This WSJ article claims that free trade, in the form of the end of the MFA (the Multifiber Arrangement that has governed textile quotas for the last thirty years, which limited China to minimal textile exports), will hurt many countries such as Bangladesh. This is because China is so much more efficient than Bangladesh that once the limits on China's exports are removed, everyone will choose to buy from China. Experts predict that Bangladesh will lose half of its 1.8 million textile jobs, and the 15 million support jobs are likely to decline significantly as well. This has severe implications for stability:
The prospect of soaring unemployment is particularly worrisome to Bangladesh, a mostly Muslim nation of 140 million where lawlessness and Islamic conservatism are fast gaining ground. The country's vulnerability spotlights a debate gathering steam since the global trade talks in Cancun, Mexico, broke down in September: With heightened concern about poverty fueling sympathy for extremism, can the world afford unfettered free trade if it works to erode stability in marginalized states?
This sounds like a grave situation as a result of the 'unfettered' free trade that the anti-capitalism/anti-globalization folks are always complaining about. But then, a bit further down in the article, we find out...
...the U.S. maintains stiff duties on garments imported from Bangladesh. The reasons include protecting U.S. garment producers and pressuring governments to improve working conditions or favor American companies competing for contracts.
Last year, Bangladesh paid about the same amount of duty on its $2.4 billion of garment exports to the U.S. - about $330 million - as France paid on all of its $24 billion in exports to the U.S. Despite those tariffs, Bangladesh still ranks among the most-favored nations in terms of quotas while its exports remain competitive thanks to low wages.
The WTO generally urges its richer members to give duty-free and quota-free access to products originating in poorer countries such as Bangladesh. The U.S. has resisted lifting duties for Bangladesh, which has focused its lobbying efforts on changing that policy as the expiration of the MFA nears.
That's funny - I thought that free trade meant no quotas *or* tariffs. I expect better than this from the WSJ. Yes, we should do everything possible to enable Bangladesh to compete. This should start with the removal of the massive tariffs that we impose on their goods, not by implementing new or perpetuating current restrictions on imports from other countries.
Posted by Stephen Bronstein at November 24, 2003 06:52 PM