An introductory workshop designed to give:

• global trade and investment theories and trends;
• an overview of the major players (countries, institutions, TNCs);
• Ethical issues involved in international trade and investment from the perspective of countries of the global South and north (such as the U.S.).
• Key structures and agreements and their elements;

• how agreements get negotiated;
• what to watch for in ongoing or upcoming negotiations;
• the role religious organizations can play in helping to shape a just trading and investment system; and
• what to ask for when talking with members of congress

1) Introductions: who’s here and why this workshop?

2) Who does trade impact? (Discussion starter, as much as possible, participants should name some of the traded goods and or services that they enjoy throughout the day).

Individuals: if we go through our normal day at almost every point of the day we can see how products traded come into play:
• when you have time check to see where your sheets, clothes, shoes are made,
• look at your breakfast food if you eat bananas, or drink coffee or tea, these can only come to your table through international trade.
• Half of the internet messages you receive might be from people any where in the world trying to sell you something or
• On your dinner table there will be a number of vegetables, fruits, grains, wine or cheese imported from another country.
No one in the work can say that he or she had nothing to do with trade or commerce. We would have trouble surviving if we weren’t involved in commerce. No one country and no one person can produce everything needed to live. That’s why people have to exchange goods and services.

International trade is organized with the goal of assuring consumers and producers enjoy secure supplies and greater choice of finished products components, raw materials and services.

3) Trade Theory
Although trade supposedly based on “supply and demand” for certain products, since the advent of industrialization and the growth of “assembly line production” goods are produced, not necessarily to satisfy the direct needs of people, but rather as a way to generate more profit/capital. With capitalist production (where profit is the goal) classical economists, like David Ricardo of the UK started talking about comparative advantage.

COMPARATIVE ADVANTAGE, in traditional trade theory is based on the claim that each country or region should specialize in products it is best equipped to produce. These are products that the country or region can produce efficiently, cheaply, and with better quality than other countries or regions.
           CAMPARATIVE ADVANTAGE provides the rationale for FREE TRADE -- assuming that there an international division of labor allowing some countries to specialize in industrial goods while other countries specialize in agricultural goods or in raw materials. Critics of this theory claim it does not explain actual trade patterns. Its assumptions (like perfect competition and full employment) do not conform to real world experience.
           Several theorists have tried to modify, expand on it. New trade theorists cite the role of ECONOMIES OF SCALE and imperfectly competitive markets in determining intra-industry trade patterns among industrial countries. This leads to a justification for subsidizing certain industries, to give them strategic advantage in international markets. Most countries operating under new trade theories protect national production by charging tariffs on foreign products, or creating non tariff barriers like quota systems or health regulations on products from other countries which might compete with in-country products. Many rich countries still apply these measures.

IMPORT SUBSTITUTION was a strategy used to promote some industrialization in some Latin American countries from the 50’s to the 70’s. The idea is to encourage national businesses to produce goods and services that it was importing. Regional trade agreements under import substitution served as a protective mechanism. The regional markets protected themselves from competition from other countries and trade blocs through a common external tariff (all countries that signed the regional agreement had to charge the same tariff on products coming in from other parts of the world).
           The thought behind import substitution was that domestic investment and technological capabilities would be spurred by providing domestic producers with (temporary) protection against imports. As an industrialization strategy import substitution worked fairly well (at least in a broad range of countries until at least the mid-1970s) to raise domestic investment and enhance productivity. UNCTAD found that, “in the second half of the 1970s, disaster struck in most of the economies that had been doing well. Only 12 of the 42 developing countries with growth rates above 2.5 per cent between 1960 -73 were able to maintain them over the next decade (1973–84).” TRADE FOR HUMAN DEVELOPMENT UNCTAD found at: http://www.rbf.org/pdf/01-chapter%201.pdf

NEOLIBERAL POLICIES AND THE DOMINIATION OF TRANSNATIONAL COMPANIES: in the 1980’s Neoliberal economics became dominant. OPEN Market policies, favoring large transnational corporations, were emphasized. These policies supported eliminating all barriers to trade (like taxes and tariffs) and lifting restrictions on the circulation of money in poor countries. Strategies of regional cooperation developed under import substitution become replaced by bilateral and or multilateral FREE TRADE agreements which promote the free circulation of goods and foreign capital.

Mainstream trade theory holds FREE TRADE will lead to lower prices and increased efficiency in the domestic economy, thereby benefiting both consumers and producers. However, empirical evidence shows no straightforward correlation between trade liberalization and overall economic performance as measured by GDP growth.
In order to benefit from import liberalization, several other factors need to be addressed: 1) competitiveness levels 2) macroeconomic stability 3) market access for exports 4) governance and 5) human, institutional and productive capacity. If imports are liberalized too rapidly when the conditions for success are not present, there can be serious negative effects such as the de industrialization, closure of local firms and job losses suffered by many countries.

COMPARATIVE ADVANTAGE VS. COMPETITIVE ADVANTAGE:
Getting the most out of trade depends not only on material resources, climate and geographic location, but on knowledge and technology as well. The neo-liberal system tips the advantage toward the more industrialized countries and their multinational corporations that have the “know how,” control of technological advances, financial resources, research and development capacity.
In such a setting the comparative advantage then offered by smaller less industrialized countries like Namibia, is the that Namibia can offer cheap labor – and lower labor standards – this fits well with the competitive advantage of TNC’s which look to find places where labor is cheap an there are few requirement for worker protection.

Currently, developing countries face pressure on two fronts: rapid import liberalization (under International Monetary Fund World Bank conditionality and World Trade Organization rules), and uncertain export earnings (especially in cases of low supply capacity and declining terms of trade).

4) An overview of the major players (institutions, countries, TNCs)
• WTO BACKGROUND AND ROLE
• The U. S. ROLE
BILATERAL TRADE AGREEMENTS
FREE TRADE AGREEMENTS
BEHAVIOR AT THE WTO

5) Ethical issues involved in international trade and investment from the perspective of countries of the global South.

According to UNCTAD, “Trade should be seen as a means to development rather than an end…trade liberalization policies should not be viewed as a reliable mechanism for generating self-sustaining growth and reducing poverty, let alone achieving other positive human development outcomes.”

• Gender inequalities
• Unequal playing fields: “arm twisting in negotiations”
• Nontransparent, undemocratic“Green Room” negotiation processes.
• Undermining democracy and sovereignty of nations (trade agreements trump government authority)
• Weakening of institutions that protect workers
• Losses of culture, integrity of creation declining terms of trade Dumping

6) KEY UPCOMING AGREEMENTS AND THEIR ELEMENTS;

• how agreements are negotiated;
• what to watch for in ongoing or upcoming negotiations;
• the role religious organizations can play in helping to shape a just trading and investment system; and
• CAPITOL HILL ADVOCACY: what to ask for when talking with members of congress (see leave behind).

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