If we were told that from now on all major decisions by our government had to be vetted and okayed by the US Congress there would be national uproar. After all, haven’t we fought in two world wars to maintain national sovereignty?
But our national sovereignty is draining away more each day. No, not through those international treaties the rednecks get all excited about, but through so-called free trade agreements. These can be either multilateral through the WTO or bilateral like the current agreement being hurriedly negotiated by Australia and the US.
The problem is that such agreements aim at removing all restraints on trade, and sooner or later almost anything can be interpreted as such. In particular, government actions for social equity purposes (like the Pharmaceutical Benefits Scheme) or environmental protection (like a species quarantine regime) can be seen in this light.
There is some irony here, and some simple politics. For instance, Australia is now weak in manufacturing, thanks to the demise of protection, which has decimated the working and lower middle classes, who tend, or at least tended, to vote Labor. While primary industry, which is the backbone of the conservative parties, has been made internationally competitive largely through government support programs like those run by the CSIRO. Indeed, it was the mining industry, with its international linkages, that pushed the whole neo-liberal (in Oz, ‘economic rationalist’) agenda so hard, while the manufacturing sector as a whole slept.
The principle of free trade is sound. Production should be carried out according to actual comparative advantage, no matter where. But given the complex and political character of the global political economy, and its various institutions, this is in fact a recipe for consolidating existing inequalities in economic power. The developed nations, of course, originally got that way by protecting their own manufacturing sectors, and then decided everyone else should be subject to a free trade system. The Asian Tigers – at least until they got clobbered by the global finance system still run from London, New York, Tokyo, etc – were succeeding though their own version of industry protection through strong government. The extent to which the developed nations do actually open their own manufacturing sectors to free trade tends to reflect their perception that their own economic interests have shifted into post-industrial sectors like services and finance.
Australia is in some ways a developed country, but in other ways it resembles more a developing economy. This is a tricky situation, and we should tread warily to maintain the careful balance needed to keep our privileged way of life. Handing our key decisions over to a bunch of American econocrats is not going to do that.
In fact, if we want to give up our national sovereignty we should do it properly and demand a world government. At least that way everyone would be in the same boat.