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GI expands into larger offices PDF Print E-mail
Written by Tom Clougherty   
Thursday, 01 February 2007
Apologies to our readers for the lack of recent activity on the blog. We have been busy moving into new offices in Covent Garden, London. That's me at my new desk in the picture. We've almost sorted everything out now, so normal service should resume next week.

Another exciting project for the New Year is our very own TV programme - "The Globalisation Show" - which will be broadcast on 18 Doughty Street every Wednesday evening. Last night’s show focused on immigration and our studio guests were Susie Symes, Chair of 19 Princelet Street (London’s first museum of immigration and diversity), and Damian Hockney, a member of the Greater London Assembly and leader of the One London Party. Alex Singleton, the GI's director-general, presented the show, while I introduced the debate in a pre-recorded short film. The subsequent discussion was very lively.
Trade diversion PDF Print E-mail
Written by Alex Singleton   
Thursday, 01 February 2007
The Wall Street Journal reports on the effect of preferential access to European markets:
Chiquita Brands International Inc. is braving this war-torn country [Ivory Coast] in an experiment that may shift a slice of its banana production from Latin America to Africa. The reason: the European Union's preferential tariffs for bananas grown in its former African colonies.

Cincinnati-based Chiquita Brands International, the world's second-largest banana grower after Dole Food Co., has operated extensive plantations in Latin American countries such as Costa Rica, Panama and Ecuador for decades. Now, it is crossing the Atlantic to revamp existing farms and set up a new banana plantation in Ivory Coast...
It's great that Africa is getting new jobs, but is it really helpful for production to artificially move to less efficient producers, just because politicians have given them a preference?
Putting the pro-globalisation case on Al Jazeera PDF Print E-mail
Written by William Danzek   
Friday, 26 January 2007
The GI's Alex Singleton was on Al Jazeera International yesterday dicussing the case for globalisation in the light of the World Economic Forum which is being held at the moment. He argued that developing countries that have opened to globalisation have gained huge improvements in living standards, while those that have remained relatively closed have been left behind. Globalisation, far from being about exploitation, has seen millions of people lifted out of poverty in the past year alone.
Brown: the case for globalisation PDF Print E-mail
Written by Tom Clougherty   
Thursday, 18 January 2007
There is an excellent article in The Times today about Gordon Brown's keynote speech in India. It reports that "Mr Brown made a forceful case for the deeply unfashionable cause of globalisation" and describes the notion that the world’s poor are victims of economic globalisation as "utterly ridiculous." The following passage is especially good:

He was right to be unambiguous in his defence of its vast capacity to alleviate human poverty throughout the planet. Critics of freer trade like to portray themselves as the protectors of those who have to live on the smallest incomes. Yet if they could abandon their instinctive hostility to capitalism and were to look at the transformation that is taking place in Asia, they might realise that for all their assumed sophistication they harbour ignorant prejudices on a scale not dissimilar to those fools currently featured on Celebrity Big Brother.

The lessons of China and India, as Mr Brown asserts, is that economic competition and access to global markets are the source of salvation for those previously trapped in poverty. Arguments about whether the gap between rich and poor in either of these countries is increasing or not are inconsequential compared with the huge advance in the absolute standards of living of the poor.

The paper also rightly points out that the Chancellor might like to "ponder that India's breakthrough came after it abandoned a long period of excessive state direction. It is the liberated private sector that has allowed her to boom today, not a central government initiative." While he waxes lyrical about India's economic success, Britain is becoming over-taxed, over-regulated and increasingly uncompetitive. Something to think about perhaps...

Mr Brown also called for urgent and far-reaching reform of the United Nations, the International Monetary Fund, the World Bank and the G7 (see today's Guardian):

The post-1945 system of international institutions, built for a world of sheltered economies and just 50 states, is not yet broken but - for a world of 200 states and an open globalisation - urgently in need of modernisation and reform.

This is hard to disagree with, and seems to represent the consensus here in Westminster. David Cameron, the Leader of the Opposition, has already called for a permanent Indian seat on the UN Security Council - a call which Mr Brown echoed, noting that India is now the third biggest provider of UN peacekeeping forces. Germany, Japan, Brazil and South Africa should also join the club.

I am, however, a little sceptical about Mr Brown's suggestion that "there is now a case for bringing together some of the work of the IMF and the World Bank and even some of the work of the UN... the World Bank should focus for the first time on energy security and environmental care."

The key to successful reform of international institutions is not creating bigger organisations with more activities - in fact, it is quite the opposite. Yes: we need institutions that reflect the true balance of power in the modern, globalised world. But we also need institutions that are more streamlined and more focused on their core functions. Do less, but do it better. That should be the mantra for reform.
Globalisation Institute "has performed an invaluable service" PDF Print E-mail
Written by Tom Clougherty   
Wednesday, 17 January 2007
The Globalisation Institute's new report, Positive Environmentalism: A Convenient Truth, has been receiving some very favourable coverage in the press. My favourite piece comes from yesterday's Yorkshire Post:

Can green taxes halt climate change?

AT last some common sense has been cast on the environmental challenges presented by global warming. The Globalisation Institute has performed an invaluable service by providing a harsh but realistic assessment of the effect green taxes and emissions trading are likely to have on slowing climate change.

A report it has produced concludes they will not solve the problem. Whether this message gets through to Gordon Brown is another matter, however. Green taxes suit his purposes too well for him to step away from them simply because a think tank says they are next to useless in combating global warming. His dependence on every kind of stealth tax, so evident during his Chancellorship, is such that the chances of weaning him off any of them at this late stage are dis-appearingly slight.

The institute's preference for a pro-growth, pro-technology approach will be a gift for David Cameron and the Tories should the Government pass up on it.

Another gift, already in their hands, is criticism of massively-expensive projects to offset carbon emissions generated by Ministerial travel. One of them, in Thailand, involves burying rotting vegetables which at present produce methane, a potent global-warming gas. By donating about £3m of taxpayers' money to cut these emissions, Ministers can fly around the world with clear consciences – dismaying hard-core environmentalists and the highly-pragmatic Globalisation Institute alike.
The Economist says "just do it" PDF Print E-mail
Written by Tom Clougherty   
Tuesday, 16 January 2007
According to an article in The Economist this week, it is "make-or-break time this spring for global trade talks." Following on from meetings in Washington DC last week between Jose Manuel Barroso and President Bush, The Economist suggests what needs to happen if real progress is to be made. The first movers, the newspaper suggests, must be the Americans:

…the Americans will have to agree to screw down the limit on their trade-distorting farm subsidies, from about $22 billion to something like $15-17 billion.

The next move will fall to the Europeans: "they seem ready to cut their agricultural tariffs by about half on average, but still want to spare too many "sensitive" products, such as beef and poultry, from the full force of the chop." Europe has a tendency towards cutting tariffs only where there is no real competition. Negotiators must make sure this doesn't happen this time.

The third dimension consists of Brazil, which does not want to cut industrial tariffs, and India, which does not want to open up its farming sector. The hope is that once the US and the EU make suitable concessions, a compromise with India and Brazil will follow.

All of this remains a tall order, but at least it seems the political will is there. George Bush reportedly told Peter Mandelson, the EU Trade Commissioner, and Susan Schwab, his US counterpart: "Go to it, Susan. Go to it, Mandelson. Just get it done."

Positive Environmentalism PDF Print E-mail
Written by Alex Singleton   
Tuesday, 16 January 2007
A new report by the the Globalisation Institute challenges the conventional wisdom on how to solve climate change - on the same day as two of David Cameron's policy commissions meet to discuss how environment and development fit together. Positive Environmentalism: A Convenient Truth says that while many proposed solutions to climate change have the right intentions, they will ultimately fail to protect the planet. These "big government" solutions, including green taxes, food mile reductions, and emissions trading may make policymakers feel they are doing the right thing, but, the report says: "the road to hell is paved in good intentions".

The debate about climate change solutions has been hijacked by "negative environmentalism", the view that thinks that improving the environment has to be done through big government plans to restrict foreign holidays, limit trade, force local shopping, or curb GDP. It regards the rise of India and China with dread. Economic growth is seen as finite: the West, in this view, has become rich at the expense of the planet, and there are not enough resources to sustain increasing economic prosperity in the emerging economies.

Instead, the report says, policymakers need to adopt "positive environmentalism". This view recognises the importance of dealing with environmental problems but rejects the doom and gloom approach so commonly encountered. It sees the great environmental achievements over the past century and rejects the notion that there are long term limits to economic prosperity. It sees the importance of technology, innovation and economic growth in tackling climate change.

According to the report, there is a convenient truth about growth and the environment: "becoming wealthier and more prosperous in the coming century is not the enemy of environmental progress: it is its very heart and soul."

It says that: "Instead of a fear of economic growth, policymakers should see it as a force for good. Within decades, technological progress, funded by growth, will break the relationship between GDP and carbon emissions. An approach to climate change that emphasises technological progress hand in hand with growth offers the best way to tackle the issue of the developing economies. Our approach to India and China must be more savvy than trying to beat them into an international agreement that is not in their interests.”
Mobile phones ring in changes for Bangladeshis PDF Print E-mail
Written by Mike Masnick   
Thursday, 11 January 2007
It's been interesting to see some of the efforts to bring computing and electronics to less developed countries. Clearly, better infrastructure can help some of the people in these countries, as seen by things like "phone ladies" or rural farmers who are able to do much more thanks to mobile phones. At the same time, it's important to realize that technology alone isn't what many of these countries need -- and claiming that just adding technology will solve some of the larger economic issues is going to end up badly. Still, for many companies looking at the "the bottom of the pyramid" there's opportunity there, if you can just help get over some of the market hurdles. Motorola has apparently realized this. Recognizing the importance of the third world in growing their business, they've decided to build their very own bicycle phone chargers (found via Engadget). As you ride the bicycle, it charges your phone. The idea is that this way, the mobile phone users don't have to worry as much about electricity -- though, they'll have to do plenty of bicycle riding to keep the phone charged. Of course, this could work well in some villages where villagers have built a business out of riding around on a bicycle with a mobile phone for others to use. Next up, they'll have to design some stationary bikes to keep power on at the cell towers.

Crossposted from TechDirt.
Doha: signs of progress PDF Print E-mail
Written by Tom Clougherty   
Wednesday, 10 January 2007
President Bush and European Commission President Jose Manuel Barroso met in Washington on Monday, and reviving the stalled Doha round of trade talks was high on the agenda. "We both recognise that the best way to help impoverished nations is to complete this Doha trade round," said Bush. According to Barroso they have both instructed their negotiators "to come up with a solution as soon as possible."

The WTO talks collapsed in July - with the EU and the USA each blaming the other for refusing to reduce agricultural subsidies and tariffs. However responsiblity is apportioned (and I think it's fairly clear the EU is the root of the problem) it is vital the both parties make concessions if the benefits of freer, fairer trade are to be extended to the world's poorest people. Globalisation has the potential to lift millions out of poverty - but only if policy-makers let it.

EU Trade Commissioner Peter Madelson and his US counterpart Susan Schwab told reporters that there had been "progress" in recent weeks, but would not give any details. Nevertheless, they claimed that "there is some stirring of momentum which is a welcome change..."

All of which is good news. Although formal mulitlateral negotiations remain suspended the key players appear to be working hard behind the scenes to get the process back on track. However, it would be unwise to get too optimistic. Real progress needs to be made and made fast. President Bush's trade promotion authority (which allows him to fast-track agreements through Congress)  expires in March, and it will be very difficult to make any meaningful deals once that happens. At the same time, European protectionism seems to be alive and well, despite the Commission's assurances to the contrary.

Reviving the Doha round is not going to be easy.
Apple TV will help decentralise television PDF Print E-mail
Written by Alex Singleton   
Wednesday, 10 January 2007
Time magazineA recent issue of Time magazine highlighted the massive change in the media that is happening thanks to new technology. YouTube, bought last year by Google for $1.65bn, allows ordinary people, equiped with their home computer, a camcorder, and software like iMovie, to distribute their own home-made programs, fundamentally shifting power away from broadcasters like the BBC. Of course, we all like professionally produced programming like Curb Your Enthuasiasm on HBO or movies from Paramount, but the problem is that watching them when a programme controller at the BBC or ITV decides we should watch them is often just too much hassle.

The good news is that yeserday Steve Jobs demonstrated a new product, the Apple TV. Available next month, it will allow you to download programmes and films off the internet and then wirelessly watch them on your television in high definition, cutting traditional TV channels out of the equation. Apple has signed up Disney and Paramount to provide content through its iTunes Music Store, and I'm sure that other programme producers will also sign up soon. Of course, movies won't need to be bought specifically from the iTunes store, and some I'm sure some will use file sharing services to get the content. Google's CEO is on Apple's board, so it wouldn't surprise me if we see some special integration between YouTube and Apple's iTunes software.

We are witnessing a fundamental shift away from the old world of limited broadcasting spectrum, with programme times set in stone, to a world in which people can enjoy the programmes they want to watch at they time that suits them. And television is becomming more global - I find myself increasingly wanting to watch Bollywood and European films, and America's HBO programming over the Beeb's output. This globalisation and greater diversity in television will increase the pressure on the BBC to become self-financing, rather than relying on taxpayer subsidy.

Apple TV
Food labelling chaos? PDF Print E-mail
Written by Tom Clougherty   
Wednesday, 10 January 2007
A coalition of 21 leading food and drink manufacturers and three major retailers (Tesco, Somerfield and Morrisons) recently angered "consumer and health watchdogs" by launching their own nutrition labelling system. The new labels, which clearly display calorie, sugar, fat, salt, saturates and salt content by amount and percentage of guideline daily allowance (GDA), will be in direct competition with the government's "traffic light" system - which uses red, amber and green to show levels of fat, saturated fat, sugar and salt in processed foods.

Naturally, the nanny state is not happy with the new labels. Apparently the GDA system is flawed since nearly half of the UK's adult population lack the "complex" numerical skills needed to understand the labels. I find this claim baffling. Are we really to believe that 47% of British adults cannot add up a series of percentages? So much government policy today seems to be predicated on the assumption that people cannot look after themselves and must be treated like children. Whatever the flaws in the national education system, this is simply not the case.

The usefulness of the traffic light system also strikes me as questionable. All it tells me is that I can eat something, I shouldn't eat something, or I might be able to eat something. The truth is that a balanced diet is what matters to our health. A red light product will do me no harm whatsoever as long as my overall diet is acceptable.

The government's favoured system is not only unrealistic, it is also damaging to retailers and producers - people are inclined to avoid red lights without considering the actual health consequences. Of course, health campaigners have criticised the motives of the new labelling scheme, suggesting it is designed to hoodwink vulnerable consumers into purchasing less healthy food. The reality, as usual, appears to be somewhat different: Tesco research has already shown that consumers are using their new labels to “move towards products that are lower in salt and fat”. Perhaps people are more intelligent than the government gives them credit for.
Old McDonald had a farm... PDF Print E-mail
Written by Tom Clougherty   
Tuesday, 09 January 2007
I was on More4 News last night discussing McDonald's decision to source every bean of its coffee (in the UK) from farms certified by the Rainforest Alliance. Some might assume that this is another "Fair trade" scheme, based on subsidising a minority of farmers and thus perpetuating the chronic overproduction that causes low prices in the first place.

In fact, the Rainforest Alliance is very different from Fairtrade - and is an altogether more commendable organisation. Unlike Fairtrade they do not charge a premium or guarantee a minimum price. Instead the Rainforest Alliance - an independent non-profit organisation - only certifies farms that meet certain social and environmental standards, as well as providing training, advice and improved access to credit. The market alone determines the prices paid to farmers - and if Rainforest Alliance farmers do get paid more it is simply because they are adding value to their product. Importantly, and again unlike Fairtrade, the Rainforest Alliance does not make political assumptions about the organisation of labour. Any can be certified if they meet the required standards.

McDonald's announcement is a welcome reminder that big business is not the enemy of world development. Indeed, it can be an extremely positive force. Moreover, their decision shows that government regulation and state intervention are not required to make business "ethical". Markets represent a constant referendum, where people vote with their money - markets thus represent people’s preferences. If consumers demand ethical products then businesses like McDonald's will provide them. Their intention may be to increase profits, but that isn't really the point.

My only reservation about this announcement - which I expressed on More4 last night - is that the Rainforest Alliance's focus seems to be on Central and South American countries like Mexico and Brazil. While these countries remain poor by our standards they are fast emerging economies that can fend for themselves in the international marketplace and which are naturally developing higher social and environmental standards as they become wealthier. Africa, where coffee drinking was invented, is not doing so well. If big corporations really want to do something for world poverty, they could do far worse than investing in African produce and African farmers. 
Why politicians who talk about a "trade deficit" should be quiet PDF Print E-mail
Written by Alex Singleton   
Monday, 08 January 2007
Adam Smith summed up the delusion of worrying about the"balance of trade" very well:

"Nothing, however, can be more absurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this doctrine supposes that, if the balance be even, neither of them either loses or gains; but if it leans in any degree to one side, that one of them loses and the other gains in proportion to its declension from the exact equilibrium. Both suppositions are false. A trade which is forced by means of bounties and monopolies may be and commonly is disadvantageous to the country in whose favour it is meant to be established, as I shall endeavour to show hereafter. But that trade which, without force or constraint, is naturally and regularly carried on between any two places is always advantageous, though not always equally so, to both."
Greenpeace savaged over misleading Mac-bashing PDF Print E-mail
Written by Alex Singleton   
Monday, 08 January 2007
iMacGreenpeace has been suffering a wave of criticism after issuing a press release denouncing the environmental record of Apple computers. Unfortunately, for Greenpeace's smear campaign, the lobby group's claims are contradicted in its own research and by America's Environmental Protection Agency, which rates Apple laptops as the most environmentally friendly on the market. The EPA rates Apple desktops as more eco-friendly than ones from HP, Dell or Lenovo (formerly IBM). And the company is recognised as an "environmentally responsible company" by the the Forward Green Leaders programme of the Sierra Club, a prominent US environmentalist group.

Yet Greenpeace ignores the empirical evidence and chooses to attack Apple's environmental record not because of what it actually does. Instead, it ranks Apple's environmental record as rock bottom because it doesn't publish on its web site what it is going to do in the future and also ranks the company down because it only gives figures for the quantity of Apple products eventually recycled by weight not percentage of sales. Dell, conversely, is highly rated because it has published what it is going to do in the future and because it has a "strong definition of the precautionary principle". In essence, Greenpeace's ranking is based on what a company says rather than want it does - indeed one of Greenpeace's complaints is that Apple does not link to its environmental policy from its home page.

Greenpeace's criteria are so bizarre that they could almost of have been drawn up simply to get the result of bashing Apple. Whatever was going through the Greenpeace lobbyists' minds when they were working on this campaign, the end product was shameful. If the result of this is to encourage people to buy products that are more highly ranked according to Greenpeace, the result will be to do more damage to the environment, not less. It's no wonder that Greenpeace co-founder and former Director Patrick Moore has described the organisation as having evolved "into a band of scientific illiterates who use Gestapo tactics". Greenpeace: not as progressive as you might think.
Sebastian Wolfgarten tunnels under the Great Firewall of China PDF Print E-mail
Written by Brian Micklethwait   
Monday, 08 January 2007
On December 30th, the Belmont Club linked to an article by Annalee Newitz at the  Popular Science Blog, about the efforts of German IT security expert Sebastian Wolfgarten to get past the censorship system that has been imposed on the Chinese version of the internet.

Google is, famously, part of this system:
Researchers have known for the past several years that when Chinese citizens type certain phrases like "Falun Gong" and "Taiwan" into Google, they receive very different results than people outside the region do. Wolfgarten wanted to know why, and whether there might be a simple technical way to dig a little escape route through the Great Firewall.
Wolfgarten . . .
. . . tried several methods for getting uncensored data to his Chinese server through the Great Firewall.  He would log into the server, then make requests for information about or Falun Gong. What he discovered was that there are three fairly simple ways to trick the automatic Chinese censorship system.
These are: use the anonymous network Tor, ignore censorship commands sent by Chinese servers, and "tunnelling".  Read the article, and probably a lot of other stuff too, to learn details.

Obviously the battle against Chinese censorship is an ongoing struggle that will not be settled finally one way or the other for the foreseeable future.  But what does seem to be very clear is that if you want to improve the political climate in China, trying to stop free trade with China is a no-hoper compared to efforts such as these.  Blocking free trade with China means that you don't care about the interests of the Chinese people generally, as opposed to the interests of political dissidents, or for that matter anybody else's interests.  Getting true information as well as goods in and out of China, on the other hand, means that, from the point of view of all of the Chinese people, you are squarely on their side.  Such efforts cost almost nothing compared to the huge cost of arguing successfully against free trade between China and the world, and compared to the vastly greater costs of actually interrupting such trade.

Read Wolfgarten's paper about his research here.
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