Trading in Pieties

One happy day, perhaps, world trade negotiations might be looked upon principally as a means of liberalising world trade. Until then, it seems we are likely to have to suffer from wrong-headed proposals such as the one which just emanated from the European Commission: that certain poor countries be granted special access to European Union markets in return for signing up to the Kyoto protocol on carbon emissions and other treaties on the environment, labour standards and human rights. This misguided idea reveals the woolly thinking and thinly veiled protectionism that far too often characterises trade policy in Brussels. It should be resisted.

The manipulation of trade privileges, whether by the carrot of access or the stick of tariffs, should rarely be used to achieve non-trade goals. Hanging peripheral or unrelated issues on trade negotiations only encourages trading partners to do likewise until the entire multilateral system collapses under the weight of extraneous policy matters which would be better dealt with elsewhere.

In this case, it cannot make sense for the Commission to compel what it calls "vulnerable countries" (though it has not yet specified which, they will be poor nations with exports concentrated in one or a few areas) to sign up to the 1971 United Nations Convention on Psychotropic Substances, the Cartagena Protocol on Biosafety, the International Covenant on Economic Social and Cultural Rights or any other of the 27 specified conventions or treaties before allowing them duty-free access to EU markets.

True, many of these agreements will make little difference in practice to such nations. Conventions on labour standards, for example, mean little in countries likely to qualify for this special treatment, which will almost certainly have a high proportion of the workforce outside the formal sector. As for insisting that countries sign up to the Kyoto protocol, this is almost pure symbolism: no country poor enough to benefit from special treatment will be rich enough to have any binding commitments to reduce carbon emissions.

But by implementing the principle of raising labour or environmental standards as a prerequisite for market access, the Commission makes it easier to insert more serious restrictions later and encourages its own domestic producers and trade unions to look for ways of using such standards as de facto protectionism, a game at which some of their US counterparts have become adept. Trade agreements should not be a lever for rich countries to force other governments to implement unrelated policies, however symbolic. The EU has got this one wrong.