Time to stand up & support the unsung heroes of international free trade

As we are living through yet another hot summer of heated political debates on international free trade, on what trade is (and what it’s not), on what it’s supposed to be and what it’s supposed to deliver in terms of benefits and prosperity (and to whom), here are three fundamental tenets that we should all keep in mind. Firstly, trust the theory or the practice – or both: free trade does work! Secondly, trade is bound to get into trouble whenever politics takes (overly) center-stage. Finally, it’s time to debunk simple but ill-conceived myths about international free trade and stand up in support of those – often unsung – heroes that continue to pursue its agenda. 

Regarding the first point: repetition is the mother of all learning, so there is absolutely no shame in repeating again and again that international free trade does work. Theories about comparative competitive advantage (if you give me something I want from you, and I give you something you want from me, we’re both better off as a result…)  and the benefits of international free trade may appear dated or dry to some, yet it’s hard to contest that their intellectual relevance is as fresh as when they were first presented 250 years ago and that the practical impact of trade in an ever more connected and globalized world has never been greater. 

Secondly, politics is well advised not to get too much into the way of international free trade. International market competition is about private enterprises fighting to win with their products and services in a marketplace that is open for all and governed by rules that are clear, fair and predictable. It is NOT about states fighting each other – and definitely NOT a about individual politicians fighting each other. Political contest is bound to create (election) winners and losers, modern-day state conflict (aka war) has – more often than not – produced suffering and misery for all.

By contrast, international free trade is about peaceful exchange and mutual gain. Yes, politicians and states do need to talk about trade and applicable rules in trade, but they must be careful not to let the different and incompatible logic of the rules that govern their own survival (election/campaign success) or that of brutal state conflict govern the tone and way that trade talks are held. It’s bound to end in failure. After all, politicians can’t force trade to happen via governmental order. All they can do is to get the rules right and wait for private companies to fill the space and make trade happen.

Finally, it’s time to stand up and challenge those that follow the temptation to tell simple, but incorrect myths about international free trade. We have seen this ill-conceived logic unfold in certain aspects of prior discussions on trade (remember TTIP and CETA?). Yes, citizens and communities often have grave and legitimate concerns on what free trade agreements will – or will not – deliver for them. We better take these concerns very seriously. Even if the business community is not always best placed to explain the benefits of free trade, it’s up to us to do a better job here. In doing so, we must not forget to acknowledge and applaud the tireless efforts of those – often unsung – heroes that continue to pursue the agenda of international free trade. In Europe, that’s the EU, and the European Commission in particular, which has done a fine task in completing MERCOSUR and the Vietnam FTA recently, not to forget the one with Japan. As spirits sector, we’ll be loud and clear in explaining why these agreements matter, and why they are positive steps in the right direction.

Ulrich Adam*

Director General

*In his capacity as permanent representative of SPRL ADLOR Consulting