November 24, 1999

by Peter J.M. Orvetti

The New World Trade Order
Signed, Sealed, Delivered
A Lesson In Human Rights

The New World Trade Order

The Associated Press reported on China's mindset about likely accession into the World Trade Organization: "Beside the farmers selling baskets of persimmons, carpenter Chan Yinmiao cut a forlorn figure sitting by the side of the road on a Beijing overpass, waiting in the wind for work. But when talk turned to the breakthrough trade deal his government struck with the United States last week, he brightened up. Chan's family, hundreds of miles away in eastern China, cultivates rice. He hopes the trade deal will open up lucrative export markets for their crop. Excitement in China about the deal, which marked a major milestone in China's campaign to join the World Trade Organization, extends beyond those who hope to measure its benefits in dollars, cents and improved trade figures. Some hope entry into the group that makes the rules for world trade will also spur improvements in human rights, legal reforms and, eventually, progress toward democracy."

But there are two sides to the story, as Claude E. Barfield and Mark A. Groombridge wrote in a commentary, "Two Sides to China's WTO Membership", published Monday on our Web site: "As we learn the details of a deal struck between the United States and China on the terms of accession for Chinese membership into the World Trade Organization, there is cause for rejoicing and cause for worry. Certainly, the market access provisions seem close to the liberal package China agreed to in April and therefore heartening. But on key issues such as administered protection through the use of selective safeguards, antidumping actions and transparency (relating to commercial law and legal due process), the deal appears wanting and potentially retrograde. Finally, it appears that U.S. negotiators have also missed an important opportunity to use the accession process to force the Chinese to introduce greater transparency in their commercial laws and administrative procedures as they affect foreign businesses and investors.

"First the good news on market access and tariff reduction. Despite adamant opposition from strategic industrial sectors and their allies in Beijing, President Jiang Zemin pushed through a market-opening package that will certainly gladden the hearts (and, they hope, the pocketbooks) of Western businessmen. Thus, industrial tariffs will be cut to 17% from an average of 21%, and agricultural duties to 14.5% -- 15%. China will also end export subsidies of agricultural commodities… The downside of the new agreement stems from the very long periods carved out for the United States and other industrial nations to 'manage' trade with China. This will be done using 'safeguards,' actions that permit supposed temporary protection against a sudden influx of imports that threatens sudden injury to a domestic industry. Under current WTO rules, nations can institute safeguards for a four-year period, renewable once. They cannot single out individual nations for special action, and they must gradually phase out the protection. Under the new agreement, however, the United States forced the Chinese to accept this highly protectionist action for 12 years, or in the crucial textile sector for nine years."

Signed, Sealed, Delivered

The Senate has finally approved the legality of contracts signed electronically, AP reported. The legislation would establish a minimum standard for electronic signatures while states work on overhauling their own laws. "This provision assures that a company will be able to rely on an electronic contract and that another party will not be able to escape their contractual obligations simply because the contract was signed electronically," said bill sponsor Sen. Spencer Abraham (R-Mich.).

Solveig Singleton wrote about electronic signature technology in the Cato Policy Analysis "Encryption Policy for the 21st Century: A Future without Government-Prescribed Key Recovery" (pdf): "Public key cryptography provides a way for the recipient of a message to identify the sender, a 'digital signature.' The sender encrypts part of the message, the signature, with his or her private key. The recipient decrypts this part with the sender's public key, confirming the sender's identity. Digital signatures will be important to the successful growth of Internet commerce; for example, banks will want to be certain that they are actually communicating with their customers, and the customers will want to be certain that they are communicating with their banks. When both the recipient and the sender are using public key technology, encryption can provide privacy and identity authentication. The sender signs a message with his private key and enciphers the message with the recipient's public key. The recipient deciphers the message with her private key and checks the sender's signature with his public key… Public key cryptography amounts to a revolution in security because it enables computer users to secure and authenticate their communications without revealing their own secret keys. The general cryptographic system can be exposed to public scrutiny, allowing weaknesses to be ferreted out, as long as the key remains secret."

Digital signatures are also discussed in the Cato Policy Report articles "Money in the Electronic Age" and "The Future of Money In the Information Age". In the latter, William Melton, founder and CEO of CyberCash, notes, "If chains of trust are the primary ingredient of liquidity, then the technology of digital signatures and digital certificates is indeed a breakthrough that allows maintenance of ever more subtle, more complex, and yet still reliable chains and domains of trust. The economic impact is to provide greater liquidity. Yet that additional liquidity is provided under the tight feedback loops of the market and thus is, on the whole, noninflationary."

A Lesson In Human Rights

Thousands of protesters, many wearing black robes and white death masks, marched on Fort Benning, Georgia, Sunday to protest human rights abuses committed by graduates of the United States Army's School of the Americas, which has trained Latin American anticommunist military personnel. Several of the 4,800 demonstrators, carrying coffins and crosses bearing the names of victims of violence in Latin America, were detained by military and civilian police.

"The International Military Education and Training (IMET) program is a grant-aid program that provides training for foreign military personnel. IMET and its predecessor programs have trained more than 500,000 officers and enlisted personnel since 1950. The training ranges from basic technical skills to professional military education," wrote David Isenberg in the 1992 Cato Foreign Policy Briefing "The Sins of Security Assistance Programs". "As are FMF programs, IMET is directly financed by U.S. taxpayers. Such training, according to its advocates, is supposed to instill respect for human rights and democratic values. However, the record of IMET on that score is not impressive. Obviously, in the case of Manuel Noriega, who took courses in 1964 and 1967 at the Army School of the Americas in the Canal Zone, such values did not take hold. IMET-funded training was also given to many members of El Salvador's Atlacatl Battalion, nine of whom were charged with the killing of six Jesuit priests, their cook, and her daughter in November 1989. Less egregious examples of brutal and authoritarian acts by IMET graduates are too numerous to mention.

"IMET gives the U.S. government access to future civilian and military leaders of other countries, which was deemed essential to counter Soviet influence. At least in a quantitative sense, the program has succeeded. From FY 1979 through 1984, more than 1,500 IMET-trained personnel served as chiefs of military services, cabinet ministers, ambassadors, senior staff officers, field commanders, and commandants of senior professional military schools. IMET also funds Mobile Training Teams that do their work in the host countries. Those teams are yet another vehicle for U.S. influence. Such teams are now deployed in Colombia, Peru, and Bolivia as a part of U.S. counternarcotics efforts."