The Guardian June 21, 2000


Editorial:
Free trade

Debate about economic policy is hotting up in the run-up to the ACTU 
Congress (opening on June 26 in Wollongong) and the ALP National Conference 
in August. So the publication of the findings of a six-month survey 
conducted for The Australian by the Canberra University's National 
Centre for Social and Economic Modelling are very timely. The survey 
concluded that Australia has become "a deeply divided, rich get richer 
nation, in which both winners and losers of almost two decades of economic 
and social upheaval are baffled and angry at the destruction of the fair-go 
society". The survey covered the last 15-year period which is precisely the 
period during which the policies of the economic rationalists have been 
relentlessly implemented by both Labor and Coalition Governments.

Economic policy surfaced as a key issue at the recent NSW State Conference 
of the ALP. The Manufacturing Workers' Union (AMWU) proposed that "free 
trade" be abandoned in favour of "fair trade" with the adoption of a 
"social tariff" but the conference upheld the ALP's commitment to "free 
trade".

So-called free trade is one of the darlings of the economic rationalists 
and is being strongly pushed by the transnational corporations (TNCs) at 
the World Trade Organisation. It means that all states should abandon 
tariffs or export subsidies and other job-creating or industry 
protectionist measures that might in any way place restrictions on the flow 
of goods and services between states. It also involves the removal of 
restrictions on trade that might arise out of domestic laws and regulations 
governing health and safety and environmental measures.

The TNCs want absolute freedom to manipulate prices, switch production to 
where the highest profits can be made, taxes are lowest and anti-worker 
trade union laws prevail. Doug Cameron, National Secretary of the AMWU, 
said that free trade is "where big businesses are free to exploit working 
people all over this world. It's where big business has got the freedom to 
adopt the worst standards in undemocratic countries and then say we have to 
compete with those standards in Australia."

"Fair trade" involves trade conducted on the basis of "mutual benefit" to 
both importer and exporter, and the peoples of each country. But associated 
with the proposal for "fair trade" the concept of a "social tariff" is 
being raised. By this is meant the imposition of trade restrictions on some 
countries based on considerations of human rights, labour conditions, the 
existence of repressive regimes or whether or not a state is considered to 
be "democratic". The idea of a "social tariff" was advanced by the trade 
union movement of the USA in its opposition to the admission of China as a 
member of the World Trade Organisation.

In practice the idea, however, turns out to be untenable. Should the 
importation of oil be banned from Saudi Arabia and the Gulf States, all of 
which have autocratic and undemocratic regimes? If the criteria of a 
"social tariff" were to be applied it should also apply to the US because 
it has by far the greatest number of persons in jail and has conducted 
aggressive wars against Yugoslavia, Panama, Grenada, Vietnam and continues 
to bomb Iraq, although the war there ended more than 10 years ago. 

One consequence of trade bans based on social and political considerations 
is that the country concerned reciprocates and would ban imports from 
Australia. Do we want to have the China market closed to our exporters 
because we imposed a "social tariff"?

Social, labour and environmental clauses are being promoted by the US and 
other Western governments as a means to avoid honouring their obligations 
to lift barriers to exports from third world countries.

The alternative to "free trade" is trade conducted on the basis of "mutual 
benefit" with national governments retaining full sovereign rights over 
what they import and export and what protection they offer domestic 
producers.
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