For a quite long time now there had been somewhat of a consensus amongst British politicians that free trade is beneficial. This was reflected with bills like the cross-border taxation Act passing 86 to 7 and the Freeport motion receiving wide support from both the Left and the Right.
At a recent questions session the Work , Skills and Labour Secretary /u/Stalin1963 seems to have taken a stand this consensus by stating that
>”The ‘fruits of globalisation’ are being offset by rapid urbanisation, increasing economic inequality, increased poverty and homelessness, and increased deprivation. The rapidly increasing transnational movement of money and jobs to cities and countries where costs are cheapest is contributing to the urbanisation of poverty. Unfortunately, the good… is being masked by the vast discrepancies and inequalities that are of a much larger scale.”
This is starkly contrasted by Labour’s manifesto commitment to free trade. Yet the Work Secretary was not the only recent cabinet Minister to support protectionism with u/KalvinLokan arguing for protectionism in defence procurement while a member of government . On the far-left Solidarity members have argued for protectionist measures to be implemented with the party choosing to back an almost complete reversal of the Cross-border Taxation Act.
As of today anywhere in between 55 and 80 percent of all food products we consume are imported ,while exports and imports combined equate to around 2/3s of our GDP . It would be utterly foolish for a British government regardless of its political allegiance to gamble that away by pursuing mercantilist policies and running the risk of a trade war in the name of attempting to bring back “‘old’’ industries or to gain some negligible amount of perceived leverage.
In fact we don’t even need to dabble in hypotheticals because the negative impact of protectionist policies are well documented. In the 18th and 19th centuries a series of protectionist measures known as the Corn laws caused drastic rises in the prices of grain and ultimately were a contributing factor to the famine in Ireland that set the island back decades.
In the US the pursuit of protectionist tariffs decimated economic growth , forced many farmers out of business all the while sensitive industries like freight hit unprecedented lows Moreover tensions with Canada and the European Union lead to the souring of relations between longtime allies and disruptions to supply-chains that put many working-class people out of business , those who the left claim to support.
According to one report the conflict is claimed to have cost the United States 300 thousand jobs, moreover, the wealthiest households were found to spend 0.3% of their after-tax income on tariffs , while those in the bottom 10% spent 5 times that. In the United Kingdom the impact of such policies would likely be far greater as the percentage of imports to GDP is roughly twice that to the US here in the UK.
Contrast that with the benefits of free trade and globalisation. Free trade allows Britain to specialise and to produce specialised goods and services that it can later exchange with the rest of the world.At the end of the day the benefits of comparative advantage allow us to generate more value than we would have otherwise. To claim that we can somehow create a stronger economy by repatriating the industrial base is like to say that one would prefer the poor to be poorer if it meant the rich were less rich….