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Free trade more important than ever in a year of momentous events

Free trade more important than ever in a year of momentous events

You won’t be surprised to know that Glasgow Chamber of Commerce is a consistent supporter of free trade, not least since the formation of the Chamber in 1783 came only seven years after Adam Smith - through his academic work at Glasgow University and then ten years of writing in Kirkcaldy - published ‘The Wealth of Nations’.

I am reflecting more profoundly on the arguments in support of free trade following the historic events of 2016 – Brexit and the election of President Trump.

The week after the British people decided that the UK should leave the European Union, a delegation from the Chamber was in Milan signing a deal with the British Chambers in Italy to promote trading links between Glasgow business and companies in cities across Northern Italy.  

Now it so happens that next week, a week after the American people decided to elect Donald Trump as their president, we are leading a group of Glasgow companies to do business in New York. We are doing so on the back of another deal, signed with Manhattan Chamber of Commerce.

Out of opting to leave the European Union comes a vigorous debate about the importance of having access to the European single market and the relative costs opponents perceive in having to accept the free movement of people as an entry ticket to that market.

Out of the Trump presidency decision comes a broadly mercantilist proposal to reject free trade agreements such as the North American Free Trade Agreement and the Trans Pacific Partnership as damaging to jobs in the United States - even if they deliver cheaper goods to American consumers.

It would appear that there is a job for us to do in the Chamber to refine our messages in support of free trade. Globalisation has undoubtedly pulled millions of people in emerging economies out of abject poverty and is generating a growing professional and technical class in those countries, like China and India, who are potential customers for Western goods and services.

But it is equally obvious that the economic benefits are not so clear to voters in the developed economies. That is perhaps not surprising. Lower costs for goods and services are not as easily spotted as the stagnation of incomes for so many families over many years, the loss of jobs and industry in many communities and the growing inequalities in rewards between those with the skills to exploit globalisation and those who do not.

So I would argue that we have a task on our hands. The Chamber has a long track record of arguing against barriers to free trade in whatever form they come and we will continue to do that. We may have to be more vocal and more thoughtful in making the case for free trade.   And we will redouble our efforts to expand our network of connections with Chambers overseas and the overseas membership of our Presidents Club.

But we will also do more to understand how the Chamber can help improve the effectiveness of actions which help those in our city who have experienced the downside of global trade. We have traditionally done that through championing the economic development plans for the city and supporting initiatives, both local and national, which aim to spread the benefits of a growing economy to as many of Glasgow’s citizens as possible. 

Our support for the City Council’s Glasgow Economic Leadership is an example of the former, and our promotion of the Scottish Government’s Developing the Young Workforce reflects the latter. 

But there is clearly so much more needing to be achieved if we are not to risk further damage to the support for free trade.  If we don’t work harder to ensure everyone benefits from growing trade and growing economies then there will be many more examples to come of voters rejecting the basic principle of free trade.