Full marks to Blair
Over the past fortnight it has been necessary for this magazine to side with those who would like to bury Tony Blair. This week it is our solemn duty to praise him. No amount of disquiet over his illiberal — and happily failed — scheme to subject terror suspects to 90 days’ detention without charge will stop us from recognising that the Prime Minister’s foreignpolicy speech at Guildhall on Monday was an impressive piece of statesmanship.
In a month’s time members of the World Trade Organisation will gather in Hong Kong to continue the so-called ‘Doha round’ of negotiations over the liberalisation of world trade. The leaders of developed nations have a choice: either they elect to dismantle the system of agricultural subsidies and food import tariffs which have supported their farmers since 1945, thereby allowing developing nations to compete on equal terms in our food markets. Or Western leaders concoct some kind of sickly fudge, which allows them all to enjoy a good lunch, beam at the cameras, then go home and reassure their farming lobbies that nothing will really change.
With no prevarication, Mr Blair on Monday reaffirmed that he will be doing his utmost to take the former course. ‘Do we make trade work for all of us, or do we continue with a system with two billion people locked out of prosperity and denied a chance to work their way out of poverty?’ he said, reminding his fellow Western leaders that agriculture accounts for just 2 per cent of their collective GDP and that any harm caused to individual farmers will be vastly outweighed by the opportunities afforded to other sectors of the economy through a general freeing-up of trade. He might have added that the experience of the one developed nation so far to dismantle agricultural subsidies and trade barriers — New Zealand — is that free trade is far from harmful to agriculture. In the immediate aftermath, farms did go out of business, but over the following 15 years there emerged a far stronger and highly profitable agricultural sector, which thrives because it is responsive to market forces, not to the decisions of central planners.
Mr Blair’s stance on free trade is brave because there are so few votes in it. It is certainly not calculated to win favours in rural constituencies. As for voters at large, they do not as yet tend to associate their low mortgages and cheap jeans with free trade. Rather, they have a vague idea of globalisation as an evil which threatens their jobs, and which because they have been subjected to endless propaganda about foreigners stitching trainers for a couple of dollars a day — somehow exploits the poor. As for the World Trade Organisation, it is unlikely to have registered at all: put to the average Briton the words ‘Doha round’ and it is probable that he would visualise a large doughnut.
Neither is free trade an issue which wins much favour with the large development charities. Take the response of ActionAid to Mr Blair’s speech. In spite of fighting for two of the things the charity has, quite rightly, demanded over the past few years — an end to EU tariffs on imported food and farm subsidies — ActionAid perversely attacked the Prime Minister’s commitment to parallel free trade in industrial goods. This, it complained, will benefit Western corporations at the expense of the world’s poorest people.
This is nonsense. Sure enough, Western corporations will benefit if it becomes easier for them to invest in the developing world. But logic does not imply that the world’s poor cannot also benefit from the process. Global wealth is not in finite supply; it can be created by economic activity. Why, if Western corporations are exploiting the poor, is there usually a queue of graduates looking for jobs whenever a Western corporation opens a factory or call-centre in Asia? It is because, while their wages might seem unexciting when translated into dollars, Western corporations spread wealth wherever they are allowed to operate.
There was a strong passage in Tony Blair’s speech to the Labour party conference in which he said that those who wish to debate globalisation ‘may as well debate whether autumn follows summer’. Quite. There is barely a man, woman or child in Britain who has not already benefited from the globalisation of world trade. There are some who still stick to the fantasy that the past decade of low inflation and steady economic growth is somehow all down to Gordon Brown’s ‘handling of the economy’. But the Prime Minister — and not just for political reasons — is clearly not one of them. The world has enjoyed growth without inflation because huge numbers of manufacturing jobs have been transferred to Asia, especially China, hugely increasing the world’s industrial workforce.
A fortnight ago we accused Tony Blair of flapping around for a big idea with which to end a lacklustre premiership. There are great obstacles to the Prime Minister achieving what he wants to in Hong Kong — not least from Jacques Chirac, whose country’s Canute-like attempt to save French jobs from global competition has been rewarded with 10 per cent unemployment. But were Mr Blair to succeed in forging a deal which phases out agricultural subsidies, it would be a big idea well worth a place in the history books.
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