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k-man
Gym climber
SCruz
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Topic Author's Original Post - Aug 28, 2015 - 08:54am PT
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First, sorry about posting an OT, somewhat political topic. But I saw this and felt I had to share...
WTO Ruling Against India's Solar Push Threatens Climate, Clean Energy
The World Trade Organization (WTO) on Wednesday ruled against India over its national solar energy program in a case brought by the U.S. government, sparking outrage from labor and environmental advocates.
As power demands grow in India, the country's government put forth a plan to create 100,000 megawatts of energy from solar cells and modules, and included incentives to domestic manufacturers to use locally-developed equipment.
According to Indian news outlets, the WTO ruled that India had discriminated against American manufacturers by providing such incentives, which violates global trade rules, and struck down those policies—siding with the U.S. government in a case that the Sierra Club said demonstrates the environmentally and economically destructive power of pro-corporate deals like the Trans-Pacific Partnership (TPP).
This type of stuff makes my blood boil.
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Reilly
Mountain climber
The Other Monrovia- CA
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Aug 28, 2015 - 09:05am PT
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Did you also know about India's draconian laws against American lawyers doing work over there?
The HORROR!
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k-man
Gym climber
SCruz
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Topic Author's Reply - Aug 28, 2015 - 09:08am PT
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No Reilly, I didn't, care to expand? And, how does that relate to the article I posted?
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Reilly
Mountain climber
The Other Monrovia- CA
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Aug 28, 2015 - 09:20am PT
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It doesn't, of course, but it is symptomatic of India's protectionist trade policies made all the
worse by their byzantine and capricious bureaucracy which, according to The Economist,
is one of the most egregious impediments to India's advancement.
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McHale's Navy
Trad climber
From Panorama City, CA
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Aug 28, 2015 - 09:40am PT
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Oh Jesus. I'm posting your link somewhere else maybe more useful K-man. Thanks.
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k-man
Gym climber
SCruz
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Topic Author's Reply - Aug 28, 2015 - 10:22am PT
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Reilly, don't you find it somewhat ironic that you write, "symptomatic of India's protectionist trade policies", in light of what the article I posted says?
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Reilly
Mountain climber
The Other Monrovia- CA
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Aug 28, 2015 - 10:34am PT
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Doesn't the article say that "the WTO ruled that India had discriminated against American manufacturers by providing such incentives, which violates global trade rules"? Isn't that
protectionism? Sometimes I doesn't read to good but that's my take on it.
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Studly
Trad climber
WA
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Aug 28, 2015 - 10:54am PT
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"Free trade" is nothing of the kind.
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rbob
climber
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Aug 28, 2015 - 11:06am PT
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Oldie but goodie regarding free trade from Krugman (1997):
"In Praise of Cheap Labor: Bad jobs at bad wages are better than no jobs at all."
By Paul Krugman
http://www.slate.com/articles/business/the_dismal_science/1997/03/in_praise_of_cheap_labor.single.html
For many years a huge Manila garbage dump known as Smokey Mountain was a favorite media symbol of Third World poverty. Several thousand men, women, and children lived on that dump--enduring the stench, the flies, and the toxic waste in order to make a living combing the garbage for scrap metal and other recyclables. And they lived there voluntarily, because the $10 or so a squatter family could clear in a day was better than the alternatives.
The squatters are gone now, forcibly removed by Philippine police last year as a cosmetic move in advance of a Pacific Rim summit. But I found myself thinking about Smokey Mountain recently, after reading my latest batch of hate mail. The occasion was an op-ed piece I had written for the New York Times, in which I had pointed out that while wages and working conditions in the new export industries of the Third World are appalling, they are a big improvement over the "previous, less visible rural poverty." I guess I should have expected that this comment would generate letters along the lines of, "Well, if you lose your comfortable position as an American professor you can always find another job--as long as you are 12 years old and willing to work for 40 cents an hour."
Such moral outrage is common among the opponents of globalization--of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad.

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter- accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.
After all, global poverty is not something recently invented for the benefit of multinational corporations. Let's turn the clock back to the Third World as it was only two decades ago (and still is, in many countries). In those days, although the rapid economic growth of a handful of small Asian nations had started to attract attention, developing countries like Indonesia or Bangladesh were still mainly what they had always been: exporters of raw materials, importers of manufactures. Inefficient manufacturing sectors served their domestic markets, sheltered behind import quotas, but generated few jobs. Meanwhile, population pressure pushed desperate peasants into cultivating ever more marginal land or seeking a livelihood in any way possible--such as homesteading on a mountain of garbage.
Given this lack of other opportunities, you could hire workers in Jakarta or Manila for a pittance. But in the mid-'70s, cheap labor was not enough to allow a developing country to compete in world markets for manufactured goods. The entrenched advantages of advanced nations--their infrastructure and technical know-how, the vastly larger size of their markets and their proximity to suppliers of key components, their political stability and the subtle-but-crucial social adaptations that are necessary to operate an efficient economy--seemed to outweigh even a tenfold or twentyfold disparity in wage rates.

A nd then something changed. Some combination of factors that we still don't fully understand--lower tariff barriers, improved telecommunications, cheaper air transport--reduced the disadvantages of producing in developing countries. (Other things being the same, it is still better to produce in the First World--stories of companies that moved production to Mexico or East Asia, then moved back after experiencing the disadvantages of the Third World environment, are common.) In a substantial number of industries, low wages allowed developing countries to break into world markets. And so countries that had previously made a living selling jute or coffee started producing shirts and sneakers instead.
Workers in those shirt and sneaker factories are, inevitably, paid very little and expected to endure terrible working conditions. I say "inevitably" because their employers are not in business for their (or their workers') health; they pay as little as possible, and that minimum is determined by the other opportunities available to workers. And these are still extremely poor countries, where living on a garbage heap is attractive compared with the alternatives.
And yet, wherever the new export industries have grown, there has been measurable improvement in the lives of ordinary people. Partly this is because a growing industry must offer a somewhat higher wage than workers could get elsewhere in order to get them to move. More importantly, however, the growth of manufacturing--and of the penumbra of other jobs that the new export sector creates--has a ripple effect throughout the economy. The pressure on the land becomes less intense, so rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise. Where the process has gone on long enough--say, in South Korea or Taiwan--average wages start to approach what an American teen-ager can earn at McDonald's. And eventually people are no longer eager to live on garbage dumps. (Smokey Mountain persisted because the Philippines, until recently, did not share in the export-led growth of its neighbors. Jobs that pay better than scavenging are still few and far between.)
The benefits of export-led economic growth to the mass of people in the newly industrializing economies are not a matter of conjecture. A country like Indonesia is still so poor that progress can be measured in terms of how much the average person gets to eat; since 1970, per capita intake has risen from less than 2,100 to more than 2,800 calories a day. A shocking one-third of young children are still malnourished--but in 1975, the fraction was more than half. Similar improvements can be seen throughout the Pacific Rim, and even in places like Bangladesh. These improvements have not taken place because well-meaning people in the West have done anything to help--foreign aid, never large, has lately shrunk to virtually nothing. Nor is it the result of the benign policies of national governments, which are as callous and corrupt as ever. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better.
Why, then, the outrage of my correspondents? Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land--or of a Filipino scavenging on a garbage heap?
The main answer, I think, is a sort of fastidiousness. Unlike the starving subsistence farmer, the women and children in the sneaker factory are working at slave wages for our benefit--and this makes us feel unclean. And so there are self-righteous demands for international labor standards: We should not, the opponents of globalization insist, be willing to buy those sneakers and shirts unless the people who make them receive decent wages and work under decent conditions.
This sounds only fair--but is it? Let's think through the consequences. First of all, even if we could assure the workers in Third World export industries of higher wages and better working conditions, this would do nothing for the peasants, day laborers, scavengers, and so on who make up the bulk of these countries' populations. At best, forcing developing countries to adhere to our labor standards would create a privileged labor aristocracy, leaving the poor majority no better off.
And it might not even do that. The advantages of established First World industries are still formidable. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved. And since export- oriented growth, for all its injustice, has been a huge boon for the workers in those nations, anything that curtails that growth is very much against their interests. A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries.
You may say that the wretched of the earth should not be forced to serve as hewers of wood, drawers of water, and sewers of sneakers for the affluent. But what is the alternative? Should they be helped with foreign aid? Maybe--although the historical record of regions like southern Italy suggests that such aid has a tendency to promote perpetual dependence. Anyway, there isn't the slightest prospect of significant aid materializing. Should their own governments provide more social justice? Of course-- but they won't, or at least not because we tell them to. And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard--that is, the fact that you don't like the idea of workers being paid a pittance to supply rich Westerners with fashion items.
In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.
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k-man
Gym climber
SCruz
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Topic Author's Reply - Aug 28, 2015 - 11:40am PT
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Doesn't the article say that "the WTO ruled that India had discriminated against American manufacturers by providing such incentives, which violates global trade rules"?
Yes Reilly, the article says exactly that.
But why stop your quote before the end of the sentence? Here's the whole quote:
According to Indian news outlets, the WTO ruled that India had discriminated against American manufacturers by providing such incentives, which violates global trade rules, and struck down those policies—siding with the U.S. government in a case that the Sierra Club said demonstrates the environmentally and economically destructive power of pro-corporate deals like the Trans-Pacific Partnership (TPP).
Continuing:
"Today, we have more evidence of how free trade rules threaten the clean energy economy and undermine action to tackle the climate crisis," Ilana Solomon, director of the Sierra Club's Responsible Trade Program, said on Thursday. "The U.S. should be applauding India’s efforts to scale up solar energy—not turning to the WTO to strike the program down."
I still find it ironic that your quote makes my point exactly by showing how the WTO rolls. Indian "protectionism" in this case is their not paying into the corporate shenanigans instilled in these free trade agreements.
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EdwardT
Trad climber
Retired
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Aug 28, 2015 - 11:41am PT
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Is this part of President Obama's Plan to Fight Climate Change?
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k-man
Gym climber
SCruz
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Topic Author's Reply - Aug 28, 2015 - 11:58am PT
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At least Obama says the phrase "climate change." A step, small, but still a step.
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Reilly
Mountain climber
The Other Monrovia- CA
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Aug 28, 2015 - 12:20pm PT
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So, a quick scan of the WTO charter doesn't show me any mandate for dealing
with climate change. And, if the solar cells are going to be built anyway
why does the Sierra Club have their knickers all twisted up? The issue is
jobs and adhering to agreements irrespective of some busybody outfit trying
to move the goalposts. And if the Sierra Club is so hot and bothered about
climate change why have they steadfastly refused to ever promote the best
device ever invented to prevent and reduce climate change? Yes, the condom.
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JEleazarian
Trad climber
Fresno CA
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Aug 28, 2015 - 12:44pm PT
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Reilly, don't you find it somewhat ironic that you write, "symptomatic of India's protectionist trade policies", in light of what the article I posted says?
Reilly already answered that question. K-man, I mean no offense, but most arguments I read against free trade seem to resonate only with those who want to force people to do what they do not want to do -- specifically, to make them buy what they don't want to buy.
Since the inception of the mercantilist policies that fostered both the American Revolution and The Wealth of Nations, groups with local political power have tried to use that power to gouge customers into paying more for their goods than what they would pay elsewhere. India's protecitonism fits right into that model. India's policies intended to force its citizens to buy solar energy products locally, even though they were available for less elsewhere, in violation of international agreements to which India was a party.
Just how is it moral or ethical to force Indian citizens to pay more money to enrich Indian firms to obtain solar energy, rather than to obtain the goods from the producers who take away the least from the Indian population? Krugman's nonsense ignores the whole issue, but Krugman writes that nonsense only for a general, ignorant, audience. What he says to economists differs, because they know his political columns are economic garbage.
I've often told my students that international trade remains the least understood aspect of economics. The arguments I see in favor of protectionism continue to confirm that.
John
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k-man
Gym climber
SCruz
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Topic Author's Reply - Aug 28, 2015 - 01:06pm PT
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First... Reilly, what? The OP is really not about climate change, per say. So so why you're looking up that phrase in the WTO papers seems off base.
Also that's an interesting twist, bringing population control into the discussion. I just finished Inferno, a novel by Dan Brown (of The Da Vinci Code fame). Yeah, it's a popcorn novel, but the basis is overpopulation, and the population math that's presented is pretty darn scary.
John, honestly I don't know the details of the WTO ruling. But, the article says, "[India's] government put forth a plan to create 100,000 megawatts of energy from solar cells and modules, and included incentives to domestic manufacturers to use locally-developed equipment."
If the "incentives" were actual tariffs on imports, then I understand your point. However, if it is as the article says, and the WTO is all aghast at incentives to buy locally, then that's another thing altogher, and it goes against what you say (e.g., "force Indian citizens to pay more money to enrich Indian firms to obtain solar energy, rather than to obtain the goods from the producers who take away the least from the Indian population").
If it as you say, that the Indian gov't is forcing Indian-products and goods on it's citizens, then I might have a different take. And in that case, the article I posted is way off base.
Cheers,
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JEleazarian
Trad climber
Fresno CA
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Aug 28, 2015 - 01:35pm PT
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k-man, most free trade agreement violations are no longer illegal tariffs, but illegal subsidies. The U.S. sometimes gets whacked on that score.
Essentially, a subsidy can work the same result for the producer as a tariff. The only difference is who pays. In a tariff, the customer pays more. With a subsidy, the taxpayer pays more. Both distort the market by steering business to local producers who otherwise could not compete.
John
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k-man
Gym climber
SCruz
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Topic Author's Reply - Aug 28, 2015 - 04:19pm PT
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Makes sense John. Thx.
Now how bout dat?
I think I'd have to say goodbye to my entire developer team.
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