Globalization and Other Minor Issues

So, I’ve decided to pick back up on this thing. Here goes nothing.

I just got back from a lecture by the NYT’s Tom Friedman in Baltimore. He’s still in the process of promoting his book The World Is Flat, which approaches the subject of globalization with wide-eyed, almost childish optimism through the lens of information technology. He’s a smart guy and by the end, I was pretty well on board with his basic thesis- that IT technologies developed in the last 15 years are going to reshape the world on the scale of electricity.

My personal gripe was that he never really addressed the problem of access, since information technology is still, fundamentally, a first-world luxury. Though terrorists in Iraq and Afghanistan might use Outlook Express, very few of Africa’s 850 million people even have access to the Internet in the first place. And given the deplorable condition of education and human rights in the third world, a high-speed Internet connection doesn’t level the playing field for an illiterate subsistence farmer.

Regardless of the hole (or hole) in Friedman’s arguments, his talk got me thinking about what seems like a gaping double standard in American trade policy. The Bush administration is a loud proponent of globalization, and if you listen to Scott McClellan, you’d believe that we’re on the march across the planet to spread social and economic freedom. The people of Iraq might not believe it, but at least Bush does.

For all of its crappy implementation, globalization a la Bush is an admirable goal. I can’t deny that a world with fewer trade barriers and increased global communication would be more productive and (since it would be so interdependent) probably a little more peaceful. But the problem is, America in general (and Bush in particular) don’t quite get that it’s a two-way street.

America is great at doing things, but in the last 30 years, we’ve lost the competitive edge in making things. And we tend to be pretty crappy when it comes to admitting that other people do a better job. From Canadian lumber to Korean steel, the United States has been trying to prevent inexpensive foreign goods of comparable quality from making it into our markets, using a battery of legal (and illegal) measures.

Let’s start with the Korean steel. Up until the winter of 2003, the United States was putting heavy tariffs on foreign steel (especially East Asian products coming out of South Korea, Japan and China.) The American steel firms couldn’t effectively compete without the U.S. government’s help, and they had plenty of friends in that government. Eventually, however, this proved counterproductive- the WTO came pretty close to slapping sanctions on American exports and the Bush administration buckled and removed the tariffs. We didn’t even pretend they were legal.

On the other hand, with Canadian timber, we have a semi-legal method of recourse to supposed predatory trade practices known as “anti-dumping legislation.” Foreign goods sold significantly below the current market value of domestic goods can (under WTO rules) be subjected to tariffs. In theory, this prevents countries like China or India from flooding other markets with dirt-cheap goods and driving domestic manufacturers out of business. In practice, however, it’s usually used as a tool by the United States to keep foreign competitors from getting too competitive, as in the case of the Canadian lumber industry.

We’ve invoked anti-dumping protections against Canadian wood products because (according to Congress) their government owns 95% of the Canadian timberland and leases it to local mills for about half of market value. Granted, it sounds pretty bad. Our logging industry, it’s true, can’t really compete with subsidized Canadian timber. Isn’t Canada violating the founding principles of free trade? What about NAFTA?

Well, not really, if you consider the fact that every taxpayer spends around $500 a year to subsidize America’s farmers. American farm subsidies are bad for our economy, and bad for everyone else. The vast majority of the money goes to support large corporate farms that reap- quite literally- billions of dollars in tax breaks every year (think of what that money could be doing if we invested it in education, or maybe small-business loans.)

So, not only is tax time pretty much stress-free, but every American farmer gets a guaranteed minimum price at which to sell their crops. So when we’re done selling all this cheap produce at home, it gets shipped off to the rest of the world and- you guessed it- dumped on domestic markets, bankrupting local farmers.

It’s true that Canada is being pretty unfair with the softwood lumber issue, but the damage they’d be doing to our logging communities is positively laughable compared to the damage we’re doing to local farmers around the world, and all to subsidize a nearly-extinct conception of the “family farm” that has been replaced by massive corporate entities.

All of this makes me a little bit surprised to see George Bush stepping into the fray on (at least what I perceive to be) the right side of the globalization debate, in regards to this ridiculous controversy about port ownership. I guess, after six years of unmitigated disasters, he had to get one right. Monkeys on a typewriter, maybe.

In terms of security, it really, truly, does not matter who owns the company, who owns the company, who owns the companies, who own American ports. American port security was crappy before 9/11. It remains crappy after 9/11. And regardless of whether a company based in the United Arab Emirates buys the British firm that’s been controlling the ports of Miami, Baltimore, Newark, Philadelphia, New Orleans and New York.

The main, articulated fear is that a company based in the same country as two of the 9/11 hijackers would somehow be tainted by Islamic extremism. This could, in theory, compromise port security and allow terrorists and weapons into the country. This is crap. More specifically, this is pure, unadulterated xenophobia, allowing Congressional politicians to grandstand during an election year about a homeland security issue that is really quite pointless. Okay, some of the hijackers came from Dubai. Well, shoe-bomber Richard Reid and Timothy McVeigh came from Britain and New York State. How about we start preventing British people and New Yorkers from owning transportation assets?

I live in one of those cities. I am not worried about who owns the port. The Bush administration is spending billions of dollars on a pointless war in Iraq that could have been spent (among a zillion other things) on equipping those ports with more ICE inspectors, radiological detection devices, and X-ray systems. The likelihood of a nuclear bomb making into my city by sea, is not going to change based upon the nationality of who owns the port. What interest does any company, be it based in Dubai, Manhattan, or Outer Mongolia, have in allowing terrorists to blow up its assets?

If we really intend to promote freedom and free trade throughout the world, we’re going to have to suck it up and play by the rules that we want everyone else to play by. America is historically bad at this. Take national security. We don’t want to allow anyone else to have nuclear weapons, but we’re perfectly comfortable not only retaining them, but threatening to use them. We don’t want to allow cheap foreign products into our markets but we have no problem flooding others with our exports.

As David Brooks of the NYT mentioned, the people who own the ports in Dubai are some of the few Arab folks who still like us, and now we’re pissing them off. If we’re going to get behind globalization and the free flow of economy activity, we have to play by the rules, and that means we’re not always going to come out on top.