11 July 2006

France: world champion of hypocrisy

Europe must be careful not to turn itself into a fortress just to keep out immigrants, a French minister has said. Addressing a European-African migration conference, French Interior Minister Nicolas Sarkozy said the concept of zero immigration was a dangerous myth. Ministers from 57 European and African nations are meeting in the Moroccan capital Rabat to discuss ways of dealing with migrants. BBC
The fact is, Mr Sarkozy, that it is your benighted France that has already turned Europe into a fortress. France, with its loathsome trade policy, has led Europe in refusing to allow imports of agricultural products from poor countries, especially in Africa. Through its support of the corrupt, insane Common Agricultural Policy, France has helped impoverish the third world, and made escape to the west the only option for hard-working Africans who want to make a better life for themselves and their families. Not content with that it is the ludicrous French elite that does its best to ingratiate itself with thugs and kleptocrats like Robert Mugabe, whose actions encourage immigration, legal and illegal, to the west.


Frank said...

Hi Ronnie,

I am wondering where to draw the line.
On one hand, access to western markets could be benificial for the so called developing countries, on the other hand we see the negative effects of free global trade, such as the transformation of their economies to purely export oriented ones, as happening under the regime of structural adjustemnt programs.
The "poor" will only benefit from exporting their, mainly agricultural, goods if they own the land the goods are produced on. But what actually seems to happen is that the peasants are bought out by foreign investors (thanks to the unrestricted flow of capital under the WTO rule), Production is then moved to export goods like sugar or coffee with all the negative environmental effects.

How could we get the best of both worlds? A good start might be to remove tarifs on fair trade goods. Maybe this would meet less resistance in the western countries, as their market share is small. But it would make them cheaper and more attractive to "mainstream" consumers.

What do you think?


Ronnie Horesh said...

Thanks Frank for your comment.

I don't think free global trade leads to purely export economies, or to the extent that it does, that such economies are wholly worse than the alternative. I certainly agree with you though that free trade in goods should precede free flows of capital. But this is how I see it.

First: trade barriers lead to industry concentration. In fact they work the other way as well. Trade barriers in agriculture go mainly to the largest landowners and wealthy agribusiness corporates. This is partly because they take the form of market-based support, which rewards most the inputs that are most inelastic. In agriculture the least elastically supplied input is farmland, so its price rises and farming becomes more land-intensive as a result. The other major beneficiaries of the current corrupt subsidy regime are suppliers of purchased inputs and agricultural processors. Richer landowners buy more of their products and services and can be charged more. These companies tend to be large corporates who can and do lobby government to maintain trade barriers, and in this they are successful, lamentably.

So negative environmental effects arise partly from intensive farming in the protected economies, but also as a result of the impoverishment of the third world. Yes, there are negative environmental effects of production for export, but there are also negative impacts arising from lack of development. This is a thorny question, but in general the negative effects of trade are also the negative effects of economic growth under the current model, which favours big and global businesses at the expense of the small and local. Subsidies to cronies and government intervention are features of the current model.

Economic growth under the current model, where many large environmental impacts are externalised, does have many negatives, but it also has many positives, not only those that are internal to large corporates. It has lifted many millions out of poverty, most notably, and this has to be weighed against the indisputable negatives. Economic growth accompanies trade, not necessarily cross-border trade, but that does help when it's not distorted by corrupt lobby groups and their friends in government. On economic theory and on all the evidence, trade is necessary, though not sufficient for economic growth and economic growth is essential for rising standards of living. I certainly agree though that the current growth model is flawed, perhaps fatally, but I don't see that limiting trade is a solution. Getting rid of all trade barriers - including subsidies to cronies and including subsidies to roads, energy extraction and consumption, ports, airports - is a start. Internalising the negative environmental effects of economic activity should also be attempted. There is also the important question of freedom. What business is it of government to intervene between willing buyers and willing sellers of goods or services? There are cases where it's necessary to protect plant, animal and human life, but for the most part government trade barriers are as spurious as they are corrupt.

I hope this is helpful, but don't hesitate to respond. Regards

Dies Soli said...

Hi Ronnie,

thanks for your elaborate reply.

what concerns me is that the policy makers and the corporations are urging for free trade but not also for measures to cushion the negative impacts.
And it seems to me that it is very hard to weight the positive against the negative consequences.
Do you have objective numbers, e.g. about what happened in Mexico since NAFTA was implemented? GDP does not count, at least I don't accept it as a measure of well beeing.


Ronnie Horesh said...

I agree that GDP is very badly flawed. However, there does seem to be a correlation between a high GDP per capita and (1) lower levels of poverty and (2) more concern for the physical environment. There are also of course many negative impacts that correlate with a high GDP, but I don't think they justify trade restrictions. It's better to tackle the problems directly. Government intervention that blocks trade is an abuse that has favoured corporations at the expense of people; that's why I hold French trade policy in contempt. (This sort of debate is so politicised that I should reassure you that I don't think a high GDP should be a government objective.)

The problems we have at the moment are precisely those caused by managed trade and other corporatist/government schemes that are biassed in favour of large corporations and their lapdogs in government.

I don't know the detail of NAFTA. But I can say that the US still has many corporate welfare schemes that favour large companies at the expense of natural persons. One of these are the very high trade barriers to farm produce. Another are the subsidies to oil extraction and consumption. 'Free' trade under these conditions may well be overall negative and damaging, but it is market distortions and biasses that are the problem, not the principle of unimpeded trade between willing buyers and sellers.

In general I think government should allow as many freedoms as possible and work to avoid and mitigate the negative impacts, rather than use such impacts to push its own agenda, much of which dictated by the large corporates anyway. But first it should get rid of all corporate welfare schemes - including trade barriers.