Free trade and backward Britain
Is Britain becoming a protectionist country? Sadly, the answer seems to be Yes.
Of course, the British political class likes to talk a good game on free trade but as Britain slips ever more inexorably into decline other issues are coming to the fore.
Anti-immigration prejudice and scaremongering – not economic growth – are a growing priority for all Britain’s political parties. I covered the story of the forthcoming EU-India trade agreement here.
Britain’s government is deeply split over the EU-India “Free Trade Agreement” because it clashes with a moronic pledge to limit or “cap” non-European immigration.
Britain’s newly emerging status as a protectionist country is making ripples.
The EU-India trade deal negotiations are still ongoing with the aim of having an agreement to be signed off at a December 10 summit with the Indians.
The European Commission has asked for comments from EU governments on a negotiating position hammered out with the Indians over the summer by the end of October – the British Cabinet begins talks this week.
Britain, which likes to flatter itself that it is on the free trade wing of the EU, has balked at Indian demands for increased mobility for its skilled workers.
It’s all about something called “Inter-Corporate Transferees”, or ICTs in the jargon, people who are allowed to work in the subsidiaries of their companies in the countries that have signed up to the deal.
In the context of the EU India deal, European companies will be the main beneficiaries. This “mode 4” part of the deal comes from the GATS and has been inserted into all trade deals since January 2000.
But India wanted something more in return for reducing its tariffs on European products and for lifting restrictions on businesses providing services or bidding for public procurement contracts.
Under the current negotiating position, individual Indians, skilled professionals only, who have a contract in the EU will be able to come and work in European countries.
People must have a high level of qualifications, an existing contract in the bag and the length of stay will be limited to year, according to EU sources.
“The numbers of Indian professionals that may enter as contractual service suppliers and independent professionals are still under discussion and any limits we set will be matched by Indian restrictions on EU business access to their markets,” said a source close to talks.
“The more forward Britain is will be vital in the negotiations as it is an issue of great interest to India. The more forward we are, the more we can India to move on tariffs and restrictions on European companies. There are difficult political decisions ahead.”
Not much to ask for a deal worth €4.4 billion a year to the EU’s flagging economy – but too much it seems for backward Britain and others.
One diplomat told me: “Developing countries want freedom for their people to work here in Europe in return for allowing European companies to come in and clean up in their domestic markets. That’s what free trade means.”
It is an indicator of how inward-looking, backward and protectionist the British elite has become that caps on immigration are now the policy of all political parties in the country.
The economic benefits of free trade are huge but they are outweighed by an increasingly fearful elite that uses immigration as an excuse for its own decline, its failure to provide basic infrastructure and absence of a future orientated narrative from Britain.
Immigration, all British politicians agree, is a big problem. It is blamed for public dissatisfaction with the state, under resourced public services, low wages and a loss of national identity.
The British public has good cause not to be satisfied. The political class has let people down, not least by taking a “not in front of the children” attitude to having an immigration debate in public. Immigration is never properly discussed and the issue is a spectre to be rolled on in a “something must be done” bidding war at election time.
Voters, we are told, (Gordon Brown expressed this publicly during the last election) are bigots. Immigration must be kept out of their hands, anti–free speech laws and migration limits are needed to stop mobs of bigoted voters lynching immigrants – or that’s the misanthropic fantasy. Today’s anti-immigration policy is as much about further insulating decision-making from voters and mobilising the middle class to sneer at the oiks as it is about scapegoating foreigners.
Also pernicious, is the claim that immigration, leading to alleged overcrowding in cities or towns, is responsible for overburdened and creaking infrastructure. What a lie this is. The failings of Britain’s infrastructure are clearly those of the state and the failure of the political class to invest in, plan or to be accountable for services.
As for low wages… Britain’s historical defeat of the organised working class is largely responsible for pushing wages down. The minimum wage has also tended (in catering, care, retail and agriculture) to equalise pay downwards over time. If anyone is to blame for wages decline, where it exists, then it is British employers.
Constructing a new British identity around blaming immigration for decline will confirm Britain as backward, inward place that, like its elite, dodges the real issues and hides from the world.
A country that puts fears over a few thousand migrants before the economic opportunity of the century is going nowhere fast.
The EU-India deal offers a choice for Britain and other European countries. They can look outwards and build something for the future out of new economic dynamics, including flows of people. Or, they can turn inwards while hiding their loss of nerve and purpose behind an unpleasant, pathetic, culture of blame.
It is make your mind up time.
