WCJ Comments on The National Security Strategy of the United States of America (17 September 2002)

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vi. Ignite a New Era of Global Economic Growth through Free Markets and Free Trade

“When nations close their markets and opportunity is hoarded by a privileged few, no amount — no amount — of development aid is ever enough. When nations respect their people, open markets, invest in better health and education, every dollar of aid, every dollar of trade revenue and domestic capital is used more effectively.”

President Bush – Monterrey, Mexico – March 22, 2002

WCJ Comments The National Security Strategy of the United States of America Report – 17 September 2002
No.		The NSS Report	Comment
1		A strong world economy enhances our national security by advancing prosperity and freedom in the rest of the world. Economic growth supported by free trade and free markets creates new jobs and higher incomes. It allows people to lift their lives out of poverty, spurs economic and legal reform, and the fight against corruption, and it reinforces the habits of liberty.	The suggestion in this paragraph is that economic growth spurs economic and legal reform, and the fight against corruption, and reinforces the habits of liberty. This is wrong — the relationship is the opposite. It is individual freedom, an effective legal system, and honest, competent and effective government that ensure economic growth, general prosperity and economic stability, while any form of politics, absence of adequate legal system, and inadequate and corrupt governments prevent healthy economic growth.
2		We will promote economic growth and economic freedom beyond America's shores. All governments are responsible for creating their own economic policies and responding to their own economic challenges. We will use our economic engagement with other countries to underscore the benefits of policies that generate higher productivity and sustained economic growth, including: pro‐growth legal and regulatory policies to encourage business investment, innovation, and entrepreneurial activity; tax policies‐particularly lower marginal tax rates — that improve incentives for work and investment; rule of law and intolerance of corruption so that people are confident that they will be able to enjoy the fruits of their economic endeavors; strong financial systems that allow capital to be put to its most efficient use; sound fiscal policies to support business activity; investments in health and education that improve the well‐being and skills of the labor force and population as a whole; and free trade that provides new avenues for growth and fosters the diffusion of technologies and ideas that increase productivity and opportunity.	Theses are moves in the right direction, but they can only succeed, if any form of politics is eradicated from government.
3		The lessons of history are clear: market economies, not command‐and‐control economies with the heavy hand of government, are the best way to promote prosperity and reduce poverty. Policies that further strengthen market incentives and market institutions are relevant for all economies — industrialized countries, emerging markets, and the developing world.	This is right.
4		A return to strong economic growth in Europe and Japan is vital to U.S. national security interests. We want our allies to have strong economies for their own sake, for the sake of the global economy, and for the sake of global security. European efforts to remove structural barriers in their economies are particularly important in this regard, as are Japan's efforts to end deflation and address the problems of non‐performing loans in the Japanese banking system. We will continue to use our regular consultations with Japan and our European partners — including through the Group of Seven (G–7) — to discuss policies they are adopting to promote growth in their economies and support higher global economic growth.	Economic activities of people are an integral part of Human life, not something which exists on its own. It was precisely the Marxist view of “Economics” as something which exists in itself, for its own sake, and is the determining force of all Human Progress, that lead to the rise of the Socialist “Economies” of the 20th century. As the Socialist experiment proved unworkable, the Socialist governments turned to the “Free Market Economics”. But they are still locked in their Marxist thinking — the “Economy” is still seen as something that has a separate existence, rather than an integral part of Human Life.
5		Improving stability in emerging markets is also key to global economic growth. International flows of investment capital are needed to expand the productive potential of these economies. These flows allow emerging markets and developing countries to make the investments that raise living standards and reduce poverty. Our long‐term objective should be a world in which all countries have investment‐grade credit ratings that allow them access to international capital markets and to invest in their future.	This will only work satisfactorily when a stable supra‐national legal framework emerges, which will free the world from wars, terrorism and politics. Only under such conditions will the free flow of capital around the world become possible, which will lead to natural politics‐free economic development.
6		We are committed to policies that will help emerging markets achieve access to larger capital flows at lower cost. To this end, we will continue to pursue reforms aimed at reducing uncertainty in financial markets. We will work actively with other countries, the International Monetary Fund (IMF), and the private sector to implement the G–7 Action Plan negotiated earlier this year for preventing financial crises and more effectively resolving them when they occur.	These are positive moves.
7		The best way to deal with financial crises is to prevent them from occurring, and we have encouraged the IMF to improve its efforts doing so. We will continue to work with the IMF to streamline the policy conditions for its lending and to focus its lending strategy on achieving economic growth through sound fiscal and 18 National Security Strategy monetary policy, exchange rate policy, and financial sector policy.	Financial crises are the result of politics, mis‐education of the people, and deficiencies of the legal framework.
8	a	The concept of “free trade” arose as a moral principle even before it became a pillar of economics. If you can make something that others value, you should be able to sell it to them. If others make something that you value, you should be able to buy it. This is real freedom, the freedom for a person — or a nation — to make a living.	“Free trade” existed¹ long before the concept of “free trade” arose as a principle, but it was known as “trade”. It was not until governments started imposing “politically” motivated restrictions on trading that there appeared a need for a concept of “free trade”, to distinguish it from “government controlled trade”. The “free trade” concept appeared in 17th century Europe in response to interference by the then monarchies. In 18th and 19th centuries “free trade” became established in Europe and the Americas. This lead to fast industrial growth and economic development.In the 20th century the two world wars and spread of Socialism resulted in decline of “free trade” and high level of control over economic activities by governments. Toward the last quarter of the 20t century, it became clear that government control of economic activity of the people leads to economic stagnation, inflation and unemployment, and the idea of “free market economics” and “free trade” came back into fashion. But the level of political interference with private economic activities by governments still remains high.
	b	To promote free trade, the Unites States has developed a comprehensive strategy: Seize the global initiative. The new global trade negotiations we helped launch at Doha in November 2001 will have an ambitious agenda, especially in agriculture, manufacturing, and services, targeted for completion in 2005. The United States has led the way in completing the accession of China and a democratic Taiwan to the World Trade Organization. We will assist Russia's preparations to join the WTO.	Any removal of restrictions in trade between nations is a welcome development.
	c	Press regional initiatives. The United States and other democracies in the Western Hemisphere have agreed to create the Free Trade Area of the Americas, targeted for completion in 2005. This year the United States will advocate market‐access negotiations with its partners, targeted on agriculture, industrial goods, services, investment, and government procurement. We will also offer more opportunity to the poorest continent, Africa, starting with full use of the preferences allowed in the African Growth and Opportunity Act, and leading to free trade.	Encouragement of free trade is welcome. Eventually all free trade areas should merge in a single world‐wide free market.
	d	Move ahead with bilateral free trade agreements. Building on the free trade agreement with Jordan enacted in 2001, the Administration will work this year to complete free trade agreements with Chile and Singapore. Our aim is to achieve free trade agreements with a mix of developed and developing countries in all regions of the world. Initially, Central America, Southern Africa, Morocco, and Australia will be our principal focal points.	These are welcome developments, which should culminate in a single world‐wide free market, where agreements between nation states will become redundant.
	e	Renew the executive‐congressional partnership. Every administration's trade strategy depends on a productive partnership with Congress. After a gap of 8 years, the Administration reestablished majority support in the Congress for trade liberalization by passing Trade Promotion Authority and the other market opening measures for developing countries in the Trade Act of 2002. This Administration will work with Congress to enact new bilateral, regional, and global trade agreements that will be concluded under the recently passed Trade Promotion Authority.	These are welcome developments.
	f	Promote the connection between trade and development. Trade policies can help developing countries strengthen property rights, competition, the rule of law, investment, the spread of knowledge, open societies, the efficient allocation of resources, and regional integration — all leading to growth, opportunity, and confidence in developing countries. The United States is implementing The Africa Growth and Opportunity Act to provide market‐access for nearly all goods produced in the 35 countries of sub‐Saharan Africa. We will make more use of this act and its equivalent for the Caribbean Basin and continue to work with multilateral and regional institutions to help poorer countries take advantage of these opportunities. Beyond market access, the most important area where trade intersects with poverty is in public health. We will ensure that the WTO intellectual property rules are flexible enough to allow developing nations to gain access to critical medicines for extraordinary dangers like HIV/AIDS, tuberculosis, and malaria.	These are welcome developments.
	g	Enforce trade agreements and laws against unfair practices. Commerce depends on the rule of law; international trade depends on enforceable agreements. Our top priorities are to resolve ongoing disputes with the European Union, Canada, and Mexico and to make a global effort to address new technology, science, and health regulations that needlessly impede farm exports and improved agriculture. Laws against unfair trade practices are often abused, but the international community must be able to address genuine concerns about government subsidies and dumping. International industrial espionage which undermines fair competition must be detected and deterred.	That is right.
	h	Help domestic industries and workers adjust. There is a sound statutory framework for these transitional safeguards which we have used in the agricultural sector and which we are using this year to help the American steel industry. The benefits of free trade depend upon the enforcement of fair trading practices. These safeguards help ensure that the benefits of free trade do not come at the expense of American workers. Trade adjustment assistance will help workers adapt to the change and dynamism of open markets.	As long as these adjustments are truly transitional, and do not amount to “unfair trading practices”.
	i	Protect the environment and workers. The United States must foster economic growth in ways that will provide a better life along with widening prosperity. We will incorporate labor and environmental concerns into U.S. trade negotiations, creating a healthy “network” between multilateral environmental agreements with the WTO, and use the International Labor Organization, trade preference programs, and trade talks to improve working conditions in conjunction with freer trade.	As transitional measures, leading to free trade.
	j	Enhance energy security. We will strengthen our own energy security and the shared prosperity of the global economy by working with our allies, trading partners, National Security Strategy 19 and energy producers to expand the sources and types of global energy supplied, especially in the Western Hemisphere, Africa, Central Asia, and the Caspian region. We will also continue to work with our partners to develop cleaner and more energy efficient technologies.	Allies against whom? Enemies? Do not these concepts belong to the past centuries?
9		Economic growth should be accompanied by global efforts to stabilize greenhouse gas concentrations associated with this growth, containing them at a level that prevents dangerous human interference with the global climate. Our overall objective is to reduce America's greenhouse gas emissions relative to the size of our economy, cutting such emissions per unit of economic activity by 18 percent over the next 10 years, by the year 2012. Our strategies for attaining this goal will be to: remain committed to the basic U.N. Framework Convention for international cooperation; obtain agreements with key industries to cut emissions of some of the most potent greenhouse gases and give transferable credits to companies that can show real cuts; develop improved standards for measuring and registering emission reductions; promote renewable energy production and clean coal technology, as well as nuclear power — which produces no greenhouse gas emissions, while also improving fuel economy for U.S. cars and trucks; increase spending on research and new conservation technologies, to a total of $4.5 billion — the largest sum being spent on climate change by any country in the world and a $700 million increase over last year's budget; and assist developing countries, especially the major greenhouse gas emitters such as China and India, so that they will have the tools and resources to join this effort and be able to grow along a cleaner and better path.	These are positive steps.

Notes:

¹⁾ There are mentions of traders in the Bible and in the Qur'an. The Qur'an not only expressly asserts that trading is a lawful activity, but also stipulates such necessary pre‐requisites for “free trade” as the need for “giving full weight and full measure”, the need for contracts for not‐on‐the‐spot transactions to be in writing and witnessed by independent witnesses, effective measures of protecting property rights and detailed rules of inheritance.