Comment: Small step on the road to a global economy

Here are a couple of questions about the World Trade Organisation's latest coup - last weekend's landmark agreement between 68 nations to free up their markets to international competition in telecommunications. Is it really as significant as it looks, and if it is, and can be followed in short order with similar agreements covering the freeing up of trade in other services, goods, labour and capital, what is the point of regional trading blocs like the European Union?

The answer to the first question perhaps lies in the second. Yes, it is important, a hugely significant staging post in the development of a truly global economy, but we are still a long way from a global version of the free trade union that typifies the EU or the United States. Indeed to regard trade agreements of this type as a substitute for the European Union, as many Euro-sceptics do, is a distinctly Anglo and highly misleading way of looking at these things.

For its roots look back to the days of Gladstonian Liberalism when Englishmen, and yes, quite a few Scots, too, were able to travel the world freely without the benefit of passport or calling card. Britain's industrial and imperial supremacy made them natural champions of free trade. The John Redwoods of these islands would like to believe that a suitably modernised version of this glorious past is still possible - that if you can win the global argument for free trade it would be perfectly possible to exist outside the Union with its expensive social and political obligations. Logically he must be right, for a global free trade economy is just a larger version of the European one; the former would supersede the latter. But here's why he's so wrong in practice. The case is best put by Peter Sutherland, managing director of Goldman Sachs International and a convinced European. He's also both a former European Commissioner and former chairman of the WTO, so in a sense he straddles the argument.

His starting point is that the telecoms breakthrough would never have happened at all but for the precedent already set by the EU in liberalising its telecoms markets. The EU, then, is not an irrelevance in the process of globalised free trade but rather a vital catalyst. His other point is that the EU is qualitatively different as a trading bloc from the sort of inter-government accords that make up WTO initiatives and the General Agreement on Tariffs and Trade (Gatt). This is largely because the EU has supra-national powers which override national legislation, enabling it to enforce free trade principles.

For the moment the WTO can only dream of the level playing field environment that the EC imposes on competing nations and businesses. The WTO can trust only to a disputes procedure, which in turn relies on the goodwill of its 68 signatories. Add to that the opportunity for fiscal and cultural discrimination among nations, and notwithstanding the good intentions of the WTO it can readily be seen that the EU is a long way from being made redundant by these very encouraging trends.

This is not to belittle the nature of the accord. Telecoms revenue forms more than 2 per cent of global gross domestic product and it's growing exponentially. One of the reasons so many nations were so willing to sign up to free trade for this industry is that those that do not, those that close their markets off to the communications revolution, will be put at a serious competitive disadvantage to those that embrace it. All the same, what has been achieved here is nowhere near as deep as what has already been put in place in Europe. It will still take decades to mirror the EU and US positions globally.

Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before