Special report: Labour party --Labour's free trade policy harms millions, says Byers

Felicity Lawrence, consumer affairs correspondent Monday May 19, 2003 The Guardian

The government's policy of liberalising trade and removing protectionist measures such as subsidies and tariffs is dangerous for millions in the developing world, the former trade and industry secretary Stephen Byers says, showing a remarkable change of heart, in the Guardian today.

Mr Byers led the UK delegation to the world trade talks in Seattle in 1999 and was responsible for pushing the government's agenda to make developing countries open up their markets to international competition. Removing protectionist measures is still a plank of Labour policy.

Mr Byers said he had changed his mind after a personal visit to Africa.

"I was aware of the arguments, but it's not until you see first hand the consequences of policies, that you see they need to be changed."

It was "getting away from Whitehall and the persuasive arguments of trade policy experts" and discovering the plight of ordinary farmers in developing countries that made the difference.

Aid organisations welcomed his comments as an important turning point in the debate on globalisation.

Andrew Pendleton, a Christian Aid spokesman, said: "This is incredibly significant. It is the first time we've heard from someone close to the heart of government that making developing countries open their markets is very damaging."

Oxfam, which has campaigned against the current trade rules, called on the government to listen to Mr Byers.

"The fact that a former trade minister who helped negotiate the current trade rules has come out and rejected established trade orthodoxies is remarkable.

"This should make our government radically rethink the impact of its policies on poor people around the world ahead of the WTO [World Trade Organisation] meeting in Cancun," said Justin Forsyth, its policy director.

Mr Byers says: "The course of international trade since 1945 shows that an unfettered global market can fail the poor, and that full trade liberalisation brings huge risks and rarely provides the desired outcome.

"The evidence shows that the benefits that would flow from increased international trade will not materialise if markets are simply left alone.

"When this happens, liberalisation is used by the rich and powerful international players to make quick gains from short term investments."

He has been converted to a "regime of managed trade in which markets are slowly opened up ... with subsidies and tariffs being used to achieve development goals."

His new thinking was dismissed as "ill-informed" by the former head of the economics and statistics department of the Organisation for Economic Cooperation and Development, David Henderson.

Professor Henderson said: "The widening of the gap between the rich countries and many of the poor ones cannot be blamed on globalisation."

"None of these factors explains the current problems of, for example, North Korea under Kim, Liberia and Somalia under their respective warlords, or Venezuela under Chavez." Internal influences, including the actions of their governments, were what had kept them poor, he said.

The Department for International Development maintains that free and fair trade is best achieved by removing barriers through the WTO.