In my view, trade benefits all countries. It spreads technology and good practice; it stimulates competition and rejuvenates economies.
Vince Cable, less than six months after being appointed Business Secretary, said that back in 2010 as he welcomed the EU-South Korea trade agreement.
Liberal Democrats should loud and proud make the case for Free Trade.
It ought to be inconceivable that we have to have this argument again.
For most of the Nineteenth and Twentieth Centuries, the bone of contention between Liberalism and Conservatism (including the peculiar form of Socialist Conservatism practised by Jeremy Corbyn’s Labour Party) has been between Free Trade and Protectionism.
Time and again, from the Corn Laws to the Great Depression to – it has been said – the causes of the World Wars, protectionist policies have led to disaster, hurting most the very people they were supposed to protect, alienating neighbours and allowing bad businesses to get away with bad practice.
Wherever free trade has flourished, there has been prosperity and higher living standards and indeed peace.
And yet here we are again, with the current referendum brewing up a toxic alliance between the Nigel Farrage-ist right who want to throw up barriers between us and the Twenty First Century and the Big Statist left who spread paranoia about the supposed evils of the Transatlantic Trade and Investment Partnership.
“Charity begins at home”, look after your own first – it’s such an easy sell. That’s why the populists sell it.
And yet it’s the ordinary man in the street, or woman doing the shopping, who are hit by the tariffs.
Trade barriers actually help big business. Their prices go up, so they sell a bit less but they have the scale to absorb it. It’s the little guys who are forced out. And it’s the customer who pays. And then the big companies without competition become lazy take the customer for granted and exploit them.
And we all suffer. Prices go up, so sales go down and a little bit of the profit is lost along the way. The economy shrinks, the government gets less taxes, we’re all paying more for stuff and everyone is a little bit worse off.
The great advantage of free trade is that it gives the small business an edge over the corporate giant: the ability to change, innovate, create new products and bring them to new markets. More people able to trade means more choice for the consumer and lower prices and more new ideas.
The Tory government’s obsession with immigration is all about throwing up barriers to free trade – the trade in people’s skills and labour. And at the same time they are increasingly serving the interests of big businesses and big banks, pushing policies to make it easier for them to exploit near-monopoly status. The Labour Party – when it can forget its internal strife long enough to have an answer – thinks that nationalisation is the cure to all ills. Liberals are properly wary of anyone having that sort of power, state or big business.
Free Trade is such a win-win for Liberal Democrats: it’s individual and it’s internationalist. When people ask us “what are the Lib Dems for?”… this is it!
We need to be strong on the economy, to make this an issue where people know we are the party on their side, who will make them better off.
The economy motion that we passed at Federal Conference in York, while good in its own ways, had a big hole in it where Free Trade, the most important issue of the day, should have been.
That’s why I’d like us to bring a Free Trade motion to Brighton.
Sir Vince is on board and Catherine Bearder, for the European dimension, has made valuable contributions, and I am looking for more people to sign up to support. Please help us reclaim our title as the party of free trade by taking these three steps:
- Sign the motion here (all Lib Dem members can do so);
- Share this post and the link to the sign-up form with other members;
- Ask your local party to support the motion (a representative of any local party willing to support can fill in the same form, ticking the box at the bottom).
* Richard Flowers has been a Party member for 20 years. He’s campaigned in many an election, stood as a local councillor, and Parliamentary candidate, was Chair of Tower Hamlets Liberal Democrats, and in 2020 was Liberal Democrat candidate for the Greater London Assembly constituency of City and East. He is currently English Party Treasurer. Thanks to Liberal Democrats in government, he is married to his husband Alex Wilcock. He also helps Millennium Elephant to write his Very Fluffy Diary.
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69 Comments
A brilliant article
Great stuff Richard. I think there’s a real opportunity here for us to become the party of genuine free trade and enterprise, supporting entrepreneurialism and properly tackling monopoly practices.
Completely agree.
Marvellous
Richard, where does fair trade fit in with this?
I agree free trade too. But that has to include everything and I don’t believe the EU is as pro Free Trade as it could be. But that’s for another discussion. George Kendall was also arguing against protectionism in a recent posting too. But I happen to know George is also very concerned about levels of debt in the country.
This takes him, and I suspect others who similarly don’t make the connection, into a contradictory position. If Free Trade for the UK, USA, Australia etc leads to those countries who wish to have a surplus in their trade selling more stuff than they buy, then those countries have to fund their trade deficits by borrowing.
So Government and/or the non government sectors in those countries have to be in deficit. See Prof Wynne Godley’s work on sectoral balances for a fuller explanation.
Yes, but there are limits.
Please see Jeremy Paxman’s TV programmes about opium being sold from India during the Raj to China, against the wishes of the Chinese Emperor.
Well done Richard.
Party policy also opposes slavery, the slave trades, human trafficking.
Liberal Democrats should loud and proud make the case for Free Trade.
But TTIP (and all the other bilateral trade agreements the US initiated at around the same time) isn’t about this type of “Free Trade”, it is all about protecting US trade with it’s ‘partners’…
If Libdem’s really believe in “Free Trade” then they need to be putting pressure on achieving agreements in recognised trade organisations that are open to ALL…
@Richard Underhill: “against the wishes of the Chinese Emperor” but not against the wishes of the Chinese people. An early first example of liberal interventionism :oD
Seriously though, the working assumption of all those advocating free trade is that the importing country is entitled to exclude prohibited items. The UK could declare unilateral free trade (as we did, under Liberal governments, in the 19th century, with great success) but it would not grant sellers of narcotics free reign to import contraband. For that to be permitted, we would need to domestically legalise those drugs (which I hope, under a Liberal government, we will do in the 21st century, with great success).
There is a profound political-philosophy question here, though. If a tyrannical regime is denying its people access to some good, are we allowed to over-ride the prohibition and impose “free trade”? Perhaps the question should not be “what are the limits to free trade?” but rather “what are the limits to state prohibition?”
@Roland: “If Libdem’s really believe in “Free Trade” then they need to be putting pressure on achieving agreements in recognised trade organisations that are open to ALL…”
Spot on! However, we have to work with what we’ve got. At present, global trade negotiations are largely bi- and multilateral. Truly global free trade agreements are rare and difficult (as the WTO’s Doha round continues to demonstrate). As a result, these kind of intra- and inter-regional trade agreements are the only game it town. It’s a suboptimal game, but at least it’s a game.
I see them as a slow elimination of trade barriers; first between countries; then between regions; and eventually between blocs. One day I dream we will be as advanced as they were 150 years ago!
@petermartin2001:
You make a good macroeconomic point, but I think your concern is a little cart-before-horse. A better way to approach it would be “If you don’t want to run a trade deficit, stop running a budget deficit!”
Incidentally, I made this very point to the fellow in the photograph above, when he was Business Secretary. He conceded the intellectual point, but moved swiftly on to advocating Industrial Policy, which rather ignored the fact that his £125bn deficit was the cause of the problem.
BTW: You’re right about the EU, too. In many ways it’s a protectionist bloc writ large. Unfortunately, for every Brexiter who wants to recreate the Liberal International Economic Order of the C19th, there are three who want to throw up trade barriers as we did in the early C20th.
I know what it is like to work very hard in the private sector and feel outraged because protesters outside are blaming the hardworkers in the office for society’s ills.
So I’ll never be anti-business. But cheering free-trade too much makes me nervous. Cheering free trade can lead to selling state assets at knock-down prices, running election campaigns that haven’t got a hope in hell and prioritising financial benefits over everything else.
The higher environmental standards etc. should ease the strong resistance of the left to TTIP, but I don’t feel comfortable with the party becoming TTIP cheerleaders. The public want caution, not “unapologetic” about free trade. Not all aspects of free trade are good.
What about economic sanctions too? The draft motion argues that free trade can be used to encourage other liberal reforms such as democracy and the rule of law, but what when this doesn’t work? Sometimes sanctions are the answer and not just positive motivation.
@Tom Papworth,
“If you don’t want to run a trade deficit, stop running a budget deficit!”
Ok this could work but it would be a Greek type solution. If solution is the right word! In other words government could cut and tax so heavily that the economy would crash and there wouldn’t be the same ability to puchase imported produce.
So, the trick needs to be to at least to tackle both deficits simultaneously if there is to be any hope of of closing the govt’s budget deficit with at the same time creating a recession or even a depression.
But tackling the external or trade deficit means that the govt would have to indulge in some protectionist measures, even if it was just exchange rate manipulation. But, better that than having millions out of work and on the dole.
TTIP has real problems, it imports US standards which we dont want. I dont want to eat food laced with hormones. I dont want large companies to bully smaller ones with spurious lawsuits. I dont want their pollution standards. I dont really want US companies suing the UK government. Is this protectionism? We have in most European countries a clearer distinction between business and politics, I dont want all of our politicians to be owned lock stock and barrel by corporates like many US politicians are. There is a lot wrong with TTIP and it is not about “free” trade in the way the author thinks it is.
There is nothing free-trade about TTIP, it’s about corporate power. We’re meant to be against concentrations of power, whether state, corporate or otherwise. Let’s be proudly about free and fair trade, yes, but if they back TTIP with stars in their eyes then this new group need to go back to the drawing board.
@Richard Flowers
Hi Richard,
I loved your motion, except for one thing.
The title “A Liberal Approach to Free Trade in a Globalised World Economy” is part of a process that’s been going on for years now. Where the term Liberal Democrat is replaced by the term Liberal.
I know many in the party think this is nitpicking, and it’s just thowbacks from the past who complain, those who were members of the SDP like myself. They have told me that Liberal Democrat is clumsy, and it’d make no difference if we dropped the word “Democrat”.
But names do matter.
Back in 1988, when the party was formed, most members genuinely thought of us as a fusion of the liberal and social democrat traditions. When I speak to new members now, they’ve completely forgotten that we have a social democrat tradition.
As the terms “Liberal” and “Social Democrat” are so poorly defined maybe this doesn’t matter to some. But matters a lot to others.
As Chair of the Social Democrat Group, I’ve spoken to a lot of people about this. I’ve had Liberals who fully support our group because, they say, the dropping of the word Democrat has been part of a rightwing drift in the party.
I think that’s unfair. Personally, as I say in my attack on protectionism (https://www.libdemvoice.org/world-poverty-is-falling-bernie-sanders-would-reverse-that-50469.html), I regard free trade as progressive and leftwing, and I think there’s a strong argument that many of the new policies my friends worry about are more progressive than they realise. But I can see their point.
For me, the big issue is the perception among Labour moderates. They regard “Liberals” as being driven my emotion rather than practical realities. As we drop the word Democrat, and airbursh out the Social Democrat tradition, they regard us less and less as a party they would want to join.
And, if Labour splits, that will become a very important issue indeed. An issue which, if we get it wrong, could threaten the future of the party.
So, sorry, I’m going to continue to nitpick and complain when the word Liberal is used in place of Liberal Democrat. Because I believe it is an enormously important issue.
TTIP is suspicious mainly because it is done in secret.We should be strong advocates of human involvement and scale , and of free and fair trade and the social market economy.
If it is in no way fair trade , we should say in our view , with modern understanding , it is not free trade. Monopoly , no , protectionist , no , more protection of human rights , labour conditions and sensible regulation of minimum standards yes!
George
Please view my strong advocating for the retention of Democrat in the recent thread on economic liberalism and its meaning .
I often say it .I , as you know was not in the SDP but feel appalled at the denigration of its significance , in wider rather than party reference .”the failure of the SDP” a phrase used.
It is absurd.The founders of the SDP were Liberals more so than many on the left or right of that word who are often socialists and libertarians in a different party , this one!
I have no objection to their being here , expect the same for Liberals who are Democrats !Democracy is as needed as Liberalism and we should be promoting them as one and both !
You need to face up to something , you are a social democrat and Liberal !Your debating free trade is so impressively Liberal , recognise today you are one of the best Liberals on here !
@George
The lack of a liberal approach or mindset in Labour ‘moderates’ should temper our enthusiasm for recruiting them to our party, regardless of how their economic outlook may coincide with ours from time to time.
It was the ‘moderate’ wing of the Labour party that proposed 42 day detention without charge and compulsory ID cards, damaged cabinet government, and oversaw a gross centralisation of power and promotion of divisive identity politics. Why would we want them to join us?
@George Kendall
George, thank you. No slight was meant to the social democratic tradition – in fact we were trying to reach out to Liberal Democrats who identify as social liberal or economic liberal or indeed neither, because there is much benefit both sides can see in Free Trade.
We will certainly take your consideration on board when drafting.
@Richard Flowers
Thank you, Richard. I really appreciate your reply.
As you know, I think free trade is not only economically essential, but a moral imperative. And that those, like Trump, who want to shut the global poor off from a chance to work their way out of poverty, are the right-wing regressives.
Why all the angst over the word “democrat”? The electors don’t, in any case, tend to have much time for those parties whose democratic credentials they regard as suspect.
There is no real need to include the word in any party name. The electorate will make its own decision on that. Would it make any difference if we had the Labour Democratic Party or the Conservative Democratic Party?
If the ex-SDP faction want the word ‘social’ included, that could be more significant.
@Simon Thorley
Hi Simon,
I’ve already discussed this issue at length in https://www.libdemvoice.org/we-already-have-the-social-liberal-forum-so-why-do-we-need-a-social-democrat-group-49955.html
I hope folk don’t mind me copying from a comment from that thread, which I think responds to Simon’s point:
“I know trying to draw all those different kinds of people into the party worries some, who think we’ll attract the wrong sort. I don’t share that thinking because:
a) in the main, the wrong kind of people won’t be joining a party with 8 MPs.
b) when I do recruiting on the doorstep or by phone, if I find someone who wants to join, I thank them. I don’t interrogate them to make sure they’re the right kind of member!
c) if there’s a realignment, under FPTP, we’ll have to build working relationships with these people anyway. It’s just, if they’ve not joined us, they’ll have formed a separate party.
d) if we don’t remain a broad church, we’ll elect zero MPs in 2020”
petermartin2001 Sir Humphrey in Yes Minister or Yes Prime Minister?
Countries with Democrat in their name are not democratic, such as the former East Germany.
Is the USA united?
“the Big Statist left who spread paranoia about the supposed evils of the Transatlantic Trade and Investment Partnership.”
It is not necessarily paranoia. TTIP will hand power to big corporations and place unusual and unfair pressures on governments and the population. It would be wrong to completely deny fracking when sufficient research supports its use but fully back back TTIP when sufficient research suggests it would be disastrous.
@George Kendall – re: Liberal v Lib(Social)Dem approach
I agree, on this particular point terminology does matter, a point that is easily answered by conducting a little market research, namely ask people what ideas come to mind after hearing each of the phrases:
1. “a liberal approach to free markets”
2. “a social democrat approach to free markets”
3. “a libdem approach to free markets”
I would oppose this motion for a number of reasons.
Firstly it suggests that the way forward for the Lib Dems is to parade an ideological commitment to an economic principle. I don’t believe it is.
Secondly the ideology is one for which I have no great enthusiasm. Free trade is a good thing in some circumstances but not always. For example, it works to the disadvantage of underdeveloped countries because the law of comparative advantage tends to lock them into being producers of low-value commodities, with diminished opportunity to move into high value-added production.
Thirdly, it is not clear what is the current problem to which more free trade is the answer. Would more free trade, for instance, help us tackle global warming, the threat of which should be dominating our thinking about the future of the economy?
Fourthly, it associates us with neoliberal ideology generally. A small dose of neoliberalism was needed in the late 1970s to unblock our economic sclerosis but since then we have overdosed on it. We see the results now in a failed housing market, a dysfunctional banking system, excessive reliance on debt, an NHS near breaking point and disgraceful economic inequality.
Fifthly, we have the Coalition to live down. Whatever our practical successes in curbing some of the worst excesses of the Tories, politically, the Coalition was a disaster for us. This was partly because we failed effectively to dissociate ourselves from the Tory narrative, much of which was grossly offensive to those of us of a liberal or social democratic disposition. Since the days of Thatcher, the Tories have been the main home for neoliberalism and I believe that continued association of us with neoliberalism will prolong our electoral agony. Free market solutions and free trade are fine in some circumstances but parading unconditional enthusiasm for them is, politically, the very opposite of what we should be doing at the moment.
Sixthly, if I were looking for the historical roots of my own political outlook, my first port of call would be the Scottish Enlightenment with its emphasis on scepticism and empiricism. Hence my strong distaste for the ideological nature of the motion. Instead of parading ideology I would prefer to parade a determination to understand the world as it is and to tackle the most serious problems it faces.
Free trade is seldom that, and even when it happens there is a down side as well as an up.
@Richard Underhill, Yes I remember that comment in YPM. Another word that strikes me as superfluous is “studies” in the title of a academic course. Like “Media Studies”? Whereas real courses like Mathematics seem to manage quite well without it 🙂
But I digress. To answer your other question of “is the USA united?” I’d say it was a good deal more united than the EU or even the UK. The Federal Government in the USA does a very good job of keeping everyone together. The poorer States like Mississippi aren’t loaned money like Greece and others in the EU. That would simply put Mississippi into a situation where they owed so much they couldn’t possibly repay. So instead of allowing that situation to develop and threatening Mississippi with everything imaginable, plus freezing the bank accounts of Mississppians from time to time, if they didn’t mend their ways and become fiscally responsible the Federal Government simply creates it and hands it out. Why would they want to leave?
Have any of us answered the question of what “free trade” actually is? Yes, TTIP type agreements can be regarded as pro free trade but they are free only on the terms demanded by the big corporations. Philip Morris, for example, has been in a long running legal dispute with the Australian government over the question of plain packaging and the size of health warnings on cigarette packages. Yes, in one way, that is an hindrance to PM’s desire to have free trade in its products. But do we want trade to be that free?
Conceivably, we could have the major car companies claim that restrictions on cars entering London or speed limits on roads are an infringement of their free trade. What is the point of their making cars capable of 120 mph if the British government only allows them to travel at 70 mph? Germany is a heavily regulated country yet it has sections of the autobahn where there is no maximum speed set. Is this the decision of its Government or BMW and Porsche?
Who do we want to make those decisions? Do we want the NHS to be allowed, singly, to negotiate the prices of drugs with the pharmaceutical companies? If they do that and use their purchasing power to get a better price for the taxpayer, is that going to be regarded as a free trade infringement? I’m sure the big pharmaceutical companies would argue it was exactly that. They may have a point, but is that kind of “free trade” we really want?
I’m very nervous about this motion. I joined the Liberal Democrats because I’m an environmentalist, I’m concerned about climate chaos, ecological decline, and the world we are leaving behind for our children. The Liberal Democrats have the strongest environmental policies, based on working within the system we’ve got; we simply don’t have the time or the inclination to pursue the pre-industrial pastoral existence which the Green Party is working towards. As liberals we are realists with ideals.
If Liberalism promotes rights and freedoms across generations, how can we feasibly advocate deregulation of markets as is implied in this article? Unabated capitalism is killing the planet, hence my concern that this motion is completely at odds with the cornerstones of what this party stands for. As another comment pointed out, TTIP is about propagation of corporate greed.
I’m not a socialist, I’m a realist. And yes, free market capitalism, generally speaking, improves health outcomes, education, life chances etc. But to paraphrase David Attenborough: “Anybody who thinks that infinite growth on a finite planet is possible is either mad, or an economist”.
I’m interested in responses to these concerns from other members of the party.
Good stuff. Worth quoting somewhere Liberal economist Richard Cobden who famously said “if goods don’t cross borders, armies do”.
I would delete call c) regarding UK bilateral trade agreements. As long as we are an EU member, we do not have bilateral trade agreements. Perhaps you are referring to another type of agreement?
@Jim Hodgson
“As another comment pointed out, TTIP is about propagation of corporate greed.”
That doesn’t make it true. TTIP is about removing barriers to free trade. As such it is intended to increase the amount of trade.
Unless you consider that all trade is about “corporate greed” (there may well be some on “The Left” who argue that) then it would be wrong to argue that TTIP is about the propagation of corporate greed.
@Simon Shaw
98% of my post was about environmental limits, not TTIP. Interested in your views on that.
@Jim Hodgson
To expand a bit, I very much agree with your first paragraph with the exception of the first sentence.
I then become a lot less convinced by what you say. For example I don’t see where the article is advocating deregulation of markets as you suggest.
@Simon Shaw thanks for your comments, as I’m keen to hear more opinions on this (I don’t have a fixed view) so thanks for engaging in this with me.
Surely deregulated markets are the basis of free trade? Hence my nervousness that we advocate TTIP in its current form…
I note that the motion mentioned above actually states that TTIP ought to to consult member states to a much higher degree than at present, and generally become more democratic process. Shouldn’t we therefore be supporting a reformed TTIP, as under its current guise it’s an extremely undemocratic treaty and grants huge powers to corporations.
I do welcome the emphasis on environmental sustainability in the motion above, but my overriding concern is that ‘free trade’ results in consumerism-on-steroids as a result of new powers being granted to corporations. This is the antithesis of the resource-efficient, low carbon future that we desperately need.
Thoughts?
I’m somewhat disappointed that no-one wanted to engage on my earlier point that “free trade” might well mean that the government needs to run a deficit in its budget, ie spend more money into the economy than it receives in taxes, to compensate for the loss of money from the economy to the determined net exporters of world trade like Germany, Denmark, Singapore, and China who therefore don’t, I would argue, believe in free trade themselves.
Is that because I’m making an obvious point with which no-one disagrees?
I find the article too ideological for my taste.
Historically Liberals supported free trade in Victorian times because – rather like the arguments in favour of the EU, free trade promoted peace. Whether it was good for the economy or not was a secondary issue.
Today I think free trade is good for similar nations, but it does not mean trade whatever you like. In the EU we have regulations that protect the environment, the consumer and the workforce. Why would we want to trade with products that undercut our prices by not adhering to those standards?
So I favour free trade on an equal basis, levelling up standards rather than levelling down.
@George Kendal
Thanks for your reply. To address your points:
“I know trying to draw all those different kinds of people into the party worries some, who think we’ll attract the wrong sort. I don’t share that thinking because:
a) in the main, the wrong kind of people won’t be joining a party with 8 MPs.”
The ‘wrong kind of person’ is someone who doesn’t share our core beliefs – I’m sure we can agree on that. Now, I agree that they won’t join us if they don’t share our beliefs – as long as we are clear on what we stand for. What concerns me is the idea of tailoring our message – promoting certain elements and downplaying others – to try and attract someone who, if the truth be told, would not join us due to their core beliefs not correlating with our own. It’s a matter of being honest and seeking to promote the things we believe in.
“b) when I do recruiting on the doorstep or by phone, if I find someone who wants to join, I thank them. I don’t interrogate them to make sure they’re the right kind of member!”
I would completely agree – but then again, see my point above. I wouldn’t be happy with recruiting a new member if I’d had to twist the LD message into something it isn’t in order to attract them.
“c) if there’s a realignment, under FPTP, we’ll have to build working relationships with these people anyway. It’s just, if they’ve not joined us, they’ll have formed a separate party.”
Building a working relationships with people with different views is somewhat different from seeking to integrate them into a party which doesn’t share their core beliefs. In fact, the latter is borderline undemocratic, in my view.
“d) if we don’t remain a broad church, we’ll elect zero MPs in 2020”
And if we become too broad a church, we might elect the whole Parliament – or zero MPs, as we aren’t perceived to stand for anything in particular by the electorate. Can we deny that our 2015 drubbing was due in part to our pre-2010 behaviour of seeking to be all things to all electors – an alternative to Labour in certain seats and the Tories in others – which meant that when in government we were perceived to be two-faced and opportunistic?
The number of comments illustrates how important this is.
I am all for the idea, the principle and the policy of completely free trade but in a sense that is not at issue.
What bedevils that happening is first an international definition of ‘Free Trade’ which has almost as many definitions as ‘reasonable’. If we have to spend years writing up a Free Trade agreement then the likelihood is that what ever is finally agreed will not be truly ‘Free’ and the devil in the detail will mean that someone somewhere will regret signing up to it.
The second is ‘How do we get there’ even if we can get agreement.
Moving from where we are will inevitably mean that there are winners and losers. That may be short, medium or long term and may be in this country or in the USA and even in countries that have no role in whatever deal may be struck but are simple currently trading with any of the signatories. If we agree a free trade deal in good old ‘widgets’ with a signatory to the Agreement we will have to consider what happens to our current supplier(s) of widgets who may be severely disadvantaged as a result.
I am confused and I think I would represent a large number of the electorate by saying this. The motion proposes free trade and then states quite a number of caveats to free trade as I (mis)understand it. So what is free trade? Is it the free movement of goods and services around the world or isn’t it? How does free trade help small businesses? How does it stop a large corporation like Nestle from exploiting mothers by persuading them bottle is better but who have no clean water to mix baby formula with so babies become ill and die, or who seek solve the problem of solving the lack of that water supply by selling people their bottled water products?
How will free trade benefit the person in the street, still suffering from the after effects of the recession? I think free trade became a populist movement in the 19 th century because the Government of the day imposed taxes on corn from abroad,and this limited the supply of bread so people starved because they couldn’t afford this basic food. Things are much more complicated now.
We have to stop relying on ancient Liberals, great though they were, and develop policies, which, I agree, should be based on great Liberal truths, but which are suited to the 21st century and resonate with people today.
As Bill le Breton suggests maybe Fair Trade is the answer?
I’m not one to scaremonger but I’m a bit wary of throwing support behind the final TTIP agreement before we even know what it will actually consist of!
@Simon Thorley
Hi Simon,
We’re a lot broader a church than many realise. For example, over the EU, some members have formed a group to advocate leaving. I strongly disagree, but I’m glad we’re tolerant enough to include them in the party.
In the Social Democrat Group, a few of us were in the SDP. I’m one. One of the founding reasons for the SDP was that Labour adopted policy to leave Europe. But, in this referendum, former leader David Owen is campaigning for Leave. His position puzzles me, but if there are some who support leave, who would like to join the Social Democrat Group, they’d be very welcome.
Regarding the issues you raise, for example centralisation of power, our guest Labour speaker at our York fringe meeting, Lord Liddle did a mea culpa. He said he had been too much in favour of centralising power, and he now believes that we should move more power down to local politics. (If anyone is interested in hearing this, there’s a recording here https://www.facebook.com/SocialDemocratGroup/posts/1726336800945797 ). And he won’t be the only one who has changed their mind since 2010.
On identity cards, there’s a wider spread of opinion within the Lib Dems than you may realise. I’ve heard party activists say, having lived in continental Europe, they don’t mind ID cards. Though, there are probably fewer who are relaxed about the national database linked with the ID cards.
I’ve been engaging with Labour people for a few months now, and there are a few who would make me uncomfortable if they joined us. However, I think they’d sooner join the Tories than us. One even said so to me!
Overall, moderate Labour people I’ve chatted with, would fit in perfectly. For example, there’s a few disillusioned Labour members who have joined as a result of SDG members. I met two at York, and they were great. I’d be astonished if you objected to them.
What worries me about your comment is that there are moderate members of the Labour party who aren’t hardline on these issues, but may interpret your post as saying that, in order to join, they have to agree with all Lib Dem policy. If potential recruits thought that, we’d have very few of them.
I have to say this seems totally bizarre. How can the Lib Dems `promote free trade` when they are `the party of IN` rather than being explicitly the party of reform.
The EU IS a protectionist racket around a customs union. The only way you can promote practical free trade is to either a) come out of the EU or b) have a leader that makes it one of the main policies to demand change in the EU rather than prattling on about the conduct of the Conservatives in a recent election they didn’t win.
If the Lib Dems had a stronger leader who would harry the Tories (and Labour) about free trade in the form of putting our fist on the table with the EU demanding a clear timetable for every other country I could understand it. Yet that’s not what’s on offer.
Tell me – how are you going to be aggressively free trade inside the EU? What if TTIP fails? That’s years of work down the drain that the UK could have used to make a bilateral deal (as the US have with ooh let me think… Switzerland and err Chile).
No, the only way to get these free trade policies is to come out of the EU and just work on our own bilateral agreements. If it incentivises the other members of the EU that’s a spin off.
When was “free trade” ever really free? Was it really an unequalled blessing with no offsetting downsides? Certainly not in Victorian times although the folk memory of a powerful policy stance echoes down the years.
And in a very different world? The reliably challenging Charles Hugh Smith says not.
http://www.oftwominds.com/blogmay16/globalization5-16.html
This party has no business supporting TTIP if its backers won’t be open about it. The obsessive secrecy can mean nothing good.
[youtube https://www.youtube.com/watch?v=Ozj0qwnMGZ0&w=640&h=360%5D
@Gordon. I rather thought the whole point of the Liberal Party was free trade, pure and simple. Questioning its benefits is simply ahistorical.
Josh – the motion doesn’t call for Lib Dems to support the final TTIP agreement come what may. It calls on:
“Liberal Democrat parliamentarians to support the European Commission’s trade delegation in its negotiations with the US and, subject to the final agreement meeting reasonable, liberal tests on transparency, standards, anti-monopoly provisions, intellectual property and support for small and medium-sized businesses, to support the final TTIP agreement in the European and UK Parliaments.”
@ WHS 13th May ’16 – 7:53pm ” I rather thought the whole point of the Liberal Party was free trade, pure and simple. Questioning its benefits is simply ahistorical.”
Maybe that statement was true up to 1932….. but…..
Joining the then Common Market wasn’t free trade (see for example Roy Douglas’s comments in past year). Roy Douglas / The Fortunes of Free Trade in Britain — 1968
http://www.cooperative-individualism.org/douglas-roy_fortunes-of-free-trade-in-britain-19...
And certainly since at least 1960 the party position has been what you describe as ahistorical. Viz. Jo Grimond over 56 years ago.
Hansard 14 April, 1960 Mr Jo Grimond , Orkney and Shetland
“Ever since the Coal and Steel Community was first suggested, the Liberal Party has urged successive Governments, both Labour and Tory, to wake up to what was happening in Europe. It is now more and more widely agreed that we were right.
We suggested that the Government had miscalculated the forces behind the Treaty of Rome. We urged them to go in and take the place which this country could claim, as a leading European Power. But Governments proved unworthy of the opportunities offered to them”.
I want to support this motion but I think it might be a hostage to fortune in its current form. Like it or not, TTIP is (like the Liberal Democrats in many quartets) a toxic brand. It will make it too easy for former allies to dismiss us as having gone all right-wing and beyond redemption.
This need not affect the substance of our approach but it has to inform how we present it. I think we need to change emphasis. We are about “making global trade work for people and the environment” – and I would be much happier seeing a motion under that title. And right from the start, we need to define our terms: free trade is misunderstood by many if not most to mean unregulated. It is the very act of regulation that enables the trade to become freer without the “race to the bottom”. We need to show this, with a few clear examples (possibly detailed in greater depth in a supporting paper/website/article). The economic illiteracy of many on the well-meaning left, which means many support counterproductive policies, can only be changed if we bring them with us at every step of the argument.
Politically, we need to welcome all the improvements made to TTIP. Our support for any agreement has to be based on a thorough assessment of what’s actually in the final draft – not scaremongering, not anything that undermines hard-won European standards. In theory, TTIP can be made to work. I often use the example of the hypothetical small business exporting green technology, thwarted by incompatible testing regimes – I suggest such an example fleshed out would be beneficial to illustrate the whole point of Liberal Democrat support for free trade, which is distinct from knee-jerk economic liberalism and does not put principle before the facts. We need to tap into pragmatism and start stating that loud and clear. The narrative of pragmatism is the only way we are going to get people to realise why we do what we do and be prepared to accept the facts, mistakes and mis-spins of the Coalition era (and indeed the Better Together era).
I mustn’t overcommit on health grounds but I would really like to take this motion back to the drawing board.
@John Medway “Secondly the ideology is one for which I have no great enthusiasm. Free trade is a good thing in some circumstances but not always. For example, it works to the disadvantage of underdeveloped countries because the law of comparative advantage tends to lock them into being producers of low-value commodities, with diminished opportunity to move into high value-added production.”
thanks for explaining why it is that Japan and South Korea have remained low value commodity producers…..
WHS – you make some interesting points. The old Liberal Party did indeed come together from several pre-existing factions in the early 1840s largely around common support for “free trade”. But why then? Just a few years before the consensus view was to impose tariffs that reached over 200% on some product categories.
The answer was that steam power came of age – e.g. Stephenson’s Rocket had it’s first outing only a few years earlier in 1828 – and the result was to slash the production costs of textiles. So Britain became the world’s low cost manufacturer and, briefly, the world’s only industrial country. Support for “free trade” was therefore an entirely self-interested position to expand markets and increase profits.
As the world’s only superpower at the time Britain was able to enforce “free trade” on Bengal (via colonial rule) which saw its formerly important textile industry collapse, its prosperity ruined and its people immiserated. Similarly in China “free trade” (this time involving trade goods rather than manufactured goods) was promoted by military power to force them to take opium, again for profit above morality or decency.
Even in Britain the result wasn’t entirely good – conditions for working people became much worse than they had been some years earlier as documented by Engels 1845 work “The Condition of the Working Class in England”.
So, the ahistorical position is to believe that “free trade” is necessarily a win-win policy. Historically, it was the opposite but as the nineteenth century winners we have selectively remembered only half the story, arguably a quarter of the story, that of the rising industrialists only – not that of working people, not that of Bengalis etc.. Hence my earlier remark about “folk memory”.
The realpolitik perspective has to be that power and money and the naked self-interest of those that control them shape events much more than we care to remember. And that’s a legacy that haunts and disables the Lib Dems today. Arguing for a ‘back to our roots’ approach is to argue to privilege global plutocrats – as if they need it! It’s also remarkably silly when we are far from being the world’s low cost producer and in an age of universal franchise.
But it does NOT follow that we should opt for protectionism – a false alternative. Bill le Breton is right to point to “fair trade” as a better plan.
Responding to George Kendall’s point about what we call ourselves. I have for some time now felt that we are in need of a serious makeover as a Party if we are to change people’s perceptions about us and what we stand for. What I am about to say may well offend many within the Party. Liberal Democrats are seen as damaged goods to many of the people I have spoken to. The majority link it to Tuition Fees and to them we are a Party not to be trusted. I’ve taken to using the term Democrat it seems to work so what do others think should we consider a makeover? should we consider a name change? New Democrats resonates well with me what about you?
Chris Young – “free trade is misunderstood by many if not most to mean unregulated. It is the very act of regulation that enables the trade to become freer without the “race to the bottom”. “
The important thing to ask about regulation is who writes it? Who makes the rules? It’s pretty much racing certainly that they are not neutral, it’s almost impossible to write truly neutral rules even when that is the intention – and I submit it’s almost never the intention (despite what politicians may say).
So who is calling the shots on rule-writing in, for instance, the TTIP. Short answer: the Americans. Slightly longer answer: Wall Street, big pharma, agribusiness and the usual meg-lobbying suspects. It’s certainly not ordinary Americans or even Main Street America businesses – hence the strong support for non-establishment candidates Trump and Sanders both of whom are opposed.
You talk of avoiding a race to the bottom but that is exactly what it’s about promoting. Hence the obsessive secrecy (see the Youtube link I posted at 7:27 pm yesterday). We know from the EU experience how difficult and contentious it is to harmonise rules – hence all he nonsense about ‘straight bananas’ and the rest. The TTIP plan is to make an end run around such problems by removing democratic input and giving corporations their own court, staffed by their own picks. AFAIK from various leaks any reference to environmental of other standards are weak and without enforcement teeth. But then we don’t really know because this major constitutional change is all so secret, even from our elected representatives.
What could possibly go wrong with throwing democracy under the bus for the promise of some minor economic gain? A catastrophic cost for a profit that is at best debatable and which will in any case only go to a favoured few.
Another clue that it’s all for large corporations is that the average cost of an enforcement action under existing ISDS mechanisms is (IIRC) around $8 million. So the plan is to create an enforcement system with supranational courts not available to smaller businesses. But it’s one that can (and therefore probably will) be used against them. Again, what could possibly go wrong?
In my view free trade is a “liberal” type of idea not a “right wing” type of idea.
We need to make sure that parties are defined as being either liberal or authoritarian rather than left wing or right wing. The Labour party is clearly an authoritarian, central planning type party whereas Liberals have a more liberal and localist attitude.
That (fair) free trade is beneficial has traditionally been a central plank of Liberal thinking whereas protectionism has been more a trade union/Labour attitude.
@Simon McGrath – and thank you for raising the issue of Japan and South Korea. I recommend that you read Thing 7 in Ha-Joon Chang’s “23 Things They Don’t Tell You About Capitalism”. Thing 7 is entitled “Free market policies rarely make poor countries rich”. In this chapter, Chang, a Cambridge economist and himself a South Korean, gives a blow-by-blow account of how South Korea raised itself from Third to First World status through massive state intervention in the economy and protection of its new industries.
Incidentally, the title of the book suggests that Chang is anti-capitalist but, to quote from his concluding chapter: “paraphrasing what Winston Churchill once said about democracy, let me restate my earlier position that capitalism is the worst economic system apart from all the others. My criticism is of free-market capitalism, not all kinds of capitalism”.
I think the book as a whole makes a powerful case for the Lib Dems to ditch some of the ideological baggage we have inherited from the age of the Corn Laws.
Free trade restricts the powers of national governments over business. It restricts legitimate powers (e.g. environmental) as well as the power to favour local champions. For trade within the EU, this is not a problem because there is a democratic level of government at which those powers can be exercised.
The problem with bilateral agreements is that the rules must all be there at the start. If we sign TTIP, we are stuck with it for a very long time. We haven’t seen the final wording yet but it is a reasonable guess that it will be worse than the EU single market rules and better than anything a desperate post-brexit Tory government might negotiate.
It is a predictable shame to see this thread collapse into the confusion between “free trade” and “neoliberal / laissez-faire economics”. It is a confusion caused by Thatcher using liberal economic language to describe laissez-faire policies, and promoted by many outside our party and within ever since.
It is perhaps ironic that the often-reviled Orange Book spends its introduction and first chapter explaining the difference between liberal and neoliberal economics and rightly criticising the latter. I suspect the promoters of this motion will have an uphill struggle to get party members to recognise the crucial difference, and realise why free trade is such an important part of our party’s philosophy.
I have a question for all..I support this motion free trade is a key policy commitment with the Liberal Democrats, however no one has yet answered the question of why the UK cannot make its own free trade agreements with countries outside the EU. We have free trade with the eu, we have our own currency, but why do we have to wait for the eu before agreeing free trade agreements with countries outside the UK? I am an In voter which is relevant at this time of year, but should free trade agreements which have responsibility at their core not come with free from government interference in times of boom or bust ?
Interesting article but I am afraid there is quite a bit that gives me concern. The ultimate Free Trade is a race to the bottom, where societies constantly chase the cheapest labour or those Countries that have no pollution Controls, Minimum Wages, Healtha and Safety just to mention a few.
What we should be arguing for is equitable and fair trade. take the dumping of Chinese Steel for instance, this was a clear case of the UK Tories support untrammelled free trade without regard to its social consequences.
We should be using the Power of the EU to trade fairly. The mass closure of Manufacturing Industry across Europe has seen enormous social costs.
What was good in the 19th Century is not necessarily wholly transportable to the 21stC.
take the dumping of Chinese Steel for instance
Funny how everyone goes on about this, but fails to mention the ‘dumping’ of US coal which has caused the closure of opencast pits in Scotland and Wales. I suspect that TTIP won’t include any provisions that will permit redress against such actions…
Dave Page: You make some important points in your post:
“It is a predictable shame to see this thread collapse into the confusion between “free trade” and “neoliberal / laissez-faire economics”.”
I’m probably one of the guilty ones on this and I take your point. Free trade, as a plank of Liberal policy dates back to the early to mid 19th Century whereas neo-liberalism started only in the late 1930s and flowered in the 1980s. There are two problems. The first is that free trade is not quite the unalloyed blessing it might have appeared to be when the Corn Laws were repealed. It tends also to be an instrument of domination of the developed world over the underdeveloped world. In power we would need to be careful about how we apply the principles of free trade in different circumstances. In the meantime we need to be very careful about how we sing its praises as otherwise we are liable to appear naive and out of touch with the real world and the issues it faces. That, in fact, is the impression I take from the motion and why I have such strong feelings against it.
The second problem is that although the Liberal approach to free trade owes nothing to neo-liberalism, free trade as a concept fits perfectly with it. You rightly say that “the promoters of this motion will have an uphill struggle to get party members to recognise the crucial difference”. The uphill struggle will not just be with party members – it will be with public opinion. That is why, politically, this motion looks so bad to me.
You also refer to the introduction and Chapter 1 of the Orange Book. The Orange Book was a creditable attempt to define and apply liberal philosophy in the context of the time. Experience over the twelve years since its publication has damped my enthusiasm for economic liberalism as defined by David Laws in Chapter 1 – but that’s a long story involving, among other things: global warming; the crash of 2008 and what it revealed about the unaccountable power of bankers; a continuing drift towards plutocracy in the USA; the continuing saga of the great British housing disaster; and the sacrifice of decent public services to Osborne’s dream of a smaller state. My enthusiasm for political, personal and social liberalism remains undimmed.
“It is perhaps ironic that the often-reviled Orange Book spends its introduction and first chapter explaining the difference between liberal and neoliberal economics and rightly criticising the latter.”
Half the people who slag off the Orange Book as ‘neoliberal’ and ‘Thatcherite’ have never actually bothered to read the thing.
This is a superb motion and I will back it with enthusiasm. Finally, a Liberal policy I can champion!
Good article couple of questions on the thorny issue of tariff barriers .If we lose the EU referendum and tariff barriers are imposed has anyone considered the impact on the jobs market .Companies that find their costs go up because of tariff barriers will cut their workforce to offset their increased costs .The bottom line always matters.
How will we in a liberal free market economy discourage unfair trade dumping for example from China .Will retain anti dumping policies in the single market trading area.
Re Ian Shire’s point, personally I’m not sure rebranding ourselves as Democrats tells people much. We are distinguishing ourselves from who, exactly, North Korea perhaps ? New Democrat, as opposed to Old Democrats ?. I tell people I’m a Liberal, because that’s what I am, on social issues and on economic; Also means I’m instinctively pro Free Trade as well, although I recognise some of the caveats above.
I tend to focus on the concept of democracy in my personal approach to the party’s rationale, and (whilst I fall within the spectrum of liberalism) the term ‘Liberal’ would not be the first thing on my mental banner…
… but I am in no way disagreeing with Chris. Keep the name. Reclaim the heritage. Rationalise the past, don’t airbrush it. No cheap gimmicks.
Besides, the New Democrats are the Canadian sister party of Labour.
Excellent article Richard. Will be very happy to support come September.