The idea that Brexit will improve fair trade with developing countries is a fallacy, believes Alison McGovern
Brexit is not great, is it? That has been the overriding theme of the past year. For people like me who are believers in the idea that the world can – with the right political engagement – constantly become a better place, these are dispiriting times. Even during the David Cameron years there were more moments of hope, you could argue. Same-sex marriage. Legislation for 0.7 per cent of gross domestic product to be allocated for development aid. Bright spots that kept us going in an otherwise difficult period.
Well, some may say that there is a reason for international progressives to look forward to Brexit. The European Union, they argue, is a protectionist institution. Its policies – tariffs, non-tariff barriers, and agricultural subsidies – are the actions of a trading bloc that is closed to poorer countries, rather than seeking to remove impediments to trade. Should global development activists, then, be toasting Brexit, rather than worrying about it?
The people who would sell this idea posit themselves as defenders of free trade. They say that the EU sees itself as progressive. They claim that, actually, its treatment of produce from the developing world is fundamentally regressive. As Peter Lilley – a supporter of the hardest of Brexits – says: ‘it is both hypocritical and self-defeating for rich countries to give aid to developing countries while simultaneously blocking their trade’.
Not so fast.
The EU’s Everything but Arms scheme grants full duty free and quota free access to the EU single market for all products (except arms and armaments) to 49 of the poorest countries in the world. The EU is not just the world’s largest trading bloc. It imports more from developing countries than the United States, Japan and Canada combined. And when it comes to regulatory standards, and protection of the environment, deals with the EU are likely to lead to safer, better markets for poorer countries.
Geography and politics means that developing countries, especially in Africa, have much to gain from a partnership with Europe. The time zone helps, but so do European progressive values which see a large European development assistance programme. That means the focus is not just on trade, but also the potential for inclusive growth. That is what a partnership with the EU offers.
The UK is rightly proud of its work on international development, but we have been so influential in this sphere precisely because we a leading member of institutions like the World Bank, International Monetary Fund, Nato and the EU. Our development assistance comes with political support. Our budgetary support for schools and hospitals in the poorest countries in the world has come with the understanding that we would also use our influence on behalf of those same countries, when it came to the Aids/HIV epidemic, debt relief, or more recently, the refugee crisis. An isolated Britain, even with a substantial aid budget, is much less use to the poorest people in the world than we currently are.
Furthermore, it is a huge mistake to think that access to the British market of 60 million consumers could be as crucial to developing countries as a relationship with the European bloc of half a billion people. This is what is at the heart of this debate. We have essentially moved to a situation where there are three large trading blocs in the world: Europe, the Americas (dominated by the US, underpinned by the North American Free Trade Agreement) and the east (dominated by China). For smaller, poorer, countries, they must look to one of these blocs for growth.
And frankly, the European model, I believe has much more to offer developing countries than the highly unequal American model, or the Chinese model that cannot tolerate democracy or dissent. While countries like South Korea, or large parts of India, demonstrate these are not the only options, the biggest countries economically will inevitably have huge sway in the shape of global markets. And the influence of Europe on behalf of very poor countries cannot be underestimated.
What does this mean for the United Kingdom, if Brexit happens?
First, we should avoid a sense of glorious isolation on our wish for progress in developing countries. As the refugee crisis continues, vulnerable people in the world need our diplomatic capacities to be put to work on their behalf. Just getting solidarity payments from the UK is not enough. We need to rebuild the trust of our European partners.
Second, we should stop pedalling the free trade versus protectionist myth. Europe is rightly protectionist when it comes to protecting people from the race to the bottom on rights at work and consumer standards. And these protections, all things being equal, are likely to help developing countries, not hold them back. Free trade alone is never enough. We have to fight for global fair trade too.
And thirdly, the UK remaining a part of the single market will bolster our role making global markets work for the poorest. Future trade talks that seek to help the poorest countries in the world will not be aided by a Britain that is isolated. Our influence is at stake. If we give it up, we are less powerful to aid any country, and much less useful to those people in the world who have the greatest call on our moral duty to help.
Alison McGovern MP is chair of Progress and the Labour Campaign for the Single Market. She tweets @Alison_McGovern
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