As a Liberal Democrat for almost all of my adult life, I am often bemused that other citizens are yet to share my enthusiasm for our long held belief in a dynamic European Union.
The prevailing phenomena of Euroscepticism is not purely a UK problem. We only have to look at France and to a lesser extent Germany to see similar. Why?
In my view the failure is in not articulating the needs of and connecting with European citizens. People have felt marginalised by the closure of traditional industries and a sense of lack of power to change or alter what is happening to them in this brave new world. Far Right Parties have been quick to make the most of this.
Ten years ago I was merely a spectator when the anti-globalisation movements were attracting hundreds of thousands onto the streets in support of their cause. A quick check on Wikipedia describes the activists as;
Opposing what they see as large multinational corporations having unregulated political power exercised by Trade Agreements and deregulated financial markets..accused of maximizing profit at expense of work safety, conditions, pay or environmental safety” It’s often called “Turbo Capitalism.
Surely many of these sentiments would find agreement with Liberal Democrats?
This ” Turbo Capitalism” has managed to close whole chunks of the manufacturing base of Western Europe as the pursuit for ever lower wages sees industrial production transferred overseas. Often with higher Social Security Costs as workers lose skilled jobs. Our addiction to cheap consumer goods, often of questionable quality and durability belies the fact that our economy is now relying on low wages supported by £30 billion of working tax credits – essential for those in receipt but a subsidy often given to those very same multinationals that are asset stripping the European Industrial base.
The overseas production of consumer goods destined for European Markets relies on the constant pursuit of ever cheaper labour, backed up by zero health and safety, little control of pollution by greenhouse gases.
Energy Consumers, having had eight years of price rises and austerity, note the green levies on their bills and can understand that we need to fight global warming. Conversely with China opening a new coal fired power station every week and the US, Australia and India doing so little, this leaves many bill payers thinking it is somewhat unfair that they are paying when others are not.
So have we to accept that all of this will be the new economic order? Have we missed the boat? I don’t think so.
The European Union has massive political and economic clout which should be harnessed for change, not only to improve the lives of European Citizens but those around the world too.
As members of the European Union, our Country and our Party are uniquely placed to argue for change and to propogate new ideas and solutions.
We have always believed in “Free Trade” but we should move the agenda to not just Free Trade but Fair and Ethical Trade too. Such a move would benefit our European Citizenry but also the worlds’ poorest too. It would ensure that European workers and consumers are not being ripped off by uncontrolled multinationals. This is the essence of Liberalism in action. The EU should be moving to a new policy of engaging mutual trade based on equitable conditions by supporting integration into trade agreements of;
Proper taxing of Opportunistic Multinationals
Lowering of Co2/Pollution
Comparable Health & Safety standards
Fixing Low Pay
Free Trade Unions
Democratic Reform
A Free Media
Consumer Protection
Civil Liberties and
Enforcement of Copyright/Patent law to protect design and research
Otherwise what is the point of intra EU state harmonisation if we allow all our social and political gains to be bypassed and European workers disadvantaged? Linking both ethical and equitable goals to Trade should be a major priority for Liberal Democrats in the pursuit of freedom from poverty, ignorance and conformity.
Now is not the time for timidity.
* Trevor Stables was PPC for Doncaster Central in 1983 and enjoyed a career in Senior Healthcare Management.
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22 Comments
In 1990, 60% of people in China were below the extreme poverty line. In 2010, that figure was 12% and falling rapidly.
You no doubt raise lots of important issues (and I agree on greenhouse gases), but at the core of ethical trade policy we must accept the importance of letting developing countries sell us cheaper goods and services. We can’t say that until poorer countries have the same pay and standards that we do – and even the same civil liberties and democracies – that it’s unfair for them to compete with us. Rather, it is by and large trade that leads to higher pay and then higher standards and expectations.
I generally like free trade, but I don’t believe in “trade with anyone and anything”.
I’m also worried about patents encouraging a new technology bubble. We need patents, including digital ones, but if they are too generous then it leads to an over-supply of tech workers and an under-supply of other things we need such as nurses and scientists.
It’s not supply and demand, it’s supply, demand and which industry has managed to lobby the most successfully. We need to ensure fairness for all and keep an eye on special interests.
Adam Corlett – whilst I agree with your point, Trevor also has a point which isn’t contradictory. The issue is do we use our position to merely take stuff at the lowest price with no concern that it may be produced in exploitative conditions, or do we use our knowledge and buying power to influence development and so lift people out of exploitative work.
This actually is a very important issue and should be at the heart of the EU consideration of the TIPP agreeement for example; does the agreement positively encourage fair and ethical trade? if not then don’t sign.
Trevor, the EU already promotes these things to a degree amongst its member states.
Are you suggesting that we use the EU block’s trade power to pressure EU trading partners to adopt to our standards also?
I wonder if part of the problem is that no one knows where the EU is?
If we want to protest in the UK< we can have a demo in Parliament Square. If the French want to pillory their President, they could sack the Elysee Palace. Known places that are easy to get to. But where would you go to protest against the EU? Or against the Commission? Brussels? Strasbourg? Lyon? Bonn? And how would you get there cheaply?
In short, the EU seems inaccessible, and therefore undemocratic. It needs to correct this.
Poundland and stores alike are stocked to the rafters with goods bought by the container load from China, many of those goods are highly questionable in quality and indeed safety, the “buyers” will not pay more than a couple of pence per item.
I would raise a point here which Adam makes and that is one would agree we have purchased goods in mega tons over the last few decades from China and as a result many people in China have been brought out of poverty, however as a consumer I like to know that what I buy has been made ethically, if we continue to purchase poorly made goods from China and not ask the questions how they were made then are we simply accepting the very poor work ethics in China and places alike,
For a prime example of this, look back at that horrendous factory collapse which killed over a thousand in Bangladesh, you may not know that the people who lost loved ones and lost everything they had they are STILL waiting on the likes of Matalan to provide any form of worthy compensation.
We often find that Fair Trade does not come in to many of these issues when supply and demand meet in the same room, we see it happen on our own soil with the Milk wars and the Farmers squeezed into submission to make a loss on most of the products they produce, why but tomatoes from Spain and ship them all the way over here almost daily
We have an almighty trade partner within the EU and we should also have the same might in addressing the fundamentals in how the goods we purchase are produced et al,
Jerry – One of the points I made was really how ethical is this trade?- what is the cost benefit analysis ?- are we really just pandering to multinationals encouraging low pay at home subsidized by billions in tax credits? There is no future in a race to the bottom. Once China becomes competitive the very same multinationals who pay little tax will just pursue the next low pay zone, we all end up impoverished.
Daniel, I am exactly encouraging the EU and ourselves as a Party to assist our European Manufacturing base who abide by decent standards, pay and environmental controls to negotiate otherwise our Governments end up subsidizing low pay here. Let’s help those in poverty in the third world with our purchasing power but also our Foreign aid budget. Altruism is fine but we shouldn’t damage what we have built in the EU at the same time.
@Jerry “Poundland and stores alike are stocked to the rafters with goods bought by the container load from China, many of those goods are highly questionable in quality and indeed safety”
Any evidence for that ?
Thanks for raising some important points.
What we must get to grips with is that most so called ‘Free Trade’ doesn’t mean what many people assume it to. ‘Free’ in this context has mostly come to mean freedom for multinational companies (MNCs) from any sort of social or other responsibility, free to engage in regulatory arbitrage, free to maximise profits irrespective of how damaging the social, environmental or other consequences.
That’s not fair or right by any standards. It is the polar opposite of a liberal understanding of ‘Free Trade’ which is the freedom to enter a market without being squashed by the incumbents using their financial and lobbying muscle to reduce competition – and that means that big companies must be subject to restrictions to prevent them playing dog in the manger games. Needless to say the ‘Free Trade’ of the liberal free-to-challenge-incumbents sort (which would, for example, dramatically reduce retail prices in the UK) is not on Cameron’s agenda while the former sort is. There is a reason to be a Liberal NOT Conservative.
So, when Roland asks whether TTIP encourages fair and ethical trade, he asks a key question. Sadly, as we should expect of any plan so enthusiastically supported by Cameron, it is all about creating a race to the bottom in regulations. Not – please note – the important process we should support of improving regulation and replacing bad regulation with good – but simply making an end run round any and every regulation, good or bad.
In the shortish run this will of course be hugely profitable for MNCs because, among other things, it rebalances influence and control over economic issues away from people in favour of MNCs. Tellingly, the studies commissioned by the EU to support the plan only manage to find a very small advantage although we can be very sure the EU shopped around for the most rose-tinted view they could find. Also ,the models used employ a ‘computable general equilibrium’ model which assumes among other things full employment at all times – factory workers displaced are assumed instantly and without any ‘friction’ (e.g. no retraining costs) to magically transform into software engineers or whatever. Please be aware that ‘general equilibrium’ is a concept that fits right alongside perpetual motion machines in the drawer labelled ‘fantasy’; it doesn’t exist.
A new study utilising a more appropriate UN model comes to conclusions much more in line with past experience. For instance, it finds TTIP would lead to catastrophic income losses in Europe – in the case of the UK amounting to minus 4,200 Euros per worker (follow the link from this post).
http://wolfstreet.com/2014/11/29/hot-us-eu-trade-deal-destroys-600000-eu-jobs-study-warns/
GF – Many thanks for your cogently made comments, this is at you rightly say a MAJOR issue that is being neglected for short term gain for the few. This is a major LIBERAL issue but will those at the top turn their attention to this subject,- major cause of low pay, increasing Government Debt and deskilling.
Trevor : I don’t share your optimism that simply adopting these policies will have the desired effects.
Very much agree with this .We should not be buying goods where child labour has been involved. Also, clothes are still being made in sweatshops overseas for the European market. We don;t just need Fair Trade we need a sort of ‘Fair Made’ scheme to ensure that we are not importing and selling goods made by people who are being intolerably exploited. Also, all the cheap and often poorly made garments and plastic goods we import usually break within a short time and then end up in landfill. It’s environmentally bad news too.
Totally agree Judy…Men’s socks being a prime example! This throw away society, addicted to cheap poor quality imports. Socks last no time at all. Its just a symptom of where we have gone wrong. Sock makers in the East Midlands went out of business, skills lost. My feeling is many people would gladly buy good quality even if a bit higher priced.
Eddie Sammon
Actually the problem with patents in the digital/tech sector is that there are too many of them, of poor quality, and these hinder innovation and discourage tech companies from recruiting or investing. Google “patent troll” for more information. As well as the problem of trolls (companies that exist purely for the purpose of suing productive businesses over alleged patent infringement) over-generous patenting results in tech companies diverting resources away from real R&D towards generating patents (instead of products).
In 2005 the European Parliament rejected an attempt to formalize the European Patent Office’s unlawful practice of granting patents on software methods. Now the US is starting to roll back the permissive patenting rules that has allowed patent trolls to suck money from the tech sector over the past 20 years. Ironically, the EU may now be sleepwalking towards the same mistakes the US made back then by seeking to create a specialized patent court (whose judges typically have a vested interest in the patent system).
The problem with copyright/patent law is that currently there is too much of it, and this inhibits innovation. I gave an example of this in my comment of 2nd Dec ’14 – 8:58am about patents preventing tech innovation. Patent enforcement has also led to the in-transit seizure of drugs patented in the EU, but out of patent in both source and destination countries (and not intended for the EU market). This creates an obstacle to global trade in pharmaceuticals, particularly where it would benefit people in poorer countries.
Extreme copyright laws also discourage creativity and distort markets. These include laws against tinkering with equipment and media that you own in order to remove DRM just so that you can access it (e.g. region-locked DVDs), guilt-upon-accusation enforcement over the Internet, and possible removal of safe-harbour protection for ISPs and web hosts.
Successive trade agreements seem to be including ever more restrictive intellectual property laws, creating a ratchet effect where it becomes impossible to roll such laws back even when they are being shown not to work. Trade negotiators are listening only to one side of the argument, that of the rightsholders. Perhaps the most egregious example of policy laundering of maximalist IP law was ACTA, the Anti-Counterfeiting Trade Agreement, which was rejected by MEPs in 2012 (so it cannot apply in Europe — who says they European Parliament doesn’t matter?). I see absolutely no justification for any trade agreements to contain any requirement for IP law stronger than that already required by multilateral WIPO treaties (which are arguably already biased too far in favour of strong IP).
“I’m also worried about patents encouraging a new technology bubble”
No what we are seeing is a patents bubble, brought about in a large part by the USPTO being lax, issuing patents without any real consideration of their content, leaving to the courts to do the examination. Hence why in the technology sector we are seeing many daft patents, with pre-existing features being patented anew but with the magic words “on a mobile/handheld computer/device” added. Additionally, it is common practise now for the USPTO to award patents on ideas! Yes there is no requirement for the content of the patent to have been demonstrable at time of application… So what this has created is a marketplace where holding patents and then threatening court action is more renumerative than actually doing any real R&D.
What TIPP does (from the leaked draft) is to make all these dubious patents apply in the EU and for the EU to take account of actions taken in US courts… There is no appetite for TIPP in the non-US technology sector.
I fully agree with this article. I am optimistic, I am sure that the large manufactures will come back one day.
Hi Roland and Alex MacFie. You are both more informed on patents than me and thanks for your interesting posts. My main point is I think patents need to be scrutinised and when it comes to free trade the discussion of patents tends to be over-looked.
Again, I’m not anti patents, I just think we need to be looking at them. Thanks again for your posts.
There’s surely a half way house here.
The main problem I have with the article is that many of the proposals, while clearly desirable in themselves, are a lot to ask a very poor country trying hard to become less poor. The best way known – demonstrated time and time again – to move from being a poor country to being a less poor one is via trade. You get more trade by attracting trade to your shores and like it or not having a low labour cost base is a key thing that, other things being equal, should help poor countries grow if only those poor countries opened their doors to investment.
But the article suggests we should insist on things like comparable Health & Safety standards, Fixing Low Pay, Free Trade Unions and Democratic Reform as precursors to any trade agreement. I’m sorry but this sounds like protectionism. In insisting on these as precursors to trade we in fact cut off many countries whose people need trade desparately to escape poverty. We’re also piling on costs to these very poor countries that erodes their competitive advantage.
That all said, there are surely certain things that we could and should insist on – as Judy Abel says, one such example would be not to buy goods where child labour is involved.
Julian… This is exactly the half way house I’m proposing.
The pursuit of trade by Multinationals seeking low pay and poor working / social conditions does nothing for anyone other than benefit these corporations. It also undermines support for institutions like the EU, Foreign Aid. Witness the rise of the Right in Europe.
If we are to sustain our objectives we have to be fair to people in Europe as well as encourage economic growth in poorer countries.
“The best way known – demonstrated time and time again – to move from being a poor country to being a less poor one is via trade.”
Julian makes an important point here but the advantages of trade are far more nuanced than usually appreciated. For instance, as far as I know and leaving aside countries that got rich through discovering a resource bonanza (which are obviously a special case) there is only one example from history of a country that got rich without being protectionist – the UK during the industrial revolution – and that was because there was at the time no competition.
Take for example China, the stand out example of recent years. It has followed the export-led growth model followed earlier by Japan then South Korea but in doing so it has been highly protectionist despite various trade treaties it has signed up to. It gets away with it because no company or government likes to call it out on this and potentially loose access to its huge market and also because it rather suits many western firms that can source product cheaply in China to increase their profits. But is this mainly benefitting a few rich people (factory owners) in poor countries while harming poor people in rich countries (western workers)? That’s certainly what it looks like. It’s also a self-limiting strategy because when workers in western countries get poor enough sectors of demand starts to fall. Thus in the US McDonalds has experienced falling sales for many months now – the growing numbers on food stamps can’t even afford a burger.
It’s easy to forget because of the recent successes of export-led growth in Asia that it’s perfectly possible to grow thorough creating domestic demand and then supplying that with domestic production. However, for that you have to ensure that wealth is spread around and not all hoovered up by 1% so destroying much of the 99%s ability to live a decent life.