Liam Fox’s Case for Free and Open Trade

COMMENTARY Trade

Liam Fox’s Case for Free and Open Trade

Jul 12th, 2020 3 min read
COMMENTARY BY
Anthony B. Kim

Research Manager and Editor of the Index of Economic Freedom

Anthony B. Kim researches international economic issues at The Heritage Foundation, with a focus on economic freedom and free trade.
Liam Fox arrives at the Houses of Parliament in central London on June 2, 2020. JUSTIN TALLIS / Contributor / Getty Images

Key Takeaways

The United Kingdom on Wednesday nominated Liam Fox to be the next director-general of the World Trade Organization.

He underscored his belief “that if we want to keep the WTO relevant and vibrant our task is clear: Update. Strengthen and reform.”

The nomination of Fox signals the intention of the U.K. to reclaim its historical role as a pillar of the international trading system.

The United Kingdom on Wednesday nominated Liam Fox, former U.K. secretary of state for international trade, to be the next director-general of the World Trade Organization.

Accepting his nomination, Fox, a passionate advocate of free trade and a pro-Washington candidate, underscored his belief “that if we want to keep the WTO relevant and vibrant our task is clear: Update. Strengthen and reform.”

Indeed, the longtime friend of The Heritage Foundation highlighted the fundamental principle of open trade in his 2018 Margaret Thatcher Freedom Lecture at Heritage. Fox made an unambiguous case for free trade by pinpointing:  

[T]rade is not an end in itself. It is a means to spread prosperity. That prosperity underpins social cohesion. That social cohesion in turn underpins political stability, and that political stability is the building block of our collective security. It is a continuum that cannot be interrupted without consequence. … 

The structures of the international system may not have caught up with the modern world. But that is cause for reform and renewal, not rejection. The U.K. and U.S. are ideally placed to work together to modernize, and make the international rules-based trading system work better.

Not surprisingly, history has clearly proven that trading freely and expanding the freedom to trade are the cornerstones of the most pragmatic economic strategy for people all over the world.

No single nation has the natural resources, infrastructure, and human capital in sufficient quantity and quality to enable the standard of living to which developed nations have become accustomed and to which developing nations aspire. And so, people trade.

Furthermore, as The Heritage Foundation’s data-driven annual Index of Economic Freedom documents, people in countries with higher degrees of trade freedom tend to enjoy higher per capita incomes, more food security, enhanced political stability and social progress, and a better track record on protecting the environment.

In a highly multifaceted global trade and investment environment, open and free trade is a constantly evolving phenomenon and process. The temptation to seek short-term advantages through protectionist measures abounds and has been increasing. Defending and advancing trade freedom is more critical than ever, particularly in the context of the coronavirus pandemic.

The freedom to trade, whether bilaterally, regionally, or multilaterally, must be guarded and enhanced to spark constructive, free-market competition and ensure private-sector growth for the post-pandemic global economic recovery.

The nomination of Fox as the next chief of the multilateral trade organization signals the intention of the U.K., following its departure from the European Union, to reclaim its historical role as a pillar of the international trading system.

As an avowed free trader, Fox himself is a welcome addition to a crowded field of candidates for those countries that want to see the WTO emerge from its current crisis as more effective in its promotion of open, market-based free trade.

As Fox pointed out in his Heritage Foundation speech, the World Trade Organization, a negotiation forum for the resolution of trade disputes between its members that has no independent power to enforce its decisions, is not a perfect institution. 

That is why the U.S., the U.K., and other like-minded and willing members of the WTO should work together to upgrade and reinvigorate the institution they helped create 25 years ago.

The forward-looking message Fox shared in the conclusion of his Margaret Thatcher Freedom Lecture at Heritage still resonates clearly. As he reminded us:

We must have the optimism and self-confidence now to shape it for the future: free markets, through free trade, for the benefit of free people. I will leave you today with the words of President [Ronald] Reagan: ‘The freer the flow of world trade, the stronger the tides of human progress and peace among nations.’ There is no greater prize than that.

This piece originally appeared in The Daily Signal