Why I agree with Peter Mandelson on globalization: the case of the EU-India Free Trade Agreement
Guest post by John McDonnell MP
Yesterday, in a parliamentary debate on UK-India trade, I found myself in the somewhat unusual position of quoting Peter Mandelson approvingly. Writing for the FT in advance of the major IPPR report on globalization (published today), Mandelson argues:
[L]iberalisation of trade and financial markets requires a careful parallel process of building domestic institutions and capabilities. It is not the absolute level of openness in the global market that matters for growth so much as the fact that it is governed by shared rules and sustainable practice.
Sadly, when it comes to the EU-India Free Trade Agreement (FTA), negotiations on which began when Mandelson was still EU Trade Commissioner, the reality falls a long way short of his aspiration.
As a result, many millions of Indians stand to be driven towards poverty and hunger.
The sudden removal of import tariffs, especially on dairy and poultry products, and the consequent flood of imports from the EU, is likely to have a devastating effect on millions of marginal and landless farmers, who will suddenly find their markets swamped by produce – notably skimmed milk and poultry meat deemed unsuitable for the European market – which remains heavily subsidized through the European Common Agricultural Policy.
The European Commission’s own Sustainability Impact Assessment calculates that the FTA may be of benefit “in the long run to those “who are able to participate in evolving supply chains“, but it acknowledges that “integrating small farmers and producers into the supply chains is a daunting task which is only possible through domestic policy measures only.” A subsequent Right-to-Food Impact Assessment, conducted in 2011 by NGOs, came to very worrying conclusions about the impact of the FTA on the Indian poor, some 27% of whom already live with chronic hunger.
Similarly, if multi-brand retailing is suddenly and without safeguard opened up to EU retailers such as Carrefour, Metro and Tesco, 1.8 million jobs may be created, but at the cost of up to 5.7 million people working as street vendors.
In other words, Peter Mandelson’s condition for good globalisation – well-developed “domestic institutions and capabilities” which allow the poor to engage on something like equal terms – has clearly not yet been met in the case of this EU-India FTA.
This is precisely why the European Parliament resolved, in December 2010, that the European Commission should carry out impact studies on human rights in addition to those on sustainable development. To date, the Commission has completely failed to act on this resolution, even though the FTA is due to be agreed and ratified by member states during 2012.
The European Commission currently appears unwilling to listen to the views of its own Parliament, so it is up to the UK Parliament to ensure that the human right are not trampled on in the rush towards global trade.
I reiterated this call for a full Human Rights Impact Assessment in parliament yesterday, in support of a broad range of EU and Indian civil society organisations (including Traidcraft), who are doing the same.
In his FT piece Peter Mandelson goes on to say:
Globalisation is a means, not an end. This way of seeing things challenges equally the political right and left. The anti-globalisers of the left have always underplayed or ignored what is good about the expanding reach of global markets by focusing on the (legitimate) grievances of the short-term losers. The right has too often shrugged off the negative social effects of global markets as unavoidable or even a price worth paying for the benefits of ‘liquidity’.
Mandelson’s analysis may be astute, but it skirts round the brutal reality – that these “short term losers” are hundreds of millions of men, women and children going hungry for want of a fair free trade policy, and for whom being a “short term loser” can be the difference between life and death. These people are as much a part of the 99% as those now occupyingSt Paul’s.
Time is short. I hope we can build a coalition for the defence of the Indian 99%.
John McDonnell is the Member of Parliament for Hayes & Harlington. You can read his full speech in the UK-India Trade debate here. If you would like to help, please ask your MP to sign John’s Early Day Motion 2645, calling for a Human Rights Impact Assessment on the EU-India Free Trade Agreement.
(This article is cross-posted from Liberal Conspiracy, though we’ve got a slightly fuller version.)