Should Liberals still believe in free trade?
Commitment to free trade has been one of the core elements of British liberalism for nearly 200 years. It went along with peace through open borders and shared prosperity, with opposition to aristocratic landowners and cheap food for the working man. Theres a picture of John Bright (joint founder with Richard Cobden of the Anti-Corn Law League) in my living room, inherited from my wifes Liberal forebears. The economic liberals who left the Liberal Party in the late 1950s to set up the Institute of Economic Affairs still do believe. For them its an article of faith as much as their commitment to a smaller state and a deregulated economy. Liz Truss, a student liberal transformed into an ideological free marketeer, is celebrating the conclusion of the UK-Australia Trade Agreement and promising more deals to reduce tariffs and lower regulatory barriers. Our party press office has criticised her for neglecting the interests of British farmers  not something that Bright or Cobden would ever have said. But trade isnt as simple as it was. Other issues that Bright never imagined now intervene. Animal welfare and hygiene, permissible antibiotics and other phyto-sanitary standards shape global trade in food as much as tariffs  as weve seen in negotiations with Australia, the USA and the EU. Excesses of globalization, leading to over-dependence on dominant suppliers in computer chips, scarce metals and their processing, are leading to renewed concerns about reshoring manufacture of key components and materials. Human rights concerns also intervene, not only about forced labour in China but also about sweatshops in Bangladesh and beyond. Chinas drive for manufacturing and technological supremacy has also unsettled free market disciples, with calls for fair trade and reciprocity to curb Chinas rising structural surplus. Conservative Brexiteers who have argued that geography no longer matters in trade are facing criticism from environmentalists who point to the significant pollution that container shipping and airfreight create. Sustainability for our economy and environment, and arguably provision of work for all our citizens, present arguments against entirely open borders and minimally-regulated trade. Dani Rodrik, a Turkish-born Harvard economist, has argued against many of his colleagues that unrestricted globalization is incompatible with democracy, and that we have to limit globalization in order to maintain and strengthen democratic government and open societies. Chicago-school economists supported General Pinochets authoritarian regime in Chile, 30 years ago, accepting its prioritisation of free markets over civil and political rights. Fewer economists would do so openly today. Last week the Financial Times proclaimed that the Washington consensus (a term coined by an active British Liberal, John Williamson) on deregulation and freer trade is giving way to a new consensus on more active government and more directed national economies. Our Conservative government, Liz Truss above all, look to be clinging on to outdated ideas in a technologically-transformed world. Boris Johnson is as incoherent on all this as on everything else, promising major investment to level up and build back better and setting up a new agency for strategic research. President Biden is way ahead of him, pushing Congress to pledge the funding for another New Deal. Im not an economist, nor a data scientist, micro-biologist, environmental expert or electronic engineer. I think I understand that the pursuit of free trade deals that focus on the reduction of tariffs are scarcely relevant to the challenges governments and societies will face in the next decade; and that efforts to lower standards and regulations are likely to be counter-productive. Trusss faith in free trade looks like Frosts faith in national sovereignty: 19th-century principles that do not fit our current world. (Another underlying contradiction in this governments thinking is that 19th-century sovereignty went with protectionism: open economies, then and now, require international cooperation.) But I dont yet understand what form the emerging economic consensus is likely to take, or how we campaign to ensure that what emerges is made compatible with open societies, local and national communities, and a peaceful global order. * Lord Wallace of Saltaire is a Liberal Democrat member of the House of Lords.