The protesters have gone home. The broken glass and spent tear gas canisters lie in the city dump. For the most part, Seattle is returning to the holiday spirit. And so with a clear head, I think it is time to look into what environmental groups intended to achieve rather than dwelling further on the riots and the police action.
Many environmentalists claim recent decisions by the World Trade Organization (WTO) represent a loss of U.S. sovereignty. Put bluntly, they argue that the WTO is forcing the United States to water down its environmental standards. This is simply not true.
The confusion over the matter likely stems from a misunderstanding about how WTO disputes are settled. Take a major case pointed to by environmental special interests: the shrimp-turtle case. Thailand, India, Malaysia, and Pakistan challenged the United States’ requirement that imported shrimp be caught using nets equipped with little escape hatches for sea turtles called Turtle Exclusion Devices. The countries found the US restriction protectionist and in violation of WTO rules. The WTO agreed. Does the United States now have to relinquish its regulation?
If the U.S. continues to restrict shrimp caught
without turtle escape hatches, it has two options. One, it can pay a settlement
to the disputing countries. If this were the only option, United States’
sovereignty might be violated since a body outside the U.S. was forcing
it to comply or face a penalty. The U.S., however, has another option.
It can refuse to pay compensation. The omplaining countries may then retaliate
with tariffs on U.S. products. After all, these countries are
also sovereign and have a right to respond to
what they see as unfair trade practices. Imposing tariffs is something
the countries could do with or without the WTO, and so there is no change
in the United States’ sovereignty. The WTO simply acts as an arbitrator
to encourage free trade. After a WTO decision, the bickering countries
are left to settle their differences amongst themselves.
The sovereignty issue aside, many environmental groups would like to bend the will of the WTO in order to export U.S. environmental standards to countries with which we trade. These standards might be reasonable if we lived in a world where every country was as rich as the United States, but we don’t. Third-world countries cannot afford such environmental standards because their people must first become rich enough to feed themselves before they care about protecting endangered species. They must secure the wealth to chlorinate water for fighting off scourges like dysentery before they can fight air pollution.
We might yearn for overnight changes, but realistically wealth creation is a long-term process. Environmental quality in the developing world may get worse before it gets better. That is how it happened here. Serious concern for the environment emerged only after we were well fed, clothed, and sheltered. All things brought about by the industrial revolution.
As my friend from India and a founder of the Liberty Institute, Barun Mitra told me, “If anyone is really concerned about the poor, the environment and labour conditions, one must embrace the market to promote economic growth.” In other words, if we want other countries to accept environmental standards like our own, we must first increase their wealth through trade.
Barun sympathized with the protestors, but disagreed with how best to bring about their goals. As he said, “Many of the protestors were concerned about the impact of free trade on environmental and social conditions. They ignored the fact that these unsatisfactory conditions were precisely the result of restrictions put on trade hampering economic growth.”
Barun knows what a lack of trade can do. In the December 9th Wall Street Journal, Barun wrote, “…developing economies will grow less quickly, the environment will suffer, and more children throughout the developing world, including India, will remain impoverished.” He’s experienced it first hand in his homeland, which is a democracy, but one that has failed to gain wealth because of its own protectionist policies. As a result, India’s environment and its people have suffered.
We must be leery of imposing our standards on countries that will only wither under the burden. Like a championship weightlifter, these countries must first be fed and trained before they can compete. And only free trade and the increased wealth it entails will do that.
No statement rings truer in my ears than Barun’s regarding his own actions in Seattle: “The cost of staying silent was too great for people, particularly the poor, in the developing countries. In an open market, with free trade, the poor have nothing to lose but their poverty.”
J. Bishop Grewell is a Research Associate with PERC (the Political Economy Research Center), a Bozeman research institute providing market solutions to environmental problems. He would like to thank the Atlas Economic Research Foundation for helping fund his trip to Seattle.
