TRADE: Old Ways in New Language

By Sanjay Suri Reprint | | Print |

Sanjay Suri

LONDON, Jul 8 2004 (IPS) - A new trade policy statement from the British government might just sound more right than it is.

The government white paper ‘Making Globalisation a Force For Good’ claims to mark a “new direction” in Britain’s approach to trade and World Trade Organisation (WTO) negotiations.

The government says it contains “challenging policies for our partners in Europe and the rest of the international community.” Britain will push for its adoption by the EU, and at the WTO.

“This autumn I will visit European member states to build support for the UK approach,” trade and industry secretary Patricia Hewitt said at the launch of the paper earlier this week. “This is my calling card on the new European commissioners.”

On the face of it, the British proposals sound progressive.

“It is time to end the mercantilist style of trade negotiations which treat opening markets as concessions that have to be battled over,” Hewitt said at the launch of the white paper. “We need a system that allows developing countries to remove trade barriers in a way that is properly sequenced and, vitally, within their own plans for development and poverty reduction.”

The paper asks the EU to “end the trade distorting effects of its policies under the Common Agricultural Policy” and to “work with the rest of the developed world to eliminate all export subsidies and trade- distorting domestic support.”

That is in line with British policy so far to reduce subsidies. But the move also emphasises the EU position that if other developed countries make no moves on subsidies and domestic support, the EU will do nothing either.

Nor is this a move away from free market liberalisation that has been devastating to the economies of many developing countries, particularly the poorest.

The policy proposal says the EU should “push ahead with structural reforms and complete the liberalisation of product, capital and labour markets in order to meet the Lisbon agenda (agreed in Lisbon in 2000 to promote the EU economy).

The white paper wants the EU also to make sure that “no EU regulation is passed without a proper assessment and consideration of its impact on the EU’s international competitiveness.”

While talking of an end to government support to domestic industry, the white paper says also that it must continue to “support the internationalisation of business” through trade and investment and the export credits guarantee department û both of which bring strong government underpinning to domestic industry.

The language requires some ‘unreading’.

“The government here has a formidable reputation for spin,” Dave Timms from the World Development Movement (WDM), a non-government organisation that monitors trade and development issues told IPS. “It is stuffed full of lawyers adept at using language to hide, confuse or mislead. The rhetoric here is one thing; when you look at the policy, it’s very different.”

The policy paper is “an aggressive statement that the government places faith in the free market as a way to deliver development,” he said. The most it offers by way of concession is that some countries could slow down that move a little, he said.

The government is championing free trade reform “but that is not where the pro-development agenda starts and finishes, it is not the entire story,” Timms said. “Most of the debate really is about the right of developing countries to not engage in free trade, and to protect rural farmers and to regulate the market in favour of development.”

The government white paper takes a single issue of trade reforms “and represents that as the entire trade agenda,” he said. “That is a misrepresentation of where their agenda is.” The WDM says the white paper is “ideologically Thatcherite.”

WDM director Mark Curtis said there is a huge body of evidence that the free market and trade liberalisation will not deliver poverty reduction for the poorest countries.

“Yet the government dismisses this out of hand,” he said in a statement. “Far from being a pro-poor change of direction, the white paper merely allows developing countries to implement free trade policies that have been shown to make them poorer. This is a kick in the teeth for development campaigners.”

The claim that developing countries could promote policies at their own pace could also be “total fiction,” the WDM says in a statement. The claim flies in the face of the trade liberalisation policy conditions attached to debt relief, and of British backing for EU free trade deals negotiated outside of the WTO which require poor countries to sign up to free trade rules.

The white paper pays lip service to the cause of developing countries, but distortions lie as much in areas of silence as in what it claims. A significant silence sits over the demands of developing countries for ‘special and differential’ treatment in WTO trade talks.

Now on the incomparably stronger economic side, developed countries have been criticised by developing countries for demanding a ‘level playing field’. The inequalities, they say, are not far below the surface of the language of equality and consideration for developing countries.