The Anti Free Trade Backlash

There is some evidence that we are witnessing the initial sparks of an ignition that could set the entire global economic system ablaze.  There is a growing sentiment, at the level of the electorate if not the political elite, that seeks to reject one of the single most important contributing factors to world’s growing prosperity in the second half of the 20th and early 21st century; free trade.

More worryingly, the epicentre of this shift is occurring at its very heart.  Inside the world’s biggest economy, and biggest driver of global trade, is a new narrative that seeks to reject outright the idea that has brought so many benefits to those now turning their back on it.  The US election primary season has been one of the most incredible ever witnessed, captivating a global audience like some kind of grotesque soap opera with its sensationalist mix of unpredictability and conflict.  In such a tornado of events stories have come and gone quickly, with some not being afforded the attention they deserve.  One of those stories is the rise of free trade as voting priority, especially amongst certain demographics.

The concern that free trade has destroyed the jobs and livelihoods of blue collar industrial workers is one of the many factors that helps explain the horrifying success of Donald Trump but its influence is not limited to that arena.  In the Democratic primary much has been made of the issue too, with Sanders seeking to capitalise on it and Clinton attempting to re-position herself on issues like Obama’s Trans Pacific Partnership so as not to get outflanked.  So much so, in fact that it’s probably the single biggest factor influencing the surprisingly high amount of voters who are likely to defect from Sanders camp to Trump once Hillary secures the nomination.

Though there’s a chance this may be its breakout moment, this momentum is in no way limited to the US and this election cycle.  Here in the UK the rhetoric around the potentially disastrous Brexit vote has highlighted just how shallow the appreciation is, amongst the general population, of the removal of international trade barriers.  Protests against America’s landmark TPP and TTIP deals have not just been American but global.

Nor is this a new phenomenon.  There has been a continued and consistent critique of free trade for decades.  Most visibly demonstrated in the series of anti-globalisation protests that raised very real and urgent social issues and laid the blame squarely at the feet of the international governmental organisations, such as the WTO and the G7, that sought to facilitate the removal of tariffs and the encouragement of mutually beneficial trade agreements. And let’s not pretend that those protests, or the critiques they are based on are entirely without merit.  In fact, in analysing this current anti free-trade sentiment we would all be well advised to consider the fact that its roots may well not be as simple as ignorance or political manipulation.  By refusing to engage with the dissent around free trade, its proponents have done themselves no favours and it may be that now the seeds of their dishonesty in the original discourse are yielding an almost unmanageable overgrowth of resentment.

It’s important to note that there’s a difference between the worst excesses of the neoliberal capitalist economic model and free trade and because they’ve gone hand in hand so often, critiques of one have often targeted the other.  Even the term “Free Trade” is problematic – with origins in the exploitative mercantilism of the 17th century –  and can conjure images as diverse and troublesome as the murderous activities of the East India Trading Company and the morally repugnant sweatshops of East Asian “Special Economic Zones”

Beyond that important distinction, though, the effects of free trade have not been universally positive and even though many of the politicians, economists and activists involved in the huge increase in global trade may have been convinced by the overall benefits, that does not excuse the dishonest bulldozing of dissent.  By refusing to engage with some of the more substantive attacks on its outcomes, free trade supporters have fostered the atmosphere in which this potential swell of opposition we are seeing signs of now has been created.

The positive effects of free trade need to be highlighted to extinguish this fire before it catches or the results could be disastrous.  That means talking about the fact that prices have fallen, especially in real terms, for decades and it also means highlighting that falling prices disproportionately benefits poorer people.  It means highlighting the fact that free trade has helped China pull a billion people out of poverty, the single biggest poverty reduction in the history of our species and one that’s almost exclusively responsible for helping us to achieve most of the Millenium Development Goals that we reached.  It means asking countries who are forcefully removed from parts of the international trading community by sanction how it effects their economy.  Looking at how the Ruble is performing since the EU sanctions that followed Russia’s Crimean crimes.  Similarly, explaining why Iran was willing to negotiate away what many in its leadership saw as their divine destiny to create a nuclear weapon in return for access to global markets once more.  It means talking about technological innovation and economic co-operation.  It means imagining a world without these accomplishments and using that to reject the regressive protectionism proposed by the likes of Trump.

But equally these very real and powerful benefits shouldn’t silence the debate about some of the negative side effect of this process.  It’s exactly because of the lack of leadership voices speaking openly on this topic that those engaged with the detrimental impacts of free trade have felt silenced and ignored.  Yes, environmental degradation as a result of increased global trade is a very real and difficult externality that has had too little engagement.  We have to accept, too, that some livelihoods and wage levels have been detrimentally affected and it’s important to speak honestly about the nature of global competition, the destabilising effect of creative destruction and the vital need to regulate internationally to avoid a race to the bottom amongst international labour.  Most importantly, in any discussion of the global economy, it’s important not to shirk the discussion of extreme inequality.  The trend towards increased wealth disparity is clear but whether that is partially due to the way that free trade works at the moment is not.  But by refusing to entertain the possibility, or recognise the very real impacts of inequality on everything from innovation to geopolitics, the arena is left open for those who seek to explain it, without evidence, as a necessary accompaniment to lower trade barriers.

This trend may die out on its own.  Or it may just be the latest incarnation of concerns that have been consistently expressed for some time now.  But by refusing to engage with it we risk fanning its flames, which may be the most hazardous course of action possible.  And at a time when global tensions are high and international stability is not it seems particularly unwise to allow this particular fire to burn unchecked.




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