Sunday, January 20, 2008

Free trade isn't a panacea unless it is truly free

Last May, I wrote a piece about my concerns over trade talks between the European Union and the various South Pacific island nations. I wasn't against the notion, merely newly aware of the issues of isolated states with predominantly subsistence economies, where competition may overwhelm small-scale local producers. My 'reward' was to take flak from some of our more zealous defenders of a comparatively unfettered free market international economy, in particular, Cllr Liberal Polemic himself, Tom Papworth.

However, it would seem that my concerns weren't a sign of eccentric weakness. Of the Pacific nations within the ACP (Africa, Caribbean and Pacific) group, only Papua New Guinea and Fiji have signed up to the new agreements, with the others, Vanuatu amongst them, demurring at this time.

Now, there are stirrings in Africa. A campaign, led by local musicians with serious followings amongst the population, is being run against the European Partnership Agreements (EPAs), condemning them as 'Enslavement, Pillage and Appropriation'. Their rap, 'We Won't Sign It Now!' is a sign that the allegations of linkage between the signing of EPAs and allocation of development aid are having a detrimental effect on EU relations with under-developed nations.

My more gung-ho, academic friends have to realise that the politics of perception inevitably come into play when it comes to international trade agreements. Poor, underdeveloped nations, once looted by the colonial powers, are rightly suspicious of the motives of the major trading blocs in seeking such agreements. Whilst an EU/Vanuatu agreement is hardly a subject for lengthy and animated debate on the streets of Madrid, Manchester or Maribor, it is of massive significance in Port Vila, Vanuatu's capital. The discrepancy in terms of power between the two parties is vast, an inevitability of creating a European Union and, indeed, one of its much-trumpeted advantages. Vanuatu's indigenous industries have much to fear from better-resourced European competitors, especially given subsidy levels to EU farmers, and the comparative economies of scale that major European businesses have.

This is not to say that such an agreement is bad for Vanuatu, merely that there are sensitivities that we, as 'rich Westerners', have to be aware of. The simple mantra that free trade is a good thing just doesn't address the genuine fears of the people we are claiming to want to help. Liberals believe in the empowerment of individuals and communities. How does that square with the effective imposition of trade agreements perceived, rightly or wrongly, as lopsided?

1 comment:

Tristan said...

I (of course_ argue that the UK should declare unilateral free trade (which in practice means the EU must).

I tend to view these more limited agreements as being better than nothing, although that assumes they extend free trade.
The very existence of the CAP is a barrier to this, and on the global level of the WTO TRIPS is a very bad thing (in my opinion).

The problem with all these agreements is that they're not free enough. Unfortunately they're the best that we're going to get...

The only way you can empower individuals is to have truly free trade. The individual must also come before the community - if people voluntarily form a community of protectionists then that's fine, but to force that upon others is wrong.