I was recently handed a pamphlet from campus activists a few days ago, called “A Citizen’s Guide to the World Trade Organization.” On the cover of it was “Gattzilla,” so named after the old General Agreement on Tariffs and Trade, which has since been incorporated into the WTO.

A hilarious caricature of the WTO, Gattzilla is a large Godzilla-like dinosaur who is simultaneously stomping on a government buildings, dumping DDT on the ground, choking a dolphin and chewing on a globe. Though the plight of labor, the environment, national sovereignty and global activism in general deserve much sympathy, this level of discourse is disappointing.

Before Sept. 11, free trade was the most politically charged issue of the past decade, as evidenced by the 1999 Seattle riots. While free trade activists on both the right and left raise serious concerns of consequences of market liberalization on labor and the environment, their argument is a red herring. It takes aim at free trade, while largely ignoring the real problems in the global market.

Free trade with poor countries is not a problem by itself. Actually, protectionism among rich countries is a greater threat to third world development. For an example of policy that is cutting the heart out of industry in poor countries, look no further than the Bush administration’s implicit motto for world trade: “Do what we say, not as we do.”

While the Bush administration has increased tariffs on steel, subsidies on agriculture and upheld a web of protectionism on textiles–all things that poor, labor intensive economies should be selling to us at lower prices–they preach the free trade bible, asking poor countries to open up while blocking much of their exports. For instance, American consumers are paying out $140,000 per year for each textile job, amounting to $24 billion per year for jobs that should be putting third world labor to work. The ultimate result is that American consumers foot an enormous bill for the added cost of these tariffs, quotas and expensive domestic goods, while these industries in poor countries suffer.

Yet anti-globalization activists are right to argue that free trade has cost the jobs of thousands of American workers, especially in manufacturing, but overall America saw a net gain in jobs during the Clinton era of market liberalization–thanks in part to gains in more prosperous export industries.

According to economist Doug Irwin, in his excellent book Free Trade Under Fire, “Restricting trade would shift American workers away from things that they produce relatively well (and hence export and earn relatively high wages in producing) and toward things that they do not produce so well (and hence import and earn relatively low wages in producing) in comparison with other countries.” In sum, this gross misallocation of resources winds up hurting both wealthy and poor countries.

Granted, free trade activists deserve credit for being among the five or six Americans that care about conditions in developing countries. The treatment of labor by many of Western companies operating in foreign countries is indeed despicable. But curbing free trade isn’t the answer.

Like it or not, Western investment has also had substantial benefits for developing economies. Employment in these factories has taken millions out of subsistence living. This explains why immigration patterns in Mexico move north to the American managed maquiladora plants and not the other way around. In fact it’s clear that those countries that have attracted foreign investment (i.e. Mexico, Brazil, most of East Asia) have benefitted, and those that haven’t (most of Africa, and much of Latin America) are mired with the constant threat of hunger and homelessness that comes with subsistence living. Also, it is statistically undeniable that increased gross domestic product from these new investments has enabled governments to build schools and welfare programs that would have been near impossible without globalization.

Instead of bearing down on free trade, activists should support the WTOs efforts to end agriculture and textile protection. Rather than calling for the abolition of the WTO, activists should be putting pressure on it to adopt uniform international labor and environmental standards to end the worst of corporate exploitation. Instead of calling for protectionist measures for American manufacturing workers, activist should pressure the federal government for a welfare state that can adequately address the realities of poverty and unemployment–created by trade or not.

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