada since the passage of NAFTA in 1994 led to the loss of
over one million U.S. jobs.
"Not only is manufacturing in a state of collapse, we have also lost 644,000 well-paying information sector jobs
from January of 2001 to January of 2006 -- representing 17.4 percent of the workforce in that sector.
"Despite huge increases in worker productivity, the average American worker is only making a nickel more per
hour today than was the case in 1973; and real income for the bottom 90 percent of American workers has
actually gone down over the past 30 years.
"As long as American companies can hire workers in China for 50-cents an hour; or 89-cents an hour in Panama;
or 91-cents an hour in Peru, wages in the United States will continue to go down, and good-paying jobs will
continue to be outsourced. That is an issue that Congress must address.
"As someone who was around for NAFTA and PNTR with China, I can tell you that these policies have been
pushed by multi-national corporations with one goal in mind: increase profits by lowering the living standards of
American workers. Millions of American workers are suffering as a result.
"The attitude of corporate America toward the working class as they move to China, Mexico, India and other
cheap labor markets is a national disgrace. Many of the corporations who have been made great by American
workers, consumers and from the corporate welfare they are receiving from the federal government are showing
their thanks by shipping American jobs abroad and reducing the salaries, benefits and pensions of millions of
others.
"Let me quote from John Chambers, the CEO of Cisco, who said a few years ago: 'China will become the IT
center of the world, and we can have a healthy discussion about whether that's in 2020 or 2040,' as he is trying to
'outline an entire strategy of becoming a Chinese company.'
"Jeffrey Immelt, the CEO of General Electric, has said, ‘When I am talking to GE managers, I talk China, China,
China, China, China. You need to be there. You need to change the way people talk about it and how they get
there. I am a nut on China. Outsourcing from China is going to grow to $5 billion.'
"Michael Marks, the CEO of Flextronics, the largest electronics manufacturer in the world making products for
Hewlett-Packard, Dell, Motorola and Xerox, has said that, 'Outsourcing is good for America,' while telling
BusinessWeek that 'all electronics hardware manufacturing [at his company] is going to China.'
"And, Steven Anthony Ballmer, the CEO of Microsoft has said: 'Lower the pay of U.S. professionals to $50,000,
and it won't make sense for employers to put up with the hassle of doing business in developing countries.'
"If we don't reverse our unfettered free trade policy, our children and grandchildren will have a lower standard of
living than we do.
"We cannot allow that to happen. Now is the time to reverse this policy and tell American corporations loud and
clear: if they want to continue receiving all of the benefits of being an American company, they better start
investing in America and creating jobs in this country instead of moving to China and exporting our jobs
abroad."
## Trade Deficit Good ##

Trade Deficit Good 1NC (1/2)

A. 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.
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.
Trade deficit Good 1NC (2/2)

D. Global economic collapse causes extinction
Bearden, Fellow Emeritus, Alpha Foundation's Institute for Advanced Study (AIAS), 00. [T.E., “The Unnecessary
Energy Crisis: How to Solve It Quickly,” zpower.com, June 12, 2000. Accessed 7/3/08
http://www.zpower.com/ge/documents/ZPEPaper_TheUnnecessaryEnergyCrisisHowToSolveItQuickly.pdf]
History bears out that desperate nations take desperate actions. Prior to the final economic collapse, the
stress on nations will have increased the intensity and number of their conflicts, to the point where the
arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to
be released. As an example, suppose a starving North Korea {2} launches nuclear weapons upon Japan and
South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China
— whose long range nuclear missiles can reach the United States — attacks Taiwan. In addition to immediate
responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict,
escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stress
conditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch
on perception of preparations by one's adversary. The real legacy of the MAD concept is this side of the
MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive
at all, is to launch immediate full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and
massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs, with a great
percent of the WMD arsenals being unleashed. The resulting great Armageddon will destroy civilization
as we know it, and perhaps most of the biosphere, at least for many decades.
Turns Case: Alternative Energy

A. Turn- A high trade deficit is necessary for investment in new technologies- reducing the
deficit prevents long-term solvency
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.
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.
Foreign Direct Investment

A. High oil prices result in more FDI in two ways- more US dollars for oil consumers and
exporters, both of which are funneled into the US
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]
Most of the world oil trade has operated and continues to operate in dollars, even when the US is not
the trade partner. Oil prices are defined in dollars for most oil exporters. As a result, oil importing
countries also pay in dollars. The oil-exporting countries accumulate dollar reserves, which have been
preferentially invested back in the US because of the zero currency risk involved in this. Indeed, this
recycling of petrodollars has been very significant as a source of finance for US trade deficits in several
periods, including in recent times. Other countries also hold dollars for the purpose of future oil purchase.
The dramatic increase in the price of oil in the past few years could be argued to have accentuated this
tendency. As Chart 1 indicates, oil prices have increased dramatically in dollar terms especially from 2003,
going up by nearly 2.5 times between 2003 and 2007. This has obviously contributed very significantly to
the wealth of oil exporters, and allowed them to generate balance of payments surpluses and build
foreign exchange reserves, which have then been invested dominantly in dollar assets in US markets.
B. FDI is the single greatest way to prevent conflict

P.377–98.]
Trade interdependence does not always reduce hostility between states. It depends on whether the
trade represents vulnerability or sensitivity interdependence. Portfolio investment also does not represent
a tie that binds politically. Even more important, foreign direct investment (FDI) represents a link that is
costly (and timeconsuming) to break. Thus, FDI links between countries are more likely to reduce conflict
than trading links. Evidence shows that symmetrical FDI is the most stable guarantor of low conflict
between countries. One factor generating conflict may be that scarce factors of production are in political
command. Abundant factors, now more generally in power among developed states, may be partly
responsible for the diminishment of conflict among these states in recent years.
Foreign Direct Investment Good

FDI good- employment and growth
Pryce, US representative from Ohio, 06. [Deborah, “CFIUS AND THE ROLE OF FOREIGN DIRECT
INVESTMENT IN THE UNITED STATES,” Hearing before the subcommittee on domestic and international
monetary policy, trade, and technology, Apr 12, 2006. Accessed 7/3/08 http://frwebgate.access.gpo.gov/cgi-
bin/getdoc.cgi?dbname=109_house_hearings&docid=f:30540.pdf]
At a time when the rest of the world is moving forward, some here in Congress are talking of taking a
step back. Congress has no greater obligation than to protect our homeland. Our national security is
paramount above all else, but we cannot let our national security concerns morph into economic
protectionism that views foreign investment as inherently bad. I’m concerned that Congress’s quick
and politically heated reaction to a disappointing misstep by our Administration will lead to a decrease
in international trade and foreign investment. In Ohio, we have seen the benefits of welcoming
companies like Siemens, Sodexho, Honda, Lexus, Nexus, and many other global companies. Honda of
American Manufacturing, a U.S. subsidiary of the Japanese-based Honda Motor Corporation, has become the
largest auto producer in Ohio. Honda began United States production in 1979, initially investing $35 million
in Marysville, Ohio. Honda announced a new $123 million paint facility in Marysville, and to date, has
invested $6.3 billion in my State.
Honda’s North American plants purchased more than $6.5 billion in parts from 150 Ohio suppliers in 2005
alone. In 2004, Honda produced nearly 645,000 Accords, Civics, Elements, and Acuras in its Ohio facilities.
It employs 8,500 people in my district alone. That is one good example of foreign investment in this
country.
When a foreign company looks to invest in the United States, they are looking to grow their business,
and that equals growing jobs in this country. A Wall Street Journal report on April 21st said that in an
annual report on its survey of multinational corporations, the U.S. Department of Commerce said foreign
firms other than banks doing business in the United States employed nearly 5.1 million employees in
2004, slightly less than 1 of every 20 workers in our private sector.
FDI good- US leadership

Pryce, US representative from Ohio, 06. [Deborah, “CFIUS AND THE ROLE OF FOREIGN DIRECT
INVESTMENT IN THE UNITED STATES,” Hearing before the subcommittee on domestic and international
monetary policy, trade, and technology, Apr 12, 2006. Accessed 7/3/08 http://frwebgate.access.gpo.gov/cgi-
bin/getdoc.cgi?dbname=109_house_hearings&docid=f:30540.pdf]
First, the vast majority of foreign acquisitions have no bearing on U.S. national security.
Rather, they play
a positive role and make significant and increasing contributions to our economy by creating millions
of jobs by American workers and for American workers and enhancing our competitive position in the
global marketplace. Second, successive Administrations of both political parties have for
decades worked aggressively to establish a global rules-based system founded upon the
principles of open investment and free trade. This continuity in policy has enabled America to
prosper, assert a leadership role in the global economy, and to advance our broader foreign policy and
strategic interests.
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]
Trade deficit key to economic growth

Griswold, associate director of the Cato Institute's Center for Trade Policy Studies, 98 (Daniel T., “America's
There is no connection between trade deficits and industrial decline. From 1992 and 1997, the U.S.
trade deficit almost tripled, while at the same time U.S. industrial production increased by 24 percent
and manufacturing output by 27 percent. Trade deficits do not cost jobs. In fact rising trade deficits
correlate with falling unemployment rates. Far from being a drag on economic growth, the U.S.
economy has actually grown faster in years in which the trade deficit has been rising than in years in
which the deficit has shrunk. Trade deficits may even be good news for the economy because they
signal global investor confidence in the United States and rising purchasing power among domestic
consumers.
Growth 2/2
Decreasing the trade deficit reduces growth

Griswold, associate director of the Cato Institute's Center for Trade Policy Studies, 98 (Daniel T., “America's
Without a trade deficit, Americans would need to finance domestic investment exclusively from
domestic savings. To bring investment in line with savings, domestic interest rates would need to rise,
reducing investment and economic growth. As the Council of Economic Advisers recently concluded,
the trade deficit has been a "safety valve" for the expanding U.S. economy. "Imports of goods have
kept inflation low, while imports of capital have kept interest rates low, helping to sustain rapid income
growth. In the strongly expanding full-employment economy that the United States now enjoys, it should be
easier for Americans to see that trade deficits do not necessarily reduce output and employment."(42)
The United States ran trade deficits throughout much of the 19th century during a period of dynamic growth
and expansion. From independence until the 1880s, America was a net importer of capital from the rest of the
world, in particular Great Britain. Foreign investors provided the capital to build the railroads and canals
America needed for a continentwide economy. "In the 19th century, especially after the cotton boom of the
1830s, it was the current account that went into the red in order to balance the heavy inflow of funds to
finance American enterprise. The United States had more profitable investment opportunities than it had
domestic savings to finance them. The British, Germans, Dutch, and French stepped in and made themselves
(and our American forebears) richer."(43)
Today Americans run trade deficits with the rest of the world for much the same reason: America's relatively
free and unregulated economy offers attractive investment opportunities. Attempts to reduce the trade
deficit through government intervention would reduce our economic efficiency, slowing investment and
growth.
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.
Growth Good
Lower global growth fuels a collapse of international trade causing great power conflicts
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.
Slower growth causes great power wars

Reuveny and Thompson, professors, Indiana University, 02. [Rafael and William, “World Economic Growth,
Northern Antoagonism, and North-South Conflict,” The Journal of Conflict Resolution, vol 46, no.4, Aug 02, p.
484-514. Accessed 7/3/08 http://www.jstor.org/stable/3176188]
Our empirical test employs the method of vector auto-regression (VAR) and utilizes data on yearly world
economic growth and militarized interstate disputes from 1870 to 1992. The empirical outcomes
generally support our interpretation. Within our 122-year window, periods of global economic
contraction tend to exhibit more major power conflict, conflict within the North, and North-South
conflict, unless, as in the post-1945 era of prosperity, the system leader is confronted with the early emer-
gence of serious challengers. The three types of conflict influence each other posi-tively. High-intensity
conflict reduces glob al economic growth, whereas low-intensity major power conflict stimulates world
economic growth.
Growth good- prevents North-South conflict and hegemonic warfare

Reuveny and Thompson, professors, Indiana University, 02. [Rafael and William, “World Economic Growth,
Northern Antoagonism, and North-South Conflict,” The Journal of Conflict Resolution, vol 46, no.4, Aug 02, p.
484-514. Accessed 7/3/08 http://www.jstor.org/stable/3176188]
The world-system literature has long argued that Northern (core) wealthy is based on exploitation of
the South (periphery). In this view, Northern production depends on cheap Southern raw materials
and labor. States in the North have competed for control over Southern territory to guarantee their
access to Southern resources. Latin American, African, and Asian colonies linked to various European
metropoles were thereby created and fought over. However, these conflicts were not waged constantly.
Strong hegemonic leadership could suppress conflict within the core. Hegemons also had incentives to break
down old colonial relationships that institutionalized previous distributions of benefits. Hegemonic
leadership also is associated with global economic growth because hegemons introduce technological
innovation. In periods of prosperity, Northern access to Southern resources was less critical. As global
economic prosperity waned, major competitors were stimulated by fears of scarcity to expand direct
control over Southern commodities and populations. Northern expansion into the South might increase
Northern conflict with Southerners, but it also reduced intra- Northern conflict propensities. As open colonial
space diminished, increased conflict between Northern powers could therefore be anticipated. Northern
rivalry led ultimately to periods of hegemonic warfare, which, in turned distracted the core temporarily
from further expansion into the periphery.
Hegemony/Soft Power
Chinese trade deficit preserves US liberal hegemony

Davis, 2006 (Carmel, “US Hegemony, China, and the US Current Account Deficit,” Paper presented at the annual
meeting of the American Political Science Association, Marriott, Loews Philadelphia, and the Pennsylvania
Convention Center, Philadelphia, PA,Aug 25, http://www.allacademic.com/meta/p151562_index.html, accessed
online 7-16-08)
The US runs a large current account deficit, much of which is with China. I argue that the US current account
deficit with China is the action of a liberal hegemon supporting and integrating a potential challenger and
so preserving its hegemony. The US current account deficit supports China in two ways. First, it provides
significant support to China by increasing demand for Chinese exports. The Chinese economy has grown faster
than it would have if the US had not had a current account deficit with China. Second, and more speculatively,
this accelerated US demand for Chinese exports has helped China integrate its large population of un- and
underemployed labor and so reduced political instability in the context of rapid economic growth. It has
benefited US hegemony in two political ways. First, it has accelerated the rate at which China has
integrated into the US-led liberal trading order created in the mid-1940s and so enhances US hegemony:
China is the plausible peer competitor whose economic size might allow it to challenge the existing liberal
trading order or even challenge the US militarily; increasing integration makes it much more costly for China
to challenge the US and the liberal trading order. The cost for China to challenge the order reduces US
costs to preserve its position as hegemon and the congenial environment it created for itself in the second-half
of the twentieth century. Second, and more speculatively, a China that is domestically tranquil poses less of a
threat to its neighbors and so further reduces US costs to preserve its position. I focus on the current
account rather than the trade account, its major component, for three reasons. 2 First, the current account deficit
provides a more complete picture of the US situation. A country might have a trade deficit with one country but
an overall current account surplus, a situation far from that of the US. Second, the current account deficit is an
intertemporal transfer that must eventually be reversed by a current account surplus. Third, the current account
deficit must be financed by loans from or acquisitions by other countries running a capital account deficit. A
current account deficit requires current support and has future consequences. Those future consequences
may include a disorderly depreciation of the dollar and rising protectionist pressures that reduce US inclinations
and ability to act as a hegemon, reduce Chinese economic growth, and potentially increase domestic instability
in China. The US is accepting these economic risks for economic and political gains. Its capacity and
willingness to do this are much of what makes the US a liberal hegemon.
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.
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.
Loss of liquidity causes economic downward spiral

Fuller, Minneapolis Star Tribune staff writer, 07. [James, “The coming recession: not an accident,”
jamesclayfuller.com, Dec 4, 2007. Accessed 7/3/08
The effects of such events spread, of course. The big money outfits were hurt as borrowers quit making
payments and foreclosures soared. The stocks of the financial institutions have taken major hits, which means
their stockholders also were hurt as share prices dropped. The institutions also got distrustful of each other
–- hey, the other guy maybe has even more bad loans than you do -- and became reluctant to make loans to
each other, which is what the business pages mean when they talk about “loss of liquidity.”
If an institution can't borrow, it can't loan. If it can't loan, other businesses can't borrow, and so it
goes. Expansion, growth, even day to day operation in some cases, becomes difficult or impossible.
Well, most of you know the rest of it. Even the happy talkers admit that more hundreds of thousands, and
perhaps millions, of mortgages are going into foreclosure. That means more tightening of credit. It's a
downward, self-sustaining spiral.
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.
B. Unemployment bad for the economy- 4 reason

Bized.com 2002
(April, http://www.bized.co.uk/virtual/economy/policy/outcomes/unemployment/unempth1.htm, accessed7-3-08)
Unemployment Theories - Costs of Unemployment - Who pays?
Perhaps the main cost of unemployment is a personal one to those who are unemployed. However, if they
suffer then the whole economy suffers. Individuals may become dispirited by unemployment, they may lose
their self-esteem and confidence. This may affect their motivation to work. The longer they are unemployed
the more they may lose their skills and this has to be bad for the economy as well. On top of that these
problems (and financial ones) often lead to the unemployed being less healthy, and then the NHS picks up the
bill. The whole economy suffers from people being unemployed. As well as these microeconomic effects,
there will also be macro effects. These will include:
• Loss of output to the economy - the unemployed could be producing goods and services and if they
aren't, then GDP is lower than it could be.
• Loss of tax revenue - unemployed people aren't earning and they therefore aren't paying tax. The
government has lost out.
• Increase in government expenditure - the government has to pay out benefits to support the
unemployed. Along with the loss of tax this is a 'double whammy'.
• Loss of profits - with higher employment firms are likely to do better and make better profits. If they
make less profit because of unemployment, they may have less funds to invest.
The answer then is - we all pay
Unemployment is economic strain

The State, 2004
(March 7, http://www.frankwbaker.com/understandingunemployment.htm, accessed 7-3-08)
Why is the rate so important? Bill Clinton, for better or worse, summed it up in four words: “It’s the
economy, stupid.” In other words: • For a jobless person, the financial and mental stress of unemployment
can be overwhelming. Not knowing how you’ll put food on the table can put a powerful burden on your
psyche. • For society, unemployment comes at a high cost. People with jobs typically do not rob banks.
• For taxpayers, unemployment costs millions of dollars a year. State and federal programs provide
compensation to out-of-work people, but that money essentially comes from taxpayers who put a part
of their pay into unemployment taxes. In December 2003 alone, the state paid $36.8 million to jobless
people. • For the economy, unemployed people are inefficient. They waste a scarce commodity — labor
— that could be used to raise the standard of living. • For economists, the rate is a key indicator that
suggests whether the economy is improving or worsening. But government officials say the rate is
designed mostly for allocating money for job training and other programs, not necessarily as a single
measure of the economy. • And for politicians, the unemployment rate is a battlefield. Since government
decisions play a role in the economy, elected officials are quick to seek credit for good news and disown bad
news. Their opponents are quick to accent the negative. A sour economy has derailed many a president
seeking a second term, from Herbert Hoover in 1932 to George Bush in 1992.
Unemployment 2/3
Trade deficit positively affects employment
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]
Unemployment 3/3
Trade deficits correlate with lower unemployment rates

Myth: "Trade Deficits Mean Lost Jobs"A study by the Institute for Policy Studies in January 1998 predicts
that the larger trade deficit caused by the East Asian financial meltdown will cost the U.S. economy more
than 1 million jobs. Columnist Patrick Buchanan, when running unsuccessfully for the Republican
presidential nomination in 1996, offered his own, back-of-the-envelope estimate of jobs lost because of the
trade gap: "Our merchandise trade deficit was $175 billion (in 1995). For every $1 billion, you get 20,000
jobs. That's 3.5 million American workers who would have had good manufacturing jobs if we simply had a
trade balance."(36) Both estimates are based on a fundamental misunderstanding of the relationship
between trade and aggregate employment in the United States.
The total number of jobs in the United States is largely determined by fundamental macroeconomic
factors such as labor-supply growth and monetary policy. Trade with other nations does not reduce the
number of jobs, but it does quicken the pace at which production shifts from one sector to another.
Trade, like new technology, lowers demand for some jobs while raising demand for others. Trade allows the
United States to produce more Boeing jetliners, pharmaceuticals, software, and financial services for
export, but trade also means we produce fewer shoes, T-shirts, Happy Meal toys, and computer memory
chips. Meanwhile, total output and total employment keep growing.
In reality, larger trade deficits correlate positively with falling unemployment. Figure 3 illustrates how
closely the unemployment rate corresponds with changes in the U.S. trade deficit. When the trade deficit
expands, as it did in the 1980s, unemployment falls. When the deficit shrinks, as it did during the 1990-
91 recession, the unemployment rate rises. As the trade deficit has expanded in the 1990s, the
unemployment rate has fallen steadily. The unemployment rate fell in all but 2 of the most recent 14 years in
which the trade deficit grew larger than it had been the previous year (1976-78, 1982-87, 1992-94, 1996-
97).(37) As an expanding economy creates jobs, it also creates demand for imports and for capital from
abroad.
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
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?
AT “Competitiveness”
Focusing on competitiveness undermines the economy and causes trade wars

Krugman, 1994
(Paul, Foreign Affairs, “Competitiveness: A dangerous obsession,” Vol. 73 Iss.2 pg. 28,Mar/Apr 1994,
http://proquest.umi.com/pqdweb?did=415107&sid=1&Fmt=3&client Id=10553&RQT=309&VName=PQD,
accessed 07-13-08)
THE DANGERS OF OBSESSION
Thinking and speaking in terms of competitiveness poses three real dangers. First, it could result in the
wasteful spending of government money supposedly to enhance U.S. competitiveness. Second, it could
lead to protectionism and trade wars. Finally, and most important, it could result in bad public policy
on a spectrum of important issues.
During the 1950s, fear of the Soviet Union induced the U.S. government to spend money on useful things
like highways and science education. It also, however, led to considerable spending on more doubtful items
like bomb shelters. The most obvious if least worrisome danger of the growing obsession with
competitiveness is that it might lead to a similar misallocation of resources. To take an example, recent
guidelines for government research funding have stressed the importance of supporting research that can
improve U.S. international competitiveness. This exerts at least some bias toward inventions that can help
manufacturing firms, which generally compete on international markets, rather than service producers, which
generally do not. Yet most of our employment and value-added is now in services, and lagging productivity
in services rather than manufactures has been the single most important factor in the stagnation of U.S. living
standards.
A much more serious risk is that the obsession with competitiveness will lead to trade conflict, perhaps
even to a world trade war. Most of those who have preached the doctrine of competitiveness have not
been old-fashioned protectionists. They want their countries to win the global trade game, not drop out. But what if, despite
its best efforts, a country does not seem to be winning, or lacks confidence that it can? Then the competitive diagnosis inevitably
suggests that to close the borders is better than to risk having foreigners take away high-wage jobs and high-value sectors. At the very
least, the focus on the supposedly competitive nature of international economic relations greases the rails for those who want
confrontational if not frankly protectionist policies.
We can already see this process at work, in both the United States and Europe. In the United States, it was remarkable how quickly the
sophisticated interventionist arguments advanced by Laura Tyson in her published work gave way to the simple-minded claim by U.S.
Trade Representative Mickey Kantor that Japan's bilateral trade surplus was costing the United States millions of jobs. And the trade
rhetoric of President Clinton, who stresses the supposed creation of high-wage jobs rather than the gains from specialization, left his
administration in a weak position when it tried to argue with the claims of NAFTA foes that competition from cheap Mexican labor will
destroy the U.S. manufacturing base.
Perhaps the most serious risk from the obsession with competitiveness, however, is its subtle indirect effect on the quality of economic
discussion and policymaking. If tap government officials are strongly committed to a particular economic doctrine, their commitment
inevitably sets the tone for policy-making on all issues, even those which may seem to have nothing to do with that doctrine. And if an
economic doctrine is flatly, completely and demonstrably wrong, the insistence that discussion adhere to that doctrine inevitably blurs
the focus and diminishes the quality of policy discussion across a broad range of issues, including some hat are very far from trade
policy per se.
Consider, for example, the issue of health care reform, undoubtedly the most important economic initiative of the Clinton administration,
almost surely an order of magnitude more important to U.S. living standards than anything that might be done about trade policy (unless
the United States provokes a full-blown trade war). Since health care is an issue with few direct international linkages, one might have
expected it to be largely insulated from any distortions of policy resulting from misguided concerns about competitiveness.
But the administration placed the development of the health care plan in the hands of Ira Magaziner, the same Magaziner who so
conspicuously failed to do his homework in arguing for government promotion of high value-added industries. Magaziner's prior
writings and consulting on economic policy focused almost entirely on the issue of international competition, his views on which may be
summarized by the title of his 1990 book, The Silent War. His appointment reflected many factors, of course, not least his long personal
friendship with the first couple. Still, it was not irrelevant that in an administration committed to the ideology of competitiveness
Magaziner, who has consistently recommended that national industrial policies be based on the corporate strategy concepts he learned
during his years at the Boston Consulting Group, was regarded as an economic policy expert.
A2: Trade deficit bad (1/2)

A. No brink- critics of the deficit can’t articulate when or why growing deficit is going to
cause the impacts
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]
So maybe the trade deficit is something that happens as we do well. Can that be? Critics make several
arguments. First, they say that it hasn't hurt us yet, but things haven't yet come home to roost and will,
all at once, in a big-bang financial crisis, come straight to your backyard soon. Well, fine, but at what
level of trade deficit or cumulative trade deficit does that occur? To date, I've never heard such a trigger
point articulated - nor, even more important, articulated with an underlying fundamental argument as
to why that is where a trigger point should be.
B. Trade deficits are not an indicator or cause of poor economic health—their authors
make mistakes in analyzing the effect of deficits globally
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.
A2: Trade deficit bad (2/2)

C. The trade deficit will not reduce growth, unemployment
A Growing Economy, a Growing Trade Deficit
Evidence from the past 25 years directly contradicts the assumption that trade deficits impose a drag
on the U.S. economy. Contrary to prevailing assumptions, "worsening" trade deficits are associated with
faster GDP and manufacturing growth and more rapidly declining unemployment, while "improving" trade
deficits are associated with slower GDP and manufacturing growth and rising unemployment.
The evidence does not suggest that expanding trade deficits cause the superior economic performance. More
plausibly, causation runs the other direction. An expanding economy fuels demand by American
consumers and producers to buy more imports as well as domestically produced goods and services
while rising domestic output attracts the foreign investment that finances an expanding current
account deficit. In contrast, slowing domestic demand not only depresses output and employment growth
but also demand for imports and the inflow of foreign investment.
Nor does the evidence address the question of how persistent and rising current account deficits may affect
the U.S. economy in the long run. The "sustainability" of the U.S. current account deficit has been addressed
elsewhere in Cato studies.[13] But whatever negative impact the deficit may have in the long run, there is
no evidence that it poses a drag on the economy in the short run.
Misperceptions about the trade deficit and the economy can tempt policymakers to "do something" about the
deficit that would only hurt economic growth. The most obvious example would be raising barriers to
imports in the mistaken belief that protectionism would cut the trade deficit and spur the economy.
Even if higher trade barriers could somehow trim the trade deficit, there is simply no evidence that
such a policy goal would deliver faster growth in GDP, manufacturing, and employment.
AT “Dollar Collapse
Trade deficits don’t harm currency value- no economic impact to a deficit
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?
It doesn’t depreciate the dollar

Isaac, Elliott Wave International staff writer,2008
(Nico,May 2, U.S. Dollar: Death By Deficit?, http://www.elliottwave.com/freeupdates/archives/2008/05/02/US-
Dollar-Death-By-Deficit.aspx)
In lieu of the non-event event, consider one of the most common misconceptions of mainstream financial
wisdom; namely: That a widening deficit decreases the value of the dollar, and vice versa.
Hardly a week goes by that we don’t see this idea posted in the news front windows of Wall Street. In case
you missed them, here are few of 2008’s most unforgettable items:
March: One financial guru reveals: “If something is unsustainable, it’s going to have consequences: so far the
consequences [of the record-high deficit] have been a general decline in the dollar.” (Bloomberg)
Late April: “It will take years for the greenback to recover its value and prestige. You have the U.S. still
holding this trade deficit. So, it’s a very dark outlook for the dollar.” (St. Louis Post-Dispatch)
May, as the dollar hits a two-month high: “Trade deficit improvement sparks rally.” (AP)
Just one problem: An inverse correlation between the deficit and the dollar does not exist. In other
words, the mainstream “experts” are observing the wrong holiday.
Has the Dollar Hit Bottom?
EWI’s Financial Forecast Service publications provide the most comprehensive look into the near and long-
term trend changes in store for the U.S. dollar. Learn more
Seeing is believing… and in the December 2004 Elliott Wave Financial Forecast, our analysts presented this
ground-breaking chart of the past three decades of the US Trade Weighted Dollar versus the Current Account
Deficit/Surplus (as a percentage of GDP).
Here are few of the startling results:
From October 1980 to February 1985, as the deficit emerged as the largest in well over a decade, the
dollar surged 50%.
From April 1995 to December 2000, the deficit took another huge leap and the dollar rallied 34%.
And, these later observations: From December 31, 2004 to November 2005, the deficit widened to the
largest on record while the greenback enjoyed a steady, 15% uptrend.
2007: U.S. trade deficit narrowed for the first time in six years, all the while, the dollar sunk to new
record lows against the euro.
AT: “Trade Deficit Reduces Growth” 1/3

Trade Deficit does not link to economic downturn
Griswold Associate Director Center for Trade Policy Studies, 98
(Daniel T http://www.cato.org/testimony/ct-dg061198.html)
Mr. Chairman and members of the Senate Finance Committee: Thank you for allowing me to testify on the
causes and consequences of the U.S. trade deficit.
The economic turmoil in East Asia has thrust America's trade deficit back into the news. Perhaps no aspect of
American trade is talked about more and understood less than the trade deficit. It has been cited as conclusive
proof of unfair trade barriers abroad or a lack of competitiveness among U.S. industries at home. It has been
blamed for destroying jobs and dragging down economic growth. I welcome the opportunity to present a
more charitable view of this much abused trade number.
The U.S. trade deficit is the result of a net inflow of capital to the United States from the rest of the world.
Because of our stable and relatively free domestic market, we remain the world's most popular destination for
foreign investment. We have become a net importer of capital because Americans do not save enough to
finance all the available investment opportunities in our economy. This inflow of capital from abroad allows
us to pay for imports over and above what we export.
In other words, the trade deficit is simply a mirror reflection of the larger macroeconomic reality that
investment in the United States exceeds domestic savings. If we want to change the U.S. trade deficit we
must change the rate at which Americans save and invest.
In a study published by the Cato Institute in April, I address four enduring myths about the U.S. trade deficit.
Two of them relate to causes, two to consequences. The first myth is that the overall U.S. trade deficit is
caused by unfair trade barriers abroad. Foreign barriers are certainly a problem, just as our own barriers to
imports remain a problem. But trade restrictions do not determine the overall U.S. trade deficit, nor do they
fully account for the differences in bilateral trade balances. For example, the United States runs a large trade
surplus with Brazil, a country with relatively high trade barriers, while we run deficits with Mexico and
Canada, two countries virtually open to U.S. exports. The second myth is that trade deficits are caused by a
lack of U.S. industrial competitiveness. This myth has been refuted by the stellar performance of the
American economy, which today is the envy of the world. Since 1992, the U.S. trade deficit has tripled.
During that same time, U.S. industrial production has surged 24 percent and manufacturing output 27
percent. The American people sell more goods and services in the global marketplace than people of any
other country. A third myth is that trade deficits destroy jobs. Again, the performance of the U.S. economy in
the last decade should lay that myth to rest. While the trade deficit has expanded, so have American
payrolls. Indeed, there is a strong correlation between rising trade deficits and falling rates of
unemployment. The reason is simple: The same expanding economy that stimulates demand for labor also
raises demand for imported goods and capital. The final myth is that trade deficits are a drag on the U.S.
economy. With the slowdown in East Asia, this seems a reasonable claim. But the drag is not the trade deficit
itself, but falling demand for our exports in the Far East. A trade deficit that reflects both rising exports
and even more rapidly rising imports can be a sign of health. That has been the case in the United
States for most of past two decades. Since 1980, the U.S economy has grown an average of 3.1 percent in
years in which the current account deficit has expanded from the previous year, and an average of only 2.0
percent in years in which the deficit has shrunk. If trade deficits are bad for growth, why does the U.S.
economy grow more than 50 percent faster when the trade deficit expands? Frankly, we would have
more reason to worry if the U.S. were running a trade surplus. In Mexico in 1995 and more recently in
South Korea and other East Asian countries, trade balances flipped overnight from deficit to surplus because
of plunging domestic demand and the flight of foreign capital. In Japan today, a soaring trade surplus has
been accompanied by record high unemployment. It's no coincidence that America's smallest trade deficit in
recent years occurred in 1991--in the trough of our last recession. What does all this mean for policy? First,
there is no emergency. The trade deficit is not a sign of economic distress, but of rising domestic demand
and ivestment. Second, the trade deficit is largely immune to changes in trade policy. Imposing new trade
barriers will only make Americans worse off while leaving the trade deficit virtually unchanged.
In conclusion, I would urge Congress to ignore the trade deficit and focus instead on reducing and
eliminating barriers to trade, wherever they exist.
Thank you for letting me speak and I would be glad to answer any questions.
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
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
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.
Deficits don’t cause job loss or drop in proseperity- alt causes

Levy, staff writer for Business Week, 07. [Phillip, “Trade Truths for Turbulent Times,” Business Week Feb 14,
2007 pgonline. http://www.aei.org/publications/filter.all,pubID.25648/pub_detail.asp accessed 7/1/08]
The evidence shows that there's not much correlation between trade deficits and the things we really
care about--prosperity and jobs. Updating an example offered by Ben Bernanke when he was a mere
governor of the Federal Reserve, in 1960 the United States ran a small trade surplus and enjoyed an
unemployment rate of 5.5 percent; there were just over 65 million civilian jobs. In 2005, the United States
ran a large trade deficit and enjoyed an unemployment rate of 5.1 percent. There were over 140 million
civilian jobs. Over the same time span, imports grew from 4.3 percent of gross domestic product to 16
percent of GDP. Per capita income rose from roughly $15,600 per year to just over $42,000 per year (in
2005 dollars).
This is not to argue that growing imports and trade deficits were the sole cause of U.S. prosperity. Many
other factors contributed to this performance. It would be absurd to pretend that these other factors--such as
education, regulation, tax policy, or monetary policy--played no role.
In the same way, it is unreasonable to suppose that all job losses, or even all manufacturing job losses,
are attributable to imports. People lose jobs for a number of reasons. Their factory or firm may close
because of competition from abroad, or it may close because of competition from a neighboring state. One of
the biggest culprits in manufacturing sector job loss is technological change. The steady fall in manufacturing
employment has not been matched by an equivalent fall in output; the sector is using less labor to make each
unit of output.
The impacts of trade deficits are misinterpreted- deficits can actually bolster the economy
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
"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.
## WTO ##
WTO INC 1/2
A. Uniqueness: A WTO agreement is likely soon

Washington Post ‘08
“Trade WTO Accord May Be Near” March 20th 2008 Proquest.com Accessed: 7/6/08
An agreement in the stalled Doha round of World Trade Organization talks may be nearer than people
think, Brazilian President Luiz Inacio Lula da Silva said after meeting with European Commission
President Jose Manuel Barroso. Doha negotiations have stalled over a demand by developing countries
that rich nations end agricultural subsidies.
&, The U.S. is currently committed to cutting subsidies to get a deal

TWN, Third World Network, 2008
(TWN “Agriculture: Chair reports incremental progress,” June 16th,
http://www.twnside.org.sg/title2/wto.info/twninfo20080609.htm, Accessed 7/12/08)
A major highlight of the informal agriculture meeting was statements made by the G20 and the Cairns
Group of agricultural exporters criticizing the new US Farm Bill as a step backward and urging the
United States to show leadership by committing to substantial and effective cuts in subsidies. (See
separate article.)
According to trade officials, the US responded by saying that the bill was needed because the previous
law had expired and without a new one, US legislation would revert to an old law which had even
larger subsidies. The US said that it would implement the new bill within it's current commitments and
would amend the bill in order to comply with whatever is agreed in the Doha Round.
B. Link: New subsidies destroy WTO negotiations

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 United States has the ability in the next few months to make key policy making decisions at home
that could well spur our trading partners to make similar efforts. Agricultural tariffs and subsidies are
the main sticking points to a final trade accord--obstacles that the Bush administration, in league with
congressional leaders on both sides of the political aisle, can overcome with creativity and nerve.
Georgetown University Law Center professor Dan Tarullo, a Senior Fellow at the Center for American
Progress, made the point recently in his paper, The Case for Reviving the Doha Round, that these are
back-to-basics trade negotiations that are focused mostly on tariffs and trade-distorting subsidies, not
controversial domestic economic and regulatory policies that have characterized the Uruguay Round and
many bilateral agreements. The Doha Round's modest ambition is a virtue.
WTO INC 2/2
C. Impact: WTO collapse causes nuclear winter

Copley News Service, 99
(December 13 <copleynews.org>. Accessed on July 7, 2008)
For decades, many children in America and other countries went to bed fearing annihilation by nuclear war.
The specter of nuclear winter freezing the life out of planet Earth seemed very real. Activists protesting the
World Trade Organization's meeting in Seattle apparently have forgotten that threat. The truth is that
nations join together in groups like the WTO not just to further their own prosperity, but also to
forestall conflict with other nations. In a way, our planet has traded in the threat of a worldwide
nuclear war for the benefit of cooperative global economics. Some Seattle protesters clearly fancy
themselves to be in the mold of nuclear disarmament or anti-Vietnam War protesters of decades past. But
they're not. They're special-interest activists, whether the cause is environmental, labor or paranoia about
global government. Actually, most of the demonstrators in Seattle are very much unlike yesterday's peace
activists, such as Beatle John Lennon or philosopher Bertrand Russell, the father of the nuclear disarmament
movement, both of whom urged people and nations to work together rather than strive against each other.
These and other war protesters would probably approve of 135 WTO nations sitting down peacefully to
discuss economic issues that in the past might have been settled by bullets and bombs. As long as
nations are trading peacefully, and their economies are built on exports to other countries, they have a
major disincentive to wage war. That's why bringing China, a budding superpower, into the WTO is so
important. As exports to the United States and the rest of the world feed Chinese prosperity, and that
prosperity increases demand for the goods we produce, the threat of hostility diminishes. Many anti-
trade protesters in Seattle claim that only multinational corporations benefit from global trade, and that it's
the everyday wage earners who get hurt. That's just plain wrong. First of all, it's not the military-industrial
complex benefiting. It's U.S. companies that make high-tech goods. And those companies provide a growing
number of jobs for Americans. In San Diego, many people have good jobs at Qualcomm, Solar Turbines and
other companies for whom overseas markets are essential. In Seattle, many of the 100,000 people who work
at Boeing would lose their livelihoods without world trade. Foreign trade today accounts for 30 percent of
our gross domestic product. That's a lot of jobs for everyday workers. Growing global prosperity has
helped counter the specter of nuclear winter. Nations of the world are learning to live and work together,
like the singers of anti-war songs once imagined. Those who care about world peace shouldn't be protesting
world trade. They should be celebrating it.
WTO: Uniqueness 1/2
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 providing leadership in resolving Doha

Reuters ‘08
“US Committed to WTO Outcome By Year end – Official” 4/23/08
http://www.reuters.com/article/telecomm/idUSBOM24543020080423?pageNumber=1&virtualBrandChannel=0
Accessed: 7/15/08
MUMBAI (Reuters) - The United States is fully committed to an outcome to the Doha round of global
trade talks by the end of the year, a senior U.S. Treasury Department official said on Wednesday.
"We are at a critical juncture in the Doha round," David McCormick, the Treasury's Under Secretary for
international affairs, said in a speech prepared for a conference in the southern Indian city of Chennai.
"We remain fully committed to an ambitious and comprehensive outcome to the Doha Development
Round by the end of the year," he said in the text of the speech made available to Reuters.
The global trade talks have repeatedly missed deadlines since they were launched in November 2001.
World Trade Organisation Director-General Pascal Lamy said at the weekend a breakthrough was achievable
in the next few weeks.
But Brazilian Foreign Minister Celso Amorim voiced concerns on Tuesday about possible slippages in the
trade talks, with a deal to limit Western farm subsidies remaining a sticking point.
India's commerce secretary also questioned last week whether a deal could be done soon because the United
States is gearing up for presidential elections in November.
JOINT EFFORT NEEDED McCormick said the United States would provide the necessary leadership in
the negotiations.
US determined to conclude Doha this year

AFP ‘08
“US ready to push Doha on basis of new text” 7/10/08
http://news.yahoo.com/s/afp/20080710/pl_afp/wtotradefarmindustryus Accessed: 7/15/08
WASHINGTON (AFP) - The United States said Thursday it was "ready and willing to make our
contribution" to help revive a stalled global trade deal on the basis of new guidelines released by the
World Trade Organization.
"We will be reviewing the revised texts in the coming days," said Gretchen Hamel of the office of US Trade
Representative (USTR) Susan Schwab.
She said Schwab "looks forward to meeting with ministers in Geneva the week of July 21" to help
advance the stalled Doha Round of talks to further liberalize global trade.
"The US is committed to concluding a successful Doha Round this year that achieves new market access
for agricultural and industrial products and services in both developed and emerging market economies,"
Hamel said.
WTO: Uniqueness 2/2
WTO is working on a deal to liberalize trade and eliminate subsidies

Goff, Minister, 2008
(Hon Phil, Scoop Newspaper, “Evolving Asia-Pacific Regionalism,” June 9th,
http://www.scoop.co.nz/stories/PA0806/S00144.htm, accessed on 7/6/08)
Members of the World Trade Organisation have an historic opportunity to conclude a deal that will
liberalise the terms of trade between 152 nations.
As a firm believer in a rules based multilateral trading system, New Zealand believes this Round has
the greatest potential to remove obstacles to international trade. The boost to trade, growth, jobs and
living standards that will result if the Round can be concluded this year would give a critical lift to the world
economy at a time when the financial crisis, inflation including food and oil prices, and a fall in property
values threaten to cause recession.
A key outcome of the Round will be reduced domestic agricultural subsidies and the elimination of
export subsidies, which have long biased international trade in favour of developed agricultural producers at
the expense of developing countries.
There is a global push for an open, subsidy free market

Goff, Minister of Trade, 2007
(Hon Phil, Scoop Independent News, “The Doha agenda - a NZ perspective,” May 10th,
http://www.scoop.co.nz/stories/PA0705/S00241.htm, Accessed on 7/6/08)
Today’s World Trade Organisation is part of this legacy. The open international economy that developed
under the GATT and WTO is part of the liberty that was hard won by the democracies in World War
Two and the Cold War.
The principle of openness is not to be taken for granted. Those of us engaged in trade negotiations are
faced daily with pressure to protect rather than open up, along with calls to favour local over foreign.
These pressures are not new but we can learn from history. In the Depression years of the 1930s
policies of mercantilism were taken to extremes. Germany adopted a policy of autarky.
In this country the Smoot-Hawley Tariff Act had such dramatic effects on American trade that even
protectionist interests were forced to accept that beggar-thy-neighbour policies carried unacceptable
costs.
Even so, the decision by the United States to lead a push for a post-war global trade system founded on
principles of non-discrimination and progressive liberalisation was remarkable. It combined visionary
diplomacy with political courage.
The authors of the GATT were right to envisage a more open global trade regime. We have seen that
openness to trade and competition fuels economic dynamism and innovation and raises productivity
and standards of living.
President Bush in his State of the Economy report earlier this year made the point that, since World
War II, the opening of global trade and investment had resulted in income gains of about US$9,000 a
year for the average American household.
Globally engaged US companies accounted for more than half of US productivity growth between 1977
and 2000, and 83% of corporate investment in research and development. It is important that
organisations like this Chamber continue to promote the benefits of open markets and trade.
WTO: Uniqueness: US Subsidy Cuts 1/4
The US is ready and willing to negotiate on agricultural subsidies.

AFP, 2008
(July 10th 2008, “:US ready to push Doha plan on basis of new texts 1 day ago WASHINGTON (AFP)” <
http://afp.google.com/article/ALeqM5iPYrsfx0NGp8UtdmVLlNZJdPkqkw>. Accessed on 7/11/2008)
The United States said Thursday it was "ready and willing to make our contribution" to help revive a
stalled global trade deal on the basis of new guidelines released by the World Trade Organization. "We will
be reviewing the revised texts in the coming days," said Gretchen Hamel of the office of US Trade
Representative (USTR) Susan Schwab. She said Schwab "looks forward to meeting with ministers in Geneva
the week of July 21" to help advance the stalled Doha Round of talks to further liberalize global trade.
"The US is committed to concluding a successful Doha Round this year that achieves new market access
for agricultural and industrial products and services in both developed and emerging market economies,"
Hamel said. "The key to success will be everyone's willingness to contribute to a strong outcome that delivers
new economic opportunities worldwide. The US is ready and willing to make our contribution. It's time the
world's largest and fastest growing economies make market-opening contributions commensurate with their
increasing participation and role in the world economy." The WTO released texts in Geneva earlier by its trade
negotiator on agriculture, Crawford Falconer, and his counterpart on industrial products, Don Stephenson.
"These revised texts set the stage for a decisive moment in the Doha Round," said WTO director-general
Pascal Lamy. The Round, which started at the end of 2001 in the Qatar capital, aims to boost international
commerce by removing trade barriers and subsidies but a deal has so far proved elusive as countries are reluctant
to open up their markets or reduce financial support to farmers. Lamy noted that ministers would need
"negotiating documents which are clear and precise as they consider the complex issues of agriculture and
industrial goods trade. "These texts go a very long way in that direction. These negotiations have been long and
tough but the prize awaiting us should we reach agreement is worth the effort," he added.
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.
US Standing strong against subsidies now

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 US administration’s ambitious proposal has pushed the EU into a corner. There are several
reasons for Washington’s bold offer. The US is in favour of agricultural reform. Its agricultural
industry is more competitive and less reliant on trade barriers than the EU. Washington also fears a
flood of costly legal challenges to its subsidy regimes, following a recent WTO judgement against the US
cotton regime. However, the reform of the US domestic support will not be submitted to the congress before
2007. Its trade partners are entitled to wonder whether Washington’s commitment to reform will
endure, given growing protectionist sentiment within the Congress.

US taking the lead in eliminating subsidies
US dep’t of state ‘06
“The US Commitment to Global Free Trade: Supporting the Doha Development Round” June 26th 2006
http://www.state.gov/r/pa/scp/2006/68293.htm Accesses: 7/7/08
According to the OECD, the single most important thing developed countries can do to benefit developing
countries is to make deep cuts in agricultural tariffs. The U.S. proposal does just that. Last October, the U.S.
took aim at the logjam in the Doha negotiations and tabled an ambitious proposal to open markets by
eliminating export subsidies in agriculture, making deep cuts in agricultural tariffs, and sharply
reducing trade-distorting domestic subsidies. Since then, our WTO partners have failed to match that offer
with equally ambitious proposals, particularly on market access, stalling overall progress in the negotiations.
The U.S. is pushing for all countries to reduce subsidies

Andrews, Journalist of The New York Times, 2005
(Edmund L., New York Times, “U.S. and European Reluctance to Cut Farm Subsidies Weighs on Trade Talks,”
September 15th, http://www.nytimes.com/2005/09/15/business/worldbusiness/15trade.html?_r=1&oref=slogin
accessed on 7/7/08)
President Bush, addressing the United Nations on Wednesday, urged countries to push ahead and
promised to end all American subsidies and tariffs if other nations did so as well.
"Today, I broaden the challenge by making this pledge," Mr. Bush said. "The United States is ready to
eliminate tariffs, subsidies and other barriers to free flow of goods and services as other nations do the
same."
But both American and European leaders are reluctant to give up their farm protections.
European leaders have agreed to eliminate all export subsidies for farm products, but they still have high
tariff barriers and pay tens of billions of dollars a year in farm subsidies.
The United States has lower tariffs on most farm imports, but it retains high barriers for products like
sugar and orange juice and it pays out billions of dollars in subsidies to producers of cotton, corn, beef
and other commodities.
On Wednesday, Mr. Portman and Mr. Mandelson put the best spin possible on their meetings but offered no
evidence that they had bridged the gap between them.
Mr. Portman said the talks had been "very frank and constructive," adding that "we understand our
responsibilities as the two great trading partners in the global economy."
Both he and Mr. Mandelson expressed support for an approach floated in July by the Group of 20, a
collection of large developing nations, which would divide countries into five groups and let the less-
developed nations reduce their barriers more slowly.
Mr. Mandelson said the United States and Europe needed to offer "joint leadership" and said "it is
essential that we build a common and coordinated platform."
But European officials have made it clear they do not want to reduce their internal subsidies more than the
amount prescribed by the European Union's Common Agriculture Policy.
That policy calls for reductions of up to 70 percent below the level that Europe is allowed under its current
obligations to the World Trade Organization.
American officials insist that Europe make deeper cuts. But the Bush administration is under heavy
pressure from Congress to preserve up to $19 billion a year in farm subsidies. The 2002 farm bill
passed by Congress, which Mr. Bush supported, greatly increased support payments for farmers and is
set to expire at the end of 2007.
Administration officials have yet to signal which farm subsidies they would promise to reduce, and farm
state legislators are already bracing to defend their local producers.
WTO eliminating subsidies now

Cambell Saskatchewan official on intergovernmental affairs ‘01
Wendy, Gov’t of Saskatchewan “WTO Will negotiate eliminating subsidies” November 16th 2001
http://www.gov.sk.ca/news?newsId=1343078f-5609-4f73-98f3-069e3607cd55 Accessed: 7/7/08
A renewed commitment by World Trade Organization (WTO) members to fundamental reform of global
agricultural trade rules is good news over the long term for Saskatchewan farmers. Negotiations have
concluded with ministers of international trade of the 144 member-countries agreeing to complete the
reforms within the next three years. "This is a very encouraging development for Canadian farmers,"
Intergovernmental Affairs Minister Chris Axworthy said. "We are moving in the right direction and with
renewed momentum, even though the road to real progress over the next three years will be difficult.
Axworthy attended the WTO negotiations in Doha, Qatar to ensure Saskatchewan's interests were made
known, protected and advanced by Canada's ministers and negotiators. In agriculture, ministers agreed to
comprehensive negotiations aimed at substantial improvements in market access, reductions in all forms
of export subsidy with a view to their phase-out, and substantial reductions in trade-distorting domestic
subsidies.
Agricultural subsidies being eliminated within the WTO

Cambell Saskatchewan official on intergovernmental affairs ‘01
Wendy, Gov’t of Saskatchewan “WTO Will negotiate eliminating subsidies” November 16th 2001
http://www.gov.sk.ca/news?newsId=1343078f-5609-4f73-98f3-069e3607cd55 Accessed: 7/7/08
"Saskatchewan's farmers, food processors and manufacturing industries should all benefit from the
WTO's commitment to negotiations coming out of Qatar," Axworthy said. "The new commitment to
phase out agricultural export subsidies will put real pressure on a number of countries, in particular those
in the European Union, to change farm programs so global markets are not as flooded and world prices are not
as depressed as they are now."
US reducing subsidies at bequest of the WTO

BBC ‘08
“US Loses in Cotton Dispute” June 2nd 2008 http://news.bbc.co.uk/2/hi/business/7432021.stm
Accessed: 7/7/08
The US could face billions of dollars in trade sanctions for failing to scrap illegal subsidies paid to US
cotton growers. A World Trade Organization (WTO) panel upheld last year's ruling, which said that
the subsidies helped US cotton growers undercut foreign competitors. Brazil, which brought the case in
2002, must now decide whether to impose retaliatory trade sanctions on the US. The US said it was "very
disappointed" by the ruling. "We believe that the changes made by the United States brought the
challenged payments and guarantees into full compliance with the WTO's recommendations and
rulings," Sean Spicer, a spokesman for the US Trade Representative Susan Schwab, said.
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.
WTO: Brink 1/2
The WTO hinges on the July negotiations.

Kanter, staff writer for The New York Times Media Group, 2008
(James, The International Herald Tribune, June 26, Thursday “WTO calls July meeting to push trade
agreement.”
Pascal Lamy, the director general of the World Trade Organization, has called a week-long meeting of
ministers next month aimed at reaching a breakthrough deal on liberalizing global trade, officials and
diplomats said Wednesday. Since the so-called Doha trade round was started in 2001, talks have repeatedly
become deadlocked because of disagreements between major trading powers like the United States, the
European Union, Brazil and India. The upcoming meeting is scheduled to be held over five days at WTO
headquarters in Geneva starting July 21, with the goal of agreeing to specific tariff and subsidy cuts.
Up to 40 countries are expected to attend. Sean Spicer, the assistant U.S. trade representative, warned that
important differences still remained between trading partners on the crucial areas of agriculture industrial
goods and services, the areas on which the talks would focus. But Spicer still said there was ''an
opportunity for success'' over the coming weeks if other countries ''work with the same spirit'' and ''make
the same intensive efforts'' as the United States. Peter Power, a spokesman for the EU trade commissioner
Peter Mandelson, was also cautious about the chances of success. ''There is no disguising the gaps between
the negotiators as we go into the end game, Powers said. ''But with determination and political will on all
sides, an acceptable deal is still possible.'' The dates of the proposed meeting of ministers in Switzerland
still must be presented to member states before they are finalized. One factor lending urgency to Lamy's
efforts is that the administration of President George W. Bush only has a few months remaining in office
to agree on a deal. Another factor is that the next U.S. president may be less willing than Bush to agree a
market-opening deal at a time when the American economy is stumbling and sentiment in parts of the
country appears to have swung against free trade. Other factors behind Lamy's push include the
selection in 2009 by European Union governments of a new commission, the executive body that
negotiates trade deals for the EU, and elections in India, which could mean lengthy interruptions in
negotiations. Lamy has said numerous times in the past that reaching a final deal was possible. Trade
diplomats echoed that assessment on Wednesday, saying that negotiations on agriculture and industrial
goods - and in particular on subsidies for agriculture, and customs duties on agricultural and
industrial products - were more advanced than at any time since the round began seven years ago.
During a meeting with a group of ambassadors in Geneva on Wednesday, Lamy said the chances of a deal on
agriculture and industrial goods were better than 50 percent, otherwise he would not have called the meeting. But
Lamy also warned that without an agreement on agriculture and industrial goods during July, the round
would probably fail. Together agriculture and industrial goods cover about 80 percent of global trade, and
an agreement in those sectors almost would guarantee that the round could be completed.
Doha is the litmus test for the WTO, failure risks total destruction – this current round is
key
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.
WTO: Brink 2/2
Failure would prove fatal for the WTO

However, a second ministerial failure would probably prove fatal to Doha. WTO members need to think
hard about what they can achieve in Hong Kong. Much more is at stake than simply finishing Doha
negotiations on time. The Doha round is the first proper test for the WTO. The failure of talks would
call its credibility into question.
WTO: Link: US Key
US key to European cooperation – this is the prerequisite to Doha success

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
Without creative and sustained leadership by the United States at home and abroad, we will miss a
unique opportunity to move both our nation’s farm and trade policy forward together and complete a
final Doha trade and development pact that all members of the WTO can sign. The United States and the
EU have the ability to make key policymaking decisions at home that could well spur our trading
partners to make similar efforts.
Agricultural tariffs and subsidies are the main sticking points to a final trade accord. These are
obstacles that the Bush administration, in league with congressional leaders on both sides of the political
aisle, can overcome with creativity and nerve.
WTO: Link: Subsidies 1/4
US must reduce subsidies in order to successfully negotiate at Doha

Schott, senior fellow at center for international economics, ‘06
Jeffrey, Agricultural Outlook Forum, “Implications of the Doha Round for the US Farm Bill and Visa Versa 2/16/06
http://ageconsearch.umn.edu/bitstream/33382/1/fo06sc97.pdf Accessed: 7/8/09
The Doha Round has a comprehensive agenda covering agriculture, manufactures, and services. The
United States has major export interests in all three areas. To reap these gains, however, US officials
will have to offer reforms of US restrictions that have survived eight previous negotiating rounds over
the past 50 years. Therein lies the challenge for US trade officials: the remaining US trade negotiating
chips are politically sensitive items and will require large concessions from US trading partners to convince
the Congress to change existing practices. To get Congressional support for changes in longstanding US trade
barriers, US negotiators need to bring home agreements that offer substantial new trading opportunities for
US farmers, manufacturers and service industries.
Reducing subsidies key to free trade

Franc, VP of governmental relations at the heritage foundation ‘07
Michael, The Heritage Foundation “Strengthening Free Enterprise” 1/24/07
http://www.heritage.org/Press/Commentary/ed012407e.cfm Accessed: 7/7/08
The three cornerstone policies requiring the Bush Administration to exert U.S. leadership are: World
Trade Organization (WTO) negotiations in the current Doha round, bilateral and regional free trade
agreements (FTAs), and the early 2007 extension of Trade Promotion Authority (TPA).
Congress and the President should:
Lead the WTO to a successful conclusion of the current Doha round. There's just enough time to push for
completion of the Doha round in early 2007, and the U.S. Trade Representative deserves energized support.
A key step for free trade is to reduce agricultural subsidies inside the U.S. so the vital test of free trade
principles in Congress is passing genuine reform of the Farm Bill. Congress' recent decision to grant
Vietnam most-favored nation status was a positive step in this direction.
Domestic subsidies are key to WTO talk success

Penn USDA's Under Secretary for Farm and Foreign Agricultural Services ‘02
J.B. AgExporter “Doha ministerial provides new impetus for multilateral negotiations on agriculture” February 2002
Proquest.com accessed: 7/708
The Doha Ministerial Declaration launched new multilateral trade negotiations in numerous areas, from
trade in services to the environment.
As in the Uruguay Round, agriculture will be at the center of these negotiations.
The Doha Declaration on agriculture reaffirms the commitment of World Trade Organization (WTO)
members to the longterm objective of establishing a fair and market-oriented agricultural trading system.
WTO members agreed that comprehensive negotiations will aim at substantial improvements in market
access, reductions of export subsidies and substantial reductions in trade-distorting domestic support.
Energy subsidies highly controversial

Lamy Director General of the World Energy Congress, 2007
(Pascal, The World Energy Congress, Rome, 15 November “Energy Trade in the WTO” < http://www.world
energy.org/documents/kn2_151107_lamy.pdf>. Accessed on July 7, 2008)
The current negotiations on energy services cover a broad range of activities relevant for energy
companies and span all energy sources, including renewables. Commitments are sought on activities such
as drilling; engineering; technical testing and analysis services; construction work for long distance andPage
7 7 local pipelines, and for mining; wholesale trade services and retailing services of fuels. The negotiations
are addressing the establishment of commercial presence as well as easing the intra-corporate transfers of
specialists and professionals working for energy services companies. Furthermore, some Members have
proposed to negotiate additional disciplines which would address, for instance, regulatory transparency, non-
discriminatory third-party access to networks and grids, the need for an independent regulator, and
requirements preventing certain anti-competitive practices. All this is already on the table. A second area of
the Doha Round relevant for you relates to clean technology. The Doha Round aims at opening markets to
environmental goods and services. Many of these have a direct application for promoting energy
efficiency, such as material needed for production of renewable energy, heat management and pollution
control. Examples of environmental goods that have been proposed include wind turbines, solar panels,
geothermal energy sensors, fuel cells and electricity meters. Eliminating or reducing tariffs on
environmentally-friendly goods and technology would facilitate their wider dissemination. Similarly,
the negotiations on environmental services include negotiations on energy-relevant activities, such as
services to reduce exhaust gases and improve air quality, nature and landscape protection services or services
for the rehabilitation of mining sites. The environmental chapter of the WTO Doha Round can therefore
make a very concrete contribution to the promotion ofPage 8 8 energy-efficient technologies. It is a
contribution in the making that the trade community can bring to the upcoming UN Climate Change
Conference in Bali. A third area of importance to you comes under the "trade facilitation" negotiations. Here
Members have been discussing possible improvements and clarification to the "transit" obligation contained
in the old GATT rules that oblige Members to allow passage of goods in transit across their territories. This
provision was drafted in 1947. In the current Doha Round, proposals have been tabled to clarify the meaning
of this obligation and whether it includes fixed installations, such as pipelines. Energy-related concerns also
underlie proposals on export taxes and subsidies. There are proposals on the table addressing export
restrictions on energy goods and other raw materials because these restrictions are more prevalent than
in other traded goods, and represent a source of concern for importing countries as they increase prices of
inputs. The question of subsidies in the form of low-priced energy products, especially natural gas, has
recurrently stirred hot debates among WTO Members and is also part of the on-going negotiations.
US domestic subsidies are susceptible to WTO trade disputes.

Schnepf and Womach, Specialists in Agricultural Policy Resources, Science, and Industry Division at the
Congressional Research Service, 2006
(Randy and Jasper CRS Report for Congress October 25, 2006, “Potential Challenges to U.S. Farm Subsidies
in the WTO: A Brief Overview”)
The World Trade Organization’s (WTO’s) 149 members have agreed to a set of trading rules, including
constraints on domestic subsidies and a process for challenging violations. Now, the combination of three
relatively recent events — (1) the expiration of the WTO Peace Clause on January1, 2004; (2) Brazil’s
successful challenge of certain provisions of the U.S. cotton program in a WTO dispute settlement proceeding
(upheld on appeal in March 2005); and (3) the indefinite suspension of the Doha Round of WTO trade negotiations
in July2006 — have raised concerns that U.S. farm programs could be subject to a new wave of WTO dispute
settlement challenges.Page 2 CRS-2 The Peace Clause had provided protection for actionable subsidies
provided they met certain compliance conditions. Now an agricultural subsidy may be challenged under
claims of “adverse effects” in agricultural markets — even if the subsidy remains within spending limits
defined under the country schedule. The potential list of actionable subsidies includes export subsidies, amber
box, blue box, green box, and de minimis domestic support measures. (See CRS Report RL32916, Agriculture in
theWTO: Policy Commitments Made Under the Agreement on Agriculture, for an explanation of these categories).
In particular, the “serious prejudice” claim of the Agreement on Subsidies and CountervailingMeasures (SCM),
Article 5(c), accordingto expert opinion, is a lower threshold for achieving successful challenges than the injury
requirement under a countervailing duty claim. If challenges are successful, the WTO remedy likely would imply
either elimination, alteration, or amendment byCongress of the programs in question to remove their adverse
effects. Since most governing provisions over U.S. farm programs are statutory, new legislation could be required to
implement even minor changes to achieve compliance. Alternately, in light of an adverse ruling the United States
could choose to make compensatory payments (under agreement with the challenging country) to offset the alleged
injury. USDA SecretaryJohanns has stated that one of his primary objectives for the 2007 farm bill is to make
U.S. farm programs “beyond challenge.” Nevertheless, some trade specialists argue that numerous new WTO
challenges of U.S. farm support are unlikely. They contend that challenges require intense effort, the financial costs
are high, and the broader geopolitical consequences mayfar outweigh any potential trade gains. Few developing
countries have the needed resources for a challenge. In addition, there is the inherent risk that, if the challenge fails,
the effort could legitimize those very programs targeted for discipline.
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."
The U.S. has a responsibility to come out against subsidies

Goff, Minister of Trade, 2007
(Hon Phil, Scoop Independent News, “The Doha agenda - a NZ perspective,” May 10th,
http://www.scoop.co.nz/stories/PA0705/S00241.htm, Accessed on 7/6/08)
The message I would like to leave with you is one that goes back to my earlier point about the origins of the
GATT and the WTO. There are times when the United States has accepted a special responsibility to
show leadership on the international economic agenda, even at some political cost or risk. I believe this
point in the Doha process is another one of those occasions. I encourage you to offer leadership. The
stakes justify the risks. And it would be a gesture of strength and confidence. This is after all the
world’s most dynamic economy. I believe American farmers and producers have the energy and
competitiveness to thrive without current levels of protection or support. Having been part of a New Zealand
government that took hard policy decisions in these areas, and saw the rewards, I feel I have some basis for
urging the US likewise to be bold. Other big players – including the EU, China, Brazil, India and Japan
– need to match that boldness.
The U.S. is an important leader in reducing Subsidies

Goff, Minister, 2008
(Hon Phil, Scoop Newspaper, “Evolving Asia-Pacific Regionalism,” June 9th,
http://www.scoop.co.nz/stories/PA0806/S00144.htm, accessed on 7/6/08)
But structural supply factors are also in play. A key factor has been under-investment in agriculture and
infrastructure in developing countries. One of the key causes of that is unfair competition from heavily
subsidised agricultural products from rich countries and the inability of developing countries to export
over high tariff barriers to the wealthy countries.
With tight commodity markets forecast to continue over the next decade, the need to promote the efficient
production of and free up the flow of agricultural goods through reduction and elimination of subsidies and
tariffs has never been more important.
The liberalisation of trade through the WTO is New Zealand’s number one trade policy priority. The
US is an important partner in that process. New Zealand has worked closely with the USTR for a high
quality outcome to the Round.
WTO: Link: Alternate Fuel Subsidies
Alternative fuel incentives undermine WTO talks

David Howell & Carole Nakhle, Former British Secretary of State for Energy & Energy Research Fellow
University of Surrey, 2007, Out of the Energy Labyrinth, p. 119-20 (HARVEN3130)
But there are a few bits of bad news about biofuels. First, using agricultural products as a major energy source
sounds good but tangles the issue up with the traditional political minefield of farm subsidies generally.
American congressmen, and politicians everywhere in the industrialized world, get a gleam in their eyes when
they see the possibility of huge new markets opening up for their heavily protected farmers. Naturally they
want the existing subsidies and supports – of the kind which have paralyzed world trade liberalization and led
to the breakdown of trade talks at Doha in 2006 – to stay and even be increased. So the whole process could
become interwoven with farm support lobbying, severely distorting the true economics of biofuels and upsetting
food supply patterns as well. Farm politics explain why the USA keeps a 54 cents per gallon tariff on imported
ethanol – to keep out cheaper Brazilian supplies and protect US agriculture.
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.
WTO: Link: Fuel Standards
Fuel standards are contentious in the WTO

Ederington, Department of Economics, University of Miami, 2001
( Josh, The American Economic Review, Vol. 91, No. 5, (Dec., 2001), pp. 1580-1593 Published by: American
Economic Association, “International Coordination of Trade and Domestic Policies.” Accessed via JSTOR:
07/06/2008 23:19)
The past half century has seen a dramatic multilateral reduction in tariff barriers under General
Agreement on Tariffs and Trade (GATT) negotiations. However, as tariff barri-ers have fallen, attention
has shifted to the use of domestic policies as secondary trade barriers. A primary concern is that, as
countries sign trade agreements that constrain their ability to pursue trade goals through trade policy,
there will be unilateral incentives for governments to distort their domestic policies as a secondary
means of protection. Increasingly, international trade disputes revolve around a country's use of internal regulations as
a means of restricting trade. The United States has successfully chal-lenged the system of liquor taxes in both Japan and
Korea as discriminating against imported liquor, while Venezuela and Brazil have challenged American standards
for reformulated and conventional gasoline as trade protection masquerading as environmentalism.
GATT contains several articles concerning the international regulation of domestic policies, but the
question of how to fully incorporate domestic policies within GATT negotiations (and other internationalt
rade agreements) remains contentious. Indeed, at both the Ministerial Meeting in 1994 (at the close of the Uruguay
round) and the recent unsuccessful Ministerial Conference in Seattle, many GATT delegates renewed de-mands for the
relationship between trade and various domestic policies (e.g., environmental policy, labor standards, or competition
policy) to be examined. Despite the importance that has recently been placed on international cooperation over domestic
policies, no theoretical basis exists for considering how to cooperate over both trade and domestic policies within an
international agreement. Previous papers on negotiation over two instruments of protection (e.g., Copeland, 1989, 1990;
Thomas L. Hungerford, 1991) have assumed asymmetric limitations on cooperation (i.e., they assume that one of the two
instru-ments is either nonobservable or nonnegotia-ble). This paper extends such work by investigating cooperation over
two negotiable instruments of protection under symmetric lim-itations on cooperation, and provides insight into the
design of international tradea greements that incorporate cooperation over domestic policies. I adopt the view that
enforcement issues are central to the understandingo f international cooperation. One of the challenges of
international cooperation is the absence of a central authority to enforce the terms of an agreement. Without access to an
external enforcement mechanism, internationala greementsa re viable only as long as member countries view continued
coopera-tion to be in their own self-interest (i.e., the benefits from cooperating outweigh the poten-tial gains from cheating).2 While the
GATT/
WTO: Link: Tax Changes
Domestic taxes undercut GATT negotiations and create trade disparities.

Ederington, Department of Economics, University of Miami, 2001
( Josh, The American Economic Review, Vol. 91, No. 5, (Dec., 2001), pp. 1580-1593 Published by: American
Economic Association, “International Coordination of Trade and Domestic Policies.” Accessed via JSTOR:
07/06/2008 23:19)
The central focus of the paper is the treatment of domestic policy within the articles of GATT. Article III (which
covers domestic policies) re-quires that no policy that applies to either do-mestic production or consumption
should act as a "disguised" trade restriction.3 In contrast to the treatment of domestic policies, which amounts to
a blanket proscription of the use of domestic policy as a form of protection, Articles I and II (which cover tariffb
arriers)r equireo nly that tariff protection not exceed any "binding levels" that member countries may agree to in
GATT negotiations and that all tariffs conform to the principle of nondiscrimination (MFN). Such differential
treatment appears to reflect a broad presumption that protection in the form of tariffs is preferable to
protection in the form of internal taxes or regulations. GATT's prefer-ence for protection in the form of
tariffs is commonly justified on the grounds that direct tariffs are more "transparent"an d thus easier to
negotiate. This paper examines whether such differential treatment is also desirable on efficiency grounds, even
absent transparency is-sues, once enforcement constraints associated with an international agreement are taken into
account. In this paper, I argue that there is a logical basis for Article III and find the conditions under which Article
III is efficient. Specifically, I argue that when limited enforcement power prevents countries from implementing
a fully efficient set of trade and domestic policies, tariff barriers are the most efficient means of afford-ing
countries protection so as to maintain the viability of the agreement. This finding reflects a simple logic: it is the
temptation to pursue terms-of-trade gains that creates problems with enforcing international agreements over trade
and domestic policies, and, since trade policy is the most efficient means of pursuing such terms-of-trade gains,
trade policy is the most efficient means of countering the temptation to defect. This finding provides support for
the general treatment of domestic policies within GATT (i.e., the preference for existing trade barriers in the form of
tariffs). Indeed, this paper establishes that if supply and demand functions are approximately linear in local prices,
then Article III is efficient since there is essentially no gain from distorting domestic taxes. As is shown in Section II
of the paper, the only economic reason for distortionary domestic taxes comes from substantial nonlinearities
in the supply and demand functions. In the following analysis, Section I lays out the general-equilibrium model of
trade and solves for Nash and Pareto-efficient policies. Section II explores the setting of cooperative policies within
a self-enforcing agreement and derives the conditions under which Article III's prohibition against the use of
domestic policy as a trade barrier is justified
Doha Good – Alternative Energy
Global alternative energy hinges on the Doha Rounds.

Lamy, WTO Head, 2007
(9 December WTO NEWS: SPEECHES — DG PASCAL LAMY, “Lamy: Doha could deliver double-win for
environment and trade.” <http://www.wto.org/english/news_e/sppl_e/sppl83_e.htm>. 7/15/08)
There is no doubt that an immediate contribution that the WTO can make to the fight against climate
change is to indeed open markets to clean technology and services. The Doha Round of trade
negotiations offers an avenue for expanded access to products such as scrubbers, air filters and energy
management services. But, as can be expected, what is and is not an environmental good is a topic that is
hotly debated. For economists, matters appear to be clearer. They tell us that, today, the global market for
environmental goods and services is estimated to be worth more than $550 billion dollars every year. The
OECD estimates that green services account for 65% of this market and green goods 35%. Climate change
prevention and mitigation products and services represent an important proportion of these numbers.
Launched within a broader context of the Doha Round's environmental chapter, which also includes
issues such as the reduction of fisheries subsidies, and enhancing the mutual supportiveness between
WTO rules and multilateral environmental agreements, the negotiations on environmental good
services could deliver a double-win for some our members. A win for the environment and a win for
trade. For a country such as Indonesia, that is amongst the world's top 10 exporters of steam condensers, this
mandate can represent such a double gain. The same for India, that is amongst the world's top 10 exporters of
hydraulic turbines; or Malaysia that is amongst the world's top 5 exporters of photovoltaic cells; or Thailand
that is amongst the world's top 10 exporters of filtering and purifying machinery for gases.
Surely we should not miss an opportunity to open markets for clean technology and services in the
Doha negotiations. But, in doing so, we should cognizant of the fact that, ultimately, it is the existence of
environmental regulations that will drive demand for these goods and services. Hence the importance, once
again, of setting the right environmental framework within which market opening can take place.
A multilateral approach to climate change, that centers on collective action, is absolutely key.
Doha Good – Economy 1/2
Successful Doha negotiations are key to international economic stability.

Businessline, 2008
(Financial Times Information Limited - Asia Africa Intelligence Wire, April 22, NEWS: Global trade forecast
to expand by 4.5% this year, says WTO” ABI/Inform Accessed 7/11/08)
The World Trade Organisation (WTO) forecast a moderate global trade expansion of about 4.5 per cent in
real terms this year, following world trade growth sliding to 5.5 per cent in 2007 from 8.5 per cent in 2006 In
its preliminary assessment released in Geneva today, the world trade monitoring body contends that this
downbeat prognosis stems from the fact that the sharp economic deceleration in key developed countries
is only partly counterbalanced by continuing strong growth in emerging economies Stating that recent
developments cloud the near-term prospects for the world economy, WTO said among these include expectations
of recessionary tendencies in the US, weaker demand growth in both Europe and Japan, a rise in inflation and
depressed global stock The WTO Director General, Mr Pascal Lamy said, "these are uncertain and
troubling times for the global economy". Hence, he said, "a reinforced trading system is an essential anchor
for economic stability and development and the best way to achieve this is to conclude the Doha
Development Round. The time for posturing and delay has ended. What we need now is action." Performance
slows down On global trade performance in 2007, it said the preliminary figure of 5.5 per cent trade growth for
2007 is slightly lower than the 6 per cent forecast The global economy and world trade began to slow down in
2007 due to the deceleration of demand in the developed regions
Doha success critical to sustaining the world market

Eizenstat and Paemen Stuart E. Eizenstat held several senior positions in the Carter and Clinton
administrations, including ambassador to the European Union and deputy secretary of the Treasury. Hugo Paemen
was the E.U. ambassador to the United States. They are co-chairmen of the European-American Business Council
‘07
Stuart and Hugo. The Washington Post “A Trade Deal on the Ropes: Last chance to avert disaster in the Doha
round” 9/24/07 Proquest.com Accessed: 7/7/08
The World Trade Organization and global trade itself are at a critical crossroads, with one last chance
to salvage the Doha round of talks. Failure would be disastrous for the WTO, would be particularly
harmful to the least developed countries and could lead to a breakdown of the multilateral trade
system.
The Doha round of talks began in November 2001 with the goal of reaching an agreement by Jan. 1, 2005.
Unlike previous trade rounds, which were led by the United States and Europe, Doha was to be driven by a
development agenda. It promised special benefits to developing countries, such as improved access to
developed nations' agriculture and textiles markets and affordable medicines for diseases such as AIDS. It
also included more direct involvement in negotiations by countries with emerging economies, such as Brazil
and India.
Yet every forum has proved unsuccessful, from key meetings with trade ministers of the 150 WTO members
in September 2003 to informal negotiations among different groups of countries, most recently the United
States, the European Union, Brazil and India this summer in Germany. The European Union and the United
States, after years of wrangling, presented an agreement to substantially reduce E.U. tariffs on farm imports
and U.S. domestic agricultural subsidies in return for lower tariffs in the developing world on manufactured
products and greater market access for services. Brazil and India rejected this on behalf of the Group of 20
developing countries.
If the talks fail, many proposals to help developing countries will be lost. These include the elimination
of agricultural export credits from the developed world and reduced E.U. and U.S. trade-distorting
subsidies. The trend among E.U. countries and the United States toward bilateral free-trade
agreements with stronger developing nations will accelerate, to the great disadvantage of the poorest
nations. A successful WTO agreement could add nearly $300 billion to world income.
Doha Good – Economy 2/2
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]
Doha Good – Food Shortages 1/2
Agreement at the Doha talks solves world food crisis

Reuters ‘08
“Doha Agreement Key to Dealing With Food Pries –UN” April 19th 2008
http://www.reuters.com/article/latestCrisis/idUSL19538953 Accessed: 7/708
ACCRA, April 19 (Reuters) - Agreement in the Doha round of global trade negotiations is vital to
finding a long-term solution to rising food prices, the head of the U.N. Conference on Trade and
Development (UNCTAD) said on Saturday.
"We need to be able to move towards as early as possible a conclusion of the Doha development
agenda, particularly in the area of agriculture," Supachai Panitchpakdi told a news conference on the
eve of an UNCTAD summit in Ghana.
A doubling of the prices of major cereals on international markets since mid-2007 has sharply
increased the risk of hunger and poverty in developing countries and sparked food riots in parts of Asia
and Africa.
Panitchpakdi, a former World Trade Organisation (WTO) chief, said finding agreement at the delicately
poised WTO agriculture negotiations and eliminating rich nation subsidies was vital for a solution to
the food crisis in the long term.
Tackling subsidies at Doha solves world food shortage

Reuters ‘08
“Doha Agreement Key to Dealing With Food Pries –UN” April 19th 2008
http://www.reuters.com/article/latestCrisis/idUSL19538953 Accessed: 7/708
Much has been said that the elimination of distortions might result in some increases in food prices," he
said.
"But the net effect will be that the elimination of the subsidies and agricultural distortions would afford
for the first time the opportunities for farmers in poor countries to be able to look forward to getting
realistic prices so that they can go on with the expansion of their production."
Failure to cut subsidies at Doha risks the world food supply

2007
Global barriers to trade in agricultural products artificially prop up domestic prices for food and food
products. They raise the cost of living for families forced to buy food products that are made overly
expensive in these distorted markets. According to a 2004 OECD study, U.S. farm programs resulted in
higher food prices and had the effect of transferring more than $16 billion from American households
to domestic farmers over and above what the farmers received from direct government assistance.[10]
This is in addition to the $25 billion annual cost to taxpayers.
Barriers to agricultural trade are not only a burden on American households. They also depress world
prices of agricultural products, negatively affecting farmers in developing countries and blocking their
efforts to rise from poverty and improve their living standards. The U.S. argues for free trade and
economic liberalization, and yet it refuses to eliminate the very policies that would truly allow
developing countries to pursue and achieve economic prosperity. William Cline of the Institute for
International Economics has estimated that by removing trade barriers, developed countries would
convey economic benefits to developing countries that are worth about twice the amount of their
annual aid transfers.[11]
Doha Good – Food Shortages 2/2

Decreased food security risks 600 million dead
Senauer Professor of Applied Economics and Co-director of the Food Industry Center at the University of
Minnesota. ‘07
Benjamin, Foreign Affairs “How Biofuels Could Starve the Poor” May/June 2007
http://www.foreignaffairs.org/20070501faessay86305/c-ford-runge-benjamin-senauer/how-
biofuels-could-starve-the-poor.html Accessed: 7/11/08
In a study of global food security we conducted in 2003, we projected that given the rates of economic and
population growth, the number of hungry people throughout the world would decline by 23 percent, to about
625 million, by 2025, so long as agricultural productivity improved enough to keep the relative price of food
constant. But if, all other things being equal, the prices of staple foods increased because of demand for
biofuels, as the IFPRI projections suggest they will, the number of food-insecure people in the world would
rise by over 16 million for every percentage increase in the real prices of staple foods. That means that 1.2
billion people could be chronically hungry by 2025 -- 600 million more than previously predicted.
The world's poorest people already spend 50 to 80 percent of their total household income on food. For
the many among them who are landless laborers or rural subsistence farmers, large increases in the prices
of staple foods will mean malnutrition and hunger. Some of them will tumble over the edge of
subsistence into outright starvation, and many more will die from a multitude of hunger-related
diseases.
Doha Good – Free Trade 1/2
Doha prevents total collapse of free trade

Gurría, Secretary general of the OECD ‘06
Angel, Organization for Economic Co-operation and Development “Doha: The low hanging fruit” 8/21/06
http://www.oecd.org/document/4/0,3343,en_2649_34487_37295108_1_1_1_1,00.html Accessed: 7/15/08
The multilateral trading system plays an essential function in this regard, defending and promoting the
interests of all trading nations. By building on the principles of national treatment and non-discrimination,
the WTO provides a forum for negotiating. By providing recourse in cases of violations, it embodies a
rules-based system that helps international trade work as an engine of growth and development.
The alternative to a Doha agreement is bleak. There is a danger that the WTO will proceed by
litigation instead of legislation, that dispute settlement will take the place of rule making. Existing
distortions to trade and economic activity could become entrenched, making it increasingly difficult for
developing countries to compete fairly in world markets. Bilateral and regional trade deals would
proliferate. Without the disciplines of a strong multilateral trading system, the chance would increase that
these deals would introduce strains and inefficiencies: by diverting trade and investment, and through
the increased costs imposed on business by the proliferation of rules of origin and product standards.
In fact, proposals are already being made for an “APEC only” Free Trade Agreement (FTAAP), given Doha’s
impasse.
Doha is the last possible savior for global free trade

The Washington Post ‘08
“Saving Doha; why an obscure Frenchman may be the last hope for global free trade” 6/11/08
Proquest.com Accessed: 7/8/08
Okay, so we're exaggerating a bit. Not about Mr. Lamy's obscurity: The veteran French bureaucrat is
director general of the World Trade Organization (WTO), which hardly makes him a household name, even
though he is a remarkably talented and persistent international public servant. It's not precisely true that he is
the only person who can save our troubled planet. But he might just be the last possible savior of global
trade liberalization. And that's pretty important. Ever since the post-World War II establishment of the
WTO's precursor, the General Agreement on Tariffs and Trade, negotiations among nations have gradually
removed tariffs and other barriers to commerce, with huge benefits for the world economy. The latest
"round" of tariff-reducing talks began in Doha, Qatar, in 2001; it was billed as the "development round,"
because it was supposed to lead to a grand bargain between rich and poor countries that would open the
former's markets to the goods of the latter, especially in agriculture. At a time of rising food prices, a
successful Doha round could add billions of dollars to the earning potential of farmers in the developing
world -- as well as to that of businesses and workers around the globe. The vast majority of poor countries
are on board for an agreement.
Doha subsidy cuts key to free trade

Siddiqi staff writer ’05
Moin, African Business, “Free trade is key to poverty reduction” December 2005 Proquest.com Accessed: 7/8/08
The Doha round has diverse objectives. Liberalising agricultural trade by eliminating tariffs on farm
goods and axing export subsidies is vital to African farmers. But, in return, the developed world wants
reduced industrial tariffs when exporting or investing in the developing world. This is especially true for
those labour-intensive sectors where most developing countries enjoy a competitive edge, notably in the
apparel sector.
Little concrete progress has been made during the Doha round despite the fact that it is now in its
fourth year. The developing world expects genuine agricultural market reforms from wealthy
economies. Hefty subsidies lead to the dumping of artificially cheapened Western produce on world markets,
hitting the earnings of poorer countries' farmers.
Doha Good – Free Trade 2/2
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.
Doha key to free trade

US dep’t of state ‘06
“The US Commitment to Global Free Trade: Supporting the Doha Development Round” June 26th 2006
http://www.state.gov/r/pa/scp/2006/68293.htm Accesses: 7/7/08
Free trade is integral to President Bush’s vision of expanded economic opportunity, prosperity and
freedom throughout the world. Since providing the leadership that launched the WTO Doha
Development Agenda in 2001, the United States has been working for over four years through the
Doha Round of trade negotiations to bring about a comprehensive multilateral agreement to create
new market openings for trade in agriculture, manufactured goods, and services—and thereby bring new
economic opportunities worldwide and meet the development promise of Doha.
WTO negotiations essential to promotion of free trade

Townsend, writer for the economic policy and statistics section ‘06
Ian, House of Commons Library “The WTO Doha Development Round: Where Next for World Trade” 9/21/06
http://www.parliament.uk/commons/lib/research/rp2006/rp06-043.pdf Accessed: 7/9/08
While most countries operate trade barriers – quotas, tariffs or trade-distorting subsidies – successive
rounds of negotiations as part of the General Agreement on Tariffs and Trade and then the WTO have
sought to progressively liberalise trade by lowering these barriers (see box on page 18).
Classical international trade theory suggests that such barriers prevent the efficient allocation of
resources and production. Free trade allows countries to exploit their respective comparative
advantages, increasing overall economic output and welfare. Goods and services should be cheaper
under free trade, and economic growth should increase.
Failure at Doha risks a retreat from free trade

Schott, senior fellow at center for international economics, ‘06
Jeffrey, Agricultural Outlook Forum, “Implications of the Doha Round for the US Farm Bill and Visa Versa 2/16/06
http://ageconsearch.umn.edu/bitstream/33382/1/fo06sc97.pdf Accessed: 7/8/09
The first scenario is outright failure. Under this scenario, countries allow the talks to drift aimlessly
because of a lack of consensus. Diplomats go through the motions in Geneva for years to come—an
exercise for which they are well experienced. Regional initiatives proliferate—particularly in East Asia
—as an alternative to WTO liberalization. At the same time, failure feeds strong demands for new
protectionism—especially against the “flood” of low-wage exports from China and India.
Doha Good – AT “Hezzbola”
A strong Hezbollah guarantees middle east peace

Lamb, author of “The Price We Pay: A Quarter Century of Israel's use of American Weapon's against Lebanon
(1978-2006)” ‘08
Center for Research on Globalization “Why Hezbollah’ Victory May Lead to Peace in the Middle East” 6/14/08
http://www.globalresearch.ca/index.php?context=va&aid=9328 Accessed: 7/13/08
Question: Nasrallah has shown that he is capable of thinking strategically and politically. This appears to have
put him at an advantage in dealing with both Israel and the United States. Israel's 34 Day war was not just a
humiliating defeat; it was also seriously mismanaged from the beginning. In battles in cities and towns
throughout southern Lebanon, Hezbollah fighters went toe to toe with the better-equiped IDF and turned
them away. Is it possible that the real path to peace in the Middle East is a strong army--like Hezbollah--
on Isreal's northern flank to discourage further military adventurism?
Franklin Lamb: I see it certainly as one of the major elements because if takes away the first option that
Israel has used in the past. Israel has committed aggression more than 40 times on the ground against
Lebanon starting in 1967 to July 2006. This era is over. Soon even Israel's air force will be in peril from
Hezbollah missiles as it attempts to add to its more than 6000 violations of Lebanese airspace and
sovereignty since the 1960's.
WTO Good - Poverty

WTO combats poverty
Owomoyela, staff writer, ‘04
Erik The Daily Iowan “Does the WTO Promote Free Trade?” 10/12/04
http://media.www.dailyiowan.com/media/storage/paper599/news/2004/10/12/Opinions/Does-
The.Wto.Promote.Free.Trade-750017-page2.shtml Accessed: 7/8/08
The World Trade Organization is not holding back Third World countries or maintaining global
poverty. Unfair trade is, and that is exactly what the WTO exists to prevent. It isn't perfect, but it doesn't
deserve the hatred directed its way, and the world's poor would be worse off without it.
Trade is good. It means that producers have more markets in which to sell, which doesn't just help
Americans. One of the biggest obstacles to development, especially in Africa, is that many countries
don't have a large enough population to maintain a domestic market, while tariffs and trade barriers
mean it's not profitable to sell abroad. With fewer trade barriers, a factory in Sierra Leone can compete with
one in Germany.
Poverty causes a structural violence that outweighs nuclear war

Abu-Jamal 98 (Mumia, activist, 9-19, http://www.flashpoints.net/mQuietDeadlyViolence.html)
We live, equally immersed, and to a deeper degree, in a nation that condones and ignores wide-ranging "structural'
violence, of a kind that destroys human life with a breathtaking ruthlessness. Former Massachusetts prison official and writer, Dr. James
Gilligan observes;
By "structural violence" I mean the increased rates of death and disability suffered by those who occupy the bottom rungs of society, as
contrasted by those who are above them. Those excess deaths (or at least a demonstrably large proportion of them) are a function of
the class structure; and that structure is itself a product of society's collective human choices, concerning how to distribute the
collective wealth of the society. These are not acts of God. I am contrasting "structural" with "behavioral violence" by which I mean the
non-natural deaths and injuries that are caused by specific behavioral actions of individuals against individuals, such as the deaths we
attribute to homicide, suicide, soldiers in warfare, capital punishment, and so on. --(Gilligan, J., MD, Violence: Reflections On a National
Epidemic (New York: Vintage, 1996), 192.) This form of violence, not covered by any of the majoritarian, corporate, ruling-class
protected media, is invisible to us and because of its invisibility, all the more insidious. How dangerous is it--really? Gilligan notes:
[E]very fifteen years, on the average, as many people die because of relative poverty as would be killed in a nuclear
war that caused 232 million deaths; and every single year, two to three times as many people die from poverty throughout
the world as were killed by the Nazi genocide of the Jews over a six-year period. This is, in effect, the equivalent of an
ongoing, unending, in fact accelerating, thermonuclear war, or genocide on the weak and poor every year of every decade,
throughout the world.
WTO trade negotiations fostering development

Siddiqi staff writer ’05
Moin, African Business, “Free trade is key to poverty reduction” December 2005 Proquest.com Accessed: 7/8/08
A decisive WTO ministerial meeting in Hong Kong could help set the medium-term agenda for
improving welfare and growth prospects of developing countries, especially low-income ones argues
Moin Siddiqi. rade ministers and officials from the WTO's 148 member countries (or 149 countries if, as
expected, Saudi Arabia membership is ratified in time) will again try to devise a common strategy for
promoting 'freer trade' between the developed and developing world and tackle the contentious issue of
agricultural tariffs, barriers and subsidies.
The developing world comprises 80% of the WTO's membership. At their summit in Gleneagles, Scotland,
last July, G8 leaders described the Doha round Hong Kong ministerial meeting as a real opportunity to
"broaden, deepen and extend current economic expansion".
However, as the development NGO Oxfam cautions: "Promises are one thing, but now we need to see
follow-through on commitments made by the G8 governments. While it is vital that we do not lose track of
money that has been pledged, attention will now focus on trade reforms. The outcome of the WTO meeting
will ultimately determine whether many impoverished nations can finally 'trade their way to
prosperity'."
As US President George W Bush declared: "The surest path to greater wealth is greater trade. We
must work together in the WTO negotiations to eliminate agricultural subsidies that distort trade and
stunts development."
Doha Good – Russian Econ

Smooth negotiations at Doha key to Russias acceptance into the WTO
Afrasiabi and Gold Afrasiabi teaches IR at Bentley, Gold teaches Business ‘08
Kaveh, Natalia, ATimes, “Medvadev Holds Key to WTO” 4/21/08
http://www.atimes.com/atimes/Central_Asia/JC21Ag01.html Accessed: 7/9/08
The younger and more technocratic Medvedev may be more ready than his predecessor to steer the
Russian economy towards market liberalization and globalization, witness his decision to make a top
priority of Russia's entry to the World Trade Organization (WTO). Russia's bid to join the WTO has moved
forward slowly since 1993, yet expectations are rather high that all the required bilateral and
multilateral agreements, as well as technical, legal and organizational issues, can be wrapped up within
the next few months.
In that event, Medvedev can then take credit for accomplishing something that eluded Putin, even
though the latter paved the way for Russia's WTO accession by adopting many of the necessary economic
and legal reforms. The country has agreed to substantial tariff cuts, such as an average of 8% on
manufactured goods, and to permit complete foreign ownership of banks and investment companies on
accession to the world body.
Accession to the WTO saves the Russian economy

O’Donnel, Junior fellow at Carnegies Russian and Eurasian program. ‘03
Anne, Carnegie Endowment, Effects of WTO Accession on the Russian Economy” May 28th 2003
http://www.carnegieendowment.org/events/index.cfm?fa=eventDetail&id=620 Accessed: 7/9/08
Increased import competition also produced positive effects on Russian productivity. If imports to an
industry rise by one percentage point, then on average productivity increases by 0.12 percent. Improved
in access to foreign imports also positively effect TFP. While it is commonly assumed that complex industries
will suffer from market reforms, the study found that negative effects from import competition in these
sectors ceased after 1998.
A decrease in tariffs would also benefit consumers. If tariffs were to drop to 5 percent, the average
Russian family would see a 5 percent decrease in annual spending, equal to roughly $20 a year.
Many in Russia believe that WTO accession will scare off foreign investors, thinking that tariffs must be
raised to increase FDI. A close examination of FDI inflows from OECD countries to developing countries,
however, reveals that WTO accession will result in an average $4 billion increase in FDI from developed
to developing countries, roughly equal to Russia's overall inflow in 2001. Russia could thus increase its
FDI-to-GDP ratio considerably by joining the WTO.
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.
WTO Good – AT “Sovereignty”

The WTO preserves state sovereignty.
Lash and Griswold, 2000
(William H. III, former assistant Secretary of commerce, and Dan, Director of the Center for Trade Policy
Studies Trade Policy Briefing Paper No. 9, May 4, 2000, Cato Institute, "WTO Report Card II: An Exercise
or Surrender of U.S. Sovereignty?" < http://www.ncpa.org/sub/dpd/?Article_ID=9941&
page=article>. Accessed 7/15/08)
The World Trade Organization cannot dictate the domestic laws and regulations of its member nations,
and therefore does not represent a threat to U.S. sovereignty. Rather, the WTO "enhances the freedom and
the prosperity of Americans," say William H. Lash III and Dan Griswold, authors of a new study from the Cato
Institute. They make the following observations: The WTO is a contractual organization that arbitrates
disputes among members on the basis of rules that all have agreed to follow -- although the U.S. has the power
to veto any agreement of which it disapproves. The WTO wields no power of enforcement -- cannot levy
fines, impose sanctions, change tariff rates or modify domestic laws. The organization's basic charter
exempts broad categories of trade restriwctions -- allowing members to restrict trade for reasons of
national security, public health and safety, and conservation of natural resources, and to ban imports
made with forced or prison labor. The same dispute settlement mechanism that can render judgment against
U.S. laws has been used effectively to encourage other nations to scrap trade laws that discriminate against U.S.
exports. The authors add that just as WTO membership opens markets for U.S. exporters, so it encourages
the U.S. to keep its own markets open to the benefit of consumers and import-using industries here.
WTO Good - Globalization

The WTO is a tool for promoting globalization
George, Associate director of the ‘transnational institute’, ‘99
Susan, The WTO and the Global War System “The corporate utopian dream” November 28th 1999.
http://www.ratical.org/co-globalize/WTOandGWSfp.html Accessed: 7/8/08
The World Trade Organization (WTO) is one of the instruments of globalization and globalization is
clearly led by corporations. Transnational corporations are gaining enormous power in the world today,
but they can't make the rules by themselves: they need to have instruments to make those rules for
them. One of the instruments they use is the International Monetary Fund (IMF). The IMF has pried open the
markets of the indebted countries in the South and in the East and has forced those countries to "liberate"
their capital accounts so that capital can flow in and out at will, has forced them to concentrate on export
crops, has forced them to privatize everything in sight and leave everything open to international investment.
Now the biggest rule-writer the corporations have is the WTO. The WTO is really writing a
constitution to facilitate the affairs of transnational corporations and allow them to globalize as they
see fit, in a world that will be organized of, by, and for corporations. It's the corporations' utopian dream.
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.
Globalization prevents root causes of war – empirical proof

Weede, professor of sociology at the University of Bonn, Germany ‘04
Erich, The Independent Review “The Diffusion of Peace and Prosperity by Globalization” Fall 2004
http://www.independent.org/pdf/tir/tir_09_2_1_weede.pdf Accessed: 7/11/08
Capitalism and economic freedom promote peace. Globalization can be understood as a process of market
expansion and market integration, as the universalization of capitalism. After a short discussion of the
political economy of globalization, I turn to the frequently overlooked security benefits of
globalization. The diffusion of prosperity, free trade, and democratization is part of the story.
Quantitative studies provide a great deal of evidence for a causal chain running from free trade via
prosperity and democracy to the avoidance of military conflict, as well as for another causal relationship
between trade or economic openness and conflict avoidance. After a review of the quantitative literature and
a discussion of some methodological issues, I illustrate the capitalist peace by historical examples and
contemporary applications. At the end, I consider how the capitalist peace may be “exported” from
Western societies to poor and conflict-prone nations and regions.
WTO: Not Unique 1/6
Non-Unique: Countries do not view the U.S. as decreasing its subsidies

Freedman, Journalist, 2008
(Jennifer M., News Summary “EU Sees `Worrying Signs' of Rising Protectionism in U.S. Policy” June 11
www.shridathramphalcentre.org/index.php?option=com_content&task=view&id=175&Itemid=94 - 55k, Accessed
on 7/12/08)
European Union sees ``worrying signs of a re-emergence of protectionism'' in several areas of U.S.
policy that show lobbies still wield significant influence over how the American government deals with its
trade partners. `Ù.S. trade policy remains under the influence of special interest groups at the expense
of broader policy objectives which could benefit the vast majority of U.S. citizens,'' Eckart Guth, a
European Commission official, told trade diplomats in Geneva. `Ìn other instances, while the United
States pursues the unquestioned right to protect national security, it does so in a way that it
unjustifiably restricts trade and investment.'' Guth made the remarks as the WTO issued a report on
trade policies and practices in the U.S. that urged the removal of barriers to market access and other
distorting measures.
Non-Unique: Farm bill has already destroyed U.S. Trade Leadership

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)
Both houses of the US Congress passed a US$307 billion farm bill last week with majorities large enough
to override President George W. Bush's promised veto of the bill. The legislation largely continues the
current system of agricultural subsidies for the next five years, despite a recent jump in food prices
and farmers' incomes. Critics are calling the new farm bill a missed opportunity for reform.
The passage of the bill, with its many provisions for trade-distorting subsidies, has raised fears that the
US will be more constrained than ever in its negotiating stance in the ongoing push for a framework
agriculture deal at the WTO.
In votes last week, the House of Representatives passed the bill 306-110, and the Senate 82-13, thus
rendering the measure immune to an executive override. Under the US system, the President can veto
measures passed by the House or Senate; however, if a bill achieves a two-thirds 'super majority', it cannot be
rejected by the executive. This bill is just the second time that President Bush's veto has been overturned.
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.
WTO: Not Unique 2/6
Not Unique: Farm Bill

Van Der Sluis, Journalist for World Poultry, 2007
(Wiebe, World Poultry, “US farm subsidies clash with WTO leadership,” August 1st,
http://www.worldpoultry.net/id10225319/action/showDetails/us_farm_subsidies_clash_with_wto_leadership.html,
Accessed on 7/7/08)
It is great news for the farmers in the USA. The first step to a new farm bill has been set. This means that
over the next five years US farmers will receive 286 billion dollars extra from the government. The
subsidy will cover the difference between the market price and the negotiated minimum price for their
products.
The basic structure of the subsidy system has not changed, except that farmers with turnover of over one
million dollars will be exempt from receiving subsidies. I can understand that the president of the America’s
National Farmers Union, Tom Buis is very happy with the new law. His organisation has always been a
strong defender of direct support to farmers. He expressed in an interview that as of the start members of the
Congress only had the needs of the domestic farmers in mind and did not care about the WTO rules. Why
does that not surprises me?
The law passed the House of Representatives right at the moment that Canada and Brazil dropped a
complaint about existing US farm subsidies at the WTO desk. It is expected that WTO will soon come
up with a conclusion, which can, based on previous verdicts, only lead to a condemnation of the
country that always strives to take the leading role in free trade issues.
As soon as the bill has been passed the world can no longer accept a US leadership in the WTO. And
comments from the US government or industry leaders regarding foul play by other countries cannot
be taken serious anymore.
If home land first again becomes the standard, there is little justification to plea for free trade. The US
already has a history in this regard, for instance free trade in poultry products, but is the US now
showing their true colours, in that keeping their borders closed for the import of poultry products is
not just a sanitary issue. In this respect the subsidy bill shows the real face of the US leaders.
Do we have to be sad about this? I don’t think so. A lot of things can now been placed in a better and clearer
perspective. We all may wonder whether this is the end of the WTO or the beginning of a new era in
international trade in which homeland security becomes a much wider definition. One thing is very clear: By
accepting the new subsidy rule the US has lost its credibility as WTO leader and as guardian of free
and fair trade.
Not unique: Current subsidies

The Toronto Star, 2007
(December 18, “WTO probes complaints over U.S. subsidies,” Lexis Accessed on July 8 2008)
The World Trade Organization launched an investigation yesterday into Washington's multi-billion-dollar
farm subsidies that Brazil and Canada say break international trading rules. The Canadian complaint called for
a WTO assessment of U.S. subsidies and domestic support for corn and other agricultural products. The
Brazilians challenged broad U.S. domestic support. A single panel was set up by the WTO's Dispute Settlement
Body to assess the countries' concerns. While the WTO's 151 members agree some forms of farm support
are acceptable, international trade rules limit the type and size of assistance states can give. Subsidies are
believed to skew trade by allowing producers to sell goods more cheaply than producers in competing
countries. U.S. farm support is a major point of contention in the WTO's six-year-old Doha Round
negotiations on scaling back barriers to global trade. The U.S. had blocked requests last month from both Brazil
and Canada for the panel, invoking WTO rules allowing more time for parties to resolve differences outside the
dispute settlement process. Such a panel cannot be blocked when it's proposed a second time.
WTO: Not Unique 3/6
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.
France will support subsidies no matter what.

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)
PROSPECTS BLEAK Sarkozy this week took over the EU's presidency and as such will play a key role in
formulating the bloc's response to any deal Mandelson and the other WTO ministers are able to strike. Trade
experts say the prospects are bleak for an elusive trade-off between cuts by rich countries in farm
subsidies and import tariffs, and by emerging nations such as Brazil or China in import tariffs for
manufactured goods like cars or chemicals. But if European exporters get a bit more access to emerging
economies, France may struggle to drum up opposition to a deal among other key EU states such as its
main ally, Germany, trade watchers say. EU officials say Sarkozy's verbal assault could be an attempt to
intimidate Mandelson out of making concessions. "But how well thought out is that? Sarkozy would be
setting himself up as an easy target for taking the blame if there is a collapse of the round," an EU
diplomat said, speaking on condition of anonymity because of the sensitivity of issues. Fredrik Erixon, a
trade expert at the European Centre for International Political Economy, a Brussels think-tank, said Sarkozy
might be positioning himself to cope with outrage from French farmers in the unlikely event of a WTO deal
this month. "He doesn't have much to lose by making these very tough statements against Mandelson,"
Erixon said. "If there is an agreement, the French farmers are going to oppose it and Sarkozy can at least
claim to have tried his best for them." (Editing by Caroline Drees) Notes: Copyright © 2008 The
International Herald Tribune | www.iht.com
WTO: Not Unique 4/6
Agreement far from likely in WTO meeting

GIN ‘08
Global Information Network, “WTO: Agricultural talks far from over, delegates say” June
24th 2008 Proquest.com Accessed: 7/6/08
GENEVA, Jun. 24, 2008 (IPS/GIN) -- Some delegates at the World Trade Organization disagree with the
view of World Trade Organization's leader that the negotiations on trade in agricultural products are
"nearly there." Earlier this month the World Trade Organization's Director General, Pascal Lamy, said,
"We are nearly there in agriculture, but not really there in market access for industrial goods." He has
made similar pronouncements in other forums. Some developing country delegates have vehemently
disagreed with this assessment. One African delegate said on condition of anonymity that, "there is this
idea which has been floated that agriculture is progressing. It is more stable, and we should focus on
[non-agricultural market access]. We regard this with great concern. Agriculture has made progress in the
past months. But are we there yet or are we close? No."
He elaborated, saying delegates are concerned about the U.S.'s domestic supports. The recent Farm Bill is,
even in this era of extremely high prices, set to increase supports to U.S. farmers.
Non-Unique: The U.S. refuses to negotiate on subsidies

Kwa, journalist for IPS, 2008,
(Aileen, IPS, “U.S. Farm Subsidies May Survive WTO Doha Round” Jun 24th,
http://www.ipsnews.org/news.asp?idnews=42939 Accessed in 7/12/08)
Earlier this month Lamy noted that, ‘‘we are nearly there in agriculture, but not really there in market
access for industrial goods.”. He has made similar pronouncements in other forums. Some developing
country delegates have vehemently disagreed with such an assessment. One African delegate told IPS
on condition of anonymity that, ‘‘there is this idea which has been floated that agriculture is progressing. It is
more stable, and we should focus on NAMA (non-agricultural market access). We regard this with great
concern. Agriculture has made progress in the past months. But are we there yet or are we close? No.”
He elaborated, saying that delegates are concerned about the U.S.’s domestic supports. The recent
Farm Bill is, even in this era of extremely high prices, set to increase supports to U.S. farmers. Another
developing country delegate also noted that, ‘‘there is a wrong picture drawn out there that there is a
lot of progress within the consultations in agriculture. We are underestimating how much work we still
have in agriculture. We are very far from agreement on the SSM (special safeguard mechanism)’’. The
SSM is meant to be a tool for developing countries to protect their markets. He said that the special session
on the SSM held by the chairperson of the agriculture talks, Crawford Falconer, dubbed ‘‘a walk in the
woods", at the end of last week produced no results. Part of the problem is that the U.S. has still not
indicated that it would accept the lower domestic support range in Falconer’s latest negotiating text.
The U.S. currently provides about 7.5 billion dollars in ‘‘trade-distorting’’ domestic supports. The
agriculture draft text allows the U.S. to continue such supports to the tune of between 13 to 16 billion
dollars, 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 US is that they should reduce their subsidy
by just one dollar 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’".
WTO: Not Unique 5/6
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.
The U.S. does not support cutting all agriculture subsidies

2007
Much like the EU, the U.S. is constrained on what agriculture concessions can be offered in trade
negotiations. While the U.S. Farm Bill differs in both size and scope from the EU's Common Agriculture
Policy, it is supported by similar well-funded, solidly entrenched special interest groups. Real and
significant reforms to U.S. programs, as called for by other WTO members, will be very difficult to
manage with Congress now committed to preserving the policies embraced in the 2002 Farm Bill.
Without extensive commitments by other countries in services and manufacturing market access, there is
little likelihood that America will take necessary steps to reform agricultural policy.
WTO: Not Unique 6/6
The President will not cut farm subsidies

2007
In late January, the Department of Agriculture unveiled President Bush’s proposal for reauthorizing the
farm programs that expire in September. These reforms would marginally improve the current system.
The President would close a loophole that currently allows excessive marketing loan payments.
Counter-cyclical payments would be slightly altered to better target low-revenue farmers. Best of all, the
President would eliminate subsidies for farmers earning over $200,000 annually.
However, these tweaks generally retain the bloated and economically incoherent farm subsidy
programs that in 2002 replaced the innovative 1996 "freedom to farm" reforms. The watershed 1996
reforms largely ended market distortions, allowing farmers to make production decisions without government
interference. While farm subsidy costs have more than doubled in the past decade, the President would
spend only slightly less than the previous farm bill (and likely more than the Congressional Budget Office
baseline for these programs). Anti-free market milk and sugar policies would be only slightly changed.
The President's proposal represents a small step in the right direction. Better still would be a return to
"freedom to farm" policies. If these fail, the next test would be whether the President draws a line in
the sand and threatens to veto the expensive and inefficient farm legislation Congress appears ready to
write.
WTO: Link Turns
Implementing renewable energy technologies, the US will break the deadlock at Doha and
allow its successful implementation
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
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
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.
No Doha Impact 1/2
Even if Doha collapses, the WTO will continue to function.

Polaski, Director of the Trade, Equity, and Development Project at the Carnegie Endowment for
International Peace. Her work focuses on trade, development, and employment policies in the context of
globalization, 2006
(Sandra, Carnegie Endowment for International Peace, Policy Outlook, Trade Equity and Development
Project, September, “The Future of the WTO.” <http://www.carnegieendowment.org/files/Polaski_
WTO_final_formatted.pdf>.Accessed on July 9, 2008)
Notwithstanding the collapse of the Doha Round, the WTO will continue to function under the trade
rules negotiated in previous rounds, which continue to bind all 149 member countries. Existing WTO
agreements will still set the rules for trade between the major players, including the United States, the
EU, and major emerging powers such as China and India. There is little prospect that these countries
will negotiate separate free trade agreements among themselves, for the same reasons that make a
Doha deal difficult. The WTO will continue to attract new members, as seen in recent weeks as Russia and
Vietnam work hard to join the organization. The WTO dispute settlement mechanism, which is the venue for
resolving grievances that arise under existing rules, will continue to function. It is not at risk because it
provides real benefit to all member states in solving their disagreements.
The WTO will survive the collapse of Doha.

globalization, 2006
When the Doha Round of global trade negotiations derailed on July 23, many observers proclaimed a
crisis that threatens the global trading system. This alarm is misleading. The failed negotiations were
on the wrong track and unlikely to produce a balanced and widely beneficial new agreement. The
aftermath of the crash provides an opportunity to set resumed talks on a better course to achieve the agreed
objective of rebalancing trade rules so that developing countries can benefit more. The World Trade
Organization itself will survive this crash. The alternatives to the global trade regime—bilateral or
regional free trade agreements—do not offer the advantages to any country that the WTO provides.
This Policy Outlook analyzes the causes of the recent failure and identifies key objectives that must be
addressed when talks resume. It explains that the WTO remains indispensable and will survive. However
historical patterns and the political calendar suggest that the Doha Round may not be completed until 2009 or
thereafter.
No Doha Impact 2/2
Countries have no incentive to abandon the WTO if negotiations fail.

globalization, 2006
While there is broad recognition that the Doha Round was not on track to achieve an ambitious or
balanced outcome, some lament the collapse of the round nonetheless, arguing that it will unleash a frenzy
of bilateral and regional trade deals. These deals would exclude some countries, and if negotiated
between unequal partners, might be even worse for the weaker countries than the deal on offer at the
WTO. That much is true. However, it is not at all clear that negotiations for smaller trade deals will
accelerate or that they will undermine the WTO. If the U.S. fast track trade negotiating authority is not
extended, it will be impossible for the U.S. administration to achieve new bilateral free trade agreements.
Congress would be free to amend any tentative deals at will, making negotiations impossible. The U.S.
strategy of “competitive liberalization” would come to a halt. In Asia, regional and bilateral trade pacts
have been proliferating rapidly. The ongoing WTO negotiations have had no impact on the pace of
those talks, and the collapse of Doha will neither accelerate nor decelerate Asian integration. The trade
talks in Asia are meant to facilitate integrated production in the region, in addition to consolidating the
economic interests of major Asian powers. Those countries depend on outside markets, particularly the
rich markets of the United States and Europe, to take their export production, so they have no
incentive to turn away from the WTO, regardless of how many regional pacts they conclude.
Doha Bad – Hezbollah 1/2
Success of Doha allows Hezbollah to gain total superiority in Lebanon

Press TV ‘08
The Defense Association for Lebanon and Palestine Islamic Resistance Movement “Israel Concerned About Doha
Deal” 5/24/08 http://www.moqavemat.com/?lang=en&state=showbody_news&row_id=28801 Accessed: 7/13/08
The Israeli regime fears that the political deal reached between Lebanese factions in Doha would have
dire consequences for Tel Aviv.
The Doha agreement will give Hezbollah "veto power" and it could prevent the activities of UN
peacekeeping forces UNIFIL in southern Lebanon, an Israeli senior military officer told the Hebrew
language daily Maariv.
The officer claimed that the Israeli regime predicted the trend would lead to the superiority of
Hezbollah in Lebanon but it did not except it would happen so quickly.
The Israeli officer said Hezbollah was the winner of the two-week conflict between rival factions in
Lebanon and the resistance movement had achieved what it sought.
Rival political factions agreed to break an 18-month deadlock in the country during their talks in
Doha. Under the deal, Army Chief Michel Suleiman would be elected President and the opposition would
hold 11 ministerial seats in the future cabinet.
And the Shia takeover via Hezbollah risks war

NYT ‘06
New York Times “As Hezbollah Seeks Power, Lebanon is Feeling Edgy” 11/13/06
http://www.nytimes.com/2006/11/13/world/middleeast/13lebanon.html Accessed: 7/13/08
Lebanon is in the middle of a political crisis that is not just a matter of jockeying for power, but a
fundamental realignment of authority here — and perhaps in the region. It is seen in the faces of those
Sunnis and Christians who visit the Hariri memorial, nervous and drawn, and the confidence of those
picking their way through the debris and destruction of the Shiite neighborhood, known as Dahiya.
“Hezbollah gave us dignity and pride; they made us feel like human beings again,” said Ali Berro,
owner of a small grocery in the neighborhood. “It’s true that America and Israel devastated this country, but
we will rebuild again, ourselves.”
Long in the making, the 34-day war between Israel and Hezbollah — which was waged to crush the group’s
militia — seems to have accelerated the rise of Lebanon’s Shiites, from their onetime status as the nation’s
unwanted stepchild to the cusp of political dominance.
As a political party, a militia and social welfare organization, Hezbollah has used the devastation of the war
with Israel to help strengthen the allegiance of Shiites, giving out money and services that the government
has so far failed to deliver. Though no one knows for sure the size of each group in Lebanon — there has not
been a census since the 1930’s — Shiites are believed to make up more than 30 percent of the
population, and by some estimates have reached a plurality. But it would require a major leap for the
Shiites to realize their political goal of dominance — and their efforts to reach it could threaten long-
term instability, and perhaps bring armed conflict.
Israeli-Arab conflict will go nuclear.

Michel Chossudovsky January 3rd 2006. [Professor of Economics at the University of Ottawa, “Nuclear
War against Iran”]
http://www.globalresearch.ca/index.php?context=viewArticle&code=%20CH20060103&articleId=1714 Accessed:
7/14/08
The international community has endorsed nuclear war in the name of World Peace. "Making the World safer" is
the justification for launching a military operation which could potentially result in a nuclear holocaust. But
nuclear holocausts are not front page news! In the words of Mordechai Vanunu, The Israeli government is
preparing to use nuclear weapons in its next war with the Islamic world. Here where I live, people often
talk of the Holocaust. But each and every nuclear bomb is a Holocaust in itself. It can kill, devastate cities,
destroy entire peoples.
Doha Bad – Hezbollah 2/2
Hezbollah Greatest terror threat

Hoffman Staff writer ‘06
Ian, Oakland Tribune “FBI Analyzes Hezbollah Terror Threat” 9/9/06
http://findarticles.com/p/articles/mi_qn4176/is_20060909/ai_n16719547 Accessed: 7/13/08
The anniversary of the Sept. 11 hijackings has Americans thinking about al-Qaida and Osama bin
Laden. But the pressure on al-Qaida's top leadership and increasing U.S. confrontation with Iran has
many counterterrorism experts looking at the Iranian-sponsored Hezbollah as an equal, if not greater,
threat. Hezbollah's access to Iranian money, arms and military training has created the kind of
guerrilla force that can fight the Israeli military to a stalemate, and it has more of a presence inside the
United States than
al-Qaida, although neither Hezbollah nor Hamas ever has attacked inside the U.S.
Former Deputy Secretary of State Richard Armitage has called Hezbollah the "A-team" of terrorists. Pat
D'Amuro, former executive assistant FBI director for counterterrorism and intelligence, said in a phone
interview Friday that Hezbollah is "very well-funded, very well-trained. They have tremendous
capacity."
Terrorism risks extinction

Alexander 03 (Yonah, Terrorism Myths and Realities, Washington Times, Prof and Director of Inter-University
For Terrorism Studies)
the international community failed, thus far at least, to understand the magnitude and implications
of
the terrorist threats to the very survival of civilization itself. Even the United States and Israel have for
decades tended to regard terrorism as a mere tactical nuisance or irritant rather than a critical strategic
challenge to their national security concerns. It is not surprising, therefore, that on September 11, 2001,
Americans were stunned by the unprecedented tragedy of 19 al Qaeda terrorists striking a devastating blow
at the center of the nation's commercial and military powers. Likewise, Israel and its citizens, despite the
collapse of the Oslo Agreements of 1993 and numerous acts of terrorism triggered by the second intifada
that began almost three years ago, are still "shocked" by each suicide attack at a time of intensive
diplomatic efforts to revive the moribund peace process through the now revoked cease-fire arrangements
(hudna). Why are the United States and Israel, as well as scores of other countries affected by the universal
nightmare of modern terrorism surprised by new terrorist "surprises"? There are many reasons, including
misunderstanding of the manifold specific factors that contribute to terrorism's expansion, such as lack of a
universal definition of terrorism, the religionization of politics, double standards of morality, weak
punishment of terrorists, and the exploitation of the media by terrorist propaganda and psychological
warfare. Unlike their historical counterparts, contemporary terrorists have introduced a new scale of violence
in terms of conventional and unconventional threats and impact. The internationalization and
brutalization of
current and future terrorism make it clear we have entered an Age of Super Terrorism (e.g. biological,
chemical, radiological, nuclear and cyber) with its serious implications concerning national, regional
and global security concerns. Two myths in particular must be debunked immediately if an
effective
counterterrorism "best practices" strategy can be developed (e.g., strengthening
international cooperation).
The first illusion is that terrorism can be greatly reduced, if not eliminated completely, provided the
root causes of conflicts -- political, social and economic -- are addressed. The conventional illusion is that
terrorism must be justified by oppressed people seeking to achieve their goals and consequently the
argument advanced by "freedom fighters" anywhere, "give me liberty and I will give you death," should be
tolerated if not glorified. This traditional rationalization of "sacred" violence often conceals that the real
purpose of terrorist groups is to gain political power through the barrel of the gun, in violation of
fundamental human rights of the noncombatant segment of societies. For instance, Palestinians religious
movements (e.g., Hamas, Islamic Jihad) an secular entities (such as Fatah's Tanzim and Aqsa Martyr
Brigades)) wish not only to resolve national grievances (such as Jewish settlements, right of return,
Jerusalem) but primarily to destroy the Jewish state. Similarly, Osama bin Laden's international network not
only opposes the presence of American military in the Arabian Peninsula and Iraq, but its stated objective is
to "unite all Muslims and establish a government that follows the rule of the Caliphs." The second myth is that
strong action against terrorist infrastructure (leaders, recruitment, funding, propaganda, training, weapons, operational command an
control) will only increase terrorism. The argument here is that lawenforcement efforts and military retaliation
inevitably will fuel more brutal acts of violent revenge. Clearly,
if this perception continues to prevail, particularly in democratic societies, there is the danger it will paralyze
governments and thereby encourage further terrorist attacks. In sum, past experience provides useful
lessons for a realistic future strategy. The prudent application of force has been demonstrated to be an
effective tool for short- and long-term deterrence of terrorism. For example, Israel's targeted killing of
Mohammed Sider, the Hebron commander of the Islamic Jihad, defused a "ticking bomb." The assassination
of Ismail Abu Shanab -- a top Hamas leader in the Gaza Strip who was directly responsible for several suicide
bombings including the latest bus attack in Jerusalem -- disrupted potential terrorist operations. Similarly,
the U.S. military operation in Iraq eliminated Saddam Hussein's regime as a state sponsor of terror. Thus, it
behooves those countries victimized by terrorism to understand a cardinal message communicated by
Winston Churchill to the House of Commons on May 13, 1940: "Victory at all costs, victory in spite of
terror, victory however long and hard the road may be: For without victory, there is no survival."
WTO Bad: World Peace

Continuance of the WTO leads to nuclear proliferation world wide and peace will
inevitably collapse
Staples , The WTO and the Global War System, Northwestern Disarmament Coalition Proceedings ‘99
Stephen, “International Network on Disarmament and Globilization” November 28th 1999
http://www.ratical.org/coglobalize/WTOandGWSfp.html Accessed: 7/7/08
Clearly, as citizens who support peace and social justice, we have to confront the corporate agenda of the
WTO. The stakes are enormous. If the WTO is allowed to continue, military spending will rise
worldwide, as it already has in the U.S., Canada, and other industrialized countries. There will be
greater nuclear proliferation as countries try to bomb their way into the world's power elite, as India
has done. There will be greater economic strife, as there has been in Asia. And we will lose even the
limited ability that we have now as citizens to promote peace.
WTO Bad: Human Rights 1/2
WTO is an epic fail on human rights

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)
WTO rules put the "rights" of corporations to profit over human and labor rights. The WTO
encourages a 'race to the bottom' in wages by pitting workers against each other rather than
promoting internationally recognized labor standards. The WTO has ruled that it is illegal for a
government to ban a product based on the way it is produced, such as with child labor. It has also ruled
that governments cannot take into account "non commercial values" such as human rights, or the
behavior of companies that do business with vicious dictatorships such as Burma when making
purchasing decisions.
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 interests 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, environmental 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 countries 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 policies protect big Corporation over peoples lives

The WTO's fierce defense of 'Trade Related Intellectual Property' rights (TRIPs)—patents, copyrights and
trademarks—comes at the expense of health and human lives. The WTO has protected for pharmaceutical
companies' 'right to profit' against governments seeking to protect their people's health by providing
lifesaving medicines in countries in areas like sub-saharan Africa, where thousands die every day from
HIV/AIDS. Developing countries won an important victory in 2001 when they affirmed the right to produce
generic drugs (or import them if they lacked production capacity), so that they could provide essential
lifesaving medicines to their populations less expensively. Unfortunately, in September 2003, many new
conditions were agreed to that will make it more difficult for countries to produce those drugs. Once
again, the WTO demonstrates that it favors corporate profit over saving human lives.
WTO Bad: Human Rights 2/2
WTO is undemocratic
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?
WTO Bad: Environment
The WTO is deregulating environmental policies

The WTO is being used by corporations to dismantle hard-won local and national environmental
protections, which are attacked as "barriers to trade." The very first WTO panel ruled that a provision
of the US Clean Air Act, requiring both domestic and foreign producers alike to produce cleaner
gasoline, was illegal. The WTO declared illegal a provision of the Endangered Species Act that requires
shrimp sold in the US to be caught with an inexpensive device allowing endangered sea turtles to
escape. The WTO is attempting to deregulate industries including logging, fishing, water utilities, and
energy distribution, which will lead to further exploitation of these natural resources.
WTO Bad: Famine
The WTO causes global famine

Baker, 2008
(Marcia Merry, Executive Intelligence Review, “To Defeat Famine: Kill the WTO,” April 25th,
http://www.larouchepub.com/other/2008/3517kill_wto.html, Accessed 7/15/08)
The World Trade Organization—the agency and the thinking behind it—must be killed. We are at the
point of famine today, because only 13 years ago, in January 1995, the WTO was allowed to come into
existence, resulting from ten years of UN GATT talks (General Agreement on Tariffs and Trade), 1984-94,
on "reforming" world agriculture for free trade. This culminated a process of drastic takedown of world
food production potential, from its prior build-up during the FDR period and after World War II. The
inevitable result was today's worldwide food crisis. The WTO was evil from the start. Nations were
bullied and threatened into going along with it. Tolerating it today is committing evil.
The following is an accounting of the crimes of the WTO-era, and of actions by agencies and figures leading
up to it. What is evident, is that the conditions for the vulnerability of millions of people to hunger and
now famine, were masterminded by networks with the intent to subvert nations and cause
depopulation. The capstone of the whole downgrading process was the biofuels craze, with Al Gore as
the top biofool, campaigning to "save the planet." Not his own man, Gore is just the pathetic puppet of the
neo-British Empire crowd, intent on subverting the system of nation-states itself, now that the financial
system is crumbling.
The WTO crime record can be best understood by looking back to the decades and locations where
policies to promote agro-industrial production once were in effect—from the 1930s anti-Depression farm
programs in the United States, to the food self-sufficiency programs of India, undertaken after its
independence from the British Empire in 1947. But then, over the decades, a series of policy downshifts
undercut the goal and the gains made, and decreased the volume of available food. Former high-
productivity farm regions were depopulated, from the High Plains of North America, to Europe, Australia,
and South America. Now one-seventh of the world's population lacks enough to eat. Against this backdrop,
the story of the WTO is one of crimes against humanity, and not an academic "economics" debate.
## Germany ##
Germany INC 1/2
A. The German economy is strong for now

BBC, 2008
( BBC Monitoring Europe- Political Supplied by BBC Worldwide Monitoring, “German economic growth slows
down,” 04-18-08, accessed 07-15-08)
Berlin - German economic growth will slow down considerably. The leading economic research
institutes, which will present their spring forecast in Berlin today, Thursday [ 17 April], expect German
economy to grow by just 1.8 per cent in the current year. This is clearly less than was predicted in the fall
forecast. Then, economic researchers had expected a growth of 2.2 per cent. With 1.4 per cent, German
economic growth is expected to be even weaker in 2009.
The main reason for this is the global financial crisis, the consequences of which still cannot be
predicted, it was stated. According to the researchers, the strong euro, high energy prices, and the high
inflation rate are the greatest risk factors. They are decisive for the economic development over the
coming year and beyond. However, unlike the United States, despite weaker growth, Germany is not
threatened by recession, the experts said.
Renewable exports are key to continued German growth

Theil, 2008 (Stefan, “No Country Is More 'Green By Design'; Not long ago Berlin resisted every push to clean
up its act. Now it's showing the way,” Newsweek International Edition, July 14)
Today, Germany may be the world's greenest country--and not just because salmon once again return to
spawn in the Rhine. A few nations score better overall on Yale and Columbia's Environmental Performance
Index (EPI), and Germany still lags in protecting habitat and in curbing gas-guzzling cars. But "among countries
making themselves green by design, Germany is No. 1," says Yale's Daniel Esty. Germany's massive
turnaround goes far beyond its environmental cleanup, its decoupling of energy use from economic
growth, and a surge in renewable power. More important, because of the weight of its economy and
international clout, Germany has been setting standards in policy and technology that are making the world
greener beyond its borders. As climate change and energy continue to drive the global economy, no country
now seems better poised to profit. The Germans' success at pushing a green agenda--first at home, then in
the European Union, and now worldwide--stems from the decision to work in tandem with industry from the
start, not against it. The country's first Environment minister--Klaus Tipfer, a conservative, no less--formulated a
blueprint in the 1980s that still holds today. Cleaner technology, Tipfer saw, was a way to modernize Germany's
metal-bending economy. "The idea was to create markets and businesses that profit from higher
environmental standards," says Andreas Kraemer, director of the Ecologic Institute, a think tank in Berlin.
"Another key was to plan long-term and give industry time to adapt." In time, steadily tightening standards on
pollution, waste and recycling would add up to a radical overhaul of industry and the economy. The effect was
massive pressure on German companies to use less energy and fewer resources. They became more
competitive as a result. The Germans also offer an object lesson in how to mainstream green policy. Tipfer's
current successor, Sigmar Gabriel, says that green policy is merely good industrial policy--aimed at putting
German companies at the heart of what he says is a "third industrial revolution," driven by green tech and clean
energy. Much of Germany's government is behind the program: the Research Ministry funds R&D, while the
Economics Ministry markets German green-tech exporters abroad. The Finance Ministry, through the state-
owned Reconstruction Credit Agency, finances German renewable-energy projects around the world, while the
Development Ministry introduces German green tech to China, India and Africa. "It's green policy, but it's also
driven by German economic interests," says Sascha Müller-Kraenner, director of the Nature Conservancy in
Berlin.
B. Link: Reduced global energy demand undermines German exports

Despite occasional overzealousness, however, Germany's great contribution is to show that environmental
progress and economic development need not be mutually exclusive. A bit of it, of course, is luck--the
country wouldn't be at this sweet spot today if energy and commodity prices had stayed low. But for
deciding early on that green is an opportunity, not a threat, Germany ranks first.
Germany INC 2/2
C. Impact:
German economic stability key to the globe

Gordeeva, 2008 (Tatyana, “Germany in the World Economy”,
http://www.germanculture.com.ua/library/facts/bl_germany_world_economy accessed , July 6, 2008)
Along with the United States and Japan, Germany has one of the world's biggest economies and most
dominant central banks. Of the three, Germany has the smallest and most vulnerable economy. Germany's
GDP of DM3 trillion is less than one-third of United States GDP and less than one-half of Japan's. Despite
Germany's relatively small size, it has consistently exerted a powerful influence on the world economy.
Since the end of World War II, the Federal Republic has played a key role in beginning, managing, or
ending each crisis and each phase experienced by the global monetary system.
Global economic collapse leads to nuclear war

Mead, Senior Fellow for U.S. Foreign Policy at the Council of Foreign Relations, 1992 (Walter Russell, World
Policy Institute, 1992)
Hundreds of millions –billions- of people have pinned their hope on the international market economy.
They and their leaders have embraced market principles –and have drawn closer to the west- because
they believe our systems can work for them. But what if it can’t? What if the global economy stagnates
– or even shrinks? In that case, we will face a new period of international conflict: South against
North, rich against poor. Russia, China, India – these countries with their billions of people and their
nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the
30’s.
Germany: Uniqueness 1/8
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.
German economy strong now

Monthly Report of the Deutsche Bundesbank, 2008
(Monthly Report of the Deutsche Bundesbank, Frankfurt am Main, Vol.60, Iss, 2; pg.40, Feb
2008,http://proquest.umi.com/pqdweb?did=1476992111&sid=3&Fmt=3&clientId=10553&RQT=309&VName=PQ
D, accessed 07-15-08)
Despite the slowdown in growth towards the end of 2007, which was by no means surprising, the future
outlook for the economy has not significantly deteriorated. Nevertheless, the risk factors that have
been making the economic outlook less certain than usual since the middle of last year continue to
exist. They have, in fact, become more significant in some respects, such as the scenario of a marked
cyclical slowdown in the United States. So far, however, the probable impact on the German economy
has remained very limited. Neither extensive revisions to non-financial corporations' budgets nor
major disruptions to households' confidence have been identifiable so far, for example. On the whole,
the German banking system has coped well with the turbulence of the past few months and has
maintained its stability and functional viability. This means that there is still the prospect that domestic
demand - which was adversely affected in the fourth quarter by general uncertainty and the strong
upward pressure on prices - will again be shaped more by the potential for recovery justified in terms
of the fundamentals.

Germany has recovered from its economic woes and is growing faster than ever
Reiermann, Staff Writer, 2007 (Christian, “German Economic Boom Creates Job Machine,” Spiegel Online
International, April 24, http://www.spiegel.de/international/business/0,1518,479149,00.html, accessed online 7-7-08)
Similar stories of vibrant success can be heard all over Germany, which is experiencing the kind of surge in
economic energy it hasn't seen in a long time. "German companies are simply squarely back on their feet
again," says Simon. His words could apply to just about any place in Germany. The recovery has developed
a strength that exceeds even the most daring expectations. From one end of the country to another,
companies large and small are beefing up their workforces. The hiring wave has made a clear dent in labor
market statistics. From March 2006 to March 2007, the number of people seeking employment declined
by close to 900,000, the strongest drop in postwar German history. And it's expected to continue. In
their spring report, released last Thursday, Germany's five leading economic research institutes predicted
that this year will bring 450,000 new jobs. Each day, 1,200 people find new jobs. And the German job
machine is expected to continue running at similarly high levels in 2008. The economic researchers also
predict that the economy will grow by 2.4 percent annually both this year and in 2008. The German
government plans to use these estimates in its own forecast, possibly taking a slightly more conservative
approach with a 1.7 percent forecast of economic growth, for 2007. In doing so Berlin will finally be
sounding an optimistic note. German growth is now approaching the level of economic growth in the
United States. The US economy has experienced between three and 4 percent annual growth in recent years,
but coupled with strong population growth; whereas population growth in Germany has stagnated. When the
two countries are compared using the more meaningful statistic of per capita growth, Germany and the
United States are growing at about the same rate.
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.
Germany’s subsidies are necessary to achieve competitiveness

Reguly, Globe’s European business correspondent and received the Hyman Solomon
Award for Excellence in Public Policy Journalism, 2008)
(Eric, ReportonBusiness, “Lessons from Germany’s Energy Renaissance,” 03-22-08,
http://www.theglobeandmail.com/servlet/story/LAC.20080322.RCOVER22/TPStory/Busi
ness/?pageRequested=all, access 07-06-08)
The subsidy for all forms of green energy, largely wind, with solar just starting to come on strong, costs the
government about €3.5-billion a year. The figure is expected to rise to €6-billion by 2015, and then will
slowly decline. No wonder the renewable energy industry is on fire in Germany.
But Germany's lunge into renewable energy is not without its critics. The solar industry in particular is
sucking up tens of billions of euros of grants and the question is whether taxpayers are getting value for
money. "The construction of a solar power plant is currently an almost riskless investment," the German
newspaper Berliner Zeitung said in November.
RWI Essen, a German economic research institute, published a paper earlier this month [March] called
"Germany's Solar Cell Promotion: Dark Clouds on the Horizon," which concluded the feed-in tariff has not
accomplished two of the government's most cherished goals - job creation and carbon reduction.
The subsidies for German solar energy probably rank as the highest in the world, thanks to the feed-in
tariff and other subsidies. RWI estimated the total subsidies per job created in the PV industry (based on the
subsidies and direct PV employment in 2006) at an astounding €205,000.
The tariff has created more demand than the German PV market can satisfy. In fact, most of the PV cells
have been imported, creating jobs abroad, not in Germany (though this may change as Germany attracts
manufacturers like Arise). RWI argues that billions of euros in subsidies have crowded out investment in
other, perhaps more promising, technologies and has probably made the PV industry less efficient that it
might otherwise be.
RWI said "the subsidized market penetration of non-competitive technologies in their early stages of
development diminishes the incentives to invest in the research and development necessary to achieve
competitiveness."
Finally, RWI says the feed-in tariff "does not imply any additional emission reductions beyond those already
achieved" by the EU emissions trading system. Its argument is that reductions under the cap-and-trade
system would be made whether or not the feed-in tariff existed.
The indictment is dismissed by the German Environment Ministry and by the PV industry. Mr. MacLellan
notes that every form of energy is subsidized to some degree and that the PV subsidies will help Arise's
German factory become profitable quickly, allowing the business to pay income taxes within two years.
"This is not charity," he said.
For his part, Mr. Machnig said the subsidies will help establish an export market - three-quarters of the
wind turbines made in Germany are exported, for example - as the number of technology manufacturers
expands. Furthermore, he said, renewable energy can only make Germany more competitive as the price
of fossil fuels rises. By 2020, renewables will provide 27 per cent of Germany's electricity production.
ARISE TECHNOLOGIES was launched in 1996 by Ian MacLellan, an amiable motormouth and Ryerson
electrical engineering graduate who calls himself a "solar geek with a spread sheet." Five years later, it
formed a partnership with the University of Toronto to develop a high-efficiency "thin-film-on-silicon-wafer"
solar cell.
Germany has become the world leader in renewable energy technology

Reguly, Globe’s European business correspondent and received the Hyman Solomon
Award for Excellence in Public Policy Journalism, 2008
(Eric, ReportonBusiness, “Lessons from Germany’s Energy Renaissance,” 03-22-08,
http://www.theglobeandmail.com/servlet/story/LAC.20080322.RCOVER22/TPStory/Business/?pageRequested=all,
access 07-06-08)
BERLIN -- Solar power will cost next to nothing. The fuel - the sun - is free. The price of the photovoltaic
cells used to covert sunlight into electricity will plummet.
Just give it time.
That's the theory of Ian MacLellan, the founder, vice-chairman and chief technology officer of Arise
Technologies, a Canadian photovoltaic (PV) cell company. But there's one small hitch: Arise doesn't have
time.
PV cells are still expensive. The solar energy market needs priming. Arise shareholders want profits. Mr.
MacLellan is 51 and would like to see his company make a buck before he's a senior citizen.
Enter Germany. The ever-so-generous Germans tracked him down and made him an offer he couldn't refuse -
free money, and lots of it - as long as Arise promised to build a PV factory on German soil. The German
love-fest even came with flowers for Mr. MacLellan's wife, Cathy.
Today, Arise's first factory is about a month away from completion in Bischofswerda, a pretty eastern
German town about 35 kilometres east of Dresden, in the state of Saxony. Covering two storeys and 100,000
square feet, the sleek grey metal building will have some 150 employees and produce enough PV cells each
year to power the equivalent of 60,000 houses. The value of the annual output, based on today's prices, will
be $375-million, or more than three times the company's current value on the Toronto Stock Exchange.
"I couldn't build this in Canada," Mr. MacLellan said. "Germany is a very high-quality environment for us. I
have nothing to worry about."
Arise couldn't build the plant in Canada because the level of financial incentives, engineering and
construction expertise and general awareness of the growth potential of renewable energy simply don't exist
there.
Those factors are abundant in Germany and it shows: The country has become the world leader in
renewable energy technology, manufacturing, sales and employment. The German map is dotted with
hundreds of renewable energy companies. They make PV cells, wind turbines, solar thermal panels,
biofuels and technology for biomass plants and geothermal energy.
Germany has created 240,000 jobs in the renewable energy industry, 140,000 of them since 2001, said
Matthias Machnig, State Secretary for the federal Ministry of the Environment. Renewable energy
technologies already make up 4 to 5 per cent of Germany's gross domestic product; Mr. Machnig expects the
figure to rise to 16 per cent by 2025.
Germany’s solar power industry is booming and helping its economy

Dumiak, Reporter of Fortune, 2007
(Michael, CNN, “Eastern Germany’s sunny future,” 05-22-07,
http://money.cnn.com/magazines/fortune/fortune_archive/2007/05/28/100049624/?postversion=2007052206, access
07-06-08)
(Fortune Magazine) -- The former East Germany, once one of the world's gloomiest places, has become
home to one of the world's brightest industries: solar power.
In late April ground was broken at a former Soviet air base near Leipzig for a $176 million, 40-megawatt
photo-voltaic power plant, four times the size of the largest existing solar plant in the world. The facility,
being built by Germany's Juwi International, is scheduled to begin production in late 2009. When it does, it
will add significant capacity to eastern Germany's mushrooming solar power industry.
Germany has invested $1.3 billion in photovoltaic research over the past decade, creating a $5 billion
industry that accounts for 52% of the world's installed solar panels. Of 45 producers in Germany, 33 are
start-ups in the former East Germany, employing 70% of the industry's 8,000 workers, with 2,000 new
jobs on the way. Even companies headquartered in the west have most of their production in the east.
The manufacturers have found a new foothold in an economically depressed place, which has an
educated labor force, 20% unemployment, and old industrial complexes with redevelopment potential.
Eastern Germany was the engineering center of the Eastern bloc, and top tech schools and research centers
pepper places where solar manufacturing is now booming - near the world-class opticians and lens cutters of
Jena and the old industrial centers of Dresden and Chemnitz.
Government incentives have helped. This year German consumers are expected to contribute $3.8 billion
in surcharges on their monthly power bills to support wind, solar, and other alternative energies. Perks
for building in the east include backing for loans, responsive planning officials, and - if certain thresholds are
met - a 30% payback of capital investment by the Berlin government.
"There's lots of space," says Anton Milner, CEO of Q-Cells, a German firm whose revenues rose 80% last
year, to $730 million. "The people are well trained. It's a good environment for us." Milner expects to break
ground in November on a plant for silicon wafers used in solar panels.
Conergy, based in Hamburg, is investing $340 million to make integrated wafers, cells, and modules on the
site of an old plant near the Polish border. One of the oldest concerns, Solarwatt Solar-Systeme of Dresden,
which started in 1993 with two employees and $200,000 in state subsidies, now has 400 employees and
annual sales of $140 million.
Companies are taking advantage of foreign demand. Q-Cells exported half its solar cells last year to
southern Europe, North America, and Asia, and expects to increase that to 60% this year. At Solar
World, a $695 million producer in Bonn whose revenues rose 45% last year, CEO Frank Asbeck says he has
booked $3.2 billion in contracts to Asian players.
China has set a goal of 15% renewable energy by 2010. With huge projects planned for its underdeveloped
interior, photovoltaic capacity will rise to two gigawatts within three years - twice the size of the current
German market - says Sal. Oppenheim energy analyst Hartmut Moers. "The question," he says, "is whether it
will be more on the production side or more on the installation side."
That means German wafers could travel halfway around the world to be packaged by Chinese companies into
finished cells and used there, or reexported back to Europe to meet rising demand. In either case, prospects
are bright for Germany's solar industry.
Germany has the world largest solar panel capacity market

(Spiegel Online, “Europe: No 1 in Sustainable Energy,” 09-04-08,
http://www.spiegel.de/international/business/0,1518,503701,00.html, access 07-06-08)
Expanding Capacity
Along with overseas markets, European companies have a steady supply of projects in their home countries
to help shore up their bottom lines. Currently more than 25,000 wind farms are operating throughout Europe,
and capacity is expected to double by 2015. According to the European Wind Energy Assn., the industry will
be worth $109 billion by 2020. Similarly, solar panel capacity in Germany, the world's largest market
with annual sales over $5 billion, is expected to reach 4,500 megawatts by 2010—the equivalent of
almost six coal-fired power stations. Government subsidies and beneficial electricity tariffs are also
making energy from marine and biomass technologies increasingly cost-effective.
The rapid increase in investment over recent years has made such advances possible. For as the public's
imagination has been caught by the fight against climate change, so too have European companies been won
over by the high rates of return offered by the renewable energy sector. No one would say firms are making
investment decisions simply to save the planet, but if that's a by-product of the growing investment in
alternative energy, so much the better.
Europe is ahead of the U.S. in renewable energy investment

Scott and Cassidy Flanagan, 2007
(Spiegel Online, “Europe: No 1 in Sustainable Energy,” 09-04-08,
Saving the planet may not seem like the quickest path to riches. Yet plenty of investors are betting that
sustainable energy will make them lots of money. Already the sector is fast becoming a multibillion-dollar
industry, giving companies the chance to boost their profit margins and help fight climate change at the same
time. Taking advantage of this investment revolution, a wave of European firms has pioneered alternative
energy technology to help make Europe the world leader in reducing carbon emissions.
The fight against climate change has definitely become big business. According to London-based research
firm New Carbon Finance, public and private investment in the global renewable-energy sector will top
$90 billion in 2007, a 27% increase over the year before. The U.N. Environment Program (UNEP) says
Europe remains the top spot for investment, receiving $27.1 billion in 2006, while the U.S. came in
second, with $22.5 billion. An estimated $27.9 billion was set aside last year for financing renewable energy
projects around the world, and $18 billion in 180 investment funds is now focused on sustainable energy.
EC Policy Spurs Growth
With so much money floating around, several public and privately held European firms have been quick to
pounce on these new opportunities, and the firms now dominate industries such as wind-turbine
manufacturing and solar-panel design. With annual sales totaling $737 million, German company Q-Cells
has recently finished building the world's largest solar farm in southern Spain, and Danish wind-turbine
maker Vestas, with $279 million profits in 2006, has outmaneuvered the likes of General Electric to become
the leading global wind-turbine provider. "The industry is growing both geographically and technologically,"
says Q-Cells spokesperson Stefan Dietrich. "You have to expand internationally because there are so many
new players coming into the market."
At present, wind and solar power remain the most commercially viable technologies, but other firms are
looking to cash in on the growing interest in the sector by developing new ways to produce renewable
electricity. One such company is Marine Current Turbines, based in southern England. It has created a
machine that harnesses tidal power to produce environmentally friendly energy, and the company expects its
first "tidal farm" to come on line by early 2008. According to MCT's technical director Peter Fraenkel, it's
now a lot easier to find funding for new technologies. "When we started it was very difficult, but now
governments and investors are throwing money at many different projects," he says.
Behind much of the growing interest in alternative energy is European Commission policy. The EC outlined
plans early this year to produce 20% of the EU's energy from renewable sources by 2020. Such regulatory
certainty has helped to reassure investors, who still face significant risks developing new types of energy
technology. According to New Carbon Finance's Chief Editor Angus McCrone, subsidies from European
governments have made the EU the No. 1 investment destination in the sector, although other countries,
particularly the U.S., are quickly catching up.
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."
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.
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.''
Germany: Link 1/4

Decreasing subsidies in Germany means any increase in US subsidies subsequently spurs
direct competition between the two countries
The Economist, 2008 (“German lessons; Renewable energy” April 5)
An ambitious cross-subsidy scheme has given rise to a new industry Q-CELLS, based in Wolfen, just north of
Leipzig, is the world's biggest maker of the photovoltaic cells used in solar panels. It overtook Sharp of Japan last
year and announced big jumps in sales (up 59%) and profits (up 69%) on March 27th. Germany, which is not
known for being sunny, seems an unusual place to find this industry leader. But the country leads the world in its
installed capacity of renewable energy sources (see chart), and is the third-biggest producer of solar panels,
after China and Japan. The environment ministry's latest report on the state of the industry, released on March 12th,
shows how quickly it is growing. Renewables now account for 6.7% of energy consumption, up from 5.5% in
2006 and 3.5% in 2003. The industry's turnover was euro24.6 billion ($32.9 billion) in 2007, up 10% on 2006 and
nearly four times the figure for 2000. The share of electricity generated from renewable sources reached 14.2%, a
big jump from 11.7% in 2006, owing in part to stronger-than-usual winds last year. This means Germany has already
met the European Union's national target that 12.5% of electricity should come from renewable sources. Andreas
Düser of Enercon, a wind-equipment maker in Lower Saxony, believes that renewable-energy equipment will
become a big part of the country's manufacturing industry, alongside cars and machine tools. Employment in the
renewables industry will increase from 250,000 in 2007 to around 710,000 in 2030, matching the jobs in
carmaking by that time, predicts Torsten Henzelmann of Roland Berger, a consultancy. Most of Germany's
electricity comes from coal-fired and nuclear plants. But the former are unpopular because of their relatively high
greenhouse-gas emissions, and the latter because of the fear of a catastrophic accident. So in 1991 Germany
adopted a renewable-energy law, now known as the EEG, which encourages investment by cross-subsidising
renewable electricity fed into the grid. The law is popular with those who support the rapid introduction of new
clean technology. Stefan Schurig of the World Future Council, a green think-tank in Hamburg, calls it "the best law
of its kind worldwide". The law says electricity produced from renewable sources must be purchased by utilities
according to a generous "feed-in tariff" that sets higher-than-market rates and fixes them for 20 years. Roof-mounted
photovoltaic systems installed in 2007, for example, can sell power at euro0.49 per kilowatt-hour, or about seven
times today's wholesale price, until 2027. The fixed rate allows investors to calculate returns and removes
uncertainty over financing. The utilities that buy power at these higher rates pass the extra costs back to their
customers in the form of higher electricity bills. This added an average of 1 euro cent per kilowatt-hour to the price
of electricity last year, increasing the typical household electricity bill by 5%, or euro3 a month. For the country as a
whole, the cost was euro7.7 billion in 2007, up 38% on the year before. Enthusiasts consider that a small price to
jump-start a new industry and start decarbonising the power supply. But the government is not so sure. It has
proposed a revision to the EEG, which calls for a shift away from solar and towards other forms of renewable
energy, and offshore wind in particular. As things stand, the feed-in tariff for solar goes down by 5% every year. But
new proposals call for a cut of 9.2% next year, and 7-8% thereafter. The problem is not just the expense of the
existing law. Cheerleaders for solar had hoped that the increased demand for panels would help manufacturers
reduce unit costs, and thus make solar more competitive in the long run. Instead, the rush into solar has led to a
shortage of the high-grade silicon used to make the cells, which has soared in price from $25 per kilogram in
2003 to around $400 today. Indeed, such is the demand for solar panels in Germany that it has kept prices high
globally. This is wonderful for manufacturers, but makes it more expensive to install solar capacity in sunnier
parts of the world, where it would generate more electricity. The EEG's generous rates for solar amounted to
"picking winners on a grand scale", says Dieter Helm, an expert on energy policy at the University of Oxford. A
euro in cross-subsidies spent on wind power, rather than solar, produces more generating capacity and a larger
reduction in carbon emissions. "Of course we want solar energy to pay for itself," says Anton Milner, the chief
executive of Q-Cells. But for some years it will not be competitive with conventional power sources, which are
also subsidised, he says, since the cost of carbon emissions is not properly priced. Fans of solar also note that
wind cannot expand for ever. Kurt Rohrig of ISET, a solar-research institute at the University of Kassel, predicts—
somewhat heroically—that wind power in Germany will reach saturation by 2038. "Then solar will take over," he
says. As the government tweaks the feed-in tariffs, manufacturers are also thinking ahead. Many expect silicon-
based cells to be overtaken by new "thin film" technology. Inside the 300-strong R&D department at Q-Cells, they
are working on both kinds. Ersol, a smaller company which is bent on mass-production, prefers to outsource
research to institutions in Erfurt, Konstanz and Hameln. Throughout Germany, around 160 institutions are doing
research on solar technology. In the long run, the hope is that Germany's clean-tech industry will be able to
survive without any subsidies, and will do its bit to preserve the country's status as an industrial titan.
Germany: Link 2/4
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.
US subsidies destroy Germany’s renewable energy economy – past actions prove

Macalister, Staff Writer, 2008 (Terry, Brussels trade war with US looms over biofuel, The Guardian, May 26)
Peter Mandelson, the European commissioner, has fired the first salvo in a potential transatlantic trade war
by agreeing to challenge the US over its biofuel subsidies, which are chasing British and continental firms out
of business. Confidential documents seen by the Guardian show that Mandelson and the European commission
have put their signatures to anti-dumping complaints lodged by the European Biodiesel Board. Washington will
be asked this week to answer allegations that subsidies amounting to 11p a litre on B99 exports from the US,
plus "splash-and-dash" operations being conducted through the US, represent unfair competition.
Industry figures who asked not to be named said they were "delighted" that their allegations that US biodiesel
was being dumped on the European market were being taken up by Brussels. "This is a huge step forward for
us," said a producer. "It opens the way for us to finally put to an end practices that are contrary to the rules of the
World Trade Organisation." The European Biodiesel Board lodged a formal complaint against the US with
Mandelson at the end of last month after a disastrous period for British, German and other biodiesel
producers
Low US competition is key to Germany’s economic success in renewable energies

Morris, author of "Energy switch: proven solutions for renewable future”, 2007 (Craig, “The Irony of U.S.
and UK Renewable Policies,” June 25, http://www.renewableenergyworld.com, accessed July 6, 2008)
Finally, is it not ironic that deregulation, which Californian environmentalists said would allow green power
producers to compete with central power plants, failed miserably in the U.S. but is part of the secret to the rise of
renewables on the European continent? Germany's Renewable Energy Act helped stimulate competition. Can
a country that does not have competition on its grid justifiably tell one that does that it is less market-oriented?
Germany has won the debate in practice, but the U.S. and the UK are sticking firmly to their disproved
economic theories, which state that German policy cannot bring down prices. "The German subsidy for
solar energy," the March 15, 2007 Economist article "What price carbon? recently stated, "has diverted the
world's solar cell production to sun-free Germany, thus raising the price in sunny countries where it might be
usefully employed." But the Economist is simply wrong about Germany raising prices. As Photon Consulting
pointed out in a study released in April, solar energy is set to fall below the retail power rate in sunny areas
as early as 2010. So when solar becomes competitive, solar cell production capacity will be set up in
Germany, not the UK or the U.S.
Germany: Link 3/4
Lack of investment from the U.S. assures Germany maintain its edge
Ewing, 2008
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."
U.S. investment in renewable energy technology threaten European’s renewable energy

market
Spiegel Online, “Europe: No 1 in Sustainable Energy,” 09-04-08,
Global Markets for Sustainable Energy
As sustainable energy becomes more mainstream, Europe's tight hold on the sector could be
threatened. Simon Shaw, managing director of London-based EEA Fund Management, which has more than
$1.5 billion invested in renewable projects, believes North America will soon attract more investment
than Europe. "Regulatory regimes around the world have shifted towards alternative energy," Shaw
says. "Over the next 10 years, the majority of governments will support this technology."
Despite the growing threat from competitors, European companies remain out front for now and hope to
stay ahead by focusing new growth in international markets. Ocean Power Delivery, a Scottish company
that has designed a turbine powered by wave energy, has targeted North America as a key battleground.
Growth in the U.S., according to the company's Business Development Director Max Carcas, could propel
the wave-power sector to a $10 billion-per-year industry by 2012. Similarly, Germany's Q-Cells, which has
gone from employing 19 people in 2000 to a projected 5,000 in 2010, is trying to diversify into Asian
markets, which are expected to be worth $36.1 billion by 2010. For many companies, the rising awareness
—and growing competition—for alternative energy is good for business as emerging markets offer new
commercial opportunities. Investment in sustainable energy in India, for example, has jumped 160% over the
last three years, while cash for such projects in China has increased by a staggering 2033%, to $6.1 billion, in
the same period.
Germany: Link 4/4
High oil prices fuel green energy demand from Germany

Ewing, 2008
JOB GENERATOR
Now, as oil prices surge and global warming concerns fuel demand for green energy, Germany is seeing
the payoff. The sector--both energy suppliers and equipment manufacturers--employs more than 235,000
people and generates annual sales upwards of $33 billion, government figures show. Nearly 60 companies in
Germany specialize in wind systems. Enercon, based near the North Sea, is in a dead heat with General Electric's
wind-power unit and Spain's Gamesa for the No. 2 slot in the global market for wind generators. The leader,
Denmark's Vestas, produces key components such as windmill blades in Germany. Winergy, a unit of Siemens,
says half the world's windmills use its parts.
Despite Germany's reputation for gray skies, the energy law has also helped build up a solar industry. Nearly 100
companies manufacture solar cells or supply the sector, with more than half of those in the old East Germany,
which has earned the nickname Solar Valley. One of the stars, 9-year-old Q-Cells, is second only to Japan's
Sharp in producing solar cells. And last year, Phoenix-based First Solar opened a $170 million solar-module
plant near the border with Poland.
First Solar is just one of a slew of foreign outfits investing in renewables in Germany. GE makes turbines near
the Dutch border and is expanding production. Solar wafer maker EverQ, backed by Massachusetts' Evergreen
Solar, has opened two factories in eastern Germany since 2006 and now employs 800 people there. And India's
Suzlon last year acquired a majority stake in REpower, a Hamburg wind-equipment supplier.
Germany: Impact
German economic decline tanks the European economy

Gow, journalist for The Guardian, 2008
(David, “Resurgent German Economy Key to ECB's Fortunes in 2008”, January 3, 2008,
http://www.guardian.co.uk/business/2008/jan/02/2, July 10, 2008)
In the run-up to the council meeting on January 10, the split has intensified, with hawks underlining
inflationary risks - as has Trichet himself - and doves forecasting that inflation will return to the ECB's
target of "close to but below 2%." Independent analysts are themselves divided, with some arguing that, as
the slowdown in the US impacts on the EU economy, the bank will be forced to cut borrowing costs
later in the spring. Others believe that, with global growth holding up and the eurozone proving more
robust, the bank will do the opposite and raise rates.
A revived German economy will be the decisive factor. Consumer prices were up 2.8% annually in
December, but this week the DIW economic institute said there were no signs of a lift-off in inflation this
year (the 3% jump in VAT falls out of the index this month).
European instability risks nuclear war

Khalilzad 1995 (Zalmay, “Order and Disorder After the Cold War,” The Washington Quarterly, Spring '95, p.
Lexis)
With the shifting balance of power among Japan, China, Russia, and potential new regional powers such as
India, Indonesia, and a united Korea could come significant risks of preventive or proeruptive war, Similarly,
European competition for regional dominance could lead to major wars in Europe or East Asia. If the
United States stayed out of such a war -- an unlikely prospect -- Europe or East Asia could become dominated
by a hostile power. Such a development would threaten U.S. interests. A power that achieved such dominance
would seek to exclude the United States from the area and threaten its interests-economic and political --
in the region. Besides. with the domination of Europe or East Asia, such a power might seek global
hegemony and the United States would face another global Cold War and the risk of a world war even more
catastrophic than the last
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.
Germany: Impact: Turns Case 1/2
German renewable leadership is uniquely key to alternative cost competitiveness

From the start, the Germans pushed their European Union partners to adopt similar standards--not least to level
the playing field for German firms. For example, when in 1983 the government of the then Chancellor Helmut
Kohl forced power companies to phase out sulfur emissions from their coal-fired plants; the Germans pressed
Brussels to pass a similar EU-wide directive only one year later. Unlike the still-greener Scandinavians,
Germany is big enough to set the agenda for its neighbors, says Miranda Schreurs, an environmental-policy
expert at Berlin's Free University. Take the feed-in tariff, a scheme that forces power companies to buy up
renewable energy at marked-up rates from anyone who wants to generate it. The Danes invented it, but
Germany adopted it and almost overnight created the world's biggest market for wind and solar power.
Dozens of other countries from Brazil to Indonesia have since passed similar measures. Thanks to these feed-in
tariffs modeled around the world on the German example, the global market has expanded and prices are
coming down
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."
Germany’s leadership affects the world and acts as a role model

The ripple effects of Germany's leadership role are felt far and wide--and dispute the conventional wisdom
that higher environmental standards just send dirty production offshore. In 2007 China adopted the EU's
directives that prohibit hazardous substances and mandate recycling of household appliances and
consumer electronics. For China, says Schreurs, the idea was not only to clean up its own companies, notorious
for ignoring product safety, but also to ensure that Chinese products could be exported to the European Union's
490 million consumers (compared with America's 300 million). Since it's usually more efficient to
manufacture to a single standard, Asian companies often choose the stricter German or EU regulations.
Germany’s global modeling impact is significant – the EU proves

Not incidentally, Germany's pioneering role has given its firms a head start in developing the technology to
meet the environmental standards that are often copied later by others. When the EU adopted Germany's
sulfur-dioxide standards in the 1980s, companies like Siemens already had the cleanup technology ready to
install on the continent's coal-fired power plants. Today, German companies are leaders in photovoltaics,
wind turbines, waste management and recycling. According to a 2007 study by the Roland Berger consulting
group, German companies specializing in ecofriendly tech already have a turnover of €150 billion a year, with
growth averaging 8 percent a year. Green tech, the study says, will pass cars to become the country's biggest
industry by 2020 and account for 16 percent of German GDP by 2030. Study author Torsten Henzelmann
sees Germany on the verge of a "green economic miracle."
Germany: Impact: Turns Case 2/2
Germany is the renewable leader for EU countries

From the start, the Germans pushed their European Union partners to adopt similar standards--not least to
level the playing field for German firms. For example, when in 1983 the government of the then Chancellor
Helmut Kohl forced power companies to phase out sulfur emissions from their coal-fired plants; the
Germans pressed Brussels to pass a similar EU-wide directive only one year later. Unlike the still-greener
Scandinavians, Germany is big enough to set the agenda for its neighbors, says Miranda Schreurs, an
environmental-policy expert at Berlin's Free University. Take the feed-in tariff, a scheme that forces power
companies to buy up renewable energy at marked-up rates from anyone who wants to generate it.
Germany: Not Unique 1/5
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.
German Economy is on the decline now

International Herald Tribune, 2008 (“Manufacturing in Germany and Britain shows sharp drops in May,”
July 7, http://www.iht.com/articles/2008/07/07/business/econ.php, accessed online 7-7-08)
Manufacturing in Germany and Britain dropped sharply in May, adding to a run of indicators that point
to a sharp slowdown in the two countries, which have the largest economies in Europe. The figures, released
Monday, matched a pattern of economic weakness across Europe. Output figures for France and Italy, to be
released Thursday, are also expected to show declines. While Britain nears its first recession in more than a
decade, Germany started this year with its strongest expansion since 1996. The German economy grew 1.5
percent in the first three months of 2008, compared with the previous quarter. But recent economic data
have pointed to a slowdown. That was reinforced by the latest data from the German Economy Ministry,
which said output in May fell by a seasonally adjusted 2.4 percent from April. A Reuters poll had indicated
an increase of 0.4 percent, and analyst forecasts had ranged between a fall of 1.1 percent and an increase of
1.4 percent. Jennifer McKeown, European economist at Capital Economics, said the latest figure "clearly adds to
the evidence" that economic growth will slow sharply from the first Hassel, an analyst at BHF-Bank, agreed:
"The economy over all should have contracted in the second quarter. We expect a clear negative." In Britain,
industrial output in May had its sharpest drop in two and a half years, adding to fears that economic growth is
freezing up there, too. The British Office for National Statistics said industrial production in May fell 0.8 percent
from the previous month, well beyond analysts' expectations of a 0.1 percent decline. This left output 1.6 percent
lower than a year earlier, the biggest drop since December 2005.
German economy is doomed now

Wandel, 2005 “Wirtschaft im, German Economy Caught Between Hope and Fear,” Sep 18, accessed online
http://www.iwh-halle.de/e/publik/Presse/36-05.pdf, 7-7-08)
The German Economy is suffering from a handicap: Domestic demand is stubbornly weak. Although there
are increasingly signs of the stimuli from the strong external trade spilling over into domestic activity, they are
still not strong enough to result in a self-sustained economic expansion. GDP in 2005 will hence increase by a
mere 0.9% and employment will continue to be weak. A broader recovery will not take place until next year.
The above forecast depends on the assumptions taken for future fiscal policies. With the early elections being
scheduled for 18.09.2005 and the race far from being decided, it is not sensible at this point in time to make a
prediction of the new government’s fiscal focus and so we chose the status quo of economic policies as the basis
for our considerations. While the German economy will continue to depend on exports, imports will not rise
as strongly as in the past, since the ongoing weakness in domestic demand and the high oil prices will pose
an obstacle. This tendency will last all the way through to the end of 2006. Additionally, exports will experience
a push from the Football World Championship in summer 2006 in Germany. The only part of the domestic
demand that so far seems to have been profiting from the strong exports is investment in equipment and
software, which, supported by favourable financing conditions have been rising. In construction, the downward
trend has steepened again. Both residential and non-residential real estate continue to suffer from a high
degree of excess supply. Only public construction spending, with its long-term planning, points upwards.
Stagnating wages, falling transfers and an ongoing labour market weakness do not provide the conditions
for a recovery in private consumption expenditure. Additionally, the high energy prices have pushed
consumer prices upwards. The inflation rate according to the consumer price index rose to 1.9%, while the core
rate continues to be relatively low at 1%. Next year, as the labour market conditions improve, and inflation slows
down, consumer expenditure should expand more strongly. Although employment is rising since April 2005, the
number of jobs contributing to social insurance has not yet made the turn-around. In other words, most of the
new jobs are publicly subsidized and fall into the so-called “Ich-AG” and “Ein-Euro- Job” categories.
Unemployment, hence, declined, but it is uncertain whether these jobs will survive in the open market and
whether a crowding-out effect of employment contributing to social insurance does takes place. The public
budget will decline only slightly this year. Although tax revenue is rising, receipts for the social insurance system
have been declining, as contributing jobs continued to retreat. Outlays, especially for social insurances, will be
rising slightly. In 2006, the improved domestic economy and will lead to rising receipts. The deficit will be 3%
of the nominal GDP after 3.6% this year.
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.
Current US subsidies undermine competition with Europe

Business Wire, 2008
(January 14, “Ambassador Bruton: EU Disappointed at U.S. Failure to End Anti-Competitive
Biodiesel Export Subsidies”, Business Wire,
http://findarticles.com/p/articles/mi_m0EIN/is_2008_Jan_14/ai_n24229646, July 12, 2008)
Ambassador John Bruton, Head of the EU Commission Delegation to the United States, expressed
disappointment today at the failure of efforts to repeal anti-competitive U.S. biodiesel blending
subsidies, which threaten the European biodiesel industry and leave U.S. taxpayers effectively
subsidizing European motorists.
Ambassador Bruton said, "The European biodiesel industry is being threatened by a flood of subsidized
U.S. biodiesel. It is estimated that around 1 million tons of biodiesel entered the EU from the U.S. in 2007,
roughly 15-20% of the EU biodiesel market and a tenfold increase over 2006. American tax credits allow
U.S. producers and others--who are eligible for European support as well--to unfairly undercut their
competitors in the EU.
"We're all for biodiesel in Europe. It's an important if small part of our energy mix, one that helps in the fight
against global warming. That's why it's so important that the European biodiesel industry not be
undermined by subsidized imports from the U.S. and other countries. Global trade in biodiesel is to be
expected and is a good thing, but that trade must be fair, not distorted by subsidies."
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.
U.S. biofuel subsidies threaten to put European producers out of business

Kanter, New York Times Media Group, 2008
(James, International Herald Tribune, “EU protests U.S. aid for biodiesel,” pg. 1406-13-08, accessed 07-12-08)
Picking a new trade fight with the United States, the European Union on Thursday accused U.S.
producers of biodiesel of benefiting from subsidies that threaten to put European producers out of
business.
Biofuels are bitterly contested because of allegations that they raise food prices and do little to fight
global warming.
But they are also a big business, with sales of about 8 billion, or $12.3 billion, annually in Europe. EU
trade officials say European producers are at risk because of a tax credit that is granted to American
exporters.
The commission said it would begin a formal anti-dumping investigation on Friday that could lead to
the imposition of punitive tariffs.
The commission ''will leave no stone unturned in this investigation and will act in accordance with its
findings,'' said Peter Power, a spokesman for Peter Mandelson, the EU trade commissioner.
The EU said the suspect subsidies consisted of federal excise and income tax credits along with a
federal program of grants for increases in production.
The EU said it also was concerned by various subsidies from state governments. Initial findings are
expected by mid-March.
Europe makes large amounts of biodiesel from plant oils like canola and sunflowers. But the Continent,
where diesel-powered cars and trucks are widespread, is also a net importer of diesel, including biodiesel
made from crops like soy in the United States.
To be sure, both the EU and the United States generously subsidize their biodiesel industries.
But European producers complain that U.S. producers benefit twice - from subsidies by the U.S.
government to produce the biodiesel, and then again from subsidies granted by individual European
governments when it sold in Europe.
''The result is that American producers are selling at a lower price than we can buy raw materials,'' said
Raffaello Garofalo, the secretary general of the European Biodiesel Board, whose complaint to Mandelson in
April led to the investigation. ''It's as if they are selling bread cheaper than we can buy flour.''
According to the EU, imports of biodiesel from the United States have increased to about a million tons
in 2007 from 7,000 tons in 2005.
A spokeswoman for the National Biodiesel Board, which represents the biodiesel industry in the United
States, declined to comment.
The commission said its investigation was not linked with broader EU policies in the area of biofuels. Even
so, those policies are a potential boon for biodiesel producers.
Under current proposals, the EU would dramatically raise the amount of biofuels blended into diesel and
gasoline as part of the bloc's efforts to fight climate change and bolster energy security.
Those ambitions have prompted a separate battle over the environmental credentials of biofuels, which are
among the most controversial forms of renewable energy because many take up farmland that otherwise
would be used to grow food at a time when food prices have shot up.
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.
Germany: No Link
Turn: Kyoto undermines Europe’s competitiveness – obliterating its economy by pushing

out investments
James G. Neuger And Matthew Newman, Bloomberg News, 2007 (“Eu vows to cut emissions 20%: 2020
deadline,” National Post, March 10)
European Union leaders set tighter targets for cutting greenhouse gases and curbing the use of fossil
fuels yesterday, challenging the world to follow their lead in fighting climate change while spurring
industry concerns that extra costs and regulations will undermine Europe's competitiveness. Pledging
to take the lead in fighting climate change, the EU agreed to reduce greenhouse emissions by 20% by 2020,
and offered to go to 30% if major nations such as the United States, Russia, China and India follow suit.
Leaders also set goals for energy efficiency and the use of such renewable sources as wind and solar
power. EU leaders rejected warnings from business groups that tougher climate regulations would push
jobs and investment out of Europe, shackling an economy that has lagged behind the United States for
most of the past decade. Europe is opening "the door into a whole new dimension of European co-operation
in the area of energy and combatting climate change," German Chancellor Angela Merkel told reporters
today after chairing an EU summit in Brussels.
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
Kyoto makes it impossible for the EU to compete globally

James Kanter, The New York Times Media Group, 2007 (James “As EU goes greener, industry fears cost,” The
International Herald Tribune, January 8)
To retain leadership in the battle to curb climate change, the European Union believes it must show the rest of
the world how to stop a predicted ecological catastrophe, while maintaining a healthy environment for
business. But that lofty goal the promise of green growth looks somewhat different from the factory floor,
according to Michel Wurth, president of Arcelor Mittal France. the world's largest steel company with 135,000
workers in Europe, is among several companies that are sending out distress signals two years after the
EU began capping carbon dioxide emissions from 10,000 factories and power plants. Tougher EU policies
to cap emissions ''could threaten two of our plants'' because they would significantly raise costs, Wurth
said during a recent interview. Instead of battling pollution, he argued, the measures were encouraging ''less
production in Europe and more imports from places with fewer environmental regulations'' a result that Wurth
deemed ''absolutely ridiculous.'' Industrialists like Wurth are not the only ones questioning why they should shoulder the cost of creating a
low-carbon economy at a time when most of the rest of the world pollutes with far fewer constraints. As the EU introduces a far-reaching
energy plan Wednesday that will spread the burden of combating global warming even more widely, a fierce debate is unfolding about
whether industry and the European economy can afford higher commitments to pollution-reduction targets, and whether Europe should make
unilateral commitments, while large polluters from the United States to China are taking smaller strides. ''We need to demonstrate
environmental leadership, but there is no point in doing so if we have no followers especially if this comes
at significant cost to the EU economy,'' Gunter Verheugen, the EU industry commissioner, wrote to Jose
Manuel Barroso, the president of the European Commission, in November. ''Our growth and jobs priority
must not be endangered,'' Verheugen said. For now, the EU is standing firm.
Germany: Link Turn: Oil Prices 1/2
High oil prices cause the Germany economy to decline

Bartha, Thomas, and Hannon, 2008
(Emese, Andrea, and Paul, Globe and Mail (Canada), “Germany’s export slowdown set to ripple across euro zone,”
Report on business: The Wall Street Journal; economy; pg. B8, 07-10-08, accessed 07-15-08)
Europe's German export engine is sputtering, joining rising prices and consumer gloom as a drag on
euro zone growth.
Germany's big export flows have been a driving force among the 15 countries that use the euro. But
those flows have been sapped by slowing demand for goods around the world and the very strength of
that currency. German exporters logged a fall in foreign sales in May for the third time in the past five
months, the German statistics office reported yesterday.
German exports fell 3.2 per cent in May to (EURO)82.6-billion ($129.31-billion U.S.) from (EURO)85.3-
billion in April, while its seasonally adjusted imports edged up by 0.7 per cent to (EURO)68-billion from
(EURO)67.5-billion in the previous month. The official data show exports slowing against all of
Germany's trading partners, including those inside the euro zone.
"Today's numbers confirm that the German export sector is finally giving in," said Carsten Brzeski,
an economist at Global Economics ING Financial Markets. With domestic demand now taking the
additional pressure of rising energy and food costs, the slowdown in Germany's exports will be felt
throughout the euro zone, economists say.
UniCredit economist Andreas Rees said that while a recession in Germany is "very - repeat: very -
improbable," the latest data indicate that one has to get used to less growth and fewer new jobs in the next 12
to 18 months.
The trade figures came after news earlier this week showed that German industrial output suffered an
unexpected 2.4 per cent fall in May, the third month in a row.
France also reported falling export sales during May. France's foreign trade deficit widened to (EURO)4.74-
billion in May from a revised (EURO)3.74-billion in April, as exports dropped to (EURO)34.72-billion from
(EURO)35.31-billion in the previous month, the French customs office said yesterday. "With some 15 per
cent of French exports destined for Germany, slower growth in Germany will clearly knock France, the euro
area's second-largest economy," said Moody's Economy.com economist Katrin Robeck.
Exports accounted for 46.7 per cent of German gross domestic product last year, said UniCredit's Mr. Rees,
expecting the percentage to rise above 47 per cent in 2008.
With German growth rates now expected to be stagnant or worse for the next two quarters, analysts
are rewriting their GDP outlook for the euro zone as a whole.
The European Central Bank has acknowledged that the euro-zone economy will come in weaker than
expected in the second quarter.
The European Union's statistics agency Eurostat said yesterday that the euro zone economy had grown
slightly less rapidly in the first quarter than it had previously estimated. It calculated that the economy grew
0.7 per cent - not 0.8 per cent - from the fourth quarter of 2007, and 2.1 per cent - not 2.2 per cent - from the
first quarter of 2007.
The downward revision is unlikely to have a major effect on the European Central Bank's interest-rate
decisions. Even the lower figure was a strong performance, particularly given prices, the reduced
availability of credit, the euro's strength and slowing demand in some key export markets.
But more economists think things will get considerably worse in the second quarter. "There is still potential
for the ECB to be surprised to the downside by a negative GDP print in the second quarter in the euro zone as
well as in Germany," said Ken Wattret, an economist at BNP Paribas.
The euro zone economy will slow considerably in the coming quarters because of weak industrial production
and private consumption growth, three leading European economics research institutes said yesterday in a
joint report. They forecast the economy in the euro zone to have stagnated in the second quarter after 0.7-per-
cent quarterly growth during the first three months of the year. Real gross-domestic-product growth, adjusted
for seasonal effects, will then expand by 0.3 per cent in both the third and the fourth quarter. For 2008 as a
whole, they forecast euro-zone growth of 1.6 per cent.
"The contribution to growth stemming from domestic demand slacks off substantially, while that of net
exports is expected to turn out negative in the light of a gradual slowdown of world economic expansion,"
the Germany-based institute Ifo, the France-based institute Insee and the Italy-based institute Isea said in
their joint report.
Germany: Link Turn: Oil Prices 2/2
High oil prices undermine the German economy

Graham, 2008
(Dave, Reuters, “Germany warns oil prices threaten global economy,” 06-14-08,
http://www.reuters.com/article/GCA-Oil/idUSL1424704920080614, accessed 07-15-08)
"An excessively high oil price for too long could throw the whole global economy into turmoil," Glos
told newspaper Bild am Sonntag, repeating comments he made last weekend to Reuters. "This would also
have an impact on jobs in Germany," he added in comments due to be published in the paper on Sunday.
Oil prices in the United States reached a record of nearly $140 per barrel last week, and have stayed high
since.
Glos is due to hold talks on energy with Saudi officials during a visit to Jeddah next weekend.
At a meeting in Osaka, Japan, finance ministers from the Group of Eight (G8) nations said on Saturday that
soaring commodity prices could hit growth. But they shrank from offering a plan to calm markets or quell
protests over the cost of fuel and food.
U.S. Treasury Secretary Henry Paulson said costly oil could extend a U.S. slowdown, the International
Monetary Fund talked of prolonged global economic weakness and European Union Economic
Commissioner Joaquin Almunia warned of 1970s-style stagflation.
## Free Trade Good ##

Free Trade Good: War 1/3
Free trade interdependence reduces risk of nuclear war

Spicer ‘96
[Michael, The Challenge from the East and the Rebirth of the West, p. 121]
The choice facing the West today is much the same as that which faced the Soviet bloc after World War II:
between meeting head-on the challenge of world trade with the adjustments and the benefits that it will bring, or
of attempting to shut out markets that are growing and where a dynamic new pace is being set for innovative
production. The problem about the second approach is not simply that it won't hold: satellite technology alone
will ensure that he consumers will begin to demand those goods that the East is able to provide most cheaply.
More fundamentally, it will guarantee the emergence of a fragmented world in which natural fears will be fanned
and inflamed. A world divided into rigid trade blocs will be a deeply troubled and unstable place in which
suspicion and ultimately envy will possibly erupt into a major war. I do not say that the converse will necessarily
be true, that in a free trading world there will be an absence of all strife. Such a proposition would manifestly be
absurd. But to trade is to become interdependent, and that is a good step in the direction of world stability. With
nuclear weapons at two a penny, stability will be at a premium in the years ahead.
Protectionism escalates to war

Robert McGee, professor in the W. Paul Stillman School of Business at Seton Hall University, 1994, A
Trade Policy for Free Societies, p. 50 7-9-08)
Another reason for free trade is that it enhances international cooperation. Countries that trade with each other
are less likely to go to war than are countries that erect trade barriers to prevent foreign goods from crossing their
borders. If goods do not cross borders, armies will. Trading with our neighbors is friendly and neighborly.
Peaceful exchange between individuals enhances harmony. Erecting trade barriers, resorting to name calling and
“Buy American” campaigns, and other forms of economic nationalism are unfriendly and promote ill-will and
discord. Military conflicts often start as trade wars, then escalate.
Free trade promotes peace and reduces conflict

Boudreaux, Chairman of the economics department at George Mason University, 2006 (Donald J., The Christian
Science Monitor, “Want world peace? Support free trade”, November 20, 2006,
http://www.csmonitor.com/2006/1120/p09s02-coop.html, accessed on July 8, 2008)
Everyone knows that a key to the Democrats' big electoral win was their opposition to the Iraq war. But also,
as the Wall Street Journal reported recently, "Democrats' stances against free trade helped build the party's
success at the polls and could tip the balance on trade matters. The new dynamic could put a definitive end to
the already troubled effort to reach a global agreement to reduce tariffs and open markets...." Protectionists
(of whatever party) believe that consumers who buy goods and services from foreigners cause domestic
employment - and wages - to fall. Economists since before Adam Smith have shown that this belief is
mistaken, largely because foreigners sell things to us only because they either want to buy things from us or
invest in our economy. These activities employ workers here at home and raise their wages. Mountains of
empirical evidence show that protectionism is economically destructive. The facts also show that
protectionism is inconsistent with a desire for peace - a desire admirably expressed by many Democrats
during the recent campaigns. Back in 1748, Baron de Montesquieu observed that "Peace is the natural
effect of trade. Two nations who differ with each other become reciprocally dependent; for if one has
an interest in buying, the other has an interest in selling; and thus their union is founded on their
mutual necessities." If Mr. Montesquieu is correct that trade promotes peace, then protectionism - a retreat
from open trade - raises the chances of war. Plenty of empirical evidence confirms the wisdom of
Montesquieu's insight: Trade does indeed promote peace. During the past 30 years, Solomon Polachek, an
economist at the State University of New York at Binghamton, has researched the relationship between trade
and peace. In his most recent paper on the topic, he and co-author Carlos Seiglie of Rutgers University
review the massive amount of research on trade, war, and peace. They find that "the overwhelming evidence
indicates that trade reduces conflict." Likewise for foreign investment. The greater the amounts that
foreigners invest in the United States, or the more that Americans invest abroad, the lower is the likelihood of
war between America and those countries with which it has investment relationships. Professors Polachek
and Seiglie conclude that, "The policy implication of our finding is that further international cooperation
in reducing barriers to both trade and capital flows can promote a more peaceful world." Columbia
University political scientist Erik Gartzke reaches a similar but more general conclusion: Peace is fostered
by economic freedom. Economic freedom certainly includes, but is broader than, the freedom of
ordinary people to trade internationally. It includes also low and transparent rates of taxation, the easy
ability of entrepreneurs to start new businesses, the lightness of regulations on labor, product, and credit
markets, ready access to sound money, and other factors that encourage the allocation of resources by
markets rather than by government officials. Professor Gartzke ranks countries on an economic-freedom
index from 1 to 10, with 1 being very unfree and 10 being very free. He then examines military conflicts
from 1816 through 2000. His findings are powerful: Countries that rank lowest on an economic-freedom
index - with scores of 2 or less - are 14 times more likely to be involved in military conflicts than are
countries whose people enjoy significant economic freedom (that is, countries with scores of 8 or higher).
Free trade encourages peaceful negotiation over war

Jim Chen, Professor of Law at the University of Minnesota Law School, Fordham International Law
Journal, November / December, 2000, 24 Fordham Int'l L.J. 217
To be sure, a causal link between trade and peace eludes easy empirical verification. Nevertheless,
the Golden Arches hypothesis rests on a sound theoretical foundation. At the simplest level,
interaction across borders enhances cross-cultural understanding and reduces xenophobia. Trade's
social and economic effects compound over time. Groups with a stake in the peaceable maintenance
of open borders and open markets gain leverage over their parochial counterparts. Wealth decreases
the taste for war, just as wealth increases the taste for environmental amenities. Finally, trade
appears to be a one-way ratchet: once a country commits itself to the economic specialization
implicit in the theory of comparative advantage, reverting to autarky and closed markets becomes
prohibitively expensive. GATT and the WTO are not the sole heirs of the legacy of Bretton
Woods. Monetary stability and infrastructural reconstruction, the domains of the IMF and the World
Bank, have made no small contribution to peace. Hyperinflation wrecked the German middle class
during the 1920s and corroded the bourgeois virtue that ordinarily insulates civil society from
extremist politics. Insurance against a recurrence of that episode is chief among the benefits from
"international monetary cooperation, exchange stability, ... orderly exchange arrangements," and
"temporary financial assistance to countries" experiencing an adverse "balance of payments"
adjustment. At the core of this stabilizing mission are crisis-defusing "multibillion-dollar rescue
packages," cobbled together before "isolated economic woes in a few countries ... grow into a global
financial crisis." Although the extent to which the IMF has "fostered economic growth and high
levels of employment" is debatable, Weimar-style hyperinflation has in fact all but disappeared from
the developed world
Free Trade Good: Environment 1/3
Free trade leads to environmental protection

Boin, Director of International Policy Network’s Environment Programme, & Okonski,
Communications Director at International Policy Network, 2008
(Caroline & Kendra, “Protectionism harms consumers and environment”, The Boston Globe, February 3, 2008)
In January, European leaders suggested that, to sell their goods in Europe, companies from the U.S.,
China, India and other countries should be forced to purchase emissions permits in the EU's Emissions
Trading Scheme. Although the U.S. trade representative criticized this proposal, legislation being
considered in the U.S. Senate -- the Lieberman-Warner bill -- would have a similar effect, applying a
carbon tax to imports from countries that do not cap their emissions.
The idea behind such protectionism is to create a "level playing field" -- where European and
American producers are not disadvantaged by their self-imposed restrictions on greenhouse gas
emissions. But instead of leveling the playing field, this game would artificially make all players one-
legged and one-armed. The benefits of trade would be replaced by losses in consumer welfare and
environmental degradation.
But in reality, it is far more moral to support liberalization. Trade barriers of any kind, including "green"
subsidies, tariffs and quotas, harm both consumers and producers. They artificially increase costs,
leading to unnecessary waste of scarce natural and human resources. Consumers and producers spend
more to purchase the same goods and services, so have less to invest in new technologies or to save for
the future.
Although some claim that trade barriers would help the environment, they are actually
counterproductive. They favor the status quo by rewarding inefficient producers and thus delaying the
adoption of cleaner, resource-saving technologies.
Consider bananas. These could be grown in the cold climates of Finland, Canada, and Russia. But to do so
would be far more costly than growing them in warm places, and then exporting them to consumers around
the world. Which is why they are grown in places such as Costa Rica and the Ivory Coast. As a result
bananas are less expensive and resources are used more sustainably.
Poor countries would suffer disproportionately from green trade barriers -- with adverse effects on both
people and the environment. Protectionism will mean fewer products from poor countries being sold to
industrialized countries. So local companies will have less money to invest in new, cleaner technologies.
Instead, they will continue to use older, dirtier production methods and thus will use scarce resources less
sustainably. This effect would be exacerbated by reduced investment from multinational companies.
Moreover, less trade means less wealth, which translates into fewer resources available to invest in
environmental conservation.
It helps the environment

Taylor 2008, University of Calgery, ( May 25th Scott Werner Antweiler, and Brian R. Copeland. "Is Free Trade
Good for the Environment" American Economic Review 94.1 (2001): 877-908. Available at:
http://works.bepress.com/taylor/23)
We find that international trade creates relatively small changes in sulfur dioxide concentrations when it alters
the composition, and hence the pollution intensity, of national output. Combining this result with our estimates
of scale and technique effects yields a somewhat surprising conclusion: if trade liberalization raises GDP per
person by 1 percent, then pollution concentrations fall by about 1 percent. Free trade is good for the
environment.1 We obtain this conclusion by estimating a very simple model highlighting the interaction of factor
endowments and income differences in determining the pattern of trade. Our approach, while relatively
straightforward, is novel in four respects. First, by exploiting the panel structure of our data set, we are able to
distinguish empirically between the negative environmental consequences of scalar increases in economic
activity—the scale effect—and the positive environmental consequences of increases in income that call for
cleaner production methods— the technique effect. This distinction is important for many reasons.2 Grossman
and Krueger (1993) interpret their hump-shaped ”Kuznets curve” as reflecting the relative strength of scale
versus technique effects, but they do not provide separate estimates of their magnitude. Our estimates indicate
that a 1 percent increase in the scale of economic activity raises pollution concentrations by 0.25 to 0.5 percent
for an average country in our sample, but the accompanying increase in income drives concentrations down by
1.25–1.5 percent via a technique effect. Second, we devise a method for determining how trade-induced changes
in the composition of output affects pollution concentrations. Many empirical studies include some measure of
openness to capture the impact trade has in altering 1Free trade appears to lower sulfur dioxide concentrations
for an average country in our sample, but may of course worsen the environment through other channels. Our
evidence is specific to sulfur dioxide, however sulfur dioxide emissions are highly correlated with other airborne
emissions. 2For example, income transfers across countries raise national income but not output, whereas foreign
direct investment raises output more than national income. To evaluate the environmental consequences of either
we need separate estimates of technique and scale effects.
Free trade improves the environment

Benjamin, PERC senior associate and professor of economics at Clemson University, 2002 (Daniel K., Property
and Environment Research Center, “Is Free Trade Good for the Environment?”, March 2002,
http://www.perc.org/articles/article262.php, accessed July 8, 2008)
Rock-throwers at World Trade Organization meetings call themselves environmentalists. They protest that
international trade is environmentally destructive, because it induces the emergence of "pollution-havens"—
Third World nations that take on the dirty work of tanning leather, making paper, and the like. These nations
become polluted and, it is claimed, total environmental damage also increases. Many economists are
skeptical of the pollution-haven story, but the contention that trade harms the environment is difficult to
assess systematically. The links between trade and the environment are subtle and complicated, and simply
measuring such concepts in a convincing way is daunting. Recent research has made huge strides in cracking
this problem and provides us with a compelling conclusion: Freer international trade improves the
environment (Antweiler, Copeland, and Taylor 2001). Whether it is between people, states, or nations, trade
can have an impact on environmental quality through three channels. These are changes in (i) where goods
are produced, (ii) the scale of economic activity, and (iii) the production techniques used. Antweiler et al. are
able to distinguish the effects of each of these on environmental quality. Interestingly, changes in the location
of production—the pollution-haven hypothesis—turn out to be empirically unimportant. The fact that freer
trade induces increases in the scale of economic activity, on the other hand, has a modest adverse impact on
environmental quality. But the third effect—changes in production techniques—swamps the other forces,
and it is environmentally beneficial, not harmful. Overall, the authors estimate that for each one percent
that freer trade raises per capita income in a nation, the result is that pollution (as measured by sulfur
dioxide concentrations) falls by one percent. When trade expands, the composition of output from each nation changes
because trading partners can now exploit their sources of comparative advantage—doing more of what each does best and less of those
things at which each is not very good. Anti-trade protestors have argued that comparative advantage moves dirty production processes to
developing countries, polluting these nations and increasing overall environmental damage. What this claim misses is that a staggering
array of factors help determine the location of productive activity. Even for pollution-intensive goods, considerations other than
pollution-abatement costs—such as capital abundance, labor market cconditions, and transportation costs—are generally the determining
forces.
As free trade expands, cleaner techniques of production form

Benjamin, PERC senior associate and professor of economics at Clemson University, 2002 (Daniel K., Property
and Environment Research Center, “Is Free Trade Good for the Environment?”, March 2002,
http://www.perc.org/articles/article262.php, accessed July 8, 2008)
On balance, the authors find little impact on the environment due to trade-induced changes in the location of
production. The other effects of freer trade—increases in the scale of activity and changes in the techniques
of production—are more important. Simply increasing the scale of economic activity means more material
goods are produced, so more byproducts are formed, causing air and water pollution. This tends to reduce
environmental quality. The authors find this effect clearly, albeit modestly, present in the data: Each one
percent rise in economic activity induces about one-quarter of one percent rise in pollution concentrations
due to this force. Overall, however, Antweiler et al. find that this negative effect is overwhelmed as economic
growth, spurred by trade, takes place. When people get richer they demand more environmental
amenities. As free trade expands, each one percent increase in per capita incomes tends to drive
pollution concentrations down by 1.25 to 1.5 percent because of the movement to cleaner techniques of
production. The conclusions one can draw from this research are limited in two dimensions. First, sulfur
dioxide concentrations are the sole measure of pollution used in this paper, a fact driven simply by the need
to select some measure. Free trade might worsen other measures of pollution, but sulfur dioxide
concentrations are known to move closely with other airborne emissions. Hence, it seems unlikely that
alternative measures of pollution would yield much different conclusions. Second, the authors do not
investigate exactly what regulatory or institutional changes are driving the environmental improvement
caused by rising incomes. In principle, the rising demand for environmental quality might get translated into
environmental improvement through explicit government pollution abatement policy or through pollution-
reducing changes in private contractual arrangements. The authors do not attempt to disentangle the relative
roles of these two effects; they can, however, discern the combined effect. But the nature of these changes is
clearly important in the debate over the efficacy of free market environmentalism. If rising incomes bring
environmental improvement chiefly due to the growth of intrusive regulatory schemes, the
environmentally beneficial effects are likely to be less appealing to many readers of this column. Still, there
is little doubt about the quite conclusive finding of this research. In the words of the authors: "Free trade is
good for the environment." Perhaps this will make attendance at future international trade
conferences somewhat less hazardous—albeit less interesting—to all concerned.
Free Trade Good – Food Prices 1/2
Free trade key to food price stability:

Lamy 08,World Trade Organization Head, ( Pascal, June 6th http://www.scoop.co.nz/stories/WO0806/S00038.htm
July 6th 2008)
As food prices and climate change spread alarm in many circles, we asked Mr Lamy - previously European
Trade Commissioner and appointed head of the Geneva based WTO in 2005 - what role if any the WTO can
play. He said rich countries must be aware of the impact of agriculture subsidies on the third world, adding prices
are rising because the world needs a better fit between rising demand and supply. He said that trade acted as
"belt" between the two. He was in parliament on 29 May to brief MEPs on the trade and climate committees.
One of Mr Lamy's key responsibilities is to conclude the Doha Development round of trade talks which were
launched in 2001 and were due to finish in 2005. Here we asked him his opinion on a few issues that face the
world. How can the ongoing negotiations in the WTO and in particular on agriculture - affect rising food prices
and the ensuing global crisis? The food crisis has very different components. The key is poverty - something that
is not new, alas. The higher prices make it even more difficult. What the WTO may do is to be useful in getting a
better fit between demand - which is stronger than before, especially grain consumption - and supply, especially
the ability of some countries, notably developing countries, to increase production. The gap between the two is
trade. But it is obviously necessary that rich countries understand that the subsidies they pay damage production
system in some Third World countries. They must accept additional discipline. This has been evident for a long
time: this crisis puts it on the agenda at an important time in our negotiations. The problem of access to natural
resources is increasing international tensions (for example China in Africa, the problem of water in the Middle
East and so on). How can the WTO contribute to a more balanced sharing of resources that are increasingly
sparse? There are plenty of ways to do that. Moreover we are trying to do it - it's part of the objectives enshrined
in the Charter of the WTO, which dates from 1994: the opening of trade to encourage sustainable development.
The first way to do that is "a bit more trade rather than a bit less". If the Egyptians had to produce all the cereals
they eat, which today is very expensive, there wouldn't be a drop of water in the Nile! So, trade, from time to
time, is a way to use natural resources, where they are most readily available. In addition, there are lots of things
we can do with tariffs: encouraging environmentally friendly goods through customs duties, further opening the
environmental services market. There are plenty of Third World countries which now have the capacity to do
that. Finally, we can go with an agreement that one day perhaps, I hope, will return to post-Kyoto and issues of
climate change. These are not being negotiated at the WTO...But it is clear that the day there is an agreement that
will succeed Kyoto - and it will surely be broader and probably more demanding than Kyoto - we will have to
adjust. As it is, roughly, the same countries that negotiate the rules on climate change and trade rules, a priori that
should not be major difficulties. So an increase in trade does not necessarily mean increased pressure on natural
resources? In some cases this is true, but there are instances where it is exactly the opposite! Take the case of
"foodmiles" (the distance food travels from field to plate), for example, which explains that roses from Kenya
are not good for the environment because they are transported by air. It has been calculated - and in fact the
European Parliament has done this itself and understands that roses from Kenya are better in terms of climate
change then greenhouse roses that come from another EU country. So we must be wary of evidence and look at
all the calculations. There are cases where the price of energy is not at a good level from the viewpoint of climate
change, where trade has a bad impact on climate change. And there are plenty of other cases where trade has a
positive impact
Free Trade Good – Food Prices 2/2
Trade liberalization would boost food productivity and incomes,

which are key to solving malnutrition and hunger
Nash and Mitchell ‘05
[John Nash, Advisor for Commodities and Trade in the World Bank’s Rural Development Department, and Donald
Mitchell is Lead Economist in the Bank’s Development Prospects Group, "How Freer Trade Can Help Feed the Poor:
An Agenda for Easing Hunger Worldwide by reducing trade protectionism, Finance & Development: A Quarterly
Magazine of the IMF, March 2005, www.internationalmonetaryfund.org/external/pubs/ft/fandd/2005/03/pdf/nash.pdf
accessed: 7-7-07]
Because chronic food insecurity comes mainly from insufficient purchasing power of the
poor, the real question is how the poor can be provided with opportunities to earn sufficient
income so they can meet their consumption needs, regardless of whether they do so through food
produced at home or abroad. Here, trade liberalization can have a major impact, as it would open markets for
producers in developing countries not only to sell their products at higher prices, but also to buy better production
technology, which in turn would help boost their productivity and raise their incomes. But this requires strong
commitment from developing and industrialized countries tosweeping liberalization in the Doha trade
negotiations.A successful Doha Round could produce huge benefits for the developing world and lift millions out of
poverty (World Bank, 2003). However, in the Doha talks, discussions of food security continue to center on
domestic production, which is reflected in negotiating positions calling for more flexibility for developing countries
—or some subset such as net food importing countries—to be exempted from the general obligations, so they can
maintain high import barriers to food products under the rubric of “special products” or as a component of the
“development box.” The focus on domestic production may be a holdover from the past, when the global food
distribution system was less developed, food imports were primarily the responsibility of often inefficient state
enterprises, and poor macroeconomic policies created the specter of foreign exchange shortages at times when food
imports were most needed. But under current conditions, the strategy should aim at reducing poverty, not increasing
domestic food production. While a comprehensive strategy to fight hunger needs to have many components,
including nutritional education, health infrastructure, safety nets, and more, the main determinant of undernutrition
is income (see Chart 3). Whereas it is difficult to find an example of a country where large numbers of people were
lifted out of poverty but are still going hungry because of a lack of locally produced food, there are prominent cases
of countries that are food self-sufficient at a national level—even holding large surplus stocks—but where large
numbers of poor people continue to go hungry.
Free trade good- Global growth 1/5
Free trade fosters economic growth

Farrell, Economics editor for Business Week, 2008 (Chris, Businss Week, “Two Cheers for Free
Trade”, March 27, 2008,
http://www.businessweek.com/investor/content/mar2008/pi20080327_636230.htm?chan=top+news_top+news+inde
x_businessweek+exclusives, July 6, 2008)
Remember the "giant sucking sound"? That was 1992 Presidential candidate Ross Perot's colorful auditory
description of how multitudes of Americans would lose their jobs to low-wage competitors in Mexico.
Well, it's more than a decade and a half later, and Perot's bête noir, the Nafta agreement, is once again the
subject of heated debate in a campaign for the White House. Democratic Presidential candidates, Senators
Barack Obama (D-Ill.) and Hillary Clinton (D-N.Y.) have both criticized the agreement (BusinessWeek,
3/19/08). But the regional fears Nafta inspired in 1992 have gone global in 2008. In addition to Mexico, most
of the world's dynamic emerging markets, including China, India, and Brazil, have become strong players in
the global economic arena. Americans worry about competition from overseas companies and workers from
other lands emigrating to the U.S., especially with the economy faltering amid falling home prices, tottering
financial markets, and shaky consumer confidence. The case for freer trade and open markets is
overwhelming. Economic evidence and economic history alike support the view that freer trade over
time invigorates economic growth by encouraging the spread of new commercial ideas, new
technologies, and new ways of organizing everyday life. Consumers enjoy lower prices and greater
choice. Competition from overseas rivals encourages corporate efficiency and innovation.
The Politics of Trade To be sure, free trade is a powerful economic medicine that can have some unpleasant
side effects, and policymakers could do a better job of ameliorating attendant job losses and other economic
dislocations. But the problems associated with free trade are manageable compared to those caused by
closed economic borders. (Just ask Messrs. Smoot and Hawley.)
Free trade is good for the U.S. economy –

Miller, Director of the Center for International Trade and Economics at The Heritage
Foundation, 07 (Terry, The Heritage Foundation, “Free Trade: Media Should Include Facts with Opinion Polls”,
October 18, 2007, heritage.org, July 6, 2008)
A recent article in The Wall Street Journal reports that support for free trade is slipping among Republicans:
"By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in
opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new
president." It also says that "six in 10 Republicans in the poll agreed with a statement that free trade has been
bad for the U.S."[1] While such polling may be useful in stoking Washington's highly charged political
debate on free trade, news outlets have a responsibility to report the facts along with people's opinions. As a
matter of fact, free trade is good for the U.S. economy: It improves growth, helps more people than it
hurts, and produces benefits that flow to all segments of society. Why Free Trade Is Good The role of
free trade in shaping America as the world's dominant economic power is undeniable. Trade
liberalization promotes the efficient use of resources--shifting labor and capital from less competitive
industries to those with greater economic potential. Free trade bolsters investment, innovation,
productivity, long-term economic growth, and job creation. Free trade has also raised living standards
by providing access to a wider variety of goods at lower prices. In fact, free trade has contributed an
additional $10,000 per year of purchasing power to the typical American household of four.[2]
Free trade is key to helping US economy and helping other economy’s

Bush 07 , President of the United states, (George October 6th , Adressing the Greate Miami Chamber of
Commerce, http://www.commerce.gov/s/groups/public/@doc/@os/@opa/documents/content/prod01_004244.pdf
7/06/08)
Today, President Bush addressed the Greater Miami Chamber of Commerce and called on Congress to pass
pending free trade agreements with Peru, Colombia, Panama, and South Korea as quickly as possible. These
agreements will level the playing field for workers, farmers, and businesses here in America. The President's
remarks focus on how the three free trade agreements with Latin American countries will help lift their
people out of poverty, and will strengthen the forces of freedom and democracy in the Western hemisphere.
Free trade agreements are benefiting the U.S. economy. For example, in the four years since we signed
a free trade agreement with Chile, American exports to that country have more than doubled. And in just one
year since we began implementing a free trade agreement with Central American nations and the Dominican
Republic, American exports have grown by 13 percent.
Congress now has an opportunity to build on this success by passing new free trade agreements with
Peru, Colombia, and Panama. Taken together, these deals will expand American access to 75 million new
consumers, with a combined GDP of $245 billion from Peru, Colombia, and Panama. Members of Congress
should have confidence in the ability of America to compete in the world, so long as the playing field is level,
and they should show that confidence by approving these trade agreements with bipartisan votes.
These trade deals are also a historic opportunity to strengthen the forces of freedom and democracy
throughout the Americas. By pursuing these trade agreements, we can help our friends in the neighborhood
lift their people out of poverty, and help counter the false promises of populism promoted by some nations in
the hemisphere.
The President will continue to work closely with Congress to pass a landmark free trade agreement with South
Korea. This agreement alone is projected to add more than $10 billion to America's economy, and would
strengthen our relationship with a democratic ally in a critical part of the world. Also, at the regional level, we
are seeking broad trade agreements in the Americas and the Asia-Pacific. And at the global level, we are pushing
hard for a successful conclusion to the Doha Round of trade talks, which has the potential to lower trade barriers
across the world.
Trade leads to growth in developing nations

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]
Openness to international trade accelerates development: this is one of the most widely held
beliefs in the economics profession, one of the few things on which Nobel prize winners of the both the
left and the right agree. The more rapid growth may be a transition effect rather than a shift to a
different steady state growth rate, but clearly the transition takes a couple of decades or more, so that
it is reasonable to speak of trade openness accelerating growth, rather than merely leading to a sudden,
onetime adjustment in real income.
Free trade is not the cause of economic downfall

Griswold, director of the Center for Trade Policy Studies at the Cato Institute in Washington, 2008
(Daniel, World Trade Magazine, “Worried About a Recession? Don't Blame Free Trade”, June 3, 2008,
http://www.worldtrademag.com/Articles/Column/BNP_GUID_9-5-2006_A_10000000000000351953, accessed on
July 10, 2008)
Speculation is growing that the U.S. economy may have already slipped into recession. If the past is any
guide, politicians on the campaign trail will be tempted to blame trade and globalization for the passing pain
of the business cycle. But an analysis of previous recessions and expansions shows that international trade
and investment are not to blame for downturns in the economy and may, in fact, be moderating the
business cycle. In recent decades, as foreign trade and investment have been rising as a share of the U.S.
economy, recessions have actually become milder and less frequent. The softening of the business cycle
has become so striking that economists now refer to it as "The Great Moderation." The more benign trend
appears to date from the mid-1980s. The Great Moderation means that Americans are spending more of their
time earning a living in a growing economy and less in a contracting economy. Our economy has been in
recession a total of 16 months in the past 25 years, or 5.3 percent of the time. In comparison, between 1945
and 1983, the nation suffered through nine recessions totaling 96 months, or 21.1 percent of that time period.
America's recent experience of a more globalized and less volatile economy has not been unique in the
world. Other countries that have opened themselves to global markets have been less vulnerable to financial
and economic shocks. Countries that put all their economic eggs in the domestic basket lack the
diversification that a more globally integrated economy can fall back on to weather a slowdown. A country
that increases trade as a share of its gross domestic product by 10 percentage points is actually about
one-third less likely to suffer sudden economic slowdowns or other crises than if it were less open to
trade. As the authors of this study concluded: Some may find this counterintuitive: trade protectionism does
not "shield" countries from the volatility of world markets as proponents might hope. On the
contrary...economies that trade less with other countries are more prone to sudden stops and to currency
crises. Globalization is not the only possible cause behind the moderation of the business cycle. Improved
monetary policy, fewer external shocks (what some economists call "good luck"), and other structural
changes in the economy may have all played a role. For example, the decline in unionization and the
resulting increase in labor-market flexibility have allowed wages and employment patterns to adjust more
readily to changing market conditions, mitigating spikes in unemployment. Better inventory management
through just-in-time delivery has reduced the cyclical overhangs that can disrupt production. Combined with
those other factors, expanding trade and globalization have helped to moderate swings in national output by
blessing us with a more diversified and flexible economy. Exports can take up slack when domestic demand
sags, and imports can satisfy demand when domestic productive capacity is reaching its short-term limits.
Access to foreign capital markets can allow domestic producers and consumers alike to more easily borrow
to tide themselves over during difficult times. A weakening dollar has helped to boost exports and earnings
abroad, but the main driver of success overseas has been strong growth and lower trade barriers outside the
United States. American companies have been earning a larger and larger share of their profits overseas for
decades now. According to economist Ed Yardeni, the share of profits that U.S. companies earn abroad has
increased steadily from about 5 percent in the 1960s to about a quarter of all profits today. If the U.S.
economy does tip into recession this year, free trade and globalization will be among the likely
scapegoats. The pain of recession will be real for millions of American households, but raising barriers
to foreign trade and investment will provide no relief for most affected workers. In fact, reverting to
protectionism would only reduce the capacity of our economy to regain its footing and resume its long-term
pattern of growth.
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
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.
Free trade boosts productivity through opening the economy to heightened competition and
in turn receives higher rates of economic growth
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
Free trade good- Heg/ Democracy

Free trade is key to soft power, promoting US global security, democratization
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]
In the immediate aftermath of the terrorist attacks on New York and Washington, U.S. Trade
Representative Robert Zoellick characterized the administration’s trade agenda as an integral element
of the “counteroffensive” against America’s terrorist adversaries. “Trade is about more than economic
efficiency,” he wrote in a September 20, 2001, op-ed in the Washington Post. “It promotes the values at the
heart of this protracted struggle.”36 The Bush administration deserves praise for drawing the connection
between trade policy and combating terrorism—and then pursuing that connection with plans for FTAs with
Morocco, Bahrain, and other Muslim countries. And as the administration recognizes, trade policy’s role in
bolstering national security goes beyond initiatives with the Muslim world. In his provocative
Washington Post oped, Zoellick called for responding to the 9/11 attacks with a vigorous assertion of
American economic leadership across the board—in particular, through an aggressive policy of bilateral,
regional, and multilateral market opening. How does reducing trade barriers around the world make
America safer? First, by helping the global spread of markets and liberal democracy. Wherever it
exists and in whatever form, tyranny spawns war and conflict and terror— and, consequently, threats
to U.S. global interests and national security. Promoting promarket policies in other countries is one
small but effective way for the United States to minimize those threats by fostering conditions more
favorable to human freedom. Second, leading the world toward closer commercial ties can reduce
threats to American interests and security by calming fears and resentment of American power. A
nation as overwhelmingly dominant as ours will inevitably face some level of reactionary opposition—
opposition that has now intensified after the recent exertions of U.S. military might. Although some of
the backlash may be unavoidable, it is clearly true that, all things being equal, we would be better off with
fewer detractors around the world. Accordingly, whenever we can avoid giving gratuitous offense or causing
unintended harm, we would be wise to do so. Seen in this light, U.S. trade policy can serve as an olive
branch to the world. By opening our markets to the rest of the world— whether unilaterally or in concert
with other nations—we demonstrate that America’s interest lies, not in keeping other countries down,
but in encouraging them to rise and prosper.
Free trade good- Poverty 1/5
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
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:
Ánd 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,
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?
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
Trade liberalization boosts the income of poor people in developing countries

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]
Now we turn to the question of whether the usual strong association between growth and poverty reduction is
somehow modified by openness.
Openness and the poor There are strong reasons to suppose that trade liberalization will benefit the poor at least as
much as it benefits the average person.Trade liberalization tends to reduce monopoly rents and the value of
connections to bureaucratic and political power. In developing countries, it may be expected to increase the relative
wage of low-skilled workers, who are likely to be scarcer in the more developed world economy than at home.
Liberalization of agriculture may increase (relatively low) rural incomes. If, nonetheless, trade liberalization
worsens the income distribution enough, then it is possible that it is not, after all, good for poverty reduction, despite
its positive overall effect on growth. After examining the cross-country evidence and reviewing some of the vast
microeconomic literature on the effects of trade liberalization on income distribution, we find that there is no
systematic relationship between openness and the income of the poorest, beyond the positive effect of openness on
overall growth. The aggregate evidence shows that the income of the poorest tends to grow one-for-one with
average income. Of course, in some countries, the poor sometimes do better than average, and sometimes they do
worse. But, as Dollar and Kraay have shown, openness does not help explain which of these outcomes occurs. On
the question of whether the poor benefit more or less than others, no clear pattern emerges from the numerous
studies of individual liberalization episodes. This is not surprising, as any particular liberalization will change
relative prices and incentives throughout the economy in idiosyncratic ways
Trade key to poverty reduction- no warrants to the argument that trade exacerbates
poverty
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.
Trade reduces poverty- empirically

We have identified a group of developing countries that have had large cuts in tariffs and large increases in
actual trade volumes since 1980. Since China, India, and several other large countries are part of this group,
well over half of the population of the developing world lives in these globalizing economies. The post-1980
globalizers are different from the rest of the developing world in terms of the extent of tariff cutting (22 point
reduction compared to 10 points) and in terms of the increase in trade volume over the past 20 years (an
increase from 16% to 32% of GDP, versus a decline from 60% of GDP to 49% of GDP). While rich country
growth rates have slowed down over the past several decades, the growth rates of the globalizers have
shown exactly the opposite pattern, accelerating from the 1970s to the 1980s to the 1990s. The rest of
the developing world, on the other hand, has followed the same pattern as the rich countries: growth
decelerating from the 1970s to the 1980s to the 1990s. In the 1990s the globalizing developing countries
grew at 5.0% per capita; rich countries at 2.2% per capita; and nonglobalizing developing countries at only
1.4% per capita. Thus, the globalizers are catching up with rich countries while the non-globalizers fall
further and further behind. In Section 3 we then looked at how general these patterns are, through cross-
country regressions. We focused on within country variation and showed that changes in trade volumes have
a strong positive relationship to changes in growth rates. In the fourth section we introduced results from our
earlier paper, “Growth Is Good for the Poor.” There is no systematic relationship between changes in
trade volumes and changes in household income inequality. The increase in growth rates that
accompanies expanded trade therefore on average translates into proportionate increases in income of
the poor. Thus, absolute poverty in the globalizing developing economies has fallen sharply in the past
20 years. The evidence from individual cases and from cross-country analysis supports the view that
open trade regimes lead to faster growth and poverty reduction in poor countries.
A2: Trade bad- rich poor gap

Trade does not increase the rich-poor gap
We considered a variety of possible variables that might explain cross-country differences in the
extent to which growth accrues to those in the bottom quintile, with little success. One of the variables
we considered was trade volumes, where we found no evidence whatsoever of a systematic relationship
between changes in trade and changes in inequality. This relationship is shown in Figure 5: there is simply
no association between changes in trade to GDP and changes in the Gini measure of inequality, or
between changes in trade to GDP and changes in the income share of the poorest quintile. No doubt
trade liberalization has distributional consequences – that is, there are “winners” and “losers” in the
short run. However, our finding is that the losers do not come disproportionately from the poor. While
it is heartening to know that the losers do not come disproportionately from the poor, nevertheless it has to be
a concern that some poor households are hurt in the short run by trade liberalization. It is thus important
to complement open trade policies with effective social protection measures such as unemployment
insurance and food-for-work schemes. (Closed economies obviously need safety nets as well since
households are subject to shocks from business cycles, technological change, weather, and disease.) To
the extent that trade openness raises national income, it strengthens the fiscal ability of a society to
provide these safety nets.
Economic openness doesn’t disproportionally impact the poor

Our conclusion is that there simply is no good evidence that countries that trade more (or are more
integrated along other dimensions) on average have rising income inequality. No doubt there are
distributional conflicts over trade policy, and we do not want to minimize the importance of these. But, it is
not the case that the poor are systematically the losers from trade openness. Combining these results
with those of the previous section, we can perform the following simple thought-experiment: what would be
the effect of a simultaneous increase in trade volumes and stabilization from high inflation of the magnitude
observed among our globalizers, on average incomes in the poorest quintile? From the case studies and the
econometric evidence above, it seems reasonable to conclude that both of these contribute to higher
growth over horizons of a decade or so, and the results in Table 6 illustrates this.
Free trade good- Terrorism 1/4

Trade key to American national security/ preventing 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
Trade agreements are absolutely key to combating terrorism

Now, in the midst of a struggle against terrorism that will likely continue for many years, the national
security dimension of trade policy is once again plainly visible. It has become painfully clear that
Americans live in a dangerous world—and that the primary danger at present emanates from the
economic and political failures of the Muslim world. Those failures breed the despair on which violent
Islamist extremism feeds; no comprehensive campaign against terrorism can leave them unaddressed.
Promoting economic and political reform throughout the Muslim world has become an urgent priority
for U.S. foreign policy— and trade liberalization, while no panacea, is an important part of the
equation. The Bush administration should therefore be congratulated for opening a trade front in the
war on terrorism. With the proper commitment and follow-through, a major U.S. trade initiative in the
Muslim world can give real encouragement to desperately needed restructuring in that troubled region.
In particular, properly structured FTAs can promote fundamental reform in participating countries.
Their successes, in turn, can turn those countries into models for change throughout the region.
Lack of open markets is the root cause of Islamic extremism and tyranny
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
Free trade key to eradicating tyranny and terrorism in the Muslim world- the US has an urgent
interest to promote FTAs
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.
Free trade agreements prevent another 9/11 terrorist attack

Such protectionist games must be avoided this time. It is bad enough to put the parochial interests of
the U.S. textile industry ahead of the U.S. national interest in promoting economic development in poor
countries. But to do so in legislation that aims to reduce the likelihood of future 9/11s would be
unforgivable. Unilateral trade preferences, when structured properly, can be a real help to people in the
Muslim world. Nevertheless, they are no substitute for the determined pursuit of FTAs. As discussed above,
the primary obstacle to economic development in the Muslim world—the failure to foster market
competition through appropriate policies and institutions—is self-imposed. Removing U.S. barriers to
exports from the region will do nothing to address that fundamental problem. Indeed, without other tracks
of U.S. engagement with the region, unilateral trade preferences on their own could actually reduce
momentum for reform. A recent World Bank study of the U.S. Generalized System of Preferences (a
program that gives duty-free treatment to selected exports of underdeveloped countries) between 1976 and
2000 concluded that countries that lost their eligibility for GSP adopted freer trade policies than those
receiving GSP benefits.35
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
Free trade is a vital to addressing economic failures that breed extremism

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)
for U.S. foreign policy— and trade liberalization, while no panacea, is an important part of the equatio
Free Trade Good: Unemployment
Free trade creates jobs

U.S. Chamber Magazine, 2008
(U.S. Chamber Magazine, “Trade Creates Jobs”, July 2008, http://www.google.com/search?hl=en&client=firefox-
a&rls=org.mozilla%3Aen-US%3Aofficial&q=free+trade+creates+jobs&btnG=Search, access date: July 13, 2008)
Joseph Gentry, U.S. Chamber member, says that there is at least one thing Congress can do to help his
Houston-based energy and technology company remain competitive with its European counterparts--pass a
free trade agreement (FTA) with South Korea. So he came to Washington, D.C., during World Trade Week in
May to show his support for trade. "Trade is the only sensible way to maintain intercountry relationships
in the global economy," Gentry, technology director for GTC Technology Inc., wrote in his blog. "Anyone
who has traveled abroad or has done business internationally will easily understand that trade barriers
only hurt us and do not solve any problems." Gentry joined more than 300 Chamber members and other
concerned business leaders from across the nation to lobby their members of Congress and to meet with U.S.
Commerce Secretary Carlos Gutierrez. President Bush capped off World Trade Week with a rally on the
south lawn of the White House, using exports from Chamber members as a backdrop for a speech in which
he called on Congress to act on pending FTAs with Colombia, South Korea, and Panama. The Chamber
estimates that American businesses and workers have paid more than $1 billion in unnecessary tariffs
since the Colombia FTA was negotiated. According to Chamber President and CEO Tom Donohue, "Our
members are frustrated by Congress' inaction on these agreements. They recognize that trade creates quality
jobs in America, and it is unacceptable for Congress to continue down this path toward isolationism."
Free Trade Good: Women’s Rights
Free trade competition brings extension of women’s rights

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 Capitalism which won the Sir Antony Fisher International Memorial Award
by the Atlas Economic Research Foundation; "Poor Man's Hero: Controversial writer Johan Norberg
champions globalization as the best hope for the developing world," interview by Nick Gillespie in Reason
Magazine, December, http://www.reason.com/news/show/28968.html accessed: 7-7-08]
Globalization has also helped extend rights to women that had long been confined to men. These include being
able to go into business, get an education, inherit money, and so on. One reason for this is simple economics. In a
globalized, competitive economy, women are a potential resource. They are able to have new ideas, to produce,
and to work. If you discriminate against women – or anyone else -- you lose opportunities as a society or as an
employer. Take the discussion that's going on now in Saudi Arabia about whether women should be allowed to
drive, which they can't legally do now. While it's unlikely the situation there will change anytime soon, it's
progress just to have the discussion. People are saying it's extremely costly to hire drivers, often from other
countries, to drive women around. You can see how basic economics, basic capitalism, creates the incentive to
give women more rights. A second reason is that all the goods, ideas, and people that cross borders under
globalization allow people to see more alternatives, to see other ways of living. When women and other
oppressed groups in poor countries see how their counterparts in Western societies are treated, they begin to have
ideas about how they want to be treated. Globalization is a great influence because people everywhere get all
sorts of new ideas. They say, "Wow, things can be very different than I'm used to."
FTAs Bad 1/2
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.)
FTAs Bad 2/2
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
FTAs Good
FTAs are absolutely key to combating terrorism

for U.S. foreign policy— and trade liberalization, while no panacea, is an important part of the
equation. The Bush administration should therefore be congratulated for opening a trade front in the
war on terrorism. With the proper commitment and follow-through, a major U.S. trade initiative in the
Muslim world can give real encouragement to desperately needed restructuring in that troubled region.
In particular, properly structured FTAs can promote fundamental reform in participating countries.
Their successes, in turn, can turn those countries into models for change throughout the region.
## Free Trade Bad ##

Free Trade Bad: AT “Generic Free Trade 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.
Free Trade Bad: Environment 1/4
Free trade risks environmental extinction

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)
War because the indigenous people are thrown out of their resource zones and livelihoods. Forceful
change in life style, culture and eco-friendly ethos is reversed through this process. Land and forests turned
to be a commodity of consumption, with concentration on private and individual (corporate) capital; it is
not meant for the welfare of all. War because their right to land, water and forests are yet to be defined by
the nation state. Although there are sufficient facts to realise the symbiotic relationship of Adivasis and Dalits
with forest environment and the eco-system at large – they are systematically and strategically bypassed,
excluded and isolated. They are not recognised as the original inhabitants and owners of land. Many so-
called development projects resulted in mass displacement and migration creating an army of domestic
refugees. And let us not forget free trade is also considered to be a part of economic growth and development.
Hence the historical omission of the already betrayed and battered continues in higher degree and magnitude.
War because their skills and knowledge are patented under the newly coined phenomenon of IPRs. The
wealth of Indian natural zones and skills and knowledge of indigenous communities are immense. Once this
is transferred it could easily brought under the IPRs. War because everything is now in the market. But the
Dalits and Adivasis are nowhere in the market. Other production-based communities have a minimum right
to enter the market, but the indigenous people have no right to market. Is it not really silly that the inherited
ones are out of livelihood, profession, trade and even market? Rank of Dalits & Adivasis in Trade process is
nothing more than a big cipher. War because the exploitation of non-renewable resources is diametrically
opposite to the man-resource relationship. This at large disturbs eco-system and erupts major
ecological problems, which threatens the life of the mother earth to unpredictable magnitude. In other
words life on earth is and will be at stake if the present process continues. This is particularly related to
the question of mining. In fact the communities have no right to mining on their own. The mining and
mineral policy has contributed a lot to this process in tune with the principles of market and trade for the
MNCs. War because the jargons like ecological democracy and ecological equity won’t go hand in hand with
globalisation and market. Both are wholly opposite to each other. War because the corporate house needs
resources whereas people need their livelihood. It is a war between surplus vs. survival. Thus the
subsistent economy is transferred into market economy. War because in an age of free trade and market
the life values sustained through the community life and love are constantly diffusing and substituted
with competition.
Environmental disaster results

Venkat, Silicon Valley's high-tech industry, and writes about the social and environmental impacts of technology
and globalization, 2004 (Kumar, News Center, “Free Trade: Benefit or Peril for the Environment?”, January 8,
2004, http://www.commondreams.org/views04/0108-10.htm, accessed on July 8, 2008)
One of the most contentious issues surrounding globalization is the concern that free trade hurts the
environment, both locally and globally. The classic argument for free global trade is that it is efficient for countries to
specialize in producing goods where they have a comparative advantage, which they can then exchange for other goods. But skeptics
like ecological economist Herman Daly have questioned this on the grounds that the real costs of trade -- including depletion of natural
resources and pollution -- are hidden and routinely ignored. In the new book “Trade and the Environment: Theory and Evidence,”
economists Brian Copeland and Scott Taylor attempt to replace some of the rhetoric in this debate with systematically produced results.
Based on a study of sulfur dioxide concentrations in over 100 cities around the world from 1971 to 1996, they reach the surprising and
provocative conclusion that free trade can actually be good for the environment. Copeland and Taylor find no evidence for the “pollution
haven” hypothesis, which states that free trade will prompt polluting industries to move to poor countries where environmental
regulations are lax. Their results suggest that rich countries have a comparative advantage in capital-intensive polluting industries, so
these industries are likely to stay in rich countries even if environmental regulations are tighter. For these developed countries, the right
environmental policy can produce a net good for the environment. Pollution policy, in the form of regulation or taxes, can lead to cleaner
production methods by encouraging better technologies. The message to developing countries is that environmental problems can be
exacerbated if trade liberalization outpaces environmental policy -- as we will see shortly, therein lies one of the conflicts between trade
and the environment. The complexity of the subject becomes evident as the book leaves a host of questions unanswered. The authors
limit their focus to local pollution caused by production of goods, while ignoring other significant environmental impacts of trade. If a
car is manufactured in Japan and then shipped to the U.S., there would be some local pollution in
Japan due to the manufacturing process. Some natural resources -- both local and imported -- would
also be used up in manufacturing the car. There would be additional resource use and pollution from
transporting the car to the U.S., and even more from driving that car year after year. Pollution from
transportation and consumption of goods, as well as resource use throughout the life cycles of
products, are all potentially major avenues through which global trade can damage the environment.
When all these effects are combined with production-driven pollution, the final outcome could easily
reverse the optimistic result that trade benefits the environment. The argument that polluting industries
will stay in capital-rich developed countries also loses steam when capital itself is highly mobile. China, for
example, received $44 billion in direct foreign investment in 2001. Even if companies are investing in China
to take advantage of its cheap labor, an indirect consequence of concentrating an increasing part of the
world’s manufacturing in China will be heavy resource use and pollution locally. A more direct instance of
the “pollution haven” effect is the routine transfer of e-waste -- used computers and other electronic
appliances that contain highly toxic chemicals -- from the U.S. to countries like India, China and the
Philippines. Low-paid workers in these countries work under hazardous conditions to salvage valuable
materials from this fast-growing waste stream, while polluting the soil, air and water in the process. These
recent examples heighten the concern that developing countries, where the bulk of the world’s population
lives, may be unprepared for the environmental consequences of global trade. Studies of air quality show that
it deteriorates in the early stages of economic growth, and then starts improving when per-capita income
exceeds $5000 per year. If this holds for most kinds of pollution and resource depletion, then incomes will
have to increase by a factor of five to ten in large developing countries like China and India before there is
sufficient local demand for environmental protection. Assuming that free trade can eventually deliver this
income growth, a big unknown is whether it will result in income-induced policy changes before the cost of
cleaning up the environment becomes prohibitively high. Equally troublesome is the issue of trans-boundary
pollution such as greenhouse-gas emissions, where countries with widely different income levels will have to
come together with a unified policy response. Between 1973 and 2001, a period in which many domestic
economies were turned inside out by globalization, annual carbon-dioxide emissions from worldwide fuel
combustion increased by 50 percent. By 2030, these emissions are projected to be 60 percent higher than in
2001 if no new policies are adopted. Power generation and transportation -- two sectors crucial to trade --
will account for three-quarters of this increase. A great deal of uncertainty remains about the long-term
environmental impacts of globalization. But the evidence we have so far suggests that free trade
unconstrained by environmental protection could be a recipe for disaster.
Free trade is bad for the Ecology

Global Exchange,2003
(Spring, http://www.rso.cornell.edu/CUSLAR/newsletter/spring03/nafta.htm, accessed 7-5-08)
The GMO Threat As they struggle against NAFTA, Mexican corn farmers are facing another threat—
contamination of ancient corn species by strains of genetically modified (GM) corn. In late 2001 corn
with genetically modified material was discovered in a region of Oaxaca where no GM experiments
had ever taken place. Experts came to realize that the millions of tons of US corn dumped into Mexico
mostly likely caused the contamination. Though the corn was intended only for food use, some farmers
replanted the seeds. Now the contamination is spreading. Local species that over millennia had built up
immunities to local diseases and pests have been compromised. Farmers are outraged that their corn is
suddenly more vulnerable than ever before.
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 polices exacerbate environmental problems to a monstrous level

8, 2008)
Industrialisation, which made a colourful and dreamy entry, is turning out to be the worst form of human
development. The steady economic growth of industries with active support from the state machinery is
directly proportional to the unchecked exploitation of masses. Most of them belong to marginalized
communities such as Dalits, Adivasis, women, working class, etc. Though during the independence struggle
“land to the tillers” and “factory to the workers” prominently came on to the national agenda, nowhere in
India had we witnessed the later one being implemented in the post independence era. Resultant
displacement, migration, repercussion of workers, loss of land and livelihood, pilfering state revenue,
forest resources, etc. has outgrown to monstrous level. This has amplified particularly with WTO
taking the centre stage of all sorts of trade related agreements and transactions at the international
level. Trade is no longer buying and selling of goods and services but it encompasses issues like Intellectual
Property Rights. With this the global market has wide open for exploration and exploitation of resources
under the aegis of free trade. Industrialised nations found their tools to maintain supremacy on world trade.
Prophets of trade and commerce argue that free trade maximises world economic output. This is what is
considered to be progress. But what we have been witnessing with the Dalits and Adivasis in India is
diametrically opposite to these claims. Decline of people’s rights on Natural Resources: The symbiotic
relationship between the forest-dwelling communities, especially the Adivasis and the forest Eco-system is
an eternal truth. They had traditional system of preserving the forest and wild life. Many of the indigenous
communities worship the forest; give offerings to the forest-gods, forest-goddess and even the wild animals.
Their life cannot be segregated into watertight compartments such as social, economic, political, religious,
cultural, administrative, intellectual, spiritual, etc.
Free trade policies deteriorate the relationship between people and natural resources
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.
Free Trade Bad: Extended Deterrence
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.
Free Trade Bad: Food Insecurity 1/2
Free trade leads to food shortages

Hattingh, research and education officer at the International Labour Research and Information Group, 2008
(Shawn, Monthly Review, “Liberalizing Food Trade to Death”, June 5, 2008,
http://mrzine.monthlyreview.org/hattingh060508.html, accessed July 9, 2008)
Up until a few years ago, free trade had led to low food prices internationally. With the advent of free
trade, subsidized agricultural products from the US flooded into the countries of the South. Farmers
involved in producing staple foods in the South, such as maize, beans, and grains, were especially hard hit.
For example, maize farmers in the US have traditionally received massive subsidies, often to the tune of $10
billion a year, which allowed them to export their produce to countries in the South at exceptionally low
prices.12 Most small-scale farmers in the South, who no longer received subsidies under the SAPs, could not
compete with the price of this imported maize.13 The outcome was that millions of small-scale maize
farmers around the world have gone bankrupt. In Mexico alone, it has been estimated that as many as
5 million small-scale farmers and farm workers have been forced to leave their farms and move to the
urban areas due to cheap imports flooding in from the US.14 Bankruptcy has not only been limited to the
maize sector -- small-scale farmers across every sector have been destroyed by free trade. Hundreds of
millions of small-scale farmers and farm workers in the South have been driven from the land. In fact,
millions upon millions of hectares of farm land has been abandoned in the South. The result has been that
most countries in the South are no longer able to meet their own food needs; they have to import food
from the US and the EU -- which of course benefits multinational companies.
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.
Free Trade Bad: Food Insecurity 2/2
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.
Free Trade Bad: AT: Global growth
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.
Free Trade Bad: Poverty 1/2
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,
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.
Free trade only benefits the rich

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 rationale for all of these free trade and free market theories was that they would produce
accelerated economic growth because they gave corporations greatly expanded access to resources and
markets and freed them from pesky environmental laws and social standards. Free trade theorists
claimed that the “rising tide will lift all boats,” providing broad economic benefits to all levels of
society. The evidence so far clearly shows that it lifts only yachts. All recent research confirms that only
a small number of people at the top of the global corporate pyramid—CEOs of global corporations
and a small number in upper management —experience significant benefits from all the growth,
expansion, mergers, and consolidations created by globalization. The gaps between the wealthiest and
poorest people in society, and between management and workers, have never been so great as they are
today. This comes following a period of the most rapid acceleration of global economic activity in
history.
Free Trade Bad: Poverty 2/2
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,
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.
Free Trade Bad: Rural Economies 1/2
Free trade hurts farming in the US and Mexico.

Global Exchange,2003
(Spring, http://www.rso.cornell.edu/CUSLAR/newsletter/spring03/nafta.htm, accessed 7-5-08)
When the former leaders of Mexico, Canada and the United States gathered in Washington, DC in December
to mark the 10th anniversary of the signing of the North American Free Trade Agreement, the mood was all
back-slapping and smiles. But a few thousands miles away, in Mexico City, the atmosphere was much
different. Capping a month of raucous campesino protests that stretched from Chiapas to Chihuahua,
thousands of farmers stormed the Mexican capitol to demand changes in NAFTA’s agricultural rules. In a
dramatic illustration of the failures of the “free trade” model, NAFTA has lit a fire in the Mexican
countryside.
What should we make of our rural neighbors’ ire? A warning signal. US agricultural subsidies and
NAFTA rules are harming small farmers on both sides of the border. Unless these policies are changed,
we can expect sweeping farmer protests in Mexico that will shake the country to its core.
Mexican farmers are in dire straits, due in large part to NAFTA. Since 1994, US corn exports to Mexico have
increased eighteenfold as US producers dump massive quantities of cheap corn on the market. The drop in
corn prices caused by this dumping has crippled the 15 million Mexicans who rely on corn farming. Another
10 million farmers have been similarly devastated by the collapse in prices for coffee and sugar.
US taxpayers are directly funding the crisis in the Mexican countryside. US agribusiness giants like
Archer Daniels Midland and Cargill are able to dump corn on the Mexican market because of the massive
subsidies they receive from the US government. Such subsidies enable US farmers to produce corn and
wheat well below production costs—an advantage not enjoyed by Mexican farmers. While Mexico gives
about $720 per year to each farmer, the US spends $20,800 per farmer. Last year the US Congress approved a
$70 billion increase in farm subsidies over the next 10 years.
So US farmers are doing well, right? If only. The new farm supports will go overwhelmingly to the largest,
corporate-owned operations. By encouraging over-production, the subsidies end up dropping farm prices on
both sides of the border, to the dismay of family farmers everywhere. While agribusiness giants Conagra and
ADM have seen profit increases of 200 and 300 percent, respectively, since NAFTA went into effect, small
farmers in the US have been pushed into bankruptcy. Thirty-three thousand US farmers went out of
business since NAFTA—three times the pre-NAFTA rate.
To add insult to injury, ordinary consumers have not received any savings from the decrease in wholesale
prices. Between 1993 and 2000, prices for food eaten at home in the US increased 20 percent. Tortilla prices
in Mexico City have also risen.
Now the situation threatens to become worse. On January 1, NAFTA’s latest stage eliminated Mexican tariffs
on wheat, rice, potatoes, pork, apples and barley. Pitting hi-tech US agribusiness corporations against
small-scale Mexican farmers is no contest. Thanks to NAFTA, Mexico will soon be converted from a self-
sufficient country to a country that cannot feed itself.
What can we expect if action isn’t taken to reverse the collapse in rural communities? The anger and
the desperation will deepen. And the protests will grow larger.
Free Trade Bad: Rural Economies 2/2
FREE TRADE BAD IT UNDERMINES HUMAN RIGHTS AND CAUSES VIOLENCE IN

SOUTHERN AMERICA AND MAKES MILLIONS OF HISPANICS LOSE THEIR LAND
AND JOBS
Sweeney 05, is president of the 13-million member AFL-CIO, (John Jay, March 21st,
http://www.commondreams.org/views05/0321-31.htm 7/6/08)
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.
The US State Department, the International Labor Organization, and human rights groups have criticized labor laws
in Central America for violating basic international standards. Employers routinely exploit these legal weaknesses to
harass, intimidate, fire, and blacklist workers who try to organize unions.
But CAFTA requires only that governments enforce their current labor laws -- the same laws the US criticizes for
allowing the rampant abuse of workers' rights. Central American governments could even weaken those laws with
no consequences under CAFTA.
Already, in the region's free trade zones, young women labor long hours in hazardous conditions for poverty wages,
producing goods that earn a handsome profit when sold in the United States. Forty percent of Central America's
workers earn less than $2 a day, and CAFTA will not make those wages better.
CAFTA's big brother, NAFTA, offers evidence of how unbalanced trade deals fail workers in both rich and poor
countries. NAFTA has cost US workers close to 900,000 jobs and job opportunities. NAFTA was supposed to open
markets for American goods and services, creating high-paying jobs at home and prosperity abroad. But the opposite
has occurred. In 11 years under NAFTA, the US trade deficit with Canada and Mexico ballooned to 12 times its pre-
NAFTA size, reaching $111 billion in 2004.
Nor has NAFTA delivered the promised reductions in poverty in Mexico. Mexico's workers still struggle for basic
human rights, decent wages, and safe workplaces. NAFTA's failure to protect workers' rights has allowed employers
to continue thwarting independent union organizing in Mexico's export industries.
While exports and investment boomed, real wages fell and poverty rose in Mexico in the past 11 years, according to
the Carnegie Endowment. More than a million Mexican farmers lost their land to low-priced agriculture imports and
were forced to search for work in factories or as migrant laborers in the United States. Now investors in Mexico's
export assembly plants are moving to China, where labor costs are even lower
Free Trade Bad: AT “Terrorism” 1/2
Trade does not solve roots of Terrorism

AEA ‘01
[American Economic Alert, “When Free Traders Excuse Terrorism”, October 25,
http://www.americaneconomicalert.org/view_art.asp?Prod_ID=65 7/7/08]
These trade-liberalization-cures-poverty-and-terrorism arguments are puzzling in another way as well. They
suggest libertarian and moderate Democrat agreement that today's world trading order is fundamentally
unjust and, in particular, unfair to developing Countries like Afghanistan. It's tempting to dismiss these
arguments by observing that Taliban leaders haven't exactly been clamoring for access to U.S. markets. If
anything, they (and other fundamentalist Muslim leaders throughout the Mid East) reject western-style
consumerist economic development. More importantly, however, the globalization cheerleaders are
conveniently forgetting the triumphalist picture of the world economy they have worked so hard to create
since the Cold War's end. As endless studies from the Cato Institute, the Heritage Foundation, and the
Progressive Policy Institute have told us, today's version of globalization gives all countries the opportunity
to grow rich provided they drop most of their own trade barriers and choking domestic regulations. If third-
world socialist holdovers want to ignore the virtues of free markets, they have no one to blame for
their poverty but themselves. It's one thing to say that industrialized countries should open their markets
more to third world exports (although American trade statistics reveal few developing countries experiencing
any difficulty exporting to the United States). It's quite another thing to say, as the free traders have begun
suggesting in these writings, that global trade is still so unfair or unfree as to merit some blame for terrorism
and other forms of political extremism. Finally, the cheerleaders' equation of global poverty and terrorism is
just plain wrong factually. Not that global poverty levels are not shamefully high. And not that they don't
generate understandable anger and frustration. But a reality double-check is urgently needed here:
First, the vast majority of the world's poor are not politically active, much less actual supporters of Bin Laden-
style mass murder. Even the rioters in Pakistan are not crossing the Afghan border to sign up with Al Qaeda. And
most desperately poor, alienated people will continue to balk at flying airliners into skyscrapers, thus
guaranteeing that Bin Laden-style movements will always be numerically tiny. So the notion that free trade is
needed to deprive terrorists of oceans of recruits is just nonsense. Second, the terrorists themselves generally
have not come from Afghanistan or other hopelessly impoverished countries. Many are from Saudi Arabia,
which even after many relatively lean years still has a per capita income of $7,000. Others, like alleged highjack
ringleader Mohammed Atta, come from Egypt. That country clearly is much poorer, but Atta himself was the son
of a lawyer, and spent years in Germany studying engineering. Ditto for one of his co-conspirators, Marwan Al-
Shehhi. And Osama Bin Laden himself is the son of a billionaire businessman. As the Washington Post has
reported, most of the September 11 attackers "did not meet the profile of the prototypical suicide bomber --
young, uneducated, poor, disaffected."
Free Trade Bad: AT “Terrorism” 2/2
Globalization is the cause of terrorism

Potvin, Publisher, editor, and writer for The Republic, 2006 (Kevin, The Republic of East Vancouver,
“Globalization and its promoters have bred terrorism”, August 2, 2006, http://www.republic-news.org/archive/143-
repub/143_kevin_potvin_globalization.htm, accessed on July 12, 2008)
But those effects are surely noticeable when they do arrive. Riots in Paris and Sydney, bombs in Bali and
London, and plots hatched in Toronto, no less than bunker busters dropped on Afghan and Iraqi
neighbourhoods and prisoners captured by Canadian troops and handed over to American torture chambers,
are the visible signs of a generation-long decline in cultural and social standards of living (even while
economic standards of living could well be rising in every one of these places). We can bicker about the
individual causes of this or that particular person who decides to take up violence against economic and state
symbols, but the accumulation of such individual causes will tell us nothing about why the effects are
spreading globally. To understand the phenomenon of “terrorism” on its global level, we need to identify
a global cause to explain it. And that cause is none other than that set of policies falling under the rubric
of economic globalization as promoted and pushed around the world beginning two decades ago, in
1986, with the signing of the first Nafta agreement. All the unthinking promoters of globalization, and all
their dollar-sign-blinded defenders in the media over the last two decades—all those newspaper columnists
and radio show hosts, the learned authors of journal articles, the speechmakers, the analysts and the
economists, the professors and their graduate students, and all the think tanks, media companies, and
universities, as well as all the companies that underwrote them with bursaries and grants —are directly to
blame for the rising death toll and the spreading culture of fear due to the twin phenomena of
terrorism and war at home and abroad. Critics of globalization warned repeatedly and convincingly that
globalization would send into a hyperdriven offensive the already deleterious effects of capitalism on
social and cultural standards, effects that would come to be felt in ways that would make the economic
gains of globalization pale in comparison. Those critics were routinely abused in the media, ignored in the
universities, and dismissed in the think tanks, and their warnings were never answered. Just as Condalleezza
Rice could say with a straight face that nobody in her administration had conceived that anyone would
ever fly a plane into a building as an act of terrorism, so too might promoters of globalization claim
that they never conceived of homegrown terrorism, bombings, or threats of prime ministerial
beheadings as the direct results of globalization. But on both claims we know they were fully warned.
What the alarmed leaders today call terrorism is nothing more, nor less, than the next stage of protest against
globalization. And what we are today alarmed to see perpetrated in the name of anti-terrorism—the
destruction of civil rights, the transformation of our economies into war economies, the forced deposing of
foreign governments, the waging of brutal war around the world, and the outright mass murder of innocent
civilians—is only the next stage in the globalization agenda. None of this has anything to do with religion,
freedom, hatred, or economic well-being or the lack of it. It is all about economic globalization and the
negative effects of it on our social and cultural standards of living, and the reaction against these, only with
the intensity on both sides ratcheted up a few levels since the Battle in Seattle of 1999. Globalization’s
critics were silenced in the blasts of 9/11, but perhaps its time to stand them up and dust them off again
to hear what they have to say, seeing as how they were right. An end to the violence perpetrated, and in
turn encouraged, by globalization’s promoters the last two decades will only come when globalization’s
promoters are finally rejected, ridiculed, and marginalized right out of the media, the universities, and the
halls of government power. Globalization is a monumental failure that has brought us to this point of
massive violence, death and fear around the world. All its promoters the last two decades should be
hunted down and held up against the wall to answer for these awful crimes. It is not the religious Islamists we
need to smoke out, but the economic globalists, and it is the globalists’ ideology that needs to be repudiated,
not the ideology of those who are only replying to globalization’s offensive. It is everyone who has
promoted globalization the last twenty years who is fully to blame both for terrorism and for the war
against it.
Free Trade Bad: Unemployment
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.
Free Trade Bad: War 1/3

Trade increase risk of war; Less trade would DECREASE the likelihood and intensity of
wars
Blainey, Professor of Economic History, Melbourne, ‘88
[Geoffrey, The Causes of War, Third Edition, pages 91-96 7/7/08]
Alec Lawrence Macfie fought with the Gordon Highlanders on the Somme in the First World War and then, at the
onset of the world depression, became a lecturer in economics
at Glasgow University. His experience of the two most shattering events of his generation came together in an odd
way, for about 1937 he detected a thread that seemed to connect the outbreak of the war with certain economic
conditions. In February 1938 he issued a short article with an ominous warning. Entitled 'The Outbreak of War and
the Trade Cycle', it occupied nine pages of a learned journal at the very time when newspapers were mesmerised by
the revival of Germany and the danger of another world war. Macfie argued that international wars were most likely
to begin when an economic recovery was well under way or had mounted the slopes and reached a prosperous
tableland. A quick study of the outbreak of twelve international wars in the period from 1850 to 1914
suggested this pattern, but what did the pattern signify? Macfie thought that wars tended to break out at those times
when the economic mood was bumptious and when 'hope is alight and obstacles are impatiently confronted'. That
mood, he suggested, provides the heat to 'germinate the seeds of war no matter when they are sown'. Macfie's
knowledge of economic fluctuations persuaded him that in Europe the danger point would appear again in about two
years. 'If these considerations are accepted', he argued, 'we may well pray that statesmen may be granted an access
of wisdom between now and 1941. The prayer was not answered. The tendency for economic activity to move
regularly from slackness to boom and from boom to slackness – the depressed years being marked by a scarcity of
jobs and falling profits – was first experienced by England and the advanced industrial countries. Variously called
the trade cycle or the business cycle, it reflected the spread of an intricate web of interdependence between nations
and between producers within each nation; economic specialization was turning much of the world into a 'global village' long before
aircraft, radio and television made the web conspicuous. Thus a fall in the demand for Manchester-made textiles was felt in the cotton fields of
the Carolinas, the terraces of Liverpool, and in many corners of the globe. In glimpsing a link between the business cycle and war, Macfie pointed
to something that could not neatly be applied to wars before 1800. He did not comment on this dilemma; he humbly disowned any intention of
setting up his plate as a historian and merely passed on his observations in the hope that they might 'prove grist to some historian's mill'. Although
the eighteenth century had ups and downs in economic activity, and although the famous Swedish historian Eli Heckschser thought his homeland
had a weak semblance of the business cycle as early as 1763, those oscillations presumably did not move with the regularity and the capitalist
clockwork that merit the name of 'business cycles'. Wind, ice and rain – and their effects on the harvests – were probably the main pendulum of
these earlier fluctuations. The ups and downs of economic activity were probably more influential on war decisions after the Napoleonic wars,
partly because the prevailing economic mood was more likely to be shared by many nations, and partly because the oscillations between
economic pessimism and optimism tended to become sharper. Macfie's link is, at first sight, open to some doubt even in his chosen period of
1850-1914. He realised that economists could argue that he had mistaken the causes of war with the preparations for war. It could be argued that
the rising prosperity which preceded wars was merely the effect of re-arming and preparing for war. This may have been partly true of the
prosperity that preceded some wars but seems untrue of the majority. It is therefore difficult to reject Professor Macfie's observation that
economic conditions affected the outbreak of wars. Changes in economic moods and conditions affect not only bankers, shopkeepers,
manufacturers and shipowners, farmers and all they employ: they also affect monarchs, first ministers and chiefs of staff of the armed forces.
They affect the revenue and expenditure of governments and they affect the problems which they have to face. They affect social unrest or
cohesion. And perhaps most important they subtly affect expectations of what the coming months will be like and
whether they can be shaped with ease.' When trade is deteriorating and when unemployment is increasing the mood
of governments tends to be cautious or apprehensive. Dwindling revenue and soaring claims for the state's adi
aggravate the mood. On the other hand, when prosperity is high – and this is the time most dangerous
to peace – there comes a sense of mastery of the environment. Indeed the economic moods closely
parallel those mental moods which psychiatrists study. Such words as 'depression' and 'mania' are
common to the vocabulary of those who chart fluctuations in the market places as well as
mental asylums. When a contemporary psychiatrist, David Stafford-Clark, describes the
emotional conditions of elation, which virtually everyone experiences at times, he is
describing a mood which all economists have observed: when the sense of well-being and
confidence not only exceeds all degree of appropriateness to the patient's life, but begins to
colour and cloud judgement and responsibility to a point at which the capacity to adjust to
reality and manage affairs becomes impaired, then it consistutes a condition of illness no
matter how little the patient may complain. More than a trace of this illness is visible in
business booms and even in the recurring moods of nations. The eve of the Crimean, Franco-
Prussian, Boer and many other wars was tinged with this mania. One cannot say that economic
events alone shape these oscillating moods. Admittedly economic events - partly because they are easily measurable
- have been studied so intensely that they can for practical purposes be explained mainly in terms of other economic
happenings. But economic behaviour cannot be isolated
from the totality of behaviour. Economists have built a deep reservoir of knowledge of how man behaves in
economic affairs, but the mental conditions which influence that behaviour are not known so well
Trade Expansion does NOT prevent War – World War I proves

McDonald and Sweeney '07
[Patrick J. McDonald, assistant professor in the department of government at the University of Texas at Austin, and
Kevin Sweeney works for the United States Department of Defense, "The Achilles' Heel of Liberal IR Theory?
Globalization and Conflict in the Pre–World War I Era," World Politics 59.3 (2007) 370-403
http://muse.jhu.edu/journals/world_politics/v059/59.3mcdonald.html7/7/08]
Despite a growing body of evidence supporting claims that democracy, expanding commercial ties, and
membership in international organizations all reduce military conflict between states, the liberal peace research
program still faces an important historical challenge. While it has become fashionable to characterize the current
world order as one of extensive globalization and suggest that peace should follow, an earlier period dating from
the middle of the nineteenth century until 1914 stands out as the Achilles' heel of liberal international relations
theory. Then, as now, the world economy was marked by dramatic integration in goods, capital, and labor
markets. For example, British and French exports grew by respective factors of thirty-five and twenty-five
between 1820 and 1913. French, German, and American exports all expanded over 30 percent in the three years
before 1914. British capital exports were nearly nine percent of the gross domestic product (gdp) in 1911—a
ratio unmatched even in the current wave of globalization. If expanding economic ties bind states together in a
commercial web that either makes war unthinkable or simply raises its costs to unacceptable levels, then why did
we have World War I?
Free trade does NOT prevent 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)
"A nation’s policy forms an integral whole. Foreign policy and domestic policy are closely linked together,
they condition each other. Economic nationalism is the corollary of the present-day domestic policies of
government interference with business and of national planning as free trade was the complement of
domestic economic freedom."[4] The interventionist and planning ideas during the last one hundred years
meant that trade among nations could not be left outside of government oversight and control, lest the
directions and patterns of international trade undermine and frustrate the goals and purposes of national
governments in their domestic affairs.[5] Free trade was unable to prevent war in the twentieth century
because by 1914, very few people believed any longer in the idea of liberty.[6] The spirit of economic
freedom reached its zenith in the 1860s and 1870s. From then on a counterrevolution began against
freedom. Germany was a major catalyst for the change in ideological and policy direction with its return to
protectionism and implementation of many of programs of the modern welfare state.[7] But France also
started to move in this direction with regulations and pressures that gave the government increasing influence
and, in fact, control over the patterns of French foreign investment in other countries to reinforce its political
foreign policy objectives, as well as restrictions on foreign investments made inside France. And even in
Great Britain, which retained the closest approximation to free trade principles for the longest time--until the
opening shots of the First World War--the London investment houses would informally make sure that their
foreign loans and investments did not conflict with the wider policy goals of the British government.[8] The
First World War was the culmination of this process, with nation and state completely becoming one as
belligerent powers made all aspects of social and economic life subservient to the ends of war.
Free trade can not withstand the winds of war

July 8, 2008)
"The answer to this question seems to be that it would not have done so. The governments of the belligerent--
and neutral--States overthrew the whole system of bank legislation with a stroke of a pen, and they could
have done so just the same if the banks had been uncontrolled."[11] Great Britain, in spite of the growing
protectionism and interventionism in other European countries in the years leading up to 1914, had followed
an open, free-trade policy throughout its Empire. There had been free movement of goods and free
movement of men, the latter without either passports or visas. And capital moved without restriction both
into and out of Great Britain itself and throughout the far reaches of the Empire. Yet overnight barriers and
restrictions went up all across the European continent, including in Britain, once war was declared and
the opening volleys were fired. Almost seventy years of British free trade, with all of its benefits, were
brought to an end with a few strokes of the pen of war emergency acts. Mises did not discount the
significance of institutional barriers to arbitrary government actions. He pointed out that, indeed, if the
countries of Europe in 1914 had still had gold standards fully based on gold coins in circulation, to which the
people were accustomed and which in their minds symbolized the security and soundness of the monetary
system, governments may very will have had a harder time justifying the abolition of the monetary order and
the resort to inflation to finance their war expenditures. "It would not be so easy for governments to disavow
the reactions of war on the monetary system; they will be obliged to justify their policy."[12] But neither the
gold standard as practiced in 1914 nor international freedom of trade as existing in 1914 could withstand
the winds of war. The "spirit of the times" had long before changed from a belief in individual freedom,
limited government, and free markets with the accompanying depoliticizing of interpersonal relationships,
including in matters of international commerce and investment, into a reborn desire for protectionism,
nationalism, planning, and imperialism.
Without the right mindset, free trade will never be the solution to war
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.
Free Trade Bad: Warming 1/2
Free trade leads to global warming—it is a major source of co2 emissions

Common Dreams ‘03
[Kumar Venkat, “Global Trade=Global Warming,” 11 Dec, http://www.commondreams.org/views03/1211-02.htm ]
Just one early impact of increasing long-distance trade is the emerging issue of "food miles." The fossil-fuel energy
spent to transport food products often exceeds the energy contained in the foods themselves. To add insult to injury,
transportation is a major source of carbon-dioxide emissions. Sustain, a U.K.-based food and farming alliance, has
shown that iceberg lettuce flown from Los Angeles to London requires 127 calories of fuel for every food calorie.
Sustain also reports that countries often end up swapping food instead of importing critical items that cannot be
produced locally. The U.K., for example, imported 126 million liters of milk and exported 270 million liters in 1997.
Researchers at Iowa State University have found that fruits and vegetables travel an average of 1,500 miles within
the U.S., a 22 percent increase since 1981. When imported foods are added to the mix, the average distance from
farm to the dinner table increases significantly. Studies show that a basic diet with imported ingredients can easily
consume four times the fossil-fuel energy and emit four times the carbon dioxide compared to domestically
produced ingredients.
Merchandise trade currently accounts for only about 20 percent of global GDP, with agriculture representing just a
small part of global trade. But even at these relatively low levels of trade, the transportation sector consumes nearly
60 percent of the world's oil and produces a quarter of all energy-related carbon-dioxide emissions. Oil use by
transportation has almost doubled since 1973. Transportation-related emissions are growing at about 2.5 percent
annually -- faster than any other sector in the economy. Any dramatic increase in global trade could add
substantially to the world's annual carbon-dioxide emissions. Particularly problematic is the growing use of
trucks and airplanes at the expense of slower and more efficient trains and ships. Technological breakthroughs for
freight transport are not yet on the horizon. Improvements in fuel efficiency are possible, but studies show that they
would encourage more long-distance transport due to lower operating costs and are unlikely to prevent emissions
growth in the face of increasing demand. Given the general scientific consensus that carbon-dioxide emissions will
have to drop below 1990 levels within a few decades in order to stabilize the climate at the lower end of various
warming scenarios, long-distance trade poses a serious challenge. If the world's future economic development
depends largely on global trade, then in the absence of radically new transportation technologies, we are likely to
face the ultimate conflict between the economy and the environment. If global trade in agricultural products is the
only way out ofpoverty for hundreds of millions of rural poor in developing countries, the conflict may well turn out
to have an additional tragic dimension. The very essence of trade -- transporting goods from producers to consumers
-- takes a toll on the environment. Free trade may appear to be the solution to many economic problems when social
and environmental "externalities" are ignored. Global warming is only one such externality, but its sheer scale and
complexity make it a litmus test for whether the emerging global economy can be sustained in the long run.
Remarkably, the World Trade Organization and the World Bank -- the two premier institutions that promote global
trade -- are silent about the links between trade, transportation and climate. And there are no policies or plans in
place for the enormous task of replacing the world's freight transportation infrastructure with a cleaner, low-
emissions version.
Free Trade Bad: Warming 2/2
Warming threatens agriculture, collapses the economy, and kills billions

Milbrath ‘94
[Lester W., Director of the Research Program in Environment and Society at the State University of New
York at Buffalo
and a professor emeritus of political science and sociology, The Futurist. Washington: May/June, Vol. 28, Iss.
3; pg. 26]
As this scenario plays out, it is improbable that the climate system will not change at all or that it will
gradually change to a new pattern and settle down, as is assumed in most current economic thinking. The
most-probable climate scenario is for even more chaos. Many meteorologists and climatologists already
perceive the climate system as chaotic. If humans increasingly perturb that system, we could expect it to become
even more, chaotic. But how chaotic will it become, what kinds of chaos might we expect, and how long will it
last? No one knows the answers to those questions. From chaos theory, we do suspect that systems which
become extremely chaotic may collapse or shift to a new pattern—one that may or may not be stable. The
climatic catastrophes of recent years do suggest one possible scenario of climate behavior. Frequent
unexpected climatic disasters may be interspersed into “normal” climate patterns. The resulting loss of life
and property could reduce the human propensity to multiply and to increase economic throughput.
Experiencing these losses may lead people to lose faith in the premise of continuity. This will retard
economic growth despite the desperate efforts of governments to promote it. Another scenario suggests that
there could be an extended period, perhaps a decade or two, when there is oscillation-type chaos in the
climate system. Plants will be especially vulnerable to oscillating chaos, since they are injured or die when
climate is too hot or too cold, too dry or too wet. And since plants make food for all other creatures, plant
dieback would lead to severe declines in agricultural production. Farm animals and wildlife would die in
large numbers. Many humans also would starve. Several years of climatic oscillation could kill billions of
people. The loss of the premise of continuity would also precipitate collapse of world financial markets. That
collapse would lead to sharp declines in commodity markets, world trade, factory output, retail sales,
research and development, tax income for governments, and education. Such nonessential activities as
tourism, travel, hotel occupancy, restaurants, entertainment, and fashion would be severely affected. Billions
of unemployed people would drastically reduce their consumption, and modern society’s vaunted economic
system would collapse like a house of cards.
Free Trade Bad: Women’s Rights 1/2
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.
In the U.S., free trade negatively affects women

For U.S. women, trade related job loss has a disproportionate and severe impact due to the fact that
women's employment is concentrated in areas often affected by trade, such as textile and apparel
industries. In fact, according to a 1999 survey, 66 percent of all recipients of NAFTA-Trade Adjustment
Assistance were women. (General Accounting Office, "Trade Adjustment Assistance: Trends, Outcomes,
and Management Issues in Dislocated Worker Programs" GAO-01-59, October 2000). In addition, when U.S.
companies shut down or move abroad, it is unlikely that women will be re-employed in good-paying
union jobs comparable to those in manufacturing. Though women may find non-union jobs in retail trade
and services, for example, textile jobs pay 64 percent more than retail sector jobs: $451.00 in weekly wages
for non-supervisory workers, compared to $274.83 for retail. (BLS, October 2000). Jobs in the service
sector are often less secure and offer fewer benefits.
Free trade in Mexico drives women from house and job

For women in Mexico, the effects of NAFTA liberalization have been particularly severe. As has been
documented, the majority of small farmers worldwide are women. Many small farmers in Mexico have
been forced off their land as NAFTA has put small farmers in fierce competition with big agribusiness
firms and driven down commodity prices. In this situation, Mexican women must migrate with their
families to cities to find work. Such work for women in Mexico is often concentrated in the Export
Processing Zones (EPZs), or Maquiladoras, where women earn wages which are often not enough to
sustain their families and pay for a higher cost of living in the cities. In addition, NAFTA has locked in a
model of unenforceable labor and human rights in the EPZs, wherein women face such threats as on the job
discrimination, sexual harassment, and violence. Women workers in many factories in Mexico have
reported rampant physical abuse and sexual harassment. In addition, mandatory pregnancy testing as a
condition for employment is often standard practice (Spieldoch, White 2003).
Free Trade Bad: Women’s Rights 2/2
Free trade creates hardships for women around the world and makes it an impossible feat
to acquire necessary medicine
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
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
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

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Gonzaga Debate Institute 2008 1

## Trade Deficit Bad ##

Trade Deficit High

Oil Key To The Trade Deficit

Alternative energy reduces the deficit

Economic collapse results

European Economic Collapse

U.S. trade deficit will cause a European economic collapse

Foreign Direct Investment

Trade deficit bad- lower FDI, decreases economic growth

FDI is the single greatest way to prevent conflict

It destroys hegemony: It overstretches military funding and undermines US industry-

Trade deficit devours US soft & economic power

Economic depression results

Trade deficit risks American protectionism & financial crisis

High trade deficits cause an upswing in protectionism

Recession/Economic Growth 1/5

Trade deficit wrecks global economic growth

Recession/Economic Growth 2/5

Continued trade deficit will trigger U.S. recession

Recession/Economic Growth 3/5

Deficit bad- global recession

Recession/Economic Growth 4/5

Recession/Economic Growth 5/5

Trade deficit causes confidence crises

Undermines the economy many ways

Trade deficit leads to loss of jobs and inflation of the dollar

Trade deficit creates lower wages and unemployment

Deficit leads to out sourcing

## Trade Deficit Good ##

Trade Deficit Good 1NC (1/2)

Trade deficit Good 1NC (2/2)

Turns Case: Alternative Energy

Foreign Direct Investment

B. FDI is the single greatest way to prevent conflict

Foreign Direct Investment Good

FDI good- US leadership

Trade deficit key to economic growth

Decreasing the trade deficit reduces growth

Slower growth causes great power wars

Growth good- prevents North-South conflict and hegemonic warfare

Chinese trade deficit preserves US liberal hegemony

Loss of liquidity causes economic downward spiral

B. Unemployment bad for the economy- 4 reason

Unemployment is economic strain

Trade deficits correlate with lower unemployment rates

Focusing on competitiveness undermines the economy and causes trade wars

A2: Trade deficit bad (1/2)

A2: Trade deficit bad (2/2)

It doesn’t depreciate the dollar

AT: “Trade Deficit Reduces Growth” 1/3

AT: “Trade Deficit Reduces Growth” 2/3

Deficits don’t cause job loss or drop in proseperity- alt causes

AT: “Trade Deficit Reduces Growth” 3/3

WTO INC 1/2

A. Uniqueness: A WTO agreement is likely soon

&, The U.S. is currently committed to cutting subsidies to get a deal

B. Link: New subsidies destroy WTO negotiations

WTO INC 2/2

C. Impact: WTO collapse causes nuclear winter

WTO: Uniqueness 1/2

US providing leadership in resolving Doha

US determined to conclude Doha this year

WTO: Uniqueness 2/2