Lagos, David Bonior, and Harley Shaiken
Development and the Americas"
Professor David Bonior (left) listening , President Ricardo
Lagos explains his views on the relationship
between trade and development on October 2.
archived webcast of the event (Real)
- Article on the event by Wendy Muse Sinek
Lagos, President of Chile, 2000-2006;
Visiting Professor, Center for Latin American Studies, Fall 2006
Bonior, Professor of Urban, Labor and Metropolitan
Affairs, Wayne State University; Member of Congress 1977-2003;
House Democratic Whip 1991-2002
Harley Shaiken, Chair of the Center for
Latin American Studies; Professor of Geography and Education
Symphony of Development Through Trade in the Americas
By Lyal White
Lagos, former president of Chile, was once described as the “Mozart
of the economy.” Credited for his ability to balance
economic growth and social delivery in the face of adverse
regional and global dynamics, Lagos has steered Chile to
new levels of success. During his six-year term, economic
liberalization was a priority, and Chile integrated further
into the global economy through a range of bilateral and
multilateral trade agreements. Today, 70 percent of Chilean
gross domestic product is from trade, and close to 80 percent
of trade is conducted under preferential trade agreements
that span from Asia to Europe and North America. It is little
surprise that the Chilean success story is often attributed
to trade liberalization.
free trade is controversial. The lightning rod of anti-globalization
protests, trade remains the most tangible result of economic
globalization. But the debate, as Harley Shaiken, chair of
the Center for Latin American Studies (CLAS) at UC Berkeley,
pointed out recently, is polarized and too narrow. Those
in favor of the current free trade model are divided by vague
differences between the market fundamentalists and the moderate
government interventionists. In contrast, those critical
of the free trade paradigm are labeled protectionists and
most often, especially outside of the United States, carry
an ideological stigma.
comments came as he moderated a discussion between former
president Lagos, a social democrat and strong advocate of
free trade, and David Bonior, a former member of congress
and House Democratic Whip, who has become a voice for the
inequities and inequalities of free trade. Perhaps unsurprisingly,
these unsuspecting adversaries ¾ one a proponent of
free trade from the developing world and the other a critic
of economic orthodoxy from the developed world ¾ came
up with similar suggestions advocating fair trade practices.
But their different points of departure offer somewhat contrasting
perspectives on how to achieve this ambitious goal.
the growth in merchandise trade, which exceeded $10 trillion
in 2005, trade is about far more than simply the exchange
of goods. Trade in services reached $2.4 trillion in 2005
and with that came a range of related issues from intellectual
property rights to capacity building and technology transfers,
not to mention the ways in which research and development
can be utilized as a real source of investment growth. These
factors should be balanced with the needs of the people,
whether that means providing access to anti-retroviral drugs
for persons infected with HIV/AIDS in developing countries
or ensuring a more fair and just labor legislation across
the spectrum in an effort to empower workers regardless of
their geographical location.
Bonior, who as House Democratic Whip was
a leader in the negotiations over Nafta, spoke about
free trade agreements, labor rights, and the potential
for "economic democracy."
was quick to point out that, “Economic democracy is,
at best, in its embryonic stages.” For him the North
American Free Trade Agreement (NAFTA) symbolizes all that
is wrong with free trade and neoliberalism in general. Social
decisions are increasingly left to the auspices of an unregulated
market. The results, he believes, have been “catastrophic,” citing
poverty levels of above 40 percent in Mexico, over 100,000
job losses in the U.S. automotive industry and the claim
that U.S. workers today are currently working 40 percent
more than their counterparts in France, Germany and Italy.
light of these statistics, NAFTA’s successes are often
quickly forgotten. Growth in foreign direct investment (FDI)
and trade between the United States, Canada and Mexico has
exceeded the estimates of even the most optimistic NAFTA
proponents. Mexico is the biggest beneficiary of the agreement.
During the first 10 years of NAFTA, the Mexican economy grew
to become the ninth largest in the world and per capita income
rose by 24 percent ¾ well above the Latin American
regional average. Democracy was entrenched through a multiparty
system instead of single-party dominance, and Mexico was
widely perceived as one of the best performing countries
in Latin America.
three participants walk through Sproul Plaza on their
way to the event.
impressive aggregate trade and investment figures, it certainly
is true that NAFTA fell short of addressing some pertinent
issues. The absence of special and differential treatment
and lack of any real asymmetrical tariff reductions has had
a detrimental effect on certain industries in Mexico, particularly
who during his term in office signed a record number of trade
agreements with a diversity of trade partners from the United
States and European Union (EU) to South Korea and New Zealand ¾ not
to mention his staunch support for free trade in the Asia-Pacific
rim ¾ cited the recognition of asymmetries among trade
partners as fundamental to free and fair trade. This is particularly
relevant in the Americas where the United States accounts
for approximately 80 percent of the total GDP, while the
28 smallest economies make up only 4 percent of the total.
Many of these smaller countries rely on tariffs and duties
for up to 40 percent of their fiscal income, which is threatened
by the prospect of free trade. There is a clear need for
export diversification in the region ¾ often a byproduct
of free trade ¾ as was the case in Mexico and Chile,
both of which diversified from oil and copper exports respectively.
crowd for the event packed the Toll Room of the Alumni
House on the Berkeley campus.
Lagos, Chile’s relentless pursuit of global integration
can be distinguished from free trade orthodoxy by the emphasis
it places on public policies and the conscious decision to
extend the benefits of trade deals to the domestic population.
Development is key and needs to be incorporated into trade
deals. Unfortunately a development dimension is sorely missing
in NAFTA and, despite the intention to prioritize development
on the multilateral trade agenda, the World Trade Organization’s
(WTO) Doha Development Agenda was suspended in July this
year after five years of fruitless negotiations.
rights of labor are also largely absent from the agreements.
Both Lagos and Bonior expressed concern over this. Labor
is the only factor of production that has not been granted
free movement from country to country in both NAFTA and free
trade talks in general. More importantly, labor is poorly
represented in bilateral and multilateral trade negotiations ¾ if
at all. Most trade partners ¾ especially in the Americas ¾ share
similar workers’ rights. But it is the enforcement
of these rights and the voice labor unions carry in trade
agreements that are of principal concern. NAFTA has no forum
for discourse where workers or even industry leaders can
challenge policy or discuss issues related to the agreement.
On the multilateral front, the International Labour Organization
is a poor excuse for a counterpart to the much-vaunted WTO.
depth of trade as a primary instrument and reflection of
globalization needs to be recognized. Free trade and market
integration should not be perceived as purely neoliberal
concepts. Economic globalization is here to stay. But rules
and regulations are essential. These help to control the
system and steer it in the right direction. That direction
should be toward greater economic democracy: empowering workers
through their involvement in trade negotiations and extending
the benefits of free trade to the masses. This will help
restore dignity and stimulate development and perhaps shed
the stigma of inequality associated with globalization in
so many countries around the world.
discussion “Trade, Development and the Americas ” was
held at UC Berkeley on October 2, 2006 . Ricardo Lagos
was the president of Chile from 2000 to 2006 and a visiting
professor at CLAS in fall 2006. David Bonior is currently
Professor of Urban, Labor and Metropolitan Affairs at Wayne
State University . Previously, he was a member of the U.S.
Congress from 1977 to 2003 and House democratic whip from
1991–2002. The discussion was moderated by CLAS chair
White is a visiting scholar at CLAS.
Lagos talks with students and other members of the
audience after the event.
Harley Shaiken (center), Chair of
the Center for Latin American Studies, the three participants
prepared for the discussion at CLAS on the afternoon
of October 2.
Lovell S. "Tu" Jarvis of UC Davis talks with President
Lagos after the discussion.