Whatever happened to Free Trade? (2003)

From the January 2003 issue of the Socialist Standard

One of the illusions that modern capitalist governments like to foster is that they are in favour of “free trade”. Mr Bush, Mr Blair and just about every political leader in Western European countries, thunder on about its wondrous benefits. They pose as champions of liberalisation, of tariff busting and global freedom of trade. The reality is somewhat different.

“The past year has been lousy for free trade. The Americans have ratcheted up farm subsidies and slapped new import duties on foreign steel. A European summit made little progress towards reform of the common agricultural policy (CAP); indeed, the French managed to secure agreement to preserve CAP spending at present levels. Poor countries are despairing over the outlook for the Doha round of trade negotiations, which was intended to benefit them. Just this week, negotiations between rich and poor countries over access to patented drugs through “compulsory licensing”, a big aim of poor countries, stalled” Economist, 30 November.

So how do we explain this apparent contradiction? The politicians are all for anti-protectionism and yet at the same time we get more and more trade barriers, more trade quotas and more restrictions on imports According to Mr Bush's trade representative Robert Zoellick all this can be changed. He is a man with a plan and he states his plan in a very concrete fashion.

By 2010, WTO members would reduce all tariffs to below 8 per cent, and scrap altogether those that are now less than 5 per cent. By 2015, all tariffs on manufactured goods would be reduced to zero. Splendid free trade rhetoric you may think; but of course it is all about manufactured goods. Mr Bush's trade representative remains strangely silent about the farming industry. For a very good reason.

“Sadly absent from the plan is any more discussion of farm goods, which form the basis of the poorest countries economics. Admittedly in July Mr Zoellick put forward a proposal to scrap many farm subsidies, but there is little sign that American farmers will support this. Rich countries' tariffs on factory goods are already low – typically less than 5 per cent – while their subsidies and tariffs on farm goods are in general far higher.”

So let us get this quite clear. Some members of the owning class, whose wealth is dependent on the exploitation of a highly skilled industrial work force, are in favour of free trade in such goods that they can sell cheaper than their competitors, but opposed to free trade when they fear that their competitors may undersell them. Politicians are just so many hired hands, hired to be in favour of free trade one minute and opposed to “dumpimg” the next, depending on their master's whim.

As a member of the only useful class in society – the working class, don't you think it is time to get rid of your exploiters and their apologists?

Richard Donnelly