FREE trade goes in and out of fashion around the world as economies wax and wane. Hong Kong is rare in its longstanding and consistent commitment to free trade, a commitment reflected in policies that have produced 34 years of uninterrupted economic growth. Even now, as nations around the world warm to the philosophy of free trade, and move towards dismantling barriers, chill protectionist voices are being raised.
Governor Chris Patten, in a speech in Britain last week, drew attention to the emergence of prominent opponents of free trade, particularly the Anglo-French financier James Goldsmith, and the American Ross Perot, whose bizarre record as a presidential candidate has apparently done little to blunt the public's appetite for his negative pronouncements on the North America Free Trade Agreement (NAFTA).
The attraction of protectionism is that it sometimes appears to deliver short-term advantages to those who practise it. It also appeals to the national pride and xenophobia of voters who strongly embrace patriotism but have only a weak grasp of economics. That is sufficient to attract opportunist politicians seeking votes, and businessmen seeking shelter from the cold wind of foreign competition.
The disadvantages of protectionism are manifold: it encourages economic inefficiency at home, is likely to lead to higher prices in the shops and, in most cases, hinders economic development. The expansion of the European Union (EU), the signing of the NAFTA, and plans by the Association of Southeast Asian Nations and the Asia-Pacific Economic Co-operation forum to dismantle barriers might suggest that free trade is here to stay.
Politicians who once sought to play out their protectionist pipe dreams at a national level now have broader vistas. Blocs such as the EU present the opportunity to think big when it comes to protectionism: the same leaders who oppose removing tariffs within the EU can also support the EU against, for example, developing Asian countries.
As Asian economies continue their relentless expansion, and many Western economies appear to falter, the spotlight of publicity is increasingly being turned on low wages and poor working conditions in Asian countries. It is as if Asian economic growth is being sustained primarily by exploitation, and excluding the products of such labour becomes a way of siding with the exploited, against the exploiters.
