Despite the bad press it’s getting lately, free trade is a core Anglosphere value and one of the building blocks of a prosperous world order. In the last twenty years, globaloney swallowing trademeisters have steered the world system into a dead end, and the stalemated Doha Round of trade talks is one consequence. (The increasing unpopularity of a free trade agenda in the US is another.)Fortunately, a few people are clear eyed enough to see something needs to be done. One of them is Australian trade minister Craig Emerson. The Australian reports on his plan:
The World Trade Organisation would hold liberalisation talks on a sector-by-sector basis under the Emerson plan, sealing agreements among those nations genuinely willing to negotiate, and leaving the protectionists to their own devices.
Dr Emerson unveiled his plan yesterday as he warned that the world would not emerge from its economic woes unless it embraced free trade as the best means to harness resources to create new jobs and prosperity.
It’s a simple but revolutionary concept. As it now stands, agreements at the World Trade Organization have to be universal: ’rounds’ like the Doha Round cover a wide range of subjects and all the member countries must sign on, basically, to the whole deal. This worked very well in previous rounds of tariff reduction talks, but agreements among so many countries on so many subjects have been getting harder and harder to reach.Emerson is suggesting that we should try to work out agreements among smaller groups of countries on a smaller range of subjects, and when a group of countries is ready to go ahead with an agreement, they should not have to wait for the laggards to sign on, or for a whole complicated, multi-subject deal to be done. Those who don’t like the deal could stay out. This seems like an approach that could help the US get a better deal in trade talks and prevent progress toward freer trade from bogging down.There are two mistakes you can make about free trade. One is to naively buy the proposition that anything that calls itself a ‘free trade agreement’ is automatically good; the other is to think that an economy like ours can prosper without an open trading system. Exploring alternatives both to protectionism and to the current global approach to trade talks is one of the jobs our political class needs to take on board.It’s worth considering, anyway. The trade negotiation process is broken, and the first step on the road to recovery is to admit how serious the problem is. Craig Emerson deserves the world’s thanks for putting an important issue on the international agenda.