区域性国际经济组织

第二节　区域性国际经济组织

Section 2　Regional International Economic Organizations

【The Fundamental】

I. European Union (EU)

A. Basic Information on the EU

The EU is a unique economic and political partnership between 27 European countries^[10]that together cover much of the continent.

It was created in the aftermath of the Second World War. The first steps were to foster economic cooperation: the idea being that countries that trade with one another become economically interdependent and so more likely to avoid conflict.

Since then, the EU has developed into a huge single market with the euro as its common currency. What began as a purely economic union has evolved into an organization spanning all policy areas, from development aid to environment.

It has delivered half a century of peace, stability, and prosperity, helped raise living standards, and launched a single European currency. Thanks to the abolition of border controls between EU countries, people can travel freely throughout most of the continent. And it’s also become much easier to live and work abroad in Europe.

The EU is based on the rule of law. This means that everything that it does is founded on treaties, voluntarily and democratically agreed by all member countries. These binding agreements set out the EU’s goals in its many areas of activity.

One of its main goals is to promote human rights both internally and around the world. Human dignity, freedom, democracy, equality, the rule of law and respect for human rights: these are the core values of the EU. Since the 2009 signing of the Treaty of Lisbon^[11], the EU’sCharter of Fundamental Rights brings all these rights together in a single document. The EU’s institutions are legally bound to uphold them, as are EU governments whenever they apply EU law.

The single market is the EU’s main economic engine, enabling most goods, services, money and people to move freely. Another key objective is to develop this huge resource to ensure that Europeans can draw the maximum benefit.

As it continues to grow, the EU remains focused on making its governing institutions more transparent and democratic. More powers are being given to the directly elected European Parliament, while national parliaments are being given a greater role, working alongside the European institutions. In turn, European citizens have an ever-increasing number of channels for taking part in the political process.

B. The History of the EU

1. A peaceful Europe-the beginnings of cooperation (1945-1959).

The European Union is set up with the aim of ending the frequent and bloody wars between neighbors, which culminated in the Second World War. As of 1950, the European Coal and Steel Community begins to unite European countries economically and politically in order to secure lasting peace. The six founders are Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The 1950s are dominated by a cold war between east and west. Protests in Hungary against the Communist regime are put down by Soviet tanks in 1956; while the following year, 1957, the Soviet Union takes the lead in the space race, when it launches the first man-made space satellite, Sputnik 1. Also in 1957, the Treaty of Rome^[12]creates the European Economic Community (EEC) or ‘Common Market’.

2. The ‘Swinging Sixties’-a period of economic growth (1960-1969).

The 1960s sees the emergence of “youth culture”, with groups such as the Beatles attracting huge crowds of teenage fans wherever they appear, helping to stimulate a cultural revolution and widening the generation gap. It is a good period for the economy, helped by the fact that EU countries stop charging custom duties when they trade with each other. They also agree jointcontrol over food production, so that everybody now has enough to eat and soon there is even surplus agricultural produce. May 1968 becomes famous for student riots in Paris, and many changes in society and behavior become associated with the so-called “68 generation”.

3. A growing Community-the first Enlargement (1970-1979).

Denmark, Ireland and the United Kingdom join the European Union on 1 January 1973, raising the number of member states to nine. The short, yet brutal, Arab-Israeli war of October 1973 result in an energy crisis and economic problems in Europe. The last right-wing dictatorships in Europe come to an end with the overthrow of the Salazar regime in Portugal in 1974 and the death of General Franco of Spain in 1975. The EU regional policy starts to transfer huge sums to create jobs and infrastructure in poorer areas. The European Parliament increases its influence in EU affairs and in 1979 all citizens can, for the first time, elect their members directly.

4. The changing faces of Europe-the fall of the Berlin Wall (1980-1989).

The Polish trade union, Solidarność, and its leader Lech Walesa, become household names across Europe and the world following the Gdansk shipyard strikes^[13]in the summer of 1980. In 1981, Greece becomes the 10th member of the EU and Spain and Portugal follow five years later. In 1986 the Single European Act^[14]is signed. This is a treaty which provides the basis for a vast six-year programme aimed at sorting out the problems with the free-flow of trade across EU borders and thus creates the ‘Single Market’. There is major political upheaval when, on 9 November, 1989, the Berlin Wall is pulled down and the border between East and West Germany is opened for the first time in 28 years, this leads to the reunification of Germany when both East and West Germany are united in October 1990.

5. A Europe without frontiers (1990-1999).

With the collapse of communism across central and Eastern Europe, Europeans become closer neighbors. In 1993 the Single Market is completed with the ‘four freedoms’ of: movement of goods, services, people and money. The 1990s is also the decade of two treaties, the ‘Maastricht’ Treaty^[15]on European Union in 1993 and the Treaty ofAmsterdam^[16]in 1999. People are concerned about how to protect the environment and also how Europeans can act together when it comes to security and defense matters. In 1995 the EU gains three more new members, Austria, Finland and Sweden. A small village in Luxembourg gives its name to the ‘Schengen’ agreements that gradually allow people to travel without having their passports checked at the borders. Millions of young people study in other countries with EU support. Communication is made easier as more and more people start using mobile phones and the internet.

6. Further expansion (2000-2009).

The euro is the new currency for many Europeans. 11^thSeptember, 2001 becomes synonymous with the ‘War on Terror’ after hijacked airliners are flown into buildings in New York and Washington. EU countries begin to work much more closely together to fight crime. The political divisions between east and west Europe are finally declared healed when no fewer than 10 new countries join the EU in 2004, followed by two more in 2007. A financial crisis hits the global economy in September 2008, leading to closer economic cooperation between EU countries. The Treaty of Lisbon is ratified by all EU countries before entering into force on 1 December 2009. It provides the EU with modern institutions and more efficient working methods.

7. A decade of opportunities and challenges (2010-today).

The new decade starts with a severe economic crisis, but also with the hope that investments in new green and climate-friendly technologies and closer European cooperation will bring lasting growth and welfare.

C. Money and the EU

The EU budget is funded from sources including a percentage of each member country’s gross national product. It is spent on efforts as diverse as raising the standard of living in poorer regions and ensuring food safety. The euro is the common currency of most EU countries.

1. EU revenue/sources of income.

The EU has various sources of income. It is not solely dependent on contributions from member countries but has its own resources in the form of import duties on products fromoutside the EU, and a percentage of the value-added tax levied by each country.

The EU has several sources of income to finance its administration and activities and to be able to achieve its goals of reducing economic disparities between regions and developing rural areas. The member countries collect the money on behalf of the EU.

The three main sources of revenue are: (a) 0.73% of the gross national income of each member country, which accounts for two-thirds of the EU budget; (b) so-called traditional own resources, mainly import duties on products from outside the EU; (c) a percentage of each EU country’s harmonized value-added tax revenue (VAT).

The EU also receives taxes paid by EU staff on their salaries, contributions from non-EU countries to certain EU programmes and fines from companies that breach EU rules and regulations.

2. EU expenditure.

The EU budget finances a vast array of activities, from rural development and environmental protection to protecting external borders and promoting human rights. The Commission, the Council and Parliament all have a say in how big the budget is and how it is allocated. But the Commission and EU countries are responsible for the actual spending.

(a) Drafting the budget. The budget is decided jointly by the Commission, the Council and Parliament. The Commission submits a draft spending plan to the Council and Parliament for their consideration. They can make changes and, if they disagree, they can try to work out a compromise. Each year’s budget falls within a long-term spending plan known as the“financial framework”. This is a seven-year framework, currently running from 2007-13. It allows the EU to plan spending programmes effectively for several years in advance.

(b) Managing EU funds. The Commission is ultimately responsible for allocating the budget. However, EU countries manage 76% of EU funds. In cases of fraud or undue payments, the Commission works with the European anti-fraud office and the EU countries to recover the money. To ensure transparency, information on beneficiaries of EU funds is available to the public.

(c) What the money is spent on. There are roughly five areas of expenditure in the EU budget. Currently the largest share goes towards creating growth and jobs and reducing economic gaps between regions. Another big portion goes to agriculture, rural development, fisheries and protection of the environment. Other spending areas include the fight against terrorism, organized crime and illegal immigration.

3. The euro/monetary union.

The euro is the most tangible proof of European integration—the common currency in 17 out of 27 EU countries^[17]and used by some 327 million people every day. The benefits of the common currency are immediately obvious to anyone travelling abroad or shopping online on websites based in another EU country.

(a) EU monetary cooperation. The Economic and Monetary Union involves the coordination of economic and fiscal policies, a common monetary policy and the euro as the common currency. The euro was launched on 1 January 1999 as a virtual currency for cash-less payments and accounting purposes. Banknotes and coins were introduced on 1 January 2002.

(b) Purpose of the euro. A single currency offers many advantages, such as eliminating fluctuating exchange rates and exchange costs. Because it is easier for companies to conduct cross-border trade and the economy is more stable, the economy grows and consumers have more choice. A common currency also encourages people to travel and shop in other countries. At global level, the euro gives the EU more clout, as it is the second most important international currency after the US dollar.

(c) Managing the euro. The independent European Central Bank is in charge of monetary issues in the EU. Its main goal is to maintain price stability. The ECB also sets a number of key interest rates for the euro area. Although taxes are still levied by EU countries and each country decides upon its own budget, national governments have devised common rules on public finances to be able to coordinate their activities for stability, growth and employment.

(Adapted from http://europa.eu/index_en.htm)

II. North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1^th, 1994. It superseded the Canada-United States Free Trade Agreement between the U.S. and Canada. In terms of combined GDP of its members, as of 2010 the trade bloc is the largest in the world.

A. Negotiation and U.S. ratification

Following diplomatic negotiations dating back to 1986 among the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it. The agreement then needed to be ratified by each nation’s legislative or parliamentary branch.

Before the negotiations were finalized, Bill Clinton came into office in the U.S. and Kim Campbell in Canada, and before the agreement became law, Jean Chrétien had taken office in Canada.

The proposed Canada-U.S. trade agreement had been very controversial and divisive in Canada, and the 1988 Canadian election was fought almost exclusively on that issue. In that election, more Canadians voted for anti-free trade parties (the Liberals and the New Democrats) but the split caused more seats in parliament to be won by the pro-free trade Progressive Conservatives (PCs). Mulroney and the PCs had a parliamentary majority and were easily able to pass the Canada-US FTA and NAFTA bills. However, Mulroney himself had become deeply unpopular and resigned on June 25, 1993. He was replaced as Conservative leader and prime minister by Kim Campbell. Campbell led the PC party into the 1993 election where they were decimated by the Liberal Party under Jean Chrétien, who had campaigned on a promise to renegotiate or abrogate NAFTA; however, Chrétien subsequently negotiated two supplemental agreements with the new US president. In the US, Bush, who had worked to “fast track” the signing prior to the end of his term, ran out of time and had to pass the required ratification and signing into law to incoming president Bill Clinton. Prior to sending it to the United States Senate, Clinton introduced clauses to protect American workers and allay the concerns of many House members. It also required US partners to adhere to environmental practices and regulations similar to its own.

With much consideration and emotional discussion, the House of Representatives approved NAFTA on November 17^th, 1993, 234-200. The agreement’s supporters included 132 Republicans and 102 Democrats. NAFTA passed the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. Clinton signed it into law on December 8, 1993; it went into effect on January 1^th, 1994. Clinton while signing the NAFTA bill stated that “NAFTA means jobs, American jobs and good-paying American jobs. If I didn’t believe that, I wouldn’t support this agreement.”

B. Provisions

The goal of NAFTA was to eliminate barriers to trade and investment between the US, Canada and Mexico. The implementation of NAFTA on January 1, 1994 brought the immediate elimination of tariffs on more than one-half of Mexico’s exports to the U.S. and more than one-third of U.S. exports to Mexico. Within 10 years of the implementation of the agreement, all US-Mexico tariffs would be eliminated except for some U.S. agricultural exports to Mexico that were to be phased out within 15 years. Most U.S.-Canada trade was already duty free. NAFTA also seeks to eliminate non-tariff trade barriers and to protect the intellectual property right of the products.

In the area of intellectual property, the North American Free Trade Agreement Implementation Act made some changes to the Copyright law of the United States, foreshadowing the Uruguay Round Agreements Act of 1994 by restoring copyright (within NAFTA) on certain motion pictures which had entered the public domain.

C. Mechanisms

1. Trade.

The agreement opened the door for open trade, ending tariffs on various goods and services, and implementing equality between Canada, America, and Mexico. NAFTA has allowed agricultural goods such as eggs, corn, and meats to be tariff-free. This allowed corporations to trade freely and import and export various goods on a North American scale.

2. Environment.

Securing U.S. congressional approval for NAFTA would have been impossible without addressing public concerns about NAFTA’s environmental impact. The Clinton administration negotiated a side agreement on the environment with Canada and Mexico, the North American Agreement on Environmental Cooperation (NAAEC)^[18], which led to the creation of the Commission for Environmental Cooperation (CEC) in 1994. To alleviate concerns that NAFTA, the first regional trade agreement between a developing country and two developed countries, would have negative environmental impacts, the CEC was given a mandate to conduct ongoing ex post environmental assessment of NAFTA.

In response to this mandate, the CEC created a framework for conducting environmental analysis of NAFTA, one of the first ex post frameworks for the environmental assessment oftrade liberalization. The framework was designed to produce a focused and systematic body of evidence with respect to the initial hypotheses about NAFTA and the environment, such as the concern that NAFTA would create a “race to the bottom” in environmental regulation among the three countries, or the hope that NAFTA would pressure governments to increase their environmental protection mechanisms. The CEC has held four symposia using this framework to evaluate the environmental impacts of NAFTA and has commissioned 47 papers on this subject. In keeping with the CEC’s overall strategy of transparency and public involvement, the CEC commissioned these papers from leading independent experts.

Overall, none of the initial hypotheses were confirmed. NAFTA did not inherently present a systemic threat to the North American environment, as was originally feared. NAFTA-related environmental threats instead occurred in specific areas where government environmental policy, infrastructure, or mechanisms, were unprepared for the increasing scale of production under trade liberalization. In some cases, environmental policy was neglected in the wake of trade liberalization; in other cases, NAFTA’s measures for investment protection and measures against non-tariff trade barriers, threatened to discourage more vigorous environmental policy. The most serious overall increases in pollution due to NAFTA were found in the base metals sector, the Mexican petroleum sector, and the transportation equipment sector in the United States and Mexico, but not in Canada.

3. Agriculture.

From the earliest negotiation, agriculture was (and still remains) a controversial topic within NAFTA, as it has been with almost all free trade agreements that have been signed within the WTO framework. Agriculture is the only section that was not negotiated trilaterally; instead, three separate agreements were signed between each pair of parties. The Canada–U.S. agreement contains significant restrictions and tariff quotas on agricultural products (mainly sugar, dairy, and poultry products), whereas the Mexico–U.S. pact allows for a wider liberalization within a framework of phase-out periods (it was the first North–South FTA on agriculture to be signed).

The overall effect of the Mexico–U.S. agricultural agreement is a matter of dispute. Mexico did not invest in the infrastructure necessary for competition, such as efficient railroads and highways, creating more difficult living conditions for the country’s poor. Still, the causes of rural poverty can be directly attributed to NAFTA; in fact, Mexico’s agricultural exports increased 9.4 percent annually between 1994 and 2001, while imports increased by only 6.9 percent a year during the same period.

One of the most affected agricultural sectors is the meat industry. Mexico has gone from a small-key player in the pre-1994 U.S. export market to the 2nd largest importer of U.S. agricultural products in 2004, and NAFTA may be credited as a major catalyst for this change. The allowance of free trade removed the hurdles that impeded business between the two countries. As a result, Mexican farmers have provided a growing meat market for the U.S., leading to an increase in sales and profits for the U.S. meat industry. This coincides with a noticeable increase in Mexican per capita GDP that has created large changes in meat consumption patterns, implying that Mexicans can now afford to buy more meat and thus per capita meat consumption has grown.

In a study published in the August 2008 issue of the American Journal of Agricultural Economics, NAFTA has increased U.S. agricultural exports to Mexico and Canada even though most of this increase occurred a decade after its ratification. The study focused on the effects that gradual “phase-in” periods in regional trade agreements, including NAFTA, have on trade flows. Most of the increase in members’ agricultural trade, which was only recently brought under the purview of the World Trade Organization, was due to very high trade barriers before NAFTA or other regional trade agreements.

(Adapted from http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement)

III. Association of Southeast Asian Nations (ASEAN)

A. Establishment

The Association of Southeast Asian Nations (ASEAN), was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration)^[19]by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand.

Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July, 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April, 1999, making up what is today the ten Member States of ASEAN.

B. Aims and Purposes

As set out in the ASEAN Declaration, the aims and purposes of ASEAN are: (a) to accelerate the economic growth, social progress and cultural development in the region through joint endeavors in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations; (b) to promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter; (c) to promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields; (d) to provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres; (e) to collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples; (f) to promote Southeast Asian studies; and (g) to maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves.

C. Fundamental Principles

In their relations with one another, the ASEAN Member States have adopted the following fundamental principles, as contained in the Treaty of Amity and Cooperation in Southeast Asia (TAC) of 1976^[20]: (a) mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations; (b) the right of every State to lead its national existence free from external interference, subversion or coercion; (c) non-interference in the internal affairs of one another; (d) settlement of differences or disputes by peaceful manner; (e) renunciation of the threat or use of force; and (f) effective cooperation among themselves.

D. ASEAN Community^[21]

The ASEAN Vision 2020, adopted by the ASEAN Leaders on the 30th Anniversary of ASEAN, agreed on a shared vision of ASEAN as a concert of Southeast Asian nations, outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development and in a community of caring societies.

At the 9th ASEAN Summit in 2003, the ASEAN Leaders resolved that an ASEAN Community shall be established.

At the 12th ASEAN Summit in January 2007, the Leaders affirmed their strong commitment to accelerate the establishment of an ASEAN Community by 2015 and signed the Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015.

The ASEAN Community is comprised of three pillars, namely the ASEAN Political-Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community. Each pillar has its own Blueprint, and, together with the Initiative for ASEAN Integration (IAI) Strategic Framework and IAI Work Plan Phase II (2009-2015), they form the Roadmap for and ASEAN Community 2009-2015.

E. ASEAN Charter

The ASEAN Charter serves as a firm foundation in achieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance.

The ASEAN Charter entered into force on 15 December, 2008. A gathering of the ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark this very historic occasion for ASEAN.

With the entry into force of the ASEAN Charter, ASEAN will henceforth operate under a new legal framework and establish a number of new organs to boost its community-building process.

In effect, the ASEAN Charter has become a legally binding agreement among the 10 ASEAN Member States. It will also be registered with the Secretariat of the United Nations, pursuant to Article 102, Paragraph 1 of the Charter of the United Nations.

The importance of the ASEAN Charter can be seen in the following contexts: (a) new political commitment at the top level, (b) new and enhanced commitments, (c) new legal framework and personality, (d) new ASEAN bodies, (e) two new openly-recruited DSGs,(f) more ASEAN meetings, (g) more roles of ASEAN Foreign Ministers, (h) new and enhanced role of the Secretary-General of ASEAN, and (i) other new initiatives and changes.

(Adapted from http://www.aseansec.org/)

[The Reflections]

1. What is EU and what does EU do?

2. What does EU benefit from using euro as its single currency?

3. What is NAFTA and what does NAFTA do?

4. What are the positive and negative impacts of NAFTA on North America? 5. How do you understand the aims and purposes of ASEAN?

6. What benefits would ASEAN Community bring to its members?

【The In-depth】

Is NAFTA a Good Model for China? Lessons from Mexico and the United States

A. Introduction

The current crisis in global financial markets comes on the heels of a global food crisis that is affecting billions of people in both developed and developing countries. From 2006 through 2008, skyrocketing food prices plunged at least 75 million people into the ranks of the malnourished and provoked food riots across the globe. The causes of the food crisis included poor weather, high oil prices, rising world-wide meat consumption, use of grains to manufacture biofuels, and financial speculation in commodity markets. The causes of the financial crisis included predatory lending practices on the part of U.S. banks and inadequate regulation of financial markets. In response to the twin challenges of the financial and food crises, China has placed rural development at the top of its political agenda. In October 2008, the Central Committee of the Chinese Communist Party announced that China would adjust its export-oriented development model and would henceforth place greater emphasis on tappingthe vast potential of its rural areas. The government plans to increase rural incomes, protect arable lands, encourage agricultural production, maintain self-sufficiency in grain supplies, and promote grassroots democratization.

The challenges ahead are formidable. China’s per capita endowment of arable land is low by world standards, and nearly 40 percent of that land is badly eroded. Urbanization and industrialization are accelerating the pace of land loss, and industrial pollution is contaminating crops and sparking rural unrest. Water shortages devastate certain regions of the country, and desertification continues to be a serious problem. At least 30 million farmers have been deprived of their lands in favor or urban development, and factory closures have left more than 10 million rural migrants jobless.

China’s struggle to overcome these challenges is occurring in the context of international trade negotiations premised on the idea that agricultural trade liberalization will benefit farmers in the global South. Agricultural trade reform was a key element of the North American Free Trade Agreement (NAFTA), and U.S. trade officials often use NAFTA as a template for bilateral and regional trade agreements. It is therefore useful to take a close look at the actual impact of NAFTA-related agricultural trade reforms in Mexico and in the United States in order draw lessons that might be useful to China in future bilateral and multilateral trade negotiations.

B. Lessons for China from the NAFTA Case Study

1. Double standards in international agricultural trade.

The grim saga of the Mexican corn sector illustrates why industrialized country agricultural subsidies have become one of the most contentious issues in the Doha Round of WTO negotiations. Poor farmers in developing countries cannot compete with highly subsidized agricultural producers in the United States and the European Union. The economic dislocations in the Mexican countryside have been replicated all over the world, as developing countries reduce agricultural tariffs and eliminate subsidies pursuant to IMF and World Bank-mandated structural adjustment programs or pursuant to bilateral and multilateral free trade agreements while the United States and the European Union maintain high subsidy levels.

Eliminating this double standard in international trade is an essential first step toward mitigating structural inequities that exacerbate poverty and accelerate rural-to-urban migration in developing countries. The WTO negotiations have repeatedly come to a standstill over the issue of agricultural trade. Developing countries have also brought and won WTO caseschallenging these agricultural subsidies (most notably, the cotton and sugar subsidies cases), and will likely continue to do so until the subsidies are eliminated.

Developing countries must continue to insist on the phase-out of U.S. and European Union agricultural subsidies. However, a successful phase-out of these subsidies will not be sufficient to alleviate poverty and protect rural ecosystems in the absence of additional measure to coordinate trade and environmental policy. The following sections discuss several lessons that policy-makers might draw from the NAFTA case study to ensure that trade policy is consistent with environmental protection and with the protection of rural livelihoods.

2. Environmental and social externalities: the problem of market failure.

One of the lessons of the NAFTA case study is that market deregulation may make trading partners worse off to the extent that market prices fail to incorporate environmental and social externalities. The market price for U.S. corn understates the true cost of production because it neglects to internalize significant human health and environmental costs, including contamination and depletion of water resources, exposure of workers and consumers to toxic pesticides, soil degradation, and the harmful impact on public health of cheap corn-sweetened foods and beverages. Similarly, the market price for Mexican corn fails to take into account the social and environmental benefits of traditional corn cultivation, including social stability, cultural integrity, the protection of rural livelihoods, and the importance of Mexico’s genetic diversity for the integrity of the world’s food supply.

As a consequence of trade liberalization, market failures in the United States interface with market failures in Mexico to misidentify the United States as the most efficient corn producer, thereby increasing harm to human health and the environment in the United States, undermining sustainable livelihoods of poor farming communities in Mexico, and jeopardizing Mexico’s genetic diversity. Economist James Boyce has referred to this phenomenon as the“globalization of market failure.” One of the implications of the NAFTA case study is that it is important for policy-makers to fully assess the social and environmental impacts of trade agreements rather than assuming that free market reforms will necessarily be beneficial.

One legal reform that would facilitate early identification of social and environmental externalities is legislation requiring environmental and social impact assessments of proposed trade agreements as early as possible in the negotiation process. In the United States, for example, Executive Order 13141 (1999) requires the environmental review of trade agreements. However, the Executive Order is deficient in at least three respects. First, while review of environmental impacts in the United States is mandatory, review of impacts in othercountries is discretionary.　Second, the Executive Order does not provide for the review of socioeconomic impacts. Third, the Executive Order does not provide for the periodic review of trade agreements already in place.

Notwithstanding the flaws in the U.S. Executive Order, environmental and social impact assessment of proposed trade agreements is an important tool to promote environmentally sustainable and socially equitable economic development. As the NAFTA case study illustrates, market deregulation needs to be approached cautiously so as to advance rather than subvert national development objectives. Environmental and social impact assessments can help policy-makers evaluate the potential effect of trade agreements on the environment and on rural communities in order to maximize benefits and minimize harm.

3. Economic development: the role of the state.

Another lesson of the NAFTA case study is the importance of strategic state intervention in the economy in order to create jobs, protect rural livelihoods, and avoid the uncontrolled migration of desperate workers from impoverished rural areas. In an increasingly competitive world environment, countries that rely on their comparative advantage in low-wage, low-skill assembly plants (like the Mexican maquiladoras) will inevitably lose out to even lower wage competitors.

Contrary to the free market ideology espoused by international trade and financial institutions, nearly all industrialized countries (including Germany, France, the United Kingdom, Japan, and the United States) achieved economic prosperity through economic protectionism, including subsidies, tariffs, and state funding of industry. Beginning in the 1950s and 1960s, state intervention in the market played a critical role in the rapid industrialization of several East Asian countries, including Taiwan and South Korea. What these countries have in common is their successful use of industrial policy-the identification and aggressive promotion of those economic sectors likely to increase overall economic growth.

These lessons are familiar to China. Like the United States in the 19th century and Japan and South Korea in the twentieth century, China’s economic success is due in large part to its strategic engagement with the global economy rather than unconditional market opening. China established its industrial infrastructure through high tariffs; carefully regulated foreign investment; refused to open its financial markets to foreigners until very recently; and adopted policy and institutional innovations suitable to local conditions that differed from Western norms.

In contrast to the neoliberal economic model known as the “Washington Consensus,”(with its double standards for developed and developing countries), China’s alternative path to economic development has been hailed as the “Beijing Consensus.” Unlike the Washington Consensus, the Beijing Consensus is not a one-size-fits-all recipe. On the contrary, the Beijing Consensus emphasizes national self-determination, acknowledges the importance of innovation and experimentation, and recognizes sustainability and equality as measures of progress along with GDP. As the NAFTA case study illustrates, the rules governing international trade must give developing countries the “policy space” to promote infant industries, to shield vulnerable populations (such as small farmers) from unfair competition, to protect the environment, to promote rural livelihoods, and to foster job growth in dynamic economic sectors.

In the context of the WTO negotiations, the principle of special and differential treatment has emerged as an important vehicle to support the imposition of asymmetrical obligations on developed and developing countries in order to provide this badly needed “policy space” for development. Indeed, in recognition of the dissatisfaction of many developing countries with the current WTO framework, the ministerial declaration that launched the Doha Round of WTO negotiations explicitly called for the strengthening of all special and differential treatment provisions in order to make them “more precise, effective, and operational.”

China, India, Brazil, South Africa, Egypt, Indonesia, Thailand and Pakistan have taken a leadership role in the G20 group of developing countries that came together during the 2003 Cancun WTO Ministerial meeting to demand renewed special and differential treatment for developing countries and to insist that developed countries phase out agricultural subsidies. The G20 represents 57 percent of the world’s total population, 70 percent of the world’s farmers, and 26 percent of the world’s total agricultural exports.

As the world-wide financial crisis discredits the Washington Consensus and underscores the importance of market regulation, China should deploy its considerable economic clout to ensure that international trade and financial institutions recognize the important role of the state in economic development and give developing countries the “policy space” to promote ecologically sustainable and socially just economic policies through tariffs, subsidies and other measures.

4. The importance of biological diversity for food security.

The final lesson of the NAFTA case study is the importance of biodiversity to the integrity of the world’s food supply. Cultivating diverse plant varieties protects againstdevastating crop failure in the event of pests, disease or adverse weather conditions. This genetic diversity is also essential to the world’s plant breeders as they seek to develop new varieties to address contemporary food security challenges, including the challenges posed by climate change.

Biodiversity protection is particularly important in regions of high genetic diversity where important food crops originated. Known as Vavilov centers in honor of the Russian geneticist who made the first systematic attempts to collect seeds from these regions, these areas of high plant genetic diversity account for a significant percentage of the world’s food crops. China, like Mexico, is one of the world’s nine major Vavilov centers.

One of the great risks to the resilience of the world’s food supply is the pressure faced by farmers all over the world to abandon traditional, biodiverse cultivation techniques in favor of uniform seeds, chemical fertilizers, and synthetic pesticides. Although thousands of food crops have been cultivated since the beginning of agriculture, the world’s food supply currently depends on approximately 100 crop species. The displacement of biodiverse agroecosystems by monocultures increases vulnerability to pest and disease infestation, depletes the soil of vital nutrients, necessitates the use of toxic agrochemicals, and increases the likelihood of catastrophic food supply disruptions in the event of drought, blight or other environmental disturbances.

The NAFTA case study underscores the importance of implementing the commitment to in situ conservation contained in the Convention on Biological Diversity-specifically the obligation in articles 10 and 8(j) to respect the traditional practices of indigenous and local communities that are compatible with the conservation and sustainable use of biological diversity. These communities have frequently developed distinct approaches to natural resource use that are uniquely compatible with local conditions, are generally more sustainable than “modern” methods, and are also capable of increasing food production.

While the United States signed but did not ratify the Convention on Biological Diversity(CBD), China is one of the 191 parties to the treaty. In order to ensure that commitments in trade agreements do not override CBD obligations to protect biodiversity, China and other developing countries should insist on a hierarchy of norms provision in bilateral and multilateral trade agreements. Such a provision would state explicitly that CBD obligations shall prevail in the event of conflict with trade norms. Ironically, NAFTA established a precedent for such hierarchy of norms provisions by giving priority to certain enumerated environmental treaties in the event of conflict with NAFTA provisions. A conflict of normsprovision would enable China and other developing countries to protect the livelihoods of rural dwellers through subsidies, tariffs and other measures that might otherwise run afoul of bilateral and multilateral trade agreements.

The specific domestic measures adopted to promote in situ conservation of agrobiodiversity will vary from country to country in accordance with local conditions. Regardless of the strategy adopted by China, the transnational agrochemical industry is likely to make aggressive efforts to penetrate the Chinese market by promoting the uniform seeds and chemical-intensive production techniques that have wreaked havoc in the United States and have made the world’s food supply dangerously vulnerable to environmental disturbances. This industry must be managed carefully for two distinct reasons. First, a few transnational corporations currently control significant segments of global seed, chemical and grain markets, and are able to exercise quasi-monopoly power over the price of inputs (seeds) and outputs (grain) to the detriment of both farmers and consumers. Second, as the NAFTA case study illustrates, the environmental consequences of adopting this chemical-intensive agricultural model include soil degradation, erosion of crop diversity, depletion and contamination of water supplies, and increased exposure of workers and consumers to toxic agrochemicals.

C. Conclusion

The NAFTA case study sheds light on the complex ways that trade policy affects domestic efforts to protect the environment and to promote rural development. As China grapples with the twin challenges of financial and food crises, it is useful to learn from the experiences of others so as to lay the groundwork for innovation and to avoid repeating past mistakes. China and Latin America are strengthening bilateral ties and establishing trade and investment relationships. By avoiding indiscriminate liberalization and strategically and selectively managing international trade (especially in agriculture), Chinese and Latin American trading partners may be able to overcome market failures and to achieve mutually beneficial results. Finally, with a new administration in power in Washington, DC, the United States may be more reflective, more open to innovation, and more willing to embrace economic policies that genuinely promote economic development, poverty alleviation, and environmental protection.

(Written by Gonzalez, Carmen G. Jiangxi Social Sciences, Vol. 5, 2009)

[The Terms]

1. Central Committee of the Chinese Communist Party: 中国共产党中央委员会

2. Phase-out: 逐步淘汰

3. Globalization of market failure: 全球化的市场失灵

4. Executive Order:（美国总统颁布的具有法律效能的）行政命令

5. Washington Consensus: 华盛顿共识

6. Beijing Consensus: 北京共识

7. One-size-fits-all: 万全之策

8. Special and differential treatment: (WTO体制下的)特殊和差别待遇

9. Convention on Biological Diversity: 《生物多样性公约》

[The Discussions]

1. The significance of agricultural trade reform in NAFTA.

2. The economic, social and environmental impacts of NAFTA in the US and in Mexico.

3. Lessons for China to draw from the NAFTA case study.

【The Further Sources】

De Burca, Grainne, The EU, the European Court of Justice and the International Legal Order after Kadi. Harvard International Law Journal, Vol. 1, No. 51, 2009.

Lejour, Arjan M., De Mooij, Ruud A. and Nahuis (deceased), Richard, EU Enlargement: Economic Implications for Countries and Industries (October 2001).

Hillberry, Russell H. and McDaniel, Christine A., A Decomposition of North American Trade Growth since NAFTA (July 2002).

Chesterman, Simon, Does ASEAN Exist? The Association of Southeast Asian Nations as an International Legal Person (December 15, 2008). Singapore Year Book of International Law, Vol. 12, 2008.