GORDON BROWN has called for a new global alliance of governments, business leaders and public figures to fight the reactionary “Luddites” opposed to globalisation and break the “dangerous global log jam” that is threatening world trade.
The Chancellor, writing today in The Times, challenges leaders to show the determination necessary to stop the world slipping back into a new era of protectionism, comparing it to the effort needed to rebuild the international order after the Second World War.
“Today I am urging progressive global business leaders and government to join forces with governments to push for a new breakthrough. Globalisation desperately needs champions, statesmen and business leaders speaking together, to challenge the current descent into protectionism,” he writes.
He has issued his battle-cry amid growing concern that the opponents of globalisation are not just shouting the loudest, but are now endangering world prosperity by succeeding in pushing up barriers to free trade. The Doha round of world trade talks collapsed in rancour in July, and many countries, particularly in Europe and Latin America, have started to pursue populist protectionist policies. Other countries are considering doing bilateral deals between themselves instead of participating in a global deal that includes most countries.
The Chancellor calls for “bold and concerted action” to restart the Doha round of trade talks, urging Europe, the United States, Brazil and India to break the deadlock by making far greater concessions than they have previously over farm subsidies, industrial tariffs and access to service markets.
The talks stalled because developing countries accused the developed world of not doing enough to curb farm subsidies, while developed countries accused developing ones of not doing enough to open their markets to their products.
His call to restart trade talks is backed by the leaders of a dozen of the world’s top companies, including BP, Wal-Mart, Vodafone, GlaxoSmithKline and Goldman Sachs, who insist that “political leadership is now essential”.
In a joint letter to The Times, the industrialists, led by Lord Browne of Madingley, the chief executive of BP, say that “millions of jobs are at stake. So too is the extension of international investment and the spread of knowledge, which are both vital to the success of globalisation and the fair distribution of its benefits.”
The rallying cry by Mr Brown and the businessmen is timed for the American mid-term elections tomorrow, in the belief that afterwards the Bush Administration will be politically freed to sidestep the increasingly powerful protectionist lobby and restart the talks.
Mr Brown fears that there is only a narrow window of opportunity for progress, since any deal must be agreed before the expiry in July of the fast-track negotiating authority granted to the US Government by Congress. Afterwards, it could become almost politically impossible for the United States seriously to participate in any significant talks for many years.
To push the urgency home, British ministers will embark on a series of visits to the big players to press them to have the political courage to make concessions.
Mr Brown will go to Brussels tomorrow to make the case for action to EU finance ministers. Ed Balls, the Treasury Minister, will travel to Japan to press the case with the new Japanese Finance Minister, while Alistair Darling, the Trade and Industry Secretary, will go to Brazil and India to urge them to help progress by reducing tariffs and opening up their markets.
To win the argument against the protectionists, Mr Brown calls for the setting up of a new “trade exchange”, bringing together leading figures from rich and poor countries to “expose not only the dangers of rolling backwards into unilateralism and bilateralism . . . but how much more the world can gain, and especially the poorest, by a globalisation that we can push forward together.”
The businessmen point out that trade has been the engine of world economic growth over the past half century and say that “without such trade living standards would be lower in the developed and developing world alike”. The view that globalisation helps the world’s poorest rather than hurts them is now embraced by development groups, such as Oxfam, which agree that free trade is essential to lifting people out of poverty.
Despite the gloom, Mr Brown insists that he is optimistic, because the opponents of globalisation have failed to put forward any positive or credibile alternative on how the world can prosper together. He dismisses them as “little more than the modern equivalent of Luddism, a negative backward-looking movement resisting necessary change”.
THE SIGNATORIES
Lord Browne of Madingley Chief executive of BP and a director of the microchip company Intel and Goldman Sachs, the merchant bank
Arun Sarin Indian-born chief executive of Vodafone. A director of the court of the Bank of England
Bernard Arnault French industrialist, chairman and chief executive of luxury goods companies Louis Vuitton Moët Hennessy and Christian Dior. Ranked by Forbes magazine as the seventh-richest person in world, worth $21.5 billion
Marcus Wallenberg Scion of Sweden’s richest family. Former chief executive of the investment company Investor AB and now chairman of Skandinaviska Enskilda Banken, the Swedish bank
Niall FitzGerald Irish-born head of Reuters, the communications group. Previously chairman and chief executive of Unilever, the Anglo-Dutch food group
Chuck Prince American chief executive of Citigroup, the finance house
Lee Scott Jr President and CEO of Wal-Mart, the world’s largest retailer
J.P. Garnier American pharmacologist, CEO of GlaxoSmithKline, the drugs group
Lloyd Blankfein Newly appointed chairman and CEO of Goldman Sachs
Paul Walsh Group chief executive of Diageo, the food and drinks company
