Free Trade

Global trade policy is dynamic. It is shaped by a range of actors, economic circumstances and policy developments.

A new factor and a major driver is the growing role of emerging markets. A second is the deadlock within World Trade Organization (WTO) negotiations.

Commitment to promote free trade among the world’s leading economies is floundering. A key reason the Doha Round is stalled is that many WTO members lack the political will and leadership to complete the Round.

Tariffs in most developing economies remain around 10 to 15 per cent higher than in industrialized economies. Non tariff barriers are significant. Many developed economies are introducing ‘green barriers’ to trade that threaten economic growth in developing countries.

Rhetoric in support of more open markets remains strong among governments in the Asia-Pacific region.

However, there is political pressure on many governments to impose domestic policies – in the name of environmental protectionism or otherwise – that will increase barriers to trade, or subsidise inefficient industries.

Many environmental groups have always favoured use of coercion in international environmental policy. Their policies have rarely won international support of governments. They have turned to lobbying governments in the EU and the US to restrict imports on environmental grounds.

The have also come to realize that the WTO gives individual countries the formal right to resist such trade coercion and have become the WTO’s greatest foes over the past decades. They have manufactured a fiction that the WTO hinders international action to protect the environment. They have made this charge a leading slogan and probably the most powerful tool in the international Green campaign against the WTO and globalization.

These campaign actions undermine the goal of securing mutual advantage from opening markets to trade, and undermine the sovereign right of governments to determine their own national policies.