Trade sanctions against the United States to force it to comply with efforts to combat global warming were advocated by a Nobel prize-winning economist in Dublin yesterday.
Prof Joseph Stiglitz, a former chief economist with the World Bank and chairman of president Bill Clinton's Council of Economic Advisors, said many people in the US would welcome such sanctions in order to push the US into complying with the 1997 Kyoto protocol on greenhouse gas emissions.
He said that under World Trade Organisation rules, certain US products could be restricted or taxed by importing countries if these countries were complying with the protocol. By not paying for their emissions, manufacturers in the US were in effect getting a subsidy that was not available to similar manufacturers in countries where the protocol was being adhered to.
Aa a guest of the Economic and Social Research Institute, Prof Stiglitz delivered a lecture entitled Making Globalisation Work to an audience of approximately 700 people. He said that he believed the threat of trade sanctions against the US would change the nature of the debate on the issue in the US and that the actual imposition of sanctions might not be needed.
He said that he agreed with a speaker from the floor, Peadar Kirby, that globalisation had created a dynamic towards concentrating power in the hands of "elite forces". However, there was another dynamic in terms of increasing democratisation in some countries and increasing democratisation and accountability within global institutions, he said. Overall, he was optimistic.
He said that in the 19th century people learned how to temper market forces by the use of democratic forces, adding that economic globalisation had outpaced political globalisation. Also, the US and the developed economies had abused their position of strength after the Cold War.
Economic theory predicted that increased global economic integration would increase the gap between the rich and poor in developed countries. The bottom 25 per cent income group in the US had seen their real wages decrease by 30 per cent over the past 30 years, he said.
However, some countries were responding successfully with a progressive taxation system, education and a strong safety net. "We know what needs to be done. It's only a matter of political will," he said.
