Readers response to the 1975 Lima Declaration that destroyed Australian manufacturing
A good comment on the effects of unregulated free trade. We see – every day – more evidence that international corporations continue to white-ant national sovereignty. The latest example is the TPP which is frightening in its implications.
It has been said that the Lima Declaration (although not a treaty and not binding) was written to preference developing countries, so that they might grow economically and socially. 40 years later, Australia has been largely de-industrialised but are developing nations actually any better off? Certainly China has benefitted, as have some other Asian countries that might have been classed as ‘developing’ 40 years ago (eg Singapore, Taiwan) – but the poorest countries in the world remain undeveloped. So it can be said that the Lima Declaration has not been effective, broadly, in bringing development to where it’s most needed.
We might ask then, why the rush to even more liberalisation of trade? Is it well-meaning but incompetent government agencies pushing this line, to help out the world’s poor? No. It is not.
Unmitigated free trade has failed to deliver the goods for most of these countries. Senior bureaucrats know this. The push for no-holds-barred free trade now comes solely from big business, interested in nothing more noble than increasing profits and shareholder returns.
If Australia is to re-industrialise, we need a sensible industry policy that doesn’t shy away from ‘picking winners’ because some libertarian policy-wonk says it’s unfashionable. Or because international corporations might be disadvantaged.
A sound industry policy would not seek to take us back to the 1970’s, but would recognise high tech industries and services that will be important in the 21st century. It would protect these industries in Australia and offer tax and other incentives for their development. It would also recognise Australia’s potential as a food and fibre manufacturer, given our ability to produce the raw materials. It would assist in developing world-class manufacturing facilities that use technology to efficiently process our food and fibre into products that the world wants. Free trade relies on ever cheaper labour to deliver inexpensive product to consumers. We need to rely on technological and management innovation, supported by national policy.
Unfortunately, though, I can’t see any of this happening soon. Australians have been conditioned to accept the dogma around how ‘free trade benefits us all’ (sic) too deeply for trade matters to decide elections.
Again – congrats on an excellent article. – contributed