The UK should adopt a free trade policy towards developing countries


In his recent Guardian article, David Cameron, the former UK Prime Minister and newly appointed Chair of the Commission on State Fragility, Growth and Development, argued that it is right for the United Kingdom to continue to give aid to developing and unstable countries. Mr Cameron argued that it is the responsibility of the UK government to give aid in order to support developing countries as not only is it the moral thing to do, but it is also in the interests of the UK to do so.

Following on from Mr Cameron’s article, I would like to argue for a better way in which the UK can help less developed countries and also advance its own interests: free trade.

As the UK prepares to leave the European Union, it gives the government an unprecedented opportunity to examine its trade policy and to forge new free trade agreements with the EU and with the rest of the world. Free trade has brought economic prosperity and lifted millions of people out of poverty in a way which is unmatched in human history. Free trade deals not only benefit all countries involved economically but also promote peace and goodwill between those countries. Therefore, the UK should aim to enter into free trade agreements with countries all over the world.

However, the newly formed Department for International Trade might face opposition- especially from developing or fragile states- in the form of protectionism. If such a situation were to arise, the UK should pursue a policy of unilateral free trade with these less economically developed countries. It should do so for two main reasons.

The first reason is that it is the morally right thing to do. As mentioned above, free trade brings economic prosperity to all parties involved. As a result, if the UK removed tariffs on its imports from developing countries in regions such as Africa, this would be incredibly beneficial for some of the poorest people on the planet.

To illustrate this point, let’s think about coffee and the EU’s protectionist approach. A 7.5 per cent tariff is imposed on roasted coffee from Africa IN EU countries. However, non-decaffeinated green coffee attracts no such tariffs. Such protectionist policies keep African countries trapped in a situation where they can only realistically export raw materials; it prevents them from adding value to their produce.

Pursuing a policy of unilateral free trade with the developing world will open up new markets in the UK for producers from these countries. Rather than simply selling raw materials, they will be able to add value to their produce and create ever more specialised and sophisticated products. This will create more jobs and increase prosperity in these countries. Embarking upon unilateral free trade will help to lift some of the world’s poorest people out of poverty and will help to bring prosperity and stability to developing and fragile states. It is the morally right thing to do.

The second reason why the UK should consider unilateral free trade with less economically developed countries is that it would benefit the UK. Removing tariffs on imports will encourage producers in these countries to export more of their products to the UK. This will result in cheaper goods for consumers and businesses. As a result, people in the UK will be wealthier. They will have more money to save and to spend on other products. Lower prices on imports- and the increase in consumer spending which would result- would also be very good news for UK businesses. It would allow them to hire more staff, thus reducing unemployment. It would also allow them to spend more money on research and innovation meaning that they create new products which people in the UK- and the rest of the world- want to buy.

Furthermore, although immigration and the UK’s generosity should be viewed positively, they are politically controversial. Increased economic prosperity and security in developing countries would reduce the burden on the UK. As a result, unilateral free trade with less economically developed countries would reduce the UK’s international aid budget and help to reduce the pressure on public services.

Unilateral free trade with the developing world would bring prosperity and security to some of the poorest people around the world and would also be beneficial to the UK. The International Trade Secretary Dr Liam Fox, should seriously consider adopting such a policy.

Ben has worked in investment banking and management consultancy and has an undergraduate and advanced degrees in law, economics, and history. Follow him on Twitter: @BenRamanauskas

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The views expressed in this article are that of the author and do not necessarily reflect the views of Conservatives for Liberty