Tuesday, July 17, 2007

Free Trade 5: Business, Rock Music and Cycling Globalization

In a news report today in the Financial Times, two very big business lobby groups in the US and Europe, voiced out their impatience at various regulatory barriers by their respective governments that hinder business and entrepreneurship. The report below:


Business lobby groups move to reduce barriers
By Jeremy Grant in Washington
Published: July 17 2007 03:48
The world’s two largest business lobby groups, the US Chamber of Commerce and Business Europe, will announce on July 17 a “strategic partnership” aimed at reducing regulatory barriers amid frustration at what they say is slow progress by governments on the issue...
Tuesday’s initiative, known as the Global Regulatory Co-operation Project, is a sign that business believes that government efforts should be “held to account” and progress measured by the businesses to be affected, according to Stanton Anderson, special counsel to the US president and the project’s chairman.
“There are increasingly around the world regulatory barriers being established and trade negotiations are becoming increasingly problematic both at the bilateral and multilateral level and we think this regulatory co-operation effort is a way around that problem, and that progress could be made in eliminating these barriers with regulator talking to regulator.”
Mr. Anderson's (the project chairman) adjective is "increasing" regulatory barriers around the world. The continuing failure in the Doha trade liberalization negotiations is actually one proof of this increasing market barriers posted by most governments around the world, whether rich country or poor country governments. Each failure in trade liberalization talks is an opportunity of one camp to blame the other.

I do not know how far these 2 big business lobby groups of the US and Europe will go in demanding reduction in business and trade barriers, at least of their respective governments. But I will not be surprised if someday they will go for drastic income tax cut and import tax cut advocacies. Taxes always distort prices upwards, whether domestic or imported prices.

Of course, businessmen, like ordinary producers and consumers, want double-standards. They want their products and services be protected by government barriers from more competition, but they also want their various consumption goods, their production raw materials and capital goods, to be liberalized so that they can bring down their production costs. But if you ask them if they have to drop one sentiment, which will they favor -- liberalization or protectionism -- it's clear in their consumption pattern that majority favor the former. At the end of the day, even the most protectionist farmers will want to have access to cheaper toys and shoes for their kids, cheaper clothes and jewelries for their wives or girlfriends, and cheaper tractors and spare parts for their farms. And only free trade can give them this opportunity, not protectionism, not so-called "fair trade".

A related paper I wrote last April 11, 2007:

From Led Zep to Lance Armstrong: Street Globalization

The British rock band of the 60s to 70s, the Led Zeppelin, is considered among the pioneers of metal rock music with class. Among their famous songs, "stairway to heaven", "rock n roll", "black dog", these are still being played in Philippine radio from time to time; performed by a few Pinoy rockers, their DVDs of live concerts can be found in Quiapo and elsewhere. The band's "Led Zeppelin: BBC Sessions" live songs are in my Ipod too.

The American cycling hero, Lance Armstrong, is the greatest road racer of all time. He won the Tour de France for 7 years (1999-2005) consecutive! He was also considered "dead man winning" because he wasa survivor of testicular cancer. His feat is known not only in Europe and the US and other developed countries in the world, but also in thePhilippines. You will not meet a single serious racer cyclist in this country, even among recreational cyclists, who do not know Lance. His previous teams' (Motorola, USPS, Discovery) jerseys are worn by localc yclists, and so on.

These 2 guys/group are among the famous symbols of globalization –along with Michael Jordan, Tiger Woods, Mike Schumacher, Bryan Adams, Bruce Springsteen, Eminem, Coca Cola, Nike, Samsung, Ericsson, and so on. Their presence are felt and seen in the streets.

With the globalization of rock music (and jazz, classical, rap, othertypes), comes along the hardwares and paraphernalias that accompany such music: stereos, tv, CD/DVD players, computers, Ipod, MP3, sound systems, home theaters, etc. These goods – imported from the US, Taiwan, Europe, China, Japan, Korea, India, and many other countries –enable the people, the ordinary Filipinos especially, to enjoy such famous music and musicians. In the process, world-class Filipino rockbands were inspired and born, bands like Eraserheads, Bamboo, 6 cycleminds, Cueshe, etc.

With the globalization of cycling (and soccer, F1, beach volleyball, basketball, golf, etc.), cycling shoes, jerseys, bicycles, bike parts and tires, speedometer, heart monitors, and the goods and services provided by commercial teams competing in big international races like the Tour de France, are made available in our malls, shops and streets. And a lot of world-class Filipino racers were inspired and born – guys like Victor Espiritu, Ryan Tanguilig, Lloyd Reynante, Warren Davadilla, etc.

Seems that the only guys who do not like the full enjoyment of more and more people of those international music, sports, adventure, technology, and the competitive spirit that go with these, are the politicians, government bureaucrats, and vested, anti-free trade sectors and producers in the local market. For the latter, all sorts of excuses and alibis are recited when all they want are (a) more taxes to feed a growing bureaucracy and pork barrels, (b) more monopolization of local markets and slam-dunk local consumers with higher prices and often low-quality goods and services.

The competitive-minded among local producers love free trade. Not onlythat free trade will give them an opportunity to penetrate other foreign markets, but they will also be able to find cheaper raw materials and intermediate goods, cheaper technologies, already available abroad, to make them more efficient in their productionp rocesses.

So one important thing that globalization offers, is that it helps expose the pretentious and lazy among us, the "more taxes for more subsidies and bureaucracies please" people among us.



See also:
Free Trade 1: Estonia's Free Market, Globalization, May 09, 2006
Free Trade 2: Unilateral Trade Liberalization, May 17, 2006
Free Trade 3: Protectionism Perpetuate Poverty, September 05, 2006
Free Trade 4: FTA in APEC, July 09, 2007

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