Ask the former Director-General of the WTO a question

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Damnthematrix's picture
Damnthematrix
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Ask the former Director-General of the WTO a question

Here's an interesting use of the web to connect questions with answers. Mike Moore, the former Prime Minister of New Zealand & Director-General of the WTO, recorded a youtube video introducing himself to Reddit. People are asking him all kinds of questions this week & he'll be recording a video response on the weekend.

Mr Moore was a Member of the NZ Parliament from 1978 til 1999. His time in New Zealand parliament spans his time in opposition during the Muldoon years, then as a part of government through the Lange years (including the anti-nuclear movement, and Rogernomics), and leader of the Labour Party until challenged by Helen Clark. Moore went on to lead the World Trade Organisation from 1999 to 2002. His term coincided with momentous changes in the global economy and multilateral trading system. He is one of the world's leading voices in support of globalization, in fact he has just released a book - Saving Globalization: Why Globalization and Democracy Offer The Best Hope for Progress, Peace and Development.

Mike Moore led the World Trade Organization through the controversial WTO Ministerial Conference of 1999, and the WTO Ministerial Conference of 2001 where China joined the WTO, and where the Doha Development Round began.

Here is Mike Moore's intro on Youtube:

 

"Gidday Reddit, my name is Michael Moore.
I'm not that Michael Moore, I'm the New Zealand one. I was a former Prime Minister and Director General of the World Trade Organization. I've written a book called Saving Globalization.

Here's the deal.

We've created more wealth in the last 60 years than all of history put together. The last 10 years except for the last 12 months, have been the most sustained period of economic growth in human history.
Those countries that have done well are the most globalized. The unpleasant, dangerous and poor places to live are the least globalized.

If you are opposed to globalization you therefore must be for de-globalization, and de-globalization is what happens when you have a recession or a depression. That's when dangerous things happen. The Great Depression gave legs to the twin tyrannies of last century - Fascism and Marxism.

So my argument is that globalization is not a policy - it's a process. And ever since man stood upright and looked beyond the horizon, we have been trading, we have been moving and we have been thinking. And it's a process and not a policy. Therefore it can't be stopped, but it can be slowed. We saw that in August 1914. We saw that in the Great Depression.

I am a Former Director General of the World Trade Organisation, AMA."

So go on, CMdotcom readers - ask Mr Moore some questions here and we'll see how his response goes over the weekend.

xraymike79's picture
xraymike79
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Posts: 2040
Re: Ask the former Director-General of the WTO a question

Globalization is creating more of a global jungle rather than a global village. This implies that life is a struggle for the survival of the fittest. "
 
 
1.) The path towards globalisation is dependent upon continuous government investments. It requires the building-up of a large-scale industrial infrastructure, including roads, mass communications facilities, energy installations, and schools for specialized education. Trillions of dollars have been spent all over the industrialized world creating superhighways and communications infrastructures that facilitate long-distance transport. Among other things, this heavily subsidised infrastructure allows goods produced on a large scale and transported long distances to be sold at artificially low prices—in many cases at lower prices than goods produced locally. Local communities and industries that were once tied together by bonds of interdependence are being eroded and dismantled by a heavily subsidised industrial infrastructure geared toward large-scale, centralised production.

2.) Developed nations have outsourced manufacturing and white collar jobs. That means less jobs for their people. This has happened because manufacturing work is outsourced to developing nations like China where the cost of manufacturing goods and wages are lower. Programmers, editors, scientists and accountants have lost their jobs due to outsourcing to cheaper locations like India.

3.) Globalization has led to exploitation of labor. Prisoners and child workers are used to work in inhumane conditions. Safety standards are ignored to produce cheap goods.

4.) Job insecurity. Earlier people had stable, permanent jobs. Now people live in constant dread of losing their jobs to competition. Increased job competition has led to reduction in wages and consequently lower standards of living. When a poor, but ambitious nation, is trading with a wealthy advanced economy free trade can undermine the wage level in the advanced economy. This helps to explain why the US hourly wage, discounted for inflation, has been stagnant for many years and has aggravated inequality in the US. Monthly wages are 11% lower than in 1973 adjusted for inflation in spite of rising productivity. A revealing statement by Wal-Mart’s chief executive, urging Congress to raise the minimum wage:

"our customers simply don't have the money to buy basic necessities between paychecks”, ironic coming from Wal-Mart.
 
5.) MNC's have set up industries causing pollution in countries with poor environmental regulation. There is little international regulation, an unfortunate fact that has had dire consequences for the safety of people and the environment.Globalisation destroys the ecology balance of the earth. Furthermore, MNCs can pull out suddenly if they find a cheaper place for their operation, causing many people to lose their jobs.
 
6.) Fast food chains like McDonalds and KFC are spreading in the developing world. People are consuming more junk food from these joints which has an adverse impact on their health.

7.) The benefits of globalization are not universal. The rich are getting richer and the poor are becoming poorer. The bottom 2.5 billion ,40% of the worlds population live on less than $2 a day and receive only 5% of the worlds income.The UN reports that gaps in income between the poorest and richest countries have continued to widen. In 1960 the 20 percent of the worlds' people in the richest countries had 30 times the income of the poorest 20 per cent. In 1997, the gap has more than doubled-- it is now 74 percent. This widening of the gap is happening at a faster pace. The assets of the 200 richest people are more than the combined income of 41 percent of the world's people. Just imagine that visually --the 200 people can fit into our local libraries' auditorium.
The gap in income within countries has also widened. In the US, according to the US Census Bureau, the top and bottom tiers are growing and the middle shrinking. The top 20% held 85% of the countries wealth. An interesting illustration of this is the recent two years of the holiday shopping season. Retailers that cater to lower and middle income shoppers like Walmart, Sears and Kohl’s had disappointing results, even with the lower prices. The higher end chains like Marcus and Nordstrom did well.

8.) Although different cultures from around the world are able to interact, they begin to meld, and the contours and individuality of each begin to fade.

9.) The control of world media by a handful of corporations will limit cultural expression.

10.) There is a greater chance of reactions for globalization becoming violent in an attempt to preserve cultural heritage.Terrorists have access to sophisticated weapons enhancing their ability to inflict damage.

11.) A materialistic lifestyle and attitude that sees consumption as the path to prosperity is being spread globally.

12.) There is the increase of human trafficking.

13.) Political and economic power is being centralized in huge multinatonal corporations which were previously restricted to commercial activities. Corporate influence of nation-states far exceeds that of civil society organizations and average individuals.

14.) There is a greater chance of disease spreading worldwide, as well as invasive species that is proving to be devastating to non-native ecosystems. Deadly diseases like HIV/AIDS are being spread by travellers to the remotest corners of the globe.

15.) International bodies like the World Trade Organization infringe on national and individual sovereignty. WTO ignores labor rights and the environment and is undemocratic. The more advanced industrial countries insist that all countries adopt the ‘one size-fits-all’ economic policies to secure ‘equal access’ to developing countries’ economies disregarding local economies and peoples’ right. The IMF and World Bank-imposed structural adjustment programs emphasize the courting and deregulation of foreign investments and pressure countries to fit much more tightly into the global economy and to change to an export economy.

16.) Because globalization increases the interconnectedness and interdependence of the world's countries, the likelihood of economic disruptions in one nation effecting all nations increases. The world has become less resilient. 

17.) Globalization increases the chances of civil war within developing countries and open war between developing countries as they vie for dwindling resources.

18.) The increase in off-shoring has reduced the governments ability to sustain social welfare programs in developed countries. 

Example:
OK, let’s suppose that there is a factory in Pennsylvania which employs 500 people to make widgets. This factory has been making widgets since 1955 and employs 500 people, who make an average income of $2,000 a month. This means that the monthly payroll is US$1 million a month, or US$12 million annually. Of course the factory owners and employees all pay taxes which go to the city, state and federal government.

Now, the owner goes to China and finds that he can go to China, and instead of paying his workers an average of US$2,000 every month, he can get Chinese workers at an average salary of US$200 a month. Their productivity is just as good as the American workers, but they cost only 1/10 the wages. His monthly payroll expenses fall from US$1 million a month to US$100,000 a month, and his annual China payroll becomes only $1.2 million. This means that he can afford to lower the price of his widgets, thus selling more widgets.

Moreover, in order to attract the investment, the local Chinese government is willing to give him cheap land and a tax holiday for several years. This means that his upfront investment costs are lowered drastically to only US$500,000 for land and factory. The business owner would be a fool to turn down such an opportunity, right?

So he goes back to Pennsylvania and begins transferring production to China, gradually laying off his Pennsylvania workers along the way. Now this is where things start getting wacky. As he lays off his workers, they go to the state government to collect unemployment, which for the sake of simplicity, we will say, runs about $400 per worker per week for six months. This cost is carried by the state government. Eventually all are laid off, and the state pays out a total of $5.2 million (400 * 26 * 500) for all the laid-off workers.

Now, our factory widget owner is happy, because thanks to globalization and WTO, not only has he lowered his costs drastically, but he can export all over the world duty-free, since WTO has regulations against import tariffs and barriers. He has more markets, and more market access. His investors are happy because they are making more because of lower costs and higher profit margins.

But what has happened in the US? More and more unskilled, then skilled, workers are losing their jobs. The state governments need to pay unemployment, and they need to tax the employers who remain in the state for corporate taxes to sustain the system. Meanwhile the tax base of factories which remain in the state shrinks while the number of unemployed grows. At the same time, there is a very large group of politicians who rail against taxes, so the states cannot raise taxes even though their tax base is shrinking and the number of unemployed is growing.

Meanwhile, the number of people accessing free state services continues to grow.

Basically, this is what has been happening in the US over the past 15 years with globalization. If you think about it, it is amazing the US economy, with all the deficit spending over the past eight years, has not collapsed sooner! http://www.chinavortex.com/2009/01/globalization-shoot-head/
 

19.) Globalization is wedded to cheap energy and cheap transportation. A more globalised economy results in greater producer-consumers distances. Spanish markets sell Danish butter, while Danish stores sell butter produced in France; England exports roughly as much wheat as it imports; the average pound of food in America travels 1,500 miles before it reaches the kitchen table, and the total transport distances of the ingredients in a pot of German yogurt totals over 1,000 miles — even though all are available within 50 miles.

Globalization only holds up if there is easy and cheap access to non-renewable energy. As oil becomes more scarce and more expensive, globalization falls apart.
 

Maria Gilardin:
"Globalization has been attempted many times by countries such as Spain, Portugal, England and the various churches, but never has the ideological and cultural justification for globalizaton been as viciously cruel and life-denying. That, I believe will be the downfall of the current corporate globalization. Each previous system denied aspects of our humanity, but the global market system puts everything on the auction block: Love, connectedness, dignity, peace, security, even our dreams and hopes, as it mortgages our common future and ravishes the natural world."
 
Randy Hayes:
"Economic globalization with its resultant ecological and human tragedies will intensify over the next decade. However, from the perspective of geological time, whatever is left of the biosphere will continue to evolve onward for billions of years. The blip on the graph that will represent globalization's frightening biological meltdown will someday be either a deeply sad episode or, if we are lucky, it will mark the environmental U-turn toward localism and sustainability that we are feverishly working to orchestrate. What is inevitable is sustainability. The only question is if human beings or many other life forms will be around to see it."

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Ask the former Director-General of the WTO a question

Fantastic post xraymike!

Larry

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