Trade protection
for citizens and
environment

Replies to:
‘Free trade benefits
everyone’
Dear Sir, In your March 11 issue there was a letter from Mark Hassed asking News Weekly to make its position clear on the issue of protection versus free trade. I think you partly did so in the excellent Colin Teese article saying that the World Trade Organisation (WTO) was stumbling as the Third World was rebelling.
    He points out that, as before, the larger economies can ignore the free-trade decisions of the WTO, but smaller economies like Australia find that if the large nations defy the WTO they can ignore the decisions and easily absorb the consequences of smaller nations applying compensatory retaliation against them.

To: The Editor, News Weekly, 582 Queensbury St, North Melbourne, Victoria, 3051, Australia
nw@newsweekly.com.au
letter from John Massam, Perth, Western Australia

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    I say that the Australian lamb export cut-off by the U.S. President is just one example of the foolishness of expecting the Great Powers to adopt genuine free trade policies. Mr Clinton supposedly bowed to the voting power of the American farmers.  In reality, he bowed to the huge export corporations, which are part of the corporate groupings that finance the multi-billion dollar U. S. election campaigns, and presumably pay bribes to politicians.
    To maintain cheap banana production for three big U.S. companies, 200 heavily-armed men recently surrounded a meeting of Guatemalan banana workers and forced union leaders to tell the local radio station that a demonstration had been cancelled.  The workers had been called together by the union, because almost 1000 workers had been dismissed from three plantations.  These plantations belonged to a subsidiary of Del Monte Fresh Produce, one of the "big three."  The UN agency trying to monitor the Peace Accords in Guatemala said this was the most serious violation of human rights since Archbishop Juan Jose Gerardi was murdered in 1998.
    In Colombia, the banana workers' leader Cesar Herrera Torreglosa was assassinated on 13 December 1999, as part of the same campaign to keep the banana workers' wages below subsistence level.
    Renwick Rose, a leader of the Windward Islands, hardest hit by the Banana War, said: "When you buy a cheap banana you are unwittingly participating in exploitation. People need to understand what lies behind the banana. There are children, mothers, fathers and blood, sweat and toil. Fair trade is not asking you to pay more, just what it costs."
    Meanwhile, businessmen and governments of the European Union and the United States are involved in a "Banana War" in the marketplace, and through the World Trade Organisation, where negotiations stumbled on.
    Raw salmon from North America, complete with viruses and other parasites, is being forced onto the Australian market in defiance of Tasmania's state rights, the exporters using the World Trade Organisation's lop-sided rules to overcome environmental considerations.
    The world's armaments trade was recently spotlighted again, huge bribes being uncovered.  Behind the disgraceful behaviour of the arms companies selling weapons to dictators and terrorists around the globe, and thus largely creating the refugee crisis, there is the ironic fact that in many developed countries research into new weapons is largely financed by government subsidies and other support.
    This is well-documented for the United Kingdom and the United States, as the Campaign Against the Arms Trade has shown.
    A few years ago it was revealed that the Italian Christian Democrats had been backed by the Mafia right from the start.  In recent months we had the amazing revelation that the German Christian Democrat party had been receiving "slush funds" from Big Business for years.  One donor to a Christian Democrat was a left-wing French President.  Far from convincing me that old enmities had faded away, I wondered where this Frenchman obtained the huge sum involved.  An Irish Prime Minister received a huge sum as a non-repayable loan from a businessman -- surely Big Business gets more than charming blarney and a Guinness or other liquor out of these transactions!
    Now that we understand more about parasites, some wide-awake people oppose too much international trade, and many oppose doctrinaire attitudes to free trade.  For example, North American forests are at risk from the long-horned asian beetles that come in packing boxes from mainland China.  The New York authorities tried to force the Communist Chinese to fumigate the boxes, but the WTO ruled that this was an unfair restraint of trade!
    Grape imports into Australia are now about to be increased at give-away prices -- does anyone remember the terrible imported grape disease that wiped out the wine industry in Victoria and other places about a century ago?  Will having cheaper grapes for a season or two pay for the ruined lives of the vineyard owners and workers if a similar disease gains entry?
    News Weekly published Max Teichmann's article saying that Australian rural industries were being slowly leached by tariff cuts, exclusion from important markets, and undercutting by subsidised products from the U.S.  Yet, the U.S. preaches economic rationalism and free trade!
    Your letter-writer said you can't have it both ways -- to criticise the fact that our citrus industry is being devastated by cheap imported juice, and to criticise Japan for imposing tariff barriers against Australian rice.
    I suggest that your journal has exposed the hypocrisy and stupidity of our leaders, past and present.  The growth of Australia's whole fruit industry was for the export trade -- it certainly wasn't to fill hungry Australian mouths.  Likewise, after the early ricegrowing attempts, every farm that grew rice after that was for export, just as our wheat farms have been for more than a century.
    With unjust bribes, worker exploitation, subsidies, tariffs, dumping, etc., it is no wonder that Australian politicians a century ago demanded protection from imports.
    Much of the world's trade is a waste of fuel and other precious resources.  Ships carrying cans of herring from Norway might be passing ships carrying herring to Norway.  Much of the trade is propped up by bad government laws on subsidies, low rural wages, land tax abolition, income tax concessions, etc., etc.
    But, in an ideal world, what we want is Fair Trade, not Free Trade.  A whole movement for Fair Trade has sprung up world-wide, largely since the big campaign against the now-stalled Multilateral Agreement on Trade (MAI).  I recommend that your readers use the internet to link with the Fair Trade movement, which is taking up signatures on a proposal to adopt a new kind of WTO that will respect the rights of workers and consumers to a healthy clean environment, as well as a living wage, decent conditions, and assurance of food production in each country.
  Yours faithfully, John Massam, March 16 2000
 


Free trade benefits everyone
  Sir, News Weekly needs to make its position clear on the issue of protection versus free trade.
    In the same sentence of your editorial (February 12, 2000) you complain about our citrus industry being "devastated" by cheap imported juice concentrates and then go on to criticise Japan for imposing tariff barriers against Australian rice.

NEWS WEEKLY, MARCH 11, 2000 -- PAGE 10
"Free trade benefits everyone"
Mark Hassed


    You can't have it both ways.
    Either free trade is a good thing -- in which case your policy of restricting imports into Australia via your so-called "primage" is nonsense.  Or, free trade is a bad thing -- in which case you should be applauding Japan for their wisdom in sealing off their markets to Australian imports.
    Maintaining the position that we can restrict imports while at the same time deplore other countries applying the same tactics to us is neither morally nor logically sound.
    In truth, free trade should benefit everyone. As a simple example, Australia is excellent at producing cheap rice.  Japan produces excellent, cheap cars. We should trade rice for cars to mutual benefit.
    Instead, protectionists in both countries lobby governments to impose tariff barriers so that Japanese consumers pay much more than they should for their rice and Australian motorists pay much more than they should for cars.
   Then we crow about how we have "protected" jobs in the car industry instead of lamenting the loss of jobs in the rice industry that such policies result in.
    It's enough to make one say:  "Protect us from the protectionists".

Mark Hassed,
Canterbury, Vic


“Free trade” and predatory policies
  Sir, May I comment on M. Hassed's letter on free trade in News Weekly (March 11, 2000).
    Extremes in economic policy are neither practical nor useful.  Pursued to its limit, unrestricted free trade simply leads to the industrial and commercial barons going flat out until monopolies and oligopolies become rampant predators.
    This was exemplified in oil and rail in 19th and 20th Century America.  We are seeing a similar trend in banking and communications emerging in Australia now.

NEWS WEEKLY, MARCH 25, 2000 -- PAGE 11
"'Free trade' and predatory policies"
R. A. D'Arcy


    Extreme application of protectionist policies, however, can also cause harm.
    No sensible country pursues a policy which is largely to its detriment.  If one were to apply a free trade policy based on comparative advantage rigorously to the Australian economy, only some rural and mining industries, perhaps some tourism, would survive.
    Manufacturing industry would largely disappear, unemployment would increase further and prove intractable.
    We would become, once more, highly dependent on overseas suppliers for all manner of goods.  Our labour force would become even more unskilled, and opportunities for developing many talents would vanish.
    The much-maligned Tariff Board in Australia did not aim to protect all industry which sought assistance.
    What it did was to apply criteria in an attempt to help industries which had reasonable prospects of success by giving aid.  This was to overcome cost disadvantages arising from the general state of the economy, compared with that of overseas suppliers.
    Pretty clearly, some industries could only succeed with massive assistance, and were refused.  Other could develop -- and did -- with moderate assistance.
    Most countries understand they need a wide area of feasible economic activity if the aspirations of their citizens are to be met and if development is to occur.
   It is unreasonable to expect that a country with a small population, a vast area and high wages can survive without some policies offsetting the many cost advantages mature and developed economies enjoy, through their development and higher population contributions.

R. A. D'Arcy,
Burleigh Waters, Qld

  Editor's Note:
The writer worked for some 25 years at the Tariff Board, later the Industry Assistance Commission, in both research and projects.


News Weekly for some years now has been published fortnightly.  During or before March 2000 it opened a website at http://www.newsweekly.com.au/ and may be contacted at nw@newsweekly.com.au
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