Mandy defends free trade
The value of open markets does not need rethinking.
Via Timmy and this Mandelson article in The Times
So what about free trade? Running through the preparatory discussions for the London Summit in April is the explicit assumption that ensuring the global trading system remains open through the downturn is an imperative and a priority. Free trade sceptics will argue that this is an ideological blindspot. But the basic case for open trade has not been damaged by the credit crunch, and it remains central to any chance of a sustained global recovery.
Open trade has driven the rising levels of global prosperity that have defined the two decades leading up to the credit crunch. The growth of trade allowed countries and their companies to specialise and compete for sales globally rather than just in their home market.
By allowing developing countries to become part of global production lines supplying developed world markets, it drove the growth that has lifted more people out of poverty more quickly than ever in human history. As they grew, these economies created demand for imports from the developed world in turn.
It is this massive demand engine that is the basis of global prosperity and that has been stalled by the credit crisis, not least because the crunch has dried up a lot of the temporary credit that finances 90 per cent of international trade. The fundamental challenge facing G20 governments is getting that global demand engine turning over again. Rebuilding demand, and transmitting that demand throughout the global economy, will both require an open trading system.
Well, yes, you cannot argue with that!
However, don’t expect the noble Lord to be messing with the EU, or criticising any potential protectionist measures they may pursue, after all his pension depends upon keeping his nose clean.
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