Global skeptics make good case

The week of Nov. 28 was a historic milestone for free trade and the expansion of the global economy. Reason: By comfortable margins, bipartisan majorities in the U.S. House of Representatives (288-146) and the U.S. Senate (76-24) approved legislation to implement the Uruguay Round of the General Agreement on Tariffs and Trade -- called GATT.

The "new GATT" will reduce tariffs (a tax on imports) by 38%. This
amounts to the largest global tax cut in history. The new regime also expands free trade principles to new areas not covered by the old GATT -- including agriculture, trade on services (e.g., construction, telecommunications, banking) and intellectual property (patents, copyrights, trademarks). These are sectors where U.S. companies are very strong, so U.S. exports should increase substantially.

Some say U.S. exports will grow by 8100 billion, which means more Americans working in high-wage, export-based industries. So, the "new GATT" should be good for workers, consumers and American producers.

Yet there were other milestones last week. On Nov. 28, Norwegian voters -- by a margin of 53% -- said "no" to membership in the European Union, the world's largest political and trading bloc. By splitting with Sweden, Denmark and Finland, who already voted to join the EU, the Norwegians turned their back on an opportunity to participate in a Nordic bloc that would have controlled 13 of 90 votes in the EU -- more than Germany. Reason: Norwegians have a strong, independent streak. They felt that membership would mean submitting to the EU's faceless bureaucrats located in faraway Brussels. They also believed that more open borders would bring more drugs, more crime and more illegal immigrants.

On the same day, Sen. Hank Brown, R-Colo., announced his decision to vote against the "new GATT." That surprised a lot of people. Brown is a pro-free trade conservative -- not a turn-back-the-clock protectionist.

Why would he oppose the "new GATT"? One reason: It endows a new trade bureaucracy in Geneva, Switzerland, with substantial powers (but few procedural safeguards) to police the new agreement. The World Trade Organization is a one-nation, one-vote, no-veto regime -- unlike the voluntary GATT, which was extremely effective in expanding global trade. The WTO's permanent bureaucracy will provide a standing forum for reducing trade barriers. But the WTO will also enforce trade rules and punish violators -- as determined by dispute settlement tribunals that are closed to the public and, in the words of the American Society of Newspaper Editors and other media groups, "an affront to the democratic traditions of this nation."

As in Norway, some Americans are concerned about ceding power to faceless bureaucrats located far away, some of whom have already opined that U.S. trade laws and our laws for consumer and environmental protection and our patent protection laws are incompatible with the "new GATT."

In Global Paradox, futurist John Naisbitt argues that the bigger the world economy, the more powerful its smallest players. Hank Brown and the Norwegian majority may be on to something. Perhaps the rest of us should take notice. Intellectuals, professionals and big business leaders promoting globalism may be missing something. It wouldn't be the first time.