Doing ourselves a favour and trade negotiations

One of the more widespread pieces of rampant stupidity is the language of trade "negotiations" in which countries make "concessions" if there is a "deal" and other countries do the same.

Let’s get this straight.  Trade barriers make a country poorer and should be abolished irrespective of whether other countries have the wisdom to do the same thing.  "We’ll only stop throwing rocks in our harbour when you stop throwing rocks in yours" is not the policy of a rational person.

But it is more than daft, it is cynical. George Bush said in his UN speech:

Today I broaden the challenge by making this pledge: The United States is ready to eliminate all tariffs, subsidies and other barriers to free flow of goods and services as other nations do the same. This is key to overcoming poverty in the world’s poorest nations.

And Tony Blair speaking today said:

going to have the World Trade Organisation in Hong Kong, that has got to be done properly, we have got to get a good strong deal out of that …  it is the test of whether international cooperation is prepared to live up to the demands of the inter-dependent international community we live in today.

Neither the EU nor US has the slightest intention of making a significant reduction in trade barriers.  These carefully phrased bluffs are designed never to be called. We will go on shovelling taxpayers’ money into the trough for agricultural and economic interests, with catastrophic consequences for the word’s poor, while blaming other countries for the lack of progress.  Here’s the White House’s press spokesman speaking in April last year

And we will be defending U.S. agricultural interests in every forum we need to, and have no intention of unilaterally taking steps to disarm when it comes to this.

We won’t get anywhere if we go on thinking of this as a negotiation. There is no analogy with disarmament: trade barriers are not something we might reluctantly give up as a price we have to pay to obtain the benefits of actions of others.  They are a form of self-harm which we should cease immediately, while earnestly hoping that others do the same.

Some say that  tariffs and subsidies give us "leverage" that we can use to accelerate reduction by other countries.  In which parallel universe is that true?  Meanwhile, back in reality, our tariffs and subsidies give other countries all the excuse they need to go on doing the same.  If you really want to put pressure on other countries, do yourself a favour and get rid of of trade barriers.

2 thoughts on “Doing ourselves a favour and trade negotiations”

  1. I agree with your cynicism about the desire of the west to restructure, but I tend to believe that accepting this is the first step tpo realisng that we must therefore give up on free trade and design frameworks that accept this.

    Owen replies: Jeremy: thanks. The reason that I am reluctant to do this is that free trade is the quintissential win-win. Sure, we could give up on free trade and just massively ramp up aid instead. But I feel in the long run we are going to make more progress arguing for something that benefits everybody than something that requires one country to make sacrifices in the interests of another. (Of course, I want free trade AND to ramp up aid massively.)

    I sense there is growing public hostility to trade barriers – for example, much greater awareness of the impact of agricultural subsidies on the prosperity of poor countries – and that we will win this argument eventually.

    It will be interesting to see which way France jumps, post Chirac. I suspect that Sarkozy might be much more willing to contemplate opening up trade than, say, Villepin. A shift in French policy could make a significant difference to the balance of opinion in the EU.

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