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| Volume X, Fall 2003, Number 3 |
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| EXCERPT: Commerce and Conflict: The U.S. Effort to Counter Terrorism With Trade May Backfire |
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| Pete W. Moore / Andrew Schrank |
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Dr. Moore is assistant professor in the Department of Political Science at the University of Miami. Dr. Schrank is assistant professor in the Department of Sociology at Yale University.
There is an old joke about the
business acumen of the Arabs: A
teacher asks a Lebanese boy,
"What does two plus two equal?" And the boy responds, "Are you buying or selling?" The Bush administration is currently placing a good deal of faith in the commercial spirit of the Arab world. Secretary of State Colin Powell has committed more than $1 billion to the United States-Middle East Partnership Initiative, an ambitious aid program designed to unleash the private sector, empower civil society and foster democracy in the Near East and North Africa, and President Bush has recently announced a 10-year time frame for the negotiation of a U.S.-Middle East free-trade agreement.
The logic of Bush's strategy is certainly grand: A self-conscious and self-confident Arab private sector is expected to use free trade and market-oriented reform to foster sustainable growth, democratic transformation and an end to regional conflict, sub-state violence and religious radicalism. But the proposed policy mechanisms -- preferential trade agreements (PTAs), free-trade zones (FTZs) and targeted assistance to the private sector -- are actually well-worn instruments of a failed U.S. policy toward the developing world. Simply put, they assume that international trade alone not only can transform deeply entrenched social and political institutions but can do so in accordance with decidedly controversial American goals and interests. "Encourage international trade," the administration seems to be saying, "and peace, prosperity and good governance will necessarily follow."
Unfortunately, the lessons of world history suggest that investors, entrepreneurs and firms capitalize upon foreign trade by exploiting, rather than transforming, their preexisting social and political institutions. Consider, for example, the growth of the Baltic grain trade in early modern Europe. While the opening of the Northern European trade routes ushered in an era of modern industrial capitalism in England and the Low Countries, where private-property rights and unfettered labor markets had already been established, it encouraged the growth of feudal exploitation and repression in Poland, Russia and the East, where serfdom had not yet been overcome. Or consider the so-called triangular trade between England, Africa and the plantation societies of the New World. The industrial mother country prospered; her agricultural trading partners -- including the southern United States -- continue to bear the scars.
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