The End of Global Free Trade? Not Quite

In the past, globalized "free-trade" has generated enormous hostility and intense social protests between the poor and the intergovernmental organizations who they perceive as primarily serving the interests of elites and multinational corporations. These protests have only increased during the current economic crisis. But is the global free-trade regime in any significant danger? The masters of the free-trade universe are already in panic-mode.

In the name of "ensuring that trade flows as smoothly and freely as possible" among countries, organizations like the WTO and OECD seek to prevent governments from implementing policies that regulate trade to promote national interests or benefit vulnerable citizens (workers, farmers, etc). The OECD has recently released a report called, Trade-Separating Fact from Fiction, in which the organization warns against widespread questioning of the benefits of trade and free markets during the current crisis.

Freer flows of trade are part of the solution to the current economic crisis... Still, there are calls from some to protect industries and workers against imports by raising tariffs, imposing quotas or resorting to various non-tariff barriers. We would all pay a high price for heeding such calls.

The WTO is making a similar case for continued faith in globalized free-trade, warning governments not to make "protectionist" trade policy changes in response to greater unemployment. Governments risk catastrophic social unrest if they fail to offer some relief to constituents who are most vulnerable to shocks in the global trading system. In the so called BRIC countries such as India, China, and Brazil popular outrage about increasing pauperization, unemployment, and social service cuts are challenging the stability of their societies. Over 50,000 Indian farmers for example have mobilized in recent days against the WTO and demanded that the Indian government offer more defense against the organization's dictates.

For now, many developing countries are locked in a delicate balancing act between meeting the immediate needs of their citizens, and opening new markets for their exports in wealthier nations. The contradiction between dependency on external markets for exports and meeting domestic needs suggests that there is a significant trade-off under the current economic development strategy pursued by emerging economies. A structural shift among the largest emerging economies would appear to be highly unlikely in the near future.

I predict that ultimately, the BRIC nations will side with their pocket-books and seek to continue the path toward high-speed economic growth under the status-quo in the "Doha Round" WTO deliberations. So far, it appears that BRIC governments are merely paying lip-service to the aspirations of the poor---many of whom have asked for a complete break with the WTO altogether. However, we can expect to see some coordinated push-back against future rulings that explicitly limit freedom of action on trade policy by Brazil, India et al. and while this is not the complete reorganization of the global trading system the poor need, it is a long overdue step in the right direction.

US Health Care in Comparison

Commentators much more capable than myself are weighing in on the important health care debate taking place in Washington D.C. However, given the historic magnitude of the Obama Administration's push for health care reform I have decided to diverge from my usual focus to humbly remind my readers exactly why the American system needs fixing. Let's put it in perspective.

According to the OECD Health Data 2009 the United States' performance is comparatively lacking on all fronts. The OECD is comprised of the world's wealthiest nations with the highest living standards. Unfortunately, for citizens of the United States, our system spends much more and covers less people.

Spending More

"Total health spending accounted for 16.0% of GDP in the United States in 2007, by far the highest share in the OECD. Following the United States were France, Switzerland and Germany, which allocated respectively 11.0%, 10.8% and 10.4% of their GDP to health. The OECD average was 8.9% in 2007."

Covering Less

"For this amount of expenditure in the United States, government provides insurance coverage only for the elderly and disabled (through Medicare, which primarily insures persons aged 65 and over and people with disabilities) and some of the poor (through Medicaid and the State Children’s Health Insurance Program, SCHIP), whereas in most other OECD countries this is enough for government to provide universal primary health insurance."

The United States has fewer doctors per-capita than any other OECD country. We also lag behind world leaders in increasing life expectancy and declining infant mortality rates. This is all despite being the world's wealthiest country. The reason? Unlike most other industrialized OECD nations, the US does not have a universal health care system. Even the current reforms being advocated by President Obama fall short of providing universal quality care for every American. Furthermore, the administration left the single-payer option off the table which would have been the most efficient cost cutting mechanism. As a country that prides its self on being the "best" in the world, health care should offer every American a powerful dose humility.