4 OCTOBER 1997, Page 32

The free-trade trap

Sir: Matthew Parris's musing (Another voice, 20 September) that Chile's President Allende's hopes would have wrecked more lives than General Pinochet ever did, ignores several unpleasant facts. Chile's post-1973 growth has been at the expense of reduced worker's rights, increased home- lessness and crippling poverty, and forests and fisheries plundered for export. By 1990 five million people, almost half the popula- tion lived in poverty, far more, in absolute and relative terms, than at any time since 1964. Rising inequality is the legacy of the free-market model, not only in Chile but worldwide. Even in Britain neo-liberal poli- cies are responsible for social and environ- mental decline.

In the Somerset town of Street, for exam- ple, there is little work for young men and women whose parents and grandparents were once assured jobs at Clarks, the shoe- makers. Global competition has forced Clarks to manufacture shoes in Portugal, India and China.

How free is so-called 'free trade' when in the name of inward investment govern- ments give huge bribes to lure in foreign investment? For example, the last govern- ment gave Siemens £200 million to set up a factory in Tyneside. This has relieved some unemployment, but for how long? Until Siemens finds a cheaper location? Such inward investment also undermines British companies providing similar goods else- where in the country.

Instead of spending vast sums on infra- structure and subsidies to fuel the monopo- listic tendencies of corporate giants, the emphasis should be on ensuring that Britain can become a productive and vibrant nation where smaller shops and manufacturers stand a chance of surviving. Small businesses pay more taxes, employ more people and are more likely to buy supplies as well as reinvest locally. Overall they provide greater security and prosperity for the majority of citizens.

Awareness is growing of the need for governments to regain control of their own economies. It's time that Britain, in con- junction with the rest of Europe, renegoti- ated trade agreements such as Gatt and Maastricht to encourage a balance between international trade and local and national production. Only then will the economy reflect the real needs of its citizens.

Such a policy shift will not only improve the lot of the majority here, but also in countries like Chile. At the moment big business and government are caught in a vicious downward spiral of lower wages and environmental standards.

Tracy Worcester

The Cottage, Badminton, South Gloucestershire