Wednesday, January 30, 2008

Can Free Trade End War?

(Part 3 of a 3-part series)

The year was 1803 and a rag-tag group of freedom fighters, led by the charismatic Toussaint Louverture, fought with unyielding strength and conviction against Napoleon’s army. The army was sent to regain control of a rebellious island of slaves. A verdant land blessed with fertile soil and abundant natural resources, Haiti had once been the richest jewel in Napoleon’s crown. Exports of Haitian sugar, cotton and coffee in the past accounted for one-half of all of metropolitan France’s foreign trade.
Napoleon sought to retain his pearl of great price, but the Haitian Revolution (1791-1803) would foreshadow his cataclysmic loss at Waterloo 12 years later. On January 1, 1804, founding father Jean-Jacques Dessalines declared the independence of Ayiti (a Taino Indian word meaning “mountainous country”), which became only the 2d free state in the Western Hemisphere, and the only successful slave revolution in modern history. But what the rebels failed to realize was that their biggest battle lay before them.
Terrified these newly freed slaves would give “big ideas” to America’s own shackled masses, U.S. President Thomas Jefferson refused to recognize the newly independent nation (despite having aided it in the struggle). Instead, Jefferson imposed a trade embargo on Haiti, which economically crippled the newborn republic for years to come. Few Americans know of Jefferson’s role in the early history of Haiti, but Haitian children are fed the story with our mother’s milk. With the stroke of a pen, Jefferson achieved what Napoleon’s army could not. Haitians won the battle but lost the war in part because Jefferson used the tourniquet of a trade embargo to cut off the island. Trade is powerful. Managed well, free trade can bring peace, advancement and prosperity. And its absence brings economic marginalization from which a country may never recover.
In 1941, Roosevelt and Churchill secretly met on a ship off the coast of Newfoundland to chart the course for freedom post World War II. They envisioned a new world order where free trade, peace and prosperity were the guiding principles. The Atlantic Charter proclaimed their “desire to bring about the fullest collaboration between all nations in the economic field with the object of securing, for all, improved labor standards, economic advancement and social security”.
Roosevelt and Churchill ‘s musings gave birth to the plethora of international economic institutions created in the late 1940s—from the Bretton Woods Institutions to the General Agreement on Tariffs and Trade. The GATT self-consciously sought to harness the power of trade to create a more just world order. In the words of the United States’ principal negotiator at the time “the questions with which the charter is really concerned are whether there is to be economic peace or economic war, whether nations are to be drawn together or torn apart, whether men are to have work or to be idle, whether their families are to eat or go hungry, whether their children are to face the future with confidence or with fear.” Trade was too powerful an instrument to be left to the unilateral will of any single nation. Henceforth, trade would have rules.
But the rules of international trade and war have never been adequately articulated. The question of national security has always been the “Achilles heel” of international law. GATT Article XXI, the national security exception to free trade, allows a WTO member to depart from its obligations: “Nothing in this Agreement shall be construed . . . to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests.” From its inception, Article XXI has proved controversial because of its alleged “self-judging” nature. In short, WTO members, including the United States, have argued that in utilizing this “virtually unlimited escape clause” they get to decide whether an action is “necessary” for security purposes. Under that analysis, Sweden once restricted imports of footwear claiming they posed a national security threat to its domestic industry. National security, after all, is in the eye of the beholder; if Sweden did not have a domestic footwear industry it might have problems outfitting its military. Prof. Raj Bhala notes that with such liberal use Article XXI could become “the exception that swallowed GATT.” So if free trade is to end war, there is much work to be done. For one, there must be some common understanding of what is and is not permissible under Article XXI. May a member impose a trade embargo on another—as the United States did to 19th Century Haiti? Of course, the GATT was not around then, but there have been many unilaterally-imposed embargos since 1947; consider, for example, the Reagan Administration’s embargo against Nicaragua’s Sandinista government in 1985 (not to mention Cuba). When Nicaragua brought the United States before GATT, its members professed themselves powerless to act; the U.S embargo was a total ban on both exports to and imports from Nicaragua—there was no way for the central American country to retaliate economically:
Even if it were found that the embargo nullified or impaired benefits accruing to Nicaragua independent of whether or not it was justified under Article XXI, GATT members could] take no decision ... that would re-establish the balance of advantages which had accrued to Nicaragua ... prior to the embargo.
There is something troubling about a decision that at least hints at impermissibility, but then claims there is nothing to be done about it. But as presently conceived, Article XXI provides no leeway. I call for a re-examination of Article XXI in my piece Terror on the High Seas: The Trade and Development Implications of U.S. National Security Measures in part to deal with this dilemma.
Can free trade truly end war? Standing alone, the answer is no. But there is much that free trade can do in conjunction with other efforts. We must begin to explore and exploit that potential for the greater good. One thing we know for sure: We need an end to war—by any means at our disposal. I started this series with a confession: At times, I worry that in straying from a career focused on preserving individual rights through direct representation of “real people,” I have not fulfilled the longing of my nine year old self to become the “international Thurgood Marshall” (a patriotic 9 year old me at right). But on good days, I recognize that law and justice represent an infinite line, and at whatever point in the continuum we intervene to make a worthy contribution is a job well done. Thurgood Marshall surely would have agreed.


Naomi Norberg said...

Hang in there, Marjorie, you are no traitor. I think many of us have this worry: I was to be a women's rights warrior and am now, for the moment anyway, a doctoral candidate specializing in the ATCA and terrorism and a lot of "universalist" theory that doesn't seem to have much practical application, particularly in terms of women's equality or ending gender violence. Step by step we're getting there, and militating for trade law that will help end war and lift countries like Haiti from poverty and political crises is certainly an admirable, worthwhile endeavor. I'm enjoying your posts and look forward to reading more. Bon courage!

Patrick S. O'Donnell said...

Marjorie (if I may),

This is wonderful stuff: indeed, anything that demands I read through it several times to appreciate the argument's details and eloquence is testimony enough for me of its high quality.

I just want to mention the fact that, perhaps surprisingly to some, Marx was an avid exponent of "free trade," as evidenced in Meghnad Desai's discussion in Marx's Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (London: Verso, 2002). For those not familiar with Lord Desai, he is a brilliant economist, as well as British Labour politician (in House of Lords). Now the reasons for Marx's endorsement of free trade in his day are rather complex and may not all carry over into our own time, nonetheless, they're worth examining, especially insofar as many Liberals and those on the Left in general frequently find themselves reflexively against "free trade" (a position which might be defensible in a specific case or the short term, but...).

Marjorie Florestal said...

Thanks for the words of support Naomi. I agree that sometimes our academic work can seem far removed from our on-the-ground passions. I feel really lucky to have found a way to wed the two (and get paid for it!)

Patrick--thanks for the kind words. I'm glad you are finding the posts appealing. I must admit I haven't encountered Marxist arguments in favor of free trade, but it is an intriguing idea. However, I'm intimately familiar with knee-jerk reactions from the left against free trade. I forget who was supposed to have said this, but "we are just not smart enough to be completely wrong." In truth, there are many strong arguments against the way we implement the free trade ideal. If only we could have our rhetoric match our reality . . .