A much linked blog of late has been Marginal Revolution, a site set up by two economists, containing a range of social commentary. It was through that blog that I discovered news of a UNESCO meeting last week on the topic of ‘cultural diversity’. From Marginal Revolution:
“Several countries, most notably France, would like UNESCO to have the power to overturn the free trade commitments made through the WTO and the EU for that matter.”
The reasoning behind this desire is the sense many of us have that the key thing being lost in the wake of free trade agreements is cultural diversity. While it is amusing that
Brussels has told France that it must allow books to be advertised on television, something previously forbidden the removal of trade barriers and government subsidies of local businesses has the potential to open the floodgates to foreign companies entering developing world countries and using their immense buying power, economic reserves and economies of scale to force smaller operations out of the market.
Many argue that this encourages efficiency in production methods and a reduced price to the consumer. When a company has free rein to source its materials, production, administration and other essential services from wherever in the world it wishes, and has the entire world population as a target market, streamlining follows resulting in extremely low unit costs.
Such processes have also allowed some businesses to achieve what many describe as ‘monopoly’ power, something the EU at least seems to disapprove of if its treatment of Microsoft is anything to go by. I am told Adam Smith (the father of capialism) believed governments should have the power to overrule market forces, by breaking up monopolies. I really must read some Adam Smith soon. Rulings against those with such monopoly power certainly suggest that the ideological commitment of our governments to free trade has its limits.
But what concerns many more than the formation of monopolies is the loss of cultural diversity which can follow from globalisation of production. This has long been one of the key complaints of the movements which came to be collectively known as ‘anti-globalisation’ and follows from the fact that free trade agreements prevent governments from putting conditions on markets (whether subsidies or other rules) which particularly support local companies. There is an exception to some of the agreements for particular crises (invoked when the US government needed more anti-anthrax drugs recently, but much debated when southern Africa felt it needed to produce more anti-retroviral AIDS treatments) but not for measures which seek to preserve traditional ways of life.
Any attempt to develop ‘cultural diversity’ clauses for trade agreements will need to be undertaken very carefully. The current state of play in international trade would suggest that any such measures would likely be implemented unevenly, with the countries with the most negotiating clout being allowed considerably more liberal interpretations than those with less clout. The latter group is also likely to be the countries most in need of the protection such measures would provide. Cultural diversity measures would need to be so worded that they did not serve—as many agricultural subsidies do at present—to support the richest countries’ indigenous businesses in flooding foreign markets with their subsidised produce.
The joy of international trade has long been the fact that we get to experience the products of other cultures, brought to us through the marvels of travel. Increasingly it seems to be the case that international trade is instead resulting in our receipt of cheap versions of the products of our culture, manufactured elsewhere. It would be a shame if the original joy of trade was entirely lost to us.