7 November 2016

Why we must make the moral case for free trade

By Garvan Walshe

When the EU-Canada Friendship Agreement was blocked by Wallonia, psychologists everywhere reacted with dismay. Despite significant research demonstrating the benefits of free friendship – it reduces loneliness, improves people’s mental health and limits international friction – this significant step towards removing barriers to amity had foundered.

Left-wing campaigners deemed it a charter for international corporations such Facebook to increase their advertising revenues. Parents were alarmed that their children might find the Canadians so lovable they would cease to pay attention to their fellow Belgians.

Anti-treaty propaganda had been slick, powerful and unscrupulous. While it was hard to find a male Walloon who admitted to believing the claims that the deal included the offer of a close friendship with Justin Trudeau to every Wallonian woman, many did confess to worrying that Canada was overstocked with men like him, reared in wild open spaces on a diet of moose steak and maple syrup.

The vote had come after decades of anti-friendship campaigning. Chief among concerns was friendships between rich and poor countries. Tabloid newspapers told tales of Westerners having their savings tricked from them by charismatic Nigerians.

Women’s groups pointed to a different dark side, of vulnerable girls sexually exploited by Western tourists. Reports that friendship networks among certain immigrant communities were being used to facilitate forced marriage and terrorist financing would sometimes lead the evening news.

Sadly, and against expert recommendation, a reduction in curbs on the relationships that people are allowed to form across borders now seems politically impossible.

We don’t, of course, live in a world where governments directly restrict our friendships. There’s no World Friendship Organisation in which schedules of quotas and tariffs regulate international relationships. A Mexican doesn’t have to pay a 10 per cent surcharge to have dinner with a Spaniard; the EU doesn’t limit South Koreans to no more than 4,000 “light acquaintanceships”, 1,400 “serious friendships”, 300 “romantic liaisons” and 80 marriages with its citizens every year.

But protectionism in commercial relationships has been making a comeback. Thinking the economic argument was all that mattered, the technocratic world of trade negotiators, whose native tongue is the acronym, has found itself outflanked by a coalition of nationalists and socialists.

The rules of trade, this alliance argues, are set in secret, for the benefit of “corporations” and the small group of international capitalists that run them. The rules, they claim, hurt the “left-behind” in the formerly industrialised West, by taking secure industrial jobs away from them; they also harm the world’s poor, by giving them those same jobs, but at low wages and in exploitative conditions.

Free traders retort that international trade has brought down the cost of goods and services, which means that we can all afford far more than we could before; they say that however miserable life in a Cambodian sweatshop is, it’s surely better than prostitution or a subsistence agriculture; and they add that we should improve international trade institutions to prevent their capture by special interests, not abolish them altogether. But the argument isn’t cutting it.

It doesn’t cut it, because the opposing case isn’t about wealth – but dignity. As a worker in a large industrial factory, you felt you were contributing to something bigger than yourself in a way that you wouldn’t in a call centre. And as a customer on the end of a long supply chain, at the other end of which is someone toiling in what you consider to be unacceptable conditions for unfathomably low wages, you’re taking part in a system that, however economically beneficial it may be to you, seems morally inferior.

To challenge this kind of argument, defenders of free trade need to start making the moral case: that to restrict trade doesn’t make you compassionate and sensitive to the dignity of your fellow citizens, it turns you into an advocate of legally-enforced discrimination that will worsen relations between countries. This new protectionism is no more virtuous than government regulation of people’s non-commercial friendships.

Trade restrictions don’t only, as Joan Robinson said, put rocks into one’s own harbour. When a government imposes tariffs or quotas on foreign products, it makes an adverse distinction based not on the quality of the product or service but the nationality of its provider. It doesn’t merely allow discrimination – as in the Jim Crow-era American South – it enforces it.

Free trade links suppliers and customers across borders, bringing peoples together. Protectionism does the opposite. It imagines that “our” companies compete against “their” ones; that our exports extract value from their economy that we then distribute to our people; and that imports mean, in turn, that we are being exploited by foreigners.

This isn’t simply untrue as a matter of economics; such protectionism pits countries against each other as though trade were a fixed natural resource to be fought over, instead of being the output we produce by working together.

Good though our economic arguments are, they’re not enough to win the intellectual battle. It’s time to take the moral high ground. Free trade’s programme is liberty, equality and peace. Its opponents stand for interference, discrimination and setting peoples against each other.

Garvan Walshe is a former national and international security policy adviser to the Conservative Party, columnist for Conservative Home and CEO of Brexit Analytica.