Countries accused of 'hypocrisy' over global free trade
been paying lip service to the notion of free markets, claims the
UK's CBI.
Speaking at the CBI (Confederation of British Industry)'s annual conference, chairman Sir John Sutherland said that "national governments have gone to great lengths to stave off the commercial realities of globalisation".
"The hypocrisy is staggering," he told delegates. "The most sublime example is France proclaiming a yoghurt manufacturer - Danone - to be a 'national champion' of strategic importance."
Sutherland's sentiments have particular resonance following the failure of WTO trade talks this summer, which collapsed due to the intransigence of a number of key trading partners. He called such protectionism "an insidious parasite in the so-called free trade ecosystems of many developed countries".
"Countries that should know better proclaim to believe in free trade but when the nasty foreign competition knocks on the door it's a case of 'it's just my shoes', or 'it's just my steel' or 'it's just my ports'It's always a special case.
"How can we preach free trade at the Doha negotiating table or ask developing countries to open their markets up if we don't practise the principles we preach?"
Sutherland argued that sectors cannot be artificially propped up indefinitely - market forces will always find a way through. There was general acceptance in Europe for example that the bloc's sugar regime required major restructuring, despite the fact that hundreds, if not thousands, of jobs were at stake.
EU agriculture minister Mariann Fischer Boel recently called on sugar processors operating within the EU to take greater initiative in reducing their production levels as required by new EU reforms on sugar that came into force in July.
"Countries and firms who refuse to face reality and accept the need for change will suffer the most as they will be the least prepared," said Sutherland.
"The European Commission must continue challenging governments which try to protect their national companies and restrict cross-border takeovers and activities."
Sutherland added that the global economy will benefit not just from the trading gains, but also from greater integration and co-operation. He claimed that the worlds poor would also be better off in a free trade world.
Agriculture however remains the sticking point to a successful outcome from the currently suspended Doha Development Round of negotiations, which promises to create a more open world economy. Even though the economic case for farm and trade policy reform remains compelling, the developed world remains reticent.
Recent OECD analysis strengthens the case for resuming talks. According to the organisation, research shows that agricultural tariffs and price support mechanisms do a poor job of providing income support for farm families, encouraging sustainable economic development, maintaining healthy rural communities, and protecting the environment.
Governments would do better to shift their efforts away from price and production-related support to policies that directly target what they want to achieve, said the OECD. The CBI would undoubtedly agree.
