In a striking blow to free(er) trade principles, a bill in the US House of Representatives died after failing to receive the two-thirds majority required under special House rules. The bill would have normalized trade relations with Vietnam, thus paving the way for a Vietnamese entry into the World Trade Organization.

President Bush is due to attend the Asia Pacific Economic Cooperation summit meeting in Hanoi next week. He had hoped to trumpet the passing of the bill as a milestone in opening up trade with the communist country. The Bush administration still has hopes for normalizing trade relations with Vietnam, although with the current political climate, it seems that the Republicans and Bush have a difficult path ahead.

This defeat is a setback for the global economy, especially with Asia trade relations. As demonstrated in the Chinese model, trade is a proven way to open closed societies and to further the influence of freedom and democratic principles. Normalized trade relations with Vietnam could have been the crack through which democracy could slowly infiltrate Vietnamese society.

The concept of globalization as I mean it, is not necessarily the homogenization of cultures, but more the homogenization of economic systems to facilitate the unencumbered exchange of products and ideas. Globalization is the economic equivalent of freedom of speech. Of course, we all know that freedom of speech is not, nor should it be absolute, just as free trade should not be absolute. However, the concept of freedom of speech as well as globalization is overall a good idea. Obviously, with trade and speech, there should be certain limits in order to not squash the rights of others. For example, US, EU farm subsidies are an example of where limits should be enacted. Those subsidies effectively limit the economic freedoms of developing countries (such as in Africa.) Those subsidies are not just unfair, they distort the market. Just as the media can distort elections via biased coverage.

My globalization ideal would involve graduated elimination of all tariffs, but of course that would require the graduated elimination of domestic subsidies. Over time, the markets will create a more efficient and productive environment. This is the stated aim of the World Trade Organization, however domestic political agendas often preclude trade fairness. Much as Colorado can trade products and services with Illinois with minimal regulatory interference, I would hope that America and Zambia, or France and Uzbekistan could enjoy similar trade efficiency.

Economic balkanization is a poison. It is one of the root causes of poverty. If Africa can’t sell tulips to Europe because the Dutch oppose tariff elimination, then Africa effectively will have a smaller or reduced market for their products, thus perpetuating poverty in that region. Bono is more of an expert in that area than me, go visit the One Campaign website for more about African trade and poverty.

I am not in favor of cultural imperialism from any country. I am in favor of eliminating barriers to trade as it will benefit all economies, from developed countries like the US all the way down to small Bangladeshi basket weavers.

Much as the civil rights movement in the United States reduced barriers between races, I want to reduce barriers between economies. Racial segregation seemed like a good idea to some people throughout history just as economic segregation seems like a good idea to some now. Realizing that segregation hurts a country took many years, but looking back it seems obvious (to most of us) that segregation was wrong, both morally and economically.

A rising tide will raise all boats -- we just need to ensure all boats are ready for the rising tide.

Read a speech from the WTO Director General Mike Moore about Globalization. In the speech he explains that "globalization works."

For an alternative view check out the Free Trade section of GlobalIssues.org. Much as I slant strongly in favor of globalization, this site provides links and commentary slanting against free trade policies.

The recent failure of free trade agreement talks between the United States and Korea is frustrating. The "sensitive" issues of rice (for the Koreans) and textiles (for the Americans) are harming consumers on both sides of the ocean. The debate about the Korea-US FTA sounds very familiar to the debate between unions and corporations' outsourcing and offshoring efforts.

Korea is concerned that by opening up its rice market to imports, that it will effectively make their domestic industry obsolete. The Korean rice industry is practically obsolete and as such requires extensive subsidies to stay afloat along with highly punitive tariffs on imports. The United States fills similarly about its textile industry, although obsolecence isn't the problem in the US, it's the union monopoly on the labor supply that has resulted in anti-competitive wages for textile workers.

The solution is simple. Let the market solve the problem. Let consumers vote with their dollars (or Won.) Allow unrestricted rice imports from the US, but label that rice in the stores as "US Rice" in big bold letters. Label the domestic rice as "Korean Rice." The US rice will of course be dramatically cheaper, but if consumers don't want to lower prices, they would be free to buy the expensive domestic product. The same model could work for textiles. If the citizens of a particular country are truely interested in protecting inefficient industries, then let them pay for it themselves.

The same approach might work in countering political opposition to outsourcing and offshoring. If US consumers want to pay more for products and services from companies that do not use outsourcing or offshoring strategies, then provide that option. For example, in the new edition of a particular software program, have an "outsourced" version which of course would cost less, and an approprately labeled, "non-outsourced" version. Consumers would overwelmingly "vote" for the cheaper version. This seems like an absurd idea, but if the benefits of outsourcing and offshoring are spelled out more clearly to the consumer (i.e. via price) the debate would cease. Consumers would immediately see the benefit to their personal bottom lines.

I'm tired of paying prices that are higher than they should be. I spend more of my paycheck supporting outdated farmers or union pension plans than I should. I would rather spend the excess on other products or perhaps invest my savings in my retirement and reducing my reliance on a dubious Social Security system.

China exported no crude oil to North Korea in December, according to Chinese customs administration reports. China delivered the entirety of its September oil exports to the United States as opposed to the typical 50,000 metric tons per month shipped to North Korea. China exported about 125,000 tons of crude oil, valued at $62 million to the United States.

North Korea relies on China for 90 percent of its crude oil supply, the remainder coming from Iran. There is no official explanation for the cuts. Beijing has not announced any plan to eliminate oil exports to North Korea and officials at the China National Petroleum Corp. declined to comment.

Although the September export cut could be an anomaly, it’s more likely that the cut was in response to North Korea’s July ballistic missile test. The Oct. 9 nuclear test could further strengthen China’s willingness to withhold oil from Kim Jong-Il’s regime. China surprised many observers with their endorsement of the UN sanctions in response to the nuclear test.

The growing threat of North Korean instability to Beijing along with pressure from the United States seems a likely prompt for China’s cooperation with the sanctions. If China becomes an ally in the North Korean crisis, the tables might finally shift, resulting in an imminent collapse of the Pyongyang regime. Or war. Either way, the status quo has begun a dramatic shift.

Read more:

China cuts oil exports to North Korea (International Herald Tribune)

Chinese’>Chinese pressure forces North Korea to apologize (The Guardian)

Pyongyang has threatened war if South Korea joins the UN mandated sanctions in response to the October nuclear test. On the surface, this seems provacative and suggestive that hostilities would resume if the South participates in the sanctions. However, North Korea has a long and predictable history of posturing in response to potential economic damage.

The so-called "Sunshine Policy" of former South Korean President Kim Dae-Jung called for an opening of communication and economic partnerships with their Stalinist friends to the North. Current South Korean President Roh Moo-Hyun has continued Kim's engagement strategy which has manifested itself most evidently in the Kaesong Industrial Complex. The Kaesong project is a joint manufacturing facility located on the northern side of the DMZ. President Kim's Sunshine ambitions could be foiled if the South participates in the UN sanctions. The Sunshine Policy has been a failure if success is measured by the North's willingness to dismantle its nuclear program.

Former US President Bill Clinton attempted a diplomatic end to the North's nuclear ambition in 1994 with the Agreed Framework. The Framework provided for light-water nuclear reactors for civilian power generation in exchange for the decommissioning of heavy-water (weapons capable) reactors. The attempted engagement by the United States resulted in a decline of regional security because, quite simply, the North failed to deliver on their side of the agreement, while the US still provided the light-water technology.

The current Pyongyang threat mimics the ongoing strategy of North Korea to use fear as a means to get what it wants. Seoul is faced with a critical decision, the results of which will determine the future of the North Korean regime. If Seoul caves (as they usually have) to the North's threat, then Kim Jong-Il would have effectively proven that threats and posturing will work in influencing Seoul. On the other hand, if the South decides to adhere to the UN mandate, then Kim-Jong-Il will have two choices: return to the six-party talks and disarm its nuclear program or launch an attack on the South.

Although possible war is a horrible extention of foreign policy, the alternative is that North Korea will have effectivly bypassed the UN sanctions and will still be able to continue developing nuclear weapons technology. It would be best for Seoul to press Pyongyang now, while the North's nuclear program is in its infancy, rather than wait until later when the threat of nuclear strikes increases to a dangerous level.

Sun Tzu said in his Art of War, attack when your enemy is at its weakest. The North Korean regime could be at a breaking point. The important straw for this East Asian camel will be if Seoul decides to call the North's bluff and agree to the enforcement of UN sanctions. If Seoul does not have the courage to fight now, the result will be a strong and nuclear armed North with an eye towards Tokyo, Seoul and even Beijing.