Commentary

Free Trade: A Potent Weapon Against Terror

This week’s Asia-Pacific Economic Co-operation summit in Bangkok provides President George W. Bush with an opportunity to promote free trade as a weapon in the fight against global terrorism, something that his administration has so far largely failed to do. An unequivocal commitment to free trade would erode the terrorists’ hateful claims that the US and its allies intend to keep Muslims poor and weak.

Formed in 1989, before the fall of the Berlin Wall, APEC has thrived in the post-Cold War environment, with the number of member nations growing from 11 to 21. There was once some hope that APEC could become a vehicle for liberalising trade throughout the region, creating a kind of super-NAFTA based on free and fair trade. The hope remains, but the prospects for that happening seem even stiffer, after the great divide between the rich and poor nations helped scuttle last month’s Cancun World Trade Organisation talks. The after-effects of that collapse hang over the APEC meeting.

The recent attempt by the Association of South-East Asian Nations to establish a free trade zone in South-East Asia is an example of the frustrations of developing countries. The ASEAN initiative would create an EU-like economic community by 2020, with particular attention on liberalising 11 key sectors, including tourism and electronics, by 2010. The 10 members of ASEAN, eight of whom are also members of the larger APEC group, are no doubt trying to go around the selective free trade policies (meaning, unfree trade policies), practised by several of the larger APEC nations, the US and Japan, especially.

Protectionism in agriculture and textiles is especially galling. The Bush administration’s decision to expand America’s shameful and counterproductive agricultural policies is certain to draw attention — and scorn — at APEC. And rightly so. Agricultural price supports and other anti-market measures cost US taxpayers more than $20 billion a year while simultaneously undermining America’s credibility abroad. For the US to preach the merits of free trade, and then punish developing nations that are striving to open their economies, is the worst kind of hypocrisy.

In the absence of a truly free and fair worldwide trading regime, the prospects for which seem even more remote following the collapse at Cancun, Americans should look upon the ASEAN free-trade initiative not as a threat, but as a good.

Unfortunately, some US policy-makers view the ASEAN initiative as a challenge to American dominance in the region. This attitude is in keeping with a broader inclination to look sceptically on any measure of independence by other countries. To make matters worse, Washington is using the promise of preferential trade agreements and the threat of economic sanctions as a perverse carrot-and-stick strategy for fighting terrorism.

Consider this: Bush has celebrated recent anti-terrorism successes in the region, including the arrest of terrorist kingpin Hambali. His capture, a joint operation involving the Royal Thai Police and US officials, following an eight-month manhunt, marks one of the most important breakthroughs in the two-year-long war on terrorism. Bush may reward Thailand’s support by announcing plans to launch bilateral free-trade negotiations next year. (Washington has negotiated trading pacts with Singapore, and hopes to close a similar agreement with Australia by the end of the year.)

But free trade should not be seen merely as a bargaining chip. Free trade is a good, contributing to better living standards for all peoples. Unfortunately, the very forms of beneficial voluntary person-to-person contact that are instrumental in defeating terrorism, and that are celebrated by the free-market trade, private investment, tourism, cultural exchange — have come to a near standstill. Reversing these trends should be a primary objective in the campaign against terrorism.

During the Cold War, the US stood ready to defend South Korea and Japan from their communist neighbours because it was in America’s interest to do so. The closing of Asian economies to the world as dictated by communist ideology would have been ruinous for the countries in question, and for the US.

Likewise, a global holy war between peoples of different religious, ethnic, or cultural background would represent a victory for the Hambalis and Osama bin Ladens of the world. Accordingly, we should look hopefully to the very forms of peaceful and co-operative dialogue represented by APEC, and we should do nothing to discourage the spread of economic engagement and liberal democracy that these institutions celebrate.

Christopher Preble is director of foreign policy studies at the Cato Institute.