Rishi Sunak – 2017 Parliamentary Question on Reducing Protectionism
The parliamentary question asked by Rishi Sunak, the Conservative MP for Richmond, in the House of Commons on 6 July 2017.
I thank my right hon. Friend for giving way and for his powerful and optimistic speech on free trade. On reducing protectionism, does he agree that leaving the customs union will give us the ability to reduce import tariffs on many goods that we do not produce here at home, which will reduce costs for ordinary working families and benefit many developing countries by helping them trade into prosperity?
Dr Fox
That is an important point. At this morning’s International Trade questions, we made the argument that being outside the common external tariff will give us freedoms to help many developing countries in a way that we are currently unable to. I hope that that will act as a spur to others taking similar measures, because we will encourage poorer countries to trade their way out of poverty and become less dependent on international aid programmes. I do not think that that is a party political issue, but the question is how best to achieve it in practice.
On the progress that has been made, we have reduced poverty levels to their lowest in history. As the world’s emerging economies have liberalised trade practices, prosperity has spread across the globe, bringing industry, jobs and wealth where once there was only deprivation. According to the World Bank, the three decades between 1981 and 2011 witnessed the single greatest decrease in material deprivation in human history. It was a truly remarkable achievement.
The Leader of the Opposition has accused the Prime Minister of following “free trade dogma”. He went on to say that this has often been pursued at the expense of the world’s most fragile economies. In fact, any economist worth their salt can see that free trade has been one of the most potent liberators of the world’s poor. Let us take India as a specific example. In 1993, about 45% of India’s population sat below the poverty line as defined by the World Bank. By 2011, it was 22%—too many, but a phenomenal achievement. It is no coincidence that, in the intervening period, India had embraced globalisation and started to liberalise its economy. It is hard to imagine an international aid programme—even one as generous as our own—that would or could have been so effective on its own.
Sadly, it is also easy to find examples of where a lack of free trade has harmed the most vulnerable. If we want to see the contrasting results of open and closed economies, we should look across from China to the Korean peninsula, where so much attention is focused today. In 1945, both North and South Korea began from a very similar base, but while South Korea was more embracing of open trade and free markets, despite any shortcomings, Pyongyang turned inwards, with the tragic consequences for its citizens that we see to this day. [Interruption.] I am happy to give way to the hon. Member for Bishop Auckland (Helen Goodman) if she thinks that North and South Korea enjoy the same living standards today.
