What future for free trade and globalisation?

With Doha dead, the way forward is regrettably a string of free trade agreements with countries that want better access to the European Union market – writes our resident satirist Schadenfreude

Today the press reported British Prime Minister David Cameron demanding more free trade and Lord Mandelson, erstwhile European trade commissioner, abandoning his support for globalisation. Since the days of Adam Smith and William Gladstone, free trade has been the key to efficiency and growth. The most ambitious attempt to carry the process further was the Doha Round of the World Trade Organisation, which after struggling for years finally collapsed. Developing countries were unwilling to open up their markets unless the incentives were strong enough.

And United States farm interests were unwilling to reduce protection. America preferred to negotiate free trade areas – especially, in its Latin American back yard - but has recurrent difficulties with protectionist interests in congress. When Cameron talks about major trading partners he must be thinking of, among others, the US and China. The idea of a transatlantic free trade area has a long antiquity. Countless schemes have been outlined, but nothing has happened. In its deals - the US wants assurances about reciprocity, which are not always available. On the European Union side, the idea of opening up to US agriculture sends shudders down many political spines.

What about an FTA with China? Not while the Chinese currency is undervalued and, probably, not when China is predominantly a state trader. In reality, there is not much substance in Cameron's proposal. With Doha dead, the way forward is regrettably a string of FTAs with countries that want better access to the EU market. The less developed get most of it free under the general system of preferences. Other candidates do not readily spring to mind.

Lord Mandelson is reported to consider that people, in Britain, object to losing their livelihoods when the search for efficiency means the closure of enterprises. Does he have in mind the instructions for the Councell of Trade, 1660, under Charles II? They read: "You are especially….to consult of some effectual means for the reinforcing encouraging and encreasing and for the reguleating and carrying on of the Trade…to the end that the people and Stock and Navigacon of these our kingdoms may be imployed therein; and our Neighbours may not be enriched with that which so properly and advantageously may be undertooke and carried on by our own subjects." What foresight.