The European Union has agreed an “equitable” outcome with China over the vexed issue of whether the Chinese should be allowed to sell textiles to us at those oh-so unfair low prices. It looks like a pretty fudged deal to me, possibly not as draconian as the original quotas demanded by protectionist lobbies in Europe, but still a slap in the face for principled free trade.
While I have my concerns about China – it has a lousy record on human rights for starters – the development of the country’s economy along hopefully free market lines is surely one of the most positive developments of its kind in the world at the moment. Europe’s economy can only benefit in the long run if China becomes prosperous and hence generates a large middle class with a keen appetite for consumer goods and services.
And some of the poorest people in Europe surely stand to gain if they can buy garments for far less than the amount they would otherwise pay. If the case for free trade is to succeed, it is vital that this point is rammed home time and again.
Let Adam Smith have the last word on this from his Wealth of Nations:
Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self evident that it would be absurd to attempt to prove it. But in the mercantile system the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce