EU duty to developing world is to open doors for trade

Until a few years ago, the lack of public interest in international trade talks meant issues of great importance were left mainly…

Until a few years ago, the lack of public interest in international trade talks meant issues of great importance were left mainly to experts to decide. That all changed at the November 1999 World Trade Organisation (WTO) meeting in Seattle.

Since then a lively debate over what rules should govern relations between nations has forced politicians all over the world to become more involved. In Europe, this public discussion is still national in character, even though decisionmaking about trade policy is supranational. While debate between citizens and nationally elected politicians remains crucial, the formation of a common European view on trade is also important. For that to happen there needs to be a wider debate across the European Union.

Trade ministers from all EU countries agree on the need for global negotiations in the WTO. The case for a new trade round is compelling: it is needed to stimulate world growth, to speed up the modernisation of Europe's economy and to adjust the world trading system to benefit developing countries. In the absence of an EU-wide debate, the case for a new WTO round has to be made nationally. The argument will not be won until politicians and others engender greater support among Europe's citizens for economic modernisation and an acceptance of the role of foreign trade in that process. I also happen to believe European voters can be persuaded that the marginalisation of the world's least-developed countries in the global economy is not sustainable, either morally or purely in terms of Europe's self-interest.

Even so, it takes courage to pursue policies that will bring change and upheaval. Economic restructuring does not just create new jobs; it also puts some people out of old ones. And it costs money to provide the social security, broad education and retraining programmes that provide those individuals struck by the forces of change with a second chance to find work.

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However, Europe's leaders must not duck the challenge. There is no future for the EU in a strategy that includes competing with the developing world for the production of T-shirts. Europe's aim of becoming the world's most dynamic economy has every chance of succeeding if it dares to apply policies that promote change.

Europe's social model provides a comparative advantage: its welfare systems can provide citizens with security in insecure times. Indeed, the model should be developed further to make adjustments endurable and beneficial to individuals.

The business sector should also recognise the advantages of a social model that works in support of flexibility. Trade liberalisation would gain from being part of a broader agenda for modernisation.

To date, Europe's role in the debate over trade has too often been defined by those who claim that globalisation has gone too far. Protesters and demonstrators are right when they say that the world is less than perfect and that the politicians in charge of trading relations have not done enough to correct this. But instead of defending an imperfect state of affairs, political leaders should be advocating change.

Contrary to common perception Europe's economy is no more open today than it was in the early 1960s. Imports from the outside world in relation to the size of the economy hover around 7 per cent - similar to 40 years ago.

The injustices of the world economy are not the fault of too much global trade but of too little. Today the least developed countries' share of world exports is only 0.4 per cent; 20 years ago it was 0.6 per cent.

There are enormous benefits to be gained from making world trade truly global. Instead of defending a globalisation of trade that is not really global for all, European politicians ought to invite the protesters to fight with them for more and fairer globalisation of trade, not less.

It is time to bring into the open what it really takes to improve the world's trading patterns. That means admitting that some people, in Europe and elsewhere, will have to adjust.

The writer is Sweden's trade minister.