Rights Before Trade

Which came first, free markets or free people? Judging by his new trade agreement with Indonesia, President Clinton has decided on the former. In China and now across southeast Asia, Clinton has unforgivably abandoned this nation's tradition of making civil rights a first priority.

Clinton's move to open trade with Indonesia has made a mockery of the techniques of economic diplomacy. Since World War II, nations with strong economies have effectively used trade sanctions to combat apartheid in South Africa, totalitarianism in Nicaragua, genocide in Bosnia and Communism in Cuba.

The president's decision does boast the backing of many politicians and economists. They contest that economic stability necessarily precedes political stability. While economic problems can provide the impetus for political struggle, as Karl Marx first suggested, President Clinton has forgotten that Marx doesn't apply everywhere.

For instance, opening trade with Indonesia will hardly help the plight of residents of East Timor who face constant discrimination in Indonesian labor markets and civil society. Why should a glut of dollars in the pockets of a nation's wealthy change their attitudes about minorities, or anything else except their opinion of the U.S.? Most of the profits from trade will go to those few Indonesians already in positions of power. President Clinton has repeatedly bashed trickle-down economics in this country, but now he's decided to try it in Indonesia.

If anything, free trade with Indonesia will cement the position of the current government. Back when Communist annexation posed an ever present threat to friendly regimes, coddling a tyrant or two was acceptable and expected. But now, Indonesia--disregarding its role as a strategic center in the South China Sea--stands to gain by the creation of a new government.

The same logic describes the situation in the People's Republic of China. President Clinton claimed that granting Most Favored Nation trading status to China would actually improve standards of living for Chinese citizens. Again, he failed to consider China's demographics. Most of China's poor live in rural areas, providing agricultural staples. Not only would these people not benefit from increased trade in, for example, video cassette recorders, new trade in goods such as grain and fresh vegetables could actually hurt them.

Some economists argue that opening trade with China will make it more competitive in global markets. But what will happen to the western farming provinces, whose technologies date back to the turn of the century? It's unlikely that the decision-makers in the east will worry much about the fate of hundreds of millions of voiceless peasants; President Suharto and his government probably don't think too much about the economic well-being of the people of East Timor.

President Clinton is offering Indonesia and China the rewards of trade before he sees any results. The promise of advances in human rights does not suffice; action must precede any economic assistance.

In highly industrialized nations, free trade can help the general population. Remember the invisible hand of self-interest? When an oligarchy has a chance to absorb all the benefits of open markets, it will. It President Clinton wants to help Indonesians and Chinese, he needs to reverse U.S. trade policy completely.

Damel Altman's column appears on alternate Mondays