USING GREEN CAMOFLAGE TO REVISIT OLD PROTECTIONISM

I'm often asked, "Isn't trade a promoter of global warming, shouldn't we retreat from the Doha Development trade round because of the Kyoto Treaty on global warming?"  Like all successful lies, it has to have a bit of truth to it for it to become believable. Yes, all human activity creates an environmental impact. The question is whether trade between countries is more environmentally damaging than trade within a country. Answer; no, because of competition and the need to be efficient to gain markets. Economists make the case that without subsidies and privileges, trade between countries can be less damaging than protected domestic economic activity. Most business is local even for great exporting nations like Germany or New Zealand, where 80% of economic activity is local now. Those who argue for food miles or food taxes to promote local agriculture ahead of overseas imports are putting a Green camouflage jacket on an ugly, old, protectionist model! This is just the argument that privileged agriculture interests in rich countries need to continue raiding the taxpayers' purse, most of which goes to the richest producers at the expense of low income earners.

Even when evidence is produced that it's more energy-efficient to ship kiwifruit from New Zealand to Europe than buy from subsidised suppliers in Europe, some environmentalists refuse this logic. How can they oppose the importation of Kenyan flowers which are cheaper and use less energy than subsidised  producers? And what about the poor consumer in rich countries and jobs in poor countries?

Global climate change is an issue but to argue it's better for the climate in California for China and India to slow growth and remain poor is serious hypocrisy. Actually, Beijing's and New Delhi's terrible pollution is about the same as London and Chicago 50 years ago. The river Thames is its cleanest in 200 years. Pollution contributed to the cholera epidemics between 1831 and 1866 which killed over 35,000 people. In 1861 it carried typhoid that killed Queen Victoria's husband, Albert. There's been progress, a simple $1.00 shot would have saved Albert and the richest man in the world at the time, Rothschild, who also died of a simple disease. A dollar injection would save millions of lives in poor countries and defeat TB and Malaria as successfully as we defeated and abolished Smallpox. Rich countries defeated Smallpox in the 1950's, poor countries in the 1980's. There are answers, and in many places the environment has improved.

It's no accident that the worst environmental outcomes were and are in closed anti-trade economies like the old Soviet Union and North Korea.

Sure, it's a new challenge given over a thousand new cars are registered every day in Beijing alone, but making people poor and wretched is not the answer. From being energy self-sufficient 20 years ago, China is now the 2nd biggest importer of energy. Here's the good news, energy costs per industrial unit produced in China is 9 times higher than a similar unit produced in Japan, and 3 times that of the U.S. Here's further good news, only 1% of U.S.; 4-wheel drive vehicles go off-road, only 15% of energy in a gallon of gas reaches the wheels of a car. If the U.S. got the same efficiency per car as Europe, they would not need Middle East oil. If oil prices truly reflected costs, industry would respond. Potentially enormous new efficiencies mean conservation gains can be made.

Open societies that value democracy, civil society, competition and trade tend to have better environmental outcomes.  The most dirty, dangerous cities are the poorest. When people are lifted out of poverty, have confidence that the basic needs of life, food, clothing, shelter, a job, and that their children will be better off, they demand better environmental, social and democratic outcomes.

Anti-trade has become a popular cause and getting more popular, especially in the media. Hollywood, one of the most globalised industries, is curiously anti-globalisation. Recently I saw a very good movie, "Border Town" about horrific rapes and murder in Northern Mexico. As a backdrop to the movie was the North American Free Trade Agreement, menacing music, sinister lights in factories. As if somehow the monsters who preyed on the workers, abused and murdered them would become less psychotic and murderous if the factories did not exist. Perhaps I'm sensitive because an anti-trade movie is being made with the backdrop of the failed Seattle Ministerial meeting as noble environmentalists battle to stop Africa trading fairly. The World Trade Organisation is portrayed as a sinister, evil organisation, plotting to rape the planet. Alas, some of my favourite actors are playing lead roles, perhaps I'm just a little apprehensive that Danny De Vito might play me.