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Is trade in turmoil a chance for justice?


The global free trade system is being battered like never before. Can any good come of it, asks Vanessa Baird in the first of an eight-article exploration?

I admit: I’m conflicted.

Recently, I was on a march calling for a people’s vote on the final deal for Britain to exit the European Union (EU).

There were the usual young people, with faces painted in the blue and gold of the EU flag, and the now familiar chants of ‘Bollocks to Brexit’ and ‘EU, we love you’.

The first I was happy to go along with. The second – well, that was more troublesome.

I value cultural diversity and the social, labour, environmental and equality rights and protections or the peace that have come with EU membership. I am determined to fight the dog-whistle racism, xenophobia, lies, misinformation and sheer criminality that has underpinned and surrounded the pro-Brexit campaign.

But I’m also acutely aware of the negative power of the world’s biggest free trade bloc. For many around the world, the experience of globalization and the doctrine of free trade upheld and exemplified by the EU has been far from ‘lovely’.

While trade liberalization was a boon for big business, able now to chase cheap labour and exploit newly opened markets, it has been bad news for many millions of ordinary citizens around the world.

And the EU, like any big trade bloc, has used its power to get its way with weaker parties, especially if they fell for the free-trade delusion – ‘the more trade the better for all’ – and failed to protect the basic needs of their own citizens.

For sure, many people – especially in East Asia – have benefited from globalization. Living standards have risen with increased manufacturing and trading and many have been lifted out of rural poverty into a new industrial, middle class of consumers.

But around the world there have been millions of losers too, who have lost their jobs and livelihoods when local markets were flooded with imports from richer nations, who have found the price of essential utilities like electricity and water rocketing when public services were opened up to rich-world providers.

Often fledgling industries could not sustain the onslaught. Shockingly, sub-Saharan Africa is less industrialized today than it was in the 1980s. Unemployment and shrinking opportunity have produced the so-called ‘migrant crisis’ out of Africa – a crisis that the EU has been signally unable to respond to collectively, fairly, humanely and appropriately.

Back in 2005 I attended mass protests against the World Trade Organization (WTO) during its ministerial meetings in Hong Kong. I remember one chant in particular: ‘Junk, junk, junk the WTO!’ Most gathered here were environmentalists, leftists, trade justice and social movement activists. Indian and South Korean farmers joined forces with Filipina maids, Brazilian environmentalists with South African miners, Western NGOs with Bangladeshi garment makers and trade unionists. All agreed that free trade was far from free or fair and the WTO, the multilateral platform for negotiating these free-trade deals, was not a level playing field.

A big issue was ‘sovereignty’ – food sovereignty in particular. Powerful nations, including the US and those of the EU, were using a variety of dirty tricks to subsidize their own farmers and dump their excess production on poorer countries in the South, ruining farmers’ lives and livelihoods. The result was to be seen in many thousands of farmer suicides.

The extreme Right rebranded themselves as anti-neoliberals, and now they’re eating our lunch

Well, ‘sovereignty’ has become a key word today – especially in the agonies of Brexit. And ‘de-industrialized’ can now be used to describe many ‘left behind’ parts of the US and Britain.

The privatization of services by foreign transnationals, like that which caused riots in Bolivia, is now a concern of any British person trying to save the National Health Service from, say, US private healthcare and medical insurance vultures.

Rich-world backlash

The issues have finally hit home in the rich world too. And now, bizarrely, it’s the president of the United States who is calling the WTO names. It is a ‘disaster’, he says, and is threatening to take his country out of the organization that the US did so much to set up – and which has served its interests so well for decades.

Today, complaints about globalization, free trade and its emblematic bodies are coming from the mouths of the populist Right, leaving leftists scratching their heads and wondering what to do.

‘They ate our lunch,’ is how academic and veteran campaigner Walden Bello puts it. ‘It was the non-establishment Left – the Left of social movements – that began and developed the critique of globalization, neoliberalism and free trade in the 1990s and the 2000s... The extreme Right... opportunistically expropriated our message, rebranded themselves as anti-neoliberals opposed to the Centre-Right as well as the Centre-Left, and now they’re eating our lunch.’2

British trade justice campaigner John Hilary sees it more positively: ‘I think the debate has been won. Everybody is now recognizing that untrammelled free trade causes massive problems. What was interesting about Trump’s election campaign was that he actually took up the mantra that we would take to be from the social movements and said “yeah, it has been absolutely no good for workers in America”.’

There are important differences, though. Donald Trump is not concerned with giving farmers, workers and consumers in the Global South a fair deal; he’s not driven in any way by internationalist solidarity.

For him it’s purely about putting ‘America First’ and seeing foreigners – be they Mexican, Chinese, Canadian or European – as rivals and enemies.

The complex game of negotiating trade has become a bellicose affair of Trumpian threats and tweets. His methods have been described as ‘going fishing with hand grenades’.

The tariff war the White House started with China last year threatens to destabilize the entire rules-based global trading system. Many would agree that the WTO system is badly in need of reform, but Trump has set about it with the subtlety of a wrecking ball.

By refusing to recognize new appointments to the WTO body that settles trade disputes between countries, the US is effectively sabotaging a key function of the organization. If the problem is not resolved, the multilateral body may become paralysed. It’s an existential crisis.

Centre-Left economist Joseph Stiglitz has seen the trouble brewing in the global trading system for some time. He first wrote Globalization and its Discontents 20 years ago, recently updating it to include the impact and implications of Trumpian policies. His question now is: Can globalization be saved?

‘Trump has leveraged some real grievances,’ notes Dani Rodrik, a Harvard economist and trenchant critic of what he calls hyper-globalization. But, he also notes, ‘as Trump’s presidency has already amply revealed, the inchoate discontent around globalization can be easily subverted to an altogether different agenda, more in line with elite interests.’

The same applies to Brexit. The past two years have shown no sign that its most prominent leaders and champions – people like Boris Johnson, Jacob Rees-Mogg, Liam Fox and Nigel Farage – have any plans or concern for the ‘left behind’ of Britain’s rural shires or post-industrial urban wastelands, many of whom voted ‘Leave’. On the contrary, elite Brexiteers are bent on pulling the UK out of the world’s largest rules-based free-trade bloc in order to pursue even more free trade, but without the rules that help protect citizen health or the jobs of ordinary folk.

Their goal appears to be to turn Britain into a beachhead for the US’s particular brand of ‘savage capitalism’, even willing the ‘shock doctrine’ of a hard Brexit.

Meanwhile, nervousness abounds in international trade circles. At the opening of the 2018 G20 summit in Buenos Aires, WTO chief Roberto Azevedo said: ‘I would say this is the worst crisis for the whole multilateral trading system since 1947.’

The rules are being torn up... Or are they?

Do the current disruptions, wherever they come from, present an opportunity for positive change?

And what are people who care about global justice to do?

These are just some of the questions I plan to find answers to on the journey into the maelstrom of global trade in the era of Trump and Brexit.

What is...?

ACFTA – African Continental Free Trade Area, framework to create a new 55-nation single African market for goods and services to be ratified in 2019.

AFTA – ASEAN Free Trade Area comprising 10 countries: Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand. Vietnam, Laos, Myanmar, Cambodia.

BIT– Bilateral Investment Treaty, establishing the terms and conditions for foreign direct investment by nationals and companies of one state in another.

CETA – EU-Canada Comprehensive Economic and Trade Agreement.

CPTPP – Comprehensive and Progressive Agreement for Trans-Pacific Partnership, previously known as TPP and now also known as TPP11 or TPP-11, being negotiated between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

EPAs – Economic Partnership Agreements between the EU and African, Caribbean and Pacific countries and regions.

ISDS – Investor-State Dispute Settlement mechanism, giving investors special rights to sue states. Has also spawned the ICS (Investor Court System) and MIC (Multilateral Investment Court).

Mercosur – Trade bloc of Argentina, Brazil, Paraguay, Uruguay and Venezuela.

Pacific Alliance – Trade bloc formed by Chile, Colombia, Mexico and Peru.

RCEP – Regional Comprehensive Economic Partnership, being negotiated between Australia, New Zealand, Japan, South Korea, India and China and 10 ASEAN countries.

TiSA – Trade in Services Agreement, proposed international treaty between 23 parties, including the EU and the US.

TRIPs – Trade Related Intellectual Property Rights, international legal agreement between all the member nations of the WTO.

TTIP – US-EU Transatlantic Trade and Investment Partnership, now defunct, trashed after 20 rounds and much protest.

UNCTAD – United Nations Conference on Trade and Development.

USMCA – United States, Mexico and Canada free trade agreement, re-negotiated NAFTA.

WTO – The World Trade Organization, both a multilateral forum for negotiations and enforcer of rules-based global trading system, was set up in 1995 and comprises 164 member states.

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