Glasgow Business . 43
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generation. Tomas Macaulay’s comment that “Free trade, one of the greatest blessings a government can confer on its people, is in almost every country unpopular” was made in 1824, but it is as relevant today as it was then. As Financial Times economic commentator
Martin Wolf (who appeared in a recent Glasgow Talk) outlined in his book Why Globalisation Works, countries that substantially increased their trade ratios between 1980 and 1997 experienced significantly higher growth than the others. Te book also discusses the criticism that
while rich countries are advocating trade liberalisation for developing countries, they are at the same time taking protectionist measures themselves. Wolf is particularly critical of the enormous
subsidies given to farming products in the European Union and the United States, branding that a disgrace. So it is very easy for countries and
individual politicians to condemn trade protectionism in other places while advocating it in their own country. Enacting protectionist barriers against trade
may be in the interests of specific groups but as the evidence presented in Wolf ’s book shows, nations and the world as a whole suffer from these policies that prove ultimately short-sighted. Te most recent efforts to develop free
trade have come in the push for a Transatlantic
Free Trade Area – efforts to open trade between the EU and the US following the derailing of the Doha round of world trade talks. Te aim is ambitious. Te Transatlantic
Trade and Investment Partnership, or TIP, aims for a formal agreement that shall “liberalise one third of global trade”, and will, it is hoped, create millions of new paid jobs. While tariffs between the EU and US are
already low, the Centre for Economic Policy Research estimates that 80 per cent of the potential gains from TIP will come from doing away with duplication of regulation
The Transatlantic Trade and Investment
Partnership between the US and Europe is expected to create millions of new jobs
between EU and US regulatory rules. Tere are, of course, questions and
controversial issues involved in such a major, ambitious agreement. But as Allan Hogarth, Executive Director of the Scotish North American Business Council, said in evidence to the Scotish Parliament, while trade barriers between the EU and the US are sometimes referred to as being small, British companies still pay $1 billion (£637 million) to the US in tariffs every year. Te issues are complex, but once again the
benefits of achieving a significant step forward for free trade are very great indeed.
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