The philosophy of free trade is likely to come under systematic attack around the world in coming months as the slide in Asia's financial markets deepens, British elder statesman Lord Douglas Hurd warned yesterday.
At a joint luncheon of the British Chamber of Commerce and the General Chamber of Commerce, the former British Foreign Secretary said calls to reverse liberalisation from Southeast Asian leaders would be joined by others from Europe and the United States as cheaper Asian goods penetrated global markets.
Lord Hurd said governments must not cave in to the pressure as the best way to promote continued economic growth was through further liberalisation of trade.
He predicted there would be no quick end to the unease afflicting world markets.
'I think it will continue for a quite a long time and it will be accompanied by a speculative assault on the doctrine of free trade and liberalisation,' he said.
'You have seen it already in Southeast Asia.
'You will see it in Europe as the devaluation of Asian currencies gives Asian goods a new impetus into European and US markets.
'It is in a common interest of Britain and Hong Kong that the best way to promote the human race is not to resort to protectionism or restrict free trade.' Lord Hurd said it was a common mistake of many to believe the opening up of world markets had contributed to the crisis.
He said: 'A market, although it may exaggerate weaknesses, does not invent them.' Lord Hurd, who had just visited the mainland leading a British business delegation, said he received a warm response when he raised the topic of liberalisation with Chinese Vice-Premier Zhu Rongji.
He said: 'The vice-premier took me up very strongly and said the mainland would continue the step-by-step process of opening up the economy.
'The process of liberalisation will continue because openness, over a period of time, is a strength.
'That is understood there as well as here.' Lord Hurd said he believed Beijing would not devalue the yuan but seek other ways of staying competitive in the face of the declines in other Asian currencies.
Lord Hurd had just returned from heading a trip to the mainland by British Invisibles, a cross-sector organisation promoting services and other invisible exports.
Many senior figures in the finance, insurance and securities sectors were delegates.