Re: The WTO is useless.......it is doomed

On 19 Dec 2005 14:50:24 +1300, mark <sometimes2003@xxxxxxxxxxxx>
wrote:

>In either case, the WTO has been used successfully to stop the US doing
>things against other countries, so I don't think WTO membership is a bad
>step for China.

The impact of WTO membership to China is neutral. Its hard to tell
anyway because of the dearth of of economic news out of China that
attributes anything to WTO.

The current situation, as I see it, is that just as the WTO is getting
its act together the ground has shifted. There are indeed many
indications that the WTO will not survive in its present form and that
many changes will be necessary. But the WTO is not useless and
something similar must exist to avoid chaos in world trade. But back
at the pass the EU is just cautiously emerging out of the US shadow as
their biggest trade is still with the US. Then there is this
complication of trading blocs like NAFTA and the EU. The US, China
and other countries are at the same time furiously signing bilateral
trade agreements. Something is going on. I don't know what.

The US had originally made the assumption that the humongous China
market can be pried open in the guise of fair trade. Then the US shot
itself in the foot in banning participation in the Three Gorges Dam
project by forbidding iher banks, contractors and heavy equipment
suppliers from involvement in the name of environmental protection and
human rights (resettlements.) The obvious reaction from China was,
in no way would she allow herself to be held hostage to US politics by
inviting US companies to bid for strategic infrastructure
mega-projects. For ordinary industrial equipment China is quite
capable of manufacturing the equipment herself. The technology
transfer pact for the 3GD generators meant that after importing the
first four or so units China would make the rest herself.

See the URL link below for more on this development.

Earlier this year I read in a San Francisco paper that the Oakland
harbor was facing shipping delays because they could not expand fast
enough. The recent dedging of the channel and expansion of the port
ws insufficient. The interesting details were that the four brand new
container handling gantries were imported from Shanghai and assembled
in record time. The gigantic container ships that call at Oakland
were manufactured in Shanghai. Then the report went on to say that
the containers were full coming in but empty going out. It used to be
outgoing containers would be filled with scrap paper, scrap
electronics and scrap metal. But the Chinese don't even want that
anymore because unloading scrap increased the turnaround time for the
congtainers. However, the US does export billions in dollars of
microchips and other high value items to China by air.







http://www.atimes.com/atimes/Global_Economy/GL17Dj01.html
(snip)
The reason is the US is in the process of losing its position as the
major economic power. Author Prestowitz has actually destroyed one of
the essential myths of American civilization, the myth of American
efficiency.

This myth has always been related to the image of capitalism - and
America has been the very embodiment of capitalism. This capitalism is
brutal in a social-Darwinistic way and can also be militarily weak.
Indeed, for generations, Americans have agreed that they are not
militaristic and can be beaten by others, but never economically.

During the Cold War, the Soviets were accepted as military but not as
economic peers. And it is only now that fundamental changes are
occurring - America is increasingly losing its economic standing in
regard to the rest of the world. In fact, the US is starting to be
pressed hard on not just one but several economic fronts, including
those of whose very existence most Americans have not been aware.

This is, for example, the case with Europe. With fresh views on
American/European economic rivalry, the author follows a line that one
cannot easily find in the US mass media. The media usually present
Europe as a stagnating, declining economy that cannot carry the heavy
task of a protective safety net for Europe's citizens. This stagnant
semi-socialist group of countries is juxtaposed to the dynamic,
vibrant, albeit tough, America.

The author has discarded this notion. With a close look at statistical
data, he has concluded that Europe is economically not far behind the
US. Moreover, in some key areas, Europe is actually ahead. For
example, in the author's view, the US is in a process of erosion of
its industrial skeleton, while the European picture is much brighter.

Moreover, European industrial goods have retained their reputation of
high quality and thus make it possible for Europeans to sell their
goods to China, for example, despite what seems to be prohibitive
prices because of the euro exchange rate.

With all the importance of the European economy, it is not Europe that
constitutes the major threat for the American economy. The battering
ram that could destroy it is coming from Asia, mostly China. The
American economy is increasingly unable to compete with Asian goods,
and the situation will be worse in the future.

Why is this happening? In the view of the author, it is mostly due to
globalization. At the beginning of the post-Cold War era,
globalization was hailed in the US as a blessing that would bring
absolute economic and implicitly geopolitical domination. But the
reality is quite different. And the author suggests that globalization
has led to disaster for the American economy. According to his views,
Asia has the ability to acquire the technology and skills to compete
with the US in nearly all areas. Cheap labor makes Asian goods even
more competitive.

The author is absolutely right in seeing in the spread of technology
one of the major reasons for the competitiveness of Asian goods, but
it is not the only one.

One would have to look closely at American society, its education,
government and business to see that many of these segments have become
ossified bureaucratic structures that work with exceptional
inefficiency and are shielded from any control from market or
government.

In many ways, the US has become similar to the USSR in the last decade
of its existence, when the Soviet Union had only one first-class and
efficient organization - its military force.

But, if the US economy/society in general is becoming increasingly
inefficient, how can it maintain its high living standards and engage
in expensive imperial adventures?

The author answers this question by pointing to America's
ever-increasing borrowing from the outside world, mostly from Asia.
But why do these countries continue to lend to the US? Why at some
point do they not dump dollars or treasury notes? Here the author once
again rightfully points to the peculiar position of the US in modern
society and the reason it still has an almost free ride - at least for
a while.

(more)
.

Relevant Pages

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