An important part of my life in the sugar industry, particularly the latter part, was spent battling the absurd concept that free trade is a universal good. Interminably, it seemed, one had to make the point that indiscriminate application of free trade mantras in relations between rich, developed countries and poor, developing countries would be ruinous to the weaker partner. How could it be otherwise? Treating those with very different capacities the same is bound to be unjust. In a free-for-all between full-sized bullies and still growing children, who has the advantage?
Infuriatingly, such arguments were never of any avail. Deaf to good sense, oblivious to our common humanity, the unthinking fundamentalists, principally located in the European Union and the international financial institutions, insisted on the gospel of unbridled free trade. “Tariffs must come down,” “subsidies are anathema,” preferential arrangements must go on the scrap heap,” “the uncompetitive will go to the wall,” “find niche markets or perish.” This was the litany of the received wisdom of the consultancy circuit. Such fundamentalist nonsense got into the data bases which multilateral and think-tank consultants automatically referred to and then unthinkingly regurgitated in a thousand and one reports they wrote for unfortunate poor country clients. These clients had no alternative to employing these people since their services were all too often part and parcel of some aid deal or debt bail-out or structural adjustment programme or HPIC initiative into which the client state was locked by force of circumstances. I hope it is not the same nowadays.
The bedrock of Guyana’s sugar industry and the sugar industries of many other Caribbean, African and Pacific countries was the Sugar Protocol. This was, in fact, a commercial trading arrangement freely negotiated between the European Union and ACP sugar-exporting countries. Both sides benefited, certainly the EU did so since the price in the Protocol was lower than the world price at the time of the negotiation. The Sugar Protocol represented a model of trade cooperation between developed and developing countries, benefiting both partners and giving the world an example of how the rich and the poor could deal fairly with one another.
However, the European Union, as time went by, chose to forget that this was a commercial treaty, freely entered into, and labelled it a “preferential arrangement” which, according to the free trade fanatics who increasingly inhabited their corridors of power, no longer had any place in the grand new world where, somehow, the free play of market forces would bring heaven on earth to all men. Thus was a hugely beneficial trade arrangement gradually, methodically, ruthlessly dismantled. This long experience of stupidity and callousness on the part of the EU was a sad and frustrating feature of my last decade or so in sugar. It is significant that the ending of the Sugar Protocol coincided with the precipitous decline of the Caribbean sugar industry.
I have continued in my retirement to wonder if those in the so-called developed world – so far as their minds and imaginations were concerned the word developed did not apply – can still be clinging to their belief that fundamentalist free trade maxims make any sense. And beyond my disgust at their nonsense the knowledge that the countries they represented never practised what they preached hurts as much as it ever did. Those countries whose representatives lectured us about the glories of free trade never practised free trade until and unless it suited them. A huge dose of hypocrisy was always added to what was measured out and fed to us.
My knowledge that the rich countries, who are supposed to be our partners in beneficial trading arrangements, seek only to use us for their own benefit was considerably bolstered recently by a devastating article in the New Yorker by John Cassidy, author of How Markets Fail: The Logic of Economic Calamities. His article, about the growing success of China in the world, quotes extensively from a Cambridge economist Ha-Joon Chang who has written on the subject in his book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. In his book Chang points out, and gives all the details to prove it, that not one of today’s economic powers practised free trade during its developmental stage. Not one. Free trade was a taste they acquired only after they had become rich. The idea that the free play of market forces led to developed economies is rubbish.
Just take one example. For the vital period of 50 years after 1865 the tariff on manufactured goods imported into America was forty-five to fifty per cent, the highest level anywhere. It was during these years that the US economy grew to rival the economies of Britain and Germany in industries such as iron and steel and chemicals – all of which benefited from protection. Even during and after the First World War, when President Woodrow Wilson, in his Fourteen Points, elevated free trade to a goal of US policy, hefty tariffs remained in place. (For some agricultural products, such as sugar and ethanol, they to this day exist – greatly to the advantage of big US agribusinesses such as Cargill and Archer Daniels Midland, which otherwise would struggle to compete with foreign suppliers.
And that’s aside from the billions that these companies have received in US government subsidies).
The hypocrisy of developed countries in advocating the free play of market forces is endless. For instance, developing Asian countries were once harshly criticized for propping up struggling banks rather than allowing market forces to operate. But during the recent financial crisis, of course, the United States – along with other prominent members of the World Trade Organisation, like Britain and Germany – found itself doing precisely the same thing. As for the US bailouts of General Motors and Chrysler, a good case can be made that they violate WTO rules, but nobody of course is going to call Washington to account.
The humbug has always been extreme and pervasive. It constantly provoked me. A friend and I were once discussing the trials of negotiating with free trade extremists and he asked me if I recalled the story of the American general in the Vietnam war who ordered the obliteration of a village which he suspected of harbouring Viet Cong guerrillas. I said of course I recalled the story. The general became notorious for saying with a hard, straight face, “We destroyed them to save them.”
“Well”, my friend said, “Same thing. They screw us and tell us they are helping.” Rude, perhaps, and of course not appropriate applied generally to the very pleasant and well-meaning individuals who visit us for a while to represent policies they do not formulate. Nevertheless, true in a larger sense, true as true can be. “They screw us and tell us they are helping.”
