I know that our International Development spokeperson reads this blog feed, so if you have a moment, Lynne…
The European Union is currently negotiating a trade agreement with twelve Pacific Island nations, one of which is Vanuatu, and whilst there, I became aware of local concerns in terms of the proposals. Reading the arguments, I began to realise that nations like Vanuatu enter into these negotiations at a huge disadvantage.
Vanuatu has no real industry, and is, for the most part, a subsistence economy, with 70% unemployment. With a population of less than 250,000, spread over more than eighty islands, and with most of the citizens dependant on what they can grow or catch to sustain themselves, I find myself wondering who will benefit from such a deal.
Indeed, it was originally expected that such an agreement could only follow on from a successful conclusion to the Doha Round of trade negotiations. In fact, the intention was that the deal would follow three years afterwards, and yet the Doha Round is still ongoing, which makes you wonder whether or not the European Union negotiators are acting in good faith.
At the moment, Vanuatu’s economy is dominated by Australian companies, with banks like ANZ, clothing firms such as Billabong and various food brands dominating the marketplace. Whilst the tourism industry still has a significant element of indigenous providers, this is likely to change as international hotel chains move in. Tourism requires initial investment, which is hard to come by in a subsistence economy.
So perhaps the solution is to start the move towards meaningful free and fair trade by allowing such small nations free access to our markets, without reciprocity. For the most part, they produce nothing that we can produce here, and as long as we ensure that other developed nations don’t cheat by using such nations as an alternative manufacturing base, like the Mexican production facilities for American companies, it would allow these comparative micro nations to support their inhabitants and reduce their dependence on overseas aid.
I have always believed that we should help poorer nations to help themselves and wonder why the link between trade and aid has been so undersold. A cynic would suggest that aid linked to the provision of services by British companies allows us to feel good about ourselves, whilst closing off our markets to these countries allows us to protect our indigenous industries and secure votes from those workers thus saved from potential unemployment.
We need to enhance our store of goodwill post-Iraq, and perhaps a trade concession to the small, mostly poor ACP (Africa, Caribbean and Pacific) nations would achieve that and help them build secure economies for the future. Then, and only then, should we seek to open up their currently fragile industrial bases to competition.