GLOBALIZATION AND EQUITYA VIEW FROM NORWAY

Valter AngellNorwegian Institute of International

Affairs - NUPI

Three strands of reflections

1. The history of globalization Key features

2. Norway and globalizationAnything to learn?

3. The future of globalizationTowards a new order?

My basic premise

• The need for a holistic approach and to understand the political economy

– IDEOLOGY/POLITICS– THEORY– POWER

The basic model of the 40-ties

• A system designed by economists– In powerful nations

• Formed by historical experiences– Stability– Multilateralism

Globalization started focus on trade

• Liberalization is good– For a nation, because the gains for the consumers

are larger than the losses for the producers– From Adam Smith to Bhagwati– By compensations, everybody is better off,

• AssumptionsMarginal costs of money is equalPerfect competitionEntry, knowledgeLater-Symmetric information

• And, if the transfer is done!

Key historical points

• ITO failed – – Havanna Charter not ratified

• 1947 27 nations negotiate in Geneva– The General Agreement on Tariffs and Trade

– GATT – MFN clause

• I – I – I– Tariffs reduced– A powerless organization takes form

1950 - 60

• Commodities left out– The Haberler report

• New countries joins

• A Part IV of GATT is added /1964

• The first UNCTAD is taking place

• But, no real concessions to south

The turbulent 70-ties

• Limits to growth

• The commodity crisis– OPEC OIL

• The new international economic order– NIEO– Fair and equitable prices

• Resolution 93 IV UNCTAD IV– The Common Fund for Commodities - CFC

NIEO/ a break with the past

• New political institutions– 10 commodities - stable and equitable prices– Global buffer stocks – Intervention in the market

• With support from the north / for a while• OPECs power declined, • CFC 1980 / A weak resolution

– Result – a small office in Amsterdam– Project support / no intervention in the marked

GATT/WTO 1980/90

• The Uruguay-round– The voice from the south is heard– Tarification of trade obstacles– Further reduction of industrial tariffs

• GATT=WTO (pluss..)

Present

• The Doha round – the development round• Agriculture is the key

– Marked access in the north(300> Mia. USD)Elimination of export subsidies– The right to protection of developing

economies (Good? Jagdish?)

• Collapse– And after Bush?

• The end of a system controlled by north?

Where we are now?

• Most countries members of WTO• DC understands the benefits of

international trade– Still their tariffs high

• North has lost its grip– Protection in the North– Agricultural subsidies 350 bill. USD

• Museveni –Trade, no aid

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Norway and globalizationTwo faces

• Norway, from bottom to top, in 200 years– UNDP criteria questionable

• Natural resources, capital and labor important– and the economic system (Sweden,

Denmark, Finland)

• Growth and equity

Key elements

• Ownership to land

• Democratic institutions working

• The interdependence between capital, government and labor accepted– Negotiated settlements

• Education to all

A smooth transformation?

• The international dimension always a factor– When land become scarce, migration– When capital shortage, foreign investment– When food shortage occurred, imports

• Now, – surplus capital - oil revenues invested abroad– Lack of labor, imports

The Nordic Model

• We are all social democrats

• The welfare state– Understanding the system– The interdependence between key actors– Role of the public sector– Stability / no strikes– Good governance

• Deficiencies? Yes!

The Nordic Model

GOVERNMENT

CAPITAL LABOR

Norway and the south

• Words and deeds– Declarations and realities– ODA, almost 1 pst. of GNP– Trade……

• In international organizations– THE BIG WORDS /

• GENDER, ENVIRONMENT, GOOD GOVERNANCE, PEACE ETC.

In trade

• GATT / enabling clause

• Having GSP– Watch the clauses / in Norwegian

• The farmers rule……….– 30.000, <2% of GDP

• No trade– Multifunctionality– Read / disfunctionality

The future of globalizationTowards a new order?

• GATT 1947 27 countries

• Today 150

• WTO’s 2006 report highlights developing countries’ growing role in world trade– Today the real dynamism in trade is to be

found in the developing world, where Brazil, China, India, Malaysia, Mexico and Thailand all posted double digit growth in exports.

WTR Dec. 2006 Lamy

• Concerning the role of developing countries, Lamy mentions the formation of powerful negotiating groups like the G-90, the G-33 and the G-20 that illustrate that this is an organization in which all Members can not only state their case, but can achieve meaningful objectives on their path towards development.

The future

• What will happen in Asia?• Standing together

– In G-20– In G-90

• Going alone?– Multilateralism and or regionalism

• Breaking history? – Being big and good?

• Taking care of all?