A European Voice for Free Trade
European Union (EU) Trade Commissioner Karel De Gucht visited the Lee Kuan Yew School of Public Policy (LKYSPP) on March 3rd 2010 and gave a public lecture entitled EU and Singapore: Partners in Trade and Partners for Growth.
In his speech, he reviewed the adverse impact of the financial crisis on world trade, explained how it has shaped EU’s trade policy and discussed the prospects of the EU-Singapore Free Trade Agreement he launched the same day with Mr. Lim Hng Kiang, Singapore’s Minister for Trade and Industry.
A strong message that came out of his talk was that the EU is back to resume its leadership role in promoting free trade and that, despite its perceived flaws of being a source of impoverishment and unemployment, free trade is “a gift to the world.”
Many trade experts in the region for several reasons have welcomed the strong and powerful European voice of advocating free trade in Asia with great enthusiasm. First, while the United States (US) and the EU have been the leading states in pushing global free trade, the US President Obama’s administration has so far been slow in pushing this agenda, partly due to the political sensitiveness of free trade at a time of global economic recession and a high domestic US unemployment rate. The EU’s resolve to continue pushing free trade was much needed for restoring confidence. Second, the financial crisis had given rise to protectionist policies across the world. With the political consensus for free trade seriously weakened, the EU’s commitment to pushing for free trade remains an effective counterforce to protectionism.
Economists, such as Joseph Stiglitz, however argue that free trade can be harmful to developing countries without a level playing field. Stiglitz believes advanced economies should lower their tariffs and help poor countries develop their domestic institutions before demanding open access to their markets. Other critics say free trade will widen income inequality and build domestic economic insecurity. Aware of these flaws, De Gucht argued that he remains convinced that no country could develop their economies robustly without trade and emphasized that international competition and free trade is not necessarily a zero sum game.
– by Wang Jing (MPP 2009/2011)