All models of trade are normative – not only do they say something about the way trade works, they say something about how the exchange of commodities should work. This is the case even when trade models are expressed in the scientific language of orthodox economics. This issue of ROAPE is published on the bicentennial of the abolition (in Britain at least) of the trade in African people to plantation owners across the Atlantic. For those who defended this ‘triangular trade’ that contributed centrally to industrialisation in northern Europe, the case was often made with reference to the imperatives of the market and the ‘efficiency’ of the slave plantation system. Perhaps this example, more than any other in the history of European empire and the predations it has imposed on other parts of the world, demonstrates how references to market exchange to justify regimes of accumulation can serve as powerful ideological devices. And, as the slave trade flourished in the late eighteenth century, the British abolitionist movement used the transnational social relations generated by the slave trade to argue that peoples in different parts of the world shared a common moral space defined by the fact that the consumption of ‘slave sugar’ in London was an act of complicity in what one can reasonably call a global crime against humanity. Indeed, transnational capitalist trade relations have proven to have generated a diverse range of progressive political mobilisations in Britain and beyond: the ‘free’ sugar of the early 1800s, the Fair Trade movement, the boycotting of sweatshop commodities, the Anti-Apartheid Movement's boycotting of South African goods, and so on. Trade is politics: just as capitalism is based in the social relations of the workplace, relatedly, contemporary circuits of commodities are not a result of the timeless workings of the market mechanism (however imperfect) but are premised on those very same social relations. It is very clear that now more than ever, trade is managed by (and often within) transnational corporations in an increasingly detailed fashion, commodities are massively infused with symbolisms of liberal consumer power, and the regulation of trade is strongly (but neither transparently nor straightforwardly) influenced by international business.
We can discern three broad political and theoretical approaches that aim to outline a general understanding of the market and its social functions: one liberal, one nationalist, and one broadly of the Left.
The Left has long held an equivocal attitude to international trade. Core economic texts of early capitalism, such as Adam Smith's The Wealth of Nations and David Ricardo's Principles of Political Economy and Taxation (which introduced the key concept of comparative advantage), opened the door (no doubt more widely than their authors would have wished) to policies of unbridled market forces in international trade. When this became the orthodoxy in the 1980s, socialist planning, and even mere economic nationalism were casualties. Yet Smith's and Ricardo's prime targets were not state initiatives in general but rather private monopolists who had been awarded their privileges by undemocratic monarchs.
When in the mid-19th century Friedrich List in Germany, and a host of followers and state practitioners, attacked the simplistic application of free trade, it was not so as to restore the power of monopolists and mercantilists, but to provide governments (which might well now be democratic, or at least populist) with the power to resist the economic depredations wrought by British-enforced free trade on their less advanced economies. What India, inside the British Empire, could not do, independent Germany, France and the US could: protect their infant industries. For an initial period (which could be quite protracted in large countries like the US and later China) this could involve a reduction in international trade while the internal market was developed. Eventually it became undeniable that economic benefits for the country (though not necessarily, depending on internal politics, all classes), could be obtained by wider opening to external trade, now on the basis of a more level playing field.
A focus on the ‘Imperialism of free trade’ (Lenin, 1917) and the consequences of the one-sided imposition of free trade inside colonial empires (or ‘informal empires’, as in Latin America or the middle-east) should not blind us to the beneficial, or rather the essential role, of trade in the economic development of small countries. But such trade needs to be part of a development strategy aimed at transforming the structure of the economy from one that is either peasant-based or skewed by colonial plantations or mines. Such a transformation will need to develop agriculture, but this can only be a starting point towards building a modern economy in which industry, agriculture and services all play a role. However one attempts to ‘think through’ how a more equitable and holistic trade strategy might be conceived, our foundations must be to address the multiple ways in which trade – local and global– serve to reproduce relations of exploitation and oppression: between nations,classes and genders.
Trade & Development
If we look at the experience of the newly industrialising countries (NICs) South Korea and Taiwan since the 1950s we note certain key elements drawn from earlier successful developers: a land reform breaking the power of a landed aristocracy (many of whom then became successful capitalists) and raising the productivity of small farmers; and state intervention that simultaneously protected the domestic market and subsidised exporters (illegitimate, according to the IMF and the World Bank – especially in combination).
The root of the problem for Africa is that the West won the battle of ideas, imposing its free-trade ‘structural adjustment’ policies from 1980. This battle was won less through the intrinsic merits of economic liberalism and more through the massive redistributions of power facilitated by the accrual of international debt by most African states. By contrast in Asia, the ideology of free trade fared far less well, certainly in China, India and Vietnam, but also in South Korea and Taiwan which were given special dispensation, being in the front-line of the Cold War. All these countries protected their domestic markets and used the state to plan economic strategy (including export promotion). This was in line with the well-known ‘infant industry exception’ to free trade, admitted even by orthodox economists. When they ceased to be infants they could begin to benefit from the free market – as we are currently seeing – and not because they have reversed their earlier policies.
By contrast, from 1980 Africa was forced to abandon planning and industrialisation and embrace the free market by the IMF, the World Bank and individual Western nations, while their economies were still in their infancy. In the 1980s Zimbabwe almost alone stood out against this trend, with semi-NIC policies which gave it growth of three times the African average, and (almost uniquely on the continent) without having to reschedule its debts. This ‘threat of a good example’ produced a suspension of programme aid from the USA and the UK, and in 1990 (despite still healthy growth) it succumbed to promises of a restoration of substantial aid (most of which failed to materialise) and liberalised. Africa was quite successful (comparable to Asia) between independence in the early 1960s and the late 1970s. Western ‘solutions’ have set it back at least 25 years.
The Articles
The [Fairtrade] movement's analysis of trade – that poor countries are prevented from trading by unfair rules, tariffs and subsidies – is wrong and its suggested solutions are routinely misguided. With a few exceptions (cotton in particular), rich nations' trade tariffs and subsidies do not significantly hurt developing-world farmers, and certainly not those in Africa. The products most African farmers grow are not subsidised heavily by Europe and the US, which concentrate their support on temperate crops such as beet and wheat (Beattie, 2007)
It is the contention of Paul Goodison that Europe's ‘new’ trade policy in fact exhibits continuity over several decades. In a wide-ranging article that takes up where his topical paper in our last issue (March, No. 111) left off, he argues that the Economic Partnership Agreements (EPA) negotiations, now in their final year, show a Europe determined to subordinate Africa (and parts of the Caribbean and Pacific) into a role not very different from when it formed parts of different European colonial empires. The non-reciprocity of the earlier Lomé agreements showed sensitivity to the requirements of countries in their early stages of development, whereas EPAs, using the pretext of WTO compatibility, see unbridled free trade with the EU as the bottom line, with a ‘development dimension’ much talked about but not coming through in many practical provisions. More important for Europe is that it gains free trade into African markets that still maintain tariffs with the US and the rest of the world (ironically because, unlike the EU, the WTO still accepts that free trade may not be in the interests of the least developed countries).
The following paper, also by Paul Goodison, may seem at first sight to be merely a technical paper on a corner of internal EU policy of little concern to its trading partners, but in fact it is of high political significance. Europe's Common Agricultural Policy (CAP) is well known to have required enormous subsidies to farmers and export subsidies to dispose of mountainous surpluses (that have depressed world market prices of wheat, maize, sugar, beef and dairy products). CAP reform is claimed to have ended all this, so as to ensure compatibility with WTO requirements, which, through a technicality agreed with the US, it does. However, it is obvious that if farmers are paid income support instead of inflated prices and if as a consequence the EU's output of inefficiently produced commodities continues at the same level as before (in fact in some cases output has increased!) then the trade outcomes are just as prejudicial. But the argument does not stop there: CAP reform is not merely part of the EU's strategy to keep the WTO off its back, it is at the same time part of a process of structural transformation of European agriculture and associated industry to raise quality and systematically shift European food-and-agricultural production to higher-value and higher-quality products (serving the ‘luxury purchase’ component of the market, not only in the EU but globally). As a byproduct this policy also intensifies competition in those areas which form part of the first stage of any agriculture-based developing country's strategy. From prejudicing Africa's agricultural production, Europe is now moving to prejudice its way out of agricultural dependence.
Jan Orbie's paper also looks at the political economy of European-African trade relations. Taking a broader overview, he charts a history of trade agreements from Lomé through Cotonou to the current EPAs. Orbie's interest lies in the developmental assumptions that underpin changing trade politics, and it is here that we can see how recent gestures towards rethinking trade agreements in which it is declared that Europe has gone beyond a ‘market fundamentalism’ are misleading and problematic. The neoliberal drive behind EPAs is, in fact, accompanied by limited transition/adjustment phases and aid packages which afford no real developmental ‘space’ (Wade, 2003) for African countries.
Taken together the articles in this special section should leave us extremely concerned about the state of trade politics and the prospects it creates for African economies. Subjected to powerful Northern state agendas, compelled to liberalise in a massively uneven global political economy, and currently unable to generate strong ideological counter-currents to the neoliberal framing of all trade discussions, notions such as ‘trading out of poverty’, ‘making globalisation work for the poor’, and so on, seem naïve at best and positively misleading at worst.
This issue also carries three other articles. Patricia Daley analyses the peace process in Burundi, highlighting the liberal assumptions behind the negotiation processes. She offers a detailed account of the way negotiations have been constructed, highlighting the elitist nature of negotiations. Not only are negotiations heavily ‘overdetermined’ by the agendas of external and international mediators and other actors; also the process is premised on the idea that ‘leaders’ can – through a process of mutual concession and agreement – forge a political pact that will end widespread violence. For Daley, not only do negotiations suffer from the Machiavellian game-playing of those at the table; furthermore, and more profoundly, this form of peace-making fails to take into account in any way broader questions about social justice or peacemaking as a popular act. Relatedly, Anthony Vinci analyses the ways in which warlordism has been conceptualised in regard to Africa. Vinci's meticulous analysis reveals two striking points. First, that modern warlordism is characterised by a paradoxical relation to the state: both its protagonist and dependant, warlordism is fundamentally opposed to national societies and state purview, but the maintenance of this opposition is the prerequisite for a warlord organisation's survival. Second, warlordism is a unique form of social organisation: the forms of violence, leadership, and plunder that reproduce warlords constitute a complete rejection of any other forms of sociability. For Vinci, the violence of warlord organisations are not politics by other means; rather violence is a demonstration of warlords' complete autonomy and separation from all other political communities. Finally, Rebecca Davies analyses the fluidity in Afrikaaner identities in South Africa. Using a Gramscian framework, she argues that neoliberalism has generated varied responses and divergences within a previously fairly stable and homogenous social class. She provides evidence of this fluidity in the ways that Afrikaans-speaking capital has aligned itself with the South African state.