Trade is the lifeblood of the global economy, it must be allowed to flow

These are heady days for the anti-globalists. The global economy is in a pronounced downturn. The economic repercussions have been severe and no economy or industry has been left untouched. According to the World Trade Organisation, the current economic downturn will drive exports down by roughly 9 per cent in volume terms in 2009 – the biggest contraction since the Second World War.  Given the historic strength of its exporting sector, Taiwan has been particularly affected.

But for all the hyperbole about the end of Anglo-Saxon capitalism, it is important to recognise what has worked well in the global economy over the last three decades. Above all, this means renewing, not rejecting, our fundamental global commitment to open markets and open trade.

This month, in recognition of this, the UK is launching its inaugural World Trade Week UK (June 8th – 12th). The US staged the first World Trade Week in 1935. It was launched by President Roosevelt at a point when the US was gripped by a growing mood of isolationism and protectionism. Roosevelt wanted the week to highlight the importance of trade for American growth.

In World Trade Week UK we want not only to showcase the success of the UK as a trading nation, but to highlight the critical role global trade can play in the economic recovery and reducing world poverty. The week, which will begin with an international trade conference in London attended by business leaders and leaders in trade policy from around the World, is to include a range of events both across the UK and globally.

Here in Taiwan, we will hold the 11th meeting of the Taiwan Britain Business Council on 8/9 June.  This is an important opportunity to foster the growing ties between British and Taiwanese businesses.  This year’s meeting will focus on key themes such as the ambitious i-Taiwan project of key infrastructure projects.  With Taiwan’s recent accession to the WTO’s Government Procurement Agreement, foreign companies, including those from the UK, will increasingly be able to help Taiwan achieve these goals at lowest cost and using the latest technology.  In turn, Taiwanese companies will benefit from new procurement opportunities overseas.  The meeting will also look at opportunities that arise from cross-straits developments and from Taiwan’s strength in emerging mobile and wireless technology.  

It is tempting in difficult economic times to retreat and concentrate on our domestic markets. But we need to remind ourselves that the argument for protecting domestic jobs and growth at the expense of promoting world trade simply doesn’t add up. History has shown us that protectionism can only exacerbate a recession. Trade, both at home and abroad, is the engine for economic prosperity; it is a key driver for jobs and growth. More trade means more jobs, higher incomes and cheaper and more diverse goods and services for consumers.  

The agreement by international leaders at the London Summit in April in this regard was therefore extremely important. They agreed on the importance of preserving the open trading system: resisting protectionism by stopping the creation of any new barriers to trade or investment; and working to complete the Doha Development Agenda for a new world trade deal.  Such a deal would lock tariffs at their current levels or lower.

Since the depths of the 1930s depression, the last seventy years have seen the progressive dismantling of global trade barriers for industrial goods among developed nations – we must work together to ensure this progress cannot be undone. We need to keep trade flowing to return to strong economic growth rebuild global prosperity. The meeting of the Taiwan Britain Business Council plays a part in promoting these vital flows.

By David Campbell, Director, British Trade and Cultural Office

Published on Economic Daily, 8 June 2009