Trade as Counterterrorism?

1. Trade as Counterterrorism? Julie A. Sokol U.S. & Global Trade Fall 2008

2. Overview • 2001- “Global War on Terror” • This strategy merged counterterrorism with free trade initiatives. • Resulted in a confused and over-reaching policy served to undermine U.S. credibility and national security.

3. Pre 9/11 U.S. Trade Policy Goals • remove trade barriers in foreign markets • further liberalize domestic markets • reestablish the bipartisan Executive-Congressional negotiating partnership • reestablish trade promotion authority for the President • shape the international trading order, or be left behind.

4. Post 9/11 U.S. Trade Policy Goals • Economic strength at home and abroad as the foundation of America's hard and soft power. • Re-establish American trade leadership by moving on multiple fronts: globally, regionally and with individual countries • “Trade is about more than economic efficiency. It promotes the values at the heart of this protracted struggle” “The terrorists deliberately chose the World Trade towers as their target. While their blow toppled the towers, it cannot and will not shake the foundation of world trade and freedom. – R. Zoellick 2003

5. The Debate over EffectiveCounterterrorism Strategy • Some argue that an overly aggressive strategy plays into the hands of the terrorist agenda. • Others maintain that nothing less than a “Global War on Terror” can be effective. • Most parties can agree on is that the root causes of terrorism lie in socio-economic disparity more than any other cause • This perspective justifies the goal of economic empowerment within counterterrorist doctrine, but does not guarantee the effectiveness of free trade principles in particular.

6. President BushMonterrey, MexicoMarch 22, 2002 “When nations close their markets and opportunity is hoarded by a privileged few, no amount—no amount—of development aid is ever enough. When nations respect their people, open markets, invest in better health and education, every dollar of aid, every dollar of trade revenue and domestic capital is used more effectively.”

7. Unfinished business as of 2008 • Middle East Free Trade Agreement (MEFTA) • South African Customs Union (Botswana, Lesotho, Namibia, South Africa and Swaziland) • Thailand • United Arab Emirates • Free Trade Agreement of the Americas (FTAA) to include Mercosur, Venezuela and Ecuador.

8. Candidates’ Views on Trade “The stability of Colombia is more critical than ever as others in the region seek to turn Latin America away from democracy and away from our country.” –McCain 2008

9. Main problem: • The United States has maintained a confused and over-reaching policy involving free trade and counterterrorism which is undermining U.S. credibility and national security. • The root causes of this problem can be organized as those related to the practice of free-trade and those related to diminished U.S. credibility in regions of strategic importance related to terrorism.

10. Problems related to FTA’s • “Neither plague nor panacea”- debate over effectiveness • Weak countries “lack the capacity to adjust, retool and relocate with changing market conditions” • Were it not for foreign policy interests, these nations would never be considered as viable trading partners

11. MEFTA as an example • Pressing internal issues: • massive population increases • youth “explosion” of males • the integration of women into the workplace • failed or inadequate growth in infrastructure and in key areas like housing and education • scarcity of water • a decline in non-petroleum exports • the lack of precedent of regional trade in the Middle East “A contest for the soul of Islam" is raging, and the United States can help “by striking trade deals that generate jobs and reduce poverty” –Robert Zoellick 2004

12. Excerpts from 2005 Bahrain Conference on the Topic of MEFTA • "If Arab countries can integrate with the United States (through FTA’s), it will be easy for them to integrate with each other." -US Rep. Lawrence • "FTA’s are not the ultimate solution for this region ... I see FTA’s as a catalyst for change and reform rather than promoting trade." –Rashid, Egypt’s minister of foreign trade and industry • "I really fail to understand the logic that if you want to do Arab integration, you have to go to the US," -Sharif Al Zubi, Jordan’s minister of industry and trade

13. Policy Proposal • A new global trade and development policy that realigns bilateral negotiations with measures that support development and regional security for weak and failed states • This policy would streamline trade agreements and aid programs. • Possible oversight provided by the United Nations Conference on Trade and Development (UNCTAD).

14. What is UNCTAD? • Established in 1964 by the UN to deal with trade, investment and development issues • Created the New International Economic Order (NIEO) to replace the Bretton Woods system • Favored greater participation and safeguards for developing countries • Would present guiding principles for negotiations and institutions

15. Positive Outcomes • The U.S. would become less of a target to terrorist groups. • As trade agreements are filtered through the UN, labor, health, and environmental standards would be upheld in this realm which could even increase the use of free trade principles. • As weak states are nurtured by aid programs and UNCTAD-based trade practices, they become less threatening to the United States to improve global security overall.

16. Forces working against this proposal • The U.S. has never been willing to abdicate its own power on issues that directly affect its own economy and security. • A rejuvenation of the UN’s presence in the field of global economics would have to occur in order to guide trade practices. • Business leaders would not welcome new bureaucracy to contend with. • Tremendous upheaval would be involved to implement this proposal, along with almost perfect human behavior.

17. Final Thoughts “In the initial years, UNCTAD used to attract the best talents among economists in the world, who used to come motivated by the idealism to serve the vast majority of mankind living in the developing world and to contribute to the shaping of a world economic order which was just, fair and equitable- a goal that was in the interest of both developed and developing worlds. Experts committed to such idealism have been sidelined or eased out of UNCTAD by a variety of means adopted for this purpose. The reoriented mandate and programmes, and the kind of environment it has created do not provide scope or incentive to attract new bright original talents committed to an ideal. This has increasingly turned the UNCTAD Secretariat into an uninspiring place.” -Boutros Boutros-Ghali 2006

18. Works Cited Bardhan, Pranab. 2006. Does Globalization Help or Hurt the World’s Poor? http://www.sciam.com/article.cfm?id=does-globalization-help-o (accessed September 14, 2008). Boutros-Ghali, Boutros. 2006. Reinventing UNCTAD. http://www.globalpolicy.org/socecon/trade/unctad/2006/0220revitalizing.pdf (accessed September 14, 2008). Looney, Robert. 2005. U.S. Middle East Economic Policy: Are Trade-Based Initiatives an Effective Tool in the War o Terrorism? http://www.ccc.nps.navy.mil/si/2005/Jan/looneyJan05.asp (accessed September 14, 2008). Moore, Michael O. and Alissa Bellotti. 2007. Initiating U.S. Free Trade Agreements: How Do Potential Partners Stack Up? http://home.gwu.edu/~mom/ftarank.pdf (accessed September 14, 2008). Samuelson, Robert J. 2008. Goodbye, Free Trade; Hello, Mercantilism. http://www.newsweek.com/id/81372 (accessed September 14, 2008). Schott, Jeffrey J. 2001. Understanding US Trade Policy: Circa 2001. http://www.iie.com/publications/papers/schott1001-2.pdf (accessed September 14, 2008). Stern, Paula. 2002. Making Trade Policy While Pursuing the War on Terrorism. http://www.sterngroup.biz/speakers/nabe.pdf (accessed September 14, 2008). The White House. 2002. The National Security Strategy of the United States of America. http://www.whitehouse.gov/nsc/nss.pdf (accessed September 14, 2008). The White House. 2003. The National Strategy for Combating Terrorism.http://www.whitehouse.gov/news/releases/2003/02/counter_terrorism/counter_terrorism_strategy.pdf (accessed September 14, 2008). Zoellick, By Robert B. 2001. Countering Terror with Trade.http://www.ustr.gov/Document_Library/Op-eds/2001/Countering_Terror_with_Trade.html (accessed September 14, 2008).