Speech to the Trade Justice Movement

By Alex Singleton | 16 April 2005

The following is a speech delivered at a debate organized by Christian Aid and Oxfam to an audience of 700 in St Margaret's Church, Westminster. It was part of the Trade Justice Movement's "Wake up to Trade Justice" night. The debate featured speakers from the Globalisation Institute, Libertarian Alliance, Oxfam and the Third World Network.

This debate is supposed to be between we who support free trade, and they who support fair trade. This is actually a caricature. I believe in fair trade. I believe that trade should be a way for the poor in the world to become rich. I believe that trade should be just.

Like Christian Aid and Oxfam, I believe that Europe and America often talk the talk but don't walk the walk. They talk about the need for free trade, but in many areas they don't do it. The reason of course is simple: in agriculture, especially, there are powerful lobbies in favour of protectionism. Farmers write to the US Congress or the French parliament demanding to be protected. Politicians are afraid of losing power and so they cower away from dropping protectionism. If Europe's agricultural protection ended tomorrow - something all of us here would celebrate - farmers would probably riot on the streets of Paris.

You may have noticed that I have started using free trade and fair trade interchangeably. That is because fair trade and free trade are the same thing. Free trade is fair trade.

The argument often given for getting rid of our protectionism is that we are rich, while other countries are poor. So, out of charity, we should open up our markets to developing countries' goods. But the case for free and fair trade is much more powerful. Rich countries should unilaterally pursue free trade, regardless of what poor countries do, out of self-interest, not just out of charity. It is in our economic interests to open up our markets to poor countries even if they don't reciprocate. People often believe that through protectionism, Europe and America get an economic advantage. They don't. It reduces their prosperity. Protectionism helps specific producers, yes. But it never helps a country's economy as a whole.

I'm not in favour of forcing other countries to open up their economies. But if poor countries want to get rich, the best thing they can do is to practice free and fair trade. When countries open up, some of their producers will need to adapt. Oxfam and the Third World Network will no doubt tell you about some of them. But that is just one part of the story. While the losers from free and fair trade are often vocal and obvious groups, the winners from free and fair trade are everyone. The benefits are spread throughout an economy.

In the 30 years after independence, India decided to protect itself. It said no to free and fair trade. It protected its infant industries. The result was that India's economy got poorer and living standards declined. The infant industries produced expensive, substandard goods, and lobbied for more and more government help. The owners of infant industries got rich. The ordinary Indians were fleeced and many literally starved. But then India unilaterally started to open up its economy - doing what the other side will say they shouldn't do. The result is that they experienced some of the world's fastest economic growth. It has created a booming middle class. Last year alone, millions of Indians were lifted out of poverty. That is the power of free and fair trade.

After World War II, Hong Kong was hopelessly poor. Yet it decided to adopt free and fair trade. It unilaterally abandoned its protectionism. It refused to make its people buy from expensive local producers if they could buy more cheaply elsewhere. It became the most economically free country in the world. And today it is among the world's richest countries.

In Ghana, protectionism is stopping people from having a home to live in. The building material plaster is so expensive - because import tariffs force people to buy from a Ghanan company - that many people just can't afford it. The protectionism however has a winner - it has made the company that makes plaster very rich. That's not what I call trade justice.

You might have seen adverts in the media from Christian Aid attacking free trade. But the enemy of the poorest is not free trade - it is unfree and unfair trade. It is policies like the Common Agricultural Policy that are the enemies of the poorest.

The Trade Justice Movement says that poor countries should not be forced to liberalize their economies. I agree with them. To believe in free trade is to believe that it's worthwhile to do it regardless of everyone else. Let us - Britain, Europe and America - adopt free trade unilaterally. It is time for the rich countries to remove all tariffs, to end all quotas, to reject rules of origin, to cancel export subsidies. It is time for us to let the products of developing countries have free access to our economies. That would do more good for Africa than a hundred Marshall Plans of foreign aid. It would be the greatest gift we could possibly give to the third world. And, what's more, it would also be a gift to ourselves.