Menu Close

Fair trade, not free trade

Fair trade, not free trade – David Faber

With the Abbott government secretively negotiating away our economic sovereignty under the looming Trans-Pacific Partnership with the corporate juggernaut of the United States and other Pacific Rim jurisdictions, Free Trade is more topical than ever.

Usually passed off as an uncomplicated good thing, Free Trade dogma has a secular history. Born as a reaction to the restrictions involved in state monopolies and the economic system known as mercantilism [which emphasised commercial war, demographic growth, positive specie trade balances and the like], Free Trade doctrine came into its own with the Industrial Revolution.

Antagonistic to labour market regulation and protectionism and laissez faire domestically, Free Traders have always been globalisers. They see the ‘free’ market as self-regulating nationally and internationally with countries ideally specialising in niche export marketing often at the expense of domestic production and commerce. Free Trade ideology remains recognisably deegulationist and an essential tenet of militant neo-liberal extremism.

The idea of Fair Trade goes further than the principle and practice of paying an ethical price for coffee. Equitable tax reform is very much a part of the Fair Trade concept. This addresses concern about corporate tax evasion which is crippling the revenue base and service delivery of the public sector, apprehension even amongst the most fiscally conservative of developed states.

In the developing world, the longstanding problem of transfer pricing to avoid taxation at the source of wealth production to transfer value to jurisdictions which are relative tax havens is rife. In May of last year Kofi Annan released a report Equity in Extractives showing that tax evasion by resource companies is hamstringing growth in Africa.

Here in Australia the mining vested interests have successfully fought off their obligation to pay a fair share of tax for extracting finite public resources.

Notions that Australia can afford to be a cut price quarry without much in the way of a manufacturing or public sector are rampant in the finance sector, press and now government circles.

Government plans to reintroduce work choices under other names are part and parcel of this plot against the people.

On the contrary the Australian economy and society must be a high wage high tech economy if our democracy is not to wither. Australia must be the Scandinavia of Asia. This can never be whilst we try insanely to compete in a race to the bottom with countries which do not permit free labour organisation, rights of assembly and free speech. Rational tariff protect- ion and trade restrictions ought to apply against firms and states which compete unfairly on cost in this way, dumping in our markets with export subsidies and undercutting Australian wages and conditions.

This is not protection for protection- ism’s sake or the featherbedding of unviable industries. It is the positive construction of a level playing field through state and community action for a just and economically and ecologic- ally sustainable future linked to a rational foreign policy.

Dr David Faber is a visiting research fellow in the School of Economics at the University of Adelaide, and an ERA member.

Leave a Reply