Making Globalization WORK

by Joseph Stiglitz

Another World is Possible

introduction,
- the way globalization has been managed
The great hope of globalization is that it will raise living standards throughout the world: give poor counties access to overseas markets so that they can sell their goods, allow in foreign investment that will make new products at cheaper prices, and open borders so that people can travel abroad to be educated, work and send home earnings to help their families and fund new business.
sort of capital market libralization, labour market libralization, libral migration

economics had been driving globalization by lowering communication cost, transportation cost. but politics has shaped it.
former WTO official said that: if the trade libralization - lowering of tariffs and other trade barriers - had not fully delivered on its promise of enhanced growth and reduced poverty, it was the fault of the developing countries, which needed to open their markets more to free trade and globaliza faster.
an Indian running micro credit bank stressed on downside of free trade for India. He spoke of peanut farmers who could not compete with imports of Malaysia palm oil. He said it was increasingly difficult for small and medium sized business to get loads from banks.(reference: '../excerpts/indiauninc.html')
Around the world, counties that have opened up their banking sectors to large other multinational banks have ofund that those banks prefer to deal with other multinations like coca-cola, IBM, Microsoft. While in the competition between large international banks and local banks the local banks often appeared to be the losers, the real losers were the local small businesses that depended on them.

TWO FACES OF GLOBALIZATION

WTO establised in 1995
seattle 1999 protests, WTO meet
negatives,
- factory workers in USA saw their jobs being thretened by competition from China
- farmers in developing countries saw their jobs being threatened by the highly subsidized corn and other crops from US.
- workers in europe saw hard-fought-for job protections being assiled in the name of globalization
- AIDS activists saw new trade agreements raising the prices of drugs to levels that were unaffordable in much of the world (IP protection and companies)
- environmentalists felt that globalization undermined their decades long struggle to establish regulations to preserve nature
can't accept the argument that economically at least globalization would make everybody better off.
report snippet from world commission on social dimentions of globalization,
"The current process of globalization is generating unbalanced outcomes, both between and within countires. ... Many of them live in the limbo of informal economy without formal rights and in a swathe of poor countries that subsist precariously on the margins of global economy. ... the global imbalances are morally unacceptable and politically unsustainable."

of course, those who are discontent with economic globalization generally do not object to the greater access to global markets or to the spread of global knowledge which allows the developing world to take advantage of the discoveries and innovations made in developed countires.

There are many forms of market economy. The american model differs from the Nordic countires, from the Japanese model and from European social model. Even those in developed countries worry that globalization has been used to adbance the Anglo-American liberal model over these alternatives and even if the american model has done well as measted by GDP, it has not done well in many other dimensions, such as the length of life, eradication of poverty, maintenance of the well being of those in middle.
globalization has been used to advance a version of market economics that is more extreme, and more reflective of corporate interests, than can be found even in the United States.

globalisation and poverty
life in <$2 a day. extreme poor <$1 a day. Life for people this poor is brutal. Childhood malnutrition is endemic, life expectancy is often below 50 years and medical care is scarce. Hours are spent each day searching for fuel and drinkable water and eking out a miserable livelihood, planting cotton on a semi-arid plot of land and hoping that this year the rains will not fail, or in the backbreaking toil of growing rice in a meager half acre, knowing that no matter how hard one works there will be barely enough to feed one's family. roughly 1/6th of world live in extreme poverty. worst is in Africa. With it's increasing population #people in poverty would rise. is rising.
During the years of colonialism the world took africa's resources and gave back little in return. ... In recent years, they opened up their markets but globalization did not deliver on its promises.
Globalisation has exposed developing countries to more risk but the markets to insure against these risks are absent. In more advanced countires, governments fill in the gap by providing pensions for senior citizens, disability payments, health insurances, welfare and unemployment insurance. In developing countires governments are too poor to implement insurance programes.
wealthy has buffer to protect themselves in rough times, poor do not.
While the idea of democracy has spread. developing countries find their ability to act eroded both by new constraints imposed from outside to which globalization has contributed. Conditions imposed for receiving aid. Conditionality undermines domestic political institutions. The electorate sees its gov bending before foreigers or giving into international institutions that it belives to be run by United States. Thus globalisation has helped spread the idea of democracy, it has, paradoxically been managed in a way that undermines democratic processes within countries.
In IMF votes are largly on the basis of economic power years ago when it was establised.

REFORMING GLOBALIZATION

After having debated on general recognition that something is wrong with globalization coming to analysis of specific policies and specific failures.
Those who benefit currently will resist the changes required and are very powerful. Some of the required changes are small and would easily pass through, others might not.
specific policies and failure areas,
1. The pervasiveness of poverty (UN millenium goals, World bank, IMF, developed nations)
2. The need for foreign assistance and debt relief (reference: ../excerpts/endofpoverty.html)(conditions against aid)
3. The aspiration to make trade fair (unfair subsidising farmers and forcing others to drop terrifs)
4. The limitations of liberalization (short term speculative capital flow and quick move out. washington concensus suggesting downscaling of government, deregulation and rapid liberalization and privatization. this was too much focused on GDP and ignored sustainability of growth, equity considerations and so on)
there will be grave problems ahead if everybody (china, India and others) starts emiting greenhouse gases at the rate which Americans have been doing.
5. A flawed system of global governance (league of nations after WWI, failed, UN, IMF, world bank, <- clubs of riches, )
United States agreed that Europe could appoint the head of the IMF, with and American in the number two position and Europe agreed that the U.S. president could appoint the head of the World Bank.
There was a need for regulations restricting officials from moving quickly to private firms as they departed their public service to the IMF; such restrictions are standard fare in modern democracies to reduce the appearance - or reality - of conflicts of interests, the incentive of servants rewarding potential future employers through favorable procurement or regulation.
Nation State and Globalization
At early stage globalization started as the transportation/communication cost reduced. Before that most of the trade was local.
Governments took on new roels in preventing monopolies in laying the foundations of modern social security systems, in regulating banks and other financial institutions.
The conventional wisdom that the United States development was the result of unfettered capitalism is wrong. Even today U.S. gov plays a central role in finance. It provides, guarantees for significant fraction of all credit with programs for mortages, student loads, exports and imports, cooperatives and small businesses. Gov not only regulates banking and insures depositors but also tries to ensure that credit flows to underserved groups and at least until recently to all regions in the country not just the big money centers.
United States was successful partly because of the role that its gov played in promoting development, in regulating markets, and in providing basic xocial services. The question facing developing countires today is will their gov be able to play a comparable role?
market forces by themselves are so string the gov, often in developing countires cannot control them. (conuntry may want to raise minimum wages but the foreign companies then would move away to country with lower wages.)

Economic globalization has outpaced political globalization. We have a chaotic, uncoordinated system of global governance without global governance, an array of institutions and agreements dealing with a series of problems, from global warming to international trade and capital flows. Fiance ministers discuss global finance matters at the IMF, paying little heed to how their decisions affect the environment or global health. Environment ministers may call for something to be done about global warming but they lack the resources to back up those calls.

ideal of global sympathy hasn't developed. Europeans are learning how to think of themselves are German/British/Italian and Europeans. Closer economic integration has helped.

Today, these is an understanding that many of the problems with globalization are of our own making - are a result of the way globalization has been managed.

The Promise of Development

Quarter century ago, three major schools of economic thought competed with each other - free market capitalism, communism and managed market economy. With the fall of Berlin wall in 1989, however, the three were reduced to two, and the argument today is largely between free market and managed marked.
washington concensus (1989)
free market-minimizing the role of gov, emphasizing the privatization(selling of gov enterprises to the private sector), trade and capital market liberalization and deregulation (eliminating regulations on the conduct of business). Do privatize everything, from factories to social secutiry; don't have the government involved in promoting particular industries; do strengthen property rights; don't be corrupt. Minimising gov meant lowering taxes but keeping budget in balance!
managed market-gov having more role in promoting development and protecting the poor. While markets are the center of any sucessful economy, gov has to create a climate that allows business to thrive and create jobs. It has to construct physical and institutional infrastructure - laws ensuring a sound banking system and securities market in which investors can have confidence that they are not boing cheated. Poorly developed markets are marked by monopolies and oligopolies; high prices in a vital area like telecommunications hinder development; so gov must have strong competition policies. There are many other areas in which markets by themselves do not work well. There will be too much of somethings like pollution and environment degradation and too little of others like research.
What separates developed from less developed countires is not just gap in resources but a gap in knowledge, which is why investments in education and technology larkely from government, are so important.

The results of any theory depends on its assumptions and if the assumptions depart too far from reality, policies based on that model are likely to go far away.

Limits of markets:[advanced economic theory (1970-80)]unfettered markets do not lead to economic efficiency whenever information is imperfect or markets are missing (for instance, good insurance markets to cover the key risks confronting individuals). And information is always imperfect and markets are always missing. Nor do markets, by themselves, necessarily lead to economic efficiency when the task of a country is to absorb new technology, to close the "knowledge gap": a central feature of development. [reference: tejas]
Most successful countries have been those in Asia, where gov played a very active role. (china, japan, south korea to name few)
- East Asia
- Latin America
- Countries in transition from communism
- Africa
- South Asia

East Asia(south korea, China, singapore, Malasia, Indonesia, Vietname, Japan, Taiwan): Globalization in form of export-led growth helped pull the East asian countries out of poverty. Globalization made this possible, providing access to international markets as well as access to technology that enabled vast increases in productivity. But these countries managed globalization : it was their ability to take advantage of globalization, without being taken advantage of by globalization that accounts for much of their success.
These countries simultaneously achieved growth and stability: some had not a single year of negative growth over a span of almost a quater century, others had one bad year. If the province of China were treated as separate countries- and with populations sometimes in excess of 50million, they are far larger than most countries around the world- then most of the fastest growing countriies in the world would be in China.
Gov in these countries made sure that benefit of growth did not go just to a few but were widely shared.
usual things gov do: they expanded primary education and higher education simultaneously, recognising that success required both universal literacy and cadre of highly skilled individuals capable of absorbing advanced technology. They invested heavily in infrastructure such as ports, roads and bridges, all of which made it easier to transport goods and so drove down the cost of doing business and of shipping goods out of the country.
they expanded beyond that: gov in east asia played large role in planning and in advancing technology choosing which sectors their countries would develop rather than leaving it up to only the market to devide. Investment in high tech sector helped Taiwan, Korea, and Malaysia become major producers of electronics, computers and computer chips.
Intent of gov was not to outsmart the market, picking winners better than the market would do. But they realized that there were often enormous spillovers: tech advances in one area could help stimulate growth in another. They realized that markets often failed to coordinate new activities well: firms using plastics would not develop without a local supplier of plastics, but it was an enormous risk for firm to produce plastic wihout an assured demand for is output. They realized too that banks often were less interested in lending to new industries than in providing finance to speculative real estate or just lending to government.
Savings: Policy makers (before east asia demonstrated it) thought, there was little gov could do to encourage savings. East asian govs showed that it was not true. Money to make their investments came from their own people, so these countries didn't have to depend on volatile capital flows from abroad. [China was saving 40% of GDP, in singapore 42% of wage income was compulsorily placed in PF, in Japan gov created savings institutions, which reached deep into rural areas]
While most of the regions libralised, opening up markets and scaling down gov regulations, it did so slowly at a pace consistent with economies capacity to cope. (in contrast, there are examples of countires that did it in disruptive way, their laws couldn't catup.)
Some countries such as China, malaysia, Singapore invited in foreign investment; others, Japan, Korea, felt more confortable without it and grew just well. Even those that invited in foreign capital made sure that the guest firms transferred technology and trained local workers, so that they were countributing to the nation's development effort.
crisis: With their high savings rate, the countries of East Asia were hardly in need of additional capital. But during 1980s many of these countries perhaps succumbing to pressure from the IMF and the US Treasury opened up their markets to the free flow of capital. For a while capital flowed in but then sentiment changed and it fled out. The result was a crisis that spread across the region and beyond. In 1997 speculators attacked thai baht causing the currency to go into freefall beginning in early July. Foreign banks called in their loads to Korea. Indonesia faced problems from both the banks and speculators. IMF provided money with long list of ocnditions. These wre massive bankrupcies and currency crisis turned into banking crisis. IMF policies failed to stabilize the currencies; they only succeeded in making the economic downturns far worse than they otherwise would have been. Critics of IMF argue that policies were not really designed to protect the countries from recessino but to protect the lenders; their intent was to quickly rebuild reserves to that international creditors could be repaid. The countires did, quickly restore their reserves and even managed to repay the IMF the money owed within a few years.

Latin America: ()Latine america embraced the Washington consensys policies more wholeheartedly than any other region.
In 1980 fighting its own problem of inflation U.S. initiated interest rate increases that climbed to over 20%. There rates spilled over to loads to Latin America, triggering latin american debt crisis of the early 1980s, when Maxico, Argentina, Brazil, Costa Rica, and a host of other countries defaulted on their debt. It was during this period that Latin American economic policies changed dramatically with most countries adopting washington consensus. Government had not been working well for them.
price stability was restored and growth resumed. The growth was based on heavy borowing from abroad and on privatizations which sold off national assets to foreigners- the proceeds from which were not invested. There was a consumption boom. GDP was increasing but nation's wealth was diminising.Growth was short last and was followed by recession and stagnation. And even during growth, it went dispropotionaly to rich.

Countries in transition from communism: After the Berlin wall fell, many believed that shock therapy was needed. Transition to western style capitalism should take place overnight through rapid privatization and liberalization. Instantaneous price liberalization brought with it- hyperinflation. Prices in Ukrain at one point increased at the rate of 3300 percent a year. Tight monerary policy (high interest rate with little credit available) and fiscal austerity (tight budget) were used to bring down the hyperinflation. They also brought down economies, which slid into deep recessions and depressions. Meanwhile rapid privatizaitons were giving away hundreds of billions of dollars of the countries' most valuable assets, creating a new class of oligarchs who took money out of the country far faster then the inflow of billions that the IMF was pouring in as assistance. Capital markets were liberalised in the mistaken belief that money would be induced to come in. Instead, there was massive capital flight, including the famous purchase of chelsea football club.
Without appropriate laws concerning corporate governance, there might be massive theft of corporate assets by managers; there would be incentives to strip assets rather than to build wealth.
The rapid and corrupt privatizations in russia set in motion a vicious circle. The meager amounts received by the government led to questioning the legitimacy of the transfer of public resources to the private sector. Investors-those who had acquired the assets - then felt, quite rightly that their property rights were not secure, that a new government might under popular pressure reverse the privatization. As a result they limited their investment and took as much of their profits out of the country as they could - leading to further disilluisionment with privatization process, making property rights still less secure. The capital liberalization pushed by IMF made matters worse because it made it possible for the oligarchs who had stripped assets from the corporations they controlled to take their money offshore, to places where secure property rights were already well established. They enjoyed benefits of weak legal frameworks at home and strong property protections abroad.
It is now widely aggreed that the speed of reforms in former soviet bloc countreis was a mistake. The privatizations were done before sound regulations and strong tax laws were put into place. As government revenue dropped spending on health and infrastructure collapsed.
One of the legacies of russia's past was a high quality education system, but this quickly deteriorated as budgets were slashed. At the same time the old social safety nets were being cast aside.
Some countries like poland, slovenia managed the transition better. They (being in eastern europe) had prospects of joining EU.

Africa:African countries failed to attract investors. The vast markets of Asia, with their more highly educated labor fource, their better infrastructure, their fast growing economies were simply more attractive for most of the multinationals. Low agricultural productivity, AIDS epidemic, malaria. Globlization bypassed the continent, green revolution bypassed the continent.
In 1990s, many of the African countries including Nigeria, Kenya, Tanzania, Uganda, Ethopia, Ghana, found themselves with new leadership and new leaders seemed more committed to pursuing good economic policies.

South Asia: Green rovolution 1970s, Libralization 1990s, access to internet and service outsourcing to India.

A vision of Development

What we measure is what we strive for. GDP is easier to measure compared to sustainability, happiness index, environmental degredation. So GDP has become fixation of economists.
Social and political stability come from high leel of employment and limited inequality.
The role of Markets
Comprehensive approach to development
comprehensive approach recognized the dangers of the kind of single minded focus that had characterized development policies of the past. China has been adept at the changing the focus of its attention as it has moved along in its three decades long development. Its eleventh5 year plan adopted in March 2006, shifted from exports to increasing domestic demand, in recognition of growing protectionist pressures around the world. For China, with a saving rate of over 40% of GDP, capital with which to invest was no longer the problem. the current necessity is to stimulate the consumption.
At one stage the focus was on attracting foreign investment, when that proved successful, focus shifted to developing domestic entrepreneurs.
The right mix of gov and markets will differ between countries and over time.
People are at the core of development
brain drain. another way in which developing countries end up subsidising developed nations.
importance of community
grahmin micro credit banks in rural Bangladesh.
Challenge of Implementation
Governance
Countries must be able to use the resources well and take advantage of new opportunities. This is the responsibility of each country. A major factor determining how well a country will do is the quality of the public and private institutions which in turn is related to how decisions get made and in whose interest a subject broadly referred to as governance.
corruption issue.
In uganda, the government has been publicizing all checks sent to the local level, so that villagers know what they should be receiving-and can make sure that those between do not take their cut. In nigeria, government has promised to publise what it receives from oil companies. In thailand, new constitution includes the notion that citizens have basic right to know what their gov is doing.
These are striking moves in the right direction - but too often they have made only a small dent in prevailing cultures of corruption.
secret bank accounts

Making Globalization Work - for more people

reference to World is Flat.
High technology is high-stake game, in which large investments (by gov and countries) are quired. The advanced industrial countries and their large firms have the resources; many others do not. What chances then do much less capitalized innovative firms from the developing countries have? At most, they can pick up the crumbs-occupy niches too small for the giants to bother with.

Making Trade Fair

NAFTA, north american free trade area (maxico, USA, canada)
even before NAFTA, maxico and canada were United State's biggest trade partners and countries most visited by USA citizens.
"Advocates of trade libralization believe it will bring unprecendented prosperity. They want developed countries to open themselves up to exports from developing countries, liberaliza their markets, take away man-made barriers to the flows of goods and services, and let globalization work its wonders. BUT"
"trade liberalization is also among the most controversial aspects of globalization; many see the alleged costs - lower wages, growing unemployment, loss of national soverignty - as out weighing the purported benefits of greater efficiency and increased growth."
We have not fully truly tried free trade. Past agreements have been asymmetric.
but even if trade had been free, not everyone are in equal position to take advantage. So not all would benefit equally.
some might become worse off, as liberalization exposes countries to greater risks.

NAFTA

One of the main arguments of NAFTA was that it would help close the gap in income between maxico and USA and thus reduce the pressure of illegal migration.
In fact, NAFTA made maxico more dependent on USA. A fairer trade agreement would have eliminated america's agricultural subsidies and its restrictions on imports of agricultural goods like sugar, into USA. Even if USA didn't eliminate subsidies, maxico should have been given right to countervail that is, to impose duties on US imports to offset subsidies. But NAFTA doesn't allow that.
Anti-dumping duties on maxican tomatoes under pressure from american farmers.
One part of maxico's economy that was successful at least in the years immediately after NAFTA, was the area just south of the border. So-called maquiladora factories sprang up supplying american manufacturers like GM, GE with low-cost parts. Employment grew.
NAFTA gae maxico a slight advantage over other U.S. trading partners' but maxico, with its low investment in education and technology, has had a hard time competing with China, which invests twice as much (as percentage of GDP) in research. Tariffs play limited role.

Trade Libralization: Theory and Practice

Adam Smith: free trade allows countries to take advantage of their comparative advatage, with all nations benefiting as each one specializes in the areas in which it excels.
Large trading areas allow firms and individuals to specialize even further.
Fear of Job Loss
In many countries unemployment rates are high and those who loose their job do not move to higher wage but simply retire early or stay unemployed.
This has happedned in many developing countries, as they liberalize quickly and private sector did not have time to respond and create new jobs, or when interest rates were so high that private sector could not afford to make investment necessary to create new jobs.
Even if people do not loose job, in advanced industrial countries people see their wages decreasing.
Infant Industries and INfant Economies
The standard argument for tree trade is based on efficiency. More goods can be produced with given resources if each country focuses on its own comprative advatange.
Developing countries lag not only in resources but also in technology .
Closing the knowledge gap is more vital than improving efficiency or increasing available capital.
How best to learn? some argue, the only way to learn how to produce steel is to produce steel, as korea did.
If developing countries are to enter into such high tech industries, those industries have to be protected until they are strong enough to compete with established international giants. Tariffs result in higher prices - high enough that the new industries can cover costs, invest in research and make the other investments that they need in order to be able to eventually to stand on their own feet. This is called Infant industry argument.
It was popular idea in Japan in 1960s and in united states and europe in nineteenth century.
Without protection, a country whose static comparative advantage lies in, say agriculture risk stagnation; it's comparative advantage would remain in agriculture, with limited growth prospects.
Fair Trade versus Free Trade
The History of Trade Agreements
0. GATT 1. Uruguay (Latin America) 1986(Grand bargain). World trade organisation. (sort of enforcement mechanism. WTO did not itself punish violators, but it authorized countries that had suffered injury as a result of violation to retaliate by imposing trade restrictions on offending country.)The EU has become quite sofisticated in using this instrument against the US. It draws up a long list of potential candidates for retaliation, targeting areas in which tariffs will be particularly painful, or goods produced in the sitricts of congressmen whom they are trying to sway. The threats have worked well. The rule is still imperfect as the restriction threat by small country to united states doesn't mean much to USA.
2. 1999 seattle round.: developing and powerful countries sometimes just don't keep their side of deal. riots broke in seattle in opposition to globalization. Oppositors didn't provide any solution but they pointed that something was wrong.
3. Doha 2001. promise to make this development round. it stalled over issue of agri subsidies in developed world.
4. Cancun 2003. talks collapsed.
5. Hong kong. originally intended to wrap up development round promised in Doha. Nothing fruitful came out.
The era of multilateral trade liberalization seems to be nearing an end (at least for a while), as well founded disilluisionment in the developing countries combines with growing protectionist sentiment in the developed world.
The real danger today is not that something will or will not be agreed to at the conclusion of the development round which will harm the developing countries significantly: The scale of reform is so low that it is likely to matter little. Any eventual agreement will do only the little. The real danger is that the world will think that it has accomplised what was set out in Doha.
Making Globalization Work
It is possible to design a global trade regime that promotes the well-being of poorest countreis and that is at the same time good for the advanced industrial countries as a whole-though of course some special corporate interests might well suffer. This was of course the promise of Doha. The reforms would cost the developed countries little in most cases nothing at all, as taxpayers would save billions from lower prices and developing countries would benefit enormously.
Developing countries should be treated differently
Agriculture
Escalating Teriffs
Unskilled Labour intensive services and Migration
Nontariff barriers
Restricting Bilateral trade agreement
Institutional Reforms
Developing ocuntries should be treated differently
It seem widely acknowledged that developing countries should be treated differently in trade agreements.
In reality, tariffs by developed nations on developing nations are four times higher compared to on developed nations.
Preferrential treatment to developing nations by developed nation is completely voluntary and preferential treatment could be taken away if the developing nation does not do what the granting country wants.
free trade for poor and extended market access proposal
one single reform would simultaneously simplify negotiations, promote development and address the inequities of the current regime. Rich countries should simply open up their markets to poorer ones, without reciprocity and without economic or political conditionality.
Middle income countries should open up their markets to least developed countries and should be allowed to extend preferences to one another without extending them to rich countries, so that they need not fear that imports from those countries might kill their nascent industries.
European union recognised the wisdom of this basic approach when in 2001 it unilaterally opened up its markets to the poorest countries of the world, taking away all tariffs and trade restrictions.

In one of the high points of hypocrisy and cynicism in the Hong Kong meeting in 2005, the US open itself up to 97% of the goods produced by the least developed countries a number carefully calibrated to exclude most of the products, such a Bangladeshi textile and apparel that it wanted to keep out. Bangladesh would be free of course to export jet engines and all manners of other products which are beyind its capacity to produce(right now).
broadening developing countries development agenda
There is a difference between agricultural subsidies by USA and EU and subsidies by poor countries. Subsidies by developed nations do affect global prices. Poor countries subsidies would not affect global prices.
externality: There is a difference between the effects on the global economy of agricultrural subsidies given by the united states and Europe, which are allowed and the subsidies that developing countries might want to give to help start new industries or even to protect their industries and farmers against subsidized competition, which are prohibited. When the United states subsidizes cotton, global prices are affected; farmers in the developing world are hirt because of U.S. generosity to its farmers. (Economist call this an 'externality.')
Agriculture
The total amount going to USA, EU and japanese farmers as subsidies is nearly 75% of african countries income. Its impossible for african farmers to compete in global markets. (these countries again are in position to force push others to buy their cotton or so on. giving prefered treatments to those who obey them.) Part of those subsidies also goes to big corporate farms. Just another form of corporate welfare.
subsidies encourage farmers to produce even more, driving down international prices and directly affecting farmers of poor countries.

Vast majority of those in developing countries live on agriculture. Removing subsidies would drive the prices up and benefit all those. Of course the urban poor in developing countries or anywhere would suffer because of higher prices and benefit won't be event. These risks would have to be cousioned by government until stability comes.
Cotton is exception. Cotton as raw material is very cheap and has negligibal effect on final product, e.g cloths. Slight increase in price of cotton would affect the final product price very little. This is one of the reasons that there is currently such a strong demand by developing countries for the elimination of cotton subsidies.
Escalating Tariffs
^ higher tariffs on manufectured goods compared to raw. Countries growing some fruit/vegetable if process and sell in developed world, higher tariff is applied, discouraging such industrialising in poor countries who produced them.
Tariffs on value added by industries in developing countries should be reduced drastically.
unskilled labour intensive services and migration
Developed countries are rich in capital. Capital moves around the global searching for better returns.
Developing countries have abundance of unskilled labour, who want to move around the world in search of better jobs. Capital markets (by the efforts of US and EU are a lot liberalized at this point). But even modest increase in labor flows would increase global GDP by amounts that are order of magnitude greater than the most optimistic estimate of the benefit of capital market libralization.
Since capital markets are liberalized, countries have to fight to keep them by lowering taxes on corporations. Unskilled labour is not as mobile. So countries don't have to fight for it. And this drives wages down.
Non tariff Barriers
safeguards, Dumping duties, technical barriers, rule of origin.
Safeguards,
temporary tariffs, to adjust to suddent upsurge in imports.
Devloping countries have probably not made as much use of safegaurds as they should. At the other end, USA has repeatedly abused safeguards measures, imploying them to protect industry in decline

Dumping Duties,
could be permanent. e.g the dutires caliming someone is selling something below cost to attract cutomers and generate monopoly.
India used Indian cost(surrogate country) in bringing dumping charges against China in the case of important chemical, isobutyl benzene.

Technical Barriers,
trade barrier in disguise. barriers using quality control.
Rules of Origin,
x% of product made in country. Today most of products are made in parts manufectured in different countries. The threshould could be caliberated to keep specific products from entering countries market. Or preferences could be given to country importing from home country.
Restricting Bilateral Trade agreements
After failure of cancun, US announced that it would push for bilateral trade agreement.
Bilateral trade agreements undermine movement towards multilateral trade regime.
USA has succeeded into getting some provisioned signed (around IP, cpaital markets and so on) that it couldn't in Doha.

Institutional Reforms
Governance - problems in the ways decisions are made in the international arena - are at the heart of the failure of globalization.
The problems of unfairness start in the beginning: with setting the agenda. We have seen how the past focus on manufecturing has moved to high skill services, capital flows, and IP property rights.
A development oriented trade agenda would be markedly different. First, it woudl remain marrowly focused on those areas where a global agreement is needed to make the international trade system work. The developing countries simply don't have the resources to negotiate effectively on a broad range of topics. Secondly, it would focus on areas of benifit to developing countreis: unskilled labor internsive services and migration. There are some new topics that would be added: circumscribing bribery, arms sales, bank secrecy and tax competitino to attract business, all of which hurt developing countries and all of which can only be controlled by international cooperation.

The issue of openess in international discussions has been a major concern. Having trade ministers in closed room (green room), separated from the experts on whom they rely, negotiating all night, may be a good test of endurance, but it is not a way to create a better global trade regime.

Mechanism to sell enforcement rights--> There is no way Antigua could effectively enforce decision on USA after it won major case in online gambling. There should be a mechanism by which Antigua could sell enforcement right to say Europe, who might have some grivance against USA. EU could use enforcement right.

Patents Profits and People

Intro, - introduction of TRIPs in Uruguay round. signed in 1994. (TRIPs - Trade related, intellectual property rights)
- Patents give innovators monopoly rights over their innovations. The higher prices are supposed to spur innovation. (whether they do so or not is different). TRIPs was designed to ensure higher priced medicine.
- double standards of government as they reduce accessibility barriers to health care in their own country to gather more votes, and for TRIPs over other countries knowing there are many poor who would die as a result.
- American and EU corporate interests using this as rationale have attempted to use trade agreement to force developing countries to adopt intellectual property laws that are to their liking.
- using simplistic ideology of patents and ip to advance their cause.
There is need to have balanced intellectual property regime.

Intellectual Property: Its Strengths and Limits

structural adjustment""
south asia, east asia, sub saharan africa, north america, latin america, middle east, west europe, east europe, australia

Further reading books/topics

1. globalization and its discontents
2. why globalization work - martin wolf
3. In defence of globalization - Jagdish bhagwati
4. The elusive quest for growth - Bill Esterley
5. study: voice of poor
topics,
speculative foreign money in argentina, upsurge and fall
international institutions created (and context/background) after WWII
1997 currency crisis, east asian financial crisis
rise of South korean, Thai baht, Malisia, Indonesia's
european union opening of markets in 2001 for poor countries