Leading article: We should welcome China's bold step to end economic isolation

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The Independent Culture
THE DEAL struck yesterday to get China into the World Trade Organisation is good news for the country, but even better news for the rest of the world. Before the announcement that the most significant emerging economy would end its economic isolation, it looked as though the pall of failure were hanging over the WTO's forthcoming annual meeting in Seattle.

It may still prove to be too difficult for the bickering blocs of the US, Europe, Asia and the developing nations to agree on anything of substance at that meeting; there are some terrible trade rows brewing. But at least there will be new momentum on the path to free trade, a process to which the bicycle theory - if you stop cycling, you fall over - certainly applies.

Free trade, more of it and ever freer, is essential. To listen to the trendy campaigners and aid organisations, you would think trade were a cynical device for evil American multinationals to exploit the world's poor. This flies in the face of a mass of accumulated evidence that every country that has managed to escape from poverty has exported its way to success. Equally, the hard evidence is that multinationals are among the best employers in a poor country, paying higher than average wages, offering better working conditions and observing stricter environmental standards.

The rules of world trade embodied in the WTO are indeed unfairly skewed against the poor. The body is dominated by the big, rich nations and serves their interests best. But the real cynics are the anti-trade campaigners planning to turn the Seattle talks into a cacophonous demonstration. Although they claim to champion the poor, the political pressures these well-meaning campaigners are applying to their home governments threaten progress on opening developed country markets to the developing countries.

Unfortunately, they have had some success already. The EU is holding out for imposing labour standards through trade agreements, a shameless device to protect the European market against cheap imports in the guise of compassion for child labourers. If the Europeans insist, the developing countries will walk out of the talks. Nobody wants to see children working in factories, but trade restrictions are not the way to improve matters. And income growth depends on there being more trade, not less.

Few politicians have been willing to make themselves unpopular by spelling out the truth that trade is good. Clare Short is an honourable exception, but DTI and Treasury ministers have not distinguished themselves by supporting her. American administrations have been far better than the Europeans at facing down domestic protectionist pressures, and abiding by international trade rules, but their attitude is less assured now that they have a presidential election campaign to worry about.

That makes it all the more welcome that the China deal is on the cards, even though there will be intense lobbying against it by US textile unions alarmed at the prospect that American consumers may be able to buy cheaper clothes. The WTO needs to have this success under way in time for the Seattle conference at the end of this month. This may be a flawed organisation, like the trading system that it oversees, but the world economy will be a poorer and unfairer place without a new round of talks on free trade.

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