The Rudd Government may be the most protectionist Federal Government since the Fraser years, but it deserves the plaudits coming its way for the ASEAN FTA – which, to be fair, started life under the Howard Government.
At least with Simon Crean you get the sense that, despite his Victorian and trade union background, he actually believes in the benefits of free trade. With Mark Vaile and Warren Truss, you got the impression that they always wanted to skip ahead to the agriculture bits.
Other parts of the labour movement, however, have shown a worrying protectionist reflex that needs to be highlighted and condemned.
Yesterday the ACTU tried to fuse community anger over the Pacific Brands remuneration issue with a call for government assistance to be linked to protectionism. The AFR reports today that it is planning to urge the Federal Government to adopt “buy local” preferences in its procurement, as well as require workplace standards higher than those to be established under its new industrial relations laws.
Commonwealth procurement guidelines already commit to sourcing 10% of purchases from small-medium enterprises, which have to be Australian or New Zealand companies, so there’s a de facto local preference requirement already built into Commonwealth procurement.
Predictably, AWU secretary Paul Howes is in the thick of it. Howes, perhaps following the example of his predecessor Bill Shorten, is a gifted self-publicist committed to obtaining all the personal profile he can get. He is carving out a high-profile niche as the Right’s favourite trade unionist, using The Australian to try to sabotage emissions trading (impressively combining bank-bashing and opposition to an ETS) and wording up The Oz on his push in favour of a nuclear power industry. Howes even leapt on the Beaconsfield musical to get a headline. But the reactionaries at News Ltd might be a bit careful. Howes is an out-and-out protectionist who wants to end free trade agreements and impose buy local requirements on governments. His protectionism even extends to investment.
Australia already has enough trouble with local procurement preferences. State Governments are particularly prone to this sort of rubbish. Here’s the basic question for Paul Howes and every other economic ignoramus, crass populist and self-promoting would-be Labor MP in the union movement: how would your members feel about every other country adopting “buy local” preferences? They may not mind inflicting the higher costs that inevitably come from local purchase preferences on taxpayers, but they might be rather worried if they work in an industry that exports.
To advocate “buy local” is to engage in doublethink, to assume the world stops at Australia’s borders. The doublethink is beautifully summarised by this line to be found at the website of the voluntary protectionist campaign, “Australian Made“:
Australian pasta is exported to Italy, cars to America, fashion to France, electronics to Asia and software to Silicon Valley. With global quality and value like that, why wouldn’t you buy Australian Made?
Protectionism, no matter how it is dressed up — whether it’s financial assistance to industries, local purchase preferences, or voluntary “Australian Made” campaigns — is toxic in any dose. The smallest shift by Australia toward protectionism will be noticed by other countries and used as a basis for their own “buy local” campaigns and, eventually, legislation. It has happened before and will happen very quickly again. Every trade union call for buying local is a slap in the face for workers in export industries, and ultimately for all of us.
If publicity-hungry trade unionists are intent on replaying the spiral of protectionism that gave us the Great Depression, they should at least remember that we only got out of that through the greatest war in history. Don’t think it could happen again?
Don’t buy local. Don’t buy foreign. Buy whatever is best value for money, regardless of origin.