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Trade as a force for good

Pruce and Dr. Liam Fox

ANYONE with half an eye on world events can see that we are at a crossroads when it comes to trade. Everywhere we look, more measures are being taken to “protect” domestic economies from “unfair” competition. Protectionist messages often play well with domestic audiences, encouraging those in charge to double down and do more of the same.

If you doubt this, here’s a startling fact: In 2009, following the financial crisis, only 0.7 percent of imports into G20 countries faced new restrictive measures—a figure which by 2019 had risen to 10.3 percent. In short, some of the world’s richest countries are raising barriers to market access for some of the poorest.

Of course, the argument that this helps countries who import such measures is illusory; domestic consumers pay more for the same goods, choice diminishes, and the security offered by global supply chains is eroded.

The Philippines has had a proud history of trading with hundreds of years of exporting and importing from these islands. So, trade and the international rules that govern free trade really matter here. It is a fact that the rules-based system governing world trade has helped to lift over 1 billion people out of extreme poverty over the last 30 years.

This is not some throwaway line, or a trite factoid to illuminate an “op-ed;” it is a truly remarkable outcome that should shine brightly on any discussion about trade—considered one of the greatest achievements in recent human history.

Trade is a force for good. There are still billions of people still left untouched by the benefits of the ability to trade more widely than their own domestic markets. There are billions more who have taken steps along the trading path whose progress is now threatened.

So, when we see the trend toward protectionism, we should all worry. Now, more than ever, as the global pandemic continues to cause economic turmoil, countries need to work together to develop and rebuild trade flows.

Of course, trade is not a panacea; actually, it is far from being a “one cure for all.” But trade has been so successful in spreading prosperity and allowing countries to take steps toward creating domestic stability and security that we should all worry that this vital tool is being rendered less and less effective. Today, millions of people are able to live where they grew up, where they want to stay, and where they can stay, because there is a living to be made. But still, not everyone benefits.

What then for the future, and how should the World Trade Organization (WTO) focus its efforts at this particular time?

First, the WTO has to be more muscular in making the case for trade—not just providing the operating model for it. We need to champion the vision for trade in an interconnected, coronavirus disease 2019-threatened and less stable world as a shared endeavor and a force for good.

We need people to understand that trade helps create prosperity, causes individuals to rely on others more widely, encourages social cohesion, offers the chance of increasing political stability which, in the end, is the building block of collective security for all.

Second, we have to understand that the problems we face are political—not technical. The problems that beset the WTO itself—the paralysis of the Appellate Body, the lack of progress on new and important challenges, and many more—are manifestations of larger, political issues.

Likewise, those bigger political issues are the products of cycles of leadership that the WTO has to understand, exist within, and maneuver around with great care and understanding.

Third, the WTO needs to find its place within the web of interconnected agencies so that we can properly address global challenges that confront us.

The United Nations’ Sustainable Development Goals are key drivers of much global activity around poverty and its eradication, and trade plays a vital part on both sides of the coin. It is enormously important that in increasing trade and prosperity the WTO does not inadvertently encourage practices that undermine sustainability.

That is a lot of work in those three short points. But if we can make progress on them, we would have done much to bolster trade and improve the life chances of huge numbers of people across the globe.

To that end, we have nominated former international trade secretary, Dr. Liam Fox, as the United Kingdom’s candidate as WTO director general. An elected politician with proven global experience, Dr. Fox is ideally placed to deal with the monumental challenges we face at the WTO. He combines decades of proven experience at the heart of global politics, with an unwavering belief in trade as the foundation for our collective stability and prosperity.

When the WTO members decide on their next leader, I hope they will consider the challenges that face us and the work that needs to be done to secure a more prosperous world for everyone.

Image credits: Embassy of the UK and UK.gov



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